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Cornubia Industrial and Business Estate Management Association Annual Report for year ended 30 June 2019 of 6

CORNUBIA INDUSTRIAL AND BUSINESS ESTATE MANAGEMENT ASSOCIATION

NON-PROFIT COMPANY Registration No: 2013/020224/08

Annual Report

For the year ended 30 June 2019


CORNUBIA INDUSTRIAL AND BUSINESS ESTATE MANAGEMENT ASSOCIATION NON-PROFIT COMPANY

(Registration No: 2013/020224/08)

Contents

Pages

Notice of Meeting

3

Meeting Agenda

4

Directors Nomination Form

5

Form of Proxy

6

Minutes of the Annual General Meeting on 6 of December 2018

7

Annexure 1 - Auditors Report and Annual Financial Statement Annexure 2 - Directors Roles and Responsibilities




(“the Company)

Notice of the Annual General Meeting

Notice is hereby given that the Annual General Meeting of the Members of the Cornubia Industrial and Business Estate Management Association NPC will be held at the offices of Samuels Group, 15 Crispa Road, Cornubia Business Estate, Durban, 4015 on 10 December 2019 at 2pm for the following purposes:

1. To receive the Chairman’s Report.

2. To receive and adopt the audited annual financial statements for the year ended 30 June 2019, which incorporates the independent auditors report.

3. To appoint Stewart Edwards and Company as the auditors of the Company.

4. To elect directors in terms of Article 5 of the Memorandum of Incorporation. The Board shall comprise a maximum of ten Directors and a minimum of four. Please note that we will be holding a Members’ Meet & Greet on Friday 6 December 2019 at 12pm to encourage members to actively engage with the management of the precinct.It would facilitate secretarial procedures if nominations for the appointment of Directors could be emailed to [email protected] by no later than 9 December 2019. Nominations must be in writing with the name of the proposer and seconder, the acceptance of such nomination by the nominee, and should be accompanied by the curriculum vitae of such nominee. A Nomination form is enclosed for this purpose.

5. To transact such other business as may be transacted at an annual general meeting.

NOTE: Any member entitled to attend and vote is entitled to appoint a proxy to attend, vote and speak in his/her stead, and such proxy need not also be a member of the Company.

Items for discussion under any agenda item should be advised to the Chairman Cornubia Industrial and Business Estate Management Association and emailed to [email protected] by no later than the 9 December 2019. Please note that such notification must be in writing.

In terms of clause 14.12 of the Memorandum of Incorporation, any member who is 60 (sixty) days or more in arrears in the payment of any levies due to the Association in terms of the MOI, shall not be allowed to vote at the meeting, either in person or by proxy

By order of the Board

mailto:[email protected]





Agenda

1. Welcome

2. Apologies

3. Development PeriodTo note that Tongaat Hulett Developments (THD) have called the Development Period over. As a result, the current Memorandum of Incorporation will need to be read as such and in time will need to be amended via special resolution of members.

4. Notice of meeting and quorumA quorum required for the Annual General Meeting is Members holding between them, in aggregate, not less than 5% of the rights (bulk ownership) entitled to vote, personally present, or by its duly authorized representative (subject to 2 (two) Members personally present).

5. To adopt the Minutes of the Annual General Meeting held on 6 December 2018

6. Matters arising from the Annual General Meeting held on 6 December 2018

7. Chairman’s Report to be presented

8. Resolution 1: To receive and adopt the annual financial statements for the year ended 30 June 2019which incorporates the report of the independent auditors (Annexure 1).

9. Resolution 2: To appoint Stewart Edwards & Company as the auditors of the Company.

10. Resolution 3: To elect Directors for the ensuing year. Current directors who will resign include Selemo Sefehle, Darin Samuels, Vivian Appalsamy and Devon Govender (Annexure 2).

11. General

12. Close of Meeting

By order of the Board




Directors Nomination Form for the Annual General Meeting of 10 December 2019

I, the undersigned:…………………………………………………………………………………………………………………..

duly authorised representative of:…………………………………………………………………………………………..

being a fully paid up member of the Association and registered owner of Ptn:……………………....

in the area known as CORNUBIA INDUSTRIAL AND BUSINESS ESTATE, hereby nominate for appointment as Director of the Association:

…………………………………………………………………………………………………………………………………………….....

__________________________ ___________________________ Proposer’s signature Nominee’s signature

NOTE :

Directors Nomination Form should be emailed to [email protected] for the attention the Chairman Cornubia Industrial and Business Estate Management Association by 9 December 2019.





Form of Proxy

I, the undersigned.……………………………………………………………………………………………………………………….

duly authorised as representative of…………………………………………………………………………………………….

being a fully paid up member of the Association and registered owner of Ptn No:……………………….

in the area known as CORNUBIA INDUSTRIAL AND BUSINESS ESTATE , hereby appoint:

…………………………………………………………………............ (Name of Proxy)

Or, failing him/her, the Chairman of the meeting, as my proxy to vote for me and on my behalf at the Annual General Meeting of the Association to be held on 10 December 2019.

I record that my proxy will vote as he/she thinks fit.

Signed at:……………………………………………………. this…………….day of..……………………………………2019

Signature:……………………………………………………………………………

FOR AND BEHALF OF:…………………………………………………………………………………………………………………

NOTE:

Proxy forms should be emailed to [email protected] for the attention the Chairman Cornubia Industrial and Business Estate Management Association by 9 December 2019 2019.


CIBEMA– AGM held on 6 December 2018 Page 1 of 6

CORNUBIA INDUSTRIAL AND BUSINESS ESTATE MANAGEMENT ASSOCIATION NON-PROFIT COMPANY (Registration No: 2013/020224/08)

Minutes of the CIBE Management Association AGM held at the offices of Samuels Group, 15 Crispa Road, Cornubia Business Estate, Durban on 6 December 2018 at 2pm

Directors: Name Initial Representing Present Apologies Bongani Gumede BG Tongaat Hulett Developments Apologies Darin Samuels DS Samuels International In attendance Graeme Phillips GP Garlicke & Bousefield Inc. In attendance Selemo Sefehle SS Tongaat Hulett Developments Apologies Vivian Appalsamy VA Redefine Properties In attendance

By Invitation: Name Initial Representing Present Apologies Alain Tostee AT Blinds Mart Apologies (Proxy) Angela Cinquina AC Cargo Compass Apologies Gareth Tombleson GT Twosome Corner In attendance John Veasey JV 4-Site Projects Apologies (Proxy) Mogie Naidoo MN BDO - The Auditors In attendance Nishal Polton NP Cargo Compass In attendance Brian Wright BW CIBE Management Association In attendance Bruce Macaulay BM CIBE Management Association In attendance Cherrie Francis CF CIBE Management Association In attendance Joanne Barnard JB CIBE Management Association In attendance Maxine Schilz MS CIBE Management Association In attendance Sihle Miya SM CIBE Management Association In attendance

Summary of actions coming out of the meeting:

Min. no Action: Tasked:

AGM 5/18 (d) CIBE hotline number: To be circulated via the Everlytic system. CR/DR AGM 5/18 (e) Walkway on Bridge: SM/BM to interrogation options to improve pedestrian safety. SM/BM AGM 5/18 (f) Traffic violations: SM/BM to continue to request Metro Police’s assistance. SM/BM AGM 7/18 Rotation of Auditor: JB to add to the Board agenda following resolution of the

SARS issue. JB

AGM 8/18 Annual Financials: MN to review the suggested approach for the payment of THD’s R2m contribution to the Association.

MN/MS

AGM 9/18 Election of Directors: JB to prepare the appointment documentation. JB AGM 10/18 (a) Amendments to the Design review code:


• BM to engage with VA regarding his concerns around “to let” and “for sale” signage.

• BM to ensure that the updates to the Code are approved at the next Board meeting.

• BM to ensure that all members are issued with a copy of the final approved Design Review Code

BM BM BM

AGM 10/18 (b) Progress of CCTV: DS to sign Marshall’s Letter of Appointment (LoA) on behalf of the Board.

BM/DS

AGM 10/18 (c) Fibre: JB to add new Fibre Optic Rule to the next Board meeting agenda. JB AGM 10/18 (d) Signage for the CIBE: SM/BM to request approval from ETA to move the proposed

CIBE entrance feature signage to the centre island of the M41 to improve visibility. SM/BM

AGM 10/18 (e) Dedicated right turn at the M41 traffic lights: BM/SM to raise the matter of increasing the timing the turn right arrow with ETA.

SM/BM

AGM 10/18 (g) Board Director updates: BM/SM to ensure that Board Directors are sent a breakdown and periodic updates of all operations and projects.

SM/BM

AGM 1/18 Welcome and Introductions Action a.) In the absence of Bongani Gumede, Graeme Phillips (“the Chair”) agreed to chair the

meeting and in his stead. The Chair welcomed all to the 5th Annual General Meeting of Members of the Cornubia Industrial and Business Estate Management Association (CIBEMA).

AGM 2/18 Apologies

a.) Apologies were recorded as listed above.

AGM 3/18 Quorum Attendees confirmed having received due notice of the meeting.

The meeting noted that quorum required for the Annual General Meeting was members holding between them, in aggregate, not less than 5% of the rights (bulk ownership) entitled to vote, personally present, or by its duly authorised representative. The meeting noted that there had been some confusion over the venue of the meeting, however, with these members being present and notice being properly given, the Chair declared the meeting duly constituted.

The Chair introduced the meeting to the CIBEMA Board of Directors (“the Board”):

• Bongani Gumede (Chair) - Tongaat Hulett Developments (THD) • Selemo Sefehle - Tongaat Hulett Developments (THD) • Darin Samuels - Samuels International • Graham Phillips - Garlicke & Bousefield Inc. • Vivian Appalsamy - Redefine Properties.

The following changes to the Board were noted:

• Rob Moran resigned from his role at JT Ross and therefore retired from the Board as at 8 June 2018.

• Mtura Matshini had been replaced on the Board by Selemo Sefehle as at 26 October 2018.

• Karen Peterson had recently resigned from THD, she would therefore not be re-standing as a director on the Board.


• Bongani Gumede would not be re-standing for nomination as a Director unless there was a need for him to stand.

The Board thanked the above directors for their service on the Board and subsequently welcomed Selemo to the Board. The Chair noted that THD do intend on ending the Development Period shortly, but that their exit from the Board would be phased. Joanne Barnard (JB) explained that during the Development Period, THD hold four out of the seven directorships on the Board and that as part of the Board’s succession planning, THD had agreed to nominate two non-THD Directors onto the Board as Karen Peterson’s and Bongani Gumede’s replacements. The Chair then introduced the Management Team consisting of Bruce Macaulay, Sihle Miya, Brian Wright, Celine Spies, Maxine Schilz, Cherrie Francis and Joanne Barnard from the Association. In addition, the Chair welcomed Mogie Naidoo (MN) from BDO, the Company’s auditors. It was noted that Mogie had been running late and should be in attendance shortly.

AGM 4/18 To adopt the Minutes of the Annual General Meeting held on 6 December 2017 The Minutes of the Annual General Meeting held on 6 December 2017 had been

circulated to attendees before the meeting. The minutes were approved as a correct record of proceedings. There being no comments minutes were approved as a correct record of proceedings, adopted and signed by the Chair.

AGM 5/18 Matters Arising from Previous Minutes JB took the meeting through the matters arising from the previous meeting:

a.) Minute 5/17 (a) – Board succession planning: Cross refer with minute 3/18 above.

b.) Minute 9/17 – Appointment of Directors: JB confirmed that CIPC had been updated with Darin Samuels appointment.

c.) Minute 10/17 (b) – General Estate Security: • It was noted that the Board had decided that patrol dogs would not be in keeping

with the environment of the CIBEMA and opted for CCTV cameras instead. • JB confirmed that the security WhatsAPP group had been created. • JB confirmed that the CIBEMA Website Proposal was presented and accepted by

the Board and the website is now operational.

d.) Minute 10/17 (b) – Public Transport • JB confirmed that the members had emailed their requirements to the Precinct

Manager. • JB confirmed that a service request function had been created on the CIBEMA

Website and was working well. • Vivian Appalsamy (VA) requested that the CIBE Hotline number be circulated via

Everlytic system.

CR/DR

e.) Minute 10/17 (e) – Walkway on Bridge: Subsequent to the previous meeting, this section of the road had been handed over to eThekwini Transport Authority (ETA). Bruce Macaulay (BM) confirmed that a meeting had been held with the Roads Provision Inspector to discuss various options to improving pedestrian safety and that the Management Team would continue to interrogate these.

BM


f.) Minute 10/17 (f) – Traffic violations: Numerous requests had been sent to Metro Police to assist with the policing of traffic violations such as speeding and non-adherence to stop streets, but to no avail. The Management Team would continue to make these requests.

SM

g.) Minute 10/17 (g) – Verge maintenance: JB confirmed that the Precinct Manager had met with Cargo Compass in this regard and the matter was resolved.

AGM 6/18 Chair’s Report The meeting noted the Chair’s Report, as circulated ahead of the meeting. There being

no comments, the report was taken as read, with no comments added.

AGM 7/18 Resolution 2 - To re-appoint BDO the auditors of the Company.

Due to the Auditor not yet having arrived it was agreed that Resolution 2 be tabled ahead of Resolution 1. The Chair advised that for good governance the Board consider the rotation of the CIBEMA auditor. It was agreed that a change in auditor would be considered following conclusion of the objection to SARS. JB undertook to add this to the Board agenda for consideration. As such, the meeting agreed the re-appointment of BDO as the auditors of the Company until such time as the tax exemption issue was resolved. The Chair therefore proposed to re-appoint BDO as the Auditor of the Company and the motion was unanimously carried. Mogie Naidoo (MN) joined the meeting at 14h30.

JB

AGM 8/18 Resolution 1: To receive and adopt the annual financial statements for the year ended

30 June 2018, which incorporates the Chairman’s report to members, and the report of the independent auditors.

The Chair invited all attendees to put forward any comments and questions regarding the Annual Financial Statements of the Company for the year ended 30 June 2018 (the AFS). MN took the meeting through a detailed summary of the AFS, confirming that there had been an unqualified audit opinion. MN noted that the only matter of significance was the tax exemption issue, explaining that BDO was awaiting confirmation of SARS’ decision regarding the dispute resolution process. BW explained that THD had agreed to contribute R2 million to the CIBE for the installation of primary infrastructure, it was noted that this would be directed to the CCTV project. Initially it was agreed that THD would pay service providers directly, however due to donation tax implications and the capitalisation of the assets, it was suggested that THD pay a special levy instead to CIBEMA. BDO undertook to review the suggested approach and whether this is acceptable from an auditing perspective. There being no further comments, acceptance and approval of the AFS was proposed by the Chair and the motion was put to the meeting and unanimously carried. The Chair thanked MN for her report back and excused her from the meeting.

MN/MS


AGM 9/18 Resolution 3: To elect directors for the ensuing year The Chair explained that all Directors retire at the Annual General Meeting, however the

following were automatically re-elected due to their appointment being that of the Developer:

• Selemo Sefehle - Tongaat Hulett Developments (THD) • Graham Phillips - Garlicke & Bousefield Inc.

As discussed in minute 3/18 above, THD had agreed to relinquish two of their four directorships on the Board as part of a succession planning strategy. BW explained that he felt it important that the positions be filled by members operating a business within CIBEMA. Following an in-depth discussion, it was agreed that the THD nominees be Nishal Potton (NP) of Cargo Compass, subject to Angela Cinquina’s approval, and Gareth Tombelson of Vision Project Management, representing portion 107. The following further nominations were received:

• Vivian Appalsamy - Redefine Properties • Darin Samuels - Samuels Group.

Taking the above into consideration, the Chair noted the Companies Act of 2008 required that Directors be individually elected, and as such he called for nominations of directors:

• Selemo Sefehle - nominated by THD, seconded by GP • Graham Phillips - nominated by THD, seconded by DS. • Vivian Appalsamy - nominated by Redefine Properties, seconded by GP. • Nishal Potton – nominated by THD, seconded by GP. • Darin Samuels - nominated by Samuels Group, seconded by GP. • Gareth Tombelson – nominated by THD, seconded by GP

There were no objections to the nominations, so the Chair moved that the above nominees be elected to the Board until the next Annual General Meeting. The motion was unanimously carried. JB undertook to prepare the appointment documentation. [Post meeting note: Angela Cinquina confirmed that NP would not be standing as a director, it is therefore noted that NP’s appointment as per the above is nullified. However, he was available to attend meetings in an invitee capacity.]

JB

AGM 10/18 General The Chair asked whether there was any other business to be dealt with under general and

the following items were raised:

a.) Amendments to the Design Review Code (“the Code”): BM noted that there would be a number of minor amendments to the Code as stated below:

• Reduction in size of “To Let” and “For Sale” signage following the completion of a development. Vivian Applesamy (VA) requested clarification on the existing 3-month time limit on “To Let” and “For Sale” signage, as he believed the limit was not suitable. VA indicated that if the signage was kept to the required standards,


then it should be allowed to remain until the concerned property was let or sold. BM undertook to meet with VA outside of the meeting.

• Addition to allow internal pylon type direction signage.

It was also noted that following approval by the Board of the above changes, all members would be issued with a copy of the final approved Design Review Code.

BM

b.) Progress of CCTV: Garth Tombleson (GT) enquired regarding the progress of the CCTV project. BM explained that following a thorough tender process Marshall Security had been awarded the contract. DS agreed to sign Marshall’s Letter of Appointment (LoA) on behalf of the Board and BM confirmed that the project would commence shortly, with an anticipated completion date was March 2019.

BM/DS

c.) Fibre: In response to a question from GT, BW confirmed that CIBE currently has 2 (two) sleeves , one being for the security contingency’s fibre optic backbone and the other with the intention to lease to an external service provider. However, on inspection of the ducts they were found to be blocked and required reproving. As such, the Board had taken a decision to conduct testing on the ducts to locate the blockages and to clear them, following which the leasing of the duct to an external service provider can be considered. It was agreed that an additional rule would need to be added to the Management Association Rules in this regard. JB undertook to add this to the next Board meeting agenda.

JB

d.) Signage for the CIBE: BM explained that Gray Braatvedt had met with Gert Lombard of the eThekwini Transport Authority (ETA) to request wayfinding signage for CIBE. GT requested that branded signage be installed at the traffic lights on the M41 approaching CIBE. The Management Team agreed to request approval from ETA to move the proposed CIBE entrance feature signage to the centre island of the M41.

BM/SM

e.) Dedicated right turn at the traffic lights: GT requested that the timing of the dedicated right turn traffic lights on the M41 be reviewed with the intention of extending the timing. The Management Team agreed to raise this with ETA.

BM/SM

f.) Restructure of UrbanMGT team: BW explained that the UrbanMGT Team had undergone a restructuring, with Sihle Miya (SM) now taking over as the Precinct Manager handling the day to day operations within CIBE and Gray Braatvedt focusing on the DRP and management of development controls.

g.) Member updates: GT requested that members be sent a breakdown and periodic updates of all operations and projects. BM undertook to do so.

BM/SM

AGM 11/18 Meeting Closure There being no further business the Chair thanked the meeting for their attendance and

declared the meeting closed at 15h00.

Read and confirmed this _________________________day of ___________________ 2019 __________________ Chair

Cornubia Industrial and Business EstateManagement Association NPC(Registration number 2013/020224/08)Annual financial statementsfor the year ended 30 June 2019

Cornubia Industrial and Business Estate Management Association NPC(Registration number: 2013/020224/08)Annual Financial Statements for the year ended 30 June 2019

General Information

Country of incorporation and domicile South Africa

Nature of business and principal activities Management and Administration of Cornubia Industrial and BusinessEstate

Directors Vivian AppalsamyDarin David SamuelsGareth TomblesonBernard Selemo Sefehle

Registered office 305 Umhlanga Rocks DriveLa Lucia4051

Business address 305 Umhlanga Rocks DriveLa Lucia4051

Auditors BDO South Africa IncorporatedRegistered Auditors

Company registration number 2013/020224/08

Level of assurance These annual financial statements have been audited in compliancewith the applicable requirements of the Companies Act of SouthAfrica.

Preparer The annual financial statements were independently compiled by:BDO Business Services (Pty) Ltd under the supervision of:Bernice Pillay CA (SA)

1


Index

The reports and statements set out below comprise the annual financial statements presented to the members:

Index Page

Directors' Responsibilities and Approval 3

Directors' Report 4

Independent auditors report 5 - 6

Statement of Financial Position 7

Statement of Profit or Loss and Other Comprehensive Income 8

Statement of Changes in Equity 9

Statement of Cash Flows 10

Accounting Policies 11 - 13

Notes to the Annual Financial Statements 14 - 16

The following supplementary information does not form part of the annual financial statements and is unaudited:

Detailed Income Statement 17

2


Directors' Responsibilities and Approval

The directors are required by the Companies Act of South Africa, to maintain adequate accounting records and areresponsible for the content and integrity of the financial statements and related financial information included in thisreport. It is their responsibility to ensure that the financial statements fairly present the state of affairs of the company asat the end of the financial year and the results of its operations and cash flows for the period then ended, in conformitywith the International Financial Reporting Standard for Small and Medium-sized Entities. The external auditors are engagedto express an independent opinion on the financial statements.

The financial statements are prepared in accordance with the International Financial Reporting Standard for Small andMedium-sized Entities and are based upon appropriate accounting policies consistently applied and supported by reasonableand prudent judgements and estimates.

The directors acknowledge that they are ultimately responsible for the system of internal financial control established bythe company and place considerable importance on maintaining a strong control environment. To enable the directors tomeet these responsibilities, the board of directors sets standards for internal control aimed at reducing the risk of error orloss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly definedframework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk.These controls are monitored throughout the company and all employees are required to maintain the highest ethicalstandards in ensuring the company’s business is conducted in a manner that in all reasonable circumstances is abovereproach. The focus of risk management in the company is on identifying, assessing, managing and monitoring all knownforms of risk across the company. While operating risk cannot be fully eliminated, the company endeavours to minimise itby ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed withinpredetermined procedures and constraints.

The directors are of the opinion, based on the information and explanations given by management, that the system ofinternal control provides reasonable assurance that the financial records may be relied on for the preparation of thefinancial statements. However, any system of internal financial control can provide only reasonable, and not absolute,assurance against material misstatement or loss.

The directors have reviewed the company’s current situation and forecast for the year to 30 June 2020 and, in the light ofthis review and the current financial position, they are satisfied that the company has or has access to adequate resourcesto continue in operational existence for the foreseeable future.

The financial statements set out on pages 7 to 17, were approved by the board on the 12 November 2019 and were signedon their behalf by :

Darin David Samuels Vivian Appalsamy

3


Directors Report

The directors have pleasure in submitting their report on the financial statements of Cornubia Industrial and BusinessEstate Management Association NPC for the year ended 30 June 2019.

1. Nature of business

Cornubia Industrial and Business Estate Management Association NPC was incorporated in South Africa with interests inthe Non-profit industry. The company is a mixed-use development, comprising of residential, commercial andindustrial sites.

There have been no material changes to the nature of the company's business from the prior year.

2. Review of financial results and activities

The financial statements have been prepared in accordance with the International Financial Reporting Standard forSmall and Medium-sized Entities and the requirements of the Companies Act of South Africa. The accounting policieshave been applied consistently compared to the prior year.

Full details of the financial position, results of operations and cash flows of the company are set out in these annualfinancial statements.

3. Directors

The directors in office at the date of this report are as follows:

Directors ChangesVivian AppalsamyDarin David SamuelsGareth Tombleson Appointed 06 December 2018Bernard Selemo Sefehle Appointed 26 October 2018

4. Events after the reporting period

The directors are not aware of any material event which occurred after the reporting date and up to the date of thisreport.

5. Going concern

The directors believe that the company has adequate financial resources to continue in operation for theforeseeable future and accordingly the annual financial statements have been prepared on a going concern basis.The directors have satisfied themselves that the company is in a sound financial position and that it has access tosufficient borrowing facilities to meet its foreseeable cash requirements. The directors are not aware of anymaterial changes that may adversely impact the company. The directors are also not aware of any material non-compliance with statutory or regulatory requirements or of any pending changes to legislation which may affect thecompany.

6. Auditors

BDO South Africa Incorporated continued in office in compliance with section 90 of the Companies Act.

4

Independent Auditor's Report

To the members of Cornubia Industrial and Business Estate Management Association NPC

We have audited the financial statements of Cornubia Industrial and Business Estate Management Association NPC, as setout on pages 7 to 16, which comprise the statement of financial position as at 30 June 2019, and the statement of profit orloss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended,and the notes, comprising a summary of significant accounting policies and other explanatory information.

In our opinion, the financial statements present fairly, in all material respects, the financial position of Cornubia Indusrialand Business Estate Management NPC as at 30 June 2019, and its financial performance and cash flows for the year thenended in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities and therequirements of the Companies Act of South Africa.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under thosestandards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of ourreport. We are independent of the company in accordance with the Independent Regulatory Board for Auditors Code ofProfessional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performingaudits of financial statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with theIRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBACode is consistent with the 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 ouropinion.

Other Information

The directors are responsible for the other information. The other information comprises the Directors’ Report as requiredby the Companies Act of South Africa and the supplementary information set out on page 18. The other information doesnot include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does notcover the other information and we do not express an audit opinion or any form of assurance conclusion thereon. Inconnection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,consider whether the other information is materially inconsistent with the financial statements or our knowledge obtainedin the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude thatthere is a material misstatement of this other information, we are required to report that fact. We have nothing to reportin this regard.

Responsibilities of the Directors for the Financial Statements

The directors are responsible for the preparation and fair presentation of the financial statements in accordance with theInternational Financial Reporting Standard for Small and Medium-sized Entities and the requirements of the Companies Actof South Africa, and for such internal control as the directors determine is necessary to enable the preparation of financialstatements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as agoing concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accountingunless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to doso.

5

Independent Auditor's Report

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free frommaterial 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 audit conducted in accordance with ISAswill always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions ofusers taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professionaljudgement and maintain professional scepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, designand perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for oneresulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override ofinternal control.

- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriatein the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internalcontrol.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and relateddisclosures made by the directors.

- Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and based on the auditevidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt onthe company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required todraw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures areinadequate,to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’sreport. However, future events or conditions may cause the company to cease to continue as a going concern.

- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, andwhether the financial statements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit andsignificant audit findings, including any significant deficiencies in internal control that we identify during our audit.

BDO South Africa IncorporatedSally JuckesDirectorRegistered Auditor30 November 2018

Rydallviews Building5A Rydall Vale Office Park38 Douglas Saunders DriveLa Lucia Ridge4051

6


Statement of Financial Position as at 30 June 2019Figures in Rand Note(s) 2019 2018

Assets

Non-Current AssetsProperty, plant and equipment 2 1,053,736 25,237

Current AssetsTrade and other receivables 3 2,872,059 49,394Cash and cash equivalents 4 5,523,291 5,807,093

8,395,350 5,856,487

Total Assets 9,449,086 5,881,724

Equity and Liabilities

EquityReserves 5 3,593,327 1,262,805Retained income 2,420,611 2,420,611

6,013,938 3,683,416

Liabilities

Current LiabilitiesTrade and other payables 7 354,450 248,308Other financial liabilities 6 2,800,000 1,950,000Current tax payable 280,698 -

3,435,148 2,198,308

Total Equity and Liabilities 9,449,086 5,881,724

7


Statement of Profit or Loss and Other Comprehensive IncomeFigures in Rand Note(s) 2019 2018

Revenue 8 6,253,261 3,855,078Other income 9 60,000 46,000Operating expenses (4,128,990) (3,288,765)

Operating surplus 10 2,184,271 612,313Investment revenue 11 426,958 337,334Finance costs 12 (9) (3,049)

Surplus before taxation 2,611,220 946,598Taxation 13 (280,698) (376,707)

Surplus for the year 2,330,522 569,891

Other comprehensive income:Transfer to maintenance reserve 5 (2,330,522) (233,529)

Other comprehensive loss for the year net of taxation (2,330,522) (233,529)

Total comprehensive income for the year - 336,362

8


Statement of Changes in Equity

Figures in RandMaintenance

reserveRetainedincome

Total equity

Balance at 01 July 2017 1,029,276 2,084,249 3,113,525

Surplus for the year - 569,891 569,891Transfer to maintenance reserve @ 6% 233,529 (233,529) -

Total comprehensive income for the year 233,529 336,362 569,891

Balance at 01 July 2018 1,262,805 2,420,611 3,683,416

Surplus for the year - 2,330,522 2,330,522Transfer to maintenance reserve 2,330,522 (2,330,522) -

Total comprehensive income for the year 2,330,522 - 2,330,522

Balance at 30 June 2019 3,593,327 2,420,611 6,013,938

Note 5

9


Statement of Cash FlowsFigures in Rand Note(s) 2019 2018

Cash flows from operating activities

Cash (used in) generated from operations 14 (514,308) 287,982Interest income 426,958 337,334Finance costs (9) (3,049)Tax paid 15 - (376,707)

Net cash from operating activities (87,359) 245,560

Cash flows from investing activities

Purchase of property, plant and equipment 2 (1,046,443) -

Cash flows from financing activities

Proceeds from other financial liabilities 850,000 650,000

Net cash from financing activities 850,000 650,000

Total cash movement for the year (283,802) 895,560Cash at the beginning of the year 5,807,093 4,911,533

Total cash at end of the year 4 5,523,291 5,807,093

10


Accounting Policies

1. Basis of preparation and summary of significant accounting policies

The annual financial statements have been prepared in accordance with the International Financial ReportingStandard for Small and Medium-sized Entities, and the Companies Act of South Africa. The annual financial statementshave been prepared on the historical cost basis, and incorporate the principal accounting policies set out below. Theyare presented in South African Rands.

These accounting policies are consistent with the previous period.

1.1 Significant judgements and sources of estimation uncertainty

In preparing the annual financial statements, management is required to make judgements, estimates andassumptions that affect the amounts represented in the annual financial statements and related disclosures. Theestimates and associated assumptions are based on historical experience and other factors that are considered to berelevant. Actual results in the future could differ from these estimates which may be material to the annual financialstatements.

Critical judgements in applying accounting policies

Management did not make any critical judgements in the application of accounting policies, apart from those involvingestimations, which would significantly affect the financial statements.

Key sources of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at theend of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts ofassets and liabilities within the next financial year.

Impairment testing

The company reviews and tests the carrying value of assets when events or changes in circumstances suggest that thecarrying amount may not be recoverable. When such indicators exist, management determine the recoverable amountby performing value in use and fair value calculations. These calculations require the use of estimates andassumptions. When it is not possible to determine the recoverable amount for an individual asset, managementassesses the recoverable amount for the cash generating unit to which the asset belongs.

Expected future cash flows used to determine the value in use of goodwill and tangible assets are inherently uncertainand could materially change over time. They are significantly affected by a number of factors including supply anddemand, together with economic factors such as exchange rates inflation interest.

Taxation

Cornubia Industrial Business Estate is exempt from income tax. Levy income is exempt in terms of section10(1)(e)(i)(cc) of the Act.

Useful lives and residual values of assets

The company depreciates its tangible assets over their estimated useful lives taking into account residual values,where appropriate. The appropriateness of its assets estimated useful lives, residual values and their depreciationmethods are re- assessed on an annual basis. The actual lives of these assets and their respective residual values mayvary depending on a variety of factors. In re-assessing asset lives, factors such as technological innovation, product lifecycles and maintenance programmes are taken into account.

1.2 Property, plant and equipment

Property, plant and equipment are tangible items that:� are held for use in the production or supply of goods or services, for rental to others or for administrative

purposes; and� are expected to be used during more than one period.

Property, plant and equipment is carried at cost less accumulated depreciation and accumulated impairment losses.

11


Accounting Policies

1.2 Property, plant and equipment (continued)

Cost includes all costs incurred to bring the asset to the location and condition necessary for it to be capable ofoperating in the manner intended by management.

Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costsincurred subsequently to add to or replace part of it. If a replacement cost is recognised in the carrying amount of anitem of property, plant and equipment, the carrying amount of the replaced part is derecognised.

Depreciation is provided using the straight-line method to write down the cost, less estimated residual value over theuseful life of the property, plant and equipment, which is as follows:

Item Average useful lifeFurniture and fixtures 6 yearsSecurity equipment 5 yearsOffice equipment 5 years

The residual value, depreciation method and useful life of each asset are reviewed at each annual reporting period ifthere are indicators present that there has been a significant change from the previous estimate.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognisedin profit or loss in the period.

1.3 Financial instruments

Initial measurement

Financial instruments are initially measured at the transaction price. This includes transaction costs, except forfinancial instruments which are measured at fair value through profit or loss.

Trade and other receivables

Trade receivables are recognised initially at the transaction price. They are subsequently measured at amortised costusing the effective interest method, less provision for impairment. A provision for impairment of trade receivables isestablished when there is objective evidence that the company will not be able to collect all amounts due accordingto the original terms of the receivables.

Cash and cash equivalents

Cash and cash equivalents includes cash on hand, demand deposits and other short-term highly liquid investments withoriginal maturities of three months or less. Bank overdrafts are shown within borrowings in current liabilities on thestatement of financial position.

Trade and other payables

Trade payables are recognised initially at the transaction price and subsequently measured at amortised cost using theeffective interest method.

Other financial liabilitiesOther financial liabilities are initially measured at fair value and are subsequently measured at amortised cost, usingthe effective interest rate method. These liabilities are derecognised when the obligation specified in the contract isdischarged, cancelled or expired.

1.4 Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership tothe lessee. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewardsincidental to ownership.

12


Accounting Policies

1.4 Leases (continued)

Operating leases – lessee

Operating lease payments are recognised as an expense on a straight-line basis over the lease term except in caseswhere another systematic basis is representative of the time pattern of the benefit from the leased asset, even if thereceipt of payments is not on that basis, or where the payments are structured to increase in line with expectedgeneral inflation.

1.5 Revenue

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associatedwith the transaction is recognised by reference to the stage of completion of the transaction at the end of thereporting period. The outcome of a transaction can be estimated reliably when all the following conditions aresatisfied:� the amount of revenue can be measured reliably;� it is probable that the economic benefits associated with the transaction will flow to the company;� the stage of completion of the transaction at the end of the reporting period can be measured reliably; and� the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue shallbe recognised only to the extent of the expenses recognised that are recoverable.

Revenue is measured at the fair value of the consideration received or receivable and represents the amountsreceivable for goods and services provided in the normal course of business, net of trade discounts and volumerebates, and value added tax.

Interest is recognised, in profit or loss, using the effective interest rate method.

1.6 Finance costs

Finance costs are recognised as an expense in the period in which they are incurred.

1.7 Maintenance Reserves

In the prior year, there was an established policy that 6% of the levies are to be transferred to a maintenance reserve.The objective of this is to build a reserve to cater for any unforseen costs that would be required by CornubiaIndustrial and Business Estate Management Association to maintain the estate. In the current year, the board amendedthis policy by a resolution to transfer the entire surplus for the year to the maintenance reserve.

1.8 Related Parties

A party is related to the company if any of the following are met:

i) Directly,or indirectly through one or more intermediaries,the party controls, is controlled by or is under commoncontrol with the company;ii) The party is a member of the key management personnel of the entity or its parentiii) The party is a close member of the member of the family of an individual referred to in (i)or (ii); A Close member of the family individual includes - The individuals domestic partner and children; - Children of the individuals domestic partner; and - Dependents of the individual or the individuals domestic partneriv) The party is a post-employment benefit plan for the benefit of the employees of the company

13


Notes to the Annual Financial StatementsFigures in Rand 2019 2018

2. Property, plant and equipment

2019 2018

Cost Accumulateddepreciation

andimpairments

Carrying value Cost Accumulateddepreciation

andimpairments

Carrying value

Furniture and fixtures 70,798 (63,505) 7,293 70,798 (51,705) 19,093Office equipment 41,440 (41,440) - 41,440 (35,296) 6,144Security equipment 1,046,443 - 1,046,443 - - -

Total 1,158,681 (104,945) 1,053,736 112,238 (87,001) 25,237

Reconciliation of property, plant and equipment - 2019

Openingbalance

Additions Depreciation Total

Furniture and fixtures 19,093 - (11,800) 7,293Office equipment 6,144 - (6,144) -Security equipment - 1,046,443 - 1,046,443

25,237 1,046,443 (17,944) 1,053,736

Reconciliation of property, plant and equipment - 2018

Openingbalance

Depreciation Total

Furniture and fixtures 30,891 (11,798) 19,093Office equipment 14,433 (8,289) 6,144

45,324 (20,087) 25,237

A register containing the information required by Regulation 25(3) of the Companies Regulations, 2011 is available forinspection at the registered office of the company.

3. Trade and other receivables

Trade receivables 2,635,212 45,985Deposits 38,448 2,744Value Added Tax 198,399 665

2,872,059 49,394

4. Cash and cash equivalents

Cash and cash equivalents consist of:

Bank balances 5,523,291 5,807,093

Bank accounts for Cornubia Industrial and Business Estate Management Association NPC are held in the name of ErisProperty Group Proprietary Limited.

5. Maintenance reserve

Opening balance brought forward from prior period 1,262,805 1,029,276Transfers during the year 2,330,522 233,529

3,593,327 1,262,805

14



6. Other financial liabilities

Development depositsThe development deposit is an amount that is payable by the owner/developeronce they commence with construction of their site. This amount is refundableonce the construction is completed and there have no damages to the estate.

2,800,000 1,950,000

Current liabilitiesAt amortised cost 2,800,000 1,950,000

7. Trade and other payables

Debtors with credit balances 147,381 88,203Accrued Expenses - 50,936Provision for Audit Fees 27,744 20,544Design fees Accrual 179,325 88,625

354,450 248,308

8. Revenue

Levy income 6,253,261 3,855,078

9. Other income

Sundry income 60,000 46,000Design fee income 216,000 54,000Design fee expenses (125,300) (181,800)Carry forward/utilisation of design fee income (90,700) 127,800

60,000 46,000

10. Operating surplus

Operating surplus for the year is stated after accounting for the following:

Operating lease chargesPremises� Contractual amounts 118,304 35,454

Depreciation on property, plant and equipment 17,944 20,088

11. Investment revenue

Interest revenueBank 426,958 337,334

12. Finance costs

Interest paid 9 3,049

15



13. Taxation

Major components of the tax expense

CurrentLocal normal tax - current period 321,505 -Local normal tax - prior year (over)/under provision (40,807) 376,707

280,698 376,707

The company is a not for profit organisation and the receipts and accruals for levies income are exempt from incometax in terms of section 10(1)(e)(i)(cc) of the Income Tax Act. Provision has been made for the 2019 tax on sundryincome and investment income over and above the exempt portion. Provision has also been made going back toprevious years to provide for tax for this income that fall outside of the exemption.

During the 2017 financial year, the company was granted an exemption from income tax for levies income. Theexemption was granted effectively from the date of application, and not the date that operations commenced. SARShas raised a taxation assessment for the financial periods 2015 and 2016. There was an assessment of R376,707 forfinancial periods 2015 and 2016, created in the prior year.

14. Cash (used in) generated from operations

Profit before taxation 2,611,220 946,598Adjustments for:Depreciation and amortisation 17,944 20,088Interest received - investment (426,958) (337,334)Finance costs 9 3,049Changes in working capital:Trade and other receivables (2,822,664) 30,986Trade and other payables 106,141 (375,405)

(514,308) 287,982

15. Tax paid

Current tax for the year recognised in profit or loss (321,505) (376,707)Over-provision of tax in prior year 40,807 -Balance at end of the year 280,698 -

- (376,707)

16. Directors' remuneration

No emoluments were paid to the directors or any individuals holding a prescribed office during the year.

17. Going concern

The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern.This basis presumes that funds will be available to finance future operations and that the realisation of assets andsettlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

18. Events after the reporting period

The Directors are not aware of any material matter or circumstance arising since the end of the financial year, nototherwise dealt with in this report of the financial statements, which significantly affect the financial position of thecompany results of its operations to the date of this report.

16


Detailed Income StatementFigures in Rand Note(s) 2019 2018

RevenueLevy income 6,253,261 3,855,078

Other incomeSundry Income 60,000 46,000Design fee income 216,000 54,000Design fee expenses (125,300) (181,800)Carry forward / (utilisation of design fee income) (90,700) 127,800Interest received 11 426,958 337,334

486,958 383,334

Operating expensesAdministration and management fees (1,259,377) (1,192,556)Auditors remuneration (33,369) (21,923)Bank charges (3,692) (3,150)Cleaning (624,580) (548,887)Consumables - (7,196)Contract - Landscaping (72,655) (106,136)Depreciation, amortisation and impairments (17,944) (20,088)Entertainment (646) (997)General Office Expense (6,657) (2,296)IT expenses (36,086) (103,131)Insurance (24,503) (27,111)Lease rentals on operating lease (118,304) (35,454)Legal expenses - (12,500)Levies (12,411) (24,788)Municipal expenses (17,205) (2,000)PR Services (89,948) (66,024)Printing and stationery (1,649) (9,424)Projects (725,692) (70,463)Repairs and maintenance (6,566) -Secretarial fees (69,575) (50,218)Security (930,520) (937,007)Telephone and fax (39,757) (40,912)Waste & Compactor & Equipment hire (37,854) (6,504)

(4,128,990) (3,288,765)

Operating profit 10 2,611,229 949,647Finance costs 12 (9) (3,049)

Profit before taxation 2,611,220 946,598Taxation 13 (280,698) (376,707)

Surplus for the year 2,330,522 569,891

17The supplementary information presented does not form part of the annual financial statements and is unaudited

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CORNUBIA INDUSTRIAL AND BUSINESS ESTATE MANAGEMENT ASSOCIATION

NON-PROFIT COMPANY (Registration No: 2013/020224/08)

______________________________________________________________________________________

Directors Roles and Responsibilities as Prescribed by the Companies Act, Common Law and the King IV Report and Code of Governance

1. Purpose

The purpose of this guidance note is to clearly illustrate the different directors’ duties taken from the common law, the Companies Act 71 of 2008 (“the Act”) and the King IV Report and Code on Governance (“King IV”). The fact that the Company is a Non-Profit Company (NPC) has no impact on directors duties in relation to the Act and common law, however the King IV has identified a number nuances for NPCs and therefore has provided a NGO/NPC Supplement to the King IV Code. By accepting their appointment to the position, directors of a company are in a fiduciary relationship with that company and therefore should always act in good faith towards the Company and in the best interests of the company. This fiduciary relationship forms the basis and the foundation from which all director duties emanate.

2. Legislative Framework a. Common Law: Prior to the introduction of the Companies Act, 71 of 2008 (“the Act”), the duties of Directors were governed by the South African Common Law. Many of the Common Law directors’ duties have been codified into legislation, primarily through the Act. However, it must always be kept in mind that in the event that the common law duty has not been codified, the duty still exists and is upheld by the courts, which is confirmed in the Act - common law and the Act are both relevant and applicable.

Fiduciary duties: These are good faith duties. They are derived directly from the fact that directors of the Company need to act in good faith towards the Company. Fiduciary duties are non-negotiable and cannot be waived by either sides. Fiduciary duties include the below stated:

1. A director should act in the best interests of the company.

This common law duty has been codified in Section 76(3)(b) of the Act.

2. A director should not act beyond or exceed the limitations of powers or capacity which means a director should always act within the ambit of their authority.

This common law duty has no equivalent codified legislation however on interpreting Section 20(5) and (6) of the Act, it may support this common law duty.

3. A director should act within their powers and for a proper purpose. This means that they should act in the best interests of the

This common law duty has no equivalent codified legislation however on interpreting Section 76(3)(a) of the

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company and in a manner that benefits the company as a whole and bona fides towards the company interests.

Act it may support this common law duty.

4. Should exercise unfettered and independent discretion and judgement. This requires that a director should exercise independent and unbiased judgement when reaching and making decisions for the company.

This common law duty has no equivalent codified legislation however on interpreting Section 76(4)(a) of the Act, it may support this common law duty.

5. Should not be in a position or should avoid a position of conflicts of interests. Their personal interests should not conflict with those of the company and this also includes the duty to disclose any potential conflicts of interests.

This common law duty has been codified in Section 76(2) of the Act.

6. Should not make any secret profits or possible incidental profits at the expense of the company

This common law duty has no equivalent codified legislation however on interpreting Section 76(2) further, it may support this common law duty.

7. Should disclose any personal interests in any contracts with the company.

This common law duty has been codified in Section 75 of the Act, particularly subsections 4, 5 and 6.

8. Should not misappropriate corporate opportunities due to the company as well as improperly competing with the company

Not directly codified however on interpreting Section 76(2) read together with Section76(3), it may support this common law duty.

Duty of Skill, Care and Diligence: 1. This duty requires a director to display and

demonstrate the same care as a reasonable person in their personal affairs as well as degree of skill which one would reasonably expect from a reasonable person with his/her knowledge and experience.

This common law duty has been codified in Section 76(3)(c)(i) and (ii) of the Act.

b. Companies Act Director duties, primarily taken from the common law, have been expanded upon or created anew and have been formalised into law through the Act. The codified director duties as found within the Act are set out below.

Section 20(5) of the Act One or more directors of a company may apply to the High Court for an appropriate order to restrain the company or the directors from doing anything inconsistent with any limitation, restriction or qualification contemplated in subsection (2), but any such proceedings are without prejudice to any rights to damages of a third party who: a) obtained those rights in good faith; and b) did not have actual knowledge of the limit, restriction or qualification.

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Section 20(6) of the Act Each member of a company has a claim for damages against any person who intentionally, fraudulently or due to gross negligence causes the company to do anything inconsistent with: a) this Act; or b) a limitation, restriction or qualification contemplated in this section, unless that action has been ratified by the shareholders in terms of subsection (2).

Section 75(4) of the Act At any time, a director may disclose any personal financial interest in advance, by delivering to the board, as contemplated in subsection (3), a notice in writing setting out the nature and extent of that interest, to be used generally for the purposes of this section until changed or withdrawn by further written notice from that director

Section 75(5) of the Act If a director of a company, other than a company contemplated in subsection (2)(b) or (3), has a personal financial interest in respect of a matter to be considered at a meeting of the board, or knows that a related person has a personal financial interest in the matter, the director:

a. Must disclose the interest and its general nature before the matter is considered at the meeting;

b. must disclose to the meeting any material information relating to the matter, and known to the director;

c. may disclose any observations or pertinent insights relating to the matter if requested to do so by the other directors;

d. if present at the meeting, must leave the meeting immediately after making any disclosure contemplated in paragraph (b) or (c);

e. must not take part in the consideration of the matter, except to the extent contemplated in paragraphs (b) and (c);

f. while absent from the meeting in terms of this subsection (i) is to be regarded as being present at the meeting for the purpose of determining whether sufficient directors are present to constitute the meeting; and (ii) is not to be regarded as being present at the meeting for the purpose of determining whether a resolution has sufficient support to be adopted; and

g. must not execute any document on behalf of the company in relation to the matter unless specifically requested or directed to do so by the board.

Section 75(6) of the Act If a director of a company acquires a personal financial interest in an agreement or other matter in which the company has a material interest, or knows that a related person has acquired a personal financial interest in the matter, after the agreement or other matter has been approved by the company, the director must promptly disclose to the board as contemplated in subsection (3), the nature and extent of that interest, and the material circumstances relating to the director or related person’s acquisition of that interest

Section 76(2) of the Act A director of a company must: a. not use the position of director, or any information obtained while acting

in the capacity of a director • to gain an advantage for the director, or for another person other

than the company or a wholly-owned subsidiary of the company; or

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• to knowingly cause harm to the company or a subsidiary of the company; and

b. communicate to the board at the earliest practicable opportunity any information that comes to the director’s attention, unless the director:

• reasonably believes that the information is either immaterial to the company; or generally available to the public, or known to the other directors; or

• is bound not to disclose that information by a legal or ethical obligation of confidentiality.

Section 76(3)(a) and (b) of the Act

Subject to subsections (4) and (5), a director of a company, when acting in that capacity, must exercise the powers and perform the functions of director:

a. in good faith and for a proper purpose b. in the best interests of the company.

Section 76 (3)(c)(i) and (ii) of the Act

Subject to subsections (4) and (5), a director of a company, when acting in that capacity, must exercise the powers and perform the functions of director with the degree of care, skill and diligence that may reasonably be expected of a person:

a. carrying out the same functions in relation to the company as those carried out by that director; and

b. having the general knowledge, skill and experience of that director.

Section 76(4)(a) of the Act

In respect of any particular matter arising in the exercise of the powers or the performance of the functions of director, a particular director of a company:

a. will have satisfied the obligations of subsection (3)(b) and (c) if: i. the director has taken reasonably diligent steps to become

informed about the matter; ii. either:

• the director had no material personal financial interest in the subject matter of the decision, and had no reasonable basis to know that any related person had a personal financial interest in the matter; or

• the director complied with the requirements of section 75 with respect to any interest contemplated above; and

iii. the director made a decision, or supported the decision of a committee or the board, with regard to that matter, and the director had a rational basis for believing, and did believe, that the decision was in the best interests of the company.

c. King IV Code King IV Report Non-Profit Companies Supplement provides directors’ duties in alignment with the common law and the Act, in that it requires:

Principle 1.1 The board of directors should lead ethically and effectively.

Principle 1.2 The board of directors should govern the ethics of the company in a way that supports the establishment of an ethical culture.

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Principle 1.3 The board of directors should ensure that the company is and is seen to be a responsible corporate citizen.

Principle 2.1 The board of directors should appreciate that the company’s core purpose, its risks and opportunities, strategy, business model, performance and sustainable development are all inseparable elements of the value creation process.

Principle 2.2 The board of directors should ensure that reports issued by the company enable stakeholders to make informed assessments of the company’s performance and its short, medium and long-term prospects.

Principle 3.1 The board of directors should serve as the focal point and custodian of corporate governance in the company.

Principle 3.2 The board of directors should comprise the appropriate balance of knowledge, skills, experience, diversity and independence for it to discharge its governance role and responsibilities objectively and effectively.

Principle 3.3 The board of directors 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.

Principle 3.4 The board of directors 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.

Principle 3.5 The board of directors should ensure that the appointment of, and delegation to, management contribute to role clarity and the effective exercise of authority and responsibilities.

Principle 4.1 The board of directors should govern risk in a way that supports the company in setting and achieving its strategic objectives.

Principle 4.2 The board of directors should govern technology and information in a way that supports the company setting and achieving its strategic objectives.

Principle 4.3 The board of directors should govern compliance with applicable laws and adopted, non-binding rules, codes and standards in a way that supports the company being ethical and a good corporate citizen.

Principle 4.4 The board of directors should ensure that the company remunerates fairly, responsibly and transparently so as to promote the achievement of strategic objectives and positive outcomes in the short, medium and long term.

Principle 4.5 The board of directors 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 company’s external reports.

Principle 5.1 In the execution of its governance role and responsibilities, the board of directors should adopt a stakeholder-inclusive approach that balances the needs, interests and expectations of material stakeholders in the best interests of the company over time.

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3. Summary:

DIRECTORS’ DUTY COMMON LAW COMPANIES ACT KING IV Act in the best interests of the Company X X X

Not exceed powers or capacity X X # X **

Exercise powers for proper purpose X X X **

Exercise independent and unfettered discretion X X # X **

Avoid conflicts of interest between their personal interests and those of the company

X X X

Not make any secret or incidental profits X X # X **

Disclose personal interests X X X **

Not misappropriate corporate opportunities X X # X **

Exercise care, skill and diligence X X X

# - Subject to interpretation of sections within the Companies Act ** - Subject to interpretation of what fiduciary duty entails as a collective of various other duties

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