CONSOL HOLDINGS LIMITED (formerly Consol Holdings Proprietary Limited) (incorporated in the Republic of South Africa) (Registration number: 2005/034965/06) JSE Share Code: CNH ISIN: ZAE000223053 (the “Company”) PRE-LISTING STATEMENT The definitions and interpretations contained in Annexure 20 to this Pre\ -listing Statement apply to this entire document, including the cover page, except where the context indicates a contrary intention. This Pre-listing Statement relates to a private placement by way of an offer for subscription by the Company, subject to certain conditions (the “Offer”) to selected persons in South Africa who fall within one of the specified\ categories listed in section 96(1)(a) of the South African Companies Act, 71 of 2008, as amended (the “Companies Act”), and to selected persons in other jurisdictions, to whom the Offer will specifically be addressed, and by whom the Offer will be capable of acceptance, of 760,869,565 ordinary shares (“Ordinary Shares”) in the Company (the “Offer Shares”) (assuming an Offer Price at the mid-point of the Offer Price Range and that all the Offer Shares are taken up), comprising an aggregate of 34.2% of the total issued Ordinary Shares of the Company on the Listing Date (as defined below) to raise gross Offer proceeds of up to R3.04 billion. The over-allotment shareholders named in this Pre-listing Statement (the “Over-allotment Shareholders”) have granted the Stabilisation Manager (as defined below\ ), on behalf of each of the Joint Global Coordinators (as defined below), an option (the “Over-allotment Option”) pursuant to which the Stabilisation Manager, on behalf of each of the Joint Global Coordinators, may require the Over-allotment Shareholders to sell at the Offer Price in the aggregate up to 114,130,435 Ordinary Shares (assuming an Offer Price at the mid-point of the Offer Price Range) held by them, comprising up to 15% of the total number\ of Offer Shares to be sold in the Offer (the “Over-allotment Shares”) for the purpose of covering short positions resulting from over-allotments during the period ending 30 days after the Listing (as defined below) (the “Stabilisation Period”). The Over-allotment Option is exercisable on one or more occasions during the Stabilisation Period on the relevant date on which the Over-allotment Shares are to be purchased. On Listing, all of the Ordinary Shares constituting the issued ordinary share capital of the Company subsequent to the Offer are expected to be listed on the exchange operated by the JSE Limited (the “JSE”\ ). This Pre-listing Statement is not an offer, or an invitation to the general public to subscribe for, or purchase, the Offer Shares in any jurisdiction and is issued in compliance with the Listings Requirements (“Listings Requirements”) of the JSE for the purpose of providing information to selected persons in South Africa and other jurisdictions with regard to the Company. At the date of this Pre-listing Statement, it is estimated that the price at which the Offer Shares will be offered for subscription pursuant to the Offer (the “Offer Price”) will be between R1.50 and R6.50 per Offer Share (the “Offer Price Range”), corresponding to a market capitalisation of between R8,033 million and R9,752 million. However, the Offer Price may be outside the Offer Price Range. If the Offer Price is below the Offer Price Range for any reason, or if the Offer is not fully subscribed, or if the Board (as defined below) in their discretion determine that it would not be advisable to proceed with the Offer, the Company shall not be obliged to proceed with the Offer and/or the Listing, but reserves the right to do so. The Offer Shares will be delivered in dematerialised form only and, accordingly, no documents of title will be issued to successful applicants. The Offer Shares subscribed for pursuant to the Offer will rank pari passu with all of the other Ordinary Shares in issue in all respects, including the right to receive dividends or other distributions declared, made or paid after Listing. All of the Company’s classes of shares are of no par value and, accordingly, the Company does not have a share premium account. The Offer is subject to the conditions set out below in “Particulars of the\ Offer–The Offer”. The Offer is subject to a minimum subscription amount of R2.5 billion, which must be raised pursuant to the Offer (“Minimum Subscription Amount”). Subject to certain conditio\ ns (including the JSE’s minimum subscribed capital and minimum free float requirements, as set out in the Listings Requirements, being attained), a listing of all of the Ordinary Shares has been granted by the JSE (the “Listing”) in the “Industrial–\ Containers and Packaging” sector of the Main Board of the exchange operated by the JSE under the abbreviated name “Consol”, JSE Code “CNH” and ISIN ZAE000223053.\ On Friday, 4 May 2019 (the “Listing Date”), the Ordinary Shares will comprise 20,000,000,000 authorised and 2,223,120,097 issued Ordinary Shares (assuming an Offer Price at the mid-point of the Offer Price Range and that all the Offer Shares are taken up). On the Listing Date, the Ordinary Shareholders are expected to hold Shareholder Loans in an aggregate amount of R4,742 million, of which R3,131 million is expected to b\ e interest bearing. On the Listing Date, a portion of the Shareholder Loans will be repaid utilising part of the net proceeds of the Listing and the remaining portion of the Shareholder Loans will be converted into Ordinary Shares at the Offer Price. Accordingly, there will be no other class of shares in issue on the Listing Date other than the Ordinary Shares and the B Ordinary Shares to be issued pursuant to the B Ordinary Share Subscription Agreement, and there will be no outstanding Shareholder Loans. For further information, see “Incorporation and Share Capital–Capital Structure Reorganisation”. The actual number of issued Ordinary Shares on the Listing Date will be higher, or lower, than indicated above if the Offer Price is below, or above, the mid-point of the Offer Price Range or if the Offer is not fully subscribed. Successful applicants will be informed of t\ he Offer Price, the actual number of Offer Shares to be issued and the issued Ordinary Shares on the Listing Date and certain other information by way of a pricing\ and allocation announcement, which is expected to be announced on SENS on Thursday, 26 April 2018, and published in the South African press on Monday, 30 April 2018. The amount of the authorised and expected issued Ordinary Shares on the Listing Date is set out in “Incorporation and Share Capital”. 7,253,007 Ordinary Shares will be held in treasury on the Listing Date. The board of Directors of the Company (the “Board”), whose names are given on page 64 of this Pre-listing Statement, collectively and individually accept full responsibility for the accuracy of the information contained herein and certify that, to the best of their knowledge and belief, there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that this Pre-listing Statement contains all information required by the Listings Requirements. Date of Issue: Monday, 16 April 2018 Joint Global Coordinator, Stabilisation Manager and Sponsor Joint Global Coordinator Joint Global Coordinator Joint Global Coordinator US and English legal adviser to the Company South African legal adviser to the Company US, English and South African legal adviser to the Joint Global Coordinators Auditor and independent reporting accountant A-11 Key assumptions Value-in-use calculations include budgeted sales volumes and operating margins. Such assumptions are based on historical results adjusted for anticipated future growth in the country it operates in. These assumptions are a reflection of management’s past experience and have been endorsed by Group management as part of the consolidated Group budget. Where applicable, management believes that the forecast period of 10 years is justified due to the long-term nature of the business which matches the average furnace useful lives.Consol Glass Proprietary Limited Consol Glass Kenya Limited Glassforce Limited Juniper Glass Industries Share Company Other key assumptions % Terminal growth rate: 2017 5.06.67.13.5 2016 4.06.03.5 – Pre -taxation discount rate: 2017 15.323.130.515.3* 2016 16.820.726.2 – The terminal value growth rate is consistent with long-term industry growth forecasts. Rm Impairment recognised: 2017 –125 59120 2016 ––78 – 2015 –––– * Based on US Dollar denominated cash flows Consol Glass Proprietary Limited The recoverable amount exceeded the carrying amount. A reasonably possible change in the assumptions used to calculate the value in use is not likely to cause the carrying amount\ of the CGU to materially exceed its recoverable amount in the financial years ended 30 June 2017, 30 \ June 2016 and 30 June 2015. Consol Glass Kenya Limited The goodwill has been impaired by R125 million in the financial year ended 30 June 2017 as the business has been impacted by a slowdown in consumer consumption and a change in mark\ et mix. Management assessed the information on goodwill and noted that no impair\ ment charge had to be recognised on the goodwill of Consol Glass Kenya Limited as at 30 June 2016. Glassforce Limited The goodwill has been impaired by R59 million and R78  million in the financial years ended 30  June  2017 and 2016, respectively as the business continues to be impacted by the slowdown in \ consumer consumption and increased input costs due to a lack of liquidity in foreign currency that creates challenges to acquire inputs in Nigeria. Management assessed the information on goodwill and noted that no impair\ ment charge had to be recognised on the goodwill of Glassforce Limited as at 30 June 2015. Juniper Glass Industries Share Company At 30 June 2017, as a result of the annual impairment test performed, the goodwill was impaired by R120 million. ACCOUNTING ESTIMATES, JUDGEMENTS AND ASSUMPTIONS (CONTINUED) A-12 Sensitivity analysis of assumptions used in the impaired tests: 30 June 2017Consol Glass Kenya Limited Glassforce Limited Discount rate: – movement %+1 +1 – impairment increase/headroom decrease Rm3922 Terminal growth rate: – movement %(1)(1) – impairment increase/headroom decrease Rm1411 30 June 2016 Discount rate: – movement %+1 +1 – impairment increase/headroom decrease Rm6327 Terminal growth rate: – movement %(1)(1) – impairment increase/headroom decrease Rm25 7 Intangible assets Useful livesThe useful life of an asset is the period over which the Group expects to use the asset, and not necessarily the asset’s economic life. The Group uses the following factors to determine useful life: • expected usage patterns of intangible assets; and • technical and commercial obsolescence. The useful lives have been estimated as follows: • key customer relationships 10 - 15 years • non-key customer relationships 10 years • Consol trade name Indefinite The Consol trade name has been assessed as having an indefinite useful l\ ife as it is well known to consumers and customers and has been used for an extensive period by a company wit\ hin the Group which is expected to continue. Management believes there is no foreseeable limit over which the company will continue to generate revenue from the continuing use. Supporting this assumption is the fact that the company’s brand is well known, established and can reasonably be expected to generate revenue beyond the company’s strategic planning horizon. In addition, the company can continue to renew legal rights attached to the Company’s trade name without significant costs and intends to do so beyond the foreseeable future. ImpairmentManagement assesses changes in interest rates, exchange rates, the state of affairs in the manufacturing sector as well as the minimum indicators as per IFRS that impairment testing ma\ y need to be performed. When impairment indicators have been identified, management will estimate the assets’ recoverable amount based on cash flow projections at a discounted rate. Intangible assets, specifically intangible assets with an indefinite use\ ful life, are assessed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired. The recoverable amounts of the intangible assets are determined as the higher of the values in use or fair values less costs to sell. Value in use – Consol trade name in Consol Glass Proprietary Limited Value in use is determined by using the generally accepted relief from royalty method and is based on the following key assumptions: • Cash flows are based on revenue projections into perpetuity based on the indefinite useful life of the bra\ nd. • Pre-taxation royalty rate of 5.0% (2016: 4.7%; 2015: 4.7%). 201720162015 % The pre-tax discount rate applied was as follows: 15.316.816.6 The recoverable amount was based on the value in use of the asset and exceede\ d the carrying amount. A reasonably possible change in the assumptions used to calculate the value\ in use is not likely to cause the carrying amount of the asset to materially exceed its recoverable amount. ACCOUNTING ESTIMATES, JUDGEMENTS AND ASSUMPTIONS (CONTINUED) A-14 PREFERENCE SHARES In April 2016, the Group issued the “B” Preference Share which is redeemable. The “B” Preference Share includes an embedded derivative and is accounted for at fair value through profit or loss. The “B” Preference Share has been carried at fair value which is calculated by forecasting the final dividend cash flows and then discounting these. A successful listing would result in an early redemption event, making the “B” Preference Share redeemable at such date. The assumptions used are as follows: 30 June 2017 • 90% probability of a listing on 31 March 2018; and • 10% probability of a listing on 31 October 2018. A key input in the determination of the future cash flows related to the dividend payable on the “B” Preference Share is an EBITDA multiple (as defined in the Preference Share terms) and the EBITDA multiple assumptions are as follows: • At 31 March 2018: 7 – 8; and • At 31 October 2018: 7 – 8. 30 June 2016 • 75% probability of a listing on 31 October 2016; and • 25% probability of a listing on 31 March 2017 A key input in the determination of the future cash flows related to the dividend payable for the “B” Preference Share is an EBITDA multiple (as defined in the Preference Share terms) and the EBITDA multiple assumptions are as follows: • At 31 October 2016: 7.5 – 9 • At 31 March 2017: 7.5 – 9 Another input used in the determination of the future cash flows related to the dividend payable for the “B” Preference Share is a projected EBITDA value (as defined in the Preference Share terms) on each of the potential future cash flow dates and management have estimated the future EBITDA values at each of the potential future cash flow dates. The “B” Preference Share is entitled to two types of dividends. The final dividend is based on \ the EBITDA multiple at the date of redemption. The “B” Preference Share is also entitled to an interim dividend which begins accruing on the s\ ettlement of the “A” Preference Shares and the payment of the final “B” preference dividend. The assumption used is that the redemption and settlement of the “A” and “B” Preference Share will occur simultaneously due to the early redemption arising from the potential future listing of Consol, thereby resulting in no interim “B” preference dividend being payable. Each cash flow has been discounted using the JIBAR swap yield curve (ri\ sk-free rate) back to the valuation date. This curve only incorporates inter-bank credit risk and an additional spread of 425 basis points was added to represent an estimate of the Consol- specific credit risk. PUT OPTION In terms of the shareholders’ agreement between the Group and the minority shareholder of Juniper Glass, the minority shareholder holds a put option in respect of its shareholding in Juniper Glass. The put option, as at 30 June 2017, has been valued by forecasting the expected payments to settle the liability and discounting b\ ack to calculate the present value. Key inputs to the calculation are as follows: Revenue growth (pricing and value growth)* 3.5 – 9.3% Average EBITDA margin 29.4% Discount rate 25.7% The above inputs are used to forecast EBITDA (as defined in the shareholders agreement). The option is exercisable in three equal tranches on fixed dates subsequent to the commissioning of the \ glass manufacturing plant. The option price is calculated at a fixed EBITDA multiple of 7.0 times on th\ e latest audited results. * once the plant is fully operational EXCHANGE RATE USED FOR TRANSLATION In determining the exchange rate to use in translating the results and financial position of an entity in a multiple foreign exchange rates regime such as the Federal Republic of Nigeria (Nigeria), the rate usually applied is the rate at which future cash flows represented by the transaction or balance could have been settled if those cash flows had o\ ccurred at the measurement date. The Group has received certificates of importation of capital in Nigeria and management\ believe that the Group would be able to repatriate future dividends, or proceeds on sale of the investment at the official exchange rate. The Group has therefore applied the official exchange rate in translating the results of Glassforce Limited. A-23 201720162015 Rm Statement of cash flows Cash flows from operating activities 1611488 Cash flows from investing activities (36)(69)(28) Cash flows from financing activities (36)46(46) Net movement in cash and cash equivalents 89(9)14 Juniper Glass Industries Share Company (14%) Statement of financial position Non-current assets 131–– Current assets 274–– Current liabilities (71)–– Less: goodwill ––– Net assets excluding goodwill 334–– Carrying amount of NCI 46–– Statement of profit or loss and other comprehensive income Revenue ––– Loss (116)–– OCI (47)–– Total comprehensive income (163)–– Profit allocated to NCI 0–– OCI allocated to NCI (5)–– Statement of cash flows Cash flows from operating activities 26–– Cash flows from investing activities (157)–– Cash flows from financing activities 164–– Net movement in cash and cash equivalents 33–– Total carrying amount of NCI 10792111 The information above is presented before any intra-group eliminations. 14. Shareholder loans 2017 20162015 Rm Capital – “A” shareholder loans 1,6101,5201,520 Present value adjustment of “A” shareholder loans (187)–– Capital – “B” shareholder loans 909750750 Accrued interest on “B” shareholder loans 1,9171,6041,337 4,249 3,8743,607 The “A” shareholder loans are subordinated and shall not be repaid prior to the repayment in full of the “B” shareholder loans and accrued interest. In addition, the “A” shareholder loans are subordinated in favour of trade creditors to the extent that the liabilities of Consol Holdings Proprietary Limited, fairly valued, exceed the assets of company. The “B” shareholder loans are subordinated in favour of the priority claims, being all claims of whatever n\ ature and the claims of trade creditors to the extent that the liabilities of the company, fairly valued, exceed the assets of the company. In addition, the “B” shareholder loans are subordinated in favour of the Preference Shares liabilities. As at 30 June 2017 and 30 June 2016 the shareholder loan between Consol Holdings Proprietary Limited and Business Venture Investments No. 3001 (RF) Proprietary Limited has been subordinated in favour of the preference shareholders. In addition, the shareholder loan between Business Venture Investments No. 1840 Proprietary Limited and Consol Glass Proprietary Limited has been subordinated in favour of the Senior debt. As at 30 June 2015 the shareholder loan between Consol Holdings Proprietary Limited and Consol Glass Proprietary Limited has been subordinated in favour of the Senior debt. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-24 15. Loans, borrowings and financial instruments 15.1 Loans and borrowings 2017 20162015 Rm Senior debt 4,1424,6274,811 Principal amount 4,1454,645 4,845 Less: unamortised transaction costs (3)(18) (34) Long term loan (denominated in Kenyan shillings) 114146 – Other loans and borrowings 184425 Commercial paper (denominated in Nigerian naira) –21 15 4,274 4,8384,851 Classified as: – Non-current 4,2364,760 4,640 – Current 3878211 15.2 Preference Shares liabilities 2017 20162015 Rm “A” and “A1” Preference Shares liabilities (2016 “A” Preference Shares liability): – capital 425325 – – capitalised bridge loan interest 2727 – – accrued interest 609– – unamortised transaction costs 0(1) – Total “A” and “A1” Preference Shares liabilities 512360 – “B” Preference Share liabilities 5531 – Deferred day-one loss on “B” Preference Share: – opening balance (28)–– – recognised during the year –(30) – – amortised to profit or loss 102– Total deferred day-one loss (18)(28) – Total Preference Shares liabilities 549363 – Preference Shares are redeemable as follows at 30 June 2017 and 30 June 2016: • The “A” and “A1” Preference Shares are redeemable at their issue price (R44,200 and R80,000 respectively) three years and one day after the issue date. • The “B” Preference Share is redeemable at its issue price (R25,396) three years and one day after the day that the final preference dividend has been paid in full. The final preference dividend date is defined and further explained below. • On redemption, any dividends owing on the Preference Shares must be paid. The “A” and “A1” preference shareholders have a right to receive cumulative cash dividends that are mandatory. They also have a right to receive additional dividends in the case of certain events. The “B” preference shareholder has a right to receive a cumulative cash dividend and the shareholder is entitled to an ‘interim dividend,’ ‘final dividend’ and an ‘adjustment d\ ividend’, if applicable. 15.3 Derivatives 2017 20162015 Rm Forward exchange contracts 3(2) – Interest rate swaps ––17 3 (2)17 NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-25 16. Employee related liabilities 16.1 Share appreciation rights (cash-settled) A subsidiary company granted share appreciation rights (SARs) to employees that entitle them to a cash paymen\ t once the vesting conditions have been met. 2017 20162015 Rm Balance at beginning of year 2993 Adjustment recognised during the year 3220 6 Less: current portion (23)(4)– Balance at end of year 3825 9 Empowerment phantom share option scheme Executive phantom share option scheme Phantom equity share scheme for senior executives Number of SARs As at 30 June 2017 Year granted 2012 12,600372,600 – 2013 44,200 506,200 – 2014 343,700 1,400,900 – 2015 110,700792,30011,847,883 2016 276,500856,800 – As at 30 June 2016 Year granted 2012 12,600460,800 – 2013 44,200613,300 – 2014 369,3001,516,900 – 2015 110,700846,20011,847,883 As at 30 June 2015 Year granted 2008 10,400–– 2009 23,200137,400 – 2010 22,400285,900 – 2011 125,700383,500 – 2012 12,600486,300 – 2013 44,200653,700 – 2014 377,0001,612,200 – Vesting date: One third on each of the 4th, 5th and 6th anniversary3rd anniversary 3rd anniversary Cash payment based on: Increase in share price of Consol Glass Proprietary Limited which is determined based on the terms of the scheme.Increase in share price of Consol Holdings Proprietary Limited which is determined based on the terms of the scheme. 16.2 Post-employment medical aid benefit The defined benefit fund falls within the South African jurisdiction and\ can be summarised as follows: Nature of benefitsThe post-employment medical aid liability relates to a commitment to pay a portion of members’ post-employment medical scheme contributions. The post-employment contributions for acti\ ve and continuation members are as follows: • For employees who joined Consol Glass Proprietary Limited and the medical scheme before 1 October 1996, 50% of medical scheme contributions. Dependents are also offered continued membership of the medical scheme on the death of the primary member and under certain other specific conditions.\ • For employees who joined the Group and medical schemes after 1 October 1996, the Group does not make any contributions. Funding policyThere are no plan assets which have been set aside to fund this obligation and b\ eneficiaries and the employer contribute on an equal basis to the employees’ medical scheme contribution. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-26 Actuarial assumptionsActuarial assumptions applied in the valuation of the defined benefit fu\ nds performed at the end of each reporting period are as follows: 201720162015 % Discount rate 9.710.2 9.1 Medical inflation rate 8.79.28.2 Salary inflation rate 8.79.28.2 Mortality rate: – active members SA85-90 rated down 3 years for females – pensioners PA(90)-2 A change in these significant actuarial assumptions would have the follo\ wing effect on the defined benefit obligation: 2017 20162015 Rm RmRm Medical inflation rate: – one percentage point increase/(decrease): * effect on the aggregate service and interest cost 1/(1)1/(1)1/(1) * effect on defined benefit obligation 11/(10)11/(9)12/(10) Discount rate: – one percentage point (increase)/decrease: * effect on the aggregate service and interest cost (0)/0(0)/0(1)/1 * effect on defined benefit obligation (9)/11(9)/11(10)/12 Defined benefit fund liability Balance at beginning of year 98103 98 Net expense recognised in profit and loss: 101010 – current service cost 11 1 – net interest expense 99 9 Remeasurement recognised in OCI: – actuarial (gain)/loss (1)(8) 1 – movement from changes in demographic assumptions –(3) – – movement from changes in financial assumptions –(1) 1 – movement from changes in experience adjustments (1)(4) 0 Other: – benefit payments (7)(7)(6) 100 98103 Current portion transferred to current liabilities (7)(7)(7) Balance at end of year 939196 Expected contributions and expense for the next reporting period: – benefit payments 777 – expense 101010 Total employee related liabilities 131116105 17. Provisions 2017 20162015 Rm Balance at beginning of year 1071 Provision raised during the year 236 Balance at end of year 1210 7 The Group has raised a provision of R12 million (2016: R10 million; 2015: R7 million) for rehabilitation and site restoration work which will have to be undertaken at sand mines that the Group operates once operations at the sites cease. 18. Finance lease liability The Group has entered into a lease agreement for property used for logistics purposes and the agreement has been classified as a finance lease agreement. The lease agreement provides the Group with options for an outright purchase of the property at different stages of the lease period. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-27 Future minimum lease payments InterestPresent value of minimum lease payments 2017 20162015 201720162015 201720162015 Rm The minimum lease payments as per the lease agreement are as follows: – less than one year 413532 (3)(2)(2) 383330 – between one and five years 113141160 (26)(36)(46) 87105 114 – more than five years ––16 ––(7) ––9 Total 154176208 (29)(38)(55) 125138153 19. Deferred taxation 2017 20162015 Rm Movement in deferred taxation balance: Balance at beginning of year 591435418 Charged to profit or loss: – current year (76)4926 – changes in estimate in respect of prior years 1911(10) – participation in export partnerships ––(1) Foreign currency translation impact (16)9(1) Deferred taxation arising on business combinations –100 14 Current year charge relating to components of other comprehensive income (2)(3)(11) Balance at end of year 688591435 Deferred tax liabilities comprise: Capital allowances on property, plant and equipment 405459384 Post-employment medical aid benefit and provisions (80)(66)(54) Participation in export partnerships –4 5 Intangible assets 424443441 Deferred income (15)–– Assessed loss benefit (35)(242) (335) Finance lease (15)(16)(16) Unrealised exchange differences (2)(4) – Unredeemed capital allowances 613 10 Total deferred tax liabilities 688591435 As future taxable profits are probable, the Group expects to utilise the remaining assessed loss except those relating to Glassforce Limited and Silica Quartz Proprietary Limited. Unrecognised deferred taxation assets – Glassforce Limited and Silica Quartz Proprietary Limited Deferred taxation assets have not been recognised in respect of the following items as it is not probable that future taxable profits will be available against which the Group can utilise the benefits therefrom. 2017 20162015 Rm Deductible temporary differences 354422 Assessed losses 9314 44 4736 20. Trade and other payables Included in trade and other payables are the following: Financial liabilities – trade payables and related accruals 478368335 – accrual for technical fees 999 – margin interest accrued ––3 – other payables 236650 510 443397 Non financial liabilities – accrual for leave pay and bonus 9793122 – Value Added Tax 163622 – other payables 361516 – employee related liabilities 234– – post-employment medical aid benefit 777 689 598564 NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-28 21. Deferred income 2017 20162015 Rm Amount received from customers 633–– Interest accrued 32–– Recognised in revenue in the current year (492)–– Foreign currency translation (10)–– 163 –– During the 2017 financial year, the Group received payments from customers which have been treated as deferred income and incurred interest at a rate of 10.5 % - 12.5 % per annum. 22. Accounting classification of financial instruments Carrying amount At fair value Loans and receivables Other financial liabilities TotalFair value Fair value level Rm 2017 Financial assets measured at amortised cost Trade and other receivables (1) –759 –759 759Note 1 Cash and cash equivalents(1) –575 –575 575Note 1 – 1,334 –1,334(2)1,334 Financial assets measured at fair value Forward exchange contracts used for hedging 3––3 3Level 2 Financial liabilities measured at fair value through profit or loss “B” Preference Share (55)––(55) (55)Level 3 Financial liabilities measured at fair value through equity Put liability over NCI (50)––(50) (50)Level 3 Financial liabilities measured at amortised cost Shareholder loans ––(4,249) (4,249)(4,105)Level 2 Loans and borrowings (3) ––(4,277) (4,277)(4,293)Level 2 Finance lease liability ––(125) (125)(125)Level 2 Trade and other payables (1) ––(510) (510)(510)Note 1 “A” and “A1” Preference Shares(3) ––(512) (512)(519)Level 2 Bank overdraft(1) ––(353) (353)(353)Note 1 – –(10,026) (10,026) (9,905) 2016 Financial assets measured at amortised cost Trade and other receivables (1) –914 –914 914Note 1 Cash and cash equivalents(1) –135 –135 135Note 1 Long term receivables –7 –7 7Level 2 – 1,056 –1,056 (2)1,056 Financial liabilities measured at fair value Forward exchange contracts used for hedging (2)––(2) (2)Level 2 “B” Preference Share (31)––(31) (31)Level 3 (33) ––(33) (33) Financial liabilities measured at amortised cost Shareholder loans ––(3,874) (3,874)(3,829)Level 2 Loans and borrowings (3) ––(4,856) (4,856)(4,833)Level 2 Finance lease liability ––(138) (138)(138)Level 2 Trade and other payables (1) ––(443) (443)(443)Note 1 “A” Preference Shares(3) ––(361) (361)(366)Level 2 – –(9,672) (9,672)(9,609) 2015 Financial assets measured at amortised cost Trade and other receivables (1) –673 –673 673Note 1 Cash and cash equivalents(1) –225 –225 225Note 1 Long term receivables –7 –7 7Level 2 – 905 –905 (2)905 NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-29 Carrying amount At fair value Loans and receivables Other financial liabilities TotalFair value Fair value level Rm Financial assets measured at fair value Interest rate swaps used for hedging 17––17 17Level 2 Financial liabilities measured at fair value Forward exchange contracts used for hedging (0)––(0) (0)Level 2 Financial liabilities measured at amortised cost Shareholder loans ––(3,607) (3,607)(3,376)Level 2 Loans and borrowings (3) ––(4,885) (4,885)(4,900)Level 2 Finance lease liability ––(153) (153)(153)Level 2 Trade and other payables (1) ––(397) (397)(397)Note 1 – –(9,042) (9,042)(8,826) Notes:(1) The fair value approximates the carrying value due to the short term nature of the instrument.(2) Maximum credit exposure.(3) Gross of unamortised transaction costs. 23. Financial risk management Overview The Group has exposure to the following risks from its use of financial instruments: • credit risk • liquidity risk • market risk This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing financial risk and the Group’s management of capital. Further quantitative disclosures are included throughout these financial statements. Risk management framework The Board has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Board has established the Risk Committee, which is responsible for developing and monitoring the Group’s risk management policies. The committee reports regularly to the Board on its activities. The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Audit and Corporate Governance Committee oversees how management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Audit and Corporate Governance Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit and Corporate Governance Committee. 23.1 Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to mee\ t its contractual obligations. The Group is exposed to credit risk through the following instruments: • derivative financial assets • trade and other receivables • cash and cash equivalents • long-term receivables 23.1.1 Trade and other receivables The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each\ customer. Senior Management also considers the demographics of the Group’s customer base, including the default risk of the industry and country in which customers operate, as these factors\ may have an influence on credit risk. The Risk Committee has established a credit policy under which each new customer is analysed individually for creditworthiness before the Group’s standard payment and delivery terms and conditions are offered. The Group’s review includes external ratings, when available, and in some cases bank references. Purchase limits are established for each customer, which represents the maximum open amount without requiring approval and are reviewed on a regular basis. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-30The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures. Other receivables do not pose a material credit risk to the Group as they are sundry in nature. The associated credit risk is considered to be limited. Any concentration of credit risk is managed by the Group’s credit risk policy. Exposure to credit risksThe carrying amount of financial assets measured at amortised cost represents the maximum credit exposure (refer to note 22). Trade receivables – customer typeThe maximum exposure to credit risk for trade receivables of the Group at the reporting date by customer type and geographical region was: 2017 20162015 South Africa Rest of Africa South Africa Rest of Africa South Africa Rest of Africa Rm Alcoholic beverages 51778489123 43275 Food and non-alcoholic beverages 7457127 101 – Cosmetics and pharmaceuticals 25–19 –21 – Other 11412 615 1 627 87591156 56976 Trade and other receivables – geographical split 2017 20162015 Rm The maximum exposure to credit risk for trade and other receivables for the Group at the reporting date by geographic region was: South Africa 645755525 Rest of Africa 114159148 759 914673 Trade and other receivables ageingThe ageing of trade and other receivables at the reporting date was as follows: 2017 20162015 Gross Impairment GrossImpairment GrossImpairment Rm Not past due 720–845 –619 – Past due 0 - 30 days 21(4) 45 –13 – Past due 31 - 60 days 10–13 (1) 31(2) Past due >60 days 13(1) 21(9) 14(2) 764 (5)924 (10) 677 (4) Management believes that any unimpaired amounts are still collectible in full, based on historical payment behaviour and extensive analysis of credit risk, including underlying customers’ credit ratings if they are available. 2017 20162015 Rm Balance at beginning of year 1043 Allowance for impairment (reversed)/raised during the year (net) (5)61 Balance at the end of year 510 4 The allowance accounts in respect of trade receivables are used to record impairment losses unless the Group is satisfied that no recovery of the amount owing is possible; at that point the amount is considered irrecoverable and is written off directly against the financial asset. Approximately 57% of total trade receivables at 30  June  2017 were covered by insurance policies (30 June 2016: 41%; 30 June 2015: 36%). During the 2017 financial year, revenue from sales to customers in South Africa amounted to approximately 83% (30 June 2016: 82%; 30 June 2015: 84%) of total Group revenue. Individual balances in excess of 5% of total trade receivables at year end accounted for 54% (2016: 50%, 2015: 40%) of tot\ al trade receivables. There were no other significant concentrations of credit risk. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-31 23.1.2 Derivative financial assets Derivatives are entered into with financial institutions with high credit ratings, as determined by credit rating agencies, within a credit limit policy that is subject to regular review. 23.1.3 Long-term receivables Long-term receivables are mostly sundry in nature and have not been impaired. The associated credit risk is considered to be limited. 23.1.4 Cash and cash equivalents Cash balances are all kept at financial institutions with high credit ratings, as determined by credit rating agencies, within a credit limit policy that is subject to regular review. 23.2 Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.\ The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damag\ e to the Group’s reputation. The Group reviews and assesses cash flow forecasts on a regular basis and ensures that adequate borrowing facilities are available to the Group. Typically the Group ensures that it has sufficient cash on demand and available credit facilities to meet expected operational expenses, including the servicing of financial obligations; \ this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. The following are the contractual maturities of financial liabilities, including estimat\ ed interest payments and excluding the impact of netting agreements as at the dates highlighted. 30 June 2017 Nominal interest rate Final Maturity date Carrying amount Contractual cash flows Less than 1 year 1 – 3 years Thereafter Rm Non-derivative financial liabilities Senior debt: Capital – A facility JIBAR + 3.85% July 2018 (1)2,645 2,645 –2,645 – – B facility JIBAR + 4.25% August 2018 (1)1,500 1,500 –1,500 – Interest – A facility –296 296 –– – B facility –199 174 25 – Finance lease liability 11% October 2020 125 154419716 Trade and other payables 510 510510 –– Shareholder loans: – “A” Class 0No fixed maturity date (2) 1,423 1,610 –1,610 – – “B” Class Prime + 2.00% March 2037 (2)2,826 3,103 –3,103 – “A” and “A1” Preference Share liabilities 127.5% of Prime April 2019 512 673 –673 – Unsecured loan 8.6%No fixed maturity 18 1919 –– Long-term loan: – Capital KBRR + 5% September 2021 114 114205539 – Interest –391520 4 Put liability over NCI 50 207 ––207 NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-32 30 June 2016 Nominal interest rate Final maturity date Carrying amount Contractual cash flows Less than 1 year 1 – 3 years Thereafter Rm Non-derivative financial liabilities Senior debt: Capital - A facility JIBAR + 3.85% August 2017 (1)3,145 3,145 –3,145 – - B facility JIBAR + 4.25% August 2018 (1)1,500 1,500 –1,500 – Interest - A facility –412 353 59 – - B facility –377 174203 – Finance lease liability 11%October 2020 138 176358061 Trade and other payables 443443443 –– Shareholder loans: - “A” Class 0No fixed maturity date (2)1,520 1,520 –1,520 – - “B” Class Prime + 2.00% March 2037 (2)2,354 2,999 –2,999 – Commercial paper 18.5%June 2017 212323 –– “A” Preference Share liability 127.5% of Prime April 2019 361 521 –521 – Unsecured loan 7-15%No fixed maturity 444848 –– Long-term loan: - Capital KBRR + 5% September 2021 146 146125282 - Interest –66203214 30 June 2015 Nominal interest rate Final maturity date Carrying amount Contractual cash flows Less than 1 year 1 – 3 years Thereafter Rm Non-derivative financial liabilities Senior debt: Capital - A facility JIBAR + 4.1% August 2017 (1)3,345 3,345 1953,150 – - B facility JIBAR + 4.5% August 2018 (1)1,500 1,500 ––1,500 Interest - A facility –734 342392 – - B facility –501 159318 24 Finance lease liability 11%October 2020 153 2083273103 Trade and other payables 397397397 –– Shareholder loans: - “A” Class 0No fixed maturity date (2)1,520 1,520 ––1,520 - “B” Class Prime + 2.15% March 2037 (2)2,087 2,840 ––2,840 Commercial paper 16.0%June 2017 151717 –– Unsecured USD denominated loan 5.2%No fixed maturity 2527–27 – NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-33 1. The contractual terms of the Senior debt require the debt to be immediately repaid upon the occurrence of certain events including: • a listing of any company in the Group on a financial or stock exchange; • a change in control of the Group; • a material change in the shareholding of the Group; or • a sale of substantially all of the assets of the Group. 2. The contractual terms of the shareholder loans in Consol Holdings Proprietary Limited require settlement at the earlier of: • At any time subsequent to 2026 when the Senior debt has been settled and\ the Group is solvent, or • 2037. In addition to the contractual settlement dates, management is of the vi\ ew that the Shareholder Loans would also have to be settled early in the case of the early settlement of the Senior debt \ (as detailed above). The intention of the arrangement has always been that the current shareholders will seek to exit their investment in the Group at an appropriate time. In line with the intention, the shareholders of the Group have been actively seeking an exit event for a few years. The Shareholder Loans are recorded using the amortised cost methodology. This means that the carrying value at each reporting date must be recorded at the present value of the expected future cash flows (discounted back using the relevant market-related interest rate at date of issue in 2007). As at 30 June 2016 and 30 June 2015, management believed that an exit event could occur at any time and that it was ther\ efore appropriate to record the shareholder loans at their respective redemption amounts. As a result, no discounting was applied and no present value adjustment was recognised for the years ended 30 June 2016 and 30 June 2015. As at 30 June 2017, management believe that an exit event would most likely occur by 31 March 2018 and that it was appropriate to discount the shareholder loan redemption amounts for nine months. As a result, finance income was recognised for the year ended 30 June 2017 which will unwind by 31  March  2018. The loans are recorded as non-current liabilities at both year ends, as none of the events detailed above had occurred by these dates. Derivative instruments The following table indicates the period in which the cash flows associa\ ted with derivative instruments are expected to occur and the fair value of the related derivative instruments: Carrying Amount Expected Cash flow Less than 1 year 1 – 3 years Thereafter Maturity Date Rm 2017 Forward exchange contracts – assets 3(160) (160) ––Various 2017 Derivative financial liabilities – “B” Preference Share (55)(59) –(59) –April 2019 2016 Forward exchange contracts – liabilities (2)(43) (43) ––Various 2016 Derivative financial liabilities – “B” Preference Share (31)(34) –(34) –April 2019 2015 Forward exchange contracts – liabilities (0)(32) (32) ––Various 2015 Interest rate swaps – assets 171717 ––March 2016 NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-34 Assets held as security for borrowings A cession and pledge in security of the following assets for loans and f\ acilities granted has been made in favour of senior lenders; Stanbic IBTC Bank Plc and First Bank of Nigeria Plc. Consol Glass Proprietary Limited Consol Glass Kenya Limited Glassforce Limited In favour of: Senior debt lenders Stanbic IBTC Bank Plc First Bank of Nigeria Plc 2017 20162015201720162015201720162015 Rm Property, plant and equipment (encumbered) 2,2272,1682,377 413503 –133 175197 Prepayment for plant and equipment 42100 6–––––– Intangible assets 1,4661,5171,571 4558 –––– Investment in subsidiaries –24 24 –––––– Long term receivables 440573362 –––––– Inventories 1,5191,3371,218 11152 –82 7551 Trade and other receivables 882931735 4180 –17 4280 Cash and cash equivalents 1096208 2531 –86 5– 6,586 6,7466,501 635724 –318 297328 In addition, the shares of the Group entities for which loans and facilities have been granted are pledged in favour of the holders of the Preference Shares and Senior debt. 23.2.1 Banking facilities 23.2.1.1 Facilities The Group maintains the following credit facilities with banking institutions: 2017 20162015 Rm Nedbank Limited 750750750 The Standard Bank of South Africa Limited 101010 760 760760 KESm Stanbic Bank Kenya Limited 300300 – NGNm First Bank of Nigeria Plc –1,000 250 Stanbic IBTC Bank Plc 750–– 23.2.1.2 Covenants The covenants as detailed below relating to the Senior debt apply to the financial position and financial performance of Consol Glass Proprietary Limited. The consortium of financial institutions providing the Senior debt is entitled to measure compliance with the covenants at any time during the duration of the facilities granted. The covenants as detailed below apply to the financial position of Conso\ l Glass Proprietary Limited: • The Senior Total Net Debt to EBITDA (as defined in the facility agreement) ratio shall not be more than 3.75 times. (2016: 4.5 times; 2015: 5.0 times). • The Interest Cover Ratio for any Measurement Period shall not be less than 2.0 times (30 June 2016: 2.0 times; 30 June 2015: 1.75 times). The covenants as detailed below apply to the financial performance of Co\ nsol Glass Proprietary Limited for the financial year ended 30 June 2017 (30 June 2016 a\ nd 30 June 2015): • EBITDA (as defined in the facility agreement) for any twelve month period ending on either 30 June or 31 December during the loan term, is at least R1bn or more. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-35 The covenants as detailed below apply to the capital expenditure of Consol Glass Proprietary Limited for the financial year ended 30 June 2017 (30 June 2016 a\ nd 30 June 2015): • The aggregate of the capital expenditure of Consol Glass Proprietary Limited for the financial year ended 30 June 2012 and for each of the six financial years ending t\ hereafter shall not exceed the budgeted capital expenditure for that financial year by more than 10%. • In addition to the capital expenditure permitted pursuant to the aggregate of capital expenditure covenant above, each company in the Consol Holdings Proprietary Limited group shall be entitled to make any capital expenditure or acquire a business or undertaking (or, in each case, any interest in any of them) (in the form of an asset acquisition or a share acquisition (other than a partnership)) (such capital expenditure being referred to as additional capital expenditure) from third party sellers on arm’s length terms in the ordinary course of business, and linked to the nature of the business of the Consol Holdings Proprietary Limited group provided that certain conditions and requirements are met. The loan agreements covering the senior debt and Preference Shares contain covenants that govern the company’s ability to incur additional debt, create liens, pay dividends and make distributions or purchase shares, make investments, sell shares, enter into new business, enter into sale and leaseback transactions, merge or consolidate or transfer and sell substantially all of the Group’s assets for all years presented. The covenants as detailed below relating to the Preference Shares apply to the financial position and financial performance of the Consol Holdings Proprietary Limited group. The preference shareholders are entitled to measure compliance with the covenants at any time during the duration the Preference Shares are in issue. The covenant as detailed below applies to the financial position of the Consol Holdings Proprietary Limited group as at 30 June 2017: • The Net leverage ratio shall not be more than 4.5 times (30 June 2016: 5.0 times). The covenant as detailed below applies to the capital expenditure of Consol Holdings Proprietary Limited group excluding Glassforce Limited and Consol Glass Kenya Limited for the financial year ended 30 June 2017 and 2016. The aggregate of the capital expenditure of the Consol Holdings Proprietary Limited group excluding Glassforce Limited, Consol Glass Kenya Limited and Juniper Glass SC for the fina\ ncial years ended 30 June 2017 and 30  June  2016 and for the financial year ending thereafter shall not exceed the budgeted capital expenditure for that financial year by more than 10%. The covenants as detailed below relating to the Stanbic Bank Kenya Limited (Stanbic) loan applies to the financial position and financial performance of Consol Glass Keny\ a Limited. Stanbic is entitled to measure compliance with the covenants at any time during the duration of the f\ acilities granted. Kenyan shillings at 30 June 2017 and 30 June 2016: • The Net Debt to EBITDA (as defined in the loan agreement) ratio at 30 June 2017 and 30 June 2016 shall be less than 2.25 times. The loan agreements covering the Stanbic loan contain undertakings that govern the company’s ability to pay dividends and make distributions, cease trading, change a\ ccounting policies, enter into joint ventures, purchase shares, make investments, sell shares, enter into new business, as well as enter into any mergers, demergers, amalgamations and corporate restructuring. At no point in time during the financial years ended 30 June 2017, 30 June 2016 and 30 June 2015 has the bank recalled its loans as a result of breach of covenants. 23.3 Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and commodity input prices, will affect the Group’s income or the value of its holdings of financial instruments. The obje\ ctive of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The Group buys foreign currency derivatives in order to manage market risks. Such transactions are carried out within the guidelines set by Group treasury. Generally, the Group may seek to apply hedge accounting in order to manage volatility in profit or loss. The Group does not enter into commodity contracts. The Group has exposure to currency and interest rate risk for all periods to 30 June 2017, 30 June 2016 and 30 June 2015. 23.3.1 Currency risk The Group is exposed to currency risk on sales and purchases that are denominated in a currency other than the functional currency of each entity in the Group. The Group is primarily exposed to the Euro; the United States dollar; the pound sterling; the Kenyan shilling; the Nigerian nai\ ra for 30 June 2017, 30 June 2016 and 30 June 2015. In addition, the Group was exposed to the Ethiopian birr during the 30 June 2017 financial year as a result of its acquisition of Juniper Glass. The Group may use FECs to hedge its currency risk, all with a maturity of less than one year from the reporting date. When necessary, FECs are rolled over at maturity. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-36In respect of transactions not covered by FECs, or other monetary assets, and liabilities denominated in foreign currencies that arise in the normal course, the Group ensures that its net exposure is kept to an acceptable level by buying foreign currencies at spot rates when necessary. Exposure to currency risk The Group’s exposure to significant foreign currency risk based on nominal amounts was as follows: EUR USD GBP KESZAR Amounts shown in foreign currency units millions 2017 Trade and other receivables 1000 – Cash balances –16 0987 – Loans and borrowings –(2) ––– Trade and other payables (2)(0)(0) –(51) Gross statement of financial position exposure – excluding FECs (1)14 0987 (51) Estimated future committed purchases (24)(9)(0)(0)(32) Gross exposure (25)50987 (83) FECs 74 ––– Net exposure (18)9–987 (83) 2016 Trade and other receivables 00 ––– Cash balances 02 ––– Loans and borrowings –(2) –762 (9) Trade and other payables (0)(0)(0) – – Gross statement of financial position exposure – excluding FECs 00(0)762 (9) Estimated future committed purchases (5)(1)(0) –– Gross exposure (5)(1)(0)762 (9) FECs 210 –– Net exposure (3)(0)(0)762 (9) 2015 Trade and other receivables 02 ––– Cash balances 020 –– Loans and borrowings –(2) ––– Trade and other payables (0)(1) ––– Gross statement of financial position exposure – excluding FECs 010 –– Estimated future committed purchases (1)(1) ––– Gross exposure (1)–0 –– FECs 12 ––– Net exposure –2 0 –– The following significant exchange rates applied during the financial ye\ ars presented: 2017 20162015 Reporting date spot rate Average for the year Reporting date spot rate Average for the year Reporting date spot rate Average for the year Rands Euro 14.8814.81 16.5716.09 13.6013.73 US dollar 13.0213.62 14.9314.50 12.1511.45 GB pound 16.9417.28 19.9821.47 19.1318.01 Ethiopian birr 0.560.59* –– –– Kenyan shilling 0.130.13 0.150.15 –– Nigerian naira 0.040.04 0.050.07 0.060.06 Note: * Average for seven-month period ended 30 June 2017. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-37 Sensitivity analysis A 10% weakening of the rand against the following currencies at the reporting date applied against the gross statement of financial position exposure including FECs would have increased/(decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis was performed on the same basis for 2016 and 2015\ . Profit/(loss) 2017 20162015 Rm Euro 932 US dollar 2414 GB pound 0(0) 0 Kenyan shilling 1311 – A 10% strengthening of the rand against the above currencies at the reporting date would have had the equal but opposite effect to the amounts shown above. Due to volatility in foreign exchange rates and fluctuations of balances denominated in foreign currencies during the period, the analysis is not necessarily representative of the exposure throughout the year. 23.3.2 Interest rate risk The Group’s exposure to interest rate risk mainly relates to financial liabilities. Liabilities bear interest, where applicable, at fixed or floating rates. 2017 20162015 Rm Variable rate instruments Financial assets Cash and cash equivalents 575135225 Financial liabilities Loans and borrowings (1) 4,2774,8564,885 Shareholder loans 2,8262,3542,087 “A” and “A1” Preference Shares (1) 513361 – Bank overdraft 353–– 7,969 7,5716,972 Note:(1) gross of unamortised transaction costs. The Group accounts for fixed rate instruments on an amortised cost basis and therefore a change in interest rates at the reporting date would not affect profit or loss. Fixed rate instruments include finance lease liabilities. Cash flow sensitivity analysis for variable rate instruments: an increase of 100 basis points in interest rates at the reporting date calculated on the closing balances, would have (decreased)/increased profit or loss by the amounts shown below. A decrease in interest rates will have an equal but opposite effect. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis was performed on the same basis for 2016 and 2015 and includes the impact of\ interest rate swap hedges. Profit/(loss) 100 bps change 2017 20162015 Rm Sensitivity analysis (74) (74)(42) Due to the volatility in balances during the 30 June 2017 financial year and its comparative years, the analysis is not representative of the exposure throughout the year. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-38 23.4 Capital management The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of its business. The Group monitors its capital on the basis of the Net Debt: Adjusted EBITDA r\ atio. Net Debt relates to the third party long-term loans as reflected in the statement of financial position adjusted for cash and cash equivalents. Adjusted EBITDA is Operating Profit as reflected on the statements of profit or loss and other comprehensive income for the year adjusted for depreciation and amortisation. The Net Debt: Adjusted EBITDA ratio maintained by the Group in the 30  June  2017, 30  June  2016 and 30  June  2015 financial years is as follows: 2017 20162015 Rm Net Debt is calculated as follows: Total loans and borrowings (excluding Shareholder Loans) (1) 4,8265,2194,885 Adjusted for: cash and cash equivalents (222)(135)(225) Net Debt 4,6045,0844,660 Adjusted EBITDA is calculated as follows: Operating profit 1,020989868 Depreciation 536597562 Amortisation 575954 Adjusted EBITDA 1,6131,6451,484 Debt: Adjusted EBITDA 2.853.093.14 Note:(1) Gross of unamortised transaction costs. 24. Fair values A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non- financial assets and liabilities. If third party information, such as broker quotes or pricing services is used to measure fair values, then the evidence obtained from the third parties is evaluated to support the conclusion that such valuations me\ et the requirements of IFRS, including the level in the fair value hierarchy in which such valuations should be classified. When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. Where inputs and valuation adjustments are unobservable, the Group determines fair value using other valuation techniques, including amongst others: net present values; discounted cash flow models; and comparisons with similar instruments for which market observable prices exist. The following table shows the valuation techniques used in measuring Lev\ el 2 and Level 3 fair values, as well as significant observable and unobservable inputs used. TYPE VALUATION TECHNIQUE OBSERVABLE INPUT Derivatives: Forward exchange contracts and interest rate swaps The fair value of foreign exchange contracts is marked to market by comparing the contracted forward rate to the present value of the current forward rate of an equivalent contract with the same maturity date. The fair value of interest rate swaps are based on broker quotes. Similar contracts are traded in an active market and the quotes reflect the actual transactions in similar instruments. Market interest rates and curves. Debt securities Discounted cash flows: The valuation model considers the present value of the expected payment, discounted using a risk-adjusted discount rate. Market interest rates and curves. Put option over NCI Discounted cash flows: The valuation model considers the present value of the expected payment, discounted using a risk-adjusted discount rate. Market interest rates. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-39 Reconciliation of Level 3 fair valuesPut liability over NCI “B” Preference Share 2017 20172016 Rm Balance at beginning of year –31 – Issue of “B” Preference Share ––30 Recognition of put option over NCI 50–– Recognised in profit or loss –24 1 Balance at end of year 505531 Sensitivity of fair values to reasonably possible alternative assumptions The fair value of financial instruments in Level 3 is measured using valuation techniques that incorporate assumptions that are not evidenced by prices from observable market data. The following table shows the sensitivity of \ these fair values to reasonably possible alternative assumptions, determined at a transactional level: At 30 June 2017 Carrying value Significant unobservable inputRange which unobservable input has been changed Favourable changes Unfavourable changes Rm Liabilities “B” Preference Share 55EBITDA (10%) – 10% (10)10 EBITDA multiple (0.5) – 0.5 (7)7 Put option over NCI 50EBITDA (10%) – 10% (6)6 Discount rate (2%) – 2% (5)6 25. Commitments 2017 20162015 Rm Commitments Capital commitments Capital expenditure 6469991 It is anticipated that this expenditure will be financed from borrowings and cash generated from operating activities. Guarantees for environmental rehabilitation Guarantees for the environmental rehabilitation made to the Department of Mineral Resources, in South Africa, on behalf of Group companies: 977 Operating leases: Non-cancellable operating lease rentals are payable as follows: – within one year 384531 – between two and five years 184337 56 8868 The Group leases a number of warehouses and equipment under operating lease agreements. These leases typically run for a period of one to five years, with an option to renew the lease after that date and interest/increases vary between 0% and prime. 26. The South African Revenue Service (SARS) audit During 2011, SARS commenced an income tax audit of Consol Holdings Proprietary Limited, Consol Glass Proprietary Limited and Old Consol in respect of the 2007 to 2016 years of assessment. The subject of the SARS audit was the expenditure incurred at the time of and subsequent expenditure which arose in respect of the 2007 private equity transaction in which Old Consol was de-listed an\ d its operations purchased by Consol Glass Proprietary Limited in terms of a scheme of arrangement. A dispute arose between SARS and Consol Glass Proprietary Limited as to the deductibility of such expenditure. For the year ended 30 June 2016 the matter was still ongoing and SARS had not concluded its finding\ s. Management was unable to determine whether SARS will issue a further assessment in respect of the SARS audit and had not made any provision in its financial statements. In addition, a deferred taxation asset for the assessed loss carried forward was recorded at 30  June  2016 as management was of the view that it had a strong justification for the taxation treatment followed by Consol Glass Proprietary Limited. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-40In terms of Part F of the Tax Administration Act No 28 of 2011, Consol Glass Proprietary Limited and SARS entered into a settlement agreement on 31 October 2017. Both parties agreed to settle the dispute by fully utilising the assessed loss as at 30 June 2016 and for Consol Glass Proprietary Limited to pay additional tax of R70 million plus interest from the effective date of the agreement to the date of payment on or before 31 July 2018. Consol Glass Proprietary Limited also paid R111 million in provisional taxation for the 2017 year of assessment on 30 November 2017 i\ n accordance with the settlement agreement. The settlement was recorded in the annual financial statements for the year ended 30 June 2017 as settlement negotiations with SARS were at an advanced stage and it was considered very likely that a settlement agreement would be reached within these parameters. Refer to notes 6 and 19. The settlement resulted in an increase in taxation to R302  million for the financial year ended 30  June  2017 in comparison to R69 million for the financial year ended 30 June 2016 and R20 \ million for the financial year ended 30 June 2015. 27. Going concern The Group recorded a loss after tax of R554 million during 30 June 2017 (2016: Profit after tax of R34 million; and 2015: Profit after tax of R63 million) primarily due to the following non-operating \ items in the year ended 30 June 2017: • Impairments of goodwill amounting to R304 million (as disclosed in note\ 3); • Black Economic Empowerment (BEE) share-based payment expense of R121 million (as disclosed in note 3); and • Taxation change in estimate in respect of prior years of R261 million (as disclosed in note 6). Furthermore, as at 30 June 2017, the Group’s total liabilities exceeded its total assets by R850 million (2016: to\ tal liabilities exceeded total assets by R223 million; and 2015: total liabilities excee\ ded total assets by R243 million). As at 30 June 2017, the directors made an assessment of the ability of the Company and its subsidiaries to continue as going concerns on the following basis: • the Shareholder Loans amounting to R4,249 million have been subordinated as disclosed in note 14; • the forecast operating cash flows for the twelve-month period from the date of the directors’ report are positive; • the availability of sufficient credit facilities as disclosed in note 23.2.1.1. During the latest reporting period, the six months ended 31 December 2017, the Group recorded a loss after tax of R119 million primarily due to the following items: • impairments on goodwill, intangible assets and property, plant and equipment amounting to R125 million; and • net finance expense of R614 million. Furthermore, as at 31  December  2017 the Group’s total liabilities exceeded its total assets by R1,077  million and its current liabilities exceeded its current assets by R2,267 million at 31 December 2017. The directors have made an assessment of the ability of the Company and its sub\ sidiaries to continue as going concerns on the following basis: • the South African loans and borrowings will be refinanced after negotiations with lenders (refer to note 15). • the shareholders loans amounting to R4,540  million as at 31  December  2017 are not repayable to shareholders within the next twelve months and have been subordinated as reflected in note 14. • the forecast operating cash flows for the twelve-month period from the dates of the periods and year presented are positive. • the availability of sufficient credit facilities which will be utilised for working capital management is\ as follows: Reviewed 6 months ended 31 December 2017 Rm Nedbank Limited 750 The Standard Bank of South Africa Limited 10 760 KESm Stanbic Bank Kenya Limited 200 NGNm Stanbic IBTC Bank Plc 750 Based on the above assessment the financial statements for the years ended 30 June 2017, 30 June 2016 and 30 June 2015 have been prepared on the basis of accounting policies applicable to a going concern which assumes it is highly probable that funds will be available to finance future operations through refinancing of the borrowings with the lenders prior to the maturity date, and that the realisation of assets and the settlement of liabilities will occur in the ordinary course of business. Should the refinancing not occur, this condition gives rise to a material uncertainty which may cast sig\ nificant doubt on the ability of the Company and its subsidiaries to continue as going concerns. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-41 28. Events after the reporting date Post-employment Medical AidEffective 1 January 2018, Consol Glass Proprietary Limited changed medical aid providers from a closed scheme to an open scheme. The company is obligated to continue contributing 50% of the med\ ical aid contributions of employees and retired members who joined the company prior to 1 October 1996. It is estimated \ that the change in medical aid schemes will result in a once off saving of approximating R20 million to the Group. There are no additional payments, cash flows and costs incurred to facilitate the transfer. Glassforce Minority AcquisitionConsol Glass Africa has concluded an agreement with the minority shareholders in Glassforce to acquire their remaining interests in Glassforce for an aggregate purchase price of $15 million, of which $7,5 million will be payable on the\ effective date of the transaction, with the balance, which does not accrue interest, being payable in three equal instalments on the three subsequent anniversaries of the effective date of the transaction. Consol Holdings Limited will guarantee \ the payment by Consol Glass Africa of the subsequent instalments of the purchase price. As at the Last Practicable Date, the suspensive conditions \ to which the sale agreement is subject had not yet been fulfilled, but Consol expects that th\ ose conditions will be fulfilled by the Listing Date, and that Consol Glass Africa will thus be the owner of 100% of the issued shares in Glassforce, by the Listing Date. The Historical Financial Information of the Group for the three years ended 30  June  2017 was approved by the Company on 12 April 2018 in accordance with a resolution of the Group’s Board of Directors adopted on 4 April 2018. The Company was converted from a private company to a public company on 13 April 2018. 29. Business combination As at 30 June 2017 Effective 16 December 2016, the Group acquired 86% of the shares and voting rights in Juniper Glass situated in the Federal Democratic Republic of Ethiopia thereby acquiring control of the company. The acquisition was effected by acquiring newly issued shares, thereby diluting the existing shareholders’ interest. The following summarises the major classes of consideration transferred, the recognised amounts of assets acquired and the liabilities assumed at the effective date (all amounts were translated from foreign currency to the presentation currency at the date when effective ownership passed): 2017 Rm Contribution made to Juniper Glass Cash 177 Loan 267 Total consideration 444 Identifiable assets acquired and liabilities assumed (pre-Consol contribution): Property, plant and equipment 3 Other receivables 2 Other payables (1) Loan payable (83) Total identifiable net assets/(liabilities) (79) Identifiable assets acquired and liabilities assumed (post-Consol contribution): 365 Goodwill Goodwill was recognised as a result of the acquisition as follows: – identifiable net assets acquired and liabilities assumed (post-Consol contribution) 365 – non-controlling interests* (51) 314 Contribution made (444) Goodwill 130 Cash flow on acquisition of subsidiary Contribution made 177 Contribution received (177) Total net cash flow on acquisition of subsidiary for the Group – * based on minority shareholders’ proportionate interest in the recognised amounts of the assets and liabilities acquired. Obtaining control of Juniper Glass will allow the Group to further expand its operations in East Africa in line with the Group’s expansion strategy. For the period ended 30 June 2017 Juniper Glass contributed a profit before tax of R4 million to the Group’s results arising mainly from foreign currency exchange gains. Juniper Glass has not started trading as it is stil\ l a greenfield project and in the process of constructing a new glass facility. Goodwill The goodwill is attributable mainly to gaining access to the East Africa\ n glass market and the synergies expected to be achieved from integrating the company into the Group’s existing glass manufacturing business. The R130 million of goodwill recognised is not expected to be deductible for tax purposes. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-42 As at 30 June 2016 Effective 1 October 2015, the Group acquired 100% of the shares and voting interests in CGK in the Republic of Kenya thereby acquiring control of the company. The following summarises the major classes of consideration transferred, the recognised amounts of assets acquired and the liabilities assumed at the acquisition date (all amounts wer\ e translated from foreign currency to the presentation currency at the date when effective ownership passed): 2016Rm Consideration transferred Cash 555 Short-term borrowings acquired 61 Short-term borrowings settled 20 636 Identifiable assets acquired and liabilities assumed: Property, plant and equipment 466 Intangible assets 56 Prepaid tax 12 Cash and cash equivalents 4 Inventories 29 Trade and other receivables 17 Trade and other payables (59) Deferred taxation (100) Total identifiable net assets 425 Goodwill Goodwill was recognised as a result of the acquisition as follows: Consideration transferred 636 Settlement of cash flow hedge on acquisition of subsidiary (26) 610 Identifiable net assets acquired and liabilities assumed (425) Goodwill 185 Cash flow on acquisition of subsidiary Consideration transferred 636 Cash and cash equivalents acquired (4) Settlement of cash flow hedge on acquisition of subsidiary (26) Total net cash flow on acquisition of subsidiary 606 Taking control of CGK will allow the Group to expand its operations into East Africa in line with the Group’s expansion strategy. For the nine months ended 30 June 2016, CGK contributed revenue of R230 million and profit before taxation of R22 million to the Group’s results. If the acquisition had occurred on 1 July 2015, management estimates that consolidated revenue would have been R331 million and consolidated profit before taxation would have been R24 million. In determining these amounts, management has assumed that the fair value adjustments, determined provisionally, that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 July 2015. The Group incurred acquisition-related costs of R22 million. These costs have been included in non-opera\ ting and capital items – please refer to note 3. Goodwill The goodwill is attributable mainly to gaining access to the East Africa\ n regional market, the skills and technical talent of CGKs’ workforce and the synergies expected to be achieved from integrating the company into the Group’s existing glass manufacturing business. R40 million of the goodwill recognised is expected to be deductible for tax purposes in 2016. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-43 As at 30 June 2015 During the 2015 financial year, the Group obtained control of Glassforce Limited, a glass packaging manufacturing operation situated in the Federal Republic of Nigeria, by acquiring 51% of the own\ ership and voting interests in the company with effect from 21 July 2014. The acquisition was considered to be strategic to grow the Group’s footprint in Africa. The following summarises the major classes of consideration transferred, the recognised amounts of assets acquired and the liabilities assumed at the acquisition date (all amounts were translated from Nigerian naira to the presentation currency at the date when effective ownership passed): 2015Rm Consideration transferred Cash 345 Short-term borrowings acquired 70 415 Identifiable assets acquired and liabilities assumed: Property, plant and equipment 223 Inventories 98 Trade and other receivables 55 Trade and other payables (70) Long-term borrowings (21) Taxation payable (1) Deferred tax arising on acquisition (14) Total identifiable net assets 270 Goodwill Goodwill was recognised as a result of the acquisition as follows: – identifiable net assets acquired and liabilities assumed 270 – non-controlling interests (98) 172 Consideration transferred (415) Goodwill 243 The identifiable assets acquired and liabilities assumed were taken from the accounts of the acquiree at the acquisition date. Valuation techniques The valuation techniques used for measuring the fair value of material a\ ssets acquired were as follows: Receivables and payablesThe fair value approximates the carrying amounts due to their short-term nature. Property, plant and equipmentThe valuation model was based on depreciated replacement cost. Depreciated replacement cost reflects adjustments for physical deterioration as well as functional and economic obsolescence. Intangible assets The valuation model was based on multi-period excess earnings method. The multi-period excess earnings method considers the present value of net cash flows expected to be generated by the customer r\ elationships, by excluding any cash flows related to contributory assets. Inventories The fair value of inventories acquired in a business combination is determined based on its estimated selling price in the ordinary course of business less the estimated cost of sale and a reasonable profit margin based on the effort required to sell the inventories. Trade and other receivables The fair value of trade and other receivables approximates their carrying amounts due to their short-term nature. Trade and other payables The fair value of trade and other payables approximates their carrying amounts due to their short-term nature. 30. Related parties Consol Holdings Proprietary Limited has no holding company. Subsidiaries, key management personnel and shareholders represented on the Board are considered to be related parties. Interest of directors in contracts The directors did not have any interest in any transaction of any significance with the Group. Subsidiaries Details of interest in principal subsidiaries are disclosed on page A-55. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-44 Shareholders Shareholders represented on the board of directors at 30 June 2017, 30  June 2016 and 30  June  2015 and their respective interests in the Group were as follows: Number of ordinary shares owned Percentage of ordinary shares owned including treasury shares “A” Shareholder loans “B” Shareholder loans including interest Interest accrued for the year 2017 Rm Brait Fund IV Entities 101,057,29229.70521914107 Old Mutual Life Assurance Company (South Africa) Limited 77,507,11622.78400701 82 Sanlam Life Insurance Limited 41,113,64512.08212372 43 Sphere Investments Two (RF) Proprietary Limited 34,024,11110.00172302 4 Number of ordinary shares owned Percentage of ordinary shares owned including treasury shares “A” Shareholder loans “B” Shareholder loans including interest Interest accrued for the year 2016 Rm Brait Fund IV Entities 101,057,29229.5521807 92 Old Mutual Life Assurance Company (South Africa) Limited 77,507,11622.6400619 70 Sanlam Life Insurance Limited 41,113,64512.0212328 37 Number of ordinary shares owned Percentage of ordinary shares owned including treasury shares “A” Shareholder loans “B” Shareholder loans including interest Interest accrued for the year 2015 Rm Brait Fund IV Entities 101,057,29229.5521715 75 Old Mutual Life Assurance Company (South Africa) Limited 77,507,11622.6400549 58 Sanlam Life Insurance Limited 41,113,64512.0212291 31 Key management personnel Key management personnel are directors and those executives having the authority and responsibility for planning, directing and controlling the activities of the Group. Details of key management personnel remuneration is disclosed in note 31. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-45 31. Directors’ remuneration and benefits Short-term benefits Post- employment benefits: Basic salary and allowances Bonuses Share based payment expense Pension contributions paid to pension scheme Total Name and designation Rm 2017 Paid by subsidiary of the Group M Arnold* 5.42.4 2.91.011.7 PJ Curnow* 3.21.3 2.90.27.6 K Nayager* 3.21.4 1.50.46.5 Total 11.85.1 7.31.625.8 2016 Paid by subsidiary of the Group M Arnold* 4.62.4 1.60.99.5 PJ Curnow # 3.11.3 1.60.26.2 K Nayager* 2.81.3 0.80.45.3 Total 10.55.0 4.01.521.0 2015 Paid by subsidiary of the Group M Arnold* 4.86.6 –0.8 12.2 BT Rodger # 2.56.7 –0.2 9.4 K Nayager* 2.83.2 –0.3 6.3 Total 10.116.5 –1.3 27.9 * Executive director: Represents key management personnel # Prescribed officer: Represents key management personnel Directors’ Fees 2017 20162015 Rm Non-executive directors: TP Bantock 0.30.30.3 QM Dicks 1.00.0 (1)– CI McDougall 0.50.30.3 CN Pongweni 0.2–– SV Zilwa 0.2–– Total 2.20.60.6 Note:(1) Less than R100 000. Directors and prescribed officers remuneration is for services rendered to Consol Holdings Proprietary Limited and its subsidiaries. Other than for the non-executive directors reflected in the above table, no other non-executive directors received any remuneration from any company within the Group for services rendered. The non-executive directors’ fees were paid by a subsidiary of the Group. Directors’ remuneration is only reflected from the date upon which an appointment commences and up to the date of resignation. Performance bonuses reflect amounts accrued in respect of the year to which the performance relates. None of the directors have fixed term employment contracts with the company. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-46 ACCOUNTING POLICIES The Historical Financial Information of the Group for the three years ended 30 June 2017, 30 June 2016 and 30 June 2015 comprise the \ Company and its subsidiaries (together referred to as “the Group” and individually as “Group entities”). The accounting policies set out below have been applied consistently to \ all periods presented. 1. Basis of preparation The Historical Financial Information of the Group has been prepared using a combination of the historical cost and fair value basis of accounting. 1.1 Prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations of those standards as issued by the International Accounting Standards Board (IASB) and the South African Institute of Chartered Accountants (SAICA). Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council. Listings Requirements Going concern assumption 1.2 Functional currency of parent and presentation currency of the Group South African Rand. 1.3 Rounding principles Million, except where otherwise indicated. Amounts below R500  000 are rounded down and are presented as 0 and above R500  000 are rounded upWhere the presented disclosure has no value in the current or prior year, this is presented as a dash 1.4 Foreign currency transactions In the Historical Financial Information of the Group, transactions are translated into the respective functional currencies of Group companies applying the following principles: Monetary assets and liabilities Translated at the closing rates at the reporting date. The foreign currency gain or loss on these monetary items is the difference between amortised cost in the functional currency at the beginning of the period adjusted for effective interest and payments during the period and the amortised cost in foreign currency translated at the exchange rates at the end of the reporting period. Non-monetary assets and liabilities Non-monetary items that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Income and expenses Translated at exchange rates at the dates of the transactions or, where exchange rates did not fluctuate significantly, at the average exchange rates for the period. Foreign currency differences Generally recognised in profit or loss, except for differences on qualifying cash flow hedges, to the extent they are effective, which are recognised in other comprehensive income. Foreign exchange differences are recognised in operating expenses other than those relating to loans and borrowings which are recognised in finance income or expense. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-47 2. Significant accounting policies Included below is a summary of the significant accounting policies appli\ cable to the consolidated financial statements. 2.1 Revenue, other income and expenses 2.1.1 Revenue from sale of goods Revenue stream DescriptionBasis of recognitionMeasurement Glass products Sale of glass containers to customers in various sectorsRevenue from the sale of goods is recognised in profit or loss when persuasive evidence that risk and rewards of ownership have been transferred, usually in the form of an executed sale agreement.Fair value of the consideration received or receivable net of returns, allowances, trade discounts and VAT. Sand products Sale of mineral sands to various industrial and commercial customers 2.1.2 Expenses 2.1.2.1 Employee benefits 2.1.2.1.1 Short-term employee benefits Includes: Salaries and wages; contributions paid on behalf of employees; paid annual leave; paid sick leave; bonuses and non-monetary benefits. Accounting treatment: Short-term employee benefits are expensed as the related service is provided. They are measured on an undiscounted basis and are recognised as an employee costs in profit or loss. A liability is recognised for the amount expected to be paid. 2.1.2.1.2 Post-employment benefits Defined benefit plan Post-employment medical aid defined benefits are provided to qualifying current and retired employees. The calculation of the defined benefit obligation is perfo\ rmed annually by a qualified actuary using the projected unit credit method. Actuarial valuations are based on assumptions which include employee turnover, mortality rates, life expectancy rates, discount rates, medical inflation and rates of increase in compensation. Post-employment benefits The post-employment medical aid liability for Consol Glass Proprietary Limited relates to a commitment to pay a portion of members’ post-employment medical scheme contributions. Accounting treatment: The Group’s net obligation in respect of post-employment medical aid liability plans is actuarially calculated by estimating the amount of future benefits that employees have earned in return for their service in the current and prior periods, and discounting that. When the benefits of a plan are changed, or when a plan is curtailed, the resulting change in benefit that relates to the past service or gain or loss on curtailment is recognised immediately in profit or loss. The Group recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs. Defined contribution plan Post-employment benefitsThe Group provides retirement benefits for its eligible employees. All permanent employees are required to be members of either a pension or a provident fund, depending on their preference, which are defined contribution funds. South African funds are governed by the Pension Funds Act, 1956, as amended. Other funds are governed by the respective legislation of the country concerned. Accounting treatment: Obligations for contributions to defined contribution plans are expensed as the related service is provided. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-48 2.1.2.1.3 Other long-term benefits The Group’s net obligation in respect of long-term employee benefits, other than post-employment and pension plans, is the amount of future benefits that employees have earned in return for their services in the current and prior periods. That benefit is discounted to determine its present value. 2.1.2.1.4 Share-based payments The grant-date fair value of equity-settled share-based payment awards granted to employees is recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes. The fair value of the amount payable to employees in respect of share appreciation rights, which are settled in cash, is recognised as an expense with a corresponding increase in liabilities, over the period that the employees unconditionally become e\ ntitled to payment. The liability is measured at fair value at each reporting date and at settlement date. Any changes in the fair value of the liability are recognised as employee costs in profit or loss. Black Economic Empowerment (BEE) transactionsBEE transactions where the Group receives or acquires goods or services as consideration for the issue of equity instruments of the Group are treated as share-based payment transactions. BEE transactions where employees are involved are measured and accounted for on the same basis as share-based payments as disclosed above. Transactions in which share-based payments are made to parties other than employees are measured by reference to the fair value of equity instruments granted if no specific goods or services are received. Vesting of the equity instruments occurs immediately and an expense and related increase in equity is recognised on the date that the instrument is granted. No further measurements or adjustments are required as it is presumed the BEE credentials are received upfront. Incremental costs that are directly associated with the BEE transaction are expensed immediately in the determination of profit or loss. 2.1.2.1.5 Termination benefits Termination benefits are recognised as an expense on the earlier of when the company can no longer withdraw the offer of these benefits or when the company recognises cost for a restructuring. If the benefits are payable more than 12 months after the reporting date, they are discounted to their present value. 2.2 Consolidation Subsidiaries are entities controlled by the Group. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The Group also considers the following facts and circumstances in assessing whether it has power over an entity: (a) rights arising from contractual arrangements; and (b) the Group’s voting rights and potential voting rights. The Group reassesses whether or not it controls an entity if facts and circumstances indicate changes to the elements of control. The Group accounts for business combinations using the acquisition method when\ control is transferred to the Group. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired at the acquisition date. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities. Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay a c\ ontingent consideration that meets the definition of a financial instrument is cla\ ssified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent\ consideration are recognised in profit or loss. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-49 2.2.1 Subsidiaries Subsidiaries The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Non-controlling interest (NCI) NCI are measured at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition, or at its fair value. The measurement distinction is made by the Group on a combination by combination basis. Changes in interests without a loss in control When there is a change in the interest in a subsidiary after control is obtained that does not result in a loss in control, the difference between the fair value of the consideration transferred and the amount by which the non-controlling interest is adjusted is recognised directly in the statement of changes in equity (in the premium on non-controlling interest reserve). No goodwill is recognised on such transactions. Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated on consolidation. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. 2.2.2 Translation for foreign operations Foreign currency differences The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into Rands at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into Rands at the average exchange rates for the period. Foreign currency differences on translation of foreign operations are recognised in other comprehensive income and accumulated in a foreign currency translation reserve, except to the extent that the translation differences are allocated to non- controlling interests (NCI). 2.3 Operational assets 2.3.1 Property, plant and equipment Categories Initial measurementSubsequent measurement Depreciation method Land and buildings Plant and machinery Office equipment and motor vehicles Moulds Assets under construction Cost Cost less accumulated depreciation and accumulated impairment Land and assets under construction are not depreciated. All other assets are depreciated on a straight-line basis over their estimated useful lives to their estimated residual value, other than moulds which are depreciated based on the units of production method. 2.3.2 Goodwill and intangible assets Categories Initial measurement and recognition Subsequent measurement Amortisation method Goodwill CostCost less accumulated impairments Not amortised. Trade names Key customer and non-key customer relationships Cost including transaction cost Cost less accumulated amortisation and accumulated impairment Straight-line basis over the estimated useful lives. 2.3.3 Inventories Category Description Measurement basis Raw materials Materials used in the manufacturing process. Lower of cost and net realisable value. Cost is determined using the weighted average method. Consumables Consumables used in the manufacturing process. Lower of cost and net realisable value. Cost is determined using the weighted average method. Finished goods Completed manufactured and purchased goods. Lower of cost and net realisable value. Cost is determined using standard costing rates, which approximate actual cost. Packaging material Packing materials used in the manufacturing process to package finished goods. Lower of cost and net realisable value. Cost is determined using the weighted average method. Net realisable value is determined with reference to the price per firm sale contract, where applicable, or the open market selling price of the inventory items concerned. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-50 2.3.4 Leases Finance lease Initial measurement and recognition Subsequent measurement Depreciation method Assets The leased assets are measured initially at an amount equal to the lower of their fair value and the present value of the minimum lease payments. Cost less accumulated depreciation and accumulated impairment. Assets held under finance leases are depreciated over their expected useful lives, or where shorter, the lease term, on the same basis as owned assets. Liabilities Lease liabilities are recognised in the statement of financial position at amounts equal to the fair value of the leased asset or, if lower, the present value on the minimum lease payments. At amortised cost using the effective interest method. Operating leases Rentals payable and receivable under operating leases are recognised in profit or loss on a straightline basis over the term of the relevant lease. 2.4 Financial instruments The classification of financial instruments is dependent on the purpose \ for which the financial instrument is acquired. Management determines the classification of its financial instruments at\ the time of the initial recognition. The Group initially recognises loans and receivables, debt securities issued and subordinated loans on the date that they are originated. All other financial assets and financial liabilities are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial asset when the contractual rights to the cash flow\ s from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability. The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire. When entering into a transaction, the financial instrument is recognised initially at the transaction price which is generally the best indicator of fair value. Where the fair value of the financial instrument is different from the transaction price, a day-one gain or loss may arise. The day-one gain or loss is immediately \ recognised in profit or loss within finance income or finance expense provided that the fair value has been determined based on market-observabl\ e data. If the fair value has not been determined solely based on market-observable data, the day-\ one gain or loss is deferred in the statement of financial position and amortised over the term of the instrument in p\ rofit or loss. 2.4.1 Financial assets Classification Instruments included in the classification and the criteria for classification Initial measurementSubsequent measurement Loans and receivables Long-term receivables, trade and other receivables and cash and cash equivalents. Fair value plus directly attributable transaction costs.Amortised cost using the effective interest method, less impairment. 2.4.2 Impairment Financial assets, other than those classified at fair value through profit or loss, are assessed at each reporting date to determine whether there is any objective evidence that they are impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more loss events have occurred and have had a negative effect on the estimated future cash flows of that asset. Such impairment loss is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Criteria the Group uses to determine if there is objective evidence that an impairment loss has occurred (including measurement) Loans and receivables Significant financial difficulties, probability that the company will enter bankruptcy or financial reorganisation, or default or delinquency in payments, are considered as objective evidence of impairment. Trade and other receivables An estimate of any impairment is made to an allowance account on significant individual receivables. Objective evidence that the collection of the full amount under the original terms of the invoice is no longer probable would include indicators such as probable insolvency or significant difficulties in the debtor e.g. delinquency or default experienced by the debtor. Impaired debts are derecognised when they are assessed as uncollectible. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-51 2.4.3 Financial liabilities Classification Instruments included in the classification and the criteria for classification Initial measurement Subsequent measurement Financial liabilities at amortised cost Loans and borrowings, shareholder loans, short- term borrowings, trade and other payables, “A” Preference Share liabilities and bank overdraft. Fair value less directly attributable transaction costs. Amortised cost using the effective interest method. Financial liabilities at fair value through profit or loss “B” Preference Share (Hybrid instrument). Entire hybrid instrument is designated at fair value through profit or loss due to the inclusion of an embedded derivative. Directly attributable costs are expensed in profit or loss. Fair value through profit or loss. Financial liabilities at fair value through equity Put liability over NCI. Present value of the amount that could be required to be paid to the counterparty. Fair value through equity. 2.4.4 Hedge accounting and associated derivatives Hedge accounting The Group holds derivative financial instruments to hedge its foreign currency and interest rate exposures. The Group does not hold or issue derivative financial instruments for trading purposes. Cash flow hedges When a derivative instrument is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognised in other comprehensive income and accumulated in the cash flow hedging reserve. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in profit or loss. For the hedge of a forecast transaction that subsequently results in the recognition of a non-financial item, the Group has elected to remove these gains or losses from other comprehensive income and include them in the initial cost of the non-financial item. The Group has elected to view the hedge of the purchase of a business as a hedge of a non-financial item, as the Group views these transactions as the acquisition of various assets and liabil\ ities, not the acquisition of the shares in an entity. If the forecast transaction is no longer expected to occur, the hedge no longer meets the criteria for hedge accounting, the hedging instrument expires or is sold, terminated or exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. If the forecast transaction is no longer expected to occur, then the amount accumulated in equity is reclassified to profit or loss. Derivatives Derivatives (other than those designated for hedging purposes) are recognised initially at fair value. Subsequent to initial recognition, derivatives are measured at fair value and changes therein are recognised in profit or loss. 2.4.5 Finance income and finance expenses Category Description Accounting basis Finance income Interest on bank balances Present value adjustments to loans Interest rate swap gains The effective interest method. Exchange differences on foreign denominated loans Finance expense Interest payable on borrowings, finance leases, Preference Shares, overdrafts and postemployment medical aid benefits The effective interest method. Exchange differences on foreign denominated loans Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-52 2.4.6 Cash and cash equivalents Cash and cash equivalents comprise cash balances with original maturitie\ s of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of \ the statement of cash flows. 2.4.7 Offset Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. 2.4.8 Put liability over NCI Where the Group writes a put option over the equity of a subsidiary, a gross obligation (put option financial liability) is recognised in the consolidated financial statements at an amount equal to the present value of the amount that could be required to be paid to the counterparty. The corresponding debit is presented separately within equity as a deduction from the accumulated loss reserve attributable to the owners of the company. Subsequently, the put option financial liability is measured at fair value and changes in the measurement are recognised directly in equity attributable to the owners of the company. 2.5 Capital reserves 2.5.1 Share capital Share capital issued by the company is classified as equity, and recorded at the proceeds received, net of issue costs. When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, net of any taxation effects, is recognised as a deduction from equity. Dividends declared to equity holders are included in the statement of changes in equity in the year in which they are declared. 2.5.2 Treasury shares When shares are held in the Group, through subsidiary entities, reducing the Group’s share capital, those equity instruments, held at cost (treasury shares), are presented as a deduction against the Group’s equity. No gain or loss is recognised in the statement of profit or loss and other comprehensive income. The share capital is reduced for the par value of the shares and the balance against the share premium. Repurchased shares not cancelled are classified as treasury shares and presented as a deduction from total equity. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to or from accumulated loss. 2.5.3 Foreign currency translation reserve The foreign currency translation reserve comprises the effect of translating foreign subsidiaries to the presentation currency. 2.5.4 Cash flow hedging reserve The cash flow hedging reserve comprises the accumulated effect of the effective part of any changes in the fair value of a cash flow hedging instrument. 2.5.5 Share-based payment reserve The share-based payment reserve comprises the accumulated effect of equity-settled share-based payments in terms of employee share schemes and BEE transactions. 2.6 Provisions Provisions are determined by discounting the expected future cash flows at a pre-taxation rate that reflects current market assessment of the time value of money and the risks specific to t\ he liability. Environmental Estimating the future costs of environmental and rehabilitation obligations is complex and requires management to make estimates and judgements as most of the obligations will be fulfilled in\ the future and contracts and laws are often not clear regarding what is required. The resulting provisions are influenced further by changing technologies and political, environmental, safety, business and statutory considerations. In accordance with the Group’s environmental policy and applicable legal requirements, a provision for site restoration in respect of mined land, and the related expense, is recognised when the land is mined. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-53 2.7 Taxation Taxation comprises current taxation and deferred taxation. Taxation is recognised in profit or loss except to the extent that it relates to items recognised directly in equity or in other comprehensive income, in which case it is recognised in equity or in other comprehensive income, respectively. Current taxationCurrent taxation is the calculated taxation payable on the taxable income fo\ r the period using taxation rates enacted or substantively enacted at the reporting date and any adjustments to taxation payable in respect of prior years. Deferred taxationDeferred taxation is recognised in respect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and their taxation bases. Deferred taxation is calculated using taxation rates enacted or substantively enacted at the reporting date that are expected to apply when the asset is realised or liability settled. Deferred taxation is not provided on temporary differences relating to: • the initial recognition of goodwill; • the initial recognition (other than in a business combination) of an asset or liability to the extent that neither accounting nor taxable profit is affected on acquisition; and • investments in subsidiaries to the extent they will probably not reverse in the foreseeable future. The measurement of deferred taxation reflects the taxation consequences that would follow the manner in which \ the company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. In the event that the applicable taxation rate(s) are changed from those applied in the comparative financial reporting period, the opening balance of the deferred taxation is adjusted for the change in the taxation rates. Deferred taxation assets and liabilities are offset if there is a legally enforceable right to offset current taxation liabilities and assets and they relate to income taxation levied by the same authority on the same taxable entity, or on different taxation entities, but they intend to settle current taxation liabilities and assets on a net basis or their taxation assets and liabilities will be realised simultaneously. A deferred taxation asset is recognised to the extent that it is probable that future taxable profits will be available against which the deferred taxation asset can be realised. Deferred taxation assets are reduced to the extent that it is no longer probable that the related taxation benefit will be realised. 2.8 Deferred income Income received prior to delivery occurring is included in deferred income and is recognised in profit or loss on a systematic basis when the revenue recognition criteria are met. 2.9 Definitions Operating profit is defined as profit/(loss) attributable to equity holders for the period/year before non-operating and capital items, taxation and net finance expense. Non-operating items include insurance claims received and related asset writedowns; profit or loss or on disposal of property, plant and equipment, and other items not deemed to be operating in nat\ ure. Capital items include impairments and, where applicable, impairment reversals of property, plant and equipment, goodwill, intangible assets and other receivables. Adjusted EBITDA is defined as profit/(loss) attributable to equity holders for the year adjusted for: taxation; net finance expense; non-operating and capital items; depreciation and amortisation. Adjusted EBITDA is a non IFRS measure that is presented to provide users of the financial statements with additional financial information that is regularly reviewed by management and should not be viewed in isolation or as an alt\ ernative to the equivalent IFRS measure. Adjusted EBITDA is not uniformly defined by all companies. Accordingly, it may not be comparable with similarly titled measures and disclosures by other companies. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-54 3. Accounting standards and interpretations in issue but not yet effective At the date of authorisation of the financial statements for the year en\ ded 30 June 2017, the following Standards and Interpretations relevant to the business of the Group were in issue but not yet effective. These will be adopted in the period that they become mandatory unless otherwise indicated. Standard and Interpretation Effective date for the group periods beginning on Impact assessment IFRS 15 Revenue from contracts with customers IFRS 15 requires entities to recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to, in exchange for those goods or services through a five step methodology. 1 July 2018 The Group has initiated a process to determine the impact of the standards on the Group’s statement of financial position and performance. Until the process has been completed, the Group is unable to quantify the expected impact. IFRS 9 Financial Instruments A finalised version has been issued which replaces IAS 39. The completed standard comprises guidance on Classification and Measurement, Impairment, Hedge Accounting and Derecognition. This standard may have a significant impact on the Group, which will include changes in the measurement bases of the Group’s financial assets to amortised cost, fair value through other comprehensive income or fair value through profit or loss. Even though these measurement categories are similar to IAS 39, the criteria for classification into these categories are significantly different. In addition, the IFRS 9 impairment model has been changed from an “incurred loss” model from IAS 39 to an “expected credit loss” model, which is expected to increase the provision for bad debts recognised by the Group. 1 July 2018 The Group has initiated a process to determine the impact of the standards on the Group’s statement of financial position and performance. Until the process has been completed, the Group is unable to quantify the expected impact. IFRS 16 Leases IFRS 16 replaces the previous leases Standard, IAS 17 Leases, and related Interpretations. It sets out the principles for the recognition, measurement, presentation and disclosure of leases. 1 July 2019 The Group has initiated a process to determine the impact of the standards on the Group’s statement of financial position and performance. Until the process has been completed, the group is unable to quantify the expected impact. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-55 Group structure Consol Holdings Proprietary Limited Legend: Business Venture Investments No.3001 (RF) Proprietary Limited South Africa Name Principal place of business Effective o wnership interest in 2017 Effective o wnership interest in 2016 Nature of business The Consol Holdings Staff Trust 100% 100% The Consol Holdings Executive Trust A Investment Holding The Consol Holdings Executive Trust B (Dormant) The Consol Mining Staff Trust Business Venture Investments No.1840 Proprietary Limited South Africa South Africa 100% 100% 100% 100% Incentiv e Holding Investment Holding 70% 30% Consol Proprietary Limited Consol Glass Proprietary Limited Consol Glass Africa Proprietary Limited Conhage Proprietary Limited Coninice Proprietary Limited South Africa South Africa South Africa South Africa South Africa 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Non-operating Glass manufacturing Investment Holding Non-operating Non-operating 70% 30% Silica Quartz Proprietary Limited Consol Properties Proprietary Limited Juniper Glass Industries Share Company Consol Glass Kenya Limited Glassforce Limited South Africa South Africa Ethiopia Kenya Nigeria 100% 100% 100% 100% 86% – 100% 100% 51% 51% Sand mining company Non-operating (Deregistered April 2017) Greenfield – Glass manufacturing Glass Manufacturing Glass manufacturing Unconsolidated structured entities Opiconsivia Trading 249 Proprietary Limited is a dormant structured entity formed in connection with the financing arrangements and provides guarantees to the Lenders and Hedging Counterparties of Consol Gl\ ass Proprietary Limited. Refer to note 23.2. Dormant entities Entities with no operations are classified as dormant and are not presented in the above group organogram. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP (CONTINUED) A-56 ANNEXURE 2A INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP FOR THE YEARS ENDED 30 JUNE 2017 AND 30 JUNE 2016 The Directors Consol Holdings Limited Consol House Osborn Road Wadeville Germiston 1428 INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP The definitions in Annexure 20 of this Pre-listing Statement apply mutatis mutandis to this report. Introduction At your request, and for the purposes of the Pre-listing Statement, we have audited the historical financial informatio\ n of the Group for the years ended 30 June 2017 and 30 June 2016 presented in the Historical Financial Information of the Group (as presented in Annexure 1 to this Pre-listing statement) for the three years ended 30 June 2017, 30 June 2016 and 30 June 2015 (“Histori\ cal Financial Information of the Group”). Consol Holdings Proprietary Limited will be renamed Consol Holdings Limited. The consolidated statements of financial position as at 30 June 2017 and\ 30 June 2016, the consolidated statements of profit or loss and other comprehensive income, consolidated statements of changes in equity and consol\ idated statements of cash flows for the years ended 30 June 2017 and 30 June 2016, a summary of significant acco\ unting policies and notes thereto is included in the Historical Financial Information of the Group, as presented in Annexure 1 to the Pre-listing Statement, and is prepared in compliance with IFRS and the Listings Requirements. The directors of Consol (“Directors”) are responsible for the preparation of the Historical Financial Information. The Directors are responsible for the compilation, contents and preparation of the Pre-listing Statement including the Historical Financial Information for the two years ended 30 June 2017 and 30 June 2016 which forms part of th\ e Historical Financial Information of the Group in accordance with IFRS and the Listings Requirements. KPMG Inc. is the independent auditor and the independent reporting accountant to Consol. Part A – Historical Financial Information for the year ended 30 June \ 2017 Independent Reporting Accountant’s Audit Report on the Historical Financial Information Opinion We have audited the Historical Financial Information, which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year ended 30 June 2017, including a summary of significant accounting policies and the notes thereto, which forms part of the Historical Financial Information of the Group as presented in Annexure 1 to the Pre-listing Statement (collectively the “Historical Financial Information for th\ e year ended 30 June 2017”). In our opinion, the Historical Financial Information for the year ended 30 June 2017, which forms part of the Historical Financial Information of the Group as presented in Annexure 1 to the Pre-listing Statement, presents fairly, in all material respects, for the purpose of the Pre-listing Statement, the consolidated financial position of Consol at 30 June 2017 and its consolidated financial performance and consolidated cash flows for the year then ended in accordance with IFRS and the Listings Requirements. Basis for OpinionWe conducted our audit in accordance with International Standards on Auditing (“ISAs”). Our responsibilities under those standards are further described in the Independent Reporting Accountant’s Responsibilities for the Historical Financial Information section of our report. We are independent of Consol in accordance with the Independent Regulatory Board for Auditors Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performing audits of financial statements in South \ Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent with t\ he International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our unqualified opinion on the Historical Financial In\ formation for the year ended 30 June 2017. Material Uncertainty Relating to Going ConcernWe draw attention to Note 27 of the Historical Financial Information, as set out in Annexure 1 to the Pre-listing Statement, which indicates that the Group incurred a loss after tax of R554 million during the year ended 30 June 2017 and, as of that date, the Group’s total liabilities exceeded its total assets by R850 million. As stated in Note 27, should \ the continued refinancing of borrowings with lenders not occur prior to the maturity date, a material uncertainty exists that may cast \ significant doubt on the Company and its subsidiaries ability to continue as going concerns. Our opinion is not modified in respect of this matter. A-57 Key Audit MattersKey audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Historical Financial Information of the Group of the current period. These matters were addressed in the context of our audit of the Historical Financial Information of the Group as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material Uncertainty Relating to Going Concern section, we have determined the matters described below to be the key audit matters to be communicated i\ n our report. Assessment of the carrying value of cash generating units of the African\ operations (Kenya, Nigeria and Ethiopia) Refer to note 8 to the Historical Financial Information of the Group and the “Accounting estimates, judgements and assumptions”. The key audit matter How the matter was addressed in our audit On an annual basis, as required by IAS 36 Impairment of Assets, the Group performs impairment assessments in respect of cash generating units (CGUs), specifically those containing goodwill, as well as any other CGUs where impairment indicators exist. Impairment indicators were prevalent in the African operations, particularly Kenya, Nigeria and Ethiopia. The Group has assessed the recoverable amount of these CGUs utilising discounted cash flow models which incorporate significant judgements relating to the assumptions applied, particularly: v discount rates; v terminal growth rates; v sales growth; and v operating margins. We focused on this area as a key audit matter due to the fact that the Group’s assessment of whether or not goodwill was impaired, and the level of impairment to be recorded, if applicable, involved subjective judgements and assumptions about the future performance of the Group’s African operations. The Group has recorded an impairment in respect of goodwill amounting to R 304 million of which R125 million relates to the Kenyan operation, R59 million to the Nigerian operation and R120 million to the Ethiopian operation. In conjunction with KPMG valuation experts, our procedures included, amongst others: – Evaluating the appropriateness of methodology used by the Group in respect of the discounted cash flow model used to determine the recoverable amounts of the CGUs with reference to the applicable financial reporting standard. – Critically assessing the appropriateness of the key assumptions applied by management by corroborating market related assumptions (discount rates and terminal growth rates) to external data sources and corroborating internally derived assumptions (sales growth and operating margins) to approved budgets and forecasts. Furthermore, we challenged management on the appropriateness of the assumptions applied based on our knowledge of the Group and the industry and with reference to historic and current trading performance and market conditions. – Performing sensitivity analyses to consider the impact of changes in key assumptions and estimates on the recoverable amount and the impact on the impairment assessment of the CGUs. – Evaluating the appropriateness of the relevant disclosures in the Historical Financial Information of the Group. Recognition and measurement of the put liability over the non-controlling interest arising on acquisition of Juniper Glass Industries SC Put liability over NCI - R50 million Refer to Note 24 to the Historical Financial Information of the Group and the “Accounting estimates, judgements and assumptions”. The key audit matter How the matter was addressed in our audit The Group acquired a controlling interest in Juniper Glass Industries SC (Juniper) for R444 million with the aim of developing and constructing a glass factory in Ethiopia. In terms of the Shareholders’ Agreement, the Group can exercise a call option and the non-controlling interest (Debre Birhan Glass Holdings Limited (DBGH)) can exercise a put option in respect of one third of DBGH’s shareholding after each of the fifth, sixth and seventh anniversaries of the commissioning of the glass factory. The option price is calculated based on a fixed formula detailed in the Shareholders’ Agreement. We focused on this area as a key audit matter because of the judgement involved in: – the selection of the accounting policy given that IFRS does not provide clear guidance on whether to recognise the non- controlling interest (NCI) when there is a put option over the NCI; and – the subsequent measurement of the put liability which is subjective as it is based on the Group’s estimate of the future performance of Juniper. In conjunction with KPMG accounting and valuation experts, our procedures included, amongst others: – Reading and understanding the key terms and conditions in the associated Sale and Shareholders’ Agreements related to the acquisition of the controlling interest in Juniper including the put option. – Evaluating the appropriateness of the accounting policy applied by the Group with respect to the recognition of the NCI and the recording of fair value changes relating to the put liability over NCI to ensure the policy selected is appropriate and permissible in terms of IFRS and published guidance of KPMG. – Challenging the Group’s determination of the fair value of the put liability by understanding the forecast performance of Juniper in determining the fair value and assessing the appropriateness of the assumptions applied on the same basis as set out in the key audit matter above. – Assessing the appropriateness of the relevant disclosures in the Historical Financial Information of the Group. A-58 Responsibilities of the Directors for the Historical Financial Information for the year ended 30 June 2017The Directors are responsible for the preparation and fair presentation of the Historical Financial Information for the year ended 30 June 2017 in accordance with the IFRS and the Listings Requirements, and for such internal control as the Directors determine is necessary to enable the preparation of Historical Financial Information that is free from material misstatement, whether due to fraud or error. In preparing the Historical Financial Information for the year ended 30 June \ 2017, the Directors are responsible for assessing the ability of Consol to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate Consol or to cease operations, or have\ no realistic alternative but to do so. Independent Reporting Accountant’s Responsibilities for the Historical Financial Information for the year ended 30 June 2017 Our objectives are to obtain reasonable assurance about whether the Historical Financial Information f\ or the year ended 30 June 2017 is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an a\ udit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken\ on the basis of this Historical Financial Information for the year ended 30 June 2017. As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the Historical\ Financial Information for the year ended 30 June 2017, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material miss\ tatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Consol’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors. • Conclude on the appropriateness of the Directors use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ab\ ility of Consol to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our independent reporting accountant’s report to the related disclosures in the Historical Financial Information for the year ended 30 June 2017 or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our independent reporting accountant’s report. However, future events or conditions may cause Consol to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the Historical Financial Information for the year ended\ 2017, including the disclosures, and whether the Historical Financial Information for the year ended 2017 represents the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities wi\ thin Consol to express an opinion on the Historical Financial Information for the year ende\ d 2017. We are responsible for the direction, supervision and performance of the Consol audit. We remain solely responsible for our audit opinion. We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and\ significant audit findings, including any significant deficiencies in internal control that we identify during our audit. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the Historical Financial Information of the current period and are therefore the key audit matters. We describe these matters in our independent reporting accountant’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Part B – Historical Financial Information for the year ended 30 June \ 2016 Independent Reporting Accountant’s Audit report on the Historical Financial informationWe have audited the Historical Financial Information of Consol, which com\ prises the consolidated statement of financial position as at 30 June 2016, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year ended 30 June 2016, including a summary of significant accounting policies and the notes thereto which forms part of the Historical Financial Information of the Group as presented in Annexure 1 to the Pre-listing Statement (collectively the “Historical Financial Information for th\ e year ended 30 June 2016”). Responsibilities of the Directors for the Historical Financial Information for the year ended 30 June 2016The Directors are responsible for the preparation and fair presentation of the Historical Financial Information for the year ended 30 June 2016 in accordance with the IFRS and the Listings Requirements, and for such internal control as the directors of Consol determine is necessary to enable the preparation of Historical Financial Information for the year ended 30 June 2016 that is free from material misstatement, whether due to fraud or error. A-59 Independent Reporting Accountant’s Responsibilities for the Historical Financial Information for the year ended 30 June 2016 Our responsibility is to express an opinion on the Historical Financial Information for the year ended 30 June 2016 based on our audit. We conducted our audits in accordance with ISA’s. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Historical Financial Information f\ or the year ended 30 June 2016 is free from material misstatement. Scope of audit An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Historical Financial Information for the year ended 30 June 2016. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Historical Financial Inform\ ation for the year ended 30 June 2016, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the Historical Financial Information for the year ended 30 June 2016,\ in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the Historical Financial Information for the year ended 30\ June 2016. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion on the Historical Financial Information for the year ended 30 June 2016 In our opinion, the Historical Financial Information for the year ended \ 30 June 2016, which forms part of the Historical Financial Information of the Group as presented in Annexure 1 to the Pre-listing Statement, presents fairly, in all material respects, for the purpose of the Pre- listing Statement, the consolidated financial position of Consol as at a\ nd for the year ended 30 June 2016 and its consolidated financial performance and its consolidated cash flows for the year then ended in a\ ccordance with IFRS and the Listings Requirements. KPMG Inc. Registered Auditor Yusuf Abed Director Registered Auditor 12 April 2018 KPMG Crescent 85 Empire Road Parktown 2193 (Private Bag 9, Parkview, 2122) A-60 ANNEXURE 2B INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP FOR THE YEAR ENDED 30 JUNE 2015 The Directors Consol Holdings Limited Consol House Osborn Road Wadeville Germiston 1428 INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF THE GROUP The definitions in Annexure 20 of the Pre-listing Statement apply mutatis mutandis to this report. IntroductionAt your request, and for the purposes of the Pre-listing Statement, we have audited the historical financial informatio\ n of the Group for the year ended 30 June 2015 presented in the Historical Financial Information of the Group (as presented in Annexure 1 to this Pre-listing Statement) for the three years ended 30 June 2017, 30 June 2016 and 30 June 2015 (the “His\ torical Financial Information of the Group”). Consol Holdings Proprietary Limited will be renamed Consol Holdings Limited. The consolidated statement of financial position as at 30 June 2015, the\ consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated sta\ tement of cash flows for the year ended 30 June 2015, a summary of significant accounting policies and notes thereto (collectively “the Historical Financial Information for the year\ ended 30 June 2015”) is included in the Report of Historical Financial Inf\ ormation of the Group, as presented in Annexure 1 to the Pre-listing Statement, prepared in compliance with IFRS and the Listings Requirements. The directors of Consol (“Directors”) are responsible for the preparation of the Historical Financial Information for the year ended 30 June 2015. The Directors are responsible for the compilation, contents and preparation of the Pre-listing Statement including the Historical Financial Information for the year ended 30 June 2015, wh\ ich forms part of the Report of Historical Financial Information of the Group, in accordance with IFRS and the Listings Requirements. KPMG Inc. is the independent auditor and the independent reporting accountant to Consol. Independent Reporting Accountant’s Audit Report on the Historical Financial InformationWe have audited the Historical Financial Information for the year ended 3\ 0 June 2015, which comprises the consolidated statement of financial position as at 30 June 2015, the consolidated statement of \ profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows \ for the year ended 30 June 2015, including a summary of significant accounting policies and the notes thereto, which forms part of the Report of Historical Financial Information \ of the Group, as presented in Annexure 1 to the Pre-listing Statement. Responsibilities of the Directors for the Historical Financial Information for the year ended 30 June 2015The Directors are responsible for the preparation and fair presentation of the Historical Financial Information for the year ended 30\ June 2015 in accordance with the IFRS and the Listings Requirements, and for such internal control as the directors of Consol determine is necessary to enable the preparation of Historical Financial Information for the year ended 30 June\ 2015 that is free from material misstatement, whether due to fraud or error. Independent Reporting Accountant’s Responsibilities for the Historical Financial Information for the year ended 30 June 2015 Our responsibility is to express an opinion on the Historical Financial Information for the year ended 30 June 2015 based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Historical Financial Information f\ or the year ended 30 June 2015 is free from material misstatement. A-61 Scope of audit An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Historical Financial Information for the year ended 30 June 2015. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Historical Financial Inform\ ation for the year ended 30 June 2015, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the Historical Financial Information for the year ended 30 June 2015,\ in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the Historical Financial Information for the year ended 30\ June 2015. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion on the Historical Financial Information for the year ended 30 June 2015 In our opinion, the Historical Financial Information for the year ended \ 30 June 2015, which forms part of the Report of Historical Financial Information of the Group, as presented in Annexure 1 to the Pre-listing Statement, presents fairly, in all material respects, for the purpose of the Pre-listing Statement, the consolidated financial position of Consol as at\ and for the year ended 30 June 2015 and its consolidated financial performance and its consolidated cash flows for the year then \ ended in accordance with IFRS and the Listings Requirements. KPMG Inc. Registered Auditor Steve Robinson Director Registered Auditor 12 April 2018 KPMG Crescent 85 Empire Road Parktown 2193 (Private Bag 9, Parkview, 2122) A-62 ANNEXURE 3 INTERIM HISTORICAL FINANCIAL INFORMATION OF THE GROUP The Interim Historical Financial Information of the Group included in this report relates to Consol Holdings Limited and its consolidated subsidiaries (collectively referred to as the “Consol Group” or the “Group” or “Consol” for the purposes of this report). BASIS OF PREPARATION The interim condensed consolidated statements of profit or loss and other comprehensive income, interim condensed consolidated statements of cash flows and the interim condensed consolidated statements of changes in equity for the six months ended 31 December 2017 and 31 December 2016 and interim condensed consolidated statements of financial position\ as at 31 December 2017 and 31  December 2016, and the notes thereto (“Interim Historical Financial Information of the Group”) have been extracted from the reviewed special purpose condensed consolidated financial statements of t\ he Consol Group for the six months ended 31 December 2017 and 31  December  2016 (“Reviewed Interim Financial Statements”). The Reviewed Interim Financial Statements were prepared in accordance with IAS 34: Interim Financial Reporting for the purposes of providing financial information to satisfy the requirements of section 8 of the Listings Requirements. The additional disclosure required in terms of paragraphs 8.11 and 8.12 of the Johannesburg Stock Exchange (“JSE”) Listings Requirements has been included in the Interim Historical Financial Information\ of the Group. The Interim Historical Financial Information of the Group for the six months ended 31 December 2017 and 31 December 2016 has been reviewed by KPMG Inc. in accordance with ISRE 2410: Review of Interim Financial Information Performed by the Independent Auditor of the Entity and unqualified review conclusions on the Interim Historical Financial Information of the\ Group have been issued in respect thereto. KPMG Inc. is also the independent reporting accountant to the Consol Group and has issued the reporting accountant’s report on this Interim Historical Financial Information of the Group which is included as Annexure 4 to this Pre-listing Statement. The review conclusion on the Interim Financial Statements for the six months ended 31 December 2017 and 31 December 2016 and the Reporting Accountant’s Report on the Interim Historical Financial Information of the Group for the six months ended 31 December 2017 and 31 December 2016 includes a matter of emphasis relating to a material uncertainty with regards to going concern. The Board is responsible for the Interim Historical Financial Information of the Group included in this Pre-listing Statement. GROUP COMMENTARY Revenue for the six months ended 31  December  2017 increased by 7.8% to R3.7  billion compared to R3.4  billion for the six months ended 31 December 2016, primarily as a result of an increase in sales volumes of 5.0% and price increases. Group operating profit for the six months ended 31 December 2017 amounted to R668 million, an increase of R78 million, or 13.2%, on the six months ended 31 December 2016 mainly resulting from the South African operations. Operating profit margin for the six months ended 31 December 2017 was 18.0% compared to 17.1% for the six months ended 31 December 2016. The loss before tax for the six months ended 31  December  2017 amounted to R80  million compared to the six months ended 31 December 2016 profit before tax of R229 million with the results of the 2017 interim period being impacted by the following: • Non-operating and capital item losses of R125 million for the six months ended 31 December 2017 as a result of impairment charges for Consol Glass Kenya Limited on goodwill; intangible assets; and property, plant and equipment. • Finance income for the six months ended 31  December  2017 amounted to R11  million compared to the six months ended 31 December 2016 which amounted to R186 million; which included an amount of R177 million which was processed as a present value adjustment to the “A” shareholder loans. • Finance expense for the six months ended 31  December 2017 amounted to R625  million compared to the six months ended 31  December  2016 which amounted to R523  million, being impacted by the unwinding of the discounting on the “A” shareholder loans in the 31 December 2017 period. COMMENTARY ON OPERATING SEGMENTS Demand for Consol’s products is typically strongest between October and December, the months leading up to the main summer holiday period, with Consol’s average sales volumes during this period being higher than the yearly \ average. Consol also typically experiences high sales volumes in March and April, before and during the Easter holidays. Consequently, Consol maintains higher levels of inventory during the first and fourth quarters of its financial year, in anticipation of this increased seasonal demand for its products. Consol schedules periodic shutdowns of certain of its furnaces and production lines for repairs shortly after the main December and Easter holidays. The Consol Group has a number of national and multinational customers which it suppli\ es in the alcoholic beverage; beer; food; spirits and wine categories. These customers have been customers of Cons\ ol for more than ten years in South Africa. The Group has identified two reportable segments being operations in South Africa and the Rest of Afri\ ca comprising the Ethiopian, Kenyan and Nigerian markets. The South African operations significantly contributed more than 90% of the revenue, Operating profit and Adjusted EBITDA generated by the Group in both interim periods to 31 December 2017 and 31 December 2016. A-63 COMMENTARY ON OPERATING SEGMENTS (CONTINUED) South Africa Revenue increased by 9.5% to R3.4  billion in the six months ended 31  December 2017 from R3.2  billion in the six months ended 31 December 2016, as a result of increased sales volumes of 7.0% and a positive price and mix variance. Adjusted EBITDA for the six months ended 31 December 2017 increased by R47 million, or 5.7%, compared to the six months ended 31  December 2016, mainly due to increased revenue and sales volume. The Adjusted EBITDA percentage for the six months ended 31 December 2017 amounted to 25.4% compared to 26.3% in the six months ended 31 December 2016. Operating profit for the six months ended 31 December 2017 increased by R75 million, or 13.4%, mainly due to increased revenue and sales volume and a lower deprecation charge due to a re-assessment of the estimated useful lives of property, plant and equipment effective from 1  January  2017. The Operating profit percentage for the six months ended 31  December 2017 amounted to 18.4% compared to 17.8% in the six months ended 31 December 2016. Rest of Africa Revenue decreased by 9.9% to R264 million for the six months ended 31 December 2017 mainly as a result of lower sales volumes in Nigeria. In addition, revenue in South African rands was impacted by the depreciation of the Nigerian naira, and to a lesser extent the Kenyan Shilling. Adjusted EBITDA for the six months ended 31 December 2017 decreased by R7 million, or 10.6%, compared to the six months ended 31  December 2016, mainly due to lower revenue and the devaluation of the foreign currencies. The Adjusted EBITDA percentage amounted to 22.3% for the six months ended 31 December 2017 compared to 22.5% for the six months ended 31 December 2016. Operating profit for the six months ended 31  December 2017 increased by R3  million, or 10.3%, compared to the six months ended 31 December 2016 mainly due to lower trading performance of CGK offset by the foreign exchange gain on cash balances from Juniper Glass. The Operating profit percentage for the six months ended 31 December 2017 amounted to 12.1% compared to 10.0% for the six months ended 31 December 2016. Impairment losses During both interim six-month periods ended 31  December  2017 and 31  December  2016, management considered whether there were any indicators that goodwill and other assets had been impaired. As a result of a change in sales mix in the Kenyan markets and a consequent change in manufacturing footprint, a decision was taken\ to perform an impairment test for the CGK operations at 31 December 2017. No such impairment indicators were apparent during the comparative period. As at 31 December 2017 it was noted as part of the impairment test\ process that CGK had been impacted by a slowdown in consumer consumption and a change in market mix which negatively impacted on the \ manufacturing base and expected future cash flows of the operation. This indicated that the goodwill; intangibles and property, plant and equipment previously recognised through the acquisition of this subsidiary had become impaired. Management took a decision to impair the goodwill of CGK by R48  million; intangible assets by R39  million; and property, plant and equipment by R38 million in the 31 December 2017 period (refer to note 2 and 13). There were no indicators which would indicate the need for any impairment in the other subsidiaries (namely Consol Glass Proprietary Limited; Glassforce Limited; and Juniper Glass Industries Share Company (Juniper Glass) in both interim periods. Share buy-back In prior financial years the Group established The Consol Holdings Executive Trust A and The Consol Holdings Executive Trust B (the Trusts) to act as agents for the Group and Company to facilitate a management incentive plan. Pursuant to t\ he formation of the Trusts, the Company issued 10 955 426 ordinary shares for R46.2 million in aggregate with the intention of holding the shares as treasury shares until such time as the beneficiaries meet the requirements specified in their awards and are entitled to take unencumbered ownership of the shares. On 30 November 2016, the Group repurchased 7 024 928 ordinary shares held by The Consol Holdings Executive Trust B that were held as treasury shares. The shares were repurchased and the trust will be wound up as the requisite hurdle rates and performance criteria necessary for the shares to vest had not been achieved. There was no expectation that the shares would be issued in the six months ended 31 December 2016 or 31 December 2017 due to the vestin\ g conditions not being achievable. The Consol Holdings Staff Trust held 16 621 268 “A” ordinary shares as treasury shares of which 13  298  759 were repurchased in November 2016 in order to settle a notional loan account created when the “A” ordinary shares were originally issued. Once the notional loan account had been settled all of the “A” ordinary shares automatically converted to ordinary shares, of which 3 332 509 continue to be held by The Consol Holdings Staff Trust. Major business acquisition – Juniper Glass Juniper Glass was acquired during the December 2016 interim period and is currently in the construction phase of a new glass plant with the expectation that the plant would commence operations in the fourth q\ uarter of the 2018 calendar year. Juniper Glass currently has no revenue streams, however, it is expected to contribute to the Consol Group revenue with anticipated production capacity of 40 000 tonnes of Good Glass output per year once co\ mmissioned. Consol continues to invest in the Juniper Glass project post its acquisition with capital expenditure of R173 million being incurred in six-month period ended 31 December 2017. A-64 COMMENTARY ON OPERATING SEGMENTS (CONTINUED) During the 31 December 2016 interim period, the Consol Group acquired 86% of the shares and voting rights in Juniper Glass situated in the Federal Democratic Republic of Ethiopia thereby acquiring control of the company. The acquisition was effected by acquiring newly issued shares, thereby diluting the existing shareholders’ interest. The following summarises the major classes of consideration transferred, the recognised amounts of assets acquired and the liabilities assumed at the effective date (all amounts were translated from foreign currency to the presentation currency at the date when effective ownership passed): 31 December 2016 Rm Contribution made to Juniper Glass: Cash 177 Loan 267 Total consideration 444 Identifiable assets acquired and liabilities assumed (pre-Consol contribution): Property, plant and equipment 3 Other receivables 2 Other payables (1) Loan payable (83) Total identifiable net assets/(liabilities) (79) Identifiable assets acquired and liabilities assumed (post-Consol contribution): 365 Goodwill Goodwill was recognised as a result of the acquisition as follows: – identifiable net assets acquired and liabilities assumed (post-Consol contribution) 365 – non-controlling interests (1) (51) 314 Contribution made 444 Goodwill 130 Cash flow on acquisition of subsidiary Contribution made 177 Contribution received (177) Total net cash flow on acquisition of subsidiary for the Consol Group – Note:(1) based on minority shareholder’s proportionate interest in the recognised amounts of the assets and liabilities acquired. Obtaining control of Juniper Glass will allow the Consol Group to further expand its operations in East Africa in line with the Group’s expansion strategy. For the period ended 30 June 2017, Juniper Glass contributed a profit before taxation of R4 million to the results arising mainly from foreign currency exchange gains. Juniper Glass has not started trading as it is stil\ l in the process of constructing a new glass facility. Goodwill The goodwill is attributable mainly to gaining access to the East African glass market and the synergies expected to be achieved from integrating the company into the Consol Group’s existing glass manufacturing operations. The goodwill recognised is not expected to be deductible for taxation purposes and was fully impaired in the second half of the 2017 financial year. A-65 CONDENSED GROUP STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Reviewed 6 months ended Audited year ended Notes 31 December 201731 December 2016 30 June 2017 Rm Revenue 3,7173,447 6,186 Cost of sales (2,560)(2,409) (4,258) Gross profit 1,1571,038 1,928 Other income 911 19 Operating expenses: (498)(459) (927) – distribution expenses (140)(126) (210) – amortisation of intangible assets (24)(30) (57) – selling and administration expenses (334)(303) (660) Operating profit 6685901,020 Non-operating and capital items 2(134) (24)(452) Finance income 11186 207 Finance expense (625)(523)(1,027) (Loss)/profit before taxation (80)229 (252) Taxation 3(39) (31) (302) (Loss)/profit for the period/year (119)198 (554) Attributable to: Owners of the company (122)195 (543) Non-controlling interests 33(11) Other comprehensive income: Items that will never be reclassified to profit or loss –– 1 Remeasurement of defined benefit fund liability –– 1 Taxation on remeasurement of defined benefit fund liability –– 0 Items that are or may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations (108)(84)(193) Effective portion of cash flow hedges, net of taxation 00 (4) – effective portion of changes in fair value of cash flow hedges 00 (6) – taxation on effective portion of changes in fair value of cash flow hedges 00 2 (108) (84)(197) Total comprehensive income for the period/year (227)114 (750) Attributable to: Owners of the company (215)119 (714) Non-controlling interests (12)(5)(36) Earnings per share 4Cents Basic earnings per share (36.6)62.0(172.5) Diluted basic earnings per share (36.6)60.8(172.5) Headline earnings per share (6.0)62.0 (74.7) Diluted headline earnings per share (6.0)60.8 (74.7) A-66 CONDENSED GROUP STATEMENTS OF FINANCIAL POSITION Reviewed 6 months endedAudited year ended Notes 31 December 2017 31 December 2016 30 June 2017 Rm Assets Non-current assets 7,3817,728 7,452 Property, plant and equipment 22,971 2,766 2,868 Prepayments for plant and equipment 101163 154 Goodwill 22,862 3,257 2,918 Intangible assets 21,447 1,542 1,512 Current assets 3,4663,035 3,162 Inventories 1,5051,418 1,720 Trade and other receivables 51,502 937854 Derivatives –– 3 Prepaid taxation 1111 10 Cash and cash equivalents 448669 575 Total assets 10,84710,763 10,614 Equity and Liabilities Capital and reserves (1,077)(106)(850) Share capital and premium 310310 310 Treasury shares (16)(16) (16) Other reserves (280)(91)(187) Accumulated loss (1,186)(447)(1,064) Non-controlling interests 95138 107 Non-current liabilities 6,1916,753 10,072 Shareholder loans 74,540 3,848 4,249 Loans and borrowings 81431,602 4,236 Preference Shares liabilities 595413 549 Employee related liabilities 111117 131 Provisions – rehabilitation provisions 1211 12 Finance lease liability 74104 87 Put liability over NCI 105048 50 Taxation payable –– 70 Deferred taxation 666610 688 Current liabilities 5,7334,116 1,392 Finance lease liability 3935 38 Trade and other payables 724755 689 Loans and borrowings 84,186 2,680 38 Taxation payable 72–111 Deferred income 922643 163 Factor liability 285–– Derivatives 173 – Bank overdraft 388–353 Total equity and liabilities 10,84710,763 10,614 Net asset value per share (cents) (323.4)(33.7)(255.3) Tangible net asset value per share (cents) (1,617.5)(1,558.4) (1,585.7) Net asset value per share and tangible net asset value per share (in cents) are calculated on an actual number of shares in issue of 332 986 419 for both 31 December 2017 and 30 June 2\ 017 (314 751 466 for 31 December 2016). A-67 CONDENSED GROUP STATEMENTS OF CASH FLOWS Reviewed 6 months endedAudited year ended Notes 31 December 2017 31 December 2016 30 June 2017 Rm Cash flows from operating activities Operating profit before changes in working capital 954887 1,584 Changes in working capital (266)813 17 Cash generated from operations 6881,700 1,601 Interest paid (265)(290) (543) Interest received 49 18 Taxation paid (165)(18) (21) Net cash inflow from operating activities 2621,401 1,055 Cash flows from investing activities Property, plant and equipment acquired to expand operations (173)–(44) Property, plant and equipment acquired to maintain operations (251)(263) (627) Net cash outflow from investing activities (424)(263) (671) Cash flows from financing activities Finance lease payments (19)(17) (35) Capital repaid – loans and borrowings (9)(586) (590) Capital raised – loans and borrowings 71– – Proceeds from shareholder loan –– 249 Proceeds from issue of redeemable Preference Shares –– 100 Net cash inflow/(outflow) from financing activities 43(603) (276) Net cash flow for the period/year (119)535 108 Net cash and cash equivalents at beginning of period/year 222135 135 Effect of exchange rate changes on cash and cash equivalents (43)(1) (21) Net cash and cash equivalents at end of period/year 60669 222 A-68 CONDENSED GROUP STATEMENTS OF CHANGES IN EQUITY Attributable to owners of the companyOther reserves Share capital and premium Treasury shares Share- based payment reserve Cash-flow hedging reserve Foreign currency translation reserve Accumulated loss Non- controlling interests Total equity Rm Six months ended 31 December 2017 Balances at 1 July 2017 (audited) 310(16) –(4)(183) (1,064) 107(850) Total comprehensive income for the period –––(0)(93) (122) (12)(227) Loss for the period –– –––(122) 3(119) Other comprehensive income –– –(0)(93) –(15)(108) Balances at 31 December 2017 310(16) –(4)(276) (1,186) 95(1,077) Six months ended 31 December 2016 Balances at 1 July 2016 (audited) 340(46) 14 –(15) (608) 92(223) Transfer to accumulated loss ––(14) –– 14 –– Total comprehensive income for the period ––––(76) 195 (5)114 Profit for the period –– –––195 3198 Other comprehensive income –– ––(76) –(8)(84) Transactions with owners of the company: Treasury shares repurchased (30)30 ––– ––– Recognition of put liability over NCI ––––– (48) –(48) Business combination ––––– –51 51 Balances at 31 December 2016 310(16) ––(91) (447)138(106) Year ended 30 June 2017 Balances at 1 July 2016 (audited) 340(46) 14 –(15) (608) 92(223) Transfer to accumulated loss ––(14) –– 14 –– Total comprehensive income for the year –––(4)(168) (542)(36)(750) Loss for the year –– –––(543) (11)(554) Other comprehensive income –– –(4)(168) 1(25)(196) Transactions with owners of the company: Share-based payment –––––122 –122 Shares issued 0–––– ––0 Treasury shares repurchased (30)30 ––– ––– Recognition of put liability over NCI ––––– (50) –(50) Business combination ––––– –51 51 Balances at 30 June 2017 (audited) 310(16) –(4)(183) (1,064) 107(850) A-69 Dividend per share The Group has not declared any dividends to ordinary shareholders during the periods presented. SEGMENT RESULTS The Consol Group has identified two segments based on the geographical location of its businesses, these being South African operations and Rest of Africa (excluding South Africa). These operations service \ similar customers and produce comparable glass containers for the markets which they serve. The determination of operating segments has be\ en based on financial reports that the Executive Committee regularly reviews and uses to make decisions on the allocation of resources and capital. The Executive Committee is considered to be the chief operating decision maker. An impairment charge on the Kenyan operation has been processed as detailed in the commentary above. As such, impairment relating to goodwill, intangible assets and property, plant and equipment has been disclosed in addition to the segment operating results (refer note 13). There were no impairments in the South African operations segment. Reviewed 6 months endedAudited year ended 31 December 2017 31 December 2016 30 June 2017 Rm South Africa Revenue 3,4533,154 5,676 Operating profit 636561 992 Adjusted EBITDA 8778301,511 Operating profit % 18.4%17.8% 17.5% Adjusted EBITDA % 25.4%26.3% 26.6% Net operating assets 8,7307,582 8,320 Net loans and borrowings (4,243)(3,751) (4,232) Capital expenditure 238213 469 Rest of Africa Revenue 264293 510 Operating profit 3229 28 Adjusted EBITDA 5966 102 Operating profit % 12.1%10.0% 5.5% Adjusted EBITDA % 22.3%22.5% 20.0% Net operating assets 8951,100 857 Net loans and borrowings (26)138 180 Capital expenditure 18650202 Impairments (refer note 2 and 13) 125–304 Reconciliation of information on reportable segments to the Statement of profit or loss and other comprehensive Income and to the IFRS measure Revenue 3,7173,447 6,186 South Africa 3,4533,154 5,676 Rest of Africa 264293 510 Cost of sales (2,560)(2,409) (4,258) Gross profit 1,1571,038 1,928 Operating expenses and other income (489)(448) (908) Operating profit 6685901,020 South Africa 636561 992 Rest of Africa 3229 28 Depreciation and amortisation: 268306 593 South Africa 241269 519 Rest of Africa 2737 74 Adjusted EBITDA 9368961,613 South Africa 8778301,511 Rest of Africa 5966 102 Reconciliation of information on reportable segments to the Statement of financial position and to the IFRS measure Total Group net operating assets: 9,6258,682 9,177 Total assets 10,84710,763 10,614 less: Cash and cash equivalents (448)(669) (575) less: Prepaid taxation (11)(11) (10) Trade and other payables (724)(755) (689) Derivatives (liabilities) (17)(3) – Deferred income (22)(643) (163) A-70 Reviewed 6 months endedAudited year ended 31 December 2017 31 December 2016 30 June 2017 Rm Reconciliation of information on reportable segments to the Statement of financial position and to the IFRS measure (continued) South African Operations: 8,7307.582 8,320 Total assets 9,6299,048 9,195 less: Cash and cash equivalents (290)(383) (263) less: Prepaid taxation –– – Trade and other payables (592)(648) (558) Derivatives (liabilities) (17)(3) – Deferred income –(432) (54) Rest of Africa Operations: 8951,100 857 Total assets 1,2181,715 1,419 less: Cash and cash equivalents (158)(286) (312) less: Prepaid taxation (11)(11) (10) Trade and other payables (132)(107) (131) Derivatives (liabilities) –– – Deferred income (22)(211) (109) Total Group net loans and borrowings (4,269)(3,613) (4,052) net cash/(overdraft) 60669 222 loans and borrowings (4,329)(4,282) (4,274) South African Operations: (4,243)(3,751) (4,232) net cash/(overdraft) (98)383 (90) loans and borrowings (4,145)(4,134) (4,142) Rest of Africa Operations: (26)138 180 net cash 158286 312 loans and borrowings (184)(148) (132) COMMITMENTS Reviewed 6 months ended Audited year ended 31 December 2017 31 December 2016 30 June 2017 Rm Commitments: Capital commitments: 744135 646 It is anticipated that this expenditure will be financed from borrowings and cash generated from operating activities SEGMENT RESULTS (CONTINUED) A-71 SUPPLEMENTARY NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS The Condensed Group Interim Financial Statements comprise the Company and its consolidat\ ed subsidiaries (together referred to as “the Group” or “Consol Group” and individually as “Group Entities”). 1. Accounting Policies The accounting policies applied in the preparation of these Group Interim Financial Statements are in terms of International Financial Reporting Standards and are consistent with those in the Historical Financial Information of the G\ roup. 2. Non-operating and capital items Reviewed 6 months ended Audited year ended 31 December 2017 31 December 2016 30 June 2017 Rm Non-operating and capital items consist of the following: Impairment losses: (125)–(304) Consol Glass Kenya Limited: – goodwill (48)–(125) – intangible assets (39)–– – property, plant and equipment (38)–– Glassforce Limited: – goodwill ––(59) Juniper Glass Industries Share Company: – goodwill ––(120) Black Economic Empowerment share-based payment expense ––(121) Prelisting costs (9)(22) (25) Other –(2) (2) (134) (24)(452) 3. Taxation and effective taxation rate During 2011, the South African Revenue Service (“SARS”) commenced an income tax audit of Consol Holdings Proprietary Limited, Consol Glass Proprietary Limited and Old Consol in respect of the 2007 to 2016 years of assessment. The subject of the SARS audit was the expenditure incurred at the time of and subsequent expenditure which arose in respect of the 2007 private equity transaction in which Old Consol was de-listed an\ d its operations purchased by Consol Glass Proprietary Limited in terms of a scheme of arrangement. A dispute arose between SARS and Consol Glass Proprietary Limited as to the deductibility of such expenditure. For the six months ended 31 December 2016 the matter was still ongoing and SARS had not concluded its finding\ s. Management was unable to determine whether SARS would issue a further assessment in\ respect of the SARS audit and had not made any provision in its financial statements. In addition, a deferred taxation asset for the assessed loss carried forward was recorded at 31 December 2016 as management was of the view that it had a strong justification for the taxation treatment followed by Consol Glass Proprietary Limited. In terms of Part F of the Tax Administration Act No 28 of 2011, Consol Glass Proprietary Limited and SARS entered into a settlement agreement on 31 October 2017. Both parties agreed to settle the dispute by fully utilising the assessed loss as at 30 June 2016 and for Consol Glass Proprietary Limited to pay additional tax of R70 million plus interest from the effective date of the agreement to the date of payment on or before 31 July 2018. Consol Glass Proprietary Limited also paid R111 million in provisional taxation for the 2017 year of assessment on 30 November 2017 i\ n accordance with the settlement agreement. The settlement was recorded in the financial statements for the year ended 30  June 2017 as settlement negotiations with SARS were at an advanced stage and it was considered very likely that a settlement agreement would be reached within these parameters. The settlement resulted in an increase in taxation to R302 million for financial year end 30 June 2017 in comparison to R31 million during the interim period to 31 December 2016. During the six months ended 31  December  2017 the Group effective taxation rate of negative 48.8% arises due to the IFRS expense adjustments, which are not deductible for taxation purposes, of R124  million on the present value adjustment to the “A” shareholder loans, an impairment of R48  million relating to goodwill recognised in CGK and non-deductible interest of R44 million relating to the Preference Shares liabilities. During the six months ended 31 December 2016 the Group effective taxation rate of 13.5% is mainly due to the non-taxable IFRS income adjustment of R177 million arising on the present value adjustment to the “A” shareholder loans. A-72 SUPPLEMENTARY NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (CONTINUED) 4. Earnings per share Reviewed 6 months ended Audited year ended 31 December 2017 31 December 2016 30 June 2017 Rm Earnings Calculation of basic and diluted earnings: (loss)/profit for the period/year attributable to equity holders of the parent (122)195 (543) Basic and diluted earnings (122)195 (543) Calculation of headline earnings: (Loss)/profit for the period/year attributable to equity holders of the parent (basic earnings) (122)195 (543) impairment of goodwill, intangible assets and property, plant and equipment 125–304 loss on disposal of property, plant and equipment –– 5 total tax effects on adjustments (23)–(1) Headline and diluted headline earnings (20)195 (235) Number of shares Weighted average number of shares number of shares at the beginning of period/year 332,986,419314,751,466 314,751,466 shares issued ––49,959 Basic weighted average number of shares at the end of period/year 332,986,419314,751,466 314,801,425 Diluted weighted number of shares: basic weighted average number of shares at the end of period/year 332,986,419314,751,466 314,801,425 potential ordinary shares –5,989,377 – Diluted weighted average number of shares at the end of period/year 332,986,419320,740,843 314,801,425 5. Trade and other receivables The trade and other receivables increased in the six months ended 31 December 2017 partly as a result of extension in payment terms to customers. In order to improve capital management a factoring agreement has been entered into. Consol sells its trade receivables at an amount equal to a nominal amount less an agreed deduction. The deduction percentage is specific to the customer. 6. Going concern During the six months ended 31 December 2017 the Group recorded a loss after tax of R119 million primarily due to the following items: • impairments on goodwill, intangible assets and property, plant and equipment amounting to R125 million; and • net finance expense of R614 million. Furthermore, as at 31 December 2017 the Group’s total liabilities exceeded its total assets by R1,077 million (31 December 2016: R106  million and at 30  June  2017; R850  million) and its current liabilities exceeded its current assets by R2,267  million at 31 December 2017 (31 December 2016: R1,081 million). The directors have made an assessment of the ability of the Company and its sub\ sidiaries to continue as going concerns on the following basis: • the South African loans and borrowings (refer to note 8) will be refinanced after negotiations with lenders. • the shareholders loans amounting to R4,540 million as at 31 December 2017 and R3,848 million as at 31 December 2016 (30 June 2017: R4,249 million) are not repayable to shareholders within the next twelve months and have been subordinated as reflected in note 7. • the forecast operating cash flows for the twelve month period from the dates of the periods and year presented are positive. • the availability of sufficient credit facilities which will be utilised for working capital management is\ as follows: Reviewed 6 months ended Audited year ended 31 December 2017 31 December 2016 30 June 2017 Rm Nedbank Limited 750750 750 The Standard Bank of South Africa Limited 1010 10 760 760 760 KESm Stanbic Bank Kenya Limited 200300 300 NGNm First Bank of Nigeria Plc –1,000 – Stanbic IBTC Bank Plc 750–750 A-73 SUPPLEMENTARY NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (CONTINUED) Based on the above assessment the interim financial results for the six months ended 31 December 2017 and 31 December 2016 as well as for the year ended 30 June 2017 have been prepared on the basis of accounting policies applicable to a going concern which assumes it is highly probable that funds will be available to finance future operations through refinancing of the borrowings with the lenders prior to maturity date, and that the realisation of assets and the settlement of liabilities will occur in the\ ordinary course of business. Should the refinancing not occur, this condition gives rise to a material uncertainty which may cast sig\ nificant doubt on the ability of the Company and its subsidiaries to continue as \ going concerns. 7. Shareholder loans The shareholder loans consist of A and B loans. The “A” shareholder loans are subordinated and shall not be repaid prior to the repayment in full of the “B” shareholder loans and accrued interest. In addition the “A” shareholder loans are subordinated in favour of trade creditors to the extent that the liabilities of Consol Holdings Proprietary Limited, fairly valued, exceed the assets of company. The “B” shareholder loans are subordinated in favour of the priority claims (loans and borrowings), being all claims of whatever nature and the claims of trade creditors to the extent that the liabilities of the company fairly valued,\ exceed the assets of company. In addition, the “B” shareholder loans are subordinated in favour of the Preference Shares liabilities. The shareholder loan between Consol Holdings Proprietary Limited and Business Venture Investments No. 3001 (RF) Proprietary Limited has been subordinated in favour of the Preference Shareholders. In addition, the shareholder loan between Business Venture Investments No. 1840 Proprietary Limited and Consol Glass Proprietary Limited and has been subordinated in favour of the Senior debt. The Senior debt is included in loans and borrowings. In the event of a successful listing on the JSE, the shareholder loans must be settled via the proceeds from the listing and any balance remaining on the shareholder loans will be converted into ordinary shares. 8. Loans and borrowings Upon the listing of the Group on the JSE which management expects to be in the second quarter of 2\ 018, the Group intends to repay a portion of its South African loans and borrowings. In the event that the Group does not successfully list on the JSE, the South African loans and borrowings will need to be refinanced. At 31  December  2016, South African loans and borrowings of R2,645  million were classified as current liabilities as these amounts were contractually due for repayment in August 2017. The Lenders subsequently provided the necessary consents for the repayment of this tranche of the loans to be extended to July 2018. As a result, the total South African loans and borrowings amounting to R4,145 million were treated as being non-current liabilities at 30 June 2017. 9. Deferred income During December 2016, the Group received advance payments from a customer for goods yet to be delivered. The transaction was treated as deferred income and which incurred interest at a rate of 10.5%-12.5% per annum. The deferred income is recognised in profit or loss on a systematic basis when the revenue recognition criteria are met. 10. Financial instruments measured at fair value The Group’s financial instruments that are measured at fair value on a recurring basis consist of the “B” Preference Share and the put liability over non-controlling interest (NCI). Reviewed 6 months ended Audited year ended Fair value hierarchy 31 December 2017 31 December 2016 30 June 2017 Rm “B” Preference Share (1) Level 3614955 Put liability over NCI(2) Level 3504850 Notes:(1) The fair value movement has been recognised in profit and loss.(2) The fair value movement has been recognised in equity. There have been no transfers of financial assets or financial liabilities be\ tween the categories of the fair value hierarchy. “B” Preference ShareThe “B” Preference Share fair value has been determined by discounting the forecasted final dividend cash flows that are payable on the Preference Share using the JIBAR swap yield curve (risk-free rate) as the discount rate. Future cash flows (dividend payable) are forecasted on EBITDA multiples (as defined in the “B” Preference Share terms) of between 7-8 times for the periods presented and assuming an early redemption of the “B” Preference Share upon listing. The changes in the fair value of the “B” Preference Share are recognised in profit or loss. Put liability over NCIThe put option over NCI is calculated by forecasting the expected payments to the settlement date of the liability u\ sing a discount rate of 25.7% for all periods presented. There have not been any material changes to the assumptions used in calculat\ ing the fair value of the put option in the various periods presented. The option is exercisable in three equal tranches on fixed dates subsequent to the commissioning of the \ Juniper Glass manufacturing plant. Fair value changes in the put option are recognised directly in equity attributable to the owners of the company. A-74 SUPPLEMENTARY NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (CONTINUED) 11. Covenants The Consol Group has financial covenants on its loans and borrowings with certain restrictions and limits on capital expenditure which may be incurred. During the six months ended 31  December  2017 and 31  December  2016 as well as the financial year ended 30  June  2017, financial institutions have not recalled any of the Group’s loans and borrowings. With effect from 31 December 2017, the Senior Total Net Debt: EBITDA (as defined in the loan agreement) financial ratio which Consol Glass Proprietary Limited must comply with a cover of 3.25 times (31  December  2016 being 4.00 times cover and 30 June 2017 being 3.75 times cover). 12. Events after balance sheet date Post-Employment Medical Aid LiabilityEffective 1 January 2018, Consol Glass Proprietary Limited changed medical aid providers from a closed scheme to an open scheme. The company is obligated to continue contributing 50% of the med\ ical aid contributions of employees and retired members who joined the company prior to 1 October 1996. It is estimated \ that the change in medical aid schemes will result in a once off reduction approximating R20  million in the post-employment medical aid liability to the company. There are no additional payments, cash flows and costs incurred to facilitate the transfer. Glassforce Minority AcquisitionConsol Glass Africa has concluded an agreement with the minority shareholders in Glassforce to acquire their remaining interests in Glassforce for an aggregate purchase price of $15 million, of which $7,5 million will be payable on the\ effective date of the transaction, with the balance, which does not accrue interest, being payable in three equal instalments on the three subsequent anniversaries of the effective date of the transaction. Consol Holdings Limited will guarantee \ the payment by Consol Glass Africa of the subsequent instalments of the purchase price. As at the Last Practicable Date, the suspensive conditions \ to which the sale agreement is subject had not yet been fulfilled, but Consol expects that those conditions will be fulfilled by the Listing Date, and that Consol Glass Africa will thus be the owner of 100% of the issued sh\ ares in Glassforce, by the Listing Date. The Interim Historical Financial Information of the Group for the six-month period ended 31 December 2017 and 31 December 2016 was approved by the Company on 12 April 2018 in accordance with a resolution of the Group’s Board of Directors adopted on 4 April 2018. The Company was converted from a private company to a public company on 13 April 2018. 13. Impairment of Consol Glass Kenya Limited Cash Generating Unit (“CGU”\ ) The following accounting estimates, judgements and assumptions were applied in consideration of CGU impairment for CGK: Allocation to cash generating unitsThe recoverable amount was determined using value in use, which in essence reflects the enterprise value in foreign currency of the investment. ImpairmentValue in use is determined by discounting the future cash flows expected to be generated from the continuing use of the operation. The value in use was calculated based on long term cash flow projections based on the 2018 financial year forecast, approved by management, extrapolated using a combination of sales mix changes and lo\ ng-term inflation, resulting in a cumulative average growth rate in revenue over the forecast period of 6.5%, a pre-taxation discount rate of 23.9% and a terminal growth rate of 6.7%. Key assumptionsValue-in-use calculations include forecast sales volumes and operating margins. Such assumptions are based on historical results adjusted for anticipated future growth in the country in which it operates. These assumptions are a reflection of management’s past experience and have been endorsed by management as part of the cons\ olidated Group forecast. Management believes that the forecast period of 10 years is justified due to the long term nature of the business which matches the average furnace useful life. Sensitivity analysis Discount rate – movement +1% – impairment increase R28 million Terminal growth rate – movement (1)% – impairment increase R10 million Actual impairment: Refer to note 2. A-75 SUPPLEMENTARY NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (CONTINUED) 14. Related parties The following changes to the directors and key management personnel have occurred in the six months ended 31 December 2016 and in the six months ended 31 December 2017: Director AppointedResigned Non-executive: I Kgaboesele 1 July 2017 JA Kirby* 1 December 2017 CI McDougall* 31 October 2017 CN Pongweni* 1 November 2016 M Sabi 1 July 2017 SV Zilwa* 1 November 20162 April 2018 B Baisley 3 April 2018 G Montgomery 3 April 2018 A Maharaj 3 April 2018 F Khan 3 April 2018 R Simao 3 April 2018 J Myburgh 3 April 2018 Executive: PJ Curnow 1 November 2016 *Independent non-executive directors 15. Encumbered assets There have been no changes to the categories of encumbered assets of the Group. SUPPLEMENTARY INFORMATION (THIS INFORMATION HAS NOT BEEN AUDITED OR REVIEWED) General definitions Basic earnings per share is calculated as profit or loss attributable to ordinary equity holders of the entity (numerator) divided by the weighted average number of ordinary shares outstanding (denominator). Diluted earnings per share is calculated by adjusting the earnings and the number of shares for the effects of dilutive options and other dilutive potential shares. The effects of anti-dilutive potential ordinary shares are ignored in calculating diluted earnings per share. Headline earnings as defined in circular 2/2015, issued by the South African Institute of Chartered Accountants in October 2015, which separates from earnings all separately identifiable measurements. It is not necessarily a measure of sustainable earnings. Diluted headlines earnings per share is calculated by dividing headline earnings by the diluted number of shares. Net assets is total assets less total liabilities at the end of the period/year. Net asset value per share is calculated as net assets at the end of the period/year divided by the\ total number of shares in issue at the end of the period/year. Tangible net asset value per share is calculated as net assets excluding goodwill and intangible assets div\ ided by the total number of shares in issue at the end of the period/year. Dividend per share is calculated as dividend declared (both paid and unpaid) during the period/ year (numerator) divided by the number of shares in issue for that period/year (denominator). Operating profit is profit or loss attributable to equity holders for the period/year before non-operating and capital items*, taxation and net finance expense. Adjusted EBITDA is profit or loss attributable to equity holders for the period/year before non-operating and capital items*, taxation, net finance expense, depreciation and amortisation. Operating profit % is Operating profit divided by revenue. Adjusted EBITDA % is Adjusted EBITDA divided by revenue. Note: * As defined in the accounting policies A-76 ANNEXURE 4 INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE INTERIM HISTORICAL FINANCIAL INFORMATION OF THE GROUP The Directors Consol Holdings Limited Consol House Osborn Road Wadeville Germiston 1428 INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE INTERIM HISTORICAL FINANCIAL INFORMATION OF THE GROUP The definitions in Annexure 20 of this Pre-listing Statement apply mutatis mutandis to this report. IntroductionAt your request, and for the purposes of the Pre-listing Statement, we have reviewed the historical financial information of the Group for the six-month periods ended 31 December 2017 and 31 December 2016, presented in the Interim Historical Financial Information of the Group (the “Interim Historical Financial Information of the Group”). Consol Holdings Proprietary Limited will be renamed Consol Holdings Limited. The Interim Historical Financial Information of the Group comprises the condensed group statements of financial position as at 31 December 2017 and 31 December 2016, condensed group statements of profit or loss and other comprehensive income, changes in equity and cash flows or the six month periods ended 31 December 2017\ and 31 December 2016 and the notes thereto (collectively “the Interim Historical Financial Information of the Group”), as presented in Annexure 3 to the Pre-listing Statement, in compliance with the Listings Requirements. The Interim Historical Financial Information has been prepared for the purposes of meeting the requirements of Section 8 of the Listings Requirements. The directors of Consol (“Directors”) are responsible for the preparation of the Interim Historical Financial Information of the Group. The Directors are responsible for the compilation, contents and preparation of the Pre-listing Statement including the Interim Historical Financial Information of the Group for the six-month periods ended 31 December 2017 and 31 December 201\ 6 in accordance with IAS 34: Interim Financial Reporting and the Listings Requirements. KPMG Inc. is the independent auditor and independent reporting accountant to Consol Independent Reporting Accountant’s Review Report on the Interim Historical Financial Information of the GroupWe have reviewed the Interim Historical Financial Information of the Group of Consol, which comprise the condensed group statements of financial position as at 31 December 2017 and 31 December 2016, the c\ ondensed group statements of profit or loss and other comprehensive income, changes in equity and cash flows for the six-month peri\ ods ended 31 December 2017 and 31 December 2016 and the notes thereto as presented in Annexure 3 to the Pre-listing Statement. Responsibilities of the Directors for the Interim Historical Financial Information of the Group The Directors are responsible for the preparation and fair presentation of the Interim Historical Financial Information of the Group in accordance with IAS 34: Interim Financial Reporting and the Listings Requirements, and for such internal control as the Directors determine is necessary to enable the preparation of the Interim Historical Financial Information of the Group that is free from material misstatement, whether due to fraud or error. Independent Reporting Accountant’s Responsibilities for the Interim Historical Financial Information of the Group Our responsibility is to express a review conclusion on the Interim Historical Financial Information of the Group based on our reviews in accordance with International Standard on Review Engagements ISRE 2410: Review of Interim Financial Information Performed by the Independent Auditor of the Entity. ISRE 2410 requires us to conclude whether anything has come to our attention that causes\ us to believe that the Interim Historical Financial Information of the Group, taken as a whole, is not prepared in all material respects in accordance with the applicable financial reporting framework. This Standard also requires us to comply with relevant ethical requirements. A review of the Interim Historical Financial Information of the Group in accordance with ISRE 2410 is a limited assurance engagement in terms of which we perform procedures, primarily consisting of making inquiries of management and other wit\ hin the entity, as appropriate, and applying analytical procedures and evaluating the evidence obtained. The procedures performed in a review are substantially less than those performed in an audit conducted in accor\ dance with International Standards on Auditing. Accordingly we do not express an audit opinion on the Interim Historical Financial Information of \ the Group. A-77 Conclusion on the Interim Historical Financial Information of the Group Based on our review, nothing has come to our attention that causes us to believe that the I\ nterim Historical Financial Information of the Group for the six months ended 31 December 2017 and 31 December 2016, as s\ et out in Annexure 3 to the Pre-listing Statement is not prepared, in all material respects, in accordance with the requirements of IAS 34: Interim Financial Reporting and the Listings Requirements. Material Uncertainty Relating to Going ConcernWe draw attention to Note 6 of the Interim Historical Financial Informati\ on of the Group, as set out in Annexure 3 to the Pre-listing Statement, which indicates that the Group incurred a loss after tax of R119 million during the six months ended 31 Decem\ ber 2017 and, as of that date, the Group’s total liabilities exceeded its total assets by R1,077 million and its \ current liabilities exceeded current assets by R2,267 million. As stated in Note 6, should the continued refinancing of borrowings with lenders not occur prior to maturity date, a material uncertainty exists that may cast significant doubt on the Compa\ ny and its subsidiaries ability to continue as going concerns. Our conclusion is not modified in respect of this matter. KPMG Inc. Registered Auditor Yusuf Abed Director Registered Auditor 12 April 2018 KPMG Crescent 85 Empire Road Johannesburg 2193 (Private Bag 9, Parkview, 2122) A-78 ANNEXURE 5 PRO FORMA FINANCIAL INFORMATION OF THE GROUP BASIS OF PREPARATION The definitions commencing on page A-145 of the Pre-listing Statement have been used throughout this Annexure 5. The Pro forma financial information of the Group (“Pro forma Financial Information”) has been prepared for illustrative purposes only and because of its nature may not fairly present Consol’s financial position, changes in equity and results of operations. The Pro forma Financial Information is based on the reviewed Interim Historical Financial Information of the Group as at and for the six month period ended 31 December 2017, as presented in the Interim Historical Financial Information of the Group attached as Annexure 3 to this Pre-listing Statement (“Interim Historical Financial Information of th\ e Group”). The Pro forma Financial Information has been prepared to illustrate the impact of the following transactions on the Interim Hi\ storical Financial Information of the Group (“Transactions”): • The EA Trust Ordinary Share Repurchase; • The issue of the Offer Shares; • The Loan Restructuring and raising of New Senior Debt Facilities (“L\ oan Restructuring”); • Transaction Costs; • Settlement of a portion of the Shareholder Loans (as part of the Shareholder Loan Restructuring); • Conversion of the remaining Shareholder Loans to Conversion Shares (as part of the Shareholder Loan Restructuring); • The Employee Share Ownership Plan (“Consol ESOP”); and • The purchase of the remaining 49% of the Glassforce shareholding (“Glassforce Minority Acquisition”). The Pro forma Financial Information has been prepared on the assumption that the Transactions occurred on 1 July 2017 for the statement of profit or loss and other comprehensive income purposes and 31 December 2017 for the statement of finan\ cial position purposes. The Pro forma adjustments in respect of the Pro forma statement of profit or loss and other comprehensive income for the six month period ended 31 December 2017 and the Pro forma statement of financial position as at 31 December 2017 set out below relate to the following: Column 2 – pro forma adjustments relating to the EA Trust Ordinary Share Repurchase; Column 3 – pro forma adjustments relating to the issue of the Offer Shares; Column 4 – pro forma adjustments relating to the Loan Restructuring; Column 5 – pro forma adjustments relating to the Transaction Costs; Column 6 – pro forma adjustments relating to the settlement of a portion of the Shareholder Loans; Column 7 – pro forma adjustments relating to the conversion of the remaining Shareholder Loans to Conversion Shares; Column 8 – pro forma adjustments relating to the Consol ESOP; Column 9 – pro forma adjustments relating to the Glassforce Minority Acquisition; and Column 10 – the Group subsequent to the Transactions. The Pro forma Financial Information has been prepared using the accounting policies of Consol which comply with IFRS and ar\ e consistent with those applied in the Historical Financial Information of\ the Group (refer to Annexure 1 to this Pre-listing Statement). The Pro forma Financial Information is the responsibility of the directors. KPMG’s independent reporting accountant’s report on the Compilation of the Pro forma Financial Information is set out in Annexure 6 to this Pre-listing Statement and includes an emphasis of matter relating to a material uncertainty relating to going concern. A-79 PRO FORMA STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE SIX MONT\ HS ENDED 31 DECEMBER 2017 Column 1Column 2Column 3Column 4Column 5Column 6Column 7Column 8Column 9Column 10 Interim Historical Financial Information of the Group prior to the Transactions Adjustments relating to the EA Trust Ordinary Share Repurchase Adjustments relating to the issue of the Offer Shares Adjustments relating to the Loan Restructuring Adjustments relating to the Transaction Costs Adjustments relating to the settlement of a portion of the Shareholder Loans Adjustments relating to the conversion of the remaining Shareholder Loans to Conversion Shares Adjustments relating to the Consol ESOP Adjustments relating to the Glassforce Minority Acquisition Group subsequent to the Transactions Reviewed Pro forma Pro formaPro formaPro formaPro formaPro formaPro formaPro formaPro forma Rm Revenue 3,717––––––––3,717 Cost of sales (2,560)––––––––(2,560) Gross profit 1,157––––––––1,157 Other income 9––––––––9 Operating expenses (498)––––––––(498) Operating profit 668––––––––668 Non-operating and capital items (134)–––(4) ––––(138) Finance income 11––––––––11 Finance expense (625)––156 –293 ––(2)(178) (Loss)/profit before taxation (80)––156 (4)293 ––(2)363 Taxation (39)––(31) –(47) –––(117) (Loss)/profit for the period (119)––125 (4)246 ––(2)246 Attributable to: Owners of the company (122)––125 (4)246 ––(3)242 Non-controlling interests 3–––––––1 4 Items that are or may be subsequently reclassified to profit or loss – exchange differences on translation of foreign operations (108)––––––––(108) – effective portion of cash flow hedges, net of taxation 0––––––––0 – effective portion of changes in fair value of cash flow hedges 0––––––––0 – taxation on effective portion of changes in fair value of cash flow hedges 0––––––––0 (108) ––––––––(108) Total comprehensive income for the period (227)––125 (4)246 ––(2)138 Attributable to: Owners of the company (215)––125 (4)246 ––(9)143 Non-controlling interests (12)–––––––7(5) Earnings per share: Basic earnings per share (cents) (36.6) 11.27 Diluted basic earnings per share (cents) (36.6)11.25 Headline earnings per share (cents) (6.0) 16.02 Diluted headline earnings per share (cents) (6.0) 15.99 Dividends per share (cents) – – Weighted average number of shares – basic 332,986,419–760,869,565 –––1,054,000,000 ––2,147,855,984 Weighted average number of shares – diluted 336,962,905*– 760,869,565 –––1,054,000,000 ––2,151,832,470 *Adjusted for the dilutive impact of potential ordinary shares that were anti-dilutive at 31 December 2017. A-80 Notes: (1) Column 1 presents the Interim Historical Financial Information of the Group, which has been extracted from the reviewed Interim Historical Financial Information of the Group for the six-month period ended 31 December 2017, as \ presented in the Interim Historical Financial Information of the Group attached as Annexure 3 to this Pre-listing Statement. Transaction Costs already incurred in the six-month period ended 31 December 2017, amounting to R9 million which relate directly to the Listing are included in the Interim Historical Financial Information of the Group and have been expensed in non- operating and capital items. Transaction costs will not have a continuing effect on the statement of profit or loss and other comprehensive income. (2) Column 2 presents the financial effects of the EA Trust Ordinary Share Repurchase. The Company will repurchase 3,276,521 Ordinary Shares from the EA Trust at a price of R4 per share being the mid-point of the Offer Range and extinguish the related loans to the EA Trust relating to the original purchase of Ordinary Shares by the EA Trust. The repurchase and extinguishment would have been eliminated on consolidation and as such there is no impact on the pro forma statement of profit or loss and other comprehensive income. The Restructuring of the EA Trust will not have a continuing effect on the weighted average number of Ordinary Shares in issue. (3) Column 3 presents the financial effects of the issue of 760,869,565 Offer Shares, at an issue price of R4, being the mid-point of the Offer Range, to \ raise gross proceeds of R3,043 million. The effect of the issue of the Offer S\ hares will have a continuing effect on the weighted average number of Ordin\ ary Shares in issue. (4) Column 4 presents the financial effects of the Loan Restructuring as follows: (a) Finance expense has been adjusted for the reversal of the effect of legacy capitalised transaction costs calculated\ using the effective interest method. The current charge amounting to R3 million relating to the old Senior Debt Facilities has been reversed in full. This will not have a continuing effect on the statement of profit or loss and other comprehensive income; (b) Finance expense has been adjusted for the reversal of the finance costs on the old Senior Debt Facilities amounting to R231 million as the loans will be settled using a portion of the proceeds from the Offer prior to \ being refinanced. This will have a continuing effect on the statement of profit\ or loss and other comprehensive income; (c) Finance expense has been adjusted to account for the finance expense on \ the New Senior Debt Facilities which amounts to R122 million. This will have a continuing effect on the statement of profit or loss and oth\ er comprehensive income; (d) Finance expense has been further adjusted by an amount of R44 million fo\ r interest on Preference Shares and fair value adjustments which have been reversed as the Preference Shares will be settled by Consol using a portion of the proceeds of the Offer. The reversal of the historical Preference Shares interest and fair value adjustments relating to the Preference Shares liabilities that will be repaid by the Company using a portion of the proceeds of the Offer will have a continuing effect on th\ e statement of profit or loss and the other comprehensive income; and (e) Taxation adjustments amounting to R31 million have been made for the abov\ e transactions other than for the Preference Share effects which are not deductible for taxation purposes. This will have a continuing effect\ on the statement of profit or loss and other comprehensive income. (5) Column 5 presents the financial effects relating to Transaction Costs of R129 million. Transaction Costs, amounting to R38 million, which relate directly to the Offer, have been expensed and Transaction Costs amounting to R91 million, which relate directly to the Offer have been capitalised in terms of IAS 32: Financial Instruments: Presentation. Transaction costs already incurred in the year ended 30 June 2017, amounting to R25 million, which relate directly to the Listing, are included in the Historical Financial Information of the Group and have been expensed in non-operating and capital \ items, while Transaction Costs already incurred in the six-month period ended 31 December 2017, amounting to R9 million, which relate directly to the Listing, are included in the Interim Historical Financial Information of the Group and have been expensed in non-operating and capital \ items. The balance of the Transaction costs to be incurred which will be expensed, amounting to R4 million, has been adjusted in\ non-operating and capital items in the pro forma adjustments. This will not have a continuing effect on the statement of \ profit or loss and other comprehensive income; (6) Column 6 presents the financial effects relating to finance expenses relating to Class “B” Loans of R169 million and a present value adjustment of R124 million on the Class “A” Loans, on the settlement of a portio\ n of the Shareholder Loans and conversion of the remaining Shareholders Loans to Conversion Shares. Finance expense has been adjusted to reverse the historical interest expense and the related taxation benefit of R47 million in respect of the Class “B” Loans. There is no taxation effect on the present value adjustment. The reversal of the historical finance expense and present value adjustment and the related taxation benefit relating to the Class “A” Loans and Class “B” Loans that will be repaid by the Company using a portion of the proceeds of the Offer or con\ verted to Conversion Shares will have a continuing effect on the statement of profit or loss and other comprehensive income; (7) Column 7 presents the financial effects of the issue of 1,054,000,000 million Conve\ rsion Shares, at an issue price of R4 being the mid-point of the Offer Range to settle R4,216 million of the remaining Shareholder Loans. The effect of the issue of the Conversion Shares will have a continuing effect on the statement of profit or loss and other comprehensive income. (8) Column 8 presents the financial effects of the Consol ESOP as follows: A broad based employee share ownership plan will be implemented on the listing date which will hold\ approximately 5% of the Company’s share capital. The Consol ESOP will not have an effect on the statement of pro\ fit or loss and other comprehensive income as allocations will only be made to beneficiaries of the Consol ESOP in the 2019 financial year. (9) Column 9 presents the financial effects of the acquisition of the Glassforce minori\ ty shareholders interest of 49%, Glassforce will be 100% held after the acquisition. The acquisition will result in a change in attribution of (loss)/profit for the period as well as total comprehensive income for the period between non-controlling interests and owners of the company. Finance expense has increased by R2 million which relates to the unwinding of a portion of the present value adjustment processed to the deferred consideration of $7.5million. The deferred consideration is payable in three equal tranches on the three subsequent anniversaries of the effective date of the transaction. Di\ fferences arising from fluctuations in the exchange rates are assumed to be nil. The Glassforce Minority Acquisition will have a continuing effect on the\ statement of profit or loss and other comprehensive income. (10) Column 10 presents the Pro Forma Statement of Profit or Loss and Other Comprehensive Income of the Group subsequent to the Transactions. (11) If the minimum capital raise of R2,500 million is achieved, the differences in the pro forma basic earnings per share, diluted basic earnings per share, headline earnings per share, diluted headline earnings per share, weighted average number of shares – basic and weighted average number of shares – diluted is as follows (no other differences to the pro forma statement of profit or loss and other comprehensive income): Minimum capital raised Expected capital raised Difference Indicator Cents Earnings per share Basic earnings per share 11.6411.27 0.37 Diluted basic earnings per share 11.6211.25 0.37 Headline earnings per share 16.5416.02 0.52 Diluted headline earnings per share 16.51 15.99 0.52 Weighted average number of shares – basic (1)2,079,486,419 2,147,855,984 (68,369,565) Weighted average number of shares – diluted(1)2,083,462,905 2,151,832,470 (68,369,565) Note: (1) As a result of raising less capital, less shares will be issued as part of the capital raising, as such, the weighted \ average number of shares will decrease by 68,369,565 shares, which will impact earnings per share (basic, headline and diluted). A-81 Table A Table A below sets out the Pro forma operating profit, Pro forma Adjusted EBITDA and Pro forma Headline Earnings for the six months ended 31 December 2017: Column 1Column 2Column 3 Interim Historical Financial Information of the Group prior to the Transactions Adjustments for the Transactions Pro forma financial information of the Group subsequent to the Transactions Rm Operating profit 668–668 Adjusted EBITDA 936–936 Headline Earnings (20)364 344 Notes: (1) Column 1 presents the reviewed Operating profit, reviewed Adjusted EBITDA and reviewed Headline Earnings as extracted from the reviewed Interim Historical Financial Information of the Group for the six months ended 31 December 2017, as presented in the Interim Historical Financial Information of the Group attached as Annexure 3 to this Pre-listing Statement. (2) Column 2 presents the Pro forma adjustments as follows: Pro forma adjustments to Headline Earnings: Rm • Loan Restructuring adjustments (refer to note 4 to the pro forma statement of profit or loss and other comprehensive income)125 • Transaction Costs adjustments (refer to note 5 to the pro forma statement of profit or loss and other comprehensive income) (4) • Settlement of Shareholder Loans (refer to notes 6 and 7 to the pro forma statement of profit or loss and other comprehensive income) 246 • Glassforce Minority Acquisition non-controlling interests reallocation of (loss)/profit for the period after taxation and unwinding of present value adjustment of deferred consideration (refer to note 9 to the pro forma statement of profit or loss and other comprehensive income) (3) • Total Pro Forma Headline Earnings adjustments364 (3) Column 3 presents the Pro forma Operating profit, Pro forma Adjusted EBITDA, and Pro forma Headline Earnings subsequent to the pro forma Transactions adjustments detailed in note 2 above. A-82 PRO FORMA STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017 Column 1Column 2Column 3Column 4Column 5Column 6Column 7Column 8Column 9Column 10 Interim Historical Financial Information of the Group prior to the Transactions Adjustments relating to the EA Trust Ordinary Share Repurchase Adjustments relating to the issue of the Offer Shares Adjustments relating to the Loan Restructuring Adjustments relating to the Transaction Costs Adjustments relating to the settlement of a portion of the Shareholder Loans Adjustments relating to the conversion of the remaining Shareholder Loans to Conversion Shares Adjustments relating to the Consol ESOP Adjustments relating to the Glassforce Minority Acquisition Group subsequent to the Transactions Reviewed Pro forma Pro formaPro formaPro formaPro formaPro formaPro formaPro formaPro forma Rm ASSETS Non-current assets 7,381––––––––7,381 Property, plant and equipment 2,971––––––––2,971 Prepayments for plant and equipment 101––––––––101 Goodwill 2,862––––––––2,862 Intangible assets 1,447––––––––1,447 Current assets 3,466–3,043 (2,340) (95)(324) ––(90)3,660 Inventories 1,505–— –— — –––1,505 Trade and other receivables 1,502–— –— — –––1,502 Prepaid taxation 11–— –— — –––11 Cash and cash equivalents 448–3,043 (2,340) (95)(324) ––(90) 642 Total assets 10,847–3,043 (2,340) (95)(324) ––(90)11,041 EQUITY AND LIABILITIES Capital and reserves (1,077) –3,043 – (95) – 4,216 –(168) 5,919 Share capital and premium 310(14)3,043 –(91) –4,216 1–7,465 Treasury shares (16)14 –––––(1) –(3) Other reserves (280)–––––––(52) (332) Accumulated loss (1,186)–––(4) –––(63)(1,253) Non-controlling interests 95–––––––(53) 42 Non-current liabilities 6,191––1,805 –(324) (4,216) –783,534 Shareholder loans 4,540––––(324) (4,216) ––– Loans and borrowings 143––2,400 –––––2,543 Preference shares liabilities 595––(595) –––––– Employee related liabilities 111––––––––111 Provisions – rehabilitation provision 12––––––––12 Finance lease liability 74––––––––74 Put liability over NCI 50––––––––50 Glassforce deferred consideration –– ––––––78 78 Deferred taxation 666––––––––666 Current liabilities 5,733––(4,145) –––––1,588 Finance lease liability 39––––––––39 Trade and other payables 724 ––––––––724 Loans and borrowings 4,186––(4,145) –––––41 Taxation payable 72––––––––72 Deferred income 22––––––––22 Factor liability 285––––––––285 Derivatives 17––––––––17 Bank overdraft 388––––––––388 Total equity and liabilities 10,847–3,043 (2,340) (95)(324) ––(90)11,041 Net asset value per share (cents) (323.4) 275.6 Tangible net asset value per share (cents) (1,617.5) 75.0 Number of ordinary shares in issue 332,986,419– 760,869,565 –––1,054,000,000 ––2,147,855,984 A-83 EQUITY RECONCILIATION AS AT 31 DECEMBER 2017 Shares Issued Share capital and premium Other Reserves Non- controlling Interests Treasury Shares Accumulated loss Millions RmRmRmRmRm Equity reconciliation Opening balance 333.0310(280) 95(16)(1,186) Issue of shares in respect of the Offer 760.93,043 –––– Repurchase by the Company of 3,276,521 Ordinary Shares from the EA Trust –(14) ––14 – Issue of shares in respect of the Conversion of remaining Shareholder Loans 1,054.04,216 –––– Issue of shares in respect of the Consol ESOP –1 ––(1) – Transaction costs capitalised/ expensed –(91) –––(4) Glassforce Minority Acquisition ––(52) (53) –(63) Total 2,147.97,465(332) 42(4)(1,253) Notes: (1) Column 1 presents the Interim Historical Financial Information of the Group, which has been extracted from the reviewed Interim Historical Financial Information of the Group for the six month period ended 31 December 2017, as presented in the Interim Historical Financial Information of the Group attached as Annexure 3 to this Pre-listing Statement. (2) Column 2 presents the financial effects of the EA Trust Ordinary Share Repurchase. The Company will repurchase 3,276,521 Ordinary Shares from the EA Trust at a price of R4 per share being the mid-point of the Offer Range and extinguish the related loans to the EA Trust relating to the original purchase of Ordinary Shares by the EA Trust. The restructuring of the EA Trust will not have a continuing effect on the weighted average number of Ordinary Shares in issue. (3) Column 3 presents the financial effects of the issue of 760,869,565 Offer Shares, at an issue price of R4, being the mid-point of the Offer Range, to raise gross proceeds of R3,043 million. (4) Column 4 presents the financial effects of the Loan Restructuring as follows: (a) Loans and borrowings and cash and cash equivalents have been adjusted to reflect the net settlement of R1,745 million of the old Senior Debt facilities (being the net of the R4,145 million old Senior Debt Facilit\ ies as at 31 December 2017, less the proceeds received from the New Senior Debt Facilities of R2,400 million at the Listing Date). In addition, an\ amount of R2,400 million relating to the New Senior Debt Facilities has been transferred from current liabilities to non-current liabilities to reflect the new payment terms of the New Senior Debt Facilities; (b) Preference shares liabilities and cash and cash equivalents have been adjusted to reflect the repayment of the R595 million of the Preference shares liabilities using a portion of the proceeds of the Offer. (5) Column 5 presents the financial effects relating to Transaction Costs, amounting to R129 million in total, of which R34 milli\ on was incurred in prior reporting periods. Transaction Costs, amounting to R4 million, which relate directly to the Offer, have been expensed (refer to note 5 of the pro forma statement of profit or loss and other comprehensive income) and Transaction Costs amounting to R91 million, which relate directly to the Offer have been capitalised in terms of IAS 32: Financial Instruments: Presentation. (6) Column 6 presents the financial effects of the settlement of a portion of the Shareholder Loans. Shareholder Loans and cash and cash equivalents have been adjusted to reflect the repayment of R324 million of the Class “B” Loans using a portion of the proceeds of the Offer. Shareholder loans relating to Sphere will not be settled using a portion of the proceeds, these loans will \ be settled through the issue of Conversion Shares. (7) Column 7 presents the financial effects of the issue of the 1,054 million Conversio\ n Shares, at an issue price of R4 being the mid-point of the Offer Range to settle R4,216 million of the remaining Shareholder loans. (8) Column 8 presents the financial effects of the Consol ESOP. A broad-based employee share ownership plan will be implemented on the Listing Date which will hold approximately 5% of the Company’s share capital as treasury shares. These shares will be issued to the Consol ESOP at R0.01 per share. (9) Column 9 presents the financial effects of the acquisition of the Glassforce minori\ ty shareholders interest of 49%, Glassforce will be 100% held after the acquisition. The acquisition consideration of $15 million has been trans\ lated to rand at R12/$1 which is the assumed exchange rate at the effective date of the transaction. Of the acquisition consideration, $7.5 million is deferred and will be paid in three equal tranches on the three subsequent anniversaries from the effective date of the transaction and as such the deferred consideration is classified as non-current as at 31 December 2017. The deferred consideration was adjusted to a present value of R78 million due to a discounting impact of R12 million. The non-controlling interests has been reduced by R53 million attributable to Glassforce. Other reserves has reduced by R52 million which relates to foreign currency translation reserves which were previously allocated to the non-controlling interests in Glassforce. The difference between the discounted consideration and non-controlling interests as at the effective date has been recognised directly in accumulated loss and amounts to R63 million. (10) Column 10 presents the Pro forma Statement of Financial Position of the Group subsequent to the Transactions. A-84 (11) If the minimum capital raise of R2,500 million is achieved, differences to the financial statement captions, pro forma net asset value per share, tangible net asset value per share and number of ordinary shares in issue, subsequent to the Transactions are as follows: Financial statement caption and indicator Minimum capital raised Expected capital raised Difference Rm Cash and cash equivalents (1) 392642 (250) Total current assets 3,4103,660 (250) Share capital and premium( 2) 7,215 7,465 (250) Total capital and reserves(3) 5,669 5,919 (250) Net asset value per share (cents) 272.6275.6 (3) Tangible net asset value per share (cents) 65.475.0 (9.6) Number of ordinary shares in issue (2)(4) 2,079,486,419 2,147,855,984 (68,369,565) Notes: (1) As a result of raising less capital, proceeds to increase cash and cash equivalents will not be achieved. (2) As a result of raising less capital, the total number of share to be issued is affected by (i) minimum capital raised will result in less shares being issued; and (ii) the conversion of the remaining Shareholder Loans to Conversion Shares, which increases as a result of minimum capital being raised. (3) Reconciliation of total capital and reserves after the transactions based on the minimum capital requirements to reflect compliance with Listings Requirements minimum capital requirement of R500 million: Rm Opening Total Capital and Reserves (1,077) • Adjustments relating to the Issue of Offer Shares 2,500 • Adjustments relating to the Transaction Costs (72) • Adjustments relating to the Conversion of remaining Shareholder Loans to Conversion Shares 4,486 • Adjustments relating to the Glassforce Minority Acquisition (168) Closing Total Capital and Reserves 5,669 • Less Goodwill and Intangible Assets (4,309) Closing Total Capital and Reserves excluding Goodwill and Intangible Assets 1,360 (4) Less shares will be issued as part of the listing, as such, the number of ordinar\ y shares in issue will decrease by 68,369,565 shares. Going concern During the six months ended 31 December 2017, the Group recorded a loss after tax of R119 million primarily due to the following item\ s: • impairments on goodwill, intangible assets and property, plant and equipment amounting to R125 million; and • net finance expense of R614 million. Furthermore, as at 31 December 2017, the Group’s total liabilities exceeded its total assets by R1,077 million and its \ current liabilities exceeded its current assets by R2,267 million at 31 December 2017. The directors have made an assessment of the ability of the Company and its sub\ sidiaries to continue as going concerns on the following basis: • the South African loans and borrowings (refer to note 8 of Annexure 3 to this Pre-listing Statement) will be refinanced after negotiations with lenders. • the Shareholders Loans amounting to R4,540 million as at 31 December 2017 are not repayable to shareholders within the next twelve months and have been subordinated as reflected in note 7 to Annexure 3 to this Pre-listing Statement. • the forecast operating cash flows for the twelve-month period from the dates of the periods and year presented are positive. • the availability of sufficient credit facilities which will be utilised for working capital management is\ as follows: Reviewed 6 months ended 31 December 2017 Rm Nedbank Limited 750 The Standard Bank of South Africa Limited 10 760 KESm Stanbic Bank Kenya Limited 200 NGNm Stanbic IBTC Bank Plc 750 Based on the above assessment, the interim financial results for the six months ended 31 December 2017 have been prepared on the basis of accounting policies applicable to a going concern which assumes it is highly probable that funds will be available to finance future operations, through refinancing of the borrowings with the lenders prior to the maturity date and that the realisation of assets and the settlement of liabilities will occur in the ordinary course of business. Should the continued refinancing not occur, this condition gives rise to a material uncertainty which may cast significant doubt on the ability o\ f the Company and its subsidiaries to continue as going concerns. A-85 ANNEXURE 6 INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE COMPILATION OF THE PRO FORMA FINANCIAL INFORMATION OF THE GROUP The Directors Consol Holdings Limited Consol House Osborn Road Wadeville Germiston, 1428 INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE COMPILATION OF THE PRO FORMA FINANCIAL INFORMATION OF THE GROUP The definitions in Annexure 20 of this Pre-listing Statement apply mutatis mutandis to this report. IntroductionWe have completed our assurance engagement to report on the compilation of the pro forma financial information of the Group by the directors of the Company (“Directors”). Consol Holdings Proprietary Limited will be renamed Consol Holdings Limited. The pro forma financial information consists of the Pro forma earnings and diluted earnings, headline and diluted headline earnings, net asset value and tangible net asset value per share of the Group, the Pro forma statement of financial position of the Group, the Pro forma statement of profit or loss and other comprehensive income of the Group and the related notes, including a reconciliation showing all of the Pro forma adjustments to the share capital, reserves and other equity items relating to the Company, subsequent to the Transactions, detailed below (collectively “Pro forma Financial Information”). The Pro forma Financial Information is set out in Annexure 5 of the Pre-listing Statement. The Pro forma Financial Information has been compiled on the basis of the applicable \ criteria specified in the Listings Requirements. The Pro forma Financial Information has been compiled by the Directors to illustrate the impact of the • The EA Trust Ordinary Share Repurchase; • The issue of the Offer Shares; • The Loan Restructuring and raising of New Senior Debt Facilities (“L\ oan Restructuring”); • Transaction Costs; • Settlement of a portion of the Shareholder Loans (as part of the Shareholder Loan Restructuring); • Conversion of remaining Shareholder Loans to Conversion Shares (as part of the Shareholder Loan Restructuring); • The Employee Share Ownership Plan (“Consol ESOP”); and • The purchase of the remaining 49% of the Glassforce shareholding (the “Glassforce Minority Acquisition”) (collectively, the “Transactions”) on the pro forma statement of financial position of the Group, the pro forma statement of profit or loss and other comprehensive income of the Group and the related notes, including a reconciliation showing all of the pro forma adjustments to the share capital, reserves and other equity items relating to the Group. As part of this process, the Group’s earnings, diluted earnings, headline earnings and diluted headline earnings, net asset value and tangible net asset value per share, statement of profit or loss and other comprehensive income and statement of financial position have been extracted by the Directors from the Company’s reviewed financial information as at and for the six month period ended 31 December 2017 included as Annexure 3 to this Pre-listing Statement (“Reviewed Interim Financial Information”). \ Directors’ Responsibility for the Pro forma Financial InformationThe Directors are responsible for compiling the Pro forma Financial Information on the basis of the applicable criteria as\ detailed in paragraphs 8.15 to 8.33 of the Listings Requirements and the SAICA Guide on Pro forma Financial Information, revised and issued in September 2014 (“Applicable Criteria”). Independent Reporting Accountant’s Independence and Quality ControlWe have complied with the independence and other ethical requirements of the Code of Professional Conduct for Registered Auditors issued by the Independent Regulatory Board for Auditors (IRBA), that is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Part A and B), which is founded on fundamental principles of integri\ ty, objectivity, professional competence and due care, confidentiality and professional behaviour. The firm applies International Standard on Quality Control 1 and accordingly, maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. A-86 Independent Reporting Accountant’s Responsibility Our responsibility is to express an opinion about whether the Pro forma Financial Information of the Company has been compiled, in all material respects, by the Directors on the basis of the Applicable Criteria. We conducted our engagement in accordance with International Standard on Assurance Engagements (ISAE) 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus, issued by the International Auditing and Assurance Standards Board. This standard requires that the reporting accountants comply with ethical requirements and plan and perform procedures to obtain reasonable assurance about whether the Directors have compiled, in all material respects, the Pro forma Financial Information of the Company on the basis of the Applicable Cri\ teria. For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on the Reviewed Financial Information used in compiling the Pro forma Financial Information of the Company, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the Pro forma Financial Information of Company. The purpose of the Pro forma Financial Information of the Company included in the Pre-listing Statement is solely to illustrate the impact of, the Transactions on the unadjusted Reviewed Financial Information as if, the \ Transactions had been undertaken on 1 July 2017 for purposes of the Pro forma earnings, diluted earnings, headline earnings and the Pro forma statement of profit or loss and other comprehensive income and on 31 December 2017 for purposes of the Pro forma net asset value and tangible net asset value per share and pro forma statement of financial position. Accordingly, we do not provide any assurance that the actual outcome of the Transactions for the six months ended and as at 31 December 2017 would ha\ ve been as presented. A reasonable assurance engagement to report on whether the Pro forma Financial Information of the Company has been properly compiled, in all material respects, on the basis of the Applicable Criteria involves performing procedures to assess whether the Applicable Criteria used by the Directors in the compilation of the Pro forma Financial Information of the Company provide a reasonable basis for presenting the significant effects directly attributable to the Transactions and to obtain sufficient appropriate evidence about whether: • The related Pro forma adjustments give appropriate effect to the Applicable Criteria; and • The Pro forma Financial Information of the Company reflects the proper application of those Pro forma adjustments to the unadjusted Reviewed Financial Information. The procedures selected depend on the reporting accountant’s judgment, having regard to the reporting accountant’s understanding of the nature of the Company, the Transactions in respect of which the Pro forma Financial Information of the Company has been compiled and other relevant engagement circumstances. The engagement also involves evaluating the overall presentation of the Pro forma Financial Information of the Company. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Opinion In our opinion, the Pro forma Financial Information of the Company has been compiled, in all material\ respects, in accordance with the basis of the Applicable Criteria. Material Uncertainty Relating to Going ConcernWe draw attention to the going concern note included in the Pro Forma Financial Information, as set out in Annexure 5 to this Pre-listing Statement, which indicates that the Group incurred a loss after tax of R119 million during the six months ended 31 Decem\ ber 2017 and, as of that date, the Group’s total liabilities exceeded its total assets by R1,077 million and its \ current liabilities exceeded current assets by R2,267 million. As stated in the going concern note, should the continued refinancing of borrowings with lenders not occur prior to the maturity date, a material uncertainty exists that may cast significa\ nt doubt on the Company and its subsidiaries ability to continue as going concerns. Our conclusion is not modified in respect of this matter. KPMG Inc. Registered Auditor Yusuf Abed Director Registered Auditor 13 April 2018 KPMG Crescent 85 Empire Road Parktown 2193 (Private Bag 9, Parkview, 2122) A-87 ANNEXURE 7 REVIEWED HISTORICAL FINANCIAL INFORMATION OF THE GROUP FOR THE YEARS ENDED 30 JUNE 2014, 2013, 2012 AND 2011 PURPOSE OF THE REVIEWED HISTORICAL FINANCIAL INFORMATION OF THE GROUP FOR THE YEARS ENDED 30 JUNE 2014, 2013, 2012 AND 2011 The definitions commencing on page A-145 of the Pre-listing Statement have been used throughout this Annexure 7. As part of the financial information disclosure included in this annexure and in the Pre-listing Statement, historical consolidated revenue, consolidated cost of sales, consolidated gross profit, consolidated operating expenses and consolidated operating profit for the years ended 30  June 2014, 2013, 2012 and 2011 (“Reviewed Historical Financial Infor\ mation of the Group”), has been provided to afford potential investors with additional information relating to the historical financial performance of Consol. The Reviewed Historical Financial Information is set out in Table 1 below. BASIS OF PREPARATION OF THE REVIEWED HISTORICAL FINANCIAL INFORMATION OF THE GROUP The directors are responsible for the Reviewed Historical Financial Information of the Group constituting Lines 1, 2, 3, 4 and 5 of each of Columns A to D of Table I below. Reviewed Historical Financial Information of the GroupThe Reviewed Historical Financial Information of the Group, which constitutes Lines 1, 2, 3, 4 and 5 of each of Columns A to D \ of Table I below, has been extracted, without adjustment, from the reviewed special purpose financial information for the years ended 30 \ June 2014, 2013, 2012 and 2011 (“Reviewed Carve-Out Financial Information”)\ . The Reviewed Carve-Out Financial Information comprises of the consolidated revenue, consolidated cost of sales, consolidated gross profit, consolidated operating expenses and consolidated operating profit for the years ended 30 June 2014, 2013, 2012 and 2011, the related accounting policies and notes. The Reviewed Carve-Out Financial Information has been prepared in accordance with the special purpose framework. The accounting policies used in the preparation of the Reviewed Carve-Out Financial Information are the accounting policies set out in Annexure 1 to this Pre-listing Statement and are consistent with the recognition and measurement criteria of IFRS. The Reviewed Carve-Out Financial Information has been prepared for the purposes of providing financial information to meet the requirements of Section 8.45(b) of the Listings Requirements, which state, inter alia, that a reporting accountant’s report is required when a report of historical financial information is prepared and presented on a voluntary basis. KPMG Inc. is the auditor to Consol and conducted the reviews of the Reviewed Carve-Out Financial Information, prepared in accordance with the basis of preparation detailed above, in accordance with International Standards on Auditing and issued an unqualified review conclusion on the Reviewed Carve-Out Financial Statements. The Reviewed \ Carve-Out Financial Information is available for inspection as set out in “Additional Information–Documents available for insp\ ection” included in this Pre-listing Statement. KPMG Inc. is also the independent reporting accountant to Consol. KPMG Inc’s unmodified review conclusion on the Reviewed Historical Financial Information, prepared in accordance with the basis of preparation detailed above, is attached as Annexure 8 to this Pre-listing Statement. Table I: Reviewed statements of profit or loss for the years ended 30 June 2014, 2013, 2012 and 2011Table I below sets out the reviewed consolidated revenue, consolidated cost of sales, consolidated gross profit, consolidated operating expenses and consolidated operating profit of the Group for the years ended 30 June 2014, 2013, 2012 and 2011. Line2014 201320122011 Column A Column BColumn C Column D Rm Consolidated Revenue Line 14,5644,7344,5844,320 Consolidated Cost of sales Line 23,2803,3463,1142,860 Consolidated Gross Profit Line 31,2841,3881,4701,460 Consolidated Operating Expenses Line 4652640609558 Consolidated operating profit Line 5632748861902 A-88 ANNEXURE 8 INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE REVIEWED HISTORICAL FINANCIAL INFORMATION OF THE GROUP The Directors Consol Holdings Limited Consol House Osborn Road Wadeville Germiston, 1428 INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE REVIEWED HISTORICAL FINANCIAL INFORMATION OF THE GROUP The definitions in Annexure 20 of this Pre-listing Statement apply mutatis mutandis to this report. Introduction At your request, and for the purposes of the Pre-listing Statement, we have reviewed the historical consolidated revenue, consolidated cost of sales, consolidated gross profit, consolidated operating expenses and consolidated operating profit of the Group (as presented in Annexure 7 to the Pre-listing Statement) for the years ended 30 June 2014, 2013, 2012 and 2\ 011 set out in lines 1, 2, 3, 4 and 5 of the Columns A to D of Table I in Annexure 7 to this Pre-listing Statement (“Reviewed Historical Financial Information of t\ he Group”). Consol Holdings Proprietary Limited will be renamed Consol Holdings Limited. The Reviewed Historical Financial Information of the Group is prepared for purposes of compliance with paragraph 8.45(b) of the Listings Requirements and in terms of the basis of preparation set out in the Reviewed Historical Financial Information of th\ e Group for the years ended 30 June 2014 to 2011, included as Annexure 7 to this Pre-listing Statement. KPMG is the independent auditor and the independent reporting accountant to Consol. Responsibilities of the Directors for the Reviewed Historical Financial Information The directors of Consol (“Directors”) are responsible for the compilation, contents and preparation of the Pre-listing Statement including the Reviewed Historical Financial Information in terms of the basis of p\ reparation set out in Annexure 7 to the Pre-listing Statement. The Directors are also responsible for preparing the Reviewed Historical Financial Information of the Group in terms of the basis of preparation set out in Annexure 7 to this Pre-listing Statement, and for such internal controls as the Directors determine is necessary to enable the preparation of Reviewed Historical Financial Information of the Group that are free from material misstatement whether due to fraud or error. Independent Reporting Accountant’s Responsibilities for the Reviewed Historical Financial Information of the Group Our responsibility is to express a conclusion on the Reviewed Historical Financial Information of the\ Group. We conducted our review in accordance with the International Standard on Review Engagements (ISRE) 2410, which applies to a review of historical information performed by the independent auditor of the entity. ISRE 2410 requires us to conclude whether anything has come to our attention that causes us to believe that the Reviewed Historical Financial Information \ of the Group is not prepared in all material respects in accordance with the applicable financial reporting framework. This standard also requires us to comply with relevant ethical requirements. A review of the Reviewed Historical Financial Information of the Group in accordance with ISRE 2410 is a limited assurance engagement in terms of which we perform procedures, primarily consisting of making enquiries of management and others wi\ thin the entity, as appropriate, and applying analytical procedures and evaluating the evidence obtained. The procedures performed in a review are substantially less than those performed in an audit conducted in accor\ dance with International Standards on Auditing. Accordingly, we do not express an audit opinion on the Reviewed Historical Financial Information of\ the Group. ConclusionBased on our review, nothing has come to our attention that causes us to believe that the R\ eviewed Historical Financial Information of the Group presented in Annexure 7 to this Pre-listing Statement are not prepared, in all material respects, in terms of the basis of preparation set out in Annexure 7 to the Pre-listing Statement. Emphasis of matterWe draw attention to the basis of preparation set out in Annexure 7 to the Pre-listing Statement. The Reviewed Historical Financial Information of the Group is prepared for purposes of compliance with the requirements of paragraph 8.45(b) of the Listings Requirements. Our conclusion is not modified in respect of this matter. KPMG Inc. Registered Auditor Steve Robinson Director Registered Auditor 12 April 2018 KPMG Crescent 85 Empire Road Parktown, 2193 (Private Bag 9, Parkview, 2122) A-89 ANNEXURE 9 REPORT OF ADJUSTED RETURN ON NET ASSETS Purpose of the Adjusted Return on Net Assets As part of the financial information disclosure included in the Pre-listing Statement, Consol is presenting the pro forma return on net assets of the Group (“Adjusted RONA”) for the years ended 30 June 2017, 30 June \ 2016 and 30 June 2015 and the reconstructed twelve-month periods ended 31 December 2017 and 31 December 2016. Consol Holdings Proprietary Limited will be renamed Consol Holdings Limited. The Adjusted RONA has been prepared to illustrate how efficiently Consol are using their fixed assets, select current assets and trade and other payables to generate returns excluding the effects of non-recurring taxation payments, the settlement of the SARS Audit, assessed losses and other items that result directly from Consol’s historical funding structure. Basis of preparation The Directors are responsible for the Adjusted RONA set out below, which has been prepared in accordance with the guidance set out in the SAICA Guide on Pro forma Financial Information, revised and issued in September 2014 and paragraphs 8.15 to 8.33 of the L\ istings Requirements, as applicable to the Adjusted RONA. The directors have calculated Adjusted RONA as follows: ab cd e Reconstructed twelve months ended 31 December Year ended 30 June Lines 2017 2016201720162015 Rm, unless stated otherwise Adjusted Operating Profit/Operating Profit 11 098 1 0131 020 989868 Adjusted Income Taxes 2(308) (284)(286)(277)(243) Adjusted post taxation Operating Profit 3790 729734712625 Fixed assets 43,072 2,9293,0222,9942,625 Adjusted Current Assets 53,007 2,3552,5742,4371,969 Trade and other payables 6(724) (755)(689)(598)(564) Adjusted Net Assets 75,355 4,5294,9074,8334,030 Adjusted RONA (%) 814.8% 16.1%15.0%14.7%15.5% The calculations set out above are referred to as the Adjusted RONA calculation table for the purposes of the bas\ is of preparation section of this report. Part A – Line 1 adjustments Part A.1 - Line 1 of Columns (a) and (b)The financial information reflected in line 1 of columns (a) and (b) of the Adjusted RONA calcu\ lation table above presents Operating Profit for the twelve months ended 31 December 2017 and 2016, respectively, (“Adjusted Operating Profit”) calculated as follows: Line 1 of Column (a) Rm Operating Profit for the six months ended 31 December 2017 668 extracted, without adjustment, from the reviewed condensed group statements of profit or loss and other comprehensive income of Consol, included in Annexure 3 to this Pre-listing Statement Operating Profit for the year ended 30 June 2017 1,020 extracted, without adjustment, from the audited consolidated statements of profit or loss and other comprehensive income for the year ended 30 June 2017 of Consol, included in Annexure 1 to this Pre-listing Statement Operating Profit for the six months ended 31 December 2016 (590) extracted, without adjustment, from the reviewed condensed group statements of profit or loss and other comprehensive income of Consol, included in Annexure 3 to this Pre-listing Statement 1,098 Line 1 of Column (b) Rm Operating profit for the six months ended 31 December 2016 590 extracted, without adjustment, from the reviewed condensed group statements of profit or loss and other comprehensive income of Consol, included in Annexure 3 to this Pre-listing Statement Operating profit for the year ended 30 June 2016 989 extracted, without adjustment, from the audited consolidated statements of profit or loss and other comprehensive income for the year ended 30 June 2016 of Consol, included in Annexure 1 to this Pre-listing Statement Operating profit for the six months ended 31 December 2015 (566) extracted, without adjustment, from unaudited and unreviewed management accounts for the six months ended 31 December 2015 1,013 A-90 Part A.2 - Line 1 of Columns (c) to (e)Operating Profit reflected in line 1 of columns (c) to (e) of the Adjusted RONA calculation table above has been extracted, without adjustment, from the historical consolidated statements of profit or loss and other comprehensive income for the years ended 30 June 2017, 2016 and 2015 of Consol, included in Annexure 1 to this Pre-listing Statement, prepared in accordance with Consol’s accounting policies which are compliant with IFRS. Part B – Line 2 adjustments Line 2 of Columns (a) to (e)The adjustments reflected in Line 2 of Columns (a) to (e) of the Adjusted RONA calcul\ ation table above present an adjusted income taxation figure calculated as Line 1 of Columns (a) to (e) of Table A below multiplied by 28% (“Adjusted Income Taxation”). Management has used the South African statutory tax rate of 28% for the \ purposes of presenting the Adjusted RONA in order to illustrate Adjusted RONA excluding the non-recurring impact of non-recurring taxation payments due to the settlement of the SARS Audit. Although Consol has operations in Kenya and Nigeria, where the statutory taxation rate is 30%, the impact of these businesses on \ the historical income taxes is not considered to be material and, therefore, the statutory taxation rate in South Africa has been used in this calculation and has not been weighted to take into account the differential taxation rates for Rest of Africa. Part C – Line 4 Line 4 of Columns (a) to (e)Fixed assets in line 4 of columns (a) to (e) of the Adjusted RONA calculation table above, comprises of the following financial statement information: Six months ended 31 December Year ended 30 June 2017 2016 201720162015 Rm Property, plant and equipment Prepayments for plant and equipment 2,971 101 2,766 163 2,868 154 2,894 100 2,619 6 The amounts relating to Property, plant and equipment and Prepayments for plant and equipment have been extracted, without adjustment, from the audited consolidated statements of financial position of Consol and the reviewed condensed group statements of financial position of Consol, included in Annexures 1 and 3, respectively to this Pre-listing Statement Fixed assets 3,0722,929 3,0222,9942,625 Part D – Line 5 adjustments Line 5 of Columns (a) to (e)Current assets presented in line 5 of columns (a) to (e) of the Adjusted RONA calcula\ tion table above has been adjusted to exclude cash and cash equivalents, prepaid taxation and derivatives (“Current Assets Adjustments”) as detailed below: Six months ended 31 December Year ended 30 June 2017 2016 201720162015 Rm Total current assets Less: cash and cash equivalents Less: prepaid taxation Less: derivatives 3,466 (448)(11) – 3,035 (669)(11) – 3,162 (575)(10)(3) 2,585 (135)(13) – 2,211 (225) – (17) The amounts relating to total current assets, cash and cash equivalents, prepaid taxation and derivatives have been extracted, without adjustment, from the audited consolidated statements of financial position of Consol and the reviewed condensed group statements of financial position of Consol, included in Annexures 1 and 3, respectively to this Pre-listing Statement 3,007 2,355 2,5742,4371,969 Consol management believes the adjustments to current assets for cash and cash equivalents, prepaid taxation and derivatives are not in the ordinary course of business due to the historical funding structure of Consol and certain non-recurring taxation payments. A-91 Part E – Line 6 Line 6 of Columns (a) to (e)Trade and other payables reflected in line 6 of columns (a) to (e) of the Adjusted RONA calcul\ ation table above has been extracted, without adjustment, from the audited consolidated statements of financial position of Consol a\ nd the reviewed condensed group statements of financial position of Consol, included in Annexures 1 and 3, respectively to this Pre-listing Statement prepared in accordance with IFRS. Consol management believes the inclusion of only trade and other payable\ s in the Adjusted RONA calculation is appropriate as this item is considered to be operational in nature and exclude the impact of the historical funding structure of Consol and certain non-recurring taxation payments. Part F – Lines 3, 7 and 8 (Adjusted post taxation operating profit, Adjusted net assets and Adjusted RONA) Part F.1 - Line 3 of Columns (a) to (e)Line 3 of Columns (a) to (e) of the Adjusted RONA calculation table above presents Adjusted post taxation Operating Profit and has been calculated as follows: • Line 3 of Columns (a) to (e) of the Adjusted RONA calculation table \ above equals line 1 of Columns (a) to (e) of the Adjusted RONA calculation table above less line 2 of Columns (a) to (e) of the Adj\ usted RONA calculation table above. Part F.2 - Line 7 of Columns (a) to (e)Line 7 of Columns (a) to (e) of the Adjusted RONA calculation table \ above presents Adjusted net assets and has been calculated as follows: • Line 7 of Columns (a) to (e) of the Adjusted RONA calculation table \ above equals the sum of lines 4 and 5 of Columns (a) to (e) of the Adjusted RONA calculation table above less line 6 of Columns (a) to (\ e) of the Adjusted RONA calculation table above . Part F.3 - Line 8 of Columns (a) to (e)Line 8 of Columns (a) to (e) of the Adjusted RONA calculation table above presents Adjusted RONA and has been calculated as follows: • Line 8 of Columns (a) to (e) of the Adjusted RONA calculation table \ above is calculated as Line 3 of Columns (a) to (e) of the Adjusted RONA calculation table above divided by Line 7 of Columns (a) to (e)\ of the Adjusted RONA calculation table above . Adjusted RONA Set out below is Adjusted RONA and the notes thereto: a b cd e Reconstructed twelve months ended 31 December Year ended 30 June Lines 2017 2016201720162015 Rm Adjusted Operating Profit/Operating Profit 11 098 1 0131 020 989868 Adjusted Income Taxes 2(308) (284)(286)(277)(243) Adjusted post taxation Operating Profit 3790 729734712625 Fixed assets 43,072 2,9293,0222,9942,625 Adjusted Current Assets 53,007 2,3552,5742,4371,969 Trade and other payables 6(724) (755)(689)(598)(564) Adjusted Net Assets 75,355 4,5294,9074,8334,030 Adjusted RONA 814.8% 16.1%15.0%14.7%15.5% Notes: (1) Line 1 of Columns (c) to (e) presents the audited Operating Profit relating to Consol for the years ended 30 June 2017, 30 June 2016 and 30 \ June 2015 as extracted from the Historical Financial Information of the Group as set out in Annexure 1 to this Pre-listing Statement; and Line 1 of Columns (a) and (b) present the Adjusted Operating Profit calculated as detailed in Part A.1 a\ bove. (2) Line 2 of Columns (a) to (e) presents the Tax Adjustments which have been calculated as detailed in Part B above. (3) Line 3 of Columns (a) to (e) above presents the Adjusted post taxation operating profit calculated as detaile\ d in Part F.1 above. (4) Line 4 of Columns (a) to (e) above presents the sum of the property, plant and equipment and the prepayments for plant and equipment financial statement captions that have been extracted, without adjustment, from th\ e historical consolidated statements of financial position of Consol and the interim historical condensed group statements of financial position of C\ onsol, included in Annexures 1 and 3, respectively to this Pre-listing statement. (5) Line 5 of Columns (a) to (e) above presents the current assets financial statement caption adjusted for the Current Assets Adjustments as detailed in Part D above. (6) Line 6 of Columns (a) to (e) above presents the trade and other payables financial statements caption which h\ as been extracted, without adjustment, from the historical consolidated statements of financial position of Con\ sol and the interim historical condensed group statements of financial position of Consol, included in Annexures 1 and 3, respectively to this Pre-listing Statement. (7) Line 7 of Columns (a) to (e) above presents the Adjusted Net Assets calculated as detailed in Part F.2 above. (8) Line 8 of Columns (a) to (e) above presents the Adjusted RONA calculated as detailed in Part F.3 above. KPMG’s reporting accountant’s report on the Adjusted RONA is set out in Annexure 10 to this Pre-listing Statement. A-92 Going concern The Group recorded a loss after tax of R554 million during 30 June 2017 (2016: Profit after tax of R34 million; and 2015: Profit after tax of R63 million) primarily due to the following non-operating items in t\ he year ended 30 June 2017: • Impairments of goodwill amounting to R304 million (refer to note 3 of Annexure 1 to this Pre-listing Statement); • Black Economic Empowerment (BEE) share based payment expense of R121 million (refer to note 3 of Annexure 1 to this Pre-listing Statement); and • Taxation change in estimate in respect of prior years of R261 million (refer to note 6 of Annexure 1 to this Pre-listing Statement). Furthermore, as at 30 June 2017, the Group’s total liabilities exceeded its total assets by R850 million (2016: to\ tal liabilities exceeded total assets by R223 million; and 2015: total liabilities exceeded total\ assets by R243 million). As at 30 June 2017, the directors made an assessment of the ability of the Company and its subsidia\ ries to continue as going concerns on the following basis: • the Shareholder Loans amounting to R4,249 million have been subordinated as disclosed in note 14 of Annexure 1 to this Pre-listing Statement; • the forecast operating cash flows for the twelve-month period from the date of the directors’ report are positive; • the availability of sufficient credit facilities as disclosed in note 23.2.1.1 of Annexure 1 to this Pre-listing Statement. During the latest reporting period, the six months ended 31 December 2017, the Group recorded a loss after tax of R119 million primarily due to the following items: • impairments on goodwill, intangible assets and property, plant and equipment amounting to R125 million; and • net finance expense of R614 million. Furthermore, as at 31 December 2017, the Group’s total liabilities exceeded its total assets by R1,077 million and its \ current liabilities exceeded its current assets by R2,267 million at 31 December 2017. The directors have made an assessment of the ability of the Company and its sub\ sidiaries to continue as going concerns on the following basis: • the South African loans and borrowings (refer to note 8 of Annexure 3 to this Pre-listing Statement) will be refinanced after negotiations with lenders. • the Shareholders Loans amounting to R4,540 million as at 31 December 2017 are not repayable to shareholders within the next twelve months and have been subordinated as reflected in note 7 to Annexure 3 to this Pre-listing Statement. • the forecast operating cash flows for the twelve-month period from the dates of the periods and year presented are positive. • the availability of sufficient credit facilities which will be utilised for working capital management is\ as follows: Reviewed 6 months ended 31 December 2017 Rm Nedbank Limited 750 The Standard Bank of South Africa Limited 10 760 KESm Stanbic Bank Kenya Limited 200 NGNm Stanbic IBTC Bank Plc 750 Based on the above assessment, the financial statements for the year end\ ed 30 June 2017, 30 June 2016 and 30 June 2015 as well as the interim financial results for the six months ended 31 December 2017 have been prepared on the basis of accounting policies applicable to a going concern which assumes it is highly probable that funds will be available to finance future operations, through refinancing of the borrowings with the lenders prior to the maturity date and that the realisation of assets and the settlement of liabilities will occur in the ordinary course of business. Should the continued refinancing not occur, this condition gives rise to a material uncertainty which may cast significant doubt on the ability of the Company and its subsidiarie\ s to continue as going concerns. A-93 ANNEXURE 10 INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE REPORT OF THE ADJUSTED RETURN ON NET ASSETS The Directors Consol Holdings Limited Consol House Osborn Road Wadeville Germiston, 1428 Johannesburg, South Africa INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE COMPILATION OF THE ADJUSTED RETURN ON NET ASSETS IntroductionWe have completed our assurance engagement to report on the compilation of the Adjusted Return on Net Assets (“Adjusted RONA”) of the Group Consol Holdings Proprietary Limited will be renamed Consol Holdings Limited. The Adjusted RONA has been prepared by the directors of Consol (“Directors”). The Adjusted RONA consists of the following adjustments: • Adjusted Operating Profit – Line 1; • Adjusted Income Taxes – Line 2; • Adjusted post taxation operating profit – Line 3; • Adjusted Current Assets – Line 5; • Adjusted Net Assets – Line 7; and • Adjusted RONA – Line 8; (collectively the “Adjustments”). The Adjusted RONA of the Group has been compiled on the basis of the applicable criteria described \ in the basis of preparation set out in Annexure 9 of the Pre-listing Statement, for each of the years ended 30 June 2017, 30 June 2\ 016 and 30 June 2015 and the reconstructed twelve month periods ended 31 December 2017 and 31 December\ 2016 (the “Applicable Criteria”). As part of this process: • operating profit, income taxation, property, plant and equipment, prepayments for property, plant and equipment, total current assets, cash and cash equivalents, prepaid taxation, derivatives and trade and other payables for the years e\ nded 30 June 2017, 30 June 2016 and 30 June 2015 (“Audited Financial Information”) has been extracted by the Directors from the Historical Financial Information of the Group included as Annexure 1, in respect of which unmodified audit opinions have been issued (“Audited Financial Statements”). We draw attention to the Material Uncertainty Relating to Going Concern below; • operating profit, income taxation, property, plant and equipment, prepayments for property, plant and equipment, total current assets, cash and cash equivalents, prepaid taxation, derivatives and trade and other payables for the six months ended 31 December 2017 and 31 December 2016 (“Reviewed Financial Information”) has been\ extracted by the Directors from the Interim Historical Financial Information of the Group included as Annexure 3, in respect of which unmodified review conclusions have been issued (“Reviewed Financial Statements”). We draw attention to the Material Uncertainty Relating to Going Concern below; and • operating profit for the six months ended 31 December 2015 has been extracted by the\ Directors from the unaudited and unreviewed management accounts of the Group (“Management Accounts”) Directors’ Responsibility for the Adjusted RONAThe Directors are responsible for compiling the Adjusted RONA on the basis of the Applicabl\ e Criteria. Independent Reporting Accountant’s independence and quality controlWe have complied with the independence and all other ethical requirements of the Code of Professional Conduct for Registered Auditors issued by the Independent Regulatory Board for Auditors’ (IRBA) that is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Part A and B), which is founded on fundamental\ principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. The firms apply International Standard on Quality Control 1 and accordingly maintain a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. A-94 Independent Reporting Accountant’s responsibilityOur responsibility is to express an opinion about whether the Adjusted RONA has been compiled, in all material respects, by the Directors on the basis of the Applicable Criteria. We conducted our engagement in accordance with International Standard on Assurance Engagements (ISAE) 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus, issued by the International Auditing and Assurance Standards Board. This standard requires that the reporting accountants’ comply with ethical requirements and plan and perform procedures to obtain reasonable assurance about whether the Directors have compiled, in all material respects, the Adjusted RONA on the basis of the Applicable Criteria. For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any Audited Financial Statements or Reviewed Financial Statements used in compiling the Adjust\ ed RONA, nor have we, in the course of this engagement, performed an audit or review of any other financial information used in compiling the Adjusted \ RONA. The purpose of the Adjusted RONA included in the Pre-listing Statement is solely to illustrate how efficiently Consol are using their fixed assets, select current assets and trade and other payables to generate returns excluding the effects of non-recurring taxation payments, the settlement of the SARS Audit, assessed losses and other items that r\ esult directly from Consol’s historical funding structure. A reasonable assurance engagement to report on whether the Adjusted RONA has been properly compiled, in all material respects, on the basis of the Applicable Criteria involves performing procedures to assess whether the Applicable Criteria used by the Directors in the compilation of the Adjusted RONA provides a reasonable basis for presenting the significant effects directly attributable to the events and conditions and to obtain sufficient appropriate evidence about whether: • The Adjustments give appropriate effect to the Applicable Criteria; and • The Adjusted RONA reflects the proper application of the Adjustments to the unadjusted operating profit for the six months ended 31 December 2017 and 2016 to achieve the reconstructed twelve-month periods presented, income taxation, post taxation operating profit, current assets and net assets of the Group. The procedures selected depend on the reporting accountant’s judgment, having regard to the reporting accountant’s understanding of the nature of the Group and the Adjustments in respect of which the Adjusted RONA has been compiled and other relevant engagement circumstances. The engagement also involves evaluating the overall presentation of the Adjusted RONA. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. OpinionIn our opinion, the Adjusted RONA has been compiled, in all material respects, on the basis of the Applicable Criteria. Material Uncertainty Relating to Going ConcernWe draw attention to the going concern note included in the Report of Adjusted Return on Net Assets as set out in Annexure 9 to this Pre- listing Statement, which indicates that the Group incurred a loss after tax of R119 million during the six months ended 31 Decem\ ber 2017 and, as of that date, the Group’s total liabilities exceeded its total assets by R1,077 million and its \ current liabilities exceeded current assets by R2,267 million. The Group incurred a loss after tax of R554 million during the year ended 30 June 2017 a\ nd, as of that date, the Group’s total liabilities exceeded its total assets by R850 million. As stated\ in the going concern note, should the continued refinancing of borrowings with lenders not occur prior to maturity date, a material uncerta\ inty exists that may cast significant doubt on the Company and its subsidiaries ability to continue as going concerns. Our conclusion is not modified in respect of this matter. KPMG Inc. Registered Auditor Yusuf Abed Director Registered Auditor 12 April 2018 KPMG Crescent 85 Empire Road Parktown 2193 (Private Bag 9, Parkview, 2122) A-95 ANNEXURE 11 PARTICULARS OF THE DIRECTORS AND SENIOR MANAGEMENT OF CONSOL OTHER DIRECTORSHIPS AND PARTNERSHIPS HELD BY THE DIRECTORS AND SENIOR MANAGEMENT The names of all companies, close corporations and partnerships of which\ the Directors and directors of the Major Subsidiaries have been a director, member or partner at any time in the five years preceding the Last Practicable Date are listed below: Directors NameDirectorships Status Mike Arnold Business Venture Investments No. 1840 Proprietary Limited Active Business Venture Investments No. 3001 (RF) Proprietary Limited Active Conhage Proprietary Limited Active Conince Proprietary Limited Active Consol Glass Africa Proprietary Limited Active Consol Glass Kenya Limited Active Consol Glass Proprietary Limited Active Consol Holdings Limited Active Consol Properties Proprietary Limited Deregistered Consol Proprietary Limited Active Glassforce Limited Active Juniper Glass Industries Share Company Active Karuna Nayager Apex Silica Mining Proprietary Limited Active Business Venture Investments No. 1840 Proprietary Limited Active Business Venture Investments No. 3001 (RF) Proprietary Limited Active Conhage Proprietary Limited Active Conince Proprietary Limited Active Consol Glass Africa Proprietary Limited Active Consol Glass Kenya Limited Active Consol Glass Proprietary Limited Active Consol Holdings Limited Active Consol Properties Proprietary Limited Deregistered Consol Proprietary Limited Active Glassforce Limited Active Juniper Glass Industries Share Company Active Keysource Minerals Proprietary Limited Active Kwanza Sands Minerals Proprietary Limited Active MRX 82 Security Holdings Proprietary Limited Active Nayager 6512 Proprietary Limited Active Nhlabathi Minerals Proprietary Limited Active Silica Quartz Proprietary Limited Active A-96 NameDirectorships Status Paul Curnow Apex Silica Mining Proprietary Limited Active Consol Glass Africa Proprietary Limited Active Consol Glass Kenya Limited Active Consol Glass Proprietary Limited Active Consol Holdings Limited Active Glassforce Limited Active Nhlabathi Minerals Proprietary Limited Active Silica Quartz Proprietary Limited Active Wonruc Products Close Corporation Active Quinton Dicks Consol Glass Proprietary Limited Active Consol Holdings Limited Active Liberty Star Consumer Holdings Proprietary Limited Resigned Morboard Services Proprietary Limited Resigned Primedia Holdings Proprietary Limited Resigned Reclamation Holdings Limited Resigned SASME Fund Limited Active The New Reclamation Group Proprietary Limited Resigned The Old RTT Group Proprietary Limited Resigned The Old RTT Holdings Proprietary Resigned Bruce MacRobert Afrihost Holdings Active Arrowleigh Investments Proprietary Limited Resigned Brait Advisory Services Limited Resigned Brait Capital Partners Trustees II Proprietary Limited Active (Liq) Brait Investment Services Holdings Resigned Brait IV Team Partnership GP Proprietary Limited Resigned Brait Management Services Proprietary Limited Resigned Brait Private Equity Limited Resigned Brait Private Equity GP IV Proprietary Limited Active Brait Private Equity GP V Proprietary Limited Active (Dereg) Brait South Africa Proprietary Limited Resigned Braitec Manager Proprietary Limited Active (Liq) Business Ventures Investments No 1821 Proprietary Limited Active Candy Tops Proprietary Limited Resigned Consol Glass Proprietary Limited Active Consol Holdings Limited Active Consol Proprietary Limited Resigned Corion Capital Proprietary Limited Resigned Don MacRobert Trust Active Echotel Proprietary Limited Active Elderberry Investments 103 Proprietary Limited Active Furmac Investments Proprietary Limited Active A-97 NameDirectorships Status Bruce MacRobert Grace Road Estate Proprietary Limited Active Gwen to Oxford 1 Proprietary Limited Resigned Gwen to Oxford 2 Proprietary Limited Resigned Gwen to Oxford 3 Proprietary Limited Resigned IFTLH Investments Proprietary Limited Active Isegen Proprietary Limited Resigned Jakaranda FM Proprietary Limited Resigned Kingsley Beverages Proprietary Limited Resigned KTH Media Investments Limited Resigned Martinho Investments Proprietary Limited Resigned Matrix Fund Managers Proprietary Limited Resigned Medu Capital Fund II Proprietary Limited Resigned MFM Trustees Proprietary Limited Resigned MRX 82 Security Holdings Proprietary Limited Resigned Orthograph Investments Proprietary Limited Active Players Sport Management Proprietary Limited Resigned Primedia Holdings Proprietary Limited Resigned Primedia Proprietary Limited Resigned Rheem South Africa Proprietary Limited Resigned SAPEF Radio Co-investors (Dissolved) Active (Diss) Silicon Sky Consulting Proprietary Limited Active Somerset Educational Proprietary Limited Active St Katharine’s School Anniversary Trust Non Profit Company Resigned The DSG Trust Diocesan School for Girls Grahamtown Trust Active The DSG Foundation Trust Active The Second Phase Trust Active Umoyo Communications Proprietary Limited Resigned Cynthia Pongweni Consol Glass Proprietary Limited Active Consol Holdings Limited Active Metrofile Holdings Limited Active MIC Financial Services Proprietary Limited Active MIC Investment Holdings Proprietary Limited Active MIC Management Services Proprietary Limited Active MIC Leisure Proprietary Limited Active Money Box Investments 145 Proprietary Limited Active Newshelf 1069 (RF) Proprietary Limited Active Nimble Group Proprietary Limited Resigned REPSSI Non Profit Company Active Ridge Empowerment Capital Proprietary Limited Active A-98 NameDirectorships Status Itu Kgaboesele African Leadership Academy Incorporated Resigned Babcock Ntuthuko Aviation Proprietary Limited Active Babcock Ntuthuko Engineering Proprietary Limited Active Babcock Plant Services Proprietary Limited Active Barone Budge And Dominick Proprietary Limited Resigned BBD Holdings Proprietary Limited Active Brandcorp Holdings Proprietary Limited Resigned Brandcorp Proprietary Limited Resigned Consol Glass Proprietary Limited Active Consol Holdings Limited Active Ditswammung Mineral Resources Consortium Proprietary Limited Active Entrepreneurs Organisation Non Profit Company Resigned Ethos Capital V GP (SA) Proprietary Limited Resigned Ethos Private Equity Proprietary Limited Resigned Four Fillan Forest Proprietary Limited Active Friedshelf 1291 Proprietary Limited Active Honeywell Automation and Control Solutions South Africa Proprietary Limited Active I Kgaboesele Family Trust Active Jaxson 653 Proprietary Limited Active Lace Diamond Mines Proprietary Limited Resigned Main Street 778 Proprietary Limited Active Old Mutual Life Assurance Company Limited (South Africa) Active Old Mutual Emerging Markets Proprietary Limited Resigned Old Mutual Group Holdings Limited Active Old Mutual Investment Group Proprietary Limited Resigned Pandrol SA Proprietary Limited Active Pearson South Africa Proprietary Limited Active Rosyblue Manufacturing Proprietary Limited Resigned Sphere Fund I GP Proprietary Limited Active Sphere Holdings Proprietary Limited Active Sphere Investments Proprietary Limited Active Sphere Investments Three Proprietary Limited Active Sphere Investments Two (RF) Proprietary Limited Active Sphere Private Equity Proprietary Limited Active Sphere RB Investments (RF) Proprietary Limited Active Tau Sachin Capital Proprietary Limited Active Wheatfields Investments No 216 Proprietary Limited Resigned Wiphold Financial Services Number One Proprietary Limited Resigned Wiphold Financial Services Number Two Proprietary Limited Resigned Wiphold Financial Services Number Three Proprietary Limited Resigned Telkom SA SOC Limited Active A-99 NameDirectorships Status Mohammed Sabi Babcock Ntuthuko Engineering Proprietary Limited Active Babcock Plant Services Proprietary Limited Active Consol Glass Proprietary Limited Active Consol Holdings Limited Active Lace Diamond Mines Proprietary Limited Resigned M Squared Proprietary Limited Active Meridien Capital Proprietary Limited Resigned Meridien Engineering Proprietary Limited Resigned Sphere Investments Proprietary Limited Active Sphere Investments Three Proprietary Limited Active Sphere Investments Two (RF) Proprietary Limited Active Wheatfields Investments 216 Proprietary Limited Active Jon Kirby AB Inbev Finance South Africa BV Proprietary Limited Resigned ABI Bottling Proprietary Limited (RSA) Resigned Algerienne de Bavaroise SPA Limited (Algerian) Resigned AnheuserBusch Inbev Africa Proprietary Limited Resigned B.I.H. Brasseries Internationales Holdings (Angola) Limited (Gibraltar) Resigned B.I.H. Brasseries Internationales Holdings Limited Resigned Cervejas de Angola LDA Limited (Angolan) Resigned CocaCola Beverages Africa Proprietary Limited Resigned CocaCola Beverages South Africa Proprietary Limited Resigned CocaCola Fortune Proprietary Limited Resigned Consol Glass Proprietary Limited Active Consol Holdings Limited Active Delta Corporation Limited (Zimbabwean) Active Export Compliance Services Proprietary Limited Resigned GRA Investments Close Corporation Active Mubex Limited (Mauritian) Resigned Mufin Limited (Mauritian) Resigned One Iron Projects Proprietary Limited Active Other Beverage Interests Proprietary Limited Resigned Overseas Breweries Limited (Swiss) Resigned SA Breweries Limited Resigned SAB Global Consulting Services Proprietary Limited Resigned SAB Miller Africa BV Limited (Dutch) Resigned SAB Miller Africa Holdings II Limited (UK) Resigned SAB Miller Angola Limited (Mauritian) Resigned SAB Miller Botswana BV Limited (Dutch) Resigned SAB Miller Finance BV Limited (Dutch) Resigned SAB Miller Investments Limited (Mauritian) Resigned SAB Miller Nigeria Holdings BV Limited (Dutch) Resigned A-100 NameDirectorships Status Jon Kirby SAB Miller Zimbabwe BV Limited (Dutch) Resigned SABSA Holdings Limited Resigned SKIKDA Bottling Company SARL Limited (Algerian) Resigned Societe Des Boissons de L’Ouest Algerian Limited (Algerian) Resigned Societe de Brasseries et Glacieres Internationales Limited (French) Resigned Societe Des Nouvelles Brasseries Limited (Algerian) Resigned Southridge Dune Proprietary Limited Active Zambeef Products Plc (Zambian) Active Senior Management NameDirectorships Status Mike Arnold See above See above Karuna Nayager See above See above Paul Curnow See above See above Dale Carolin Glassforce Limited Active Johan Du Plessis Vastfontein Community Transformation Non Profit Company Active Zoe Francois Snappy Coach Hire Close Corporation Resigned All Saints Business Centre Proprietary Limited Active Thami Mkhuzangwe – – Johan Pool Consol Glass Kenya Limited Active Juniper Glass Industries Share Company Active Project Management and Support Services Close Corporation Active Rapid Results Fitness Solutions Close Corporation Active Stephen van Eck Apex Silica Mining Proprietary Limited Active Keysource Minerals Proprietary Limited Active Kwanza Sands Minerals Proprietary Limited Active Henry Botha – – Jan de Wind – – Nicholas Mechanicos – – Selemo Magatikele – – Tom Shaw PC4ME Close Corporation Active Directors of Major Subsidiaries Consol Glass Mike Arnold See above See above Karuna Nayager See above See above Paul Curnow See above See above Bruce MacRobert See above See above Quinton Dicks See above See above Itu Kgaboesele See above See above Jon Kirby See above See above Cynthia Pongweni See above See above Mohammed Sabi (Alternate Director) See above See above Other than as outlined above, no directorships or partnerships were held by any of the Directors or Senior Management during the past five years. A-101 CONTRACTS RELATING TO DIRECTORS Each member of the Senior Management team has a standard service agreement with Consol. The material terms of the service agreements with the members of the Senior Management team are set out below. These service agreements are available for inspection as set out in “Additional Information – Documents available for inspection”. These agreements are generally in accordance with market standards and are terminable on notice. The Non-Executive Directors have no fixed term of appointment and the rotation of Directors is required by the Company’s Memorandum of Incorporation. NamePosition Date of appointment to current role Notice period Restraint Mike Arnold Group CEO 24 June 2002One Calendar Month 2 Years Karuna Nayager Group CFO 1 March 2004 One Calendar Month 2 Years Paul Curnow Group COO 1 August 2016One Calendar Month 2 years Dale Carolin Senior Executive: Marketing and Business Development 1 August 2004One Calendar Month 2 years Johan Du Plessis Senior Executive: IT 15 January 2002 One Calendar Month 2 years Zoe Francois Senior Executive: Sales South Africa 1 July 2015One Calendar Month 2 years Thami Mkhuzangwe Senior Executive: HR 1 December 2006 One Calendar Month 2 years Johan Pool Senior Executive: Technical 1 August 2016One Calendar Month 2 years Stephen Van Eck Senior Executive: Operations South Africa 1 April 2016 One Calendar Month 2 years Henry Botha Executive: NPD and Africa Operations 1 April 2016One Calendar Month 2 years Jan de Wind Executive: Technical Consultant 1 July 2008One Calendar Month 2 years Selemo Magatikele Executive: Manufacturing Services 1 April 2016 One Calendar Month 2 years Nicholas Mechanicos Executive: Finance 1 April 2016One Calendar Month None Tom Shaw Executive: Supply Chain 1 August 2016One Calendar Month 2 years No activities are performed by the Directors, directors of Major Subsidiaries and/or the members of Senior Management out\ side of the Company that are significant to the Company. Each of the Executive Directors’ and the Senior Management’s service agreements terminate on the normal date of retirement, being 65 years of age. All other terms and conditions are governed by the applicable human resource policies and local governing employment law, including, but not limited to, certain provisions of the South African Basic Conditions of Employment Act, 75 of \ 1997 (as amended). The dates upon which the respective service agreements were entered into are: Mike Arnold 24 June 2002 Karuna Nayager 1 March 2004 Paul Curnow 1 March 1998 Dale Carolin 1 June 2001 Johan Du Plessis 15 January 2002 Zoe Francois 1 July 2015 Thami Mkhuzangwe 1 December 2006 Johan Pool 16 January 2001 Stephen Van Eck 21 December 2005 Henry Botha 1 July 1995 Jan de Wind 1 May 1979 Selemo Magatikele 1 September 2006 Nicholas Mechanicos 1 March 2005 Tom Shaw 1 August 2005 A-102 ANNEXURE 12 SHARE INCENTIVE SCHEMES CONSOL HOLDINGS LIMITED FORFEITABLE SHARE PLAN Introduction In line with local and global best practice, the Company intends to adop\ t a new share plan, namely the Consol Holdings Limited Forfeitable Share Plan (“Consol FSP”) to incentivise, motivate and retain the right calibre of executives and Senior Management (“Participants”). The Consol FSP provides Participants with the opportunity to be awarded shares (“Forfeitable Shares”) in the Company in the form of bonus shares and/or performance shares and/or retention shares so as to enable the Participants to share in the success of the Company, and be placed in a similar position as Ordinary Shareholders. Through the delivery of Ordinary Shares under the Consol FSP, Participants will become Shareholders and will have all of the rights of Shareholders (including dividends) from the settlement date, shortly after the award date. The salient features of the Consol FSP are detailed below. Purpose The Consol FSP will be primarily used as an incentive to Participants to\ deliver the Group’s business strategy over the long-term. The intent of the Consol FSP is to incentivise, motivate and retain executives and Senior Management through the award of bonus shares, performance shares and/or retention shares (collectively referred to as, “Forfeitable Shares”) as follows: • regular annual awards of bonus shares, the value of which will be determined as a percentage of the annual bonus based on personal and Group performance in the previous financial year, the vesting of which is subject to a condition of continued employment\ (the “Employment Condition”); • regular annual awards of performance shares, the value of which will be determined primarily on, inter alia, the Participant’s individual performance, annual salary, level of seniority for purposes of market benchmarking, performance, retention and attraction considerations, and the vesting of which subject to the satisfaction of \ performance conditions and the Employment Condition in line with the Group’s approach to performance related incentives; and • ad hoc awards of retention shares, the vesting of which is subject to the satisfaction of the Employmen\ t Condition. Awards will only be made in specific ad-hoc instances where the remuneration committee of the Company (the “Remuneration Committee”\ ) recognises key talent instrumental in delivering the Group’s business strategy. The performance condition(s) applicable to the performance shares is/are approved by the Remuneration Committee annually and specifically included in the performance share award letter. The Employment Condition is the requirement for continued employment of the Participant by Consol for the duration of a certain number of years \ from the date of the award. Participants [14.1(a)] Eligible employees will include executive directors, prescribed officers and Senior Management of any company within the Group (“Employer Company”). Participation in the Consol FSP is not a c\ ondition of employment, and the Remuneration Committee has the absolute discretion to make an award to any eligible employee in terms of the Consol FSP. Rights of Participants [14.1(e)] Under the Consol FSP, Participants will become owners of the Forfeitable Shares from the settlement date, shortly after the award date, and will immediately benefit from dividends and have Shareholder voting rights in respect of the Forfeitable Shares over the vesting period. The Forfeitable Shares cannot be disposed of by the Participant prior to the vesting date an\ d will be subject to forfeiture and disposal restrictions until the vesting date. Basis of Awards and Award levels [14.1(f)] In line with the requirements of King IV and best practice, regular, annual awards of bonus and performance shares will be made on a consistent basis to ensure long-term shareholder value creation. The Consol FSP provides for the award of retention shares for use in specific cases where there is a retention risk. This separate arrangement for retention is in line with King IV, which recommends that any retention policy/awards should be ring-fenced and disclosed separately. The number of performance shares/retention shares awarded to Participants will primarily be based on, inter alia, the Participant’s individual performance, annual salary, level of seniority for purposes of market bench-marking, performance, \ retention and attraction considerations. Performance shares will vest on the basis of Company performance conditions and the Empl\ oyment Condition. The number of bonus shares awarded to a Participant will be determined by taking into consideration the quantum of the annual bonus earned by the Participant for the prior financial year, and market practice. In order to earn a bonus (and subsequently qualify for bonus shares), certain performance hurdles must be met. Overall award levels will be decided by the Remuneration Committee each time that aw\ ards are made, by taking into account the particular circumstances at that time e.g. Company affordability, retention considerations, and exceptional Company performance. Annual allocations will be benchmarked and set to a market-related level of remuneration whilst considering the overall affordability thereof to the Company. A-103 Performance conditions and vesting Bonus shares will be dependent on the quantum of the annual bonus earned based on the Company financial and non-financial results modified by the individual’s performance, and will be linked to performance in this manner. In addition, they will be subject to the fulfilment of the Employment Condition over an employment period of three years before vesting can occur. Performance shares will be subject to the fulfilment of both the pre-determined performance conditions and the Employment Condition over an employment period of three years, for vesting to occur, as well as Company performance. The Remuneration Committee will set appropriate performance conditions, performance periods, employment conditions and employment periods, as relevant, for each award, taking into account the business environment at the time of making the awards, and where considered necessary, in consultation with Shareholders. Each of these details of the award will be agreed with the Participants in terms of individual award letters. In line with prevailing market practice and principles of good governance, the anticipated vesting and performance periods will be three years. The intended performance conditions for the first award of performance shares are a combination of headline earnings per share (40% weighting), relative total shareholder return (30% weighting) and return on capital employed (30% weighting). Manner of settlement Following the making of an award of Forfeitable Shares, settlement shall take place within 30 (thirty) days of the award date. The rules of the Consol FSP are flexible in order to allow for settlement in any of the following manners: • by way of a market purchase of Ordinary Shares; • use of treasury Ordinary Shares; • issue of Ordinary Shares; and • all necessary taxes will be deducted by the Company. The exact method of settlement will be determined by the Remuneration Co\ mmittee at the time of making awards, although the preference will be a market purchase of Shares as it causes no dilution to shareholders. In order to effect any forfeiture of awards, the Forfeitable Shares will be held by an escrow agent on behalf of the Participant until they vest. Limits and adjustments Overall Company limitThe maximum number of Ordinary Shares which may at any one time be allocated under the Consol FSP shall not\ exceed 70,000,000 Ordinary Shares, which represents approximately 5% of the anticipated number of issued Ordinary Shares as at the Listing Date, when the Consol FSP will take effect. This is in line with market best practice. Ordinary Shares issued by the Company or Ordinary Shares held in treasury which are used to settle the Consol FSP, will be included in the Company limit. Forfeitable Shares allocated under the Consol FSP which are not subsequently settled to a Participant as a result of the forfeiture thereof, will be excluded in calculating the Company limit. Similarly, any Ordinary Shares purchased in the market in settlement of the Consol FSP will be excluded. [14.1(b)] The Remuneration Committee must, where required, adjust the Company limit (without the prior approval of shareholders in a general meeting), to take account of a sub-division or consolidation of the Shares of the Company. [14.3(a)] Individual limitThe maximum number of Ordinary Shares which may be allocated to an individual in respect of all unvested awards under the Consol FSP may not exceed 14,000,000 Ordinary Shares, which represents approximately 1% of the anticipated number of issued Ordinary Shares as at the Listing Date, when the Consol FSP will take effect. [14.1(c)] The Remuneration Committee may, where required, adjust the individual limit to take account of a capitalisation issue, a special distribution, a rights issue or reduction in capital of the Company. Such adjustment should give a participant entitlement to the same proportion of equity capital as that to which he was previously entitled. [14.3(b)] The auditors, or other independent advisors acceptable to the JSE, shall\ confirm to the JSE in writing that any adjustment made in terms of this paragraph has been properly calculated on a reasonable and equitable basis, in accordance with the rules of the Consol FSP and must be reported on in the Company’s financial statements in the year during which the adjustment is made. The issue of Ordinary Shares as consideration for an acquisition, and the issue of Ordinary Shares or a vendor consideration placing will not be regarded as a circumstance that requires any adjustment to the Company limit and the individual limit. [14.3(\ d), (e)] Consideration [14.1(d)(i)] The Participant will give no consideration for the award or settlement of the Ordinary Shares. A-104 Termination of employment [14.1(h)] Participants terminating employment due to resignation or dismissal on grounds of misconduct, poor performance, dishonest behaviour or fraudulent conduct or on the basis of abscondment will be classified as \ “bad leavers” and will forfeit all unvested awards of Forfeitable Shares. Participants terminating employment due to death, ill-health, disability\ , injury, retrenchment, retirement (except to the extent that is constitutes bad leaver termination as set out above), or the sale of a \ subsidiary company will be classified as “good leavers” and a portion of his unvested award(s) shall vest on date of termination of employment. This portion will reflect the number of months served since the award date to the date of termination of employment over the total number of\ months in the employment period and the extent to which the performance condition (if applicable) has been met. The r\ emainder of the award will lapse. Change of control [14.1(g)] In the event of a change of control of the Company occurring before the vesting date of any award, a portion of the award will vest. In respect of bonus shares and/or retention shares, the portion of the award which shall vest will reflect the number of complete months served since the award date to the change of control date, over the total number of months in the employment period. In respect of performance shares, with regard to determining the portion of the award which shall vest, the Remuneration Committee will calculate whether and the extent to which the performance conditions have been sat\ isfied with reference to the immediately preceding financial year and the number of complete months served since the award date to the change of control date, over the total number of months in the employment period. The portion of the award which does not vest as a result of the change of control will, except on the termination of the Consol FSP, continue to be subject to the terms of the award letter, unless the Remuneration Committee determines otherwise. Awards will not vest as a consequence of an internal reconstruction or similar event which is not a change of control as defined in the rules of the Consol FSP. In this case the Remuneration Committee shall make such adjustment to the number of awards or convert awards into awards in respect of shares in one or more of the other companies, provided the Participants are no worse off. Variation of share capital In the event of a variation in share capital such as a capitalisation issue, subdivision of shares, consolidation of shares etc. Participants shall continue to participate in the Consol FSP. The Remuneration Committee may make such adjustment to the award or take such other action to place Participants in no worse a position than they were prior to the happening of the relevant event and to provide that the fair value of the award immediately after the event is materially the same as the fair value of the award immediately before the event. In the event of a rights issue, a Participant shall be entitled to participate in any rights issue in respect of his Forfeitable Shares in accordance with the terms and conditions of the rights issue. The issuing of Ordinary Shares as consideration for an acquisition, and the issuing of Ordinary Shares or a vendor consideration placing, will not be regarded as a circumstance that requires any adjustment to the awards. Liquidation If the Company is placed into liquidation, other than for purposes of reorganisation, an award of performance shares and/or retention shares and/or bonus shares shall ipso facto lapse as from the liquidation date. [14.1(e)] Amendment [14.2] The Remuneration Committee may alter or vary the rules of the Consol FSP\ as it sees fit, however in the following instances the Consol FSP may not be amended without the prior approval of the JSE and a resolution by the Shareholders approved by 75% of the voting rights exercised on the resolution: • the category of persons who are eligible for participation in the Consol FSP; • the number of shares which may be utilised for the purpose of the Consol FSP; • the individual limitations on benefits or maximum entitlements; • the basis upon which awards are made; • the amount payable upon the award, settlement or vesting of an award; • the voting, dividend, transfer and other rights attached to the awards, including those arising on a liquidation of the Company; • the adjustment of awards in the event of a variation of capital of the Company or a change of \ control of the Company; and • the procedure to be adopted in respect of the vesting of awards in the event of termination of employment. A-105 General The rules of the Consol FSP are available for inspection from the date on which the Pre-Listing Statement is published at the Company’s registered office, being Osborn Road, Wadeville, Johannesburg, to the Listing Date. In terms of the Listings Requirements, the passing of Ordinary Resolution number 2 required the approval of a 75% majority of the voting rights exercised on the resolution. CONSOL ESOP Introduction Consol has established an employee share ownership plan (“Consol ESOP”) for the purposes of maintaining\ the B-BBEE status of Consol and incentivising and empowering employees. The Consol ESOP will \ benefit all its South African employees (irrespective of demographics) who are employed by Consol Glass Proprietary Limited at Peromnes Grade 7 or below, excluding employees employed by the Mining Division, but the trustees of the Staff Trust are required to ensure that at least 85% of the benefits of the Consol ESOP flow to black people, as defined in the B-BBEE Codes. Subject to the foregoing, the Board may resolve from time to time to include the employees of other affiliates of Consol as beneficiaries. The Staff Trust will be utilized for purposes of the Consol ESOP. Under the Consol ESOP and in terms of the B Ordinary Share Subscription Agreement, the Staff Trust will on the Listing Date subscribe for so many Ordinary Shares as will comprise 5% of the total number of issued shares (i.e. B Ordinary Shares and Ordinary Shares) on the Listing Date at R0.01 per B Ordinary Share (“Subscription Price”). This subscription (other than the R0.01 Subscription Price) will be fu\ nded through a Notional Vendor Funding (“NVF”) mechanism at a rate equal to the Prime Rate. The Staff Trust will not be entitled to sell, cede or encumber the B Ordinary Shares held by it. Consol will lend the Subscription Price to the Staff Trust, to the extent that the Staff Trust does not have sufficient resources of its own. The salient features of the Consol ESOP are detailed below. Participants Eligible employees will be employees (irrespective of demographics) who are employed by Consol Glass Proprietary Limited at Peromnes Grade 7 or below, excluding employees employed by the Mining Division. The Board may resolve from time to time to include the employees of other affiliates of Consol as beneficiaries. Rights of Participants The Staff Trust will make distributions to the Consol ESOP Beneficiaries based on d\ istributions paid to it by Consol (after settling certain expenses). The entitlement to distributions will, subject to standard good leaver/bad leaver provisions, be linked to the continued employment by Consol of the Consol ESOP Beneficiaries. The Consol ESOP will have a transaction term of 5 years, subject to furt\ her extension if additional B Ordinary Shares are issued to the Staff Trust after the Listing Date. Under the terms of the B Ordinary Shares, the Staff Trust will be entitled to receive distributions equal to 20% of the distributions payable on the Ordinary Shares. The balance of the “forfeited” dividends will be notionally of\ fset by Consol in repayment of the NVF balance then outstanding. At maturity (being the end of the 5 year period following \ any issue of B Ordinary Shares), Consol will redeem that number of B Ordinary Shares from the Staff Trust which equates, in market value terms, assuming a market value equal\ to the then market value of an Ordinary Share, to the NVF balance then outstanding, at a redemption price equal to the Subscription Price by the Staff Trust for the B Ordinary Shares concerned. Following settlement of the outstanding NVF balance, the B Ordinary Shares which have reached maturity and which continue to be held by the Staff Trust, will automatically convert into Ordinary Shares. Those Ordinary Shares will not be subject to any restriction, and the trustees of the Staff Trust will consequently be entitled to continue to hold them for the bene\ fit of the Consol ESOP Beneficiaries or distribute them to the Consol ESOP Bene\ ficiaries. Basis of Awards and Award levels From time to time the Board shall direct the trustees of the Staff Trust in writing to allocate participation units to eligible employees referred to in such directives. Participation units shall be allocated electronically or in such other manner as the Board may determine from time to time. One participation unit will be issued in respect of each full year that such a Beneficiary has been an employee si\ nce the date on which the B Ordinary Shares are issued to the Staff Trust. Vesting The B Ordinary Shares will vest in the Staff Trust upon subscription by the Staff Trust. A-106 Limits and adjustments The maximum number of B Ordinary Shares which may be issued or transferred to the Staff Trust, in aggregate, shall not exceed 300,000,000 B Ordinary Shares, (unless, subject to the Listings Requirements (if and as applicable), the Board approves an increase to such maximum aggregate and the Shareholders of the Company approve an increase to such maximum aggregate number of B Ordinary Shares by way of an ordinary resolution approved by 75 per cent. (seventy five per cent) of the votes cast in respect of such resolution by all Shareholders present or represented by proxy at the general meeting to approve such resolution and authorise an increase in the number of authorised B Ordinary Shares by way of special resolution). In respect of each Consol ESOP Beneficiary, the maximum number of participation units at any time to be allocated to any one Con\ sol ESOP Beneficiary shall not exceed five participation units. Having regard to such professional advice as it considers appropriate in the circumstances, and subject to the Listings Requirements, in respect of corporate events, the Board may, in its discretion, make such substitution of and/or adjustment to the trust deed of the Staff Trust and the allocated participation units as it considers appropriate in the circumstances (which adjustment shall be binding on Consol, the trustees of the Staff Trust, the Consol ESOP Beneficiaries and members of the Consol Group (if any), and, as applicable, the terms of the trust deed of the Staff Trust shall, without need for a formal variation (but subject to the amendment provisions as detailed below), be amended as is necessary to give effect to such adjustment), which adjustment may include, amongst other t\ hings, an adjustment to the maximum number of B Ordinary Shares issued or transferred to the Staff Trust and/or an adjustment to the maximum number of participation units at any time to be allocated to any one Consol ESOP B\ eneficiary. Consideration The Consol ESOP Beneficiaries will not be required to pay any consideration in respect of their participation in the Consol ESOP. Termination of employment Consol ESOP Beneficiaries terminating employment due to resignation or dismissal on grounds of misconduct, poor performance, dishonest behaviour or fraudulent conduct or on the basis of abscondment\ will be classified as “bad leavers” and will forfeit all rights to benefit under the Consol ESOP. Consol ESOP Beneficiaries terminating employment due to death, retrenchment, retirement (except to the extent that is constitutes bad leaver termination as set out above) will be classified as “good lea\ vers” and will, with effect from date of termination of employment, forfeit their right to any future benefit allocated to Consol ESOP Beneficiaries. A valuation will be co\ nducted, on a bi-annual basis, in respect of any benefit held by a good leaver on the date of termination o\ f his or her employment and the Staff Trust will, as soon as practical after completion of the valuation exercise, pay the good leaver an amount equal to the Company’s calculation of the net present value of his or her benefit. Amendment The rules of the Consol ESOP may be varied by agreement between the Staff Trust and the Company, however in the following instances the Consol ESOP may not be amended without the prior approval of the JSE and a resolution by the Shareholders supported by 75% of the voting rights exercised on the resolution: • the category of persons who are eligible for participation in the Consol ESOP; • the number of shares which may be utilised for the purpose of the Consol ESOP; • the individual limitations on benefits or maximum entitlements; • the basis upon which awards are made; • the amount payable upon the award; • the voting, dividend, transfer and other rights attached to the awards, including those arising on a liquidation of the Company; • the adjustment of awards in the event of a variation of capital of the Company or a Change of \ Control of the Company; and • the procedure to be adopted in respect of the vesting of awards in the event of termination of employment. General The trust deed of the Staff Trust and the MOI (which details the terms of the B Ordinary Shares) are available for inspection from the date on which the Pre-Listing Statement is published at the Company’s registered office, being Osborn Road, Wadeville, Johannesburg, to the Listing Date. In terms of the Listings Requirements, the passing of Ordinary Resolution number 3 required the approval of a 75 per cent. majority of the voting rights exercised on the resolution. A-107 ANNEXURE 13 DETAILS OF SUBSIDIARY COMPANIES AND THEIR DIRECTORS Name and registration numberPercentage ownershipDate and place of incorporation Issued ordinary shares Main business Date of becoming subsidiary 1 Consol Glass Proprietary Limited, registration number 2006/034503/07 100% 3 November 2006, South Africa 66,667 Manufacturing and marketing of glass and plastic packaging 10 April 2007 2 Consol Glass Kenya Limited, registration number C.23691 100% 5 February 1982, Kenya 43,515,115 Business activities not restricted 30 September 2015 3 Glassforce Limited, registration number RC424859 51% 16 August 2001, Nigeria 3,753,607,204 Business activities not restricted 21 July 2014 4 Juniper Glass Industries Share Company, registration number EIA/IP/01/00461/06 86% 16 October 2013, Ethiopia 137,047 To manufacture, distribute and sell glass bottles and other glass containers. 1 December 2016 5 Consol Glass Africa Proprietary Limited, registration number 2014/082007/07 100% 24 April 2014, South Africa 100 Business activities not restricted 24 April 2014 6 Business Venture Investments No. 1840 Proprietary Limited, registration number 2014/104531/07 100% 28 May 2014, South Africa 200 Business activities not restricted 22 May 2015 7 Business Venture Investments No. 3001 (RF) Proprietary Limited, registration number 2013/223552/07 100% 29 November 2013, South Africa 49,200 Business activities not restricted 22 May 2015 8 Consol Proprietary Limited, registration number 1946/021828/07 100% 29 May 1946, South Africa 221,238,853 Private households, exterritorial governments and other activities not adequately defined. 10 April 2007 9 Conhage Proprietary Limited, registration number 1915/001458/07 100% 13 October 1915, South Africa 3,050,000 Manufacturing 10 April 2007 10 Conince Proprietary Limited, registration number 1969/003989/07 100% 19 March 1969, South Africa 400 Manufacturing 10 April 2007 11 Apex Silica Mining Proprietary Limited, registration number 2015/261473/07 100% 28 July 2015, South Africa 70 Business activities not restricted 4 April 2016 12 Keysource Minerals Proprietary Limited, registration number, 2012/071278/07 100% 18 April 2012, South Africa 100 Business activities not restricted 4 April 2016 13 Kwanza Sands Minerals Proprietary Limited, registration number 2011/136852/07 100% 21 November 2011, South Africa 100 Business activities not restricted 4 April 2016 14 Nhlabathi Minerals Proprietary Limited, registration number -2012/071272/07 100% 18 April 2012, South Africa 100 Business activities not restricted 4 April 2016 15 Silica Quartz Proprietary Limited, registration number 2003/026658/07 70% 24 October 2003, South Africa 100 Business activities not restricted 10 May 2012 None of the securities of the Company’s subsidiaries are listed on the exchange operated by the JSE. No person, other than the Shareholders, holds any rights to enable such a person to vary the voting ri\ ghts held in any subsidiary. A-108 ALTERATIONS TO SHARE CAPITAL OF THE SUBSIDIARIES Set out below are the alterations to the shares of the Company’s subsidiaries which have occurred in the three years prior to the Last Practicable Date. Issue of securities by the Companies by the Company’s subsidiaries in the last three years Name of SubsidiaryDate of Issue of SecuritiesNumber and Type of Securities Issued Subscription Price Subscriber Business Venture 3001 (RF) Proprietary Limited 22 April 20167,972 “A” Preference Shares R352,362,400Syzigium Trading Products Proprietary Limited Business Venture 3001 (RF) Proprietary Limited 30 June 20171,250 “A” Preference Shares R100,000,000Syzigium Trading Products Proprietary Limited Business Venture 3001 (RF) Proprietary Limited 22 April 20161 “B” Preference Share R25,396Syzigium Trading Products Proprietary Limited Further details in respect of the Preference Shares are set out in “Material borrowings - preference shares”. DIRECTORS OF MAJOR SUBSIDIARY The directors of the Major Subsidiary are set out in the table below: MAJOR SUBSIDIARY Consol Glass Name, age and nationality Business address Occupation/functionDate of appointment as Director and term of office(1) Mike Arnold (59) British Consol House, Osborn Road, Wadeville, Gauteng, 1407, South Africa Executive Director31/03/2007 Karuna Nayager (52) South African Consol House, Osborn Road, Wadeville, Gauteng, 1407, South Africa Executive Director31/03/2007 Paul Curnow (42) South African Consol House, Osborn Road, Wadeville, Gauteng, 1407, South Africa Executive Director01/11/2010 Bruce MacRobert (54) South African 5A Upper Hillwood Avenue, Bishopscourt, Cape Town, 7708, South Africa Independent Non-Executive Director 29/11/2006 Quinton Dicks (53) South African 115A, Atholl Road, Atholl, Johannesburg, 2031, South Africa Lead Independent Non-Executive Director 12/04/2007 Itu Kgaboesele (46) South African The Place, 1 Sandton Drive, Sandton, Johannesburg, 2146, South Africa Non-Executive Director01/07/2017 Jon Kirby (55) South African 19 Cape Chestnut Road, Fourway Gardens, Fourways, Johannesburg, 2191, South Africa Independent Non-Executive Director 01/12/2017 Cynthia Pongweni (41) Zimbabwean 4 Eton Road, Parktown, Johannesburg, 2193, South Africa Independent Non-Executive Director 01/11/2016 Mohammed Sabi (37) South African The Place, 1 Sandton Drive, Sandton, Johannesburg, 2146, South Africa Alternate Non-Executive Director 01/07/2017 A-109 ANNEXURE 14 DETAILS OF PRINCIPAL IMMOVABLE PROPERTIES LEASED OR OWNEDDetails of the principal immovable properties leased or owned by the Company and its subsidiaries are as follows: PRINCIPAL PROPERTIES LEASEDLessorLesseeSub-lesseeProperty name Location/areaCommencement dateTenure and Unexpired term of the lease Current monthly rental Annual escalationElastisign Investments Proprietary Limited Consol Glass None Clayville Logistics Park Warehouse Erf 126 Sterkfontein Extension 4, registration Division JR, Province of Gauteng, measuring 75,401 hectares1 November 2010 10 years until 31 October 2020 Annual rental - R33,188,795.76, excluding VAT8.9% Wilriet Properties (Proprietary) Limited Consol Glass NoneSunnyrock Warehouse 21,331 square metres of Portion 118 of the Farm Rietfontein 63, Registration Division IR, Province of Gauteng. 1 January 2013 4 years until 31 December 2017 Annual rental - R10,318,434.72 excluding VAT8% Government Employees Pension Fund represented by the Public Investment Corporation SOC Limited Government Employees Pension Fund Consol Glass Consol Woodmead/XPRS North Showroom and Warehouse 2 326 square meter portion of Erf 511 Woodmead Ext 5, Registration Division IR, Province of Gauteng, in extent 6,852 square metres.1 October 2014 5 years until 30 September 2019 Annual rental - R2,181,038.40 excluding VAT8% Investec Property (Proprietary) Limited Consol Glass NoneCornubia Shopping Mall – Shop no. U93 Remaining extent ERF 607 Cornubia, Ethekweni, KZN1 October 2017 5 years until 30 September 2022 Annual rental – R2,812,500.00 excluding VATCPI, provided its remains at 6% or higher otherwise adjustable by 1% but not exceeding 8% IGI Glass International Limited Glassforce N/AWarehouse at Industrial Layout, Aba Abia State Industrial Layout, Aba Abia State1 July 2017 Expired December 2017 NilN/A Central Realties Limited GlassforceN/AOffices at Plot 1682 Sanusi Fafuma Street, Victoria Island Lagos Plot 1682 Sanusi Fafuma Street, Victoria Island LagosNo formal lease agreement N/A No amount payableN/A N/A GlassforceN/AResidential Property at Cluster D1 403 1004 Estates, Victoria Island Lagos Cluster D1 403 1004 Estates, Victoria Island LagosN/A Expired N/AN/A Ocean Parade Towers Limited Glassforce N/AResidential Property at Flat B/2/1 Ocean Parade Towers at Banana Island Ikoyi, Lagos Flat B/2/1 Ocean Parade Towers at Banana Island Ikoyi, Lagos 1 November 2017 6 Months until May 2018 NGN2 500 000 N/A Movamo Court Limited GlassforceN/AResidential Property, Flat No. 4, Block C, Movamo Court, Plot J32 and P32 Banana Island, Ikoy, Lagos Residential Property, Flat No. 4, Block C, Movamo Court, Plot J32 and P32. Close 216, Banana Island, Ikoy, Lagos1 July 2017 5 Months until June 2018 NGN1 333 333N/A Ethiopian Government Juniper GlassN/ALand in Debre Birhan Debre Birhan, Northern Shewa, Ethiopia7 July 2015 80 years ETB60,000N/A Kenyan Government CGKN/ACGK Factory Factory property at land Ref. Number 13560/2, Nairobi Area, Nairobi1 July 1985 66 years until 30 June 2084 K203,240 N/A A-110 PRINCIPAL PROPERTIES OWNED OwnerDescription ExtentTitle deed no. SOUTH AFRICA Johannesburg Consol Glass Erf 7 Wadeville, Registration Division IR, Province of Gauteng 5494 square metresT33453/2007 Consol Glass Erf 8 Wadeville, Registration Division IR, Province of Gauteng 2902 square metresT33453/2007 Consol Glass Erf 9 Wadeville, Registration Division IR, Province of Gauteng 3718 square metresT33453/2007 Consol Glass Erf 29 Wadeville, Registration Division IR, Province of Gauteng 1921 square metresT33453/2007 Consol Glass Erf 30 Wadeville, Registration Division IR, Province of Gauteng 1,2094 hectaresT33453/2007 Consol Glass Erf 222 Wadeville, Registration Division IR, Province of Gauteng 157 square metresT33453/2007 Consol Glass Remaining Extent of Erf 286 Wadeville, Registration Division IR, Province of Gauteng 8611 square metres T33453/2007 Consol Glass Erf 413 Wadeville, Registration Division IR, Province of Gauteng 1,2367 hectaresT33453/2007 Consol Glass Portion 61 of Erf 534 Wadeville Extention 2, Registration Division IR, Province of Gauteng 7111 square metres T33453/2007 Consol Glass Portion 62 of Erf 534 Wadeville Extention 2, Registration Division IR, Province of Gauteng 4428 square metres T33453/2007 Consol Glass Portion 63 of Erf 534 Wadeville Extention 2, Registration Division IR, Province of Gauteng 3701 square metres T33453/2007 Consol Glass Portion 64 of Erf 534 Wadeville Extention 2, Registration Division IR, Province of Gauteng 3661 square metres T33453/2007 Consol Glass Portion 65 of Erf 534 Wadeville Extention 2, Registration Division IR, Province of Gauteng 5300 square metres T33453/2007 Consol Glass Portion 103 of Erf 534 Wadeville Extention 2, Registration Division IR, Province of Gauteng 1,3910 hectares T33453/2007 Consol Glass Portion 148 of Erf 534 Wadeville Extension 2, Registration Division IR, Province of Gauteng 4,5635 hectares T33453/2007 Consol Glass Erf 779 Wadeville, Registration Division IR, Province of Gauteng 4,9653 hectaresT33453/2007 Consol Glass Remaining Extent of Portion 2 of Erf 75 Klippoortje AI, Registration Division IR, Province of Gauteng 2,5696 hectares T33453/2007 Consol Glass Portion 80 of Erf 75 Klippoortje AI, Registration Division IR, Province of Gauteng 8,9752 hectares T33453/2007 Consol Glass Portion 87 (portion of portion 78) of Erf 75 Klippoortje AI, Registration Division IR, Province of Gauteng 10,3645 hectares T33453/2007 Consol Glass Remaining Extent of Erf 104 Pretoriusstad Extention 7, Registration Division IR, Nigel, Province of Gauteng 50,7811 hectares T74019/2012 Pretoria Consol Glass Remaining Extent of Erf 6136 Clayville Extention 11, Registration Division JR, Province of Gauteng 13,6904 hectares T31721/2014 Consol Glass Remaining Extent of Erf 104 Pretoriusstad Extention 7, Registration Division IR, Nigel, Province of Gauteng 50,7811 hectares T74019/2012 A-111 OwnerDescription ExtentTitle deed no. Cape Town Consol Glass Remaining Extent of Erf 10807 Stellenbosch 1,4236 hectaresT55720/2007 Consol Glass Remaining Extent of Erf 40242 Cape Town 8,3998 hectaresT55720/2007 Consol Glass Remaining Extent of Erf 40313 Cape Town 2,8359 hectaresT55720/2007 Consol Glass Remaining Extent of Erf 40315 Cape Town 6,9954 hectaresT55720/2007 Consol Glass Erf 40316 Cape Town 12,4239 hectaresT55720/2007 Consol Glass Remaining Extent of Erf 40317 Cape Town 12,8536 hectaresT55720/2007 Consol Glass Erf 40318 Cape Town 2,5696 hectaresT55720/2007 Consol Glass Remaining Extent of Erf 40320 Cape Town 3,4096 hectaresT55720/2007 Consol Glass Erf 40321 Cape Town 17,8058 hectaresT55720/2007 Consol Glass Remaining Extent of Erf 40326 Cape Town 8,8280 hectaresT55720/2007 Consol Glass Erf 40327 Cape Town 8,8280 hectaresT55720/2007 Consol Glass Remaining Extent of Erf 40838 Cape Town 5,8466 hectaresT55720/2007 Consol Glass Erf 40185 Bellville 14,6462 hectaresT7877/2013 Consol Glass Erf 40319 Cape Town 9,4384 hectaresT61261/2010 Consol Glass Erf 14815 Bellville 1,1727 hectaresT42646/2009 Consol Glass Portion 2 of the Farm 1378 33,9449 hectaresT7973/2013 Consol Glass Portion 3 of the Farm 1378 21,5845 hectaresT7973/2013 Pietermaritzburg Consol Glass Portion 115 of the Farm Coalfield 2273, Registration Division GT, Province of Kwa-Zulu Natal 4047 square metres T35031/2010 Mpumalanga Silica Quartz Portion 22 of the Farm Groenfontein 206, Registration Division IR, Province of Mpumalanga 69,6268 hectares T14987/2014 KENYA Nairobi Consol Glass Kenya Sand plot at 851 Dalgube, Dalgube 6,57 hectaresKwale/Shirazi Dalgube/851 Consol Glass Kenya Sand plot at 650 Dalgube, Dalgube 2,35 hectares Kwale/ Dalgube/650 Consol Glass Kenya Sand plot at 2737 Msambweni 3 hectaresKwale/Msambweni ‘A’ /2737 Consol Glass Kenya Sand plot at 2764 Msambweni 0,9 hectaresKwale/Msambweni ‘A’ /2764 Consol Glass Kenya Sand plot at 2743 Msambweni 0,6 hectaresKwale/Msambweni ‘A’ /2743 Consol Glass Kenya Sand plot at 2783 Msambweni 0,5 hectares Kwale/Msambweni ‘A’ /2783 Consol Glass Kenya Sand plot at 2738 Msambweni 1,2 hectares Kwale/Msambweni ‘A’ /2738 Consol Glass Kenya Sand plot at 2537 Msambweni 1,7 hectares Kwale/Msambweni ‘A’ /2537 Consol Glass Kenya Sand plot at 2501 Msambweni 1,3 hectares Kwale/Msambweni ‘A’ /2501 Consol Glass Kenya Sand plot at 2732 Msambweni 1,3 hectares Kwale/Msambweni ‘A’ /2732 Consol Glass Kenya Sand plot at 2720 Msambweni 1,1 hectaresKwale/Msambweni ‘A’ /2720 NIGERIA Abia State Glassforce Factory property at Osusu Umueme, Igbor Hill, Aba, Abia State 6,884 hectares None A-112 ANNEXURE 15 DETAILS OF MATERIAL BORROWINGS AND MATERIAL INTER-COMPANY LOANS MATERIAL BORROWINGS OF THE COMPANY AND ITS SUBSIDIARIES AS AT THE LAST PRACTICABLE DATE: 1. Senior term and working capital facilities granted to Consol Glass by Ra\ nd Merchant Bank (acting as Mandated Lead Arranger, Joint Underwriter, Lender and Facility Agent), Nedbank Limited (as Joint Underwriter an\ d Lender), The Standard Bank of South Africa (acting through its Corporate and Investment Banking Division) (as Joint Underwriter and Lender), ABSA Bank Limited (acting through its Corporate and Investment Banking Division) (as Hedge Provider), Ashburton SA Credit Co-Investment Fund 1 (RF) Limited, iNguza Investments (RF) Limi\ ted, Investec Asset Management Proprietary Limited, Liberty Group Limited, Old Mutual Specialised Finance Proprietary Limited and Old Mutual Life Assurance Company. Reason for loan and brief description Consol Glass was granted two senior term facilities and a working capita\ l facility. The senior term facilities were to be applied towards the refinancing of Consol Glass’ existing indebtedness, costs associated with the transaction documents, repayment of the outstanding shareholder loans granted by Consol in favour of Consol Glass and lastly tow\ ards funding general corporate and working capital requirements of the Group. The working capital facility is to be applied towards general corporate and working capital purposes of the Group. Effective Date 22 September 2015 Signature Date Amendment and Restatement Agreement, in relation to Common Terms Agreement: 21 July 2015 (the “Common Terms Agreement”) (as amended by the release agreement entered into between, inter alia, Consol, Opiconsivia and Rand Merchant Bank in its capacity as facility agent, dated on or about 23 July 2015) Senior Term Facility A Agreement: 17 July 2012 Senior Term Facility B Agreement: 17 July 2012 Working Capital Facility: 16 July 2012 (as amended pursuant to an addend\ um dated 17 March 2015) Amount The available commitments under each of the facilities is as follows: • Senior Term A Facility: R3,444,999,999.93 • Senior Term B Facility: R1,500,000,000.00 • Working Capital Facility: R750,000,000.00 Interest rate Senior Term Facility A: 3 month JIBAR plus 3,85% Senior Term Facility B: 3 month JIBAR plus 4,25% Each of the instruments available under the Working Capital Facility is subject to a different interest rate: • Overdraft facility: amounts drawn up to R20,000,000.00 bear interest at the prime interest rate less 0.5%. Amounts in excess of R20,000,000.00 bear interest at the prime interest rate; • Short Term Loans: interest is levied at the prime interest rate, unless agreed otherwise in writing by Nedbank and Consol Glass; • Overnight loans and foreign finance facility: interest will be determined at the time of a request for a rate; and • Letter of Guarantee, letter of credit, foreign exchange contracts and derivative facilities: rate is as agreed between Nedbank and Consol Glass at the time of a request for the rate. Terms and conditions of repayment or renewal The Senior Term Facility A is to be repaid in full in a single payment 5 years after the first utilisation date. The Senior Term Facility B is to be repaid in full in a single payment 6 years after the first utilisation date. The Working Capital Facility does not provide for a specific repayment date for a number of the facilities thereunder and accordingly, unless agreed otherwise between the parties in writing, is repayable on demand. Period of the loan The finance documents (including the facility agreements) endure until the date on which (i) all the facility outstandings have been fully paid and discharged whether or not as a result of enforcement and (ii) the lenders have no commitment, obligations or liabili\ ty (whether actual or contingent) to lend money or provide other financial accommodation to any obligor under any finance document. As at the date of the Common Terms Agreement, the obligors under such agreement were Consol Glass (as borrower) and Consol Glass Africa, Business Venture Investments No. 1840 Proprietary Limited and Consol Properties as guarantors (collectively, the “obligors”) A-113 Secured or unsecuredSecured Security provided There is a debt guarantee granted by Opiconsivia Trading 249 Proprietary Limited (RF) (“Opiconsivia”) in favour of the finance parties under the Common Terms Agreement, guaranteeing the obligations of the obligors under the Common Terms Agreement. The obligors and Business Venture Investments No. 1840 Proprietary Limited (“Business Venture 1840”) in turn have indemnified Opiconsivia by means of a counter-indemnity agreement in favour of Opiconsivia. Pursuant to the counter indemnity agreement, the obligors and Business Venture 1840 have granted the following security in favour of Opiconsivia: • cession by Business Venture 1840 of all its rights and interests in (i) its shares in Consol Glass, Consol Glass Africa, Consol Proprietary Limited and all other subsidiaries in the Group; (ii) all of its bank accounts; (iii) any claims against its debtors for any indebtedness outstanding; (iv) proceeds arising from the sale of any businesses or assets of Business Venture 1840; and (v) any rights to or arising from its intellectual property; • cession by Consol Glass Africa of all of its rights and interests in (i) all of its bank accounts; (ii) any claims against its debtors for any indebtedness outstanding; \ (iii) proceeds arising from the sale of any businesses or assets of Consol Glass Africa; and (iv\ ) any rights to or arising from its intellectual property; • first ranking charge under Nigerian law by Consol Glass Africa over (i) all of its shares in Glassforce Limited; (ii) any additional shares in Glassforce Limited that it might hold in future; (iii) all dividends, redemption proceeds, interest and monies flowing from such shares in (i) and (ii); and (iv) all claims it may have against Glassf\ orce Limited in future, including shareholder claims and intercompany loans; • cession in security by Consol Glass of all of its rights, title and interests in and to (a) all of its bank accounts, (b) claims against its debtors, (c) all cash c\ onsideration received by Consol Glass pursuant to the disposal of one or more of its businesses or assets (subject to the terms of the Common Terms Agreement), (d) any rights to or arising from its intellectual property and (e) any insurance and reinsurance policies of any obligor under the Common Terms Agreement required to be obtained or maintained pursuant to the provisions of the Common Terms Agreement, and any proceeds obtained therefrom; • cession and pledge by Consol Glass in respect of all its rights, title and interest in and to (a) its “permitted investments” (as defined in the Common Terms Agreement), (b) any and all shares held by it, and any distributions due to it as a right of such shareholding (c) any claims it has against a company in which it has any shareholding (including shareholder loans and intercompany loans) and (d) any proceeds receivable by it in respect of any disposal of such shares; • a pledge and hypothecation of all of Consol Glass’ existing and futur\ e trademarks. Conversion or redemption rights N/A Financing of repayments of debts that are repayable within 12 months The working capital facility does not provide for a specific repayment date for a number of the facilities thereunder and accordingly, unless agreed otherwise between the parties in writing, is repayable on demand. 2. CGK Loan from Stanbic Bank Kenya Limited (“Stanbic Kenya”) Reason for loan and brief description Stanbic Kenya has made the facility available to CGK for the purpose of \ financing the settlement of a promissory note and/or intercompany loans due to East African Breweries Limited. In addition, the facility could be used for the payment of upfr\ ont charges payable by CGK under (i) a supply agreement relating to the supply of bottles, between itself and East African Breweries Limited and (ii) a management services agreement between itself and East African Breweries Limited dated 31 March 2015. Effective Date The facility is made available upon the fulfilment of all conditions precedent by CGK. Signature Date 30 September 2015 Amount KES 1 billion Interest rate Kenya Banks’ Reference Rate plus 5.235% per annum. Default interest is levied at the above interest rate plus 3%. Interest is payable on each Quarter Date (being 31 March, 30  June, 30 September and 31 December), provided the last interest payment will be made on the date of final repayment. Terms and conditions of repayment or renewal The loan is to be repaid in instalments on each Quarter Date after the date of first utilis\ ation, in accordance with the amortisation schedule. The loan must be repaid in full by no later than 6 years after the date of first utilisation and the amortisation schedul\ e provides that the final capital instalment will be on 30 September 2021 CGK may prepay the loan in multiples of KES 100,000,000, provided it gives Stanbic Kenya at least 10 Business Days’ written notice. Break costs will be levied insofar as the prepayment is not made on a Quarter Date. Period of the loan 6 years from date of first utilisation Secured or unsecured Secured Security provided (i) A charge over the property registered in the name of CGK and known as Land Reference 13560/2, Nairobi; and (ii) An all asset debenture over the assets of CGK. Conversion or redemption rights N/A Financing of repayments of debts that are repayable within 12 months N/A A-114 3. Senior term loan facility of up to N2 250 000 000 granted by St\ anbic IBTC Bank plc to Glassforce Reason for loan and brief description General capital expenditure requirements of Glassforce, including refurbishment and replacement of the glass furnace, and the payment of fees and transaction costs associated with this financing. Effective Date Upon fulfilment of the conditions precedent. Signature Date 6 September 2017 Amount Up to N2 250 000 000 Interest rate The interest rate prior to the occurrence of the Trigger Event (as defined below) is NIBOR plus 4%. The interest rate after the occurrence of the trigger event is NIBOR plus 3.5% per annum. If Glassforce fails to pay any amount payable by it under the finance documents on \ its due date, default interest shall be levied at a rate equal to the above stated interest rate plus 1%, payable on demand. “Trigger Event” means at any time after the Moratorium Period (as defi\ ned below), for two consecutive Calculation Dates and in respect of the Calculation Period immediately preceding such Calculation Date, a Total Debt to EBITDA ratio of less than 1.75 times. “Calculation Date” means each Quarter Date (as defined below) fr\ om the date of the agreement until the final maturity date. “Calculation Period” means, in respect of a Calculation Date, a period of 12 months preceding such Calculation Date. “Moratorium Period” means the period commencing on 6 September 201\ 7 and terminating on the earlier of (i) the date falling 6 months after the date of the \ initial utilisation under this agreement and (ii) the date falling 6 months after the completion of the \ refurbishment of the furnace; and “Quarter Date” means 31 March, 30 June, 30 September and 31 December. Terms and conditions of repayment or renewal Glass Force shall repay the loans in quarterly instalments commencing on the first repayment date (being the first Quarter Date occurring after the Moratorium Period). Instalments shall be paid in an amount which reduces the aggregate of the outstanding loans by an amount equal to: 5% (on the first repayment date and each repayment date thereafter up to the repayment date occurring 21 months after the first repayment date); and 7.5% (on each repayment date thereafter up until the final maturity date (i.e. the date occurring 6 years after the initial utilisation under this agreement)), of all loans borrowed by Glassforce as at the close of business in Lagos on 31 March 2018. Period of the loan The loan shall be repaid in full on the date falling 6 years after the date of initial util\ isation under this agreement. Secured or unsecured Secured Security provided As security for its obligations hereunder, Glassforce has granted in favour of Stanbic IBTC Bank plc: • a debenture over all of its assets; and • a charge over the debt service reserve account. Conversion or redemption rights N/A Financing of repayments of debts that are repayable within 12 months N/A A-115 4. Master Invoice Discounting Agreement between Consol Glass and Rand Merchant Bank Reason for loan and brief description In terms of this agreement, Consol Glass may offer to sell to Rand Merchant Bank certain debts owed to Consol Glass by certain agreed customers. The debts will be sold for a discounted purchase price, calculated as the nominal amount of the outstanding invoice\ s less an agreed deduction percentage. Rand Merchant Bank, in its sole discretion, may accept or reject Consol Glass’ offer to sell such debts. Effective Date Upon fulfilment of the conditions precedent Signature Date 22 December 2017 Amount Rand Merchant Bank makes available to Consol Glass an uncommitted revolving facility for such transactions in an amount not exceeding the aggregate of the relevant Subject Debt Limit, being R450 million. Interest rate Subject to confirmation and agreement on each utilisation. Terms and conditions of repayment or renewal Payable directly by the customer into a bank account in the name of Rand Merchant Bank on the due date of the payment. Period of the loan Each party may terminate the agreement on written notice to the other. Secured or unsecured Unsecured. Security provided N/A Conversion or redemption rights N/A Financing of repayments of debts that are repayable within 12 months None. 5. Stanbic IBTC Bank PLC overdraft facility with Glassforce Reason for loan and brief description Overdraft facility Effective Date 6 September 2017 Signature Date 6 September 2017 Amount N750 million Interest rate Interest will be based on market conditions at the time of utilisation. Per the agreement the interest rate is 21.5% per annum. Terms and conditions of repayment or renewal Committed facility Period of the loan The facility is granted without a specific expiry date and arrangements \ in respect of any unutilised facilities are subject to review and amendment. Secured or unsecured Secured. Security provided All asset debenture, encompassing fixed and or floating charges over all of the assets of Glassforce, which shall be stamped and registered to cover an amount equivalent to 20% (twenty percent) of the aggregate of the limits of the facility. Conversion or redemption rights N/A Financing of repayments of debts that are repayable within 12 months N/A 7. Stanbic Bank Kenya Limited and CGK Reason for loan and brief description Overdraft facility Effective Date 17 October 2017 Signature Date 17 October 2017 Amount KES200 million Interest rate CBR plus 3.37% per annum Terms and conditions of repayment or renewal The facilities will be reviewed on the 31 October 2018. Period of the loan Payable on demand Secured or unsecured Secured. Security provided All assets debenture over the assets of the company to a value of K300m. Conversion or redemption rights N/A Financing of repayments of debts that are repayable within 12 months N/A A-116 MATERIAL BORROWINGS OF THE COMPANY AND ITS SUBSIDIARIES ON OR ABOUT THE LISTING DATE: 1. New Senior Debt Facilities between Consol Glass, as borrower, Business Venture 1840, Consol Glass Africa, Silica Quartz (until the implementation of the Consol Mining Roadmap) and cer\ tain subsidiaries of Business Venture 1840, as guarantors, Business Venture 3001, as limited guarantor, and ABSA Bank Limited and Rand Merchant Bank, as lenders Reason for loan and brief description Refinancing of existing senior debt of Consol Glass, voluntary redemption of the Preference Shares and to fund expansionary capital expenditure Effective Date 8 May 2018 Signature Date Expected to be prior to the Listing Date Amount • a R2.4 billion bullet term facility (“Facility A”); and • a R1.0 billion revolving bullet term loan facility (“Facility B”). Expected interest rate • Facility A – three-month JIBAR plus 175 basis points; and • Facility B – three-month JIBAR plus 180 basis points. Default interest will accrue on the facilities including any unpaid amounts at the relevant interest rate plus 2%. Terms and conditions of repayment or renewal Facility A will be repayable in full five years from financial close of the finance documents. Facility B will be repayable in full five years from the date on which Facility B becomes available for utilisation. Consol Glass may prepay the Term Facilities out of internally generated cash flows on any interest reset date without any penalty. Early repayments will be made in whole or in a minimum amount of R50 million and in integral mult\ iples of R5 million. Early repayments made in relation to Facility A may not be redrawn once repaid, whereas any amounts repaid on Facility B may be redrawn during its availability period. On the occurrence of trigger events such as the delisting of the Company, a change of control, the sale of all or a greater part of the assets of Consol Glass, the facilities become payable in full. Period of the loan 5 years Secured or unsecured Secured Security provided • mortgage bond issue over the immovable properties of Consol Glass and the guarantors; • first ranking notarial bonds over immovable properties, bank accounts and cash of Consol Glass and the guarantors; • pledge and cession of the shares held by Business Venture 3001 in Business Venture 1840; and • pledge and cession of the shares, claims and loan accounts in all companies, associates and investments held by the borrower and the guarantors, save for the trade receivables against which the invoice discounting facilities (or any one of them) \ are provided; and • cession of cash, bank accounts, debts, claims and insurance policies and\ proceeds of the borrower and the guarantors. Conversion or redemption rights None Financing of repayments of debts that are repayable within 12 months N/A. Penalties of 2% will apply in the event of prepayment of these facilities within twelve months from the initial draw down date. 2. General banking facilities between FirstRand Bank Limited, The Standard Bank of South Africa Limited and Consol Glass Reason for loan and brief description Working capital facility to be used to fund the general working capital r\ equirements of the Group, for general corporate purposes and for other general banking purpos\ es Effective Date 8 May 2018 Signature Date Expected to be prior to the Listing Date Amount R750 million Interest rate The Prime interest rate (as per the relevant lender of the working capital facility) Terms and conditions of repayment or renewal Payable on 364 day notice Period of the loan Evergreen with a 364-day notice period for termination Secured or unsecured Secured Security provided The facilities share in the security for the New Senior Debt Facilities on a pari passu bas\ is Conversion or redemption rights N/A Financing of repayments of debts that are repayable within 12 months N/A A-117 3. Invoice Discounting Facility between Rand Merchant Bank, a division of FirstRand Bank Limited and Consol Glass Reason for loan and brief description Invoice discounting facility Effective Date 8 May 2018 Signature Date Expected to be prior to the Listing Date Amount R500 million Interest rate JIBAR plus 90 to 120 basis points depending on the trade receivable balance being factored Terms and conditions of repayment or renewal Uncommitted facility Period of the loan The facility is granted without a specific expiry date and arrangements \ in respect of any unutilised facilities are subject to review and amendment. Secured or unsecured Unsecured Security provided N/A Conversion or redemption rights N/A Financing of repayments of debts that are repayable within 12 months N/A PREFERENCE SHARES AS AT THE LAST PRACTICABLE DATE 1. Preference Shares issued by Business Venture 3001 (a wholly-owned subsidiary of Consol) Reason for loan and brief description Business Venture 3001 issued the A” Preference Shares and “B” Preference Shares in order to fully repay all amounts outstanding under a bridge facility agreement, which facility was used to directly or indirectly provide bridge funding to Consol Glass Africa to enable Consol Glass Africa to acquire the shares in CGK; and to fund the repayment of the shareholder loan lent and advanced by Consol Glass to Consol Glass Africa to acquire ordinary share in Glassforce. Business Venture 3001 issued the “A1” Preference Shares in order to fund the advance of a non-interest bearing shareholder loan to Business Venture 1840, which will use the proceeds in turn to advance a non-interest bearing shareholder loan to Consol Glass Africa to refinance the intercompany debt incurred by Consol Glass Africa owed to Consol Glass when Consol Glass Africa acquired shares in Juniper Glass Industries plc. Effective Date The “A” Preference Shares and “B” Preference Share were issued on 22 April 2016. The “A1” Preference Shares will be issued in two tranches (the “Tranche 1 “A1” Preference Shares” and the “Tranche 2 “A1” Preference Shares” respectively). The Tranche 1 “A1” Preference Shares were issued on 30 June 2017. Signature Date The preference share subscription agreement in respect of the “A” Preference Shares and “B” Preference Share entered into between Business Venture 3001 and Syzgium Trading Products Proprietary Limited (“Syzgium”) was executed on 21 April 2016 and \ amended on or about 28 June 2017 (the “Subscription Agreement”). The preference share subscription agreement in respect of the “A1” Preference Shares entered into between Business Venture 3001, Syzgium and Rand Merchant Bank was signed on 28 June 2017 (the “A1 Subscription Agreement”) Amount “A” Preference Shares – R352,362,400 (7,972 “A” Preference Shares were issued at a price of R44 200 per share) “B” Preference Share – R25,396.02 (1 “B” preference share was issued at a price of R25,396.02) “A1” Preference Shares – R100,000,000 (1,250 ”A1” Preference Shares were issued at a price of R80,000 per share) A-118 Dividend rateThe “A” Preference Share and “A1” Preference Share dividends accrue at 127.5% of the prime interest rate in South Africa but are only payable within two Business Days of Business Venture 3001 receiving distributable income. The B Preference Share accrues an interim dividend in the period commencing on the earlier of (i) the redemption of all the “A” Preference Shares and “A1” Preference Shares or (ii) if an “A” Exit Event (as defined in the Preference Share terms) occurs, the date on which Business Venture 3001 pays an amount equal to the aggregate of the outstanding “A” Preference Share obligations and outstanding “A1” Preference Share obligations into the collections account, and terminating on the payment of the “B” Final Preference Dividend. The interim dividend is a percentage (which differs depending on when that date occurs) (“Participation Percentage”) plus an additional participation percentage (the “Additional Participation Percentage”) of (i) the aggregate net distributions (if the “A” Preference Shares and “A1” Preference Shares have been redeemed in full) or (ii) the amount remaining after an amount equivalent to the outstanding “A” Preference Share obligations and outstanding “A1” Preference Shares obligations has been paid into the collections account (if an “A”\ Exit Event has occurred but the “A” Preference Shares and “A1” Preference Shares have not been redeemed in full). The “B” Final Preference Dividend is an amount equal to the aggregate of the Participation Percentage of the Consol NAV on that day and the Additional Participation Percentage of the Consol NAV on that day and is payable on the occurrence of a “B” Exit Event (as defined in the Preference Share terms) or on the “B” Final Date” (being 29 September 2019)\ . The Consol NAV amount depends on the whether a “B” Exit Event (as defined belo\ w) has occurred and, if so, the nature of such “B” Exit Event. Period of the loan “A” Preference Shares – Final redemption of the “A” Preference Shares occurs 3 years and one day after the issue date of such “A” Preference Shares. “B” Preference Share – Final redemption of the “B” Preference Share will occur 3 years and 1 day after the payment of the “B” Final Preference Dividend. “A1” Preference Shares - Final redemption in respect of the Tranche 1 “A1” Preference Shares and Tranche 2 “A1” Preference Shares will occur 3 years and one day after the issue of the Tranche 2 “A1” Preference Shares, provided that if no Tranche 2 “A1” Preference Shares are issued, then the final redemption of the Tranche 1 “A1” Preference Shares will occur 3 years and one day after the issue date of the Tranche 1 “A1” Preference Shares. Secured or unsecured Secured Security provided The following security is provided: (i) a pledge and cession by Consol in favour of Syzgium, in terms of which C\ onsol pledges and cedes in securitatem debiti all its rights, title and interests in and to all shares which it owns from time to time, shareholder and group claims, bank accounts and claims and all rights and interests related thereto; (ii) pledge and cession by Business Venture 3001 in favour of Syzgium in respect of certain shares, shareholder and group claims, bank accounts and claims, and all rights and interests related thereto; and (iii) a guarantee agreement, whereby Consol guarantees Business Venture 3001’s obligations under the finance documents, as defined in the Preference Share terms. A-119 Conversion or redemption rights“A” Preference Shares - (i) final redemption of all “A” Preference Shares is specified to be 3 years and 1 day after the issue date of such “A” Preference Shares; (ii) Voluntary redemption: (a) Business Venture 3001 has the option to voluntarily redeem the “A” Preference Shares subject to certain conditions; (b) in the event of an “A” Trigger Event (as defined in the Preference Share terms), the “A” preference shareholders have the right to deliver a notice requiring an early redemption of the “A” Preference Shares and Business Venture 3001 will be obliged to redeem such shares; (c) in the event that it becomes illegal for an “A” preference shareholder to perform any of its obligations under the applicable finance documents, and the circumstances resulting in such illegality are not remedied after notice to do so is delivered, the “A” preference shareholder has the right to require an early redemption of its “A” Preference Shares; and (d) if Business Venture 3001 fails to deliver the required notice in respect of a proposed issuance of shares to the Parent Shareholders (Rights Issue), or the notice duly delivered confirms that the Rights Issue will result in a change of control or that the ordinary shareholders of Consol will not subscribe for all the shares to be issued, Business Venture 3001 is obliged to pay an amount equal to the outstanding A Preference Share obligations into the collection account for distribution in accordance with the next priority of payments. B Preference Share - (i) final redemption of the B Preference Share occurs 3 years and 1 day after payment of the “B” Final Preference Dividend; (ii) Voluntary redemption (a) there is no option for Business Venture 3001 to voluntarily redeem the B Preference Share, unless all “A” Preference Shares and “A1” Preference Shares have been redeemed in full and the “B” Final Preference Dividend has been paid; and (b) in the event that it becomes illegal for the B Preference Shareholder to perform its obligations under the applicable finance documents, and the circumstances resulting in such illegality remain unremedied after notice of such illegality is duly delivered, the B Preference Shareholder has the right to require an early redemption of the B Preference Share. “A1” Preference Shares (i) Final redemption in respect of the Tranche 1 “A1” Preference Shares and Tranche 2 “A1” Preference Shares will occur 3 years and one day after the issue of the Tranche 2 “A1” Preference Shares, provided that if no Tranche 2 “A1” Preference Shares are issued, then the final redemption of the Tranche 1 “A1” Preference Shares will occur 3 years and one day after the issue date of the Tranche 1 “A1” Preference Shares. (i) Business Venture 3001 shall be entitled but not obliged to voluntarily redeem the “A1” Preference Shares if: (a) such redemption is financed from the proceeds of a refinancing and all “A1” Preference Shares are redeemed or, where such voluntary redemption is financed other than by means of a refinancing or funds standing to the credit of the bank accounts, no less than 5 “A1” Preference Shares per “A1” preference shareholder is redeemed; (b) there is no “A1” Potential Trigger Event continuing of “A1” Trigger Event at the time, and no “A1” Potential Trigger Event or “A1” Trigger Event would occur as a result of the making of the proposed voluntary redemption (each as defined in the Preference Share terms). Financing of repayments of debts that are repayable within 12 months N/A SHAREHOLDER LOANS AS AT THE LISTING DATE Loan type Loan owing byAmountInterest RateMaturity Class “A” Loans ConsolR1,610,431,898Interest free31 May 2037 Class “B” Loans ConsolR3,131,269,925Prime Rate plus 2%31 May 2037 A-120 MATERIAL INTER-COMPANY BALANCES AS AT 31 DECEMBER 2017 Details of inter-company balances of the Group as at 31 December 2017 before elimination were as follows: 1. Loan from Business Venture 1840 to Consol Glass Reason for loan and brief description Holding company loan Effective Date 29 September 2015 Signature Date On or about 16 April 2017 Amount R2,823,632,000 Interest rate Prime interest rate plus 2.15% Terms and conditions of repayment or renewal This loan is subordinated in right of payment under the long-term facility. Period of the loan The loan matures in March 2037. No further terms specified. Secured or unsecured Unsecured Security provided None Conversion or redemption rights N/A 2. Loan from Consol Glass to Silica Quartz Reason for loan and brief description Loan account Effective Date N/A Signature Date N/A Amount R121,953,612 Interest rate Non-interest-bearing loan account Terms and conditions of repayment or renewal The loan is subordinated in favour of other creditors for a period of one year from balance sheet date and is in effect until the assets of the company fairly valued exceed its liabilities. Period of the loan No fixed repayment terms Secured or unsecured Unsecured Security provided None Conversion or redemption rights N/A 3. Loan from Consol Glass to Consol Glass Africa Reason for loan and brief description Funding of CGK, Juniper and Glassforce acquisition and CGK transaction costs incurred by Consol Glass less forex credits, working capital advances and interest owed to Consol Glass Africa, on funds temporarily in Consol Glass’s bank account. Effective Date Various Signature Date N/A Amount R997,262,631.39 Interest rate Non-interest-bearing loan account Terms and conditions of repayment or renewal No fixed terms of payment Period of the loan No payment period Secured or unsecured Unsecured Security provided None. Conversion or redemption rights N/A 4. Loan from Consol Glass Africa to Glassforce (Nigeria) Reason for loan and brief description Working capital advance and sundry charges. Effective Date Various Signature Date N/A Amount R23,525,551 Interest rate Non-interest bearing loan account Terms and conditions of repayment or renewal Repayable once third-party borrowings have been settled by Glassforce. Based on an agreed payment schedule. Period of the loan Repayable once third-party borrowings have been settled by Glassforce. Based on an agreed payment schedule. Secured or unsecured Unsecured Security provided None Conversion or redemption rights N/A A-121 5. Loan from Consol Glass Africa to CGK (Kenya) Reason for loan and brief description Working capital advances and settlement of promissory notes. Effective Date 30 September 2015 Signature Date N/A Amount KES975,758,149 Interest rate Non-interest bearing loan account Terms and conditions of repayment or renewal No fixed terms of repayment Period of the loan One Year Secured or unsecured Unsecured Security provided None Conversion or redemption rights N/A 6. Loan from Consol Glass Africa to Juniper Glass Reason for loan and brief description Working capital advances and sundry charges. Effective Date Various Signature Date Various Amount US$4,250,000 Interest rate 2-month US dollar LIBOR plus 5% Terms and conditions of repayment or renewal Repayable once third-party borrowings have been settled by Juniper Glass. Based on an agreed payment schedule. Period of the loan Repayable once third-party borrowings have been settled by Juniper Glass. Based on an agreed payment schedule. Secured or unsecured Unsecured Security provided None Conversion or redemption rights N/A 7. Loan from Consol to Business Venture 3001 Reason for loan and brief description Restructure of the Group Effective Date Upon fulfilment of the conditions precedent Signature Date 23 July 2015, as amended on 26 August 2015 Amount The amount of the loan is equal to the outstanding balance of the aggregate outstanding balance of shareholder loans advanced by Consol to Consol Glass pursuant to a loan agreement between such parties dated 4 April 2007 and amended on 21 September 2011 (the “Loan Agreement”) less an amount of R29,079,041. Interest rate Prime plus 2.15% Terms and conditions of repayment or renewal This loan is subordinated in right of payment under the long-term facility. Period of the loan The loan matures in March 2037. No further items specified. Secured or unsecured Unsecured. Security provided None. Conversion or redemption rights N/A 8. Loan from Business Venture 3001 to Business Venture 1840 Reason for loan and brief description Restructure of the Group Effective Date Upon fulfilment of the conditions precedent. Signature Date 23 July 2015, as amended on 26 August 2015 Amount The amount of the loan is equal to the outstanding balance of the aggregate outstanding balance of shareholder loans advanced by Consol to Consol Glass pursuant to a loan agreement between such parties dated 4 April 2007 and amended on 21 September 2011 (the “Loan Agreement”), less an amount of R29 079 041 Interest rate Prime plus 2.15% Terms and conditions of repayment or renewal This loan is subordinated in right of payment under the long-term facility. Period of the loan The loan matures in March 2037. No further items specified. Secured or unsecured Unsecured Security provided None Conversion or redemption rights N/A A-122 ANNEXURE 16 OVER-ALLOTMENT SHAREHOLDERS Name of Over-allotment Shareholder:Maximum number of Over-allotment Shares to be sold under the Over-allotment Option Brait Fund IV Entities 45,551,964 Old Mutual Life Assurance Company 34,933,515 Sanlam 18,532,135 HarbourVest Partners 15,112,821 A-123 ANNEXURE 17 EXTRACTS FROM MEMORANDUM OF INCORPORATION OF THE COMPANY AND MAJOR SUBSIDIARIES Set out below are extracts from the Memorandum of Incorporation of the Company: “4. Authority to alter authorised Shares 4.1 The Board shall not have the powers contained in section 36(3). 4.2 The Shareholders shall have the sole authority to undertake the following actions (whether or not r\ eferred to in section 36(3)), by way of a Special Resolution which amends this MOI, namely to: 4.2.1 increase or decrease the number of authorised but unissued Shares of any class; 4.2.2 create any new class or classes of authorised but unissued Shares; 4.2.3 change by way of consolidating or subdividing (or both) any or all: 4.2.3.1 authorised but unissued Shares of any class; and 4.2.3.2 issued Shares of any class, provided that the holders of the issued Shares so consolidated or divided, confirm the change by way of a Special Resolution of the holders of the issued Shares so consolidated or divided; 4.2.4 change the name of the Company; 4.2.5 reclassify all or any Shares that have been authorised but not issued; 4.2.6 classify all or any unclassified Shares that have been authorised but are not issued; 4.2.7 determine the preferences, rights, limitations and other terms of all or any Shares that have been authorised but not issued; 4.2.8 vary the preferences, rights, limitations and other terms of any issued or unissued Sha\ res; 4.2.9 vary the preferences, rights, limitations and other terms attaching to any particular c\ lass of Shares; 4.2.10 convert any class of Shares into one or more other classes of Shares; and 4.2.11 convert any Shares of par value to Shares of no par value. 4.3 If the Shareholders act pursuant to the authority contemplated in paragraph 4.2, th\ e Company must file a Notice of Amendment of this MOI in accordance with section 16(7). 4.4 For so long as any of the Company’s Securities are listed on the securities exchange operated by the JSE, such Securities\ , and any variations thereto, shall be subject to any limitations with respect thereto contained in the Listings Requirements, and in particular Schedule 10 of the Listings Requirements, as amended from time to time.” “5. Issue of Shares 5.1 Shareholders of the Company in General Meeting may authorise the Directors, subject to paragraph 5.2. below, to issue unissued equity Securities from time to time and/or to grant options to subscribe for unissued equity\ Securities as the Directors in their discretion deem fit, provided that such transaction has been approved by the JSE (if necessary) and complies with the Listings Requirements, however, shareholder approval will not be required in terms of this paragraph 5.1 for such issue unless it is required in terms of the Listings Requirements or the Companies Act. [para 10.1 of schedule 10 of the Listings Requirements] 5.2 Subject to paragraphs 5.1 and 5.4, the Board may resolve to issue Shares at any time, but only within the classes and to the extent that those Shares have been authorised by or in terms of this MOI. 5.3 Shares or other Securities which are of a class listed on the securities exchange operated by the JSE shall be issued in the form of “uncertificated” Shares or Securities, unless the Directors resolve that any such Shares or other Securities be issued in the form of “certificated” Shares or Securities. 5.4 Notwithstanding anything in this MOI to the contrary, for so long as the Ordinary Shares are admitted to the list maintained by the JSE it shall not be competent for the Company to issue any Shares in terms of sections 40(5) to 40(7). [para 10.2(a) of Schedule10 of the Listings Requirements”] 5.5 Capitalisation Shares 5.5.1 The Board shall have the power or authority to: 5.5.1.1 approve the issuing of any authorised Shares as capitalisation Shares; or 5.5.1.2 issue Shares of one class as capitalisation Shares in respect of Shares or another class; or 5.5.1.3 resolve to permit Shareholders to elect to receive a cash payment in lieu of a capitalisation Share, as set out in section 47. [para 10.6 of schedule 10 of the Listings Requirements”] A-124 “17. Distributions 17.1 Distributions to Securities holders holding Securities listed on the sec\ urities exchange operated by the JSE must be provided for in accordance with the Listings Requirements to the extent applicable and must not provide that capital shall be repaid on the basis that it may be called up again. [para 10.8 of schedule 10 of the Listings Requirements] 17.2 The Board, or (on the recommendation of the Board) the Shareholders by ordinary resolution, may at any time authorise and/or declare a Distribution (which for the avoidance of doubt shall include a dividend), subject to compliance with section 46 and section 48. [para 10.17(a) of schedule 10 of the Listings Requirements] 17.3 The following provisions shall apply to Distributions made to Shareholders of a class or classes of Shares: 17.3.1 Distributions shall be declared payable to Shareholders registered as such on the record date with respect to such Distribution determined in terms of paragraph 3 of Annexe B, provided that such record date in the case of the payment of any dividend shall be a date subsequent to the da\ te of sanctioning of the dividend or declaring the dividend by the Board, whichever is the later; [para 10.17(b) of schedule 10 of the Listings Requirements] 17.3.2 Distributions payable in monetary form shall be declared in the currency of South Africa. The Board may, in its discretion and on such terms and conditions as it may determine, authorise th\ e payment of any Distribution to a non-resident Shareholder in any foreign currency requested by the non-resident Shareholder, at the cost, expense and risk of the non-resident Shareholder in question; 17.3.3 any Distribution declared may be paid and satisfied either wholly or in part by the distributio\ n of specific assets, and in particular of paid-up Shares or Securities of any other company, or in cash or in one or more of such ways (which shall include granting Shareholders, in accordance with Annexe B, a right of election between receiving any Distribution in cash or in the form of the distribution of \ specific assets) [para 10.7 of schedule 10 of the Listings Requirements], subject to the provisions of the Companies Act, as the Board or the Shareholders may at the time of authorising the Distribution determine and direct. If as a result of the declaration of a Distribution any Shareholders become entitled to fractions of any specific assets of the Company, the Board may, subject to paragraph 12.4 above (it being understood that fractions o\ f Securities will be dealt with in accordance with the provisions of the Listings Requirements), sell the assets represented by such fractions and after deducting the expenses of such sale distribute the balance of the proceeds of the sale amongst the Shareholders entitled to the fractions in, as reasonably possible, proportion to their entitlement; 17.3.4 the Directors may, from time to time, pay to the Shareholders on account of the next forthcoming dividend such interim dividend as in their judgement the position of the Company \ justifies; 17.3.5 in the case where several persons are registered as the joint holders of any Shares, any one of such persons may give to the Company effective receipts for all or any Distributions and payments on account of Distribu\ tions in respect of such Shares; 17.3.6 all cash Distributions (including dividends) payable to a Shareholder may be paid by electronic funds transfer (into the bank account recorded in the bank account register of the Company nominated by the Shareholder, or in the case of joint Shareholders into the bank account nominated by the Shareholder whose name stands first in the securities register in respect of the Share) or otherwise, as the Board may at the time of authorising the Distribution determine and direct. The delivery of an irrevocable instruction to the Company’s bank to effect payment by electronic transfer into the bank account recorded in the bank account register of the Company specified by the Shareholder, or in the case of joint Shareholders into the bank account nominated by any of the joint Shareholders in respect of the Share, shall be a good discharge by the Company of its obligations to pay such cash Distribution to the Shareholder entitled thereto. For the purpose of this paragraph, any notice of a new registered address(es) or a change of registered address(es) or any notice of new bank account details or a change of bank account details or any instruction as to pay\ ment being made at any other address or into any other bank account, not reflected in the securities register or the bank account register of the Company at the time of sanctioning or declaration of the Distribution by\ the Shareholders, which is received by the Company between the time of such sanctioning or declaration of th\ e Distribution by the Shareholders and the applicable record date for payment of the Distribution, and which would have the effect of changing the currency in which such payment would be made, shall become effective only after such time of payment; 17.3.7 every payment of a Distribution made by electronic funds transfer shall be made at the risk of the Shareholders. The Company shall not be responsible for the loss in transmission of any document sent through the post either to a registered address of any Shareholder or to any other address requested by a Shareholder or for the loss or misdirection of any electronic funds transfer; and 17.3.8 Distributions and any other monies due to Shareholders which are unclaimed for a period of not less than three years from the date on which such Distributions or monies became payable by the \ Company may be declared forfeit by the Board for the benefit of the Company. 17.3.9 For the avoidance of doubt, all monies due to Shareholders (including any Distributions in the form of monies) shall be held by the Company in trust in a suitable interest bearing account, as determined by the Board in its discretion, in terms of which interest will accrue for the benefit of the relevant Shareholders, until lawfully claimed by the relevant Shareholders, but subject to the provisions of paragraph 17.3.8 and the laws of prescription applicable from time to time, or until the Company is wound up. [para 10.17(c) of schedule 10 of the Listings Requirements”] A-125 “20. Directors and the Board 20.1 Powers of the Board 20.1.1 The business and affairs of the Company shall be managed by or under the direction of the Board, which has the authority to exercise all the powers and perform any of the functions of the Company, except to the extent that the Companies Act or this MOI provides otherwise. (Section 66(1)). 20.1.2 The Directors may, from time to time, at their discretion, raise or borrow or secure the payment of any sum or sums of money for the purposes of the Company. 20.2 Composition of the Board In addition to the minimum number of Directors, if any, that the Company must have to satisfy any requirements in terms of the Companies Act and/or the Listings Requirements, the Board shall comprise not less than 4 Directors. (Section 66(2)(b)). [para 10.16(a) of schedule 10 of the Listings Requirements”] 20.3 Election and appointment of Directors 20.3.1 The Shareholders shall be entitled at a General Meeting of the Company to elect \ all of the Directors of the Company (and their alternates) for the time being and from time to time, by a separate ordinary resolution with respect to each such Director and each alternate, subject to paragraph 20.3.3 provided that if the Shareholders do not elect an alternate with respect to any Director and subject to section 66(4)(b), the Board shall be entitled to appoint such alternate(s) provided further that such alternate is not a person previously proposed to the Shareholders as an alternate or as a Director but who was not elected by the Shareholders when put to the vote. (Section 66(4)(b) and 66(4)(a)(iii)). [para 10.16(b) of schedule 10 of the Listings Requirements] 20.3.2 The Shareholders shall have the right to nominate Directors, provided that such right shall not include the right to appoint or remove any Director/s, and the election of all Directors shall be subject to Shareholder approval, as contemplated by the Listings Requirements. [para 10.16(b) of schedule 10 of the Listings Requirements] 20.3.3 Subject to section 66(4)(b), the Board has the power to appoint Directors (i) to fill a casual vacancy (being a vacancy on the Board which does not amount to the number of Directors being less than the minimum number of Directors prescribed in terms of this MOI) or (ii) as an addition to the Board (as contemplated in section 66(4) (a)(i)), provided that such appointment must be confirmed by the Shareholders at the next General Meeting (in accordance with paragraph 20.3.1). [para 10.16(c) of schedule 10 of the Listings Requirement] 20.3.4 If the number of Directors falls below the minimum provided for in paragraph 20.2 above, the remaining Directors must as soon as possible and in any event not later than three months from the date that the number of Directors falls below the minimum fill the vacancies or call a General Meet\ ing for the purpose of filling the vacancies. The failure by the Company to have the minimum number of Directors during the three month period does not limit or negate the authority of the Board or invalidate anything done by the Board or the Company. After the expiry of the three month period the remaining Directors shall only be permitted to act for the purpose of filling vacancies or calling General Meetings of Shareholders. [para 10.16(d) of schedule 10 of the Listings Requirements] 20.3.5 CFO and/or CEO 20.3.5.1 The Directors may from time to time appoint a person or persons to be the CEO or joint CEOs \ of the Company and any acting CEO, or appoint a person to be the holder of any \ other executive office in the Company, including but not limited to the CFO. The Directors may determine the period of office of such appointee and may, subject to any contract between him or them and the Company and applicable law, from time to time terminate his or their appointment and appoint another or others in his or their place or places. Such persons appointed in terms of this\ paragraph 20.3.5.1 shall be Directors of the Company as long as they hold office as such. A CEO, CFO or the holder of any other executive office in the Company may be appointed by contract for a period as determi\ ned by the Board, or any other authorised committee of the Board. 20.3.5.2 A Director who is appointed in terms of the provisions of paragraph 20.3.5.1 to the office of CEO, or CFO of the Company, or to any other executive office in the Company may be paid such remuneration not exceeding a reasonable maximum in each year in respect of such office or services as may be determined by the Company’s Remuneration Committee, or any successor to such committee (which shall constitute a disinterested quorum of the Directors). [para 10.16(e) of schedule 10 of the Listings Requirements] 20.3.5.3 The Directors may from time to time entrust and confer upon a CEO, CFO or other executive officer appointed under paragraph 20.3.5.1 from time to time such of the powers and authorities vested in them as they think fit, and may confer such powers and authorities for s\ uch time, and to be exercised for such objects and purposes and upon such terms and conditions and wit\ h such restrictions as they may think expedient, and they may convert such powers and authoriti\ es either collaterally with, or to the exclusion of, and in substitution for, all or any of the powers and authorities of the Directors, and may from time to time revoke, withdraw, alter or vary all or any of such powers and authorities. A-126 20.3.6 Ineligible or disqualified persons: appointment a nullity No person may be appointed or elected as a Director (or his or her alternate), or be an ex officio Director (or his or her alternate), or be entitled to serve or continue to serve as a Director (or an alternate Director) of the Company, if that person is or becomes ineligible or disqualified from being entitled to serve as a Director in terms of section 69, and if at the time of his or her appointment or \ election that person is so ineligible or disqualified then his or her appointment is a nullity in terms of sectio\ n 66(6). (Section 66(5)(a), 69 and 66(6)) 20.3.7 Alternate Directors If a person (for whom another person has been appointed or elected as a\ n alternate Director) ceases to be a Director of the Company for any reason, then the person who is his or her alternate shall automatically and simultaneously at the same time as the first-mentioned person ceased\ to be a Director, in terms of this paragraph 20.3.7, also cease to be the alternate Director for that first-mentioned person. 20.3.8 Filing a notice with the Commission The Company shall file with the Commission a notice within 10 business d\ ays after a person becomes or ceases to be a Director of the Company. (Section 70(6)).” 20.4 20.5 Remuneration of Directors (and alternate Directors) 20.5.1 Notwithstanding anything to the contrary contained in this MOI or any ag\ reement, understanding or arrangement with a Director, the Company shall not be obliged or entitled or required to pay any remuneration to a Director for their services as Directors (which shall exclude salaries of executive Directors) except such remuneration as has been approved by and in terms of a Special Resolution of the Shareholders adopted within the period of 2 years immediately before the date of any proposed payment of any such remuneration, in compliance with section 66(9). (Section 66(8) and (9)). 20.5.2 An alternate Director shall not be entitled to any remuneration from the Company, but may be remunerated by the Director for whom he or she acts as an alternate, provided that the Directors may in their sole discretion resolve that the Company shall pay the remuneration of an alternate Director, in which case such remuneration will subject to the requirements of paragraph 20.5.1 (Section 66(8) and (9)). 20.5.3 A Director may be employed in any other capacity in the Company or as a Director or employee of a company controlled by, or itself a subsidiary of, the Company and in this event, his or her a\ ppointment and remuneration in respect of such other office must be determined by a disinterested quorum of Directors to the extent required by the Listings Requirements. [para 10.16(e) of schedule 10 of the Listings Requirements] 20.5.4 The Directors shall be paid all travelling and other expenses properly and necessarily incurred by them in and about the business of the Company, and in attending meetings of the Directors or of committees thereof; and if any Director is required to perform extra services or to reside abroad or shall be specifically occupied about the Company’s business, he or she shall be entitled to receive such remuneration as is determined by a disinterested quorum of Directors, which may be either in addition to or in substitution for any other remuneration, subject to paragraph 20.5.1 above. [para 10.16(f) of schedule 10 of the Listings Requirements] 20.6 Election of Directors by the Shareholders 20.6.1 Fixed term/rotation At each annual general meeting one-third of the Directors (not being alternate Directors or any Director appointed in terms of paragraph 20.3.5.1), or if their number is not a \ multiple of three then the number nearest to but not less than one-third, shall retire from office. The Directors so to retire at each annual general meeting shall firstly be those retiring in terms of paragraph 20.3.3 of this MOI and thereafter the Board shall determine which Directors shall retire at each annual general meeting. A retiring Director shall act as a Director throughout the meeting at which he or she retires and may be re-elected, provided that such Director is eligible. For the avoidance of doubt it is recorded that life directorships and directorships for an indefinite period shall not be permitted. [para 10.16(g) and 10.16(k) of schedule 10 of the Listings Requirements] 20.6.2 Temporary vacancies on the Board Should a Director elected by Shareholders in terms of paragraph 20.3 become ineligible or disqualified fr\ om serving as a Director in terms of the Companies Act or the MOI and thereby cease to be entitled to be a Director in terms of section 69(4), and consequently cease to be a Director thereby creating a vacancy on the Board in terms of section 70(1)(b)(v) (being a vacancy on the Board which amounts to the number of Directors being less than the minimum number of Directors prescribed in terms of the MOI), then the Board, subject to section 66(4) (b), may appoint another person, in accordance with and subject to the provisions of section 68(3), as a Director to fill any such vacancy and serve as a temporary Director on a temporary basis until the vacancy in question has been filled in an election by the Shareholders of a new Director in terms of paragraph 20 and the Board may also appoint an alternate Director on a similar temporary basis for such temporary Director. (Section 68(3)).” A-127 “Annex C – Board Meetings” “7. Chairman of the meeting 7.1 The Board may elect a chairman of its meetings, and one or more deputy chairmen to preside in the absence of the chairman, and may determine a period for which the chairman and deputy c\ hairman or chairmen are to hold office. [para 10.16(i) of schedule 10 of the Listings Requirements] 7.2 If no such chairman or deputy chairman is elected by the Board or if at any meeting neither the chairman nor a deputy chairman is present within 10 minutes after the time appointed for the beginning of th\ e Board meeting, the Directors then present shall choose one of their number to be chairman of such meeting.”\ “20.11 Personal financial interests of directors Subject to compliance by a Director, with respect to any relevant personal financial interest, with the provisions of section 75(5) and (6), that Director shall not be liable (in the absence of any agreement to the contrary) to account to the Company for any profit or other benefit arising out of or in connection with any decision,\ transaction or agreement in which that Director or a person related or inter-related to that Director has a personal financial interest.” “21. Winding up Subject to the provisions of Annexe D, in a winding-up of the Company, any part of the assets of the Company, including any securities of other companies may, with the sanction of a Special Resolution of the Company, be paid to the Shareholders of the Company in specie, or may, with the same sanction, be vested in trustees for the benefit of such \ Shareholders, and the liquidation of the Company may be closed and the Compa\ ny dissolved.” A-128 “Annex D”– “Terms of Class “A” Loans and Class “B” Loans “1. Definitions For the purposes of this Annexe D, unless inconsistent with or otherwise\ indicated by the context: 1.1 “Class “A” Loans” means the class “A” loans owing by the Company to its Shareholders as at the Listing Date, the material terms of which are set out in this Annexe D to this MOI; 1.2 “Class “A” Loan Claims” means each Shareholder’s rights in respect of its Class “A” Loans; 1.3 “Class “B” Loans” means the class “B” loans owing by the Company to its Shareholders as at the Listing Date, the material terms and conditions of which are set out in this Annexe D to this MOI; 1.4 “Class “B” Loan Claims” means each Shareholder’s rights in respect of its Class “B” Loans; 1.5 “Consol Executives” means certain current and former senior executives of the Company and/or its subsidiaries \ who were granted the right to acquire shares of the Company (to the extent of up to 6,7% of such shares collectively) either directly or indirectly; 1.6 “Delinking Date” means the effective date of a resolution by the Board that any Ordinary Shares should be delinked from any Class “A” Loan Claims and/or any Class “B” Loan Claims s\ uch that they no longer form linked units; 1.7 “EA Loan Consideration” means the consideration for the Class “A” Loans held by the EA Trust payable to Old Mutual Life Assurance Company (South Africa) Limited and Sanlam Life Insuranc\ e Limited by the EA Trust, being R6 850 200.00; 1.8 “EA Trust” means the Consol Holdings Executive Trust A, with master’s reference number IT 1692/2011, formed under the laws of South Africa; 1.9 “Linked Unit” means, subject to clauses 2.2 and 2.4, the linked unit formed by ea\ ch issued Ordinary Share and each unit of class “A” Loan Claims and each unit of class “B” Loan Cla\ ims in terms of clause 2.1; 1.10 “Loan Claims” means the Class “A” Loan Claims and the Class “B” Loan \ Claims; 1.11 “Priority Claims” means all claims of whatever nature, other than Class “A” Loans and Class “B” Loans, if any, and the claims of the trade creditors referred to in clauses 6 and 23 below, that any person may have against the Company: (i) pursuant to or arising from any written agreement with the Company from time to time; and or (ii) for which the Company accepts liability in writing from time to time; 1.12 “Sphere” means Sphere Investments Two (RF) Proprietary Limited, registration number 2004/032571/07, a private company incorporated in accordance with the laws of South Africa; and 1.13 “Sphere Holding Period” means a period of two years commencing on 30 June 2017 and ending o\ n 29 June 2019. 2. Linked Units 2.1 Subject to clauses 2.2, 2.3, 2.4, 12, 17 and 29, from the issue date of an Ordinary Share until the applicable Delinking Date, save as may be approved by the Board or contemplated in the Pre-listing Statement, each issued Ordinary Share held by a Shareholder shall be linked to each unit of Class “A” Loans and each u\ nit of Class “B” Loans and form a Linked Unit with the Class “A” Loan Claims and the Class “B” Loan Claims held by that Shareholder and notwithstanding anything to the contrary contained in the MOI (other than in this Annex\ e D): 2.1.1 no such Ordinary Share shall be transferred unless a corresponding pro rata portion of Loan Claims is concurrently therewith transferred to the same person; and 2.1.2 no Loan Claim shall be transferred unless a corresponding pro rata portion of the Ordinary Shares held by such Shareholder is concurrently therewith issued or transferred, as the case may be, to the same person. 2.2 For clarity, if the Board should resolve that the Ordinary Shares (or any of them) should be delinked from the Class “A” Loans and/or the Class “B” Loans (or any of them) such that such\ Ordinary Shares no longer form Linked Units with such Class “A” Loans and/or Class “B” Loans, such Ordinary Shares shall no longer form linked units with those Class “A” Loan Claims and/or Class “B” Loan Claims, as the case may be. To the extent that the Board resolves that any Ordinary Shares be Delinked from any Class “A” Loan Claims or Class “B” Loan Claims but not from all such Loan Claims, the references to Linked Units and the provisions of clause 2.1 and this clause 2.2 shall continue to apply to th\ e Ordinary Shares and Loan Claims which have not been delinked. 2.3 Clauses 2.1 and 2.2 are not applicable to the Consol Executives in respect of Shares acquired by them in terms of the management subscription agreements entered into in 2007 between them and the Company. 2.4 A Shareholder may transfer its Class “B” Loan Claims to an Affiliate (which has been approved in writing by the Board, which approval may be withheld by the Board at its sole discretion and without the Board having to give reasons therefor) of that Shareholder (“Relevant Shareholder”) to whom corresponding Ordinary Shares and Class “A” Loan Claims have been issued; provided that: 2.4.1 such Affiliate shall not be entitled to offer, sell, alienate, transfer, pledge, encumber or otherwise dispose of (collectively “transfer”) any Class “B” Loan Claims unless\ the Relevant Shareholder transfers corresponding Ordinary Shares and a corresponding portion of Class “A” Loan Claims concurrently therewith in accordance with the provisions of the MOI to the same transferee (or its Affiliate approved in terms of this clause 2.4 in respect of the Class “B” Loan Claims); 2.4.2 no Relevant Shareholder shall be entitled to transfer any Ordinary Shares and a corresponding portion of Class “A” Loan Claims unless its Affiliate which holds the Class “B” Loan Claims transfers a corresponding portion of Class “B” Loan Claims concurrently therewith in accordance with the provisions of the MOI to the same transferee (or its Affiliate approved in terms of this clause 2.4 in respect of the Class “B” Loan Claims); A-129 2.4.3 no creditor of the Relevant Shareholder or its Affiliate shall acquire any rights in or to the Class “B” Loan Claims until it acquires analogous rights in or to the corresponding Ordinary Shares and Class “A” Loan Claims, and vice versa; 2.4.4 if the Affiliate is to cease to bear to the Relevant Shareholder the relationship entitling it, in terms of clause 2.4.1, to receive transfer of the Class “B” Loan Claims, it shall transfer the Class “B” Loan Claims to the Relevant shareholder (or to an Affiliate of the relevant shareholder approved in terms of this clause 2.4) before so ceasing to bear such relationship to the Relevant Shareholder. CLASS “A” LOANS 3. The Class “A” Loans: 3.1 shall not bear interest; 3.2 are subordinated to, and shall not be repaid prior to the repayment in full of the Class “B” Loans, if any, and all amounts due to the holders of Priority Claims. 4. If and for so long as there are any Priority Claims or Class “B” Loan Claims that remain outstanding: 4.1 the Priority Claims and Class “B” Loan Claims, whether secured or unsecured, will rank in priority to the Class “A” Loan Claims; and 4.2 the holders of Class “A” Loan Claims shall not claim, receive or accept, directly or indirectly, payment of the Class “A” Loan Claims unless in the opinion of the Company same is permitted at th\ at time; 4.3 the holders of Class “A” Loan Claims shall not take, accept or receive the benefit of any encumbrance from the Company; 4.4 the holders of Class “A” Loans claims shall not obtain or enforce any judgment against the Company in relation to any of the Class “A” Loan Claims unless in the view of the Company same i\ s permitted at that time; 4.5 the holders of Class “A” Loan Claims shall not exercise their rights or powers (or take any steps to do so) in respect of any Class “A” Loan Claims or otherwise against the Company if that exe\ rcise would, in the opinion of the Company, result in the Company being in breach of any of its obligations in relation to the Priority Claims or the Class “B” Loan Claims; 4.6 the holders of Class “A” Loan Claims shall not petition or apply for or vote in favour of any resolution for the winding-up, dissolution or administration or any analogous or similar process or proceeding with regard to the Company; 4.7 if any payment in relation to the Class “A” Loan Claims is received by a holder of Class “A” Loan Claims in contravention of the terms set out herein, inadvertently or deliberately, then that holder shall immediately refund to the Company the full amount so received; 4.8 the holders of Class “A” Loan Claims subordinate the Class “A” Loan Claims for the benefit of the holders of\ the Priority Claims and Class “B” Loan Claims, so as to enable the holders of t\ he Priority Claims and Class “B” Loan Claims to receive payment in preference to holders of Class “A” Loan Claims and so that: 4.8.1 the Priority Claims, both present and future, will rank in preference to the Class “A” Loan Claims and the Class “B” Loan Claims; and 4.8.2 in any liquidation or insolvency (whether provisional or final) or judicial management or compromise of the Company: 4.8.2.1 no holders of Class “A” Loan Claims will prove or seek to prove claims in respect of the Class “A” Loan Claims without the prior written consent of the holders of the Prio\ rity Claims, and if the Class “B” Loan Claims have been delinked the holders of Class “B” Loan Claims, if the effect of such proof would be to reduce the liquidation dividend payable in respect of the Priority Claims or the Class “B” Loan Claims at the time of such liquidation, judicial management or comp\ romise; 4.8.2.2 the holders of the Priority Claims, and, thereafter, the holders of Class “B” Loan Claims, shall be entitled to receive payment in full in cash of all obligations under the priority doc\ uments and, thereafter the Class “B” Loan Claims, prior to the holders of the Clas\ s “A” Loan Claims being entitled to receipt of any payment; and 4.8.2.3 the holders of the Class “A” Loan Claims shall assign any rights t\ o vote, including by way of proxy, to the relevant agent or trustee for the holders of the Priority Claims, and the\ reafter to the holders of the class “B” Loan Claims, to the extent necessary to give effect to the priority and subordination provisions described in the whole of this clause 4. 5. The provisions of clause 4 constitute a stipulation for the benefit of the holders of Priority Claims, both present and future, and the benefit shall therefore be capable of express or implied acceptance by any or all of such holders of Priority Clai\ ms who may then enforce any term of the subordination set out in clause 4. 6. The holders of Class “A” Loan Claims subordinate their claims against the Company in favour of the trade creditors of the Company if and for as long as liabilities of the Company exceed its asse\ ts, fairly valued and in the manner and in the circumstances contemplated below: 6.1 to the extent that the liabilities of the Company, fairly valued, exceed its assets, fairly valued (“the excess liabi\ lities”), the holders of the Class “A” Loan Claims shall subordinate for the benefit of the then current and future trade creditors of the Company so much of the Class “A” Loan Claims (not exceeding the excess liabilities) (the “Subordinated “A” Claims”) as would enable the claims of such trade creditors to be paid in full; 6.2 6.2 the claims of such trade creditors of the Company will rank preferentially to the Subordinated “A” Claims; and A-1306.3 in the liquidation of or judicial management of or compromise by the Company, the holders of the Class “A” Loan Claims shall not prove or tender to prove a claim in respect of their Subordinated “A” Claims, which proof would reduce or diminish any dividend payable to such trade creditors, whether present or future, and accordingly, the holders of Class “A” Loan Claims hereby abandon that claim to the extent that it would reduce or diminish the dividend payable to those trade creditors. 7. The provisions of clause 6 constitute a stipulation for the benefit of trade creditors of the Company, both present and future, and the benefit shall therefore be capable of express or implied acceptance by any or all of such creditors who may then enforce any term of the subordination set out in clause 6. 8. The subordination referred to in clause 6 shall remain in force and effect for only so long as the liabilities of the Company exceed its assets, fairly valued, and shall lapse immediately upon the date tha\ t the assets of the Company, fairly valued, exceed its liabilities; provided that it shall immediately be reinstated if thereafter the Company should notify the holders of Class “A” Loan Claims that the liabilities of the Company again exceed its assets, fair\ ly valued, and provided further that the liabilities of the Company shall be deemed to continue to exceed its assets, fairly valued,\ unless and until the Company notifies the holders of the Class “A” Loan Claims that the auditors have certified in writing that they have been furnished with evidence which reasonably satisfies them that the liabilities do not exceed the assets, fairly val\ ued. 9. If the subordination set out in clause 6 has become effective, until such time as the assets of the Company fairly valued exceed its liabilities, and the auditor’s certificate referred to in clause 8 has been issued, the holders of Class “A” Loan C\ laims shall not be entitled to demand or sue for or accept repayment of the whole or any part of the Subordinated “A” Claims and set-off shall not operate in relation to the Subordinated “A” Claims in respect of any debts owing by them now or in the future, provided that if the auditors of the Company certify in writing that they have be\ en furnished with evidence that reasonably satisfies them that the amount of the Subordinated “A” Claims exceeds the amount by which the liabilities of \ the Company exceed its assets, fairly valued, such excess portion of the Subordinated “A” Claims as is specified in the said certificate shall be released from the operation of this subordination. The Company acknowledges that it is responsible for requesting the auditor to issue the said certificate and for the costs in this connection. 10. Should all or part of the amount due to the holders of Class “A” L\ oan Claims be repaid to a holder in contravention of clause 6, inadvertently or deliberately, then each such holder will immediately refund to the Company the amount repaid. 11. The Company shall be entitled but not obliged to effect repayment of the Class “A” Loans subject to: 11.1 compliance with the relevant provisions of the MOI; 11.2 repayment in full of the Class “B” Loans and accrued interest thereon; 11.3 prior written approval of the holders of Priority Claims if and to the extent such prior w\ ritten approval is required in terms of the relevant lending arrangements; 11.4 no such repayment constituting a breach of any of the Company’s contractual obligations to the holders of Priority Claims; and 11.5 compliance with the Companies Act. 12. Any repayment of the Class “A” Loans shall be made: 12.1 in cash; or 12.2 if such repayment is pursuant to the Listing and subject to the provisions of paragraph 5.1 of the MOI, by way of the Company issuing Ordinary Shares, credited as fully paid, at a subscription price equal to the Offer Price and the obligation of the relevant holders of the Class “A” Loans to pay the subscription pri\ ce for such Ordinary Shares shall be discharged by way of set-off against the Company’s obligation to repay the relevant Class “A” Loans to the relevant holders, with any entitlements to fractions of Ordinary Shares being dealt with in accordance with the Listings Requirements; and 12.3 except insofar as is provided in clause 13, in the same manner for all holders of Class “A”\ Loans. 13. During the Sphere Holding Period, notwithstanding that all or a portion of the Class “\ A” Loans of Shareholders other than Sphere may be repaid in cash, the Class “A” Loans of Sphere may only be repaid by the Company issuing Ordinary Shares to Sphere in accordance with clause 12.2. 14. The Company shall, in the event of the amendment of any part of the subo\ rdinations contained in clauses 3 to 10 in any respect, advise the auditor and the representative(s) of such holders of the Priority Claims as it is reasonably able to identify in writing forthwith of such amendment. A-131 15. Subject to the proviso to this clause 15, the Company shall settle and discharge all amounts outstanding in respect of the Class “A” Loans by payment of a single final instalment (“Final Repa\ yment”) on 11 April 2027 or, if that date is not a business day, the immediately preceding business day, if: 15.1 there remain any amounts outstanding and owing in respect of the Class “A” Loans on that date; 15.2 the Class “A” Loans are not subordinated to trade creditors as contemplated in clause 6; and 15.3 it is permitted to do so in terms of the Priority Claims documents, or i\ f all Priority Claims have been settled and discharged in full, provided that, if on 11 April 2027 either clause 15.2 or clause 15.3 do no\ t apply, the Company shall make such Final Repayment on the earlier of: 15.4 such earliest date thereafter as both clause 15.2 and clause 15.3 do apply; and 15.5 31 May 2037, prior to which the holders of the Class “A” Loan Clai\ ms shall have no right (including upon the happening of any event) to declare any default or take any enforcement action in relation to the Class “A” Loan Claims. 16. The Company shall, on or before the date on which it makes any partial or Final Repayment of the Class\ “A” Loans, and unless an alternative payment mechanism is agreed in writing with any holders of Class “A” Loans or provided for in terms of clause 12, post by registered post to each holder of Class “A” Loans at its address reflected in the Company’s securities register or, in the case of joint holders of Class “A” Loans, to the registered address of that one of the joint holders in respect of such repayment who is first named on the Company’s securities register (or at such other address as the holder or joint holders concerned shall direct in writing), cheque(s) in the currency of South Africa without provision for exchange and bank commission, in respect of such repayment, provided that the Company shall not be responsible for any loss in transmission, and payment of the cheque shall be a good discharge of any liability of the Company in respect thereof. 17. Notwithstanding any contrary provision of the MOI, including any contrary provision of this Annexe D to the MOI: 17.1 the Company may pay the purchase price for any Ordinary Shares repurchased by the Company from the EA Trust by way of set-off against any equivalent amount owed by the EA Trust to the Company and/or by way of the Company issuing new Class “A” Loans to the EA Trust; and 17.2 any new Class “A” Loans issued to the EA Trust as contemplated in clause 17.1 shall not be linked to the EA Trust’s Ordinary Shares and the EA Trust shall be entitled to settle the EA Loan Consideration by transferri\ ng such Class “A” Loans to Old Mutual Life Assurance Company (South Africa) Limited and \ Sanlam Life Insurance Limited, without being required to transfer any of the EA Trust’s Ordinary Shares. CLASS “B” LOANS 18. The Company will be charged interest on the Class “B” Loans outstanding from time to time calculated at the Prime Rate plus 2% nominal annual compounded monthly in arrear from the date on which the Class “B” Loan Claims were credited in favour of the holder of the Class “B” Loans. 19. The Class “B” Loan Claims rank ahead of the Class “A” Loan C\ laims and accordingly the Company may not repay the Class “A” Loans until the whole of the Class “B” Loans and all interest accrued in respect thereof has been repaid. 20. Any payment made shall, subject to the conditions referred to in this Annexe, first be applied to the repayment of accrued interest and thereafter to capital. 21. If and for so long as there are any Priority Claims that remain outstanding: 21.1 the Priority Claims, whether secured or unsecured, will rank in priority to the Class “B” Loan Claims; and 21.2 the holders of Class “B” Loan Claims shall not claim, receive or accept, directly or indirectly, payment of the Class “B” Loan Claims unless in the opinion of the Company same is permitted at th\ at time; 21.3 the holders of Class “B” Loan Claims shall not take, accept or receive the benefit of any encumbrance from the Company; 21.4 the holders of Class “B” Loan Claims shall not obtain or enforce any judgment against the Company in relation to any of the Class “B” Loan Claims unless in the view of the Company same i\ s permitted at that time; 21.5 the holders of Class “B” Loan Claims shall not exercise their rights or powers (or take any steps to do so) in respect of any Class “B” Loan Claims or otherwise against the Company if that exercise would, in the opinion of the Company, result in the Company being in breach of any of its obligations in relation to the Priority Claims; 21.6 the holders of Class “B” Loan Claims shall not petition or apply f\ or or vote in favour of any resolution for the winding-up, dissolution or administration or any analogous or similar process or proceeding with regard to the Company; 21.7 if any payment in relation to the Class “B” Loan Claims is received by a holder of Class “B” Loan Claims in contravention of the terms set out herein, inadvertently or deliberately, then that holder shall immediately refund to the Company the full amount so received; A-13221.8 the holders of Class “B” Loan Claims subordinate the Class “B” Loan Claims for the benefit of the holders of\ the Priority Claims, so as to enable the holders of the Priority Claims to receive payment in preference to the holders of Class “B” Loan Claims and so that: 21.8.1 the Priority Claims, both present and future will rank in preference to the Class “B” Loan Claims; and 21.8.2 in any liquidation or insolvency (whether provisional or final) or judicial management or compromise of the Company: 21.8.2.1 no holders of Class “B” Loan Claims will prove or seek to prove claims in respect of the Class “B” Loan Claims without the prior written consent of the holders of the Prio\ rity Claims if the effect of such proof would be to reduce the liquidation dividend payable in respect of the Priority Claims at the time of such liquidation, judicial management or compromise; 21.8.2.2 the holders of the Priority Claims shall be entitled to receive payment in full in cash of all obligations under the priority documents prior to the holders of the Class “B”\ Loan Claims being entitled to receipt of any payment; and 21.8.2.3 the holders of the Class “B” Loan Claims shall assign any rights t\ o vote, including by way of proxy, to the relevant agent or trustee for the holders of the Priority Claims to the e\ xtent necessary to give effect to the priority and subordination provisions described in the whole of this clause 21. 22. The provisions of clause 21 constitute a stipulation for the benefit of the ho\ lders of Priority Claims, both present and future, and the benefit shall therefore be capable of express or implied acceptance by any or all of such holders of Priority Clai\ ms who may then enforce any term of the subordination set out in clause 21. 23. The holders of Class “B” Loan Claims subordinate their claims against the Company in favour of the trade creditors of the Company if and for so long as the liabilities of the Company exceed its \ assets, fairly valued and in the manner and in the circumstances contemplated below: 23.1 to the extent that the liabilities of the Company, fairly valued, exceed its assets, fairly valued (“the excess liabi\ lities”), the holders of the Class “B” Loan Claims shall subordinate for the benefit of the then current and future trade creditors of the Company so much of the Class “B” Loan Claims (not exceeding the excess liabilities) (“Subordinated “B” Claims”) as would enable the claims of such trade creditors to be paid in full; 23.2 the claims of such trade creditors of the Company will rank preferentially to the Subordinated “B” Claims; and 23.3 in the liquidation of or judicial management of or compromise by the Company, the holders of the Class “B” Loan Claims shall not prove or tender to prove a claim in respect of their Subordinated “B” Claims, which proof would reduce or diminish any dividend payable to such trade creditors, whether present or future, and accordingly, the holders of Class “B” Loan Claims shall abandon that claim to the extent that it wou\ ld reduce or diminish the dividend payable to those trade creditors. 24. The provisions of clause 23 constitute a stipulation for the benefit of trade \ creditors of the Company, both present and future, and the benefit shall therefore be capable of express or implied acceptance by any or all of such creditors who may then enforce any term of the subordination set out in clause 23. 25. The subordination referred to in clause 23 shall remain in force and effect for only so long as the liabilities of the Company exceed its assets, fairly valued, and shall lapse immediately upon the date tha\ t the assets of the Company, fairly valued, exceed its liabilities; provided that it shall immediately be reinstated if thereafter the Company should notify the holders of Class “B” Loan Claims that the liabilities of the Company again exceed its assets, fair\ ly valued, and provided further that the liabilities of the Company shall be deemed to continue to exceed its assets, fairly valued,\ unless and until the Company notifies the holders of the Class “B” Loan Claims that the auditors have certified in writing that they have been furnished with evidence which reasonably satisfies them that the liabilities do not exceed the assets, fairly val\ ued. 26. If the subordination set out in clause 23 has become effective, until such time as the assets of the Company fairly valued exce\ ed its liabilities, and the auditor’s certificate referred to in clause 25 has been issued, the holders of Class “B” Loan \ Claims shall not be entitled to demand or sue for or accept repayment of the whole or any part of the Subordinated “B” Claims and set-off shall not operate in relation to the Subordinated “B” Claims in respect of any debts owing by them now or in the future, provided that if the auditors of the Company certify in writing that they have be\ en furnished with evidence that reasonably satisfies them that the amount of the Subordinated “B” Claims exceeds the amount by which the liabilities of \ the Company exceed its assets, fairly valued, such excess portion of the Subordinated “B” Claims as is specified in the said certificate shall b\ e released from the operation of this subordination. The Company acknowledges that it is responsible for requesting the auditor to issue the said certificate and for the costs in this connection. A-133 27. Should all or part of the amount due to the holders of Class “B” Loan Claims be repaid to a holder in contravention of clause 23, inadvertently or deliberately, then each such holder will immediately refund to the Company the amount repaid. 28. The Company shall be entitled but not obliged to effect repayment of the Class “B” Loans subject to: 28.1 compliance with the relevant provisions of the MOI; 28.2 prior written approval of the holders of Priority Claims if and to the extent such prior w\ ritten approval is required in terms of the relevant lending arrangements; 28.3 no such repayment constituting a breach of any of the Company’s contractual obligations to the holders of Priority Claims; and 28.4 compliance with the Companies Act. 29. Any repayment of the Class “B” Loans shall be made: 29.1 in cash; or 29.2 if such repayment is pursuant to the Listing and subject to the provisions of paragraph 5.1 of the MOI, by way of the Company issuing Ordinary Shares, credited as fully paid, at a subscription price equal to the Offer Price and the obligation of the relevant holders of the Class “B” Loans to pay the subscription pri\ ce for such Ordinary Shares shall be discharged by way of set-off against the Company’s obligation to repay the relevant Class “B” Loans to the relevant holders, with any entitlements to fractions of Ordinary Shares being dealt with in accordance with the Listings Requirements; and 29.3 except insofar as is provided in clause 30 below, in the same manner for all holders of Class “A” Loans. 30. During the Sphere Holding Period, notwithstanding that all or a portion of the Class “\ B” Loans of Shareholders other than Sphere may be repaid in cash, the Class “B” Loans of Sphere may only be repaid by the Company issuing Ordinary Shares to Sphere in accordance with paragraph 29.2. 31. The Company shall, in the event of the amendment of any part of the subo\ rdinations contained in clauses 21 to 28 in any respect, advise the auditor of the Company and the representative(s) of such holders of the Priority Claims as it is reasonably able to identify in writing forthwith of such amendment. 32. Subject to the proviso to this clause 32, the Company shall settle and discharge all amounts outstanding in respect of the Class “B” Loans by payment of a single final instalment (“Final Repa\ yment”) on 11 April 2027 or, if that date is not a business day, the immediately preceding business day, if: 32.1 there remain any amounts outstanding and owing in respect of the Class “B” Loans on that date; 32.2 the Class “B” Loans are not subordinated to trade creditors as contemplated in clause 23; and 32.3 it is permitted to do so in terms of the Priority Claims documents, or i\ f all Priority Claims have been settled and discharged in full, provided that, if on 11 April 2027 either clause 32.2 or clause 32.3 does \ not apply, the Company shall make such Final Repayment on the earlier of: 32.4 such earliest date thereafter as both clause 32.2 and clause 32.3 do apply; and 32.5 31 May 2037, prior to which the holders of the Class “B” Loan Clai\ ms shall have no right (including upon the happening of any event) to declare any default or take any enforcement action in relation to the Class “B” Loan Claims. 33. The Company shall, on or before the date on which it makes any partial or final repayment of the Class “B” Loans, or any payment in respect of interest, and unless an alternative payment mechanism is agreed in writing with any holders of Class “B” Loans or provided for in terms of paragraph 29, post by registered post to each holder of Class “B” Loans at its address reflected in the Company’s securities register or, in the case of joint holders of Class “B” Loans, to the registered address of that one of the joint holders in respect of such repayment who is first named on the Company’s securities register (or at such other address as the holder or joint holders concerned shall direct in writing), cheque(s) in the currency of South Africa without provision for exchange and bank commission, in respect of such repayment, provided that the Company shall not be responsible for any loss in transmission, and payment of the cheque shall be a good discharge of any liability of the Company in respect thereof.” A-134 “Annex A - Authorised Shares of the Company” “Part A: Ordinary Shares 1. Ordinary shares 1.1 The Company has 20 000 000 000 no par value authorised Ordinary Shares. 1.2 The following rights attach to an Ordinary Share: 1.2.1 the right for the owner thereof to be entered in the securities register of the Company as the registered holder thereof; 1.2.2 the right to vote on any matter to be decided by the Ordinary Shareholders of the Company and to one vote in the case of a vote by means of a poll, whether in person or by proxy; [para 10.5(b) of schedule 10 of the Listings Requirements] 1.2.3 the right to participate proportionally in any distribution made by the Company in respect of the Ordinary Shares; 1.2.4 an irrevocable right to vote on any proposal to amend the preferences, rights, limitations and other terms associated with the Ordinary Shares; and 1.2.5 subject to such preferences as may be accorded to the classes of Shares in existence from time to time, the right to receive proportionally the total net assets of the Company remaining upon its liquidation. 1.3 Upon being issued, each Ordinary Share will rank pari passu with every other issued Ordinary Share in all respects, for which purposes the expression “rank pari passu” shall have the meaning attributed to it i\ n paragraph 3.29 of the Listings Requirements. [para 10.5(a) of schedule 10 of the Listings Requirements] Part B: B Ordinary Shares 1. Definitions 1.1 Capitalised terms used in this Part B of Annexe A and not defined herein shall bear the meaning ascribed thereto in the MOI to which this Part B of Annexe A is attached. 1.2 For the purposes of this Part B of Annexe A, the following words shall, unless inconsistent in the context in which they appear, bear the following meanings and other words derived from the same origins as such words (that is, cognate words) shall bear corresponding meanings: 1.2.1 “Accelerated Redemption Date” means the 5th Business Day after the Company delivers to the B Ordinary Shareholder a written notice contemplated in paragraph 4.1.1 of this Part B \ of Annexe A; 1.2.2 “Actual Distribution” means any Distribution which is actually paid in respect of Ordinary Shares during any Notional Finance Period; 1.2.3 “B-BBEE” means Broad Based Black Economic Empowerment as contemplated in the B-BBEE Act a\ nd the B-BBEE Codes; 1.2.4 “B-BBEE Act” means the Broad-Based Black Economic Empowerment Act, 53 of 2003 and the regulations made in terms thereof; 1.2.5 “B-BBEE Codes” means the Codes of Good Practice on Broad-Based Black Economic Empowerment issued under section 9(1) of the B-BBEE Act from time to time, or where relevant, any sector code issued under section 9(1) of the B-BBEE Act, as amended or replaced from time to time; 1.2.6 “B-BBEE Legislation” means the B-BBEE Act, any regulations published under the B-BBEE Act, any Black Economic Empowerment charters and/or the B-BBEE Codes, any applicable sector legislation, any regulations published under such legislation and any licence or permit conditions ma\ de pursuant to such legislation, all as amended from time to time, provided that to the extent there is any conflict between such legislation, regulations, charters, codes of good practice and licence or permit condi\ tions, the applicable licence or permit conditions shall take precedence, followed by the empowerment requirements contained in the Codes or applicable codes of good practice, to the extent applicable; 1.2.7 “Issue Date” in respect of any B Ordinary Share, means the date on which that B Ordinary Share is issued; 1.2.8 “Net Notional Debt” means the amount calculated by deducting the Notional Credits from the Notional Finance Balance from time to time; 1.2.9 “Notional Capital Amount” in respect of any issued B Ordinary Shares, means such amount as is determined by the Company to be the Notional Market Value of the B Ordinary Shares issued on that Issue Date (reduced by a discount of 10% and the aggregate subscription price paid for those B Ordinary Shares); 1.2.10 “Notional Credits” as at any date, means the sum of: 1.2.10.1 the aggregate amount of all of the Notional Distributions calculated in respect of all of the Actual Distributions paid on or prior to that date; plus 1.2.10.2 any Notional Relief Amount; A-135 1.2.11 “Notional Distribution” means, in respect of each Actual Distribution paid during a Notional Finance Period\ , the amount which shall be calculated in accordance with the following formula: D={(Α) χ Ν}χ 80%0+Ν where: D = the Notional Distribution to be calculated; A = the aggregate amount of the Actual Distributions paid in respect of the issued Ordinary Shares on the relevant date; O = the aggregate number of issued Ordinary Shares on the date of the Actual Distribution; and N = the aggregate number of issued B Ordinary Shares to which such Notional Finance Period relates; 1.2.12 “Notional Finance Settlement Date” means the date on which the Net Notional Debt in respect of any issued B Ordinary Shares becomes zero; 1.2.13 “Notional Finance Balance” in respect of any issued B Ordinary Share at any time, means the sum of the Notional Capital Amount and the Notional Finance Charges at that time; 1.2.14 “Notional Finance Charges” in respect of any issued B Ordinary Shares, at any date, means the aggregate amount of the interest that would have accrued on the Notional Capital Amount and all inter\ est (compounded daily) thereon if it bore interest at the Notional Finance Rate for the duration of the period commenci\ ng on (and including) the relevant Issue Date and ending on (and excluding) that date; 1.2.15 “Notional Finance Period” in respect of any issued B Ordinary Shares, means the period from (and including) the Issue Date of those B Ordinary Shares up to (and excluding) the Settlement Date relating to those B Ordinary Shares; 1.2.16 “Notional Finance Rate” means the Prime Rate or any lower rate determined by the Board from time to time, as the Notional Finance Rate which shall apply for any portion/s of the Notional Finance Period and in respect of any issued B Ordinary Shares and which may, in accordance with any such determination, vary during the Notional Finance Period; 1.2.17 “Notional Market Value” in respect of any issued B Ordinary Shares as at any date, means the aggregate market value that would be attributable to all of those B Ordinary Shares if they were all converted to Ordinary Shares on that date, which shall: 1.2.17.1 in respect of the B Ordinary Shares issued on the Listing Date, be deemed to be the Offer Price multiplied by the number of B Ordinary Shares issued on the Listing Date; and 1.2.17.2 in respect of any B Ordinary Shares issued on any other date, be calculated by multiplying the aggregate number of B Ordinary Shares issued on that date by the market value of an Ordinary Share as at that date (“Reference Date”), being the volume weighted average price of the Ordinary Shares for the 30 trading days immediately preceding the Reference Date, such volume weighted average price to be calculated from, and with reference to, the volume weighted daily data supplied by the JSE (or relevant third party data provider, as the case may be) to the Company from time to time; 1.2.18 “Notional Relief Amount” means any notional amount which may have been determined by the Boa\ rd from time to time, as the Notional Relief Amount which will be used, in addit\ ion to the amount calculated in terms of paragraph 1.2.10.1 of this Part B of Annexe A, to off-set the Notional Finance Balance in the calculation of the Net Notional Debt; 1.2.19 “Prime Rate” as at any date, means the variable interest rate quoted by the bankers of the Company from time to time as its prime rate at that date, nominal annual compounded d\ aily in arrears, as calculated and charged by that bank and as certified by any manager or director of that bank whose appointment need not be proved and whose certificate shall be final and binding; 1.2.20 “Retained Shares” as at any Settlement Date, means: 1.2.20.1 the B Ordinary Shares remaining (and automatically converting into Ordinary Shares) after any redemption referred to in paragraph 4 of this Part B of Annexe A; or 1.2.20.2 if such Settlement Date is a Notional Finance Settlement Date, all the B\ Ordinary Shares to which such Settlement Date relates; 1.2.21 “Scheduled Notional Finance Settlement Date” in respect of any issued B Ordinary Shares, means the fifth anniversary of the Issue Date of those B Ordinary Shares or any other date which is agreed upon in writing by the Company and the B Ordinary Shareholder as the Scheduled Notional Finance Settlement Date; 1.2.22 “Settlement Date” means in respect of any B Ordinary Shares issued on a particular Issue Date, the earlier of: 1.2.22.1 the Scheduled Notional Finance Settlement Date relating to those B Ordinary Shares; 1.2.22.2 the Accelerated Redemption Date relating to those B Ordinary Shares; and 1.2.22.3 the Notional Finance Settlement Date relating to those B Ordinary Shares; A-1361.2.23 “Settlement Shares” as at a Settlement Date, means such number of B Ordinary Shares to which such Settlement Date relates as is calculated in accordance with the formula referred to in paragraph 4.2 or 4.3 of this Part B of Annexe A (as applicable) and which shall be redeemed by the Company in settlement of the Net Notional Debt; 1.2.24 “Ta x” includes any tax, levy, impost, duty, charge, fee, deduction or withholding of any nature and whatever called (including securities transfer tax, stamp, documentary, registration or other like duty) together with any penalties, fines or interest payable in connection therewith, which is imposed, levied, collected, withheld or assessed by SARS on the B Ordinary Shareholder or its beneficiaries; and 1.2.25 “Trickle Distribution” means, in respect of each Actual Distribution paid during a Notional Finance Period\ , the amount which shall be calculated in accordance with the following formula: D={(Α) χ Ν}χ 20%0+Ν where: D = the Trickle Distribution to be calculated; A = the aggregate amount of the Actual Distributions paid in respect of the issued Ordinary Shares on the relevant date; O = the aggregate number of issued Ordinary Shares on the date of the Actual Distribution; and N = the aggregate number of issued B Ordinary Shares to which such Notional Finance Period relates. 2. General 2.1 The Company has 300,000,000 no par value authorised B Ordinary Shares. 2.2 Save as specifically otherwise provided in this Part B of Annexe A, the B Ordinary Shares shall at all times have all of the same rights as the Ordinary Shares and shall rank pari passu with the Ordinary Shares. It is recorded that the B Ordinary Shares have been created and will be issued for the purpose of empowering the B Ordinary Shareholder by issuing B Ordinary Shares to it for a nominal subscription price with notional vendor financing\ as reflected in these preferences, rights, limitations and other terms. The B Ordinary Shares will not be listed on the JSE. 2.3 Participation 2.3.1 Up to and including the applicable Settlement Date, the B Ordinary Shareholder shall only be entitled to participate to the extent of the Trickle Distributions for every Actual Distribution of the Company, whether made during the existence of the Company or upon its final liquidation. \ It is recorded that, for every Actual Distribution that is paid to Ordinary Shareholders, the B Ordinary Shareholder will also benefit from the calculation of a Notional Distribution that will be off-set against the Notional Finance Balance in the calculation of the Net Notional Debt. 2.3.2 On the Settlement Date relating to any particular B Ordinary Shares, automatically and without the need for further action on the part of the Company or the holder of any share in the Company each Retained Share shall: 2.3.2.1 commence ranking pari passu with Ordinary Shares in all respects and shall entitle its holder to participate equally with every Ordinary Share in any Distribution (excluding any payment in lieu of a capitalisation Share and any consideration payable by the Company for any of its own Shares or for any shares of another company within the same group as contemplated in paragraphs (ii) and (iii) of the definitions of Distribution in the Companies Act); and 2.3.2.2 be converted into an Ordinary Share. 2.4 The B Ordinary Shareholder shall, on the Settlement Date, surrender the share certificates issued in respect of the B Ordinary Shares to which such Settlement Date relates and such share certificates shall be replaced by crediting the B Ordinary Shareholder’s account with its CSDP with its Retained Shares. The Company shall also procure that appropriate entries reflecting the conversion of Retained Shares to Ordinary Shares pursuant to clause 2.3.2.2 are made in its securities register; and the number of authorised Ordinary Shares shall increase by such number as is equal to the number of Retained Shares that are automatically converted to Ordinary Shares (“Converted Number”), and the number of authorised B Ordinary Shares shall decrease by such number as is equal to the Converted Number. The Company shall procure that such Ordinary Shares are listed on the JSE, if the other Ordinary Shares are listed on the JSE at that time. 3. Voting Before and after becoming entitled to participate fully in Distributions in accordance with paragraph 2.3 of this Part B of Annexe A, each issued B Ordinary Share ranks pari passu with all other B Ordinary Shares and with all Ordinary Shares in respect of voting rights and subject to the Listings Requirements entitles its holder to exercise one vote on any matter to be decided by Shareholders (other than matters which are in, terms of this MOI or the Companies Act, to be decided solely by th\ e holders of any other class/ es of Share/s). A-137 4. Redemption of B Ordinary Shares 4.1 The B Ordinary Shares are redeemable in whole or in part, on the following terms and conditions, su\ bject to the provisions of the Companies Act: 4.1.1 redemption on written notice delivered by the Company to the B Ordinary Shareholder in the event of: (i) a breach by the B Ordinary Shareholder of this MOI or its trust deed; or (ii) a change in B-BBEE Legi\ slation or interpretation of the B-BBEE Legislation as determined by the B-BBEE commission\ or a court of law which negatively impacts the extent of recognition of the B Ordinary Shareholder for B-BBEE ownership purposes or generally the B-BBEE ownership rating of the Company. The redemption notice in this paragraph 4.1.1 shall be capable of being revoked by the Company in writing at any time prior to the Accelerated Re\ demption Date; 4.1.2 redemption automatically on the Scheduled Notional Finance Settlement Dat\ e. 4.2 The number of B Ordinary Shares which shall be redeemed on the Accelerated Redemption Date in terms of paragraph 4.1.1 shall be determined by the Company in accordance with the following formula: NS1=(F)χ T1V where: NS 1 = the number of shares to be redeemed pursuant to paragraph 4.1.1; F = the Net Notional Debt on the Accelerated Redemption Date; V = the Notional Market Value of all the issued B Ordinary Shares on the Accelerated Redemption Date; T 1 = the total number of issued B Ordinary Shares on the Accelerated Redemption Date; 4.3 The number of B Ordinary Shares which shall be redeemed on the scheduled Notional Finance Settlement Date in terms of paragraph 4.1.2 shall be determined by the Company in accordance with the following formula: NS2=(F)χ T2V where: NS 2 = the number of Settlement Shares to be redeemed pursuant to paragraph 4.1.2; F = the Net Notional Debt of the B Ordinary Shares subject to settlement on the Scheduled Notional Finance Settlement Date; V = the Notional Market Value of the B Ordinary Shares subject to settlement on the Scheduled Notional Finance Settlement Date; T 2 = such number of B Ordinary Shares subject to settlement on the Scheduled Notional Finance Settlement Date. 4.4 The redemption price of the B Ordinary Shares redeemed in terms of this paragraph 4 shall be the aggregate subscription price paid by the B Ordinary Shareholder for those B Ordinary Shares. 4.5 The B Ordinary Shareholder nominates, constitutes and appoints any one of the Directors of the Company or the company secretary to be its agent irrevocably and in rem suam for the purpose of giving effect to this paragraph 4. 4.6 Notwithstanding the other provisions herein contained: 4.6.1 if the issued Ordinary Shares are consolidated or sub-divided or in any other way reorganised, the Company, and Shareholders as required, shall procure a proportionate reorganisation of the B Ordinary Shares; and 4.6.2 the terms and conditions of the B Ordinary Shares may not be modified, altered, varied, added to or abrogated other than in accordance with the provisions of the MOI. 5. Notional Finance Settlement Date If any Actual Distribution that the Company intends to make in respect of Ordinary Shares will cause the Notional Credits to exceed the Notional Finance Balance in respect of any issued B Ordinary Shares, then: 5.1 the Company shall only make so much of that Actual Distribution as will cause the Notional Credits to equal the Notional Finance Balance; and 5.2 upon the making of the Actual Distribution referred to in paragraph 5.1 of this Part B of Annexe A, the Notional Finance \ Settlement Date shall have occurred and the automatic conversion of those B Ordinary Shares to Ordinary Shares shall occur so that those Ordinary Shares shall participate as Ordinary Shares in any further Actual Distributions by the Company; and 5.3 the Company may then make further Actual Distributions. A-138 6. Withholding and recovery The Company shall be entitled and authorised to: 6.1 withhold or deduct, from any amount or other performance due by it to a B Ordinary Shareholder in terms of this MOI or any other agreement; or 6.2 if payable by the Company and it has not been so withheld, recover from an B Ordinary Shareholder, any Tax or amount payable in respect of Tax which the Company is required to pay, withhold or deduct in respect of that B Ordinary Shareholder or its beneficiaries or any B Ordinary Shares held by that B Ordinary Shareholder or any Ordinary Shares into which such B Ordinary Shares may have converted. 7. Certificates A certificate of any director of the Company as to any date, amount or number calculated or to b\ e calculated under this Part B of Annexe A, including the Notional Capital Amount, the Notional Finance\ Charges, the Notional Finance Balance, the Notional Credits, the Net Notional Debt, the Retained Shares and/or the number of Settlement Shares shall be prima facie proof thereof for the purposes of this Part B of Annexe A. “Annex B – Shareholders’ Meetings” “21. Shareholders voting (by show of hands or by polling) 21.1 At a meeting of Shareholders, voting may either be by show of hands or by polling, provided that if the notice convening a Shareholders’ meeting requires a particular motion to be voted on by polling, it shall not be compet\ ent for voting on such motion to be conducted by show of hands. (Section 63(4)) 21.2 If voting on a particular matter is by a show of hands, any person, being a Shareholder or its representative or proxy/ies, who is present at the meeting and is entitled to exercise voting rights, has one vote irrespective of the number of votes that person would otherwise be entitled to exercise. (Section 63(5)) 21.3 If voting on a particular matter is by polling, any person, being a Shar\ eholder or its representative or proxy/ies, who is present at the meeting and is entitled to exercise voting rights, has the number of votes determined in accordance with the voting rights associated with the Shares registered in the name of the Shareholder in question which that person is entitled to exercise. (Section 63(6)) 21.4 All questions, matters and resolutions arising at or submitted to any meeting of Shareholders shall be decided by a simple majority of the votes cast (unless a different majority is required in terms of the Companies Act or this MOI or the Listings Requirements) and shall in the first instance be decided by a show of hands (\ unless voting by a poll with respect to the resolution in question is specified in the notice calling the meeting, or\ a poll is demanded or required on that resolution in terms of the Companies Act or this MOI or the Listings Requ\ irements). 21.5 The chairman of the meeting will not in his or her capacity as chairman \ have a casting vote in addition to any vote he or she may have by virtue of being a Shareholder. 21.6 If voting on a resolution is on a show of hands, unless a poll is demanded, a declaratio\ n by the chairman of the meeting that the resolution has been carried, or carried by a particular majority, or lost, or not carried by a particular majority, shall be final and an entry to that effect in the minute book of the Company shall be conclusive evidence of t\ he fact. 21.7 In addition to the Shareholders’ right to demand a poll on any resolution in terms of section 63(7) at any meeting of Shareholders, a poll on any resolution may also be demanded by the chairman of the meeting, provided that (except in terms of section 63(7)) a poll may not be demanded on the question of\ the election of a chairman for the meeting, and provided further that only the chairman of the meeting (or the Shareholders in terms of section 63(7)) may demand a poll on the question of any adjournment of the meeting. 21.8 If a poll is demanded as provided for in this clause 21, it shall be taken immediately if any other\ resolution is already required to be taken by poll in terms of the notice convening that meeting, or if not then in such manner and at such place and time, either immediately or after an interval or adjournment not exceeding 30 (thirty) calendar days, as the chairman of the meeting directs. The demand for a poll may be withdrawn. 21.9 A poll shall be taken immediately in respect of resolutions included in the notice convening that meeting. 21.10 Scrutineers shall be appointed by the chairman to count the votes on a p\ oll and to declare the result of the poll, and their declaration, which shall be announced by the chairman of the meeti\ ng at the meeting, shall be deemed to be the resolution of the meeting at which the poll was demanded. In the case of \ any dispute as to the admission or rejection of a vote, the chairman of the meeting shall determine the dispute and t\ he determination of the chairman made in good faith shall be final and conclusive. 21.11 Subject to clause 2.5.4, on a poll, a Shareholder (or its representative or proxy) entitled to more than one vote is in relation to the Company free to vote, in its discretion, all or any of its Shares the same way or differently or to abstain from voting in respect of all or any of its Shares, as it chooses. 21.12 When there are joint registered holders of any Shares any one of such persons may vote at any meeting in respect of such Shares as if it were solely entitled thereto, but if more than one of such joint holders is present or represented at any meeting, that joint holder whose name appears first in the securitie\ s register in respect of such Shares or its proxy, as the case may be, shall alone be entitled to vote in respect of such Shares. 21.13 The parent or guardian of a Shareholder who is a minor, the executor or administrator of a Shareholder who is deceased, the trustee of a Shareholder who is insolvent and the curator bonis of a Shareholder who is mentally incapacitated or prodigal, may vote at any General Meeting in respect thereof in the same manner as if he or she were the registered holder of those Shares; provided that during the business day immediately preceding the date appointed for the meeting to begin or if the meeting is adjourned the date appointed for the resumption of the adjourned meeting, as the case may be, of the meeting at which he or she proposes to vote he or she satisfies the Board that he or she is such parent, guardian, executor, administrator, trustee or curator or that the Board has previously admitted his or her right to vote in respect of those Shares.” A-139 SET OUT BELOW ARE EXTRACTS FROM THE MEMORANDUM OF INCORPORATION OF CONSOL GLASS: “Article 5 – Directors and Officers” 5. “5.1 Composition of the board 5.1.1 the board comprises or up to fourteen directors and up to seven alternative directors. 5.1.2 The manner of electing directors of the Company is as set out in section 68(2), or, at the election of the board, as set out in section 60(3), and each elected director of the Company serves for an indefinite term, as contemplated in section 68(1). 5.2 Authority of the board 5.2.1 Subject to article 4.9 of this MOI, the authority of the board to manage and direct the business and affairs of the Company, as set out in section 66(1), is not limited or restricted by this M0I. 5.2.2 If, at any time, the Company has only one director as contemplated in section 57(3), the authority of that director to act without notice or compliance with any other internal formalities, as set out in that section is not limited or restricted by this MOI. 5.3 Directors’ Meetings 5.3.1 The right of the Company’s directors to requisition a meeting of the board, as set out in section 73(1), may be exercised by at least 25% of the directors as provided for in that section. 5.3.2 This MOI does not limit or restrict the authority of the board to: 5.3.2.1 conduct a meeting entirely by electronic communication, or to provide for participation in a meeting by electronic communication, as set out in section 73(3); or 5.3.2.2 determine the manner and form of providing notice of its meetings, as set out in section 73(4); 5.3.2.3 proceed with a meeting despite a failure or defect in giving notice of the meeting, as set out in section 73(5): or 5.3.2.4 consider a matter other than that at a meeting, as set out in section 74\ . 5.4 Directors compensation and financial assistance 5.4.1 This MOI does not limit the authority of the Company to: 5.4.1.1 pay remuneration to the Company’s directors in accordance with a special resolution approved by the Company’s shareholders within previous 2 (two) years, as set out in section 66(8) and (9); . 5.4.1.2 authorise the Company to provide financial assistance to a director prescribed officer or other person referred to in section 45(2); 5.4.1.3 advance expenses to a director, or indemnify a director, in respect of the defence of legal proceedings, as set out in section 78(4); 5.4.1.4 indemnify a director in respect of liability, as set out in section 78(5): or 5.4.1.5 purchase insurance to protect the Company or a director, as set out in section 78(7).” A-140 ANNEXURE 18 MATERIAL CONTRACTS The material contracts, being restrictive funding arrangements and/or contracts entered into (whether verbally or in writing) otherwise than in the ordinary course of business carried on, or proposed to be carried on, by the Company or its subsidiaries during the t\ wo years preceding the Last Practicable Date, or at any time containing an obligati\ on or settlement that is material to the Company or its subsidiaries that have been entered into by Consol, are the following: EA TRUST ORDINARY SHARE REPURCHASE AGREEMENT The EA Trust is not an employee scheme as it will not involve the issue of equit\ y securities by Consol or result in a dilution of Ordinary Shareholders. The EA Trust was set up in 2011 to incentivise Senior Management. The trust holds Ordinary Shares in Consol and Class “A” Loans and it owes loan amounts to Consol, Old Mutual and Sanla\ m. The beneficiaries of the EA Trust are senior executives of Consol. In order to settle the loans owned by the EA Trust, on 9 April 2018, the Company and the EA Trust entered into the EA Trust Ordinary Share Repurchase Agreement. Under the EA Trust Ordinary Share Repurchase Agreement, the Company will, on the Business Day prior to the Listing Date, repurchase sufficient Ordinary Shares from the EA Trust, the value of which, at the Offer Price per Ordinary Share, equals the outstanding amount of the historic debt owed by the EA Trust to the Company and to Old Mutual and Sanlam plus dividend tax payable on the repurchase. The Company will settle the consideration payable partially by issuing new Class “A” Loans to the EA Trust, which the EA Trust will cede to Old Mutual and Sanlam to settle historic debt. The bal\ ance of the consideration payable will be settled by way of set off against the historic debt owed by the EA Trust to the Company and by the Company paying the dividend tax arising. EB TRUST ORDINARY SHARES REPURCHASE AGREEMENT On 30 November 2016, the Company and the EB Trust entered into the EB Trust Ordinary Share Repurchase Agreement under which the Company repurchased 7,024,928 Ordinary Shares from the EB Trust for R29.7 million with effect from 30 November 2016. The consideration was paid by way of Consol crediting new Class “A” Loans in favour of the EB Trust, which ceded those Shareholder Loans to Old Mutual and Sanlam to settle historic debt. PLACEMENT AGREEMENT See “Particulars of the Offer–Placement Agreement”. MATERIAL BORROWINGS See Annexure 15 to this Pre-listing Statement for all material borrowings of Consol. MATERIAL INTER-COMPANY TRANSACTIONS See Annexure 15 to this Pre-listing Statement for all material Consol inter-company transactions during the period of three years prior to the date of this Pre-listing Statement. JUNIPER GLASS SUBSCRIPTION AND SALE AGREEMENT On 6 September 2016, DBGH, Brooks Eugene Washington, Consol Glass Africa, Juniper Glass and Roha entered into a subscription and sale agreement, as amended and reinstated, under which on the effective date: 1. Consol Glass Africa subscribed for 117,858 ordinary shares in Juniper Glass, constituting 86% of the issued ordinary shares of Juniper Glass, for a subscription price of US$32,500,000, payable over s\ pecific time periods as set out in a “Flow of Funds” table appended to the subscription and sale agreement; 2. Consol Glass Africa agreed to advance a loan in Ethiopian birr equivalent of up to US$10,000,00\ 0 to Juniper Glass, which accrues interest at the rate of “2 month US dollar LIBOR” plus 5%; and 3. DBGH purchased, on loan account, 19,186 ordinary shares in Juniper Glass, constituting 14% of the issued ordinary shares of Juniper Glass, from Brooks Eugene Washington. Consol Glass Africa did not acquire 100% of the holding in Juniper Glass as Roha, the promoter of the Juniper Glass facility, wished to retain a shareholding, through DBGH and Consol also wished Roha to retain an interest in the project during and for the period following the development phase. JUNIPER SHAREHOLDERS’ AGREEMENT On 6 September 2016, DBGH, Consol Glass Africa and Juniper Glass entered into a shareholders’ agreement under which: 1. the parties regulated their relationship as shareholders of Juniper Glass;  2. the parties agreed that certain matters (comprising normal minority protections, such as amendments to the articles, changes to the business, the approval of the annual budget and business plan, related party transactions, incurring long term loans and the issue of new shares) would require the approval of 87% of the shareholders; 3. Consol Glass Africa and DBGH have reciprocal call and put options in respect of the shares in Juniper Glass held by DBGH, exercisable in tranches over three years commencing in the fifth year after the defined “Start-up Date” (being the date on which Juniper Glass has commenced manufacturing saleable glass bottles with a \ production efficiency of at least 80%). Each of Consol and DBGH has the right to require Consol to purchase (or DBGH to sell, as the case may be) relevant shares at a price determined in accordance with a formula set out in the shareholders agreement. A-141 SPHERE SUBSCRIPTION AGREEMENT On 28 June 2017, as part of a B-BBEE transaction, Consol and Sphere entered into a subscription agreement under which Sphere subscribed for 18,234,953 Ordinary Shares, constituting 5.36% of the issued Ordinary Shares, for a subscription price of R182 349.53 (i.e. R0.01 per share) and advanced Class “A” Loans and Class “B” Loans to Cons\ ol in the amount of R90,697,809 and R159,119,841, respectively. SPHERE SIDE AGREEMENT On 28 June 2017, Consol and Sphere entered into a side agreement in terms of which: 1. All of Sphere’s Class “A” Loans and Class “B” Loans will be repaid by Consol issuing such number of Ordinary Shares to Sphere upon the Listing Date, at a subscription price equal to the Offer Price, as may be required in order to settle Sphere’s Class “A” Loans and Class “B” Loans; 2. Sphere may not dispose of any of the Ordinary Shares held in the Company for a period of two years from the effective date of the Sphere Side Agreement; and 3. Sphere has provided certain undertakings for a period of two years from the effective date of the Sphere Side Agreement, including, amongst others, that: (i) Sphere will maintain at least 51% ownership on a flow through basis measured in terms of the B-BBEE Codes by Black People (as defined in the B-BBEE Codes); and (ii) Sphere will remain a wholly owned subsidiary of Sphere Holdings Proprietary Limited. B ORDINARY SHARE SUBSCRIPTION AGREEMENT On 5 April 2018, Consol and the Staff Trust entered into the B Ordinary Share Subscription Agreement under which the Staff Trust shall subscribe on the Listing Date for B Ordinary Shares, for a nominal subscription price. The Staff Trust shall be restricted from selling any of the B Ordinary Shares for a period of 5 years from the Listing Date, on which date the B Ordinary Shares remaining after settlement of the notional vendor finance provided by Consol will automatically convert into Ordinary Shares. GLASSFORCE SALE AGREEMENT On 11 April 2018, Consol Glass Africa concluded an agreement with the minority shareholders of Glassforce, Maciomhair BV Inc, Novice Limited and Chief A.C.I Mbanefo, to acquire their remaining shares in Glassforce for an aggregate purchase price of $15 million, of which $7.5 million will be payable on the implementat\ ion of the transaction, with the balance (which will not accrue interest) being payable in three equal instalments on the three subsequent anniversaries of the effective date of the transaction. As a suspensive condition to the transaction, Consol will be required to guarantee the payment by Consol Glass Africa of the subsequent instalments of the purchase price. As at the Last Practicable Date, the suspensive conditions to which the sale agreement is subject, had not yet been fulfilled. A-142 ANNEXURE 19 KING CODE REGISTER KING CODE Preamble The Board recognises the link between effective governance, sustainable performance and the creation of long-term value for all of its stakeholders. The Board is committed to the principles of transparency, integrity, fairness and accountability, and recognises the need to implement good corporate governance principles. The Board, therefore, seeks to apply the principles as set out in the King Code. The Company has performed an assessment of the application of the princi\ ples set out in King Code. The assessment is reflected below together with key actions envisaged to achieve application, where gaps exist. PrincipleAppliedComments 1 The governing body should lead ethically and effectively. Applied The Directors who stand in a fiduciary relationship with the Company and who are led by the Chairperson, hold each other accountable for decision- making and ethical behaviour. The Board is committed to organisational integrity and a Group-wide ethics code is in place, communicated to stakeholders, and application thereof and other arrangements in relation to this principle is being monitored. Going forward the Company will disclose the arrangements by which the Directors are held accountable for ethical and effective leadership, such as details regarding the performance evaluations of the Board and its members. 2 The governing body should govern the ethics of the organisation in a way that supports the establishment of an ethical culture. Applied The Board is responsible for the monitoring and governance of the ethics of the Company through its Social and Ethics Committee, and will continue overseeing the application of the Company’s ethical standards to the processes for the recruitment, evaluation of performance and reward for employees, and the sourcing of suppliers. The Company’s code of conduct guides the interaction between internal and external stakeholders. 3 The governing body should ensure that the organisation is and is seen to be a responsible corporate citizen. Applied The Board is responsible for monitoring the overall responsible corporate citizenship performance of the Company, and will disclose the following in relation to corporate citizenship in its Integrated Report: • an overview of the arrangements for governing and managing responsible corporate citizenship, • key areas of focus during the reporting period, • measures taken to monitor corporate citizenship, and • how outcomes were addressed, and planned areas of future focus. The Company will continue to oversee and monitor, on an ongoing basis, how the consequences of its activities and outputs affect its status as a corporate citizen i.e. in the workplace, economy, society and environment. Through its Corporate Social Investment programmes, which include social labour plan projects. Consol endeavours to make a contribution to the social and economic uplifting of previously disadvantaged communities. 4 The governing body should appreciate that the organisation’s core purpose, its risks and opportunities, strategy, business model, performance and sustainable development are all inseparable elements of the value creation process. Applied The Company’s strategy and objectives are mapped in consultation with executive management, and the Board appreciates that strategy, risk, performance and sustainability are not separable. The Board continually reviews strategy, and annually approves the business plan. The Risk Committee assists the Board with the governance of risk, and monitors risks and ensures the establishment of various mitigating controls. The Board is satisfied that the Group has adequate resources to continue business in the foreseeable future, and the Company remains mindful of its capitals (as defined in the King Code) and the utilisation thereof. A-143 PrincipleAppliedComments 5 The governing body should ensure that reports issued by the organisation enable stakeholders to make informed assessments of the organisation’s performance, and its short, medium and long-term prospects. Applied The Directors are of the opinion that based on the information and explanation provided by, inter alia, external auditors, internal auditors and management the financial records may be relied on for preparing the financial statements, which are prepared in conformity with IFRS and other applicable legislation. The Company’s Integrated Annual Report will provide an assessment of its performance, measured against its objectives, and will be published on the Company’s website. 6 The governing body should serve as the focal point and custodian of the corporate governance in the organisation. Applied The Board is the focal point and custodian of corporate governance of the Company. The Board holds at least four meetings per year and is transparent regarding attendance at its meetings. Its role and responsibilities and the way that it executes its duties and decision making are documented and are set out in the Board Charter. Further aspects of governance are addressed through the established Board sub- committees. The Board has introduced a comprehensive suite of policies governing the Company’s operations. These policies are monitored on an on-going basis by its committees. 7 The governing body should comprise the appropriate balance of knowledge, skills, experience, diversity and independence for it to discharge its governance role and responsibilities objectively and effectively. Applied The Board considers on an annual basis, its composition in terms of balance of skills, experience, diversity, independence and knowledge and whether this enables it to effectively discharge its role and responsibilities. The Company has adopted a Board Diversity Policy to ensure that the composition of the Board is diverse. The Board is satisfied that there is a balance of skills, experience, diversity, independence and knowledge needed to discharge its role and responsibilities. The board has a lead independent director in addition to having an independent non-executive chairman. This serves to strengthen the position of chairman and the independence of the Board. The Board compromises a majority of non- executive directors, the majority of whom are independent. 8 The governing body should ensure that its arrangements for delegation within its own structures promote independent judgement, and assist with balance of power and the effective discharge of its duties. Applied The Board committees have been re-constituted pursuant to the recommendations of the King Code, and in accordance with the Listings Requirements. The Board and its committees comply with the applicable requirements of the King Code. There is a clear balance of power to ensure that no individuals have undue decision-making powers. Each committee has terms of reference, approved by the Board, which sets out its purpose, composition, functions and authority as determined by the Board. The Audit and Corporate Governance Committee is satisfied that the external auditor is independent. Only pre-approved non-audit services are performed by the auditor and the audit firm has been appointed with the designated audit partner having oversight of the audit. The Audit and Corporate Governance Committee oversees the finance function. 9 The governing body should ensure that the evaluation of its own performance and that of its committees, its chair and its individual members, support continued improvement in its performance and effectiveness. Applied The Board Charter includes the onus of annual assessments. Assessments of the performance of the Board, its committees and the Company Secretary are conducted annually by way of internal evaluation process. 10 The governing body should ensure that the appointment of, and delegation to, management contribute to role clarity and effective exercise of authority and responsibilities. Applied The Board is satisfied that the Company is appropriately resourced and that appropriate authority and responsibility has been delegated to the management of the Company. A-144 PrincipleAppliedComments 11 The governing body should govern risk in a way that supports the organisation in setting and achieving its strategic objectives. Applied The Risk Committee assists the Board with the governance of risk. The Board is aware of the importance of risk management as it is linked to Consol’s strategy. Performance and sustainability of the business are identified and managed within acceptable parameters. The Risk Committee identifies, assesses, mitigates and manages risks within the existing operating environment. Mitigating controls are in place to address these risks which are monitored. 12 The governing body should govern technology and information in a way that supports the organisation setting and achieving its strategic objectives. Applied The Board, together with the Audit and Corporate Governance Committee, oversees the governance of information technology. The Board is aware of the importance of technology and information in relation to the Company’s strategy. The Company distinguishes between technology and information, and is in the process of aligning information and technology governance, monitoring and disclosure accordingly. 13 The governing body should govern compliance with applicable laws and adopted, non-binding rules, codes and standards in a way that it supports the organisation being ethical and a good corporate citizen. Applied The Board is assisted by the company secretary to monitor compliance with the various laws the Company is subject to. Compliance is monitored by the Company in line with the Group-wide ethics code that is in place in order to ensure that the Company is an ethical and good corporate citizen. 14 The governing body should ensure that the organisation remunerates fairly, responsibly and transparently so as to promote the achievement of strategic objectives and positive outcomes in short, medium and long term. Applied The Board, assisted by the Nomination and Remuneration Committee, ensures that Directors and employees are remunerated fairly, responsibly, transparently and in line with industry standards so as to promote the creation of value in a sustainable manner. The remuneration policy of the Company was updated to align with the King Code requirements and was approved by the Board. More than 75% of the voting rights voted in favour of the policy at the Shareholders’ meeting held on 29 March 2018. Both the remuneration policy and the implementation report will be tabled, at the company’s annual general meetings, for separate non-binding votes going forward and the Board will determine the level of application of the remuneration disclosures in relation to remuneration as described by the King Code. 15 The governing body should ensure that assurance services and functions enable an effective control environment, and that these support the integrity of information for internal decision-making and of the organisation’s external reports. Applied The Board is satisfied that the assurance results indicate an adequate and effective control environment and integrity of reports for better decision- making. The internal audit function, together with the other assurance providers of the Company, provides an adequate assurance framework. 16 In the execution of its governance roles and responsibilities, the governing body should adopt a stakeholder–inclusive approach that balances the needs, interests and expectations of material stakeholders in the best interests of the organisation over time. Applied The Board has identified various stakeholder groups with the intention of balancing their legitimate and reasonable needs, interests and expectations. The Board sets Group policy in respect of governance, reward structures, risk management, values, governance philosophies, and practices throughout the Group. Each of the subsidiaries in the Group is recognised as a separate and juristic entity to which its directors owe fiduciary duties. 17 The governing body of an institutional investor organisation should ensure that responsible investment is practiced by the organisation to promote the good governance and the creation of value by the companies in which it invests. Not applicable The Company is not an institutional investor organisation. A-145 ANNEXURE 20 DEFINITIONS, GLOSSARY AND INTERPRETATION In this Pre-listing Statement, unless otherwise stated or the context clearly indi\ cates otherwise, the words in the first column have the meanings stated opposite them in the second column, words in the singular shall include the plural and vice versa, words importing one gender include the other genders and references to a person include juristic persons and associations of persons a\ nd vice versa: “2010 PD Amending Directive”Directive 2010/73/EU; “A Ordinary Shares” A ordinary shares which constituted part of the authorised ordinary shares of the Company prior to the repurchase of the majority thereof and the automatic conversion of all the A Ordinary Shares into Ordinary Shares in 2016; “A Preference Shares” A preference shares which constitute part of the authorised preference shares of Business Venture 3001, a company in which Consol owns 100% of the issued ordinary shares, issued to Syzigium Trading Products Proprietary Limited and described in “Operational and Financial Review – Material borrowings – Material borrowings as at 31 December 2017 – Preference Shares; “A1 Preference Shares” A1 preference shares which constitute part of the authorised preference shares of Business Venture 3001, a company in which Consol owns 100% of the issued ordinary shares, issued to Syzigium Trading Products Proprietary Limited and described in “Operational and Financial Review – Material borrowings – Material borrowings as at 31 December 2017 – Preference Shares”; “Adjusted EBITDA” profit/(loss) attributable to equity holders for the year before non-operating and capital items, taxation, net finance expense, depreciation and amortisation. EBITDA is referred to as Adjusted EBITDA in this Pre-listing Statement due to the inclusion of non-operating and capital items in the definition; “AB InBev” Anheuser-Busch InBev SA/NV; “Allen & Overy” Allen & Overy LLP, the Joint Global Coordinators’ US, English and South African legal adviser; “associate company” any company in which a director of the company is beneficially interested, directly or indirectly, or of which he/she is a director; “associate entity” any partnership, syndicate or other association of which a director of a company is a member; “Audit and Corporate Governance Committee” the audit and corporate governance committee of the Company, being a sub-committee of the Board; “B-BBEE” broad-based black economic empowerment; “B-BBEE Act” the South African Broad-Based Black Economic Empowerment Act, 53 of 2003 (as amended or re-enacted); “B-BBEE Codes” the South African Codes of Good Practice on Broad-Based Black Economic Empowerment issued under the B-BBEE Act from time to time; “BofA Merrill Lynch” Merrill Lynch International, a company incorporated under the laws of England and Wales with company number: 02312079; “B Ordinary Shares” B ordinary shares in the Company, having the terms set out in the Memorandum of Incorporation, which have been created for the purposes of the Consol ESOP; “B Ordinary Share Subscription Agreement” the subscription agreement entered into between the Company and the Staff Trust on 5 April 2018, in terms of which the Staff Trust will subscribe for B Ordinary Shares on the Listing Date; “B Preference Share” the B preference share which constitutes part of the authorised preference shares of Business Venture 3001, a wholly owned subsidiary of Consol, issued to Syzigium Trading Products Proprietary Limited and described in “Operational and Financial Review \ – Material borrowings – preference shares”; “Board” or “Directors” the board of directors of the Company; “Board Charter” the Company’s board charter, which sets out the role, powers, responsibilities and composition of the Board and its sub-committees; A-146 “Brait Fund IV Entities”means, collectively, (i) Brait IV SA Partnership; an en commandite partnership formed in \ accordance with the laws of South Africa, acting through its General Partner, Brait Private Equity GP (IV) (Proprietary) Limited, registration number 2004/031310/07, a limited liability private company duly incorporated under the laws of South Africa; (ii) Brait IV Invest\ ment L.P. an exempted limited partnership established in accordance with the laws of the Cayman Islands, acting through its General Partner, SAPEF GP Limited, company number WK-84040, a company duly incorporated under the laws of the Cayman Islands; (iii) Brait III Investments Limi\ ted (registration number: 20750/4555), which is a wholly owned subsidiary of Brait SE; (iv) Bra\ it IV L.P. Co Investment Trust, being Securitas Services Limited, registration number 6000, a limited liability private company duly incorporated in the Republic of the Marshall Islands, in its capaci\ ty as trustee of Brait IV, L.P. Co-Investment Trust, a trust established in accordance with the laws of Cayman Islands; (v) Brait IV SA Partnership Co-Investment Trust, being the trustees, from time to time, of Brait IV SA Partnership Co-Investment Trust, a South African trust registered under Master’s reference number: IT8412/07; (vi) Brait IV Facility Trust, being the trustees for the time being of the Brait IV Facility Trust, a South African trust registered under Master’s reference IT4275/07; (vii) and Brait Mauritius Limited (registration number: C60342), which is a wholly owned subsidiary of Brai\ t SE; “Business Day” any day other than a Saturday, Sunday or official public holiday in South Africa; “Business Venture 3001” Business Venture Investments No. 3001 (RF) Proprietary Limited, a company incorporated under the laws of South Africa with registration number: 2013/223552/07, being a subsidiary of which the Company owns 100% of its ordinary shares; “CAGR” compound annual growth rate; “Capex” capital expenditure; “Capital Structure Reorganisation” as described under “Incorporation and Share Capital–Capital Structure Reorganisation” including, inter alia the EA Trust Ordinary Share Repurchase, the Loan Restructuring, and the Shareholder Loan Restructuring; “CEPPWAWU” Chemical, Energy, Paper, Printing, Wood and Allied Workers Union; “CGK” Consol Glass Kenya Limited (formerly Central Glass Industries Limited), a company incorporated under the laws of Kenya with registration number: C.23691, being a wholly owned subsidiary of Consol Glass Africa; “CGT” Capital Gains Tax in South Africa; “CIPC” the South African Companies and Intellectual Property Commission established under section 185 of the Companies Act; “Class “A” Loans” the class A loans owing by the Company to all of its Ordinary Shareholders, except certain executives and the Staff Trust, the material terms and conditions of which are set out in the Memorandum of Incorporation, a summary of which is provided at Annexure 17; “Class “B” Loans” the class B loans owing by the Company to all of its Ordinary Shareholders, except certain executives, the Staff Trust and the EA Trust, the material terms and conditions of which are set out in the Memorandum of Incorporation, a summary of which is provided at Annexure 17; “Closing Date” the closing date of the Offer, expected to be 12:00 on Thursday, 3 May 2018, but which may be amended by way of an announcement in the South African press and on SENS; “Common Monetary Area” collectively, South Africa, the Republic of Namibia, and the Kingdoms of Lesotho and\ Swaziland; “Companies Act” the South African Companies Act, 71 of 2008 (as amended); “Company” Consol Holdings Limited, a company incorporated under the laws of South Africa with registration number: 2005/034965/06; “Consol ESOP” the employee share ownership plan for the Company in respect of the B Ordinary Shares, details of which are set out in Annexure 12; “Consol ESOP Beneficiaries” the beneficiaries of the Consol ESOP, as set out in “Business of Consol – Consol BEE Transaction”; “Consol FSP” the share plan of the Company, namely the Consol Holdings Limited Forfeitable Share Plan, details of which are set out in Annexure 12; “Consol Glass” Consol Glass Proprietary Limited, a company incorporated under the law of South Africa \ with registration number: 2006/034503/07, being an indirectly held, wholly owned subsidiary of the Company; “Consol Glass Africa” Consol Glass Africa Proprietary Limited, a company incorporated under the law of South Africa with registration number: 2014/082007/07, being an indirectly held, wholly owned subsidiary of the Company; “Consol Glass Facilities” the Senior Debt Facilities together with a R750 million working capital \ facility that consists of four instruments; A-147 “Consol Phantom Scheme”The Phantom Share Scheme for Senior Management, which is a cash settled bonus incentive scheme for senior employees of Consol, whereby participants are granted options in respect of notional shares. When a participant exercises an option, the participant is entitled to a cash sum equal to the increase (if any) in the price per notional share as at the date of exercise of the option (determined in accordance with the terms of the scheme) over the price per notional share as at the date of grant (determined in accordance with the terms of the scheme) of the number of notional shares to which the option relates, subject to any tax or other statutory deductions. The exercise of an option does not entitle a particpant to subscribe for or acqu\ ire any shares in Consol; “Conversion Shares” the approximately 424,142,857 new Ordinary Shares to be issued to Ordinary Shareholders holding the Class “B” Loans and Class “A” Loans that are not repaid in cash with proceeds of the Offer, assuming an Offer Price in the mid-price of the Offer Price Range and that all of the Offer Shares are taken up; “CSDP” a Central Securities Depository Participant, as defined in the Financial\ Markets Act, appointed by an Ordinary Shareholder for purposes of, and in regard to, dematerialisation of shares evidenced by physical documents of title into the Strate system; “Cullet” recycled glass; “DBGH” Debre Birhan Glass Holdings Limited, a company incorporated under the laws o\ f Mauritius with registration number C215023059; “Dematerialised Ordinary Shares” Ordinary Shares that have been dematerialised, the process whereby physical share certificates are replaced with electronic records evidencing ownership of shares for the purpose of Strate, being “uncertified securities” as defined in section 1 of the Fina\ ncial Markets Act; “Diageo” Diageo South Africa Proprietary Limited; “Distell” Distell Limited; “DMR” the Department of Mineral Resources in South Africa; “EABL” East African Breweries Limited (Diageo PLC -controlled); “EA Trust” the trustees for the time being of the Consol Holdings Executive Trust A, Master’s reference number IT1692/2011. The beneficiaries of the EA Trust are senior executives of Consol. The EA Trust will not involve the issue of equity securities by Consol or result in a dilution of Consol’s Ordinary Shareholders. The EA Trust was set up in 2011 to incentivize Senior Management. It holds Ordinary Shares in Consol and Class “A” Loans, and it owes a loan amount to Con\ sol. On the Business Day prior to the Listing Date Consol will repurchase a number of the Ordinary Shares held by the EA Trust so as to settle the EA Trust’s outstanding loans; “EA Trust Ordinary Share Repurchase Agreement” the agreement entered into between the Company and the EA Trust on 9 April 2018, as set out in Annexure 18 to this Pre-listing Statement; “EB Trust” the trustees for the time being of the Consol Holdings Executive Trust B, Master’s reference number IT1957/2011; “EB Trust Ordinary Share Repurchase Agreement” the agreement entered into between the Company and the EB Trust on 30 November 2016, as set out in Annexure 18 to this Pre-listing Statement; “Eskom” Eskom Holdings SOC Limited, a company incorporated under the laws of Sou\ th Africa with registration number: 2002/015527/06; “EU Prospectus Directive” Directive 2003/71/EC and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State, and includes any relevant implementing measure in each Relevant Member State; “Euro”, “EUR” or “€” the currency introduced at the start of the third stage of European economic and monetary union pursuant to the Treaty establishing the European Community; “European Economic Area” the European Union, Iceland, Norway and Liechtenstein; “Exchange Control Regulations” the Exchange Control Regulations, 1961 as promulgated by Government Notice R.1111 of 1 December 1961 and amended up to Government Notice R.445 of 8 June 2012, in terms of section 9 of the South African Currency and Exchanges Act, 9 of 1933 (as amended); “Executive Directors” those executive Directors of the Company who are identified in “Management and Corporate Governance–Directors and Senior Management –Executive Directors”; “FFS Refiners” FFS Refiners Proprietary Limited, a company incorporated under the laws of South Africa\ , with registration number: 1986/003/003962/07; “Financial Markets Act” the South African Financial Markets Act, 19 of 2012 (as amended); “FSMA” the United Kingdom’s Financial Services and Markets Act 2000; “Generic Codes” the Generic Codes of Good Practice issued under the B-BBEE Act from time to time; A-148 “GDP”gross domestic product; “GIWUSA” General Industries Work Union of South Africa; “Glassforce” Glassforce Limited, a company incorporated under the law of Nigeria with registration number: RC 424859, being the Group’s Nigerian subsidiary; “Glassforce Minority Acquisition” the acquisition of the remaining 49% of the shares in Glassforce Limited by Consol Glass Africa; “Goldman Sachs International” Goldman Sachs International, a company incorporated under the laws of England and Wales with company number: 02263951; “Good Glass” manufactured glass that can be sold; “Good Tonne” an actual tonne of glass manufactured that can be sold; “Group” or “Consol” the Company and, where the context so requires, its consolidated subsidiaries (whether or not incorporated in South Africa); “HarbourVest” collectively, Harbourvest International Private Equity Partners V - Direct Fund L.P., a limited partnership organised under the laws of the State of Delaware, United States (which is ultimately managed by HarbourVest Partners, LLC) and Harbourvest Partners 2004 Direct Fund L.P. a limited partnership organised under the laws of the State of Delaware, United States (which is ultimately managed by HarbourVest Partners, LLC). In respect of Harbourvest International Private Equity Partners V - Direct Fund L.P., other than a private UK corporation which owns 15.66% of the beneficial interest in the fund, no person or entity ultimately holds 10% or more of the beneficial interest of Harbourvest International Private Equity Partners V - Direct Fund L.P. In respect of Harbourvest Partners 2004 Direct Fund L.P., 10% or more of the beneficial interests in the fund are held by a U.S. governmental retirement fund, a U.S. governmental retirement system and a UK pension trust; “Heineken” Heineken Global Procurement B.V. (including through its historical joint ventures); “HDSAs” historically disadvantaged South Africans; “IFRS” the International Financial Reporting Standards and the South African Institute of Chartered Accountants’ (SAICA) Financial Reporting Guidelines as issued by th\ e Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council; “Income Tax Act” the South African Income Tax Act 58 of 1962 (as amended); “IRS” the US Internal Revenue Service; “ISO” International Organisation for Standardisation; “IT” information technology; “JIBAR” the Johannesburg Interbank Agreed Rate (polled and published by the South African Futures Exchange, a division of the JSE) for deposits in Rand, as displayed on \ the Reuters Screen SAFEY Page alongside the caption “YLD” at the applicable time; “Joint Global Coordinators” BofA Merrill Lynch, Goldman Sachs International, Rand Merchant Bank and Standard Bank; “JSE” JSE Limited, a company incorporated under the laws of South Africa under\ registration number: 2005/022939/06, licenced as an exchange under the Financial Mark\ ets Act; “Juniper Glass” Juniper Glass Industries Share Company, a company incorporated under the laws of Ethiopia with registration number EIA/IP/022660/06, being the Group’s Ethiopian subsidiary; “Juniper Shareholders Agreement” the shareholders agreement entered into between DBGH, Consol Glass Africa and Juniper Glass on 6 September 2016, the material terms of which are summarised in Annexure 18 to this Pre-listing Statement; “Juniper Subscription and Sale Agreement” the subscription and sale agreement entered into between DBGH, Brooks Eugene Washington, Consol Glass Africa, Juniper Glass and Roha on 6 September 2016, the mat\ erial terms of which are summarised in Annexure 18 to this Pre-listing Statement; “King Code” the Code of Corporate Practices and Conduct as set out in the King Repor\ t on Corporate Governance for South Africa, 2016; “KPMG” KPMG Inc., registered accountant and auditor, chartered accountants (SA), a company incorporated under the laws of South Africa, with registration number: 1999/021543/21, being the auditors and independent reporting accountants of Consol; “Last Practicable Date” Tuesday, 11 April 2018; “Legal advisers” Linklaters, Webber Wentzel and Allen & Overy; A-149 “Linklaters”Linklaters LLP, the Company’s US and English legal adviser; “Listing” the listing of the Ordinary Shares on the main board of the exchange operated by JSE; “Listing Date” the listing date, which is expected to be Friday, 4 May 2018; “Listings Requirements” the listings requirements issued by the JSE under the Financial Markets Act to be observed \ by issuers of equity securities listed on the exchange operated by the JSE,\ as amended; “Loan Restructuring” settlement of a portion of the Consol Glass Facilities, and the redemption of all the Preference Shares utilising proceeds of the Offer, the raising of the New Senior Debt Facilities and the settlement of the balance of the Consol Glass Facilities utilising the p\ roceeds of the New Senior Debt Facilities; “LPG” liquefied petroleum gas; “LSM” Living Standard Measure; “Major Subsidiaries” the major subsidiaries (as defined in the Listings Requirements) of the Company; “Memorandum of Incorporation” the Company’s memorandum of incorporation, relevant extracts of which are set out in Annexure 17 to this Pre-listing Statement; “NBL” Namibian Breweries Limited “New Debt Facilities” comprise (i) the New Invoice Discounting Facility; (ii) the New Seni\ or Debt Facilities; and (iii) the New Working Capital Facility; “New Invoice Discounting Facility” the new invoice discounting facility that will be obtained as part of th\ e New Debt Facilities, the details of which are set out in the third table under “Material borrowings of the Company and its subsidiaries on or about the Listing Date” of Annexure 15 to this Pre-Listing Statement; “New Senior Debt Facilities” the senior debt facilities which will be obtained in order to replace the Senior Debt Facilities of the Group as part of the Loan Restructuring, the details of which are set out in the first table under “Material borrowings of the Company and its subsidiaries on or about the Listing Date”\ of Annexure 15 to this Pre-Listing Statement; “New Working Capital Facility” the new working capital facility that will be obtained as part of the Ne\ w Debt Facilities, the details of which are set out in the second table under “Material borrowings of the Company and its subsidiaries on or about the Listing Date” of Annexure 15 to this Pre-Listing Statement; “Nigerian Breweries” Nigerian Breweries Plc (Heineken-controlled); “Nominations and Remuneration Committee” the nominations and remuneration committee of the Company, being a sub-committee of the Board; “NUCRLANMPE” National Union of Chemical, Footwear, Rubber, Leather and Non-Metallic Products of Employees; “NUM” National Union of Mineworkers; “NUMSA” National Union of Metal Workers of South Africa; “Offer” the offer for subscription by the Company, subject to certain conditions to, and only capable of acceptable by, selected persons in South Africa who fall within one of the specified categories listed in section 96(1)(a) of the Companies Act and to selected pers\ ons in other jurisdictions to whom the Offer will specifically be addressed, of the Offer Shares; “Offer Price” the price at which the Offer Shares are offered for subscription pursuant to this Pre-listing Statement, to be determined in accordance with the provisions of “Particulars of the Offer– Offer Price” and specified in the Placement Agreement; “Offer Shares” up to 62,118,012 new Ordinary Shares (assuming an Offer Price at the mid-point of the Offer Price Range and that all of the Offer Shares are fully taken up), comprising an aggregate of approximately 34.2% of the total issued Ordinary Shares of the Company immediately prior to Listing, to be issued by the Company as part of the Offer; “Offer Price Range” the current estimated price at which the Offer Shares will be offered for subscription pursuant to this Pre-listing Statement being between R1.50 and R6.50 per Offer Share; “OHSA” the South African Occupational Health and Safety Act, 85 of 1993 (as am\ ended); “Old Consol” Consol Proprietary Limited, formerly Consol Limited, a company incorporated under\ the laws of South Africa, with registration number: 1964/021828/07; “Old Mutual Life Assurance Company” Old Mutual Life Assurance Company (South Africa) Limited, a company in\ corporated under the laws of South Africa with registration number: 1999/004643/06; “Operating Profit” profit/(loss) attributable to equity holders for the period/year before non-operating and capital items, taxation and net finance expense; A-150 “Ordinary Shares”ordinary shares of no par value constituting part of the authorised ordinary shares of the Company; “Ordinary Shareholders” the holders of Ordinary Shares from time to time; “Over-allotment Option” the option granted by the Over-allotment Shareholders to the Stabilisation Manager, on behalf of each of the Joint Global Coordinators to buy Ordinary Shares at the Offer Price for the purpose of covering short positions resulting from over-allotments on or before the end of the Stabilisation Period; “Over-allotment Shareholders” the over-allotment Shareholders, whose names are set out in Annexure 16 to this Pre-listing Statement; “Over-allotment Shares” up to 15% of the total number of Offer Shares to be sold in the Offer for the purpose of covering short positions resulting from over-allotments on or before the end of the Stabilisation Period; “PFIC” for US income tax purposes, a passive foreign investment company; “PIC” Public Investment Corporation SOC Limited, a company incorporated under \ the laws of South Africa with registration number: 2005/009094/30; “Placement Agreement” the placement agreement should be entered into between the Company, the Over-allotment Shareholders and the Joint Global Coordinators on 16 April 2018 and described in “Particulars of the Offer–Placement Agreement”; “Pre-listing Statement” all documents contained in this bound document, including the annexures hereto dated 16 April 2018; “Preference Shares” the A Preference Shares, the “A1” Preference Shares and the B Preference Share; “Pricing Date” the date of pricing of the Offer, expected to be Wednesday, 25 April 2018; “Protection Act” the South African Protection of Businesses Act, 99 of 1978 (as amended); “QIBs” qualified institutional buyers, as defined in Rule 144A; “Qualifying Investors” persons falling within the exemptions set out in section 96(1)(a) of\ the Companies Act and to whom the Offer will be specifically addressed; “Rand Merchant Bank” Rand Merchant Bank, a division of FirstRand Bank Limited, a company incorporated under the laws of South Africa with regulation number: 1929/001225/06; “Regulation S” Regulation S under the Securities Act; “Relevant Member State” any member state of the European Economic Area that has implemented the EU Prospectus Directive; “Risk Committee” the risk committee of the Company, being a committee of the Board; “Rest of Africa” Africa excluding South Africa, except when referring to Consol’s business segment in which case it refers to Consol’s operations in Ethiopia, Kenya and Nigeria; “Roha” Roha Africa Holdings LLC, a company incorporated under the laws of Delaw\ are with registration number 47-2061753; “Rule 144A” Rule 144A under the Securities Act; “Sanlam” Sanlam Life Insurance Limited, a company incorporated under the laws of \ South Africa with registration number: 1988/021121/06; “SABMiller” SABMiller Procurement GmbH; “SARS” the South African Revenue Service; “SEC” the US Securities and Exchange Commission; “Sector Codes” the Sector Codes of Good Practice, issued under the B-BBEE Act from time to time; “Securities Act” the US Securities Act of 1933 (as amended); “Senior Debt Facilities” the existing senior debt facilities of the Group, the details of which are set out in the first table of Annexure 15 to this Pre-Listing Statement, which facilities will be replaced by the New Senior Debt Facilities as part of the Loan Restructuring; “Senior Management” those members of the management bodies of the Group who are identified in “Management and Corporate Governance–Directors and Senior Management–Senior Management”; “SENS” the Stock Exchange News Service of the JSE; “Settlement Date” the date of implementation of the Offer when the Offer Shares will be transferred or delivered to applicants against payment of the Offer Price in accordance with “Particulars of the offer– Application, Payment and Delivery of Offer Shares” expected to be Friday, 4 May 2018; A-151 “Shares”shares in the Company, comprising Ordinary Shares and B Ordinary Shares, as at the Listing Date; “Shareholder Loans” collectively, the Class “A” Loans and the Class “B” Loans; “Shareholder Loan Restructuring” settlement of a portion of the Shareholder Loans in cash utilising Offer proceeds and conversion of the remaining Shareholder Loans into Ordinary Shares, as described under “Incorporation and Share Capital: Capital Structure Reorganisation”; “Shareholders” the holders of Shares from time to time; “SKUs” stock keeping units; “Social and Ethics Committee” the social and ethics committee of the Company, being a sub-committee of the Board; “South Africa” the Republic of South Africa; “South African Rand”, “rand”, “R” and “cents” the lawful currency of South Africa; “Sphere” Sphere Investments Two (RF) Proprietary Limited, a company incorporated under the law of South Africa with registration number 2004/032571/07, which owns 10% of the issued Ordinary Shares as at the Last Practicable Date. Sphere Investments Two (RF) Proprietary Limited is a wholly owned subsidiary of Sphere Holdings Proprietary Limited, a South African investment holding company, the major shareholders of which are Eskom Pension and Provident Fund (20.73%); Government Employees Pension Fund (10.72%); Sanlam Life Insurance Company Limited (10.74%); and the management of Sphere (38.6%); “Sphere Side Agreement” the side agreement entered into between Consol and Sphere on 28 June 2017, the material terms of which are summarised in Annexure 18 to this Pre-listing Statement; “Sphere Subscription Agreement” the subscription agreement entered into between Sphere and Consol on or about 28 June 2017, the material terms of which are summarised in Annexure 18 to this Pre-listing Statement; “Sponsor” Rand Merchant Bank; “Stabilisation Manager” Rand Merchant Bank; “Stabilisation Period” the period ending 30 calendar days after the Listing; “Standard Bank” The Standard Bank of South Africa Limited, a company incorporated under the laws of South Africa with registration number: 1962/000738/06; “Strate” an electronic settlement environment for transactions to be settled and transfer of ownership to be recorded electronically, operated by Strate Proprietary Limited, a private company incorporated under the laws of South Africa with registration number: 1998/022242/07, and a registered central securities depository in terms of the Financial Markets Act a\ nd responsible for the electronic custody and settlement system used by the JSE; “STT” Securities Transfer Tax in South Africa; “Staff Trust” The Consol Holdings Staff Trust, Master’s reference number IT 3509/2010; “Tiger Brands” Tiger Consumer Brands Limited; “trade unions” organisations with which Consol is party to collective bargaining agreements in each of the jurisdictions in which it operates; “Transactions” the EA Trust Ordinary Share Repurchase, the issue of the Offer Shares, the Loan Restructuring, the raising of New Senior Debt Facilities, the payment of Transaction Costs, the Shareholder Loan Restructuring, the Consol ESOP and the Glassforce Minority Acquisition; “United Kingdom” or “UK” the United Kingdom of Great Britain and Northern Ireland; “United States” or “US” the United States of America, its territories and possessions, any state of the United States and the District of Columbia; “US dollar”, “$”, “US$” and “dollars” the lawful currency of the United States; “US Holder” a beneficial owner of Ordinary Shares that is, for US federal income tax purposes: (i) a citizen or resident of the United States; (ii) a corporation created or organised under the laws of the United States or any state thereof; (iii) an estate the income of which is subject to US federal income tax without regard to its source; or (iv) a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or\ more US persons have the authority to control all substantial decisions of the trust, or the trust has elected to be treated as a domestic trust for US federal income tax purposes; “Webber Wentzel” Webber Wentzel, the Company’s South African legal adviser; and “Zuberi” Zuberi Investments Proprietary Limited, a company incorporated under the laws of South Africa, with registration number: 2012/071274/07. A-152 REGISTERED OFFICE OF THE COMPANYConsol Holdings Limited Consol House Osborn Road Wadeville, Johannesburg, 1407 South Africa JOINT GLOBAL COORDINATORS Joint Global Coordinator Joint Global Coordinator Merrill Lynch International 2 King Edward Street London EC1A 1HQ United Kingdom Goldman Sachs International Peterborough Court133 Fleet Street London EC4A 2BB United Kingdom The Standard Bank of South Africa Limited 30 Baker Street Rosebank, 2196 (PO Box 61029, Marshalltown, 2107) South Africa Joint Global Coordinator, Stabilisation Manager and Sponsor Rand Merchant Bank, a division of FirstRand Bank Limited 1 Merchant Place Cnr Rivonia Road and Fredman Drive Sandton, 2196 (PO Box 786273, Sandton, 2146) South Africa LEGAL ADVISERS TO THE COMPANY As to US and English Law As to South African Law Linklaters LLP One Silk Street London EC2Y 8HQ United Kingdom Webber Wentzel 90 Rivonia Road Sandton Johannesburg, 2196 (PO Box 61771, Marshalltown 2107) South Africa LEGAL ADVISERS TO THE JOINT GLOBAL COORDINATORS As to US and English Law As to South African Law Allen & Overy LLP One Bishops Square London E1 6AD United Kingdom Allen & Overy LLP 6th Floor, 90 Grayston 90 Grayston Drive Sandton, 2196South Africa AUDITOR AND INDEPENDENT REPORTING ACCOUNTANT KPMG Inc. 85 Empire Road Parktown, 2193 (Private Bag 9, Parkview, 2122) South Africa s