JCI LIMITED. a notice of general meeting; and a form of proxy for use by certificated and own name dematerialised shareholders only.

Transcription

1 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to what action to take, please consult your broker, Central Securities Depository Participant ( CSDP ), banker, accountant, attorney or other professional adviser immediately. Action required If you have disposed of your ordinary shares in JCI Limited, please forward this circular to the purchaser of such shares or the CSDP, broker or other agent through whom the sale was effected. Shareholders are referred to page 2 of this circular, which sets out the action required. The definitions and interpretation commencing on page 4 apply to this cover page. JCI LIMITED (Incorporated in the Republic of South Africa) (Registration number 1894/000854/06) JSE share code: JCD (suspended) ISIN: ZAE ZAE CIRCULAR TO JCI SHAREHOLDERS regarding: the Settlement Agreement between JCI, R&E and JCIIF; including: an increase in the authorised share capital of JCI; the transfer of Gold Fields shares to R&E; the issue of New JCI shares to R&E; and, as a separate matter, regarding: the excussion of FSD shares by R&E; and incorporating: a notice of general meeting; and a form of proxy for use by certificated and own name dematerialised shareholders only. Sponsor and corporate adviser Legal advisers CAPITAL Auditors and reporting accountants Independent expert Date of issue: 13 May 2010 This circular is available in English only and copies hereof may be obtained from Sasfin Capital s offices and the transfer secretaries at the addresses reflected on the Corporate Information and advisers on the inside front cover of this circular from T hursday, 13 May 2010 to Friday, 4 June 2010.

2 CORPORATE INFORMATION AND ADVISERS Company secretary and registered office D O Jones (BA, LLB) 10 Benmore Road Morningside Sandton, 2196 (PO Box , Benmore, 2010) Telephone: Facsimile: Website: Directors of JCI P R S Thomas (Independent non-executive chairman) P H Gray (CEO) A C Nissen (Independent non-executive director) L A Maxwell (Financial director) H W Cochrane (Independent non-executive director) Sponsor and corporate adviser Sasfin Capital A division of Sasfin Bank Limited (Registration number 1951/002280/06) 29 Scott Street Waverley, 2090 (PO Box 95104, Grant Park, 2051) Auditors and reporting accountants KPMG Inc Chartered Accounts (SA) Registered Accountants and Auditors (Registration number 1999/021543/21) 85 Empire Road Parktown, 2193 (Private Bag 9, Parkview, 2122) Attorneys Eversheds (Registration number 1992/006150/21) 22 Fredman Drive Sandton, 2196 (PO Box 78333, Sandton City, 2146) United Kingdom registrars Capita Registrars The Registry 34 Beckenham Road Beckenham Kent BR3 4TU United Kingdom United Kingdom secretaries JCI (London) Limited 6 St James s Place London SW1A 1NP United Kingdom Independent expert Moore Stephens (Jhb) Corporate Finance (Proprietary) Limited (Registration number 2007/023666/07) 7 West Street, Houghton, 2198 (PO Box 1574, Houghton, 2041) Telephone: Facsimile: Transfer secretaries Computershare Investor Services (Proprietary) Limited (Registration number 2004/003647/07) Ground Floor 70 Marshall Street Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107)

3 TABLE OF CONTENTS The definitions and interpretation commencing on page 4 of this circular apply, with the necessary changes, to the following table of contents: Page Corporate information and advisers Inside front cover Action required by shareholders 2 Important dates and times 3 Definitions and interpretation 4 Circular to JCI shareholders 8 1. Introduction and the purpose of this circular 8 2. Background 8 3. The purpose of the Settlement Agreement Salient terms of the Settlement Agreement Categorisation of the transactions and listing of shares Financial information Information relating to JCI The excussion of FSD shares by R&E Expenses Consents Opinions, recommendations and irrevocable undertakings Directors responsibility statement General meeting and action required Documents available for inspection 24 Annexure 1 JCI Group NAV statement at 31 December Annexure 1A Valuation of Boschendal, FSD, R&E and the Investment Properties 39 Annexure 1B Summary CPRs on the Du Preez Leger Project and the Jeannette and Weltevreden Projects 44 Annexure 1C CPR on the Laingsburg Uranium prospect 49 Annexure 1D Pro forma Group NAV statement incorporating the independent valuations 57 Annexure 1E Reconciliation between the 31 March 2008 JCI Group NAV Statement and the 31 December 2009 JCI Group NAV Statement 58 Annexure 2 Overview of the R&E Claims 62 Annexure 3 Curricula vitae of the Mediators 79 Annexure 4 Opinion letter of the Mediators 81 Annexure 4 A Statement by the Mediators dated 28 February Annexure 5 Independent reporting accountant s limited assurance report on the pro forma JCI Group NAV statement 87 Annexure 6 Pro forma JCI Group NAV statement 89 Annexure 7 JCI litigation statement 91 Annexure 8 Fair and reasonable opinion on the FSD excussion 96 Notice of general meeting 101 Form of proxy Attached 1

4 ACTION REQUIRED BY JCI SHAREHOLDERS The definitions and interpretation commencing on page 4 of this circular, apply with the necessary changes, to the following action required by JCI shareholders. Please take careful note of the following provisions regarding the action required by JCI shareholders: 1. If you have disposed of your ordinary shares in JCI, please forward this circular to the purchaser of such shares or the CSDP, broker or agent through whom you disposed of such shares. The general meeting convened in terms of this circular will be held at 14:00 on Fri day, 4 June 2010, at the Protea Hotel, Balalaika Sandton, 20 Maude Street, Sandown, Sandton. 2. THE GENERAL MEETING Certificated shareholders and own name dematerialised shareholders You are entitled to attend, or be represented by proxy, at the general meeting. If you are the registered holder of certificated JCI shares or you hold dematerialised JCI shares in your own name and if you are unable to attend the general meeting of JCI shareholders convened in terms of this circular and wish to be represented at the general meeting, you must complete and return the attached form of proxy in accordance with the instructions therein so as to be received by the transfer secretaries, Computershare Investor Services (Proprietary) Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) or Capita Registrars, PXS, 34 Beckenham Road, Beckenham BR3 4TU, United Kingdom, by no later than 11:00 on Wednesday, 2 June Dematerialised shareholders, other than with own name registration If you do not hold your dematerialised JCI shares in your own name, you must provide your CSDP or broker with your voting instructions in terms of the custody agreement entered into with your CSDP or broker. Alternatively, if you wish to attend the general meeting in person, you must request your CSDP or broker to provide you with a Letter of Representation to authorise you to attend and vote your shares in terms of the custody agreement with your CSDP or broker. 2

5 IMPORTANT DATES AND TIMES The definitions and interpretation commencing on page 4 of this circular apply, with the necessary changes, to the information on important dates and times. Circular posted on Forms of proxy to be lodged by 14:00 on General meeting of JCI to be held at 14:00 on Results of general meeting announced on SENS Results of general meeting announced in the press Special resolution registered by Announce finalisation dates on SENS Announce finalisation dates in the press Expected date of listing of New JCI shares (to be suspended immediately) 2010 T hursday, 13 May Wednesday, 2 June Friday, 4 June Friday, 4 June Monday, 7 June Thursday, 17 June Friday, 18 June Monday, 21 June Monday, 5 Ju ly Note: 1. The above dates and times are subject to amendment. Any such amendment will be published on SENS and in the press. 3

6 DEFINITIONS AND INTERPRETATION In this circular, and the annexures and attachments hereto, unless otherwise stated or the context otherwise clearly indicates, the words in the first column shall have the meaning stated opposite them in the second column. Words in the singular shall include the plural and vice versa, words signifying any one gender shall include the other genders and references to natural persons shall include juristic persons and associations of persons: Act or Companies Act Allan Gray the board or the directors the Companies Act, 1973, as amended; Allan Gray Limited (registration number 2005/002576/06), a public company incorporated in South Africa; the board of directors of JCI, whose names are reflected in the inside front cover of this circular; Boschendal Boschendal (Proprietary) Limited (registration number 2002/023534/07), a private company incorporated in South Africa; business day certificated shares certificated shareholders CPR CSDP dematerialised dematerialised shares dematerialised shareholders Effective Date FSD FSD excussion general meeting a day which is not a Saturday, Sunday or official public holiday in South Africa; JCI shares held in the form of certificates or other documents of title and which have not yet been surrendered for dematerialisation in terms of Strate; JCI shareholders holding certificated shares; a competent person s report prepared in accordance with the SAMREC Code; a Central Securities Depository Participant registered in terms of the Securities Services Act, 2004, and as defined in section 91A of the Act; the process whereby paper share certificates or other documents of title are replaced with electronic records of ownership of shares or securities as contemplated in section 91A of the Act under the Strate system with a CSDP or broker; JCI shares, which have been dematerialised and incorporated into Strate and which are no longer evidenced by share certificates or other physical documents of title; JCI shareholders holding dematerialised shares; the date on which the last of the Gold Fields shares or the New JCI shares are registered in R&E s CSDP account, being a date not more than 16 business days following the fulfilment of the last of the Suspensive Conditions; Free State Development and Investment Corporation Limited (registration number 1944/016931/06), a public company incorporated in South Africa, jointly held by JCI and R&E; the excussion by R&E of FSD shares held by JCI in part satisfaction of the R&E loan, as more fully described in paragraph 8 of this circular; the general meeting of ordinary shareholders convened in terms of the notice accompanying this circular, to be held at 14:00 on Friday, 4 June 20 10, or any adjournment thereof; 4

7 GFO Gold Fields Gold Fields shares Gold Fields Operations Limited (formerly Western Areas Limited) (registration number 1959/003209/06), a public company incorporated in South Africa and a wholly-owned subsidiary of Gold Fields; Gold Fields Limited (registration number 1968/004880/06), a public company incorporated in South Africa, the shares of which are listed on the JSE; shares in the capital of Gold Fields held by JCIIF; Hawkhurst Hawkhurst Investments Limited (registration number ), a company registered and incorporated in accordance with the laws of the British Virgin Islands which is a shareholder in JCI as reflected in paragraph 7.6 of this circular; IFRS Investec Investec Loan Agreement Investec Loan Facility Investec Raising Fee Investment Properties Jaganda JCI or the company JCI Claims JCI Gold JCI Group JCI Group NAV statement JCIIF JCI shareholders or shareholders International Financial Reporting Standards; Investec Bank Limited (registration number 1969/004763/06), a public company incorporated in accordance with the laws of South Africa, the shares of which are listed on the JSE; the agreement dated August 2005 salient features of which are summarised in paragraph 2 of this circular; the loan facility granted by Investec to JCI in terms of the Investec Loan Agreement; the raising fee payable by JCI to Investec in terms of the Investec Loan Agreement; the properties referred to in Note 9 of the JCI Group NAV statement and valued in Annexure 1A; Xelexwa Investment Holdings (Proprietary) Limited, formerly known as Jaganda (Proprietary) Limited (registration number 2004/000559/07), a private company incorporated in South Africa; JCI Limited (registration number 1894/000854/06), a public company incorporated in accordance with the laws of South Africa, the shares of which are listed on the JSE and trading in which is suspended; all and any claims of whatsoever nature from whatsoever cause arising which JCI or a subsidiary of JCI enjoy against R&E or a subsidiary of R&E which arose on or before the Signature Date, or in circumstances which arise after the Signature Date in respect of transactions, dealings, conduct and/or acts or omissions which arose prior to the Signature Date; JCI Gold Limited (registration number 1998/005215/06), a public company, the shares of which are wholly owned by the JCI Group; JCI and its subsidiaries; the JCI Group NAV statement at 31 December 2009, set out in Annexure 1; JCI Investment Finance (Proprietary) Limited (registration number 2005/021440/07), a company registered and incorporated in accordance with the laws of South Africa; all registered holders of JCI shares; 5

8 JCI shares or ordinary shares or shares JSE KPMG the ordinary shares in the capital of the company with a par value of 1 cent each, which are listed on the JSE; JSE Limited, a company duly registered and incorporated with limited liability under the company laws of South Africa under registration number 2007/022939/06, licensed as an exchange under the Securities Services Act, 2004; KPMG Incorporated (registration number 1999/021543/21), a company incorporated in South Africa; KPMG Services KPMG Services (Proprietary Limited (registration number 199/012876/07), a private company incorporated in South Africa and appointed on 27 October 2005 by JCI to conduct a forensic investigation into JCI; Last practicable date Letseng Guernsey Letseng Application Letseng Indemnity Costs Litigation Disputes 30 April 2010, being the last practicable date prior to finalisation of this circular; Letseng Diamonds Limited (registration number 31750), a company registered and incorporated in accordance with the laws of Guernsey which is a shareholder in JCI as reflected in paragraph 7.6 of this circular; the application brought by Letseng Guernsey in the South Gauteng High Court (Johannesburg), further described in paragraph 2 of this circular; the amount of R to be paid by JCI to Letseng Guernsey as provided for in the Litigation Settlement Agreement; the designated actions and other claims referred to in the Litigation Settlement Agreement, excluding: the JCI Claims and the R&E Claims; and claims by JCI and R&E against persons who are not parties to the Litigation Settlement Agreement which arose before 22 January 2010; Litigation Settlement Agreement Loan Settlement Fee Merger circular Mediators Moore Stephens Corporate Finance New JCI shares own name dematerialised shareholders the agreement entered into between JCI, Investec, Letseng Guernsey and certain other parties, dated 22 January 2010, resolving the Litigation Disputes and providing for certain other matters; the amount of R plus interest, if applicable, payable to Investec in terms of the Litigation Settlement Agreement; the circular dated 15 December 2008 relating to a proposed scheme of arrangement between JCI and its shareholders, proposed by R&E; the mediators appointed to mediate in the disputes between JCI and R&E, the curricula vitae of whom are set out in Annexure 3; Moore Stephens (Jhb) Corporate Finance (Pty) Limited (registration number 2007/023666/07), the independent expert appointed by the JCI directors; the JCI shares to be issued to R&E in terms of the Settlement Agreement; shareholders who have dematerialised their shares through a CSDP and have instructed that CSDP to hold their shares in their own name on the sub-register, being the list of shareholders maintained by the CSDP and forming part of the register of the company; 6

9 Party or Parties R or Rand R&E R&E Claims R&E Group the signatories to the Settlement Agreement, being JCI, R&E and JCIIF; the lawful currency of South Africa; Randgold & Exploration Company Limited (registration number 1992/005642/06), a public company incorporated in accordance with the laws of South Africa, the shares of which are listed on the JSE and trading in which is suspended; all and any claims of whatsoever nature from whatsoever cause arising which R&E or a subsidiary of R&E enjoy against JCI or a subsidiary of JCI which arose on or before the Signature Date, or in circumstances which arise after the Signature Date in respect of transactions, dealings, conduct and/or acts or omissions which arose prior to the Signature Date. An overview of the R&E Claims is given in Annexure 2; R&E and its subsidiaries; R&E loan the loan by R&E to JCI Gold more fully described in paragraph 8 of this circular; SAMREC Code SARB SENS Settlement Agreement Signature Date South Africa Strate Suspensive Conditions transfer secretaries the South African Code for Reporting of Mineral Resources and Mineral Reserves including the guidelines contained therein; South African Reserve Bank; Securities Exchange News Service of the JSE; the agreement, dated 20 January 2010, between JCI, R&E and JCIIF, inter alia, settling the JCI Claims and the R&E Claims; the date of signature of the Settlement Agreement, being 20 January 2010; the Republic of South Africa; Strate Limited (registration number 1998/022242/06), the company operating the electronic settlement system for disposals that take place on the JSE and off-market disposals; the suspensive conditions of the Settlement Agreement set out in paragraph 4.5 of this circular; and Computershare Investor Services (Proprietary) Limited (registration number 2004/003647/07). 7

10 JCI LIMITED (Incorporated in the Republic of South Africa) (Registration number 1894/000854/06) JSE share code: JCD (suspended) ISIN: ZAE ZAE DIRECTORS Executive: P H Gray (CEO) L A Maxwell (Financial director) Non-executive: P R S Thomas (Independent non-executive chairman) A C Nissen (Independent non-executive director) H W Cochrane (Independent non-executive director) CIRCULAR TO JCI SHAREHOLDERS 1. INTRODUCTION AND THE PURPOSE OF THIS CIRCULAR On 21 January 2010 JCI and R&E jointly announced the signature of the Settlement Agreement and the Litigation Settlement Agreement. A more detailed announcement of the terms of the two agreements followed on 28 January On 14 January 2010 R&E took excussion of FSD shares pledged by JCI to R&E in part satisfaction of the R&E loan, as more fully described in paragraph 8 below. The JSE ruled that the FSD excussion was a related party transaction and accordingly required, inter alia, the approval of JCI shareholders excluding R&E and its associates in general meeting. The FSD excussion is a matter unrelated to the Settlement Agreement, but is included in this circular for convenience. A circular and notice of general meeting relating to the Litigation Settlement Agreement was posted to JCI shareholders on 19 February 2010, the purpose of which was to approve certain payments to be made in terms of the Litigation Settlement Agreement. The purpose of this circular is to provide shareholders with details of the Settlement Agreement and the FSD excussion, and to convene the general meeting of shareholders required in terms thereof. 2. BACKGROUND It is helpful to recap on the recent history leading up to the present agreements. For a brief history of the company prior to 2005, refer to paragraph 7 below: During 2005 JCI was experiencing financial pressures which were exacerbated by the adverse publicity surrounding R&E. After approaching JCI shareholders and various financiers (including Investec) the JCI board as then constituted prior to the reconstitution referred to below determined that the Investec Loan Facility was the best alternative available to JCI at the time and, accordingly, JCI and JCIIF entered into the Investec Loan Agreement. The conditions for the advancement to JCIIF of the Investec Loan Facility included inter alia, that a special purpose vehicle (JCIIF) was created to hold a number of the JCI assets as security for the Investec loan; and also included the reconstitution of the JCI and R&E boards with persons acceptable to Investec, as Investec was not prepared to entrust the administration of the funds under the loan facility while Mr R B Kebble and certain fellow directors were in control. The Investec Loan Facility when granted enabled JCI to meet its immediate cash obligations and to continue its business. 8

11 1 August 2005 trading in JCI and R&E shares was suspended on the JSE for failing to report for the financial years ended 31 March 2005 (JCI) and 31 December 2004 (R&E). It soon became apparent that the financial affairs of both companies were in complete disarray and as a result forensic accountants were appointed to investigate both JCI and R&E. A copy of the report of KPMG Services on JCI is summarised in the Merger circular, which is available for inspection as set out in paragraph 14 below. A copy of the full forensic report is also available for inspection as set out in paragraph 14 below. 7 April 2006 the new boards of JCI and R&E agreed to enter a mediation process in terms of which they would be guided by recommendations from the Mediators in order to settle the JCI and R&E Claims. 14 September 2006 JCI convened a general meeting of its shareholders, inter alia, to pass certain shareholder resolutions in regard to the Investec loan facility, the purpose of which resolutions was to ratify the Investec Loan Agreement and pave the way for the Investec Raising Fee to be paid to Investec. On 22 September 2006, Letseng Guernsey, at its own expense, launched an urgent application to obtain an interdict restraining JCI from tabling the resolutions referred to above at the general meeting. The parties to the urgent application agreed that the general meeting should be postponed, resulting in an interim Order being granted by the Witwatersrand Local Division of the High Court on 27 November 2006, inter alia interdicting and restraining JCI from tabling the resolutions at the postponed meeting of 29 September 2006 (to 30 November 2006), or any adjournment thereof, and interdicting JCI and JCIIF from making any payments to Investec in respect of the Investec Raising Fee. The application was postponed to 24 April Since the commencement of these proceedings, the Investec Loan Facility has formed the subject matter of an application in terms of which Letseng Guernsey is contending inter alia, that the agreements giving rise to the Investec Loan Facility are invalid, the resultant effect of which is that JCI and JCIIF are not liable to Investec in respect of the Investec Raising Fee. The matter came before the Witwatersrand Local Division of the High Court in April 2007 which dismissed the major part of Letseng Guernsey s application with costs on the basis that Letseng Guernsey did not have the requisite locus standi. Letseng Guernsey subsequently applied for leave to appeal to the Supreme Court of Appeal, which application for leave to appeal was granted. The appeal was argued on 25 and 26 August 2008 before the Supreme Court of Appeal which found that Letseng Guernsey had locus standi in the matter and, consequently, found in favour of Letseng Guernsey. The matter was referred back to the Witwatersrand High Court and no dates had been set down for the matter to be heard prior to signature of the Litigation Settlement Agreement. 28 February 2007 the Mediators recommended a merger between JCI and R&E. Their statement in this regard is included as Annexure 4 A. 23 April 2007 the Merger proposals were announced: in terms of which R&E would acquire all the shares of JCI pursuant to a scheme of arrangement. Mid 2008 R&E and JCI attempted a settlement agreement to settle the JCI and R&E Claims. 15 December 2008 the Merger circular was posted to JCI shareholders proposing a scheme of arrangement in terms of which R&E would acquire all the issued shares of JCI in exchange for R&E shares. In the JCI Group NAV statement which formed part of the Merger circular to JCI shareholders dated 15 December 2008 an amount of R373.3 million was provided for the Investec Raising Fee. January 2009 JCI resumed discussions with Investec leading to a settlement amount of R275 million for the Investec Raising Fee being tabled. 9 April 2009 after various postponements of the JCI scheme meeting, the merger proposals failed to achieve the required majority of votes from JCI shareholders. This terminated the merger initiative which up to that stage had been the preferred JCI solution and also failed to resolve the issue of the Investec Raising Fee. 20 to 22 January 2010 after numerous further attempts at a settlement, the Litigation Settlement Agreement and the Settlement Agreement were signed. The Litigation Settlement Agreement, which is not conditional on the implementation of the Settlement Agreement, provided among other matters, and subject to the fulfilment of certain suspensive conditions, for the settlement of the Investec Raising Fee and for payment of the Letseng Indemnity Costs. The consequence of this agreement, if implemented, will be that, among other matters, Letseng Guernsey will withdraw its Court application referred to above and Investec will release the security held for payment of the Investec Raising Fee. This will enable JCI to perform its obligations in terms of the Settlement Agreement, which is the subject matter of this circular. On 19 February 2010 a circular incorporating a notice of general meeting was posted to JCI shareholders 9

12 and on 8 March 2010 JCI shareholders passed the requisite ordinary resolutions to implement the Litigation Settlement Agreement. A copy of the abovementioned circular is available for inspection as set out in paragraph 1 4 below. Final implementation of the Litigation Settlement Agreement remains outstanding, the principal remaining items being the transfer of Randgold Resources shares to R&E by Letseng, confirmation of withdrawal of a certain action by R&E against Investec UK, release of the Letseng Indemnity fee and completion of the payment by JCI of the Investec Raising Fee. The directors of JCI are, however, confident that it will be fully implemented in due course. 3. THE PURPOSE OF THE SETTLEMENT AGREEMENT 3.1 Following the conclusion of the mediation agreement on 7 April 2006 referred to above, R&E served a statement of claim on JCI on 3 August 2006, contending that JCI is indebted to it in the amount of approximately R5.8 billion. The statement of claim was amended during January 2007 to introduce two new claims and further amended during September 2008 by the introduction of four further claims. A summary of the statement of the R&E Claims is attached as Annexure On 8 September 2006, JCI served a statement of defence on R&E, denying inter alia that it was party to and/or benefited from the schemes on which the R&E Claims were founded. 3.3 Without any admission of liability or the making of any concessions on the part of either R&E or JCI and purely with a view to avoiding costly litigation and for commercial reasons, R&E and JCI have, in terms of the Settlement Agreement, agreed, subject to the fulfilment of the Suspensive Conditions, to: effect a personal discharge of the JCI Group from the R&E Claims (without the JCI Group in any way recognising the existence thereof) such that as between the JCI Group and the R&E Group only, the R&E Claims are fully and finally settled, and the JCI Group wishes to secure such a personal discharge thereof, to the extent necessary; effect a personal discharge of the R&E Group from the JCI Claims (without the R&E Group in any way recognising the existence thereof) such that as between the R&E Group and the JCI Group only, the JCI Claims are fully and finally settled, and the R&E Group wishes to secure such a personal discharge thereof, to the extent necessary; provide for the transfer by JCI and JCIIF to R&E of the Gold Fields shares held by JCIIF; and provide for the issue by JCI to R&E of the New JCI shares. 4. SALIENT TERMS OF THE SETTLEMENT AGREEMENT A summary of the salient terms of the Settlement Agreement follows. A copy of the Settlement Agreement is available for inspection as set out in paragraph 14 below. For an appreciation of the full terms of the Settlement Agreement, shareholders should read the agreement in its entirety. 4.1 Transfer of Gold Fields shares and issue of New JCI shares to R&E Subject to the fulfilment of the Suspensive Conditions: JCI and JCIIF will cause the Gold Fields Shares to be transferred to R&E; JCI will allot and issue the New JCI Shares to R&E, representing approximately 44% of the issued share capital of JCI post the issue of the New JCI shares; and R&E will, following the transfer of the Gold Fields shares to R&E and the allotment of the New JCI shares to it, firstly make a capital distribution of the Gold Fields shares to R&E shareholders and immediately following the distribution thereof, unbundle the New JCI Shares to R&E shareholders, both in proportion to the R&E shareholders respective shareholdings. In addition, whilst not obliged to do so in terms of the Settlement Agreement, R&E intends after the Settlement Agreement is implemented, as part of an unbundling process, to unbundle its existing shares in JCI, comprising ordinary shares, to R&E shareholders in proportion to their respective shareholdings. In its capacity as a shareholder in R&E, a subsidiary of JCI will receive JCI shares, including the New JCI shares referred to in the paragraph above unless in the interim JCI will have disposed of any of its holding of R&E shares. In terms of the requirements of the Companies Act, a special resolution of JCI shareholders is required to approve the acquisition of its own shares under the distribution by R&E. Such resolution is contained in the attached notice of general meeting. To the extent that JCI s subsidiaries hold in excess of the 10% of JCI permitted in terms of the Companies Act, such excess shares will be cancelled. 10

13 4.2 Waiver of rights in respect of the New JCI shares On issue the New JCI shares will rank pari passu in all respects with the existing issued JCI ordinary shares. Notwithstanding this, R&E has agreed that it shall have no rights whatsoever in respect of the New JCI shares issued to it, including voting rights, pending the distribution of such shares to its shareholders referred to in paragraph above. R&E shareholders will waive their voting rights for a period of 48 hours after the distribution. 4.3 Dividends in respect of the Gold Fields shares Dividends, if any, declared and paid in respect of the Gold Fields shares after the Signature Date but before distribution of the Gold Fields shares to R&E shareholders shall accrue to R&E, unless the Settlement Agreement fails, in which event the dividends shall revert to JCI. 4.4 Full and final settlement of the JCI and R&E Claims Once the Settlement Agreement becomes unconditional on the Effective Date and is implemented in accordance with its terms, both the JCI Claims and the R&E Claims shall be fully and finally settled as between the JCI Group and the R&E Group and certain of their respective employees, without admission of liability. 4.5 Principal Suspensive Conditions The Settlement Agreement is subject to the fulfilment of the following remaining principal Suspensive Conditions that: within 60 days of the Signature Date, or such later date as the parties may agree to in writing: Investec shall have released to JCIIF all and any assets encumbered after settlement of the Investec Raising Fee; within 90 days of the Signature Date, or such later date as the parties may agree in writing, the shareholders of JCI in general meeting will have adopted the appropriate resolutions, approving and ratifying the conclusion and implementation of the Settlement Agreement, including but not limited to the passing of: a special resolution to increase the authorised share capital of JCI from R divided into JCI shares, to R , divided into JCI shares, through the creation of additional JCI shares in the authorised share capital of JCI, such additional JCI shares to rank pari passu in every respect with the existing JCI shares; the requisite resolution ratifying the transfer of the Gold Fields shares by JCI to JCIIF in August 2005; the requisite resolution approving of the transfer of the Gold Fields shares to R&E; and the requisite resolution approving of the issue of the New JCI shares to R&E; within 90 calendar days of the Signature Date, or such later date as the parties may agree to in writing, the R&E shareholders in general meeting will have adopted the appropriate resolutions approving and ratifying the conclusion and implementation of the Settlement Agreement, including such authority and consent as may be required from the R&E shareholders in order to give effect to the Gold Fields shares being transferred to R&E and the New JCI shares to be issued to R&E, being distributed as soon as possible to R&E shareholders in accordance with the unbundling provisions of section 46 of the Income Tax, 58 of 1962, as amended; within 120 calendar days of the Signature Date, or such later date as the parties may agree in writing: 11

14 the special resolution referred to in paragraph above will have been registered at the Registrar of Companies; and the JSE will have approved the issue of the New JCI shares to R&E and/or have imposed conditions which are acceptable to the parties. The Suspensive Conditions are for the benefit of R&E and JCI, either of whom shall on prior written notice to the other, be entitled to extend the date for the fulfilment of the conditions for a period not exceeding 20 business days, provided that such notice is given prior to the expiration of the date for the fulfilment of the relevant Suspensive Condition in respect of which an extension is sought. On 11 May 2010 JCI and R&E by an addendum extended the dates for the fulfilment of each of the above remaining Suspensive Conditions to 30 June 2010 in respect of Suspensive Condition s set out in paragraphs 4.5.1, and above, and to 30 July 2010 in respect of the Suspensive Condition set out in paragraph A copy of such addendum is available for inspection as set out in paragraph 14 below. 4.6 Warranties The Settlement Agreement contains warranties and indemnities (including against third party actions) normal for an agreement of this nature. 4.7 Performance The Settlement Agreement contains extensive provisions for the performance by each party of its obligations to ensure implementation of the agreement. 4.8 Irrevocable undertakings to vote In satisfaction of certain of the Suspensive Conditions, Allan Gray, Investec, Hawkhurst, and Letseng Guernsey have irrevocably undertaken to attend the general meeting to be called to ratify the Settlement Agreement and to vote or, in the case of Allan Gray to recommend a vote where such shares are managed on behalf of other parties, the shares reflected below in favour of the relevant ordinary and special resolutions: Percentage of voting Shares held entitlement Allan Gray Investec Hawkhurst Letseng Guernsey Information on R&E R&E is a public company listed on the JSE. The listing of its shares, along with those of JCI, was suspended on 1 August 2005, as set out in paragraph 2 above. The address of R&E s registered office is 7th Floor, Fredman Towers, 13 Fredman Drive, Sandown, R&E has a diverse shareholder base with approximately shareholders and no controlling shareholder. 5. CATEGORISATION OF THE TRANSACTIONS AND LISTING OF SHARES The transfer of the Gold Fields shares to R&E is categorised as a related party transaction in terms of the JSE Listings Requirements and accordingly requires, inter alia, the approval of JCI shareholders in general meeting. In addition, the JSE advised that it would have no objection to the company obtaining an opinion from the Mediators. The directors of JCI have retained the Mediators to advise them on the Settlement Agreement. The opinion letter of the Mediators is set out in Annexure 4. The FSD excussion is categorised as a related party transaction in terms of a ruling by the JSE and accordingly requires, inter alia, the ratification by JCI shareholders in general meeting, and a fairness opinion from an independent expert in terms of the JSE Listings Requirements. The directors of JCI have retained Moore Stephens Corporate Finance to advise them on both the fairness and the reasonableness of the FSD excussion. The opinion letter of the independent expert is set out in Annexure 8. 12

15 The issue of the New JCI shares is categorised as a specific issue of shares for cash to a related party in terms of the JSE Listings Requirements and accordingly requires, inter alia, the approval of the issue in general meeting of not less than 75% of those JCI shareholders present and voting, and, in terms of a dispensation allowed by the JSE, an opinion from the Mediators as set out above. Following an approach by JCI and R&E, the SRP provided both companies with its written view that, based on the information made available to it, the transactions referred to in the Settlement Agreement do not comprise an affected transaction as defined in the Companies Act. The JSE has granted a listing of the New JCI shares, subject to approval of the requisite resolutions by JCI shareholders in general meeting. It is expected that the New JCI shares will be listed on or about Monday, 5 July 2010, and will immediately have their listing suspended along with the existing issued JCI shares. The New JCI shares will be issued at par, and will rank pari passu with the existing issued ordinary shares. 6. FINANCIAL INFORMATION 6.1 Pro forma financial effects of the implementation of the Settlement Agreement and the FSD excussion The table below sets out the unaudited pro forma financial effects of the implementation of the Settlement Agreement and the FSD excussion on JCI shareholders. The unaudited pro forma financial effects are presented for illustrative purposes only and because of their nature may not give a fair reflection of JCI s financial position after implementation of the Settlement Agreement and the FSD excussion. It must be noted that the JCI Group NAV Statement on which these pro forma financial effects are based has not been prepared in accordance with IFRS. It has been assumed for purposes of the pro forma financial effects that the implementation took place on 31 December The directors of JCI are responsible for the preparation of the unaudited pro forma financial effects. The reporting accountants limited assurance report on the unaudited pro forma financial effects is set out in Annexure 5. Percentage change Before After After Financial effects of FSD excussion NAV cents per JCI share Net tangible asset value cents per JCI share Shares in issue Treasury shares ( ) ( ) 0.00 Net shares in issue Financial effects of the settlement NAV cents per JCI share (68.25) Net tangible asset value cents per JCI share (68.25) Shares in issue Treasury shares ( ) ( ) Net shares in issue Notes and assumptions: 1. The Before column of the table is based on the JCI Group NAV statement at 31 December 2009 as published on SENS and contained in Annexure 1. It must be noted in this respect that the JCI Group NAV statement as set out makes no provision for the R&E Claims, which are the subject of the Settlement Agreement, and the Before column is misleading in that respect. 2. The After column of the table is calculated using the following assumptions: the excussion of the FSD shares as part settlement of the loan by R&E to JCI Group. The shares were excussed at a value of R ; the issue of New JCI shares to R&E at par in terms of the Settlement Agreement; the distribution by R&E of new JCI shares to R&E shareholders; estimated transaction costs of R ; the distribution by R&E of JCI shares currently owned by R&E and to be distributed in terms of the unbundling in their circular; the transfer of Gold Fields shares to R&E in terms of the Settlement Agreement; and the distribution by R&E of Gold Fields shares by R&E to its shareholders, including to JCI as a shareholder in R&E. The NAV and net tangible asset value were calculated on the assumption that the above transactions were effective at 31 December

16 6.2 Pro forma Group NAV Statement The pro forma Group NAV Statement for JCI showing the pro forma unaudited financial effects of the Settlement Agreement and the FSD excussion is contained in Annexure 6. The reporting accountants limited assurance report on the pro forma Group NAV Statement is set out in Annexure JCI Group NAV statement Since August 2005 when the new JCI board was appointed and, given the situation referred to in paragraph 2 above, the company has been in a process of attempting to find a basis for producing audited financial statements. It has now agreed a basis with its auditors, KPMG. On this basis, the opinions for the years to March 2005, 2006 and 2007 will be unaudited and disclaimed, but the company believes it will be able to obtain audit opinions for 2008 and 2009, which may or may not be qualified in certain respects. The company believes that it should be in a position to publish its financial statements in the latter half of Given the timing deadlines of the Settlement Agreement referred to in paragraph 4.5 above, it was not feasible for the company to complete and sign off financial statements by the dates set out therein. It is important to note that the company does not control an operating business. It has a portfolio of assets, as set out in the Group NAV statement at 31 December The terms of the settlement agreement involve a transfer of assets (the Gold Fields shares) to R&E shareholders by JCI and a dilution of JCI shareholders interests by means of an issue of shares. In the circumstances, it is of primary importance to a JCI shareholder to know the present value of his assets, the value of the assets being disposed of, and the extent of the dilution of his interest. This can be satisfied by the production of a Group Net Asset Value statement together with a limited assurance opinion. Application was accordingly made to the JSE, and granted on 1 March 2010, to include a Group NAV statement, including recent valuations of assets (within six months). The JCI Group NAV Statement at 31 December 2010 is contained in Annexure 1 to this circular. It must be noted that this NAV statement has not been prepared in accordance with IFRS. The reporting accountants limited assurance report on the Group NAV Statement is also contained in Annexure 1. Attached as Annexure 1A is a valuation report on Boschendal, FSD, R&E and the Investment Properties prepared by Moore Stephens Corporate Finance. This was prepared by Moore Stephens Corporate Finance at the request of the directors in compliance with a request by the JSE to obtain recent valuations by independent third parties of assets held by JCI in connection with the 1 March 2010 ruling referred to above. Attached as Annexure 1B are CPRs on the du Preez Leger Project and the Jeannette and Weltevreden Projects, which are exploration rights held by FSD. These are annexed in order to give information on the rights held by FSD. Attached as Annexure 1C is a CPR on the Laingsburg Uranium prospect, which is a prospecting right held by JCI and which was not included as an asset in the JCI Group NAV statement because the directors consider it an immaterial asset and ascribed no value to it. It is annexed, however, in order to give information on JCI s sole prospecting right, which may in the future have some value. Attached as Annexure 1D is a pro forma NAV statement showing the effect of the valuations set out in Annexure 1A on the 31 December JCI Group NAV. The directors of JCI accept responsibility for preparing Annexure 1D. Annexure 1E contains a reconciliation requested by the JSE showing the changes between the 31 March 2008 JCI NAV statement and the 31 December 2009 Group NAV. The directors of JCI accept responsibility for preparing Annexure 1E. 6.4 Information on Gold Fields Gold Fields is one of the world s largest unhedged producers of gold with attributable production of 3.6 million ounces per annum from nine operating mines in South Africa, Ghana, Australia and Peru, based on the annualised run rate for the fourth quarter of F2009. Gold Fields also has an extensive growth pipeline with both greenfields and near mine exploration projects at various stages of development. According to its website, Gold Fields has total attributable mineral reserves of 81 million ounces and mineral resources of 271 million ounces. Full information on Gold Fields, may be found on the Gold Fields website ( Additionally, the following documents will be available for inspection as set out in paragraph 14 below: 14

17 annual reports for the last three financial years ended 30 June 2009; and the interim and quartely report for the six months ended 31 December Material loans Material loans to the JCI Group are set out in notes 11 to 14 inclusive of the JCI Group NAV Statement. Contingent liabilities are set out in note 17 of the JCI Group NAV statement. See paragraph 8 below for information on the reduction of outstanding loans by JCI subsequent to 31 December INFORMATION RELATING TO JCI Introduction JCI was incorporated under the name New Kleinfontein Limited in 1894 and has been listed on the JSE since 1894, initially as a mining company and from 1972 to 1997 also as a property company. The company was restructured during 1992, changed its name to NK Properties Limited and transferred its listing on the JSE to the Financial Property Loan Stock sector of the JSE lists. During 1997 the company was once again restructured when it acquired a 34.9% effective holding in Saflife Limited which, in turn, held 30% of the original JCI Limited and 17.1% of Capital Alliance Holdings Limited, through various acquisitions after which the company formally changed its business to that of a mining holding company. In 1997, following the acquisition of management control by Mr Brett Kebble, the company changed its name to Consolidated African Mines Limited. On 12 May 1998 the company disposed of its property portfolio, in exchange for cash and shares in Mawenzi Resources Limited, and on 30 June 1998 it gained a controlling interest in JCI Gold which, in turn, was the major shareholder in Western Areas Limited, as a result of the unbundling of the original JCI Limited and Saflife Limited, the subsequent disposal by the company of its shares in Capital Alliance Holdings Limited on 12 May 1998; and an offer to other shareholders in JCI Gold to acquire up to 45% of their shares in JCI Gold. The company distributed to its shareholders, by way of a capital reduction, its interest in Mawenzi Resources Limited and with effect from 1 July 1999, disposed of its non-gold assets, which principally comprised interests in certain non-gold mineral rights and diamond assets, to New Mining Corporation Limited. In 2002 the company changed its name to JCI Limited. The listing of JCI on the JSE was suspended on 1 August 2005 as set out in paragraph 1 above. As a result of the suspension it is not possible to give a share trading history for the company s shares. Although listed on the Gold Mining sector of the JSE lists, its present business can be more properly described as that of an investment holding company. JCI does not have a controlling shareholder and has not had a controlling shareholder in the previous five years. Further information relating to JCI required in terms of the JSE Listings Requirements is set out below. 7.1 Share capital Authorised and issued share capital The authorised and issued share capital of JCI, including shares to be created and issued in terms of this circular, are set out below: R 000 Authorised share capital before ordinary shares of R0.01 each Authorised share capital after ordinary shares of R0.01 each Issued share capital before ordinary shares of R0.01 each Share premium Issued share capital after ordinary shares of R0.01 each Share premium

18 Notes: 1. JCI subsidiary companies hold JCI shares. 2. R&E and its subsidiary companies hold JCI shares. 3. JCI is undertaking investigations into the basis upon which certain of its shares were allotted and issued with a view to determining whether or not such allotments and issues were valid. Dependent upon the outcome of such investigation and on legal advice obtained, they may take steps to declare void and accordingly set aside the allotment and issue of some or all of any of its shares which are found to be irregularly or invalidly allotted and issued, including, without limitation, applying for the rectification of its share register. 4. No shares were issued in the past three years. Increase in authorised share capital and issue of New JCI shares to R&E In compliance with the Settlement Agreement, JCI proposes to increase its authorised share capital by the creation of additional JCI shares in the authorised share capital of JCI, ranking pari passu in every respect with the existing JCI shares. JCI will then allot and issue the New JCI Shares to R&E. The New JCI shares will be issued at their par value of 1 cent per share, which compares to the closing price of 16 cents for a JCI share on 18 August 2005, being the trading day prior to the suspension of JCI s listing on the JSE. R&E will immediately unbundle the New JCI Shares to R&E shareholders in proportion to the R&E shareholders respective shareholdings in R&E. In the opinion of the directors of JCI, having considered the opinion letter of the Mediators referred to in paragraph 11 below, the terms of issue of the New JCI shares are fair insofar as the shareholders of JCI are concerned. In addition to the special resolution required for the requisite increase in authorised share capital, the JSE requires a 75% majority in favour of those shareholders present and voting on the ordinary resolution to approve the issue of the New JCI shares. R&E is a non-public shareholder in JCI, as defined in the JSE Listings Requirements and accordingly will not vote on abovementioned ordinary resolution. Once the shares are distributed to R&E shareholders as set out in paragraph above, JCI will have approximately new shareholders in addition to the approximately on its register presently. The JSE has granted a listing of the New JCI shares with effect from the commencement of business on Monday, 7 June 2010, subject to the abovementioned ordinary and special resolutions becoming effective. Immediately upon listing, the listing of the New JCI shares will be suspended along with the existing issued ordinary shares, which remain suspended. 7.2 Directors The directors and their contact and other details are set out below. All directors are South African citizens: Name and age of director Address Designation Curriculum vitae Peter RS Thomas (65) 10 Benmore Road (Independent Peter is a Chartered Accountant CA(SA) Morningside non-executive and former managing director of Appointed Sandton, 2196 chairman) The Unisec Group Limited. His 12 September 2005 current directorships include: Investec plc, Investec Bank Limited and various unlisted companies. 16

19 Name and age of director Address Designation Curriculum vitae Peter Henry Gray (62) 10 Benmore Road (CEO) Peter joined Nedbank Limited C.A.I.B (SA) Morningside before being appointed Senior Appointed Sandton, 2196 Credit Investigation Officer at 23 August 2005 Hill Samuel Merchant Bank. He then joined the French Bank of SA Limited (Indosuez), now Credit Agricole, a nd held numerous positions including those of General Manager and Deputy Chief Executive. He later joined Société Générale and became Managing Director. He retired in 2002 to follow his own interests and then decided to play a guiding role in a structured empowerment financial services group, Tlotlisa Holdings Limited. Peter serves on numerous other private boards. Leslie Arthur 10 Benmore Road (Financial Les is a Chartered Accountant Maxwell (63) Morningside director) who was formerly financial B. Comm, CA(SA) Sandton, 2196 director of Joy Manufacturing Appointed (Pty) Limited and of Fralex 13 December 2006 Limited/Fraser Alexander Limited. Thereafter he was involved in consulting and private business ventures before joining JCI. Andrew Christoffel 10 Benmore Road (Independent Chris has been extensively Nissen (51) Morningside non-executive involved in the development BA Hons, MA Sandton, 2196 director) and upliftment of communities Appointed both as a Minister in the 12 September 2005 Presbyterian Church and subsequently as a member of the African National Congress party. Furthermore he has managerial experience in a number of businesses, and as a non-executive director has pro-actively led empowerment and transformation at a number of listed companies. He is a past president of the Cape Regional Chamber of Commerce. Hylton Wilson 10 Benmore Road (Independent After completing his degrees at Cochrane (63) Morningside non-executive the University of the Appointed Sandton, 2196 director) Witwatersrand, Hylton joined 15 August 2008 Bowman Gilfillan and Blacklock (as it was then known) in He was appointed a director of that firm in March 1978 and served as manager of the Litigation Department and on the Executive Committee. He moved to Routledge Modise (now known as Eversheds) as a director in February He is still practising as an attorney as a consultant with Eversheds. 17

20 7.3 Directors emoluments Remuneration paid to directors for the period 1 March 2008 to 28 February 2009 was as follows: Director Salary Bonus Directors fees Total R R R R D M Nurek P H Gray * L A Maxwell * A C Nissen H W Cochrane P R S Thomas * Executive directors Remuneration paid to directors for the period 1 March 2009 to 28 February 2010 was as follows: Director Salary Bonus Directors fees Total R R R R P H Gray * L A Maxwell * A C Nissen H W Cochrane P R S Thomas * Executive directors There will be no variation in the remuneration of the directors as a result of the implementation of the Settlement Agreement. The following directors have service agreements with the company: P H Gray In terms of an employment agreement dated 17 August 2005, Mr Gray was appointed CEO of JCI with a salary of R1.6 million, subject to annual review. A bonus is payable based on the respective performances of the company and the employee. The company undertook to transfer R&E shares and Western Areas Limited to Mr Gray, together with an after-tax amount of R1 million, on M r Gray taking up employment. Other than the above, the employment agreement contains the terms normal for an employee in Mr Gray s position, including reimbursement of travel costs, medical aid and group life insurance provisions (although Mr Gray did not avail himself of these allowances). The agreement may be terminated on the giving of 90 days notice, and automatically terminates when Mr Gray turns 63. The agreement contains a restraint of trade provision in terms of which Mr Gray is restrained for a period of six months from the date of termination of employment during which he may not be employed by any business that is in competition with any of JCI s businesses in which Mr Gray was involved in the 12 months prior to termination ( restricted business ). Further, he may not canvass any customer of JCI who was a customer in any restricted business in the 12 months prior to termination of his employment; nor may he recruit any person or assist in the recruitment of a person employed by JCI in the 12 months prior to termination of his employment; nor may he act in a manner that creates the impression that he remains an employee of JCI. L A Maxwell Mr Maxwell was appointed Chief Financial Officer for a fixed period from 23 October 2006 to 31 January 2007, continuing on a monthly basis thereafter until terminated on 1 month s written notice by either party. His remuneration was set at an all inclusive package of R per month, subject to review after 31 January Following Mr Maxwell s appointment as Financial Director on 13 December 2006, a new contract was entered into between the company and Mr Maxwell on substantially the same terms as before, save that the all inclusive package was increased to R per month and the period of appointment was indefinite. Copies of the abovementioned service contracts are available for inspection as set out in paragraph 14 below. 18

21 7.4 Directors interests in transactions None of the directors have any direct or indirect beneficial interest in any transaction effected by JCI either during the current or immediately preceding financial year; or during an earlier financial year that remains in any respect outstanding or unperformed. 7.5 Directors interests in securities At the last practicable date, L A Maxwell holds 100 JCI shares directly and beneficially. No other directors of JCI held any beneficial or non-beneficial interest, whether directly or indirectly, in JCI shares. There has been no change in the JCI directors interests in JCI shares at the last practicable date. 7.6 Major shareholders At the last practicable date the following persons held, controlled or managed 5% or more of the company s issued shares: Direct beneficial Number of shares Percentage Name held of shares Allan Gray Limited R&E Investec Hawkhurst Letseng Guernsey Total before JCI JCI and its subsidiaries Total Prospects for JCI Following the implementation of the Settlement Agreement, JCI s major asset will be its controlling interest in Boschendal, as more fully disclosed in the JCI Group NAV statement set out in Annexure 1. The directors are actively pursuing the development of Boschendal and the enhancement of the value of JCI s investment therein. JCI is in the course of preparing financial statements for the financial years 2005 to 2009 inclusive. Once these have been finalised, they will be reported to shareholders and a general meeting of shareholders called, one of the purposes of which will be to approve the financial statements and to transact the business normal for an Annual General Meeting. At or before the holding of this meeting, shareholders will be advised of the directors plans for the future direction of the company. 7.8 Material changes Save for the FSD excussion set out in paragraph 8 below and for the Settlement Agreement and the Litigation Settlement Agreement explained in this circular, there have been no other material changes in the business of the company or its subsidiaries between 31 December 2009, being the date of the last published Group NAV Statement and the last practicable date. 7.9 Litigation A statement of litigation in respect of JCI is set out in Annexure 7. This statement has been certified correct by the company s legal advisers Material contracts With the exception of the FSD excussion, the Settlement Agreement and the Litigation Settlement Agreement, and prior settlement agreements which lapsed for non-fulfilment, JCI has not entered into any material contracts, being a contract entered into otherwise than in the ordinary course of the business of the company within the two years prior to the date of this circular or at any time and containing an obligation or settlement which is material to the group at the date of this circular. 19

22 7.11 Statement as to working capital The directors of JCI are of the opinion that the working capital available to the company and the group is not sufficient for the group s requirements for the next 12 months from the date of this circular. The directors are taking steps to raise funds for working capital which will consist of disposing of further assets, or obtaining bank finance, or raising equity capital Corporate practice and conduct The board of JCI subscribes to the principles of the King Code of Corporate Practices and Conduct ( King Code ). The board has not at this stage approved a formal policy statement, such a statement will be forthcoming when the company publishes its annual report for the most recent financial year. The board has implemented the following policies consistent with the King Code: A Nomination and Remuneration Committee has been established consisting of Messrs P Thomas and H Cochrane, both independent non-executive directors, to make recommendations to the board and to set the policy regarding appointment of directors and remuneration An Audit Committee has been established consisting of Messrs P Thomas and H Cochrane, tasked with approving the financial processes of the company, recommending the appointment and scope of responsibility of the auditors, reviewing the company s financial information, and satisfying itself of the appropriateness of the financial director. The company has not yet established a policy regarding the provision of non-audit services by the auditor The chairman of the company is non-executive and independent, and the company has a clear division of responsibilities, in that the chief executive and the financial director report on their respective responsibilities directly to the board. 8. THE EXCUSSION OF FSD SHARES BY R&E Preamble The matters addressed in this paragraph 8 are not related to or part of the Settlement Agreement. They refer to a series of actions between JCI and its subsidiaries and R&E and its subsidiaries, where JCI sought to access its share of the free cash in FSD in which it was a shareholder, and R&E as the controlling shareholder denied such access, but instead approved loans from FSD and from R&E against security of FSD shares. The ensuing excussion of those FSD shares by R&E is the subject of this paragraph 8. The JSE when it was advised of the FSD excussion ruled that it was a related party transaction requiring shareholder approval, and permitted JCI to include details thereof in this circular. 8.1 Background At 31 December 2009, JCI Gold (a wholly-owned subsidiary of JCI) held approximately 44.69% of FSD. R&E held 55.11% (there was a minority shareholder for the 0.2% balance). JCI Gold had representation on the FSD board, which was controlled by R&E. As previously mentioned the JCI board was reconstituted in August 2005 and the then board led by Mr Brett Kebble resigned. At some period before that, JCI Gold had obtained a loan from FSD ( the JCI Gold loan ). It is not clear when the loan arose, nor does the company have any copy of a loan agreement, for reasons which are well documented. At April 2009, this loan stood at approximately R105 million. During Mr Kebble s era, the loan had been secured by a pledge of assets, but it appears that certain of this security, namely about 3 million R&E shares and 117 million JCI shares, had been removed, presumably without the consent of FSD. What remained in pledge were approximately 79 million JCI shares belonging to JCI Gold. The proposed merger between JCI and R&E failed on 9 April 2009 and the parties had to consider how to manage their ongoing relationship. In order to regularise the existing loan, JCI Gold and R&E on 17 April 2009 entered into a formal written agreement regarding the loan. This provided, inter alia, for the formalisation of the security already provided by JCI Gold to FSD of the 79 million JCI shares previously mentioned. It must be noted that JCI, while it had a portfolio of assets, had no cash and no operating business to give it cash flow for its ongoing cash requirements. Consequently when the settlement date for a long-outstanding obligation arrived (the JCI Group was indebted to Letseng in an amount of 20

23 R60.5 million in respect of the disposal of Letseng Diamonds in Lesotho in June 2006) the JCI Group was unable to raise the funds from banking channels. In addition, the major part of its assets were tied up as security pledged to Investec for the Investec loan granted in Goldridge Gold Mining Company (Pty) Ltd ( Goldridge a wholly-owned subsidiary of FSD) held significant cash resources for which it had no immediate need and JCI accordingly requested that a dividend be paid from Goldridge via FSD to JCI Gold to help the JCI Group with its cash flow. This R&E refused to allow as controlling shareholder of FSD for the reasons set out below. R&E offered, however, to lend the required amount to JCI Gold, as before on an arm s length basis, and by agreement dated 17 April 2009 (the same date as that of the formalised loan agreement referred to above), the money was lent against a pledge by JCI Gold of its 44.69% shareholding in FSD, which was the last material unencumbered asset that the JCI Group held. The repayment date of these loans was periodically extended by R&E in the light of JCI s inability to raise cash. During December 2009 JCI was required to fund a cash call in respect of its shareholding in Boschendal and, if the funds were not provided, JCI faced a possible dilution of its holding in Boschendal, which would have been to the detriment of JCI shareholders. JCI again requested a dividend via FSD from Goldridge, but again R&E refused for the reasons set out below and instead on 18 December 2009 R&E advanced a further R25 million under the 17 April 2009 loan agreement, again on an arm s length basis. As a pre-condition to making this advance, R&E required that it also took cession from FSD of the JCI Gold loan amounting now to approximately R117.4 million. Following these actions, the total loan receivable by R&E from JCI Gold at 31 December 2009 was R208 million. This total loan bore interest at the bank prime lending rate and was secured by the pledge, made on 17 April 2009, by JCI of its entire shareholding of ordinary shares in FSD. The abovementioned total loan, in terms of the loan agreement, was repayable in full to R&E on or before 11 January JCI Gold was unable to settle the outstanding loan on the due date for repayment thereof and consequently, R&E on 14 January 2010 exercised its right under the pledge agreement to excuss part of the secured assets being FSD shares (approximately 30.1% of the equity share capital of FSD) held by JCI Gold. The price at which the shares were excussed/ transferred was agreed by the parties at R per FSD share, realising a total of R162 million approximately to reduce the R208 million owing. This price per FSD share was based on FSD s disclosed net asset value per FSD share at 31 December Such net asset value excluded any value for the exploration rights held in FSD on the grounds that the exploration rights had no realiseable value at this point in time. The balance of the amount owing, some R46 million, was paid out of a dividend received from FSD as set out below. The reluctance of R&E to declare dividends was inter alia due to their unwillingness to pay STC in FSD. On the other hand it was not possible to declare a dividend from FSD to JCI Gold only, and R&E did not want to declare any dividends from FSD to itself if STC were to be paid thereon. Following the abovementioned excussion the situation changed as R&E, following the excussion, held in excess of 75% of the shares in FSD which meant that R&E qualified for group relief if dividends were declared within its group of companies. Consequently a dividend was declared on 20 January 2010 which enabled JCI Gold to repay to R&E the remaining loan balance in cash. Copies of the relevant loan agreements are available for inspection as set out in paragraph 14 below. 8.2 Rationale for the actions from a JCI perspective The JCI directors had no alternative course of action open to them. They had no expectation of raising bank finance and no remaining unsecured liquid or semi-liquid assets to dispose of to raise the cash, nor could they access the cash held in FSD by receiving a dividend. The cash raised from FSD and R&E was necessary to preserve value for shareholders, and in addition the company was threatened with liquidation by, inter alia, R&E, if it did not repay the loan. JCI s access to the cash within FSD was blocked by R&E until the approval by R&E of the payment by FSD of the dividend during January Timing was critical and JCI could not afford to wait for a lengthy period while regulatory procedures were followed, if indeed they were required. 8.3 Information on FSD FSD is a minerals exploration company which was, prior to the FSD excussion, held 44.69% by JCI. R&E held 55.11%. Subsequent to the FSD disposal, R&E holds 85.21% and JCI 14.59%. Executive summary CPRs on the du Preez Leger Project and the Weltevreden and Jeanette Gold Projects, both of which are mineral exploration rights held by FSD, are set out in Annexure 1B. The full CPRs for these projects are available on the JSE website ( 21

24 A valuation of FSD, prepared by Moore Stephens Corporate Finance, is set out in Annexure 1A. Three year historical financial information on FSD for the three financial years ended 31 December 2009 will be published on SENS by R&E and copies thereof will be available for inspection as set out in paragraph 14 below not later than two weeks before the holding of the general meeting. 8.4 Pro forma unaudited financial effects of the FSD excussion Pro forma unaudited financial effects of the Settlement Agreement and the FSD excussion are set out in paragraph 6.2 above and a pro forma Group NAV statement is contained in Annexure 6. The reporting accountants limited assurance report on the pro forma Group NAV Statement is contained in Annexure Opinions, recommendations and undertakings Moore Stephens Corporate Finance was retained by the directors of JCI as an independent expert to provide them with an opinion on both the fairness and the reasonableness of the FSD excussion. Their conclusion, which is set out in Annexure 8 and should be read in its entirety, is that the disposal is not fair (as defined in paragraph 2 of their letter. Annexure 8), but reasonable in the circumstances. The directors of JCI note that the bottom range of the independent expert s valuation differs only by approximately 0.7% from the value used to effect the excussion. The directors of JCI, after taking into consideration the opinion of Moore Stephens Corporate Finance, and having considered the rationale of the FSD excussion remain of the opinion that it was beneficial to the company and reasonable to shareholders and unanimously recommend that the FSD excussion be ratified and that shareholders vote in favour of the resolutions to implement the FSD excussion at the general meeting. Allan Gray and Investec have irrevocably undertaken to attend the general meeting to be called to ratify the FSD excussion and to vote or, in the case of Allan Gray to recommend a vote where such shares are managed on behalf of other parties, the shares reflected below in favour of the relevant ordinary resolution : Percent of voting Shares held entitlement Allan Gray Investec Mr L Maxwell, who holds 100 JCI shares, intends to vote his shares in favour of the resolution necessary to implement the FSD excussion. The JSE has ruled that R&E is a related party and accordingly, in compliance with such ruling, R&E will not vote its shares on this resolution. 9. EXPENSES The estimated costs of concluding and implementing the Settlement Agreement and the FSD excussion are approximately R (costs are exclusive of VAT) and include the following: Amount R Sponsor Sasfin Capital Mediators Messrs Nupen, Burger and Wainer Reporting accountants KPMG Securities Transfer Tax Share issue expenses Legal advisers Eversheds JSE documentation fee Independent expert Moore Stephens Other Printing and publishing Ince CONSENTS Each of the Mediators, independent reporting accountants, sponsor and corporate legal adviser have consented in writing to act in the capacity stated and to their names being stated in this circular and have not withdrawn their consent prior to the issue of this circular. 22

25 11. OPINIONS, RECOMMENDATIONS AND IRREVOCABLE UNDERTAKINGS The Settlement Agreement relates to the settlement of the JCI and R&E Claims. It is to be noted that these claims have not been quantified either by an order of court or by an admission of liability by either of the parties. It is therefore not possible to place a determinate value on them, as would be required for the provision of a fairness opinion in terms of the JSE Listings Requirements. Furthermore, JCI does not yet have audited financial statements available for the years ended March 2005 to Accordingly, the Mediators were, in line with a dispensation in terms of which the JSE allowed JCI and R&E to dispense with a fairness opinion, engaged by the directors to provide the board with their opinion on the terms and conditions of the Settlement Agreement. In the application to the JSE for such ruling, JCI and R&E pointed out that the Mediators were the people best placed to provide the boards of the respective companies with guidance, being highly qualified as set out in Annexure 3, having initially been appointed to mediate in the dispute in April 2006, and having been closely involved with the various permutations of the settlement process since then. Their opinion letter to the directors is set out in Annexure 4. The conclusion in their opinion letter is that: Having regard to all of the above, the Randgold/JCI settlement agreement is in our opinion, commercially prudent and not inequitable to shareholders of Randgold or JCI. The directors, having considered the opinion of the Mediators and the rationale and the terms and conditions of the Settlement Agreement, are of the opinion that the Settlement Agreement, including the issue of the New JCI shares and the transfer of the Gold Fields shares in terms thereof, is beneficial to the company and fair to shareholders. The directors unanimously recommend that shareholders vote in favour of the ordinary and special resolutions to be proposed at the general meeting. The following shareholders have irrevocably undertaken to vote their shares or, where in the case of Allan Gray, such shares are managed on behalf of other parties, to recommend a vote, in favour of the resolutions relating to the Settlement Agreement proposed in the attached notice of general meeting: Percentage Name Number of voting of shares entitlement Allan Gray Investec Hawkhurst Letseng Guernsey Mr L A Maxwell, who holds 100 JCI shares, intends to vote his shares in favour of the ordinary and special resolutions set out in the notice of general meeting. 12. DIRECTORS RESPONSIBILITY STATEMENT The directors, whose names appear on the inside front cover of this circular, collectively and individually, accept full responsibility for the accuracy of the information given and certify that, to the best of their knowledge and belief, there are no facts that have been omitted that would make any statement false or misleading and that all reasonable enquiries to ascertain such facts have been made. 13. GENERAL MEETING AND ACTION REQUIRED A notice convening a general meeting of the company is contained in this circular, as well as a form of proxy for those shareholders who will be unable to attend the general meeting but wish to be represented thereat. The general meeting will be held at 14:00 on Friday 4 June 2010 at the Protea Hotel, Balalaika Sandton, 20 Maude Street, Sandown, Sandton. Certificated or own name dematerialised shareholders who are unable to attend the general meeting but wish to be represented thereat are required to complete and return the attached form of proxy so as to be received by the transfer secretaries of the company, Computershare Investor Services (Proprietary) Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107), or Capita Registrars, PXS, 34 Beckenham Road, Beckenham BR3 4TU, United Kingdom, by 14:00 on Wednesday, 2 June R&E is a non-public shareholder in JCI, as defined in the JSE Listings Requirements and is a co-signatory to the Settlement Agreement and accordingly will not vote on Ordinary resolutions numbers 1, 2 and 5. Ordinary resolution number 5, relating to a specific issue of shares, requires a 75% majority of those present and voting, whether in person or by proxy, in favour of such resolution. 23

26 Additionally, the JSE has ruled that R&E is a related party in connection with the FSD excussion. Accordingly, R&E will not vote on Ordinary resolution number 4. In terms of the custody agreements entered into by dematerialised shareholders and their CSDPs or brokers: dematerialised shareholders, other than own name shareholders, who wish to attend the general meeting must instruct their CSDP or broker to issue them with the necessary Letter of Representation to attend the general meeting; and dematerialised shareholders, other than own name shareholders, who wish to be represented at the general meeting by way of proxy must provide their CSDP or broker with their voting instructions by the cut-off time or date advised by their CSDP or broker for disposal of this nature. 14. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents will be available for inspection during normal business hours on business days (excluding Saturdays, Sundays and South African public holidays) at the registered office of JCI, being 10 Benmore Road, Morningside, Sandton, 2196, from T hursday, 13 May 2010 to Friday, 4 June 2010: the memoranda and articles of association of the company and its subsidiaries; the Merger circular; the R&E circular relating to the Settlement Agreement; the forensic report on JCI by KPMG Services referred to in paragraph 2; the forensic report on R&E referred to in paragraph 5 of Annexure 2; the Litigation Settlement Agreement and related circular to shareholders dated 19 February 2010; the Settlement Agreement and the addendum thereto; a signed copy of the opinion letter of the Mediators set out in Annexure 4; the JCI Group NAV statement set out in Annexure 1 including the signed limited assurance report of KPMG; the signed limited assurance report set out in Annexure 5; the signed copies of the valuations and CPRs referred to in Annexures 1A, 1B, 1C and 1D; the management contracts referred to in paragraph 7.3; the valuation reports referred to in Annexures 1A and 1B; the fairness opinion contained in Annexure 8; the agreements relating to the FSD excussion referred to in paragraph 8; the Investec Loan Agreement and subsequent amendments thereto; Gold Fields annual reports for the last three financial years ended 30 June 2009; Gold Fields interim and quarterly report for the six months ended 31 December 2009; and a signed copy of this circular. By order of the boards JCI LIMITED D O Jones Company secretary RANDGOLD & EXPLORATION COMPANY LIMITED (In respect of Annexure 2 only) Director Sandton 13 May

27 ANNEXURE 1 JCI GROUP NAV STATEMENT AT 31 DECEMBER 2009 The following is a transcript of the JCI Group NAV statement at 31 December 2009 as published on SENS on 16 February 2010: A pro forma Group NAV incorporating the valuations by the independent expert is contained in Annexure 1D. Please note: A glossary of terms used in this annexure appears at the end of the annexure. JCI LIMITED ( JCI or the Company ) (Incorporated in the Republic of South Africa) (Registration number 1894/000854/06) Share code: JCD (Suspended) ISIN: ZAE GROUP NET ASSET VALUE STATEMENT AT 31 DECEMBER 2009 DIRECTORS RESPONSIBILITY STATEMENT The JCI directors are responsible for the preparation and presentation of the Group NAV Statement of JCI at 31 December 2009 and accompanying Notes as set out herein. The Group NAV Statement has been prepared in accordance with the basis of preparation set out in the accompanying Notes for the purpose of providing the shareholders of JCI with financial information determined in accordance with the basis of preparation set out in note 2, and has not been prepared in accordance with IFRS or other generally accepted accounting principles. The JCI directors responsibility includes determining that the basis of preparation is an acceptable basis for preparing and presenting the Group NAV Statement and accompanying Notes, and making accounting estimates, which, in the opinion of the JCI directors, are reasonable in the circumstances. KPMG Inc, the independent auditor, is responsible for reporting on whether, based on the auditor s procedures arising from a limited assurance engagement, the Group NAV Statement at 31 December 2009 has been prepared, in all material respects, in accordance with the basis of preparation set out in the accompanying Notes. Approval of the Group NAV Statement The Group NAV Statement at 31 December 2009 and accompanying Notes were approved by the JCI board on 9 February 2010 and signed on its behalf by: Peter Henry Gray Chief Executive Officer Leslie Arthur Maxwell Financial Director 25

28 LIMITED ASSURANCE REPORT OF THE INDEPENDENT AUDITOR TO THE SHAREHOLDERS OF JCI LIMITED We have performed our limited assurance engagement on the Group NAV Statement of JCI at 31 December 2009 and accompanying Notes. Directors responsibility for the Group NAV Statement The JCI directors are responsible for the preparation and presentation of the Group NAV Statement in accordance with the basis of preparation set out in the Notes to the Group NAV Statement. This responsibility includes determining that the basis of preparation is an acceptable basis for preparing and presenting the Group NAV Statement and making accounting estimates, which, in the opinion of the JCI directors, are reasonable in the circumstances. Auditor s responsibility Our responsibility is to conclude on whether the Group NAV Statement at 31 December 2009 has been prepared on the basis of preparation set out in the accompanying Notes, based on the procedures performed by us in a limited assurance engagement. There are no International Standards on Auditing (Engagement Standards) applicable to an engagement of this nature. In these circumstances we applied our professional judgement in planning and performing our procedures to obtain limited assurance on the Group NAV Statement in accordance with the basis of preparation set out in the accompanying Notes. Our evidence gathering procedures are more limited than for a reasonable assurance engagement. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion. Summary of work performed Our work included making enquiries of management and performing procedures to obtain evidence in respect of the amounts and disclosures in the Group NAV Statement in accordance with the basis of preparation set out in the accompanying Notes. We have evaluated the appropriateness of the basis of preparation in the circumstances and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the Group NAV Statement. Conclusion Based on the procedures performed by us, nothing has come to our attention that caused us to believe that the Group NAV Statement at 31 December 2009 has not been prepared, in all material respects, on the basis of preparation set out in the accompanying Notes. Restriction on use of this report The Group NAV Statement has been prepared, in all material respects, in accordance with the basis of preparation, set out in the accompanying Notes. The Group NAV Statement and our limited assurance report may not be suitable for any other purpose. KPMG INC Chartered Accountants (SA) Registered Auditors 15 February

29 GROUP NET ASSET VALUE STATEMENT At At 31 December 31 March Notes R 000 R 000 ASSETS Listed investments Goldfields R&E Other listed investments Derivative instruments Unlisted investments Boschendal Jaganda FSD investment Businesses held for sale Loans Other assets Investment properties Cash and cash equivalents TOTAL ASSETS LIABILITIES Litigation settlement agreement 11 ( ) ( ) Income tax payable 12 Deferred taxation 13 (22 674) (2 564) Trade and other payables 14 ( ) ( ) TOTAL LIABILITIES ( ) ( ) NET ASSETS Number Number of shares of shares ISSUED SHARES 15 Number of shares in issue Treasury shares ( ) ( ) Net shares in issue Group NAV per share Rand

30 NOTES TO THE GROUP NAV STATEMENT AT 31 DECEMBER PURPOSE OF THE GROUP NAV STATEMENT On 7 April 2006, JCI published unreviewed, unaudited and restated provisional financial results for the six months ended 30 September 2005, and for each of the years ended 31 March 2004 and 31 March 2005 ( provisional results ). In the accompanying commentary to those provisional results, the JCI directors indicated, inter alia, that due to the extent of the misappropriations, for which details were disclosed in the commentary, there may have been other material events and circumstances of which the JCI directors were not aware and which may have had a material effect on JCI. These may have affected the completeness and accuracy of the information reflected in the provisional results and/or may have had the effect that the provisional results did not reflect a true and complete account of the financial and other affairs of JCI. In these circumstances the JCI directors disclaimed any liability in respect of the accuracy, correctness and/or completeness of the information reflected in the provisional results. This is still the position. KPMG Inc. was appointed as the independent auditor of JCI during October In view of the uncertainties relating to the provisional results, and the disclaimer by the JCI directors, they were unable to, and did not, express an audit or review opinion on the provisional results. This is still the position. The Group NAV Statement has been prepared to provide shareholders with financial information which may inter alia be used at a later date to assist them with a decision on the proposed settlement agreement with R&E (refer to note 18). 2. BASIS OF PREPARATION The Group NAV Statement has been prepared from information available to the JCI directors and may not be complete for the reasons given in note 1 above. In particular, the Group NAV Statement excludes major claims and counter-claims between JCI and R&E and does not include pro forma adjustments relating to the proposed settlement between them. Other than for these claims, the Group NAV Statement includes all known significant assets and liabilities of the JCI Group and associate companies. The Group NAV Statement includes the value of JCI s investment in FSD. The Group NAV Statement has been prepared in Rands. All financial information is presented in Rands and has been rounded to the nearest thousand. Foreign currency monetary and non-monetary items are reported using the closing rate at 31 December The Group NAV Statement required the JCI directors to make judgements, estimates and assumptions that affect the basis of preparation and the reported amounts of assets and liabilities. Actual results may differ from these estimates. The assets and liabilities of subsidiaries are included in the Group NAV Statement, except in instances where the subsidiaries are considered as businesses held for sale, or if the subsidiaries are considered to be insolvent, or dormant, or if the ownership of the assets and liabilities could not be proven. However, insolvent subsidiaries liabilities have been included to the extent where JCI or any of its other subsidiaries have guaranteed the liabilities. Intra-Group balances are eliminated in the preparation of the Group NAV Statement. The Group NAV Statement has not been prepared in terms of IFRS, but on the basis discussed under each heading below: 2.1 Listed investments The JCI Group s listed investments, except for the investment in R&E, are based on the VWAP for December 2009 comprising 21 trading days (2008: VWAP for March 2008 comprising 19 trading days). The value of the R&E investment is based on the NAV per share of R&E at 31 December 2009, as disclosed to JCI by the directors of the R&E Group (March 2008: NAV per share of R&E at 31 March 2008, as disclosed to JCI by the directors of the R&E Group, after adjusting for the proposed merger ratio of 95 to 1). 28

31 SAFEX futures were derivative instruments and were measured at the fair value of the instrument at 31 March The fair value of the futures was based on the amount of cash that would have been received if the future contracts were closed out on 31 March 2008 which included the profit or loss on the instruments. 2.2 Other assets Boschendal and Jaganda These investments are valued on the basis described in the notes 4 and 5, respectively FSD FSD has been valued per note Businesses held for sale The fair values of these businesses are based on the latest offer received as an indication of the businesses minimum values. The actual sales value was used where the business has been sold. 2.4 Loans Loans are only brought into account when they are either certain of recovery or are secured by assets which value can be determined. 2.5 Other assets Other assets include investment properties and cash and cash equivalents Investment properties Where an agreement is signed to sell the properties the value is based on the consideration in the signed agreement. Where there are no such agreements in place, the value is based on the latest offer to purchase received from a third party. Where there are no such offers to purchase, a rental yield basis has been used to determine the value Cash and cash equivalents Cash and cash equivalents comprises cash and cash deposits with banking institutions. The carrying amount of cash and cash deposits with banking institutions approximates fair value. 2.6 Taxation Income tax payable Income tax payable comprises taxation payable calculated on the basis of the expected taxable income using the tax rates enacted or substantively enacted at the reporting date, and any adjustment of income tax payable for previous years. Income tax payable has been calculated based on the best information currently available to the directors given the circumstances detailed in note 1 above (including prior year assessments and management s interpretation of current tax law) Deferred taxation Deferred taxation is provided based on temporary differences. Temporary differences are differences between the carrying amounts of assets and liabilities reported in the Group NAV Statement and their tax base. The amount of deferred taxation provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities using tax rates enacted or substantively enacted at the reporting date. A deferred taxation asset is recognised only to the extent that it is probable that future taxable profits will be available against which the associated unused tax losses, unredeemed capital 29

32 expenditure and deductible temporary differences can be utilised. Deferred taxation assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised. 2.7 Trade and other payables Trade and other payables include accruals and other amounts payable, based on management s best estimate at the reporting date. 2.8 Contingent assets Contingent assets are disclosed when it is probable that they will be realised. The amounts disclosed are the best estimate of amounts expected to be recovered. Due to the complex nature of the legal and forensic proceedings underway the actual amounts to be recovered from the misappropriation of the JCI Group s assets could vary significantly. 2.9 Contingent liabilities Contingent liabilities are disclosed when it is probable that they will be realised. The amounts disclosed are the best estimate of amounts expected to be paid. All guarantees are disclosed even if the directors are of the opinion that they will not be called up or JCI is to be released from such guarantees on the sale of the underlying assets or businesses. Number Value At At of shares/ per share/ 31 December 31 March futures future R R 000 R LISTED INVESTMENTS Goldfields R&E Other listed investments Matodzi Simmers Derivative instruments Goldfields SAFEX futures Listed investments The value of the listed investments, except for the investment in R&E, is based on the VWAP for December 2009 comprising 21 trading days. 3.2 Derivative instruments Goldfields SAFEX futures Goldfields SAFEX futures Deposit variance margin (disclosed under cash refer note 12) Deposit initial margin (disclosed under cash refer note 12)

33 The value of the Goldfields SAFEX futures was based on the closing rate per future at 31 March The value represented the mark to market price of the futures at 31 March 2008 less the mark to market prices at the inception of the contract. Each Goldfields SAFEX futures contract was convertible into 100 ordinary Goldfields SAFEX Shares on expiry of the future contracts. Thus the Goldfields futures were convertible into Goldfields shares on expiry date of the future contracts. The variance margin is the surplus cash in the JCI futures trading account that is used to settle the daily mark to market price movements. The initial margin on the contract is the cash deposited with SAFEX held as security by SAFEX over the futures. 3.3 R&E NAV For the 31 December 2009 NAV, the value of the R&E investment is based on the NAV per share of R&E at 31 December 2009, as disclosed to JCI by the directors of R&E Group, prior to any adjustments for the proposed settlement between JCI and R&E. For the 31 March 2008 NAV, the value of the R&E investment is based on the adjusted NAV per share of R&E as presented for merger purposes R R Net Asset Value per share R&E Group NAV Statement as disclosed to JCI by the directors of R&E Group Net Asset Value per share adjusted to reflect the proposed merger ratio of 1 R&E share for 95 JCI Shares N/A At At 31 December 31 March R 000 R BOSCHENDAL % investment through Moregate % investment through JCI Investment Finance (Pty) Limited Debentures in Kovacs including interest and profit share Loan to Boschendal Total investment in Boschendal The investment in Boschendal is held through an investment via Moregate and JCI Investment Finance (Pty) Limited. During July 2009 JCI Investment Finance (Pty) Limited acquired Kovacs Boschendal shares, and Kovacs settled the debentures. The Boschendal investment has been valued at the price contained in that purchase agreement. The JCI board is of the opinion that the valuation as detailed above of R397 million is fair and reasonable. 5. JAGANDA Investment at valuation The investment in Jaganda comprises preference shares. The preference shares mature in June During April 2006 JCI instituted an action against Jaganda for the delivery of preference shares held by JCI in that company which holds ordinary shares in Simmers. Jaganda has disputed the validity of the preference shares. Jaganda acknowledges that it is indebted to JCI for R89.3 million, 31

34 which is the original value of the preference shares, but denies further obligations. Pleadings in respect of the disputes have closed and the matter was postponed due to an application for liquidation of Jaganda. The liquidation application was contested by JCI, and was set aside on 8 December The other disputes are waiting to be heard by court of law. The preference shares carry interest at prime bank overdraft rate (South Africa) only in the event and to the extent that Simmers pays dividends to its shareholders. In addition, on redemption, 20% of the 21-day VWAP of the Simmers quoted share price on the JSE that exceeds 25 cents per share becomes payable to JCI in cash. At a Simmers share price of R (March 2008: R5.7053), which is the VWAP for December 2009, the total upside of the Jaganda preference shares agreement is R193 million (March 2008: R479.3 million). The JCI directors have placed a value of R141 million (March 2008: R284 million) on the investment in Jaganda, this being the midpoint of the original face value of the preference shares (i.e. R89.3 million) and the total value of the 20% upside as detailed above. The directors are of the opinion that this is a fair and reasonable value as there may be costs associated with enforcing our rights. At Number Value 31 December At 31 March of shares per share R R 000 R FSD INVESTMENT Shares held in FSD At 31 December 2009 JCI s investment in FSD Group has been valued at R per share as this is the value used in the settlement of loans from FSD Group and R&E and the investment in FSD. The settlement during January 2010 resulted in the settlement of the loans by R&E exercising their security over FSD shares and the payment of a dividend by FSD sufficient to settle the remaining outstanding loan. With the settlement of the loans the remaining security has been released. At At 31 December 31 March R 000 R BUSINESSES HELD FOR SALE AMT (Sales agreement signed 31 March 2008) AML, MSI, Cueincident including CMMS loan account (Monies received subsequent to March 2008) Bioclones (Sales agreement signed 18 February 2008) Skygistics (Sales agreement signed 30 November 2007) All the above businesses held for sale had been valued by the JCI directors based upon signed sales agreements received for the investments. The above amounts were received subsequent to 31 March The JCI Group has an investment in the Lyons group which has not been included as the JCI directors have not received any offers and are of opinion that it would not be prudent to attribute any value to this business at the current time. 8. LOANS Loans to Lyons secured by immovable properties The loans to Lyons have been valued, based on the value of the concluded sale agreements of the properties held as security for the repayment of the loans. ABSA holds R7.5 million of the proceeds received from the sale of the Sandton Emperor penthouse Unit 1004 property until the release of the guarantee. However, management has entered into an agreement with a third party where the third party has undertaken to have the guarantee released. 32

35 At At 31 December 31 March R 000 R INVESTMENT PROPERTIES Valued at offer price Houghton property (Offer accepted 30 May 2007) St James Place London (Date of offer January 2010) Valued at valuation, being GBP 2 million at ruling exchange rate Investment House (Conclusion of share purchase 2 November 2008) These properties are held through subsidiary companies. The value of the St James Place property was based on an offer to purchase received, which is still being negotiated further by the directors. Investment House has been valued on the net present value of future rental income less the outstanding bond (March 2008: Cost) CASH AND CASH EQUIVALENTS Cash and cash deposits Deposits Variance margin on Goldfields future contracts (restricted cash) Deposits Initial margin on Goldfields future contracts (restricted cash) LITIGATION SETTLEMENT AGREEMENT Investec fee ( ) ( ) Letseng legal/indemnity costs (40 000) ( ) ( ) The Investec loan agreement provides for a profit share to be paid as a fee to Investec on certain selected assets of JCI and the parties have, in terms of the litigation settlement agreement signed on 20 January 2010, resolved to settle the fee at R267.5 million (March 2008: JCI directors interpretation of the Investec loan agreement). The Letseng legal/indemnity costs are payable to Letseng Diamonds Limited in terms of the litigation settlement agreement signed on 20 January Investec hold the following assets as security for the outstanding fee: At Number Value 31 December At 31 March of shares per share R R 000 R 000 Goldfields Matodzi R&E Boschendal Jaganda

36 12. INCOME TAX PAYABLE The Group has settled with SARS in relation to CGT and Income Tax. The Group has no taxable income. At At 31 December 31 March R 000 R DEFERRED TAXATION Deferred taxation (22 674) (2 564) The deferred taxation balance is as a result of temporary differences on listed investments, unlisted investments and investment properties, except where the deferred tax liability has been offset against deferred tax assets in the respective JCI Group companies. No deferred taxation assets were raised on the assessed losses of the JCI Group as it is not probable that future taxable profits will be available when the related deductible temporary differences reverse. 14. TRADE AND OTHER PAYABLES Trade and other payables (6 954) (73 100) R&E loan (91 357) FSD group loans ( ) ( ) Trade and other payables include provisions for unsettled legal claims and matters that JCI is engaged in. JCI has also raised provisions for amounts for which it has provided security; which amounts JCI believes will not be settled by the principal debtor. R&E and FSD group loans: These loans which total an amount of R209 million were settled during January 2010 and have been reflected at full settlement value. ( ) ( ) 15. ISSUED SHARES 15.1 Treasury shares Treasury shares are JCI shares held by subsidiary companies Shares identified for cancellation Shares identified for possible cancellation Shares in the possession of R&E ( ) ( ) Total shares identified for possible cancellation excluding the shares held by R&E The above shares have been identified as fraudulent issues by the previous board. For the purpose of calculating the net shares in issue the number of shares in issue has not been reduced by the shares identified for possible cancellation for the following reasons: (a) the 104 million JCI shares are in the possession of R&E with whom JCI has signed a settlement agreement; and (b) the balance of shares have been excluded as legal proceedings in relation thereto have not yet been finalised. 34

37 16. CONTINGENT ASSETS The JCI Group has several contingent assets not included in the Group NAV Statement as their value, recoverability and ownership cannot be determined with any reliability at this time Claims against third parties (excluding R&E) JCI has identified various claims against third parties. It is not prudent at this stage to disclose a claim value or a break-down thereof, or to identify a name or to disclose any other relating details as it might influence the recoverability of these claims. 17. CONTINGENT LIABILITIES R 000 The JCI Group has provided the following guarantees: Nedbank on behalf of Boschendal Nedbank on behalf of AML (to be released as part of the sale of AML to Mvelaphanda) DME, SARS and financial institutions 190 No provision has been raised for these guarantees. The directors have assessed all claims and have raised provisions for those claims which they consider to be probable and at values estimated to be the settlement values. 18. SUBSEQUENT EVENTS [editorial note: the information set out in this note 18 has been supplanted by the information contained in the circular to which this NAV statement is annexed and should therefore be ignored] On 20 January 2010 JCI and R&E concluded and signed a Settlement Agreement in terms of which all claims (with certain specified exclusions) between them are, subject to the fulfilment of certain suspensive conditions, fully and finally settled. In this regard shareholders are referred to the detailed announcement by JCI and R&E on 28 January The table below sets out the unaudited pro forma financial effects of the settlement on the NAV and tangible NAV attributable to a JCI share held by a JCI shareholder. The unaudited pro forma financial effects are prepared for illustrative purposes only and due to their nature may not fairly present JCI s financial position. The directors of JCI are responsible for the preparation of the unaudited pro forma financial effects. Percentage change Before the After the after the settlement settlement settlement NAV cents per JCI share (66.59) Net tangible asset value cents per JCI share (66.59) Shares in issue Treasury shares ( ) ( ) Net shares in issue Notes and assumptions: 1. The Before the settlement column of the table is based on the JCI NAV statement at 31 December 2009 as published on SENS simultaneously with this announcement. It must be noted in this respect that the JCI NAV statement as set out makes no provision for the R&E claims, which are the subject of the settlement, and the Before the settlement column is misleading in that respect. 2. The After the settlement column of the table is calculated using the following assumptions: the issue of new JCI ordinary shares in terms of the Settlement Agreement announced on 28 January 2010; the transfer of shares in Goldfields to R&E in terms of the Settlement Agreement announced on 28 January 2010; and the immediate distribution by R&E of the above items. The NAV and net tangible asset value were calculated on the assumption that the settlement was effective at 31 December No other material events occurred subsequent to 31 December 2009, other than those disclosed elsewhere in the Group NAV Statement. 35

38 19. ENCUMBRANCES Except as noted above in the notes, no significant assets have been encumbered or pledged, other than those disclosed elsewhere in the Group NAV Statement. 20. COMPARATIVES The March 2008 comparatives have been restated to bring the FSD disclosure in line with that of December 2009, this change has had no effect on the comparative NAV per share. 36

39 GLOSSARY OF TERMS AMT Kovacs 620 (Proprietary) Limited (Registration number 2003/019844/07), trading as Advanced Medical Technologies, a private company incorporated in South Africa; AML African Maritime Logistics (Proprietary) Limited (Registration number 2000/011486/07), a private company incorporated in South Africa; Bioclones Bioclones (Proprietary) Limited (Registration number 1982/005469/07), a private company incorporated in South Africa; Boschendal Boschendal Limited (Registration number 2002/023534/06), a public company incorporated in South Africa; CGT capital gains tax levied in terms of the Income Tax Act; CMMS Consolidated Mining Management Services Limited (Registration number 1925/008135/06), a public company incorporated in South Africa and a subsidiary of the JCI Group; Cueincident Cueincident (Proprietary) Limited (Registration number 2000/000708/07), a private company incorporated in South Africa; DME Department of Minerals and Energy; Du Preez Leger Project the Du Preez Leger Project is a project encompassing the farms Du Preez Leger 324, Jokersrus 72, Milo 639, Rebelkop 456, Tweepan 678 and Vermeulenskraal 223 located in the district of Virginia in the Free State Province; FSD Free State Development and Investment Corporation Limited (Registration number 1944/016931/06), a public company incorporated in South Africa, jointly held by JCI and R&E; GFO Gold Fields Operations Limited (formerly Western Areas Limited) (Registration number 1959/003209/06), a public company incorporated in South Africa, and a wholly-owned subsidiary of Gold Fields; Goldfields Gold Fields Limited (Registration number 1968/004880/06), a public company incorporated in South Africa, the shares of which are listed on the JSE; IFRS the International Financial Reporting Standards; Income Tax income tax levied in terms of the Income Tax Act; Income Tax Act the Income Tax Act 1962 (Act 58 of 1962), as amended; Investec Investec Bank Limited (Registration number 1969/004763/06), a public company incorporated in South Africa, the shares of which are listed on the JSE; Investec loan agreement the agreement between JCI and Investec as amended, in terms of which Investec undertook to arrange a loan facility of up to R460 million to JCIIF, the terms of which are summarised in the circular to shareholders issued on 15 October For avoidance of doubt, the latest agreement, incorporating all the respective amendments was signed on 16 January 2006; Investec loan facility the loan facility made available to JCIIF in terms of the Investec loan agreement; Investec raising fee the raising fee as per the Investec loan agreement; Jaganda Xelexwa Investment Holdings (Proprietary) Limited, formally known as Jaganda (Proprietary) Limited (Registration number 2004/005559/07), a private company incorporated in South Africa; 37

40 JCI JCI board or JCI directors JCIIF JCI Gold JCI Group JSE JCI Limited (Registration number 1894/000854/06), a public company incorporated in South Africa, the shares of which is listed on the JSE but which are suspended; the board of directors of JCI; JCI Investment Finance (Proprietary) Limited (Registration number 2005/021440/07), a private company incorporated in South Africa and a wholly-owned subsidiary of JCI; JCI Gold Limited (Registration number 1998/005215/06), a public company incorporated in South Africa, being a wholly-owned subsidiary of JCI and a shareholder in FSD; JCI and its subsidiary companies; JSE Limited (Registration number 2005/022939/06), a public company incorporated in South Africa, which is licensed as an exchange under the Securities Services Act; Kovacs Kovacs Investments 608 (Proprietary) Limited (Registration number 2003/015125/07), a private company incorporated in South Africa; KPMG KPMG Inc (Registration number 1999/021543/21), a public company incorporated in South Africa; Lyons Lyons Property Solutions (Proprietary) Limited (Registration number 2006/026142/07), a private company incorporated in South Africa; Matodzi Matodzi Resources Limited (Registration number 1933/004523/06), a public company incorporated in South Africa, the shares of which are listed on the JSE, a subsidiary of JCI; MSI Mvelaphanda Security Investments (Proprietary) Limited (Registration number 2002/008808/07), a private company incorporated in South Africa; Moregate Moregate Investments Limited (Registration number ), a public company incorporated in the British Virgin Islands; NAV Net asset value; previous board the board of JCI prior to its reconstitution on 24 December 2005, comprised Roger Ainsley Ralph Kebble, Roger Brett Kebble, Hendrik Christoffel Buitendag, Charles Henry Delacour Cornwall and John Stratton; R&E Randgold & Exploration Company Limited (Registration number 1992/005642/06), a public company incorporated in South Africa, the shares of which are listed on the JSE but which are suspended; R&E claims the alleged claims by R&E against JCI; SARS South African Revenue Services; Securities Services Act the Securities Services Act, 2004 (Act 36 of 2004), as amended; shareholders holders of JCI shares; shares or JCI shares ordinary shares of R0.01 each in the issued share capital of JCI; Skygistics Skygistics (Proprietary) Limited (Registration number 2000/018328/07), a private company incorporated in South Africa; Simmers Simmer and Jack Mines, Limited (Registration number 1924/007778/06), a public company incorporated in South Africa, the shares of which are listed on the JSE; South Africa the Republic of South Africa; US$ United States Dollars; and VWAP volume weighted average price on the JSE. 38

41 ANNEXURE 1A VALUATION OF BOSCHENDAL, FSD, R&E AND THE INVESTMENT PROPERTIES The Directors JCI Limited 10 Benmore Road Morningside Sandton 2196 Dear Sirs 2 8 April 2010 REPORT OF THE INDEPENDENT PROFESSIONAL EXPERT TO JCI LIMITED REGARDING GROUP NET ASSET VALUE INTRODUCTION Moore Stephens Corporate Finance has been appointed by the board of directors of JCI Limited ( JCI, or the company ) to provide independent valuations of the following assets as at 31 December 2009 ( valuation date ): JCI s equity interest in R&E, comprising 8,305,427 ordinary shares in Randgold & Exploration Company Limited ( R&E ); JCI s interest in Boschendal (Proprietary) Limited ( Boschendal ), comprising 62.67% of the ordinary issued share capital of Boschendal, and shareholder loans owing by Boschendal to JCI; and JCI s equity interest in Free State Development and Investment Corporation Limited ( FSD ), comprising 9,978,350 ordinary shares in FSD. The investment properties held by JCI via its 100% held subsidiaries as follows: Coralline Limited: the beneficial owner of 6 St James Place London (St James Place ); and Liberty Moon Investments, 23 (Pty) Limited: the beneficial owner of 10 Benmore Road, Morningside, Sandton ( Investment House ), (the valuations ). DETAILS AND SOURCES OF INFORMATION In arriving at our valuations we have relied upon the following principal sources of information: Independent valuation of Estate Boschendal prepared by D Hofmeyer: M Sc US, M S OS, dated 6 April 2010; Audited annual financial statements for R&E for the year ended 31 December 2009; Draft annual financial statements for FSD for the year ended 31 December 2009; Reviewed JCI net asset value statement as at 31 December 2009; Selected additional financial information in respect of JCI, R&E and FSD up to 31 December 2009; Independent competent person s reports ( CPRs ) and mineral asset valuation reports in respect of the following projects, prepared by NJ Odendaal: B.Sc. (Geol.), B.Sc. (Min. Econ.), M.Sc. (Min. Eng.), Pr. Sci. Nat., FSAIMM, MGSSA, MAusIMM. (Competent Valuator) and CJ Muller: B.Sc. (Hons) (Geol.), Pr. Sci. Nat. (Competent Person): Weltevreden and Jeanette gold projects, dated 19 March 2010; Du Preez ledger project, dated 19 February 2010; 39

42 Doornbosch Platinum project, dated 26 March 2010; and Kameelhoek Iron Ore project, dated 26 March 2010, (the mineral assets ); Actual and planned exploration and development expenditure in respect of the mineral assets; Estimated funding requirements in respect of planned exploration and environmental work in respect of the mineral projects; Discussions with JCI and R&E directors and management regarding the financial information presented as well as the settlement calculations and the rationale for the transaction; Discussions with the independent consulting geologist and competent persons and with JCI and R&E directors and management in respect of the mineral assets; Draft share purchase agreement between JCI and Cytos Limited for the acquisition of 100% of the shares and claims in Coralline Limited, a 100% held subsidiary of JCI and the beneficial owner of 6 St James Place; Title deeds, lease agreements, schedules of current and forecast rental and other income, schedules of current and forecast operating expenses and the value of the outstanding mortgage bond as at valuation date in respect of Investment House; Discussions with JCI and R&E directors and management and advisors on prevailing market, economic, legal and other conditions which may affect underlying value; Publicly available information relating to JCI, R&E and FSD that we deemed to be relevant, including company announcements, analysts reports and media articles; and Publicly available information relating to the industry in which JCI, R&E and FSD operate that we deemed to be relevant, including company announcements, analysts reports and media articles. The information above was sourced from: Directors and management of JCI and R&E and their advisors; and Third party sources, insofar as such information related to publicly available economic, market and other data applicable to or potentially influencing our valuation. Moore Stephens Corporate Finance has not performed a due diligence, nor an audit. BASIS OF VALUATION R&E Market Value of a company s equity is commonly derived by applying one or more of the following valuation methodologies discounted cash flow; capitalised earnings; or net asset values. We have used the net asset value ( NAV ) methodology as our primary basis for the valuation of JCI s interest in R&E. Under the net asset valuation approach in respect of R&E, total equity value is based on the sum of tangible net asset value plus the value of intangible assets not recorded on the balance sheet. The NAV method of valuation is normally most appropriate for the valuation of a pure investment company. This valuation approach is considered appropriate to value an investment holding company, where the value attributable to such holding company would be determined on a sum of the parts basis. As such, a net asset methodology is most applicable for businesses such as R&E where the value lies in the underlying assets and not the ongoing operations of the business. Net asset value is determined by marking every asset and liability on and off the company s balance sheet to current market values. 40

43 R&E s principal assets and liabilities are set out in the table below. The methodology used to establish the fair value of each asset/liability class is detailed alongside. Asset Nature of asset Valuation approach Goldfields Listed investments Market price JCI Limited Listed investments Net asset value Prospecting rights Mineral asset Comparative value method Loan receivable from JCI Gold Financial instrument Amortised cost Trade receivables including outstanding settlements Financial instrument Amortised cost Cash and cash equivalents Financial instrument Cash value Liability Nature of asset Valuation approach Post-retirement medical benefit obligation Employer obligation Actuarial valuation Income tax payable Financial instrument Amortised cost Loan payable to FSD Financial instrument Amortised cost Trade and other payables Financial instrument Amortised cost R&E s attributable interest in the assets and liabilities of FSD has been valued on the same basis as detailed above. The valuations of the mineral assets were performed with due consideration of the requirements of the South African Code for the Reporting of Mineral Asset Valuation (the SAMVAL Code ), prepared under the auspices of the Southern African Institute of Mining and Metallurgy ( SAIMM ) and the Geological Society of Southern Africa ( GSSA ), which is specifically relevant to mineral companies. The SAMVAL Code is incorporated into resource classification and valuation standards promulgated by the International Council on Mining and Metals (ICMM) and Committee for Mineral Reserves International Reporting Standards (CRIRSCO). The standard comparative value method was selected as the primary approach to value the mineral assets of JCI and its attributable share of FSD s mineral assets. The comparative value method takes into account comparable transactions relating to the sale, joint venture or farm-in/farm-out of mineral assets. Such transactions may be used as a guide to, or means of, valuation. For a transaction to be considered comparable it should be similar to the asset being valued in terms of location, timing and commodity and the transaction regarded as of arm s length. The outcomes were also benchmarked against current market value of listed entities holding similar assets. In valuing the mineral assets held by R&E, we took cognisance of the fact that the Doornbosch Platinum project and Kameelhoek Iron Ore project are small in size and it is considered that these will likely be uneconomical on a stand-alone basis. In valuing the mineral assets held by FSD and R&E s attributable share thereof, we considered the relative marketability of the gold prospecting rights, potential acquirers and an assessment of recent efforts by FSD to dispose of the projects. Based on these factors we applied an additional risk premium and marketability discount to the valuation to reflect the limited sale prospects of the properties. Boschendal JCI s interest in Boschendal comprises 62.67% of the ordinary issued share capital of Boschendal and shareholder loans owing by Boschendal to JCI. The investment in Boschendal is held through an investment by JCI in Moregate (20.002% attributable interest) and JCI Investment Finance (Pty) Limited (42.668% attributable interest). The principal methodology used in the valuation of Boschendal was the comparable sales approach. This approach entails a comparison of Boschendal s characteristics with those of comparable properties which have recently sold in similar transactions, adjusted for characteristics specific to Boschendal. We have also used the replacement costs approach as a cross-check to the conclusions reached under the comparable sales approach. The replacement cost approach incorporates the value of land and the depreciated value of any improvements. The value of outstanding loans was deducted from the fair value of Boschendal to determine an equity value and JCI s attributable share, i.e %. Shareholder loans comprise a mix o f non-interest bearing and interest bearing loans, which have been measured at amortised cost, which is: Measured at initial recognition; Minus principal repayments; Plus or minus the cumulative interest using the effective interest method of any difference between that initial amount and the maturity amount; Minus any reduction (directly through the use of an allowance account) for impairment or uncollectibility. 41

44 FSD We have used the NAV methodology as our primary basis for the valuation of FSD s assets and liabilities. FSD s principal assets and liabilities are set out in the table below. The methodology used to establish the fair value of each asset/liability class is detailed alongside. Asset Nature of asset Valuation approach Prospecting rights Mineral asset Comparative value method Trade and other receivables Financial instrument Amortised cost Loans receivable (R&E) Financial instrument Amortised cost Cash and cash equivalents Financial instrument Cash value Liability Nature of asset Valuation approach Trade and other payables Financial instrument Amortised cost Income tax payable Financial instrument Amortised cost Investment properties The valuation of St James Place has been performed based on an offer to purchase the shares and claims in Coralline Limited amounting to 2,000,000 which has been accepted by JCI, although the sale agreement had not been signed as at the date of our valuation. The amount above reflects the full proceeds payable to JCI less any capital gains taxes. We have performed a valuation of Investment House based on the income capitalisation approach. The income capitalisation approach entails the capitalization of the net operating income stream using an appropriate market yield. Net operating income is defined as gross potential rental and other income, less vacancy and collection loss, less operating expenses (but excluding debt service, income taxes, and depreciation charges). The value of the outstanding bond as at valuation date has been deducted from the value determined based on the income capitalisation approach. Valuation JCI holds 8,305,427 shares in R&E and R&E holds 305,186,049 shares in JCI. The NAV of JCI therefore reflects a proportion of JCI s underlying value held via R&E and the value of R&E similarly reflects a proportion of R&E s underlying value held via JCI. We arrived at the following valuations for JCI s equity interest in R&E, JCI s equity interest in Boschendal and shareholder loans owing by Boschendal to JCI and JCI s equity interest in FSD: Table 1: Valuations Percentage held Number (excluding of shares treasury Value 31 December Description held shares) per share 2009 ( 000) (Rand) (R 000) Listed investments R&E % Unlisted investments Boschendal n/a 62.67% n/a FSD Investment % Investment properties n/a 100% n/a Total The valuation methodologies, assumptions and approaches applied in respect of R&E, JCI and FSD and each underlying asset are detailed above. 42

45 Notwithstanding our valuations, the true value negotiated between parties may differ from this value as it is dependent upon other considerations, including but not limited to differing views of micro- and macroeconomic conditions and forecasts as well as different assessments of risk. True and fair values negotiated between parties can only be determined through a process of negotiation. Yours faithfully Moore Stephens (Jhb) Corporate Finance (Pty) Limited Nick Lazanakis Director Andrew Naude Director 7 West Street 7 West Street Houghton Houghton

46 ANNEXURE 1B SUMMARY CPRS OF THE DU PREEZ LEGER PROJECT AND THE JEANNETTE AND WELTEVREDEN PROJECTS 44

47 45

48 46

49 47

50 48

51 ANNEXURE 1C CPR ON THE LAINGSBURG URANIUM PROSPECT 49

52 50

53 51

54 52

55 53

56 54

57 55