CORPORATE GOVERNANCE STATEMENT

2019

Last updated: November 2019

Investing with the times

Africa is known for its spectacular and diverse landscapes, captivating scenery and abundant wildlife. It is also a continent bursting with passion, pride and potential.

Its people are seeking new challenges, setting and breaking records in the face of headwinds, changes and challenges. To achieve new heights, outstanding Africans are on a continuous journey of discipline,

dedication, learning, knowledge and, importantly, courage.

The secret to their success lies in perseverance and the ability to adapt and grow in the face of changingcircumstances - consciously taking themselves to physical, intellectual and psychological limits through

months and years of training, trying and trials. When doing this consistently, mastering the unknownbecomes the new norm, second nature.

This past financial period has not been without challenges. We have had to operate in sluggishand volatile, local and global economic conditions. Like our fellow Africans, Ecsponent seeks and

conquers challenges, finding opportunities in areas some may overlook and persevering courageouslyto achieve results over time. Our proven long-term track record transparently displays our enthusiasm

for wealth creation.

We remain positioned to withstand the tides of an ever evolving and complex operating environment bytaking bold but necessary steps in order to ensure the Group’s sustainability.

As the Group is on the brink of significant evolution and change, this report celebrates the uniqueachievements of Africans who remain committed to their journey of excellence and achievement and the

unique natural beauty of the continent.

We look forward to continuing the journey to a rewarding 2020.

Ecsponent Corporate Governance Statement 3

CORPORATE GOVERNANCE STATEMENT

1. Policy for the appointment of DirectorsDirectors’ appointments are made in a formal and transparent manner. At least 50% of Directors are elected by Shareholders and the remaining Directors are nominated by the Board. A Nomination Committee has been established which assists the Board in considering the appropriateness of appointments. Appointments made by the Board are approved by Shareholders at the annual general meeting of Shareholders.

The Nominations Committee, which has been merged with the Remunerations Committee, consists of only the non-executive directors, the majority of whom are independent and the chairman is P Matute.

2. Policy evidencing clear balance of power and authority on the Board

The Board comprises seven directors – three executives and four independent non-executives.

There is no one director with unfettered decision-making powers. The roles of the chairman and chief executive office are separated in order to further ensure a balance of power and authority.

If there is an actual or potential conflict of interest, the director concerned, after declaring his/her interest in terms of the Companies Act, is excluded from the related decision-making process.

3. Appointment of chief executive officerTP Gregory is appointed as the Company’s chief executive officer with effect from October 2016. The role of chairman is fulfilled by RJ Connellan, who is an independent non-executive director.

Three Rondavels in Graskop, Mpumalanga.

4 Ecsponent Corporate Governance Statement

AUDIT AND RISK COMMITTEE

4. Committees

The Company has established a combined Audit and Risk Committee, which met four times in the last financial year ended 30 June 2018, and five times in the subsequent twelve-month period ended 30 June 2019.

The Audit and Risk Committee consists off the following members:

Member name Function

KA Rayner Chairman

RJ Connellan Member

PJ Matute Member

All members are independent non-executive directors. The Board is of the opinion that the current committee constitution is adequate to ensure the governance required. As at date of this report, the chairman of the Board is a member of the committee, only to fill a vacancy until appointment of an alternate independent non-executive director is appointed to the Board, with the requisite skills and knowledge.

The chief executive officer, the financial director and the external auditors attend meetings of the committee as invitees.

The committee acts in accordance with written terms of reference as confirmed by the Board, which terms set out its authority and duties. The primary mandate of the committee is to ensure:

The committee acts in accordance with written terms of reference as confirmed by the Board, which terms set out its authority and duties. The primary mandate of the committee is to ensure:› evaluate the Group’s systems of internal financial and

operational control and ensure that the Company has established appropriate financial reporting procedures and that those procedures are operating;

› review accounting policies and financial information to be issued to the public;

› facilitate effective communication between the Board, management and the external auditors;

› recommend the appointment of, and determine the fees payable to the external auditors and determine

› ensure suitability of the appointment of external auditors and the designated individual partner, specifically taking into account any information pursuant to paragraph 22.15(h) of the JSE Listing Requirements;

› approve the level of non-audit services provided by the external auditors;

› review the financial accounts of the Company and recommend adoption of the financial reports to the

Board; and› ensuring, on an annual basis, that the financial director

has the appropriate expertise and experience.

The committee furthermore reviewed the critical business, operational, financial and compliance exposures and sustainability issues facing the Group, taking into account the severity and probability of occurrence of such risks.

The committee supports the Board in discharging its responsibility for ensuring that the risks associated with its operations are effectively managed. This is done through, inter alia:

› setting out a process for the identification and management of risk and sustainability issues;

› reviewing and assessing any risk management issues;› considering items of risk, assessing such risks and

determining required solutions, and where required, reporting the most significant risks to the Board;

› reviewing corporate governance guidelines and implementation; and

› reviewing risk.

Ecsponent Corporate Governance Statement 5

The Nomination and Remuneration Committee comprised entirely of the independent non-executive directors which met three times during the last financial year ended 30 June 2018, and twice during the twelve-month period ended 30 June 2019.

The role of the committee is to:› assist the Board by performing an objective and

independent review of the functioning of the organisation’s remuneration mechanisms. It exercises its functions through close liaison and communication with management; and

› operate as an overseer and a provider of recommendations to the Board for its consideration and final approval regarding nominations to the Board. The committee assists the Board to ensure that:ê the Board has the appropriate composition for it to

execute its duties effectively;ê directors are appointed through a formal process;ê induction and ongoing training and development of

directors take place; andê formal succession plans for the Board, chief executive

officer and senior management appointments are in place.

The Nomination and Remuneration Committee consists of the following members:

Member name Function

PJ Matute Chairman

RJ Connellan Member

G Manyere Member

The committee assist the Board in:› determining the broad policy for executive and senior

management remuneration;› the remuneration of the executive directors and

Company secretary;› reviewing the non-executive directors’ fees;› to assist the Board in the appointment of directors

that are suitably skilled, and after taking into account its policies on the race and gender diversity.

The Company’s remuneration policy and implementation report will be tabled for a separate non-binding advisory vote by Shareholders at each annual general meeting. In the event that the remuneration policy or the implementation report are voted against by 25% or more of the votes exercised, the announcement on the voting results will provide an invitation to dissenting shareholders to engage with the Company and will specify the manner and timing of such engagement.

NOMINATION AND REMUNERATION COMMITTEE

6 Ecsponent Corporate Governance Statement

The Company subscribes to the highest ethical standards and behaviour in the conduct of its business and dealings with all stakeholders. The Social and Ethics Committee met three times in the last financial year ended 30 June 2018, and twice in the twelve-month period ended 30 June 2019.

The Social and Ethics Committee assists the Board monitoring all aspects associated with the sustainable development performance of the Group, specifically relating to:

› Stakeholder engagement;› Health and public safety, which includes occupational

health and safety as well as the clinical quality of the Group’s services;

› Broad-based black economic empowerment;› Labour relations and working conditions;› Training and skills development of the Group’s employees;› Management of the Group’s environmental impacts;› Ethics and compliance; and› Corporate social investment.

The Social and Ethics Committee consists off the following members:

Member name Function

PJ Matute Chairman

KA Rayner Member

TP Gregory Member

DP van der Merwe Member

SOCIAL AND ETHICS COMMITTEE

The Company has also established an investment committee, to assist the Board in assessing and recommending investments for the Group.

The Investment Committee consists off the following members

Member name Function

KA Rayner Chairman

G Manyere Member

TP Gregory Member

DP van der Merwe Member

INVESTMENT COMMITTEE

PERSISTENCE GUARANTEES THAT RESULTS ARE INEVITABLE.Paramahansa Yogananda

Ecsponent Corporate Governance Statement 7

5. Curricula vitae and categorisation of each director

Brief curricula vitae of each director standing for election or re-election is included in the notice to the annual general meeting of the Company each year.

6. Appointment of executive financial directorThe Company has appointed Dirk van der Merwe as its full-time executive financial director. The Audit and Risk Committee has confirmed that it is satisfied that Dirk van der Merwe has the necessary and appropriate expertise and experience required of an executive financial director. The audit committee assesses the expertise and experience of the financial director on an annual basis and communicates their findings to shareholders annually in the integrated report released by the Company.

7. Company SecretaryThe Board considers on an annual basis, and is satisfied that the Company Secretary, Lezanne du Preez-Cilliers, has the necessary and appropriate competence, qualifications and experience. This will be communicated to shareholders annually in the integrated report released by the Company.

The Company Secretary is not a Director of the Company. An arm’s length relationship is maintained between the Board and the Company Secretary.

8. Gender and race diversityThe Company currently has no female representation on the Board. Although the Board, through its Nomination and Remuneration Committee, is aware of the need to promote gender representation, the Directors believe that the composition of a Board that provides effective leadership is driven by a wide variety of factors. In terms of paragraph 3.84(j) of the Listings Requirements, companies are required to have a policy on the promotion of race diversity at Board level. The Company supports this and believes that the current composition of the Board reflects its race diversity policy.

Accordingly, each individual Board member is selected based on skills, experience, industry knowledge, independence and integrity, and the Board does not prioritise gender above these factors.

The Company supports the principles and aims of appropriate gender and race diversity at Board level and has adopted a formal policy in this regard and is mindful of the advantages of gender diversity in setting its nominations policies.

The Company will continue to monitor its gender and race diversity and disclose the results to the Shareholders on an annual basis.

Lake Malawi.

Ecsponent Limited Head Office1st Floor, The Wedge, 43 Garsfontein road, Waterkloof, 0145, Pretoria, Gauteng+27 87 808 0100 | +27 86 432 3459 | info@ecsponent.com

Registration no. 1998/013215/06

ecsponent.com