Notice of the annual general meeting


Merafe Resources Limited

(Incorporated in the Republic of South Africa) (Registration number 1987/003452/06)
ISIN: ZAE000060000
Share code: MRF
(hereinafter referred to as Merafe Resources or the Company)

Notice is hereby given in terms of section 62(1) of the Companies Act, 71 of 2008 (the Companies Act) that the 29th (twenty-ninth) Annual General Meeting of shareholders of the Company will be held at the offices of the Company at Building B, 2nd floor, Ballyoaks Office Park, 35 Ballyclare Drive, Bryanston, 2191 at 11:00 on Thursday, 5 May 2016 (Notice), for the purpose of transacting the business as outlined in this Notice, and to consider and, if deemed fit, to pass, with or without modification, the ordinary and special resolutions outlined below.

Important dates

Record date to receive the Notice: Friday, 18 March 2016
Last date to trade to be eligible to vote: Thursday, 21 April 2016
Record date to be eligible to vote: Friday, 29 April 2016
Last date for lodging forms of proxy (by 11:00): Tuesday, 3 May 2016

Accordingly, the date on which a person must be registered as a shareholder in the register of the Company for purposes of being entitled to attend and vote at the meeting is Friday, 29 April 2016.

Interpretation and definitions

For the avoidance of doubt and to the extent that the terms have not been defined in the integrated annual report for the year ended 31 December 2015 (integrated annual report), reference in this Notice to the following words and expressions:

• ‘Group’ means the Company and all its subsidiaries at the date of this Notice
• ‘Listings Requirements’ means the Listings Requirements of the JSE Limited
• ‘King III’ means the King Report III on Corporate Governance for South Africa
• ‘MOI’ means Memorandum of Incorporation of the Company

Any words and expressions defined in the Companies Act or the Listings Requirements, as the case may be, which are not defined in this Notice, shall bear the same meanings in this Notice as those ascribed to them in the Companies Act or the Listings Requirements, as the case may be.

Section A: Ordinary resolutions

For ordinary resolutions 1 to 6 (inclusive) to be duly adopted, the support of more than 50% (fifty percent) of the voting rights exercised on each ordinary resolution by shareholders present or represented by proxy at the Annual General Meeting and entitled to exercise voting rights on the relevant resolution, must be exercised in favour of such resolution.

1.

Ordinary Resolution Number 1: Adoption of annual financial statements

“Resolved that the Group audited annual financial statements, including the reports of the directors, the auditor and the Audit and Risk Committee, for the financial year ended 31 December 2015, be and are hereby considered and accepted.”

The summarised form of the financial statements is included with this Notice. A copy of the complete annual financial statements of the Company for the financial year ended 31 December 2015 can be obtained from www.meraferesources.co.za or on request during normal business hours at the Company’s registered address, Building B, 2nd floor, Ballyoaks Office Park, 35 Ballyclare Drive, Bryanston, 2191.

Notes to Ordinary Resolution Number 1

• In terms of the provisions of section 30(3)(d) of the Companies Act, a company’s annual financial statements must be presented to its shareholders at the first shareholders’ meeting after the statements have been approved by the board of directors of the company
2.

Ordinary Resolution Number 2: Re-appointment of retiring directors

“Resolved that, by separate ordinary resolutions numbered 2.1 to 2.2 (inclusive), the following directors, who, in terms of the Company’s MOI, retire by rotation at this Annual General Meeting, and, being eligible, stand and offer themselves for re-election, be and are hereby re-elected:

2.1 Ms Belese Majova
2.2 Ms Karabo Nondumo”

Notes to Ordinary Resolution Number 2

• Resolutions numbered 2.1 to 2.2 (inclusive) above are proposed by separate vote and the re-appointments which they represent constitute separate and divisible ordinary resolutions and will be considered to have received the support of the Nomination Committee
• The reason for resolutions numbered 2.1 to 2.2 (inclusive) is that in terms of the provisions of the Company’s MOI, one-third of the directors, or if their number is not a multiple of three, then the number nearest to, but not less than one-third, are required to retire at each Annual General Meeting and, being eligible, may offer themselves for re-election
• The Board has evaluated the performance and contribution of each director standing for re-election and has recommended the re-election of each of the directors
• Abridged curricula vitae of each of the directors of the Company standing for re-election are set out on the Directorate section of the integrated annual report
3.

Ordinary Resolution Number 3: Confirmation of appointment of director

“Resolved that the appointment by the Board of Directors of Mr Shaun Blankfield as a director of the Company with effect from 13 May 2015 be and is hereby confirmed in accordance with the Company’s MOI in order to become permanent.”

Notes to Ordinary Resolution Number 3

The reason for this resolution is that in terms of the Company’s MOI, shareholders are required to confirm an appointment made by the Board of Directors post the last Annual General Meeting in order for that appointment to become permanent.

An abridged curriculum vitae of this director is set out on the Directorate section of the integrated annual report.
4.

Ordinary Resolution Number 4: Appointment of members to the Audit and Risk Committee for the forthcoming financial year

“Resolved that the following members, by separate ordinary resolutions numbered 4.1 to 4.3 (inclusive), being eligible and offering themselves for re-election, be and are hereby appointed as members of the Audit and Risk Committee for the financial year ending 31 December 2016:

4.1 Ms Belese Majova*
4.2 Ms Karabo Nondumo*
4.3 Mr Abiel Mngomezulu”

* Subject to their re-election as a director pursuant to Ordinary Resolution Number 2.

Notes to Ordinary Resolution Number 4

• Resolutions numbered 4.1 to 4.3 (inclusive) above constitute separate and divisible ordinary resolutions and will be considered by separate vote
• The reason for resolutions numbered 4.1 to 4.3 (inclusive) is that in terms of the provisions of section 94(2) of the Companies Act, a company shall at every Annual General Meeting elect an audit and risk committee comprising at least three members
• The Nomination Committee conducted an assessment of the performance and independence of each of the directors proposed to be members of the Audit and Risk Committee and the Board considered and accepted the findings of the Nomination Committee. The Board is also satisfied that the proposed members meet the provisions of section 94(4) of the Companies Act, that they are independent according to King III (chapter 3) and that they possess the required qualifications and experience as prescribed in Regulation 42 of the Companies Regulations, 2011 and therefore recommends their nomination
• Abridged curricula vitae of each of the independent non-executive directors proposed to be appointed to the Audit and Risk Committee appear on the Directorate section of the integrated annual report
5.

Ordinary Resolution Number 5: Re-appointment of external auditors of the Company

“Resolved that the re-appointment of KPMG Inc. as the external registered auditors of the Company, and being independent from the Company, be and is hereby approved and Ms Bavhana Sooku be and is hereby appointed as the designated audit partner for the financial year ending 31 December 2016.”

Notes to Ordinary Resolution Number 5

• The reason for this resolution is that section 90(1) of the Companies Act requires a company to appoint an auditor at every Annual General Meeting
• The duty to nominate auditors for appointment lies with the Audit and Risk Committee. The Audit and Risk Committee conducted an assessment of the performance and the independence of the external auditors and considered whether or not the external auditors comply with the provision of the Companies Act and section 22 of the Listings Requirements, and the Board considered and accepted the findings. The Board is satisfied that the proposed external auditors and Ms Bavhana Sooku comply with the relevant provisions of the Companies Act and the Listings Requirements

Section B: Ordinary resolution of a non-binding nature

For Ordinary Resolution Number 6 to be duly adopted, the support of more than 50% (fifty percent) of the voting rights exercised on each ordinary resolution by shareholders present or represented by proxy at the Annual General Meeting and entitled to exercise voting rights on the relevant resolution, must be exercised in favour of such resolution.
6.

Ordinary Resolution Number 6: Non-binding advisory vote on Remuneration Policy

“Resolved that the Remuneration Policy of the Company be and is hereby endorsed by way of a non-binding advisory vote.”

The remuneration report of the Company is set out on the Remuneration report of the integrated annual report for the year ended 31 December 2015 and the Remuneration Policy can be obtained from www.meraferesources.co.za or on request during normal business hours at the Company’s registered address, Building B, 2nd floor, Ballyoaks Office Park, 35 Ballyclare Drive, Bryanston, 2191.

Notes to Ordinary Resolution Number 6:

Chapter 2 of King III dealing with boards and directors requires companies to table their Remuneration Policy every year to shareholders for a non-binding advisory vote at the Company’s Annual General Meeting. This vote enables shareholders to express their views on the remuneration policies adopted and on their implementation. The Company’s remuneration report is contained on the Remuneration report of the integrated annual report. This resolution is of an advisory nature only and failure to pass this resolution will therefore not have any legal consequences relating to existing arrangements. However, the Board of Directors of the Company will take the outcome of the vote into consideration when considering the Company’s Remuneration Policy.

Section C: Special resolutions

For Special Resolution Numbers 1.1 to 1.8, 2 and 3 to be adopted, a majority of 75% (seventy-five percent) of the voting rights exercised on each special resolution must be exercised in favour of such resolution by shareholders present or represented by proxy at the Annual General Meeting and entitled to exercise voting rights on the resolution concerned.
7.

Special Resolutions Numbers 1.1 to 1.8: Approval of non-executive directors’ fees

‘Resolved that the fees, which will be payable to the non-executive directors for their services to the Board and committees of the Board with effect from 1 January 2016 as set out below be and are hereby approved.’

        2016*    
Committee Special
Resolution
Number		 Membership Proposed
annual cost
R’000		 Proposed
retainer
per annum
R’000		 Proposed
meeting
fees per
annum
R’000		  
Board 1.1 Chairperson 492 291 295 375 196 917  
  1.2 Member 265 350 159 210 106 140  
Audit and Risk 1.3 Chairperson 191 500 114 900 76 600  
  1.4 Member 120 085 72 051 48 034  
Remuneration and Nomination 1.5 Chairperson 103 516 62 109 41 406  
  1.6 Member 63 185 37 911 25 274  
Social, Ethics and Transformation 1.7 Chairperson 103 516 62 109 41 406  
  1.8 Member 63 185 37 911 25 274  

Notes to Special Resolution Numbers 1.1 to 1.8:

The reason for and the effect of these resolutions is to approve the remuneration payable by the Company to its non-executive directors for their services as non-executive directors of the Company for the financial year ending 31 December 2016. In terms of the provisions of section 66(8) and section 66(9) of the Companies Act, remuneration may only be paid to the directors for their services as directors in accordance with the Company’s MOI and only by a special resolution approved by the shareholders within the previous two years.

An explanation of the proposed fees for 2016 is set out on the Remuneration report of the integrated annual report for 2015.
8.

Special Resolution Number 2: Loans or other financial assistance to related or inter-related companies

‘Resolved that, subject to compliance with the provisions of the Company’s MOI and the Companies Act each as presently constituted and as amended from time to time, the Board of Directors of the Company (the Board) be and is hereby authorised, for a period of two years from the date of this Annual General Meeting, on such terms and conditions that the Board may determine, to provide any direct or indirect financial assistance (financial assistance will herein have the meaning attributed to such terms in section 45(1) of the Companies Act) to a related or inter-related company or corporation (or to a member of a related or inter-related corporation) or any person related to any of them.’

Notes to Special Resolution Number 2

In terms of section 45 of the Companies Act, a company is required to obtain shareholder approval, by way of passing a special resolution for the provision by it of direct or indirect financial assistance to a related or inter-related company or corporation, or any person related to any such company or corporation.

The Company has at all relevant times and prior to the effective date of the new Companies Act being 1 May 2011, provided financial assistance to its subsidiaries and related and inter-related companies. To facilitate the achievement by the Group of its strategic goals, it is necessary that this assistance continues. The main purpose for this authority is therefore to grant the Board of Directors the authority to authorise the Company to provide inter-group loans and other financial assistance for purposes of funding the activities of the Group. However, in accordance with the provisions of section 45 of the Companies Act, the Board undertakes that it will not adopt a resolution to authorise such financial assistance, unless the Board is satisfied that:

• immediately after providing any direct or indirect financial assistance approved in terms of this resolution, the Company would satisfy the solvency and liquidity test as contemplated in section 45(3)(b) of the Companies Act
• the terms under which the financial assistance is proposed to be given are or will be fair and reasonable to the Company
•

written notice of any such resolution by the Board of Directors of the Company shall be given to all shareholders of the Company and any trade union representing its employees:

– within 10 business days after the Board adopted the resolution, if the total value of the financial assistance contemplated in that resolution, together with any previous such resolution during the financial year, exceeds 0.1% of the Company’s net worth at the time of the resolution; or
– within 30 business days after the end of the financial year, in any other case
9.

Special Resolution Number 3: General authority to repurchase Company shares

“Resolved that, the Company, or a subsidiary of the Company, be and is hereby authorised, by way of a general authority, to acquire ordinary shares of 1 cent each (ordinary shares) issued by the Company [(including the conclusion of derivative transactions which may result in the purchase of shares)], in terms of the provisions of sections 46 and 48 of the Companies Act and in terms of the Listings Requirements, it being recorded that the Listings Requirements currently require, inter alia, that the Company may make a general repurchase of securities only if:

• any such repurchase of ordinary shares is effected through the order book operated by the JSE trading system and done without any prior understanding or arrangement between the Company and the counterparty (reported trades are prohibited)
• authorised by the Company’s MOI
• the general authority shall be valid until the next annual general meeting of the Company, provided that it shall not extend beyond 15 months from the date of this Special Resolution Number 3
• when the Company has cumulatively repurchased 3% of the number of ordinary shares in issue on the date of passing of Special Resolution Number 3, and for each 3% thereof, in aggregate acquired thereafter, an announcement is published as soon as possible, in terms of the Listings Requirements
• at any time, only one agent is appointed to effect any repurchase on the Company’s behalf
• the Company or its subsidiary does not repurchase securities during a prohibited period unless the Company has a repurchase programme in place where the dates and quantities of securities to be traded during the relevant period are fixed (not subject to any variation) and have been submitted to the JSE in writing prior to the commencement of the prohibited period
• any general repurchase by the Company of its own ordinary shares shall not, in aggregate in any one financial year exceed 10% of the Company’s issued ordinary shares as at the date of passing of this Special Resolution Number 3; and
• In determining the price at which the ordinary shares are repurchased by the Company or its subsidiary in terms of this general authority, the maximum price at which such shares may be repurchased will not be greater than 10% above the weighted average of the market value for such ordinary shares for the five business days immediately preceding the date of repurchase of such shares, (the Price).
• In case of an acquisition by a subsidiary of the Company, of shares in the Company under this authority such acquisition shall be limited to a maximum of 10% (ten percent) in aggregate of the number of issued shares of any class of shares of the Company, taken together with all shares held by all the subsidiaries of the Company.

The directors of the Company confirm that no repurchase will be implemented in terms of this authority unless, after each such repurchase:

• the Company and the Group will be able to pay its debts as they become due in the ordinary course of business for a period of 12 months after the date of the notice of the Annual General Meeting ;
• the consolidated assets of the Company and the Group, fairly valued in accordance with the accounting policies used in the latest audited annual Group financial statements, will exceed its consolidated liabilities for a period of 12 months after the date of the notice of the Annual General Meeting;
• the share capital and reserves of the Company and the Group will be adequate for ordinary business purposes for a period of 12 months after the date of the notice of the Annual General Meeting; and
• the working capital of the Company and the Group will be adequate for ordinary business purposes for a period of 12 months after the date of the notice of the Annual General Meeting.

and the directors have passed a resolution authorising the repurchase, resolving that the Company and its subsidiary/ies, have satisfied the solvency and liquidity test as defined in the Companies Act and since the solvency and liquidity test had been applied, there have been no material changes to the financial position of the Group.

Pursuant to and in terms of paragraphs 11.23 and 11.26 of the Listings Requirements, the directors of the Company hereby state that:

• the intention of the Company and its subsidiaries is to utilise the general authority to repurchase, if at some future date the cash resources of the Company are in excess of its requirements; and
• the method by which the Company and any of its subsidiaries intend to repurchase its securities and the date on which such repurchase will take place, has not yet been determined.

The Listings Requirements require the following disclosures with respect to general repurchases, some of which appear elsewhere in the annual report of which this notice forms part:

• Major shareholders – JSE Limited share statistics
• Share capital of the Company – Directors' report and note 6 of the annual financial statements

Directors’ responsibility statement

The directors, whose names are given on the Directorate section of the integrated annual report, collectively and individually accept full responsibility for the accuracy of the information pertaining to the general repurchase resolution and certify that to the best of their knowledge and belief there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that the aforementioned resolution contain all information required by law and the Listings Requirements.

No material changes to report

Other than the facts and developments reported on in the integrated annual report, there are no material changes in the affairs or financial position of the Company and its subsidiaries that have occurred subsequent to the 31 December 2015 year end until the date of this notice of Annual General Meeting.

Reason and effect

The reason for and effect of Special Resolution Number 3 is to authorise the Company and/or its subsidiaries by way of a general authority to acquire their own issued shares on such terms, conditions and in such amounts as determined from time to time by the directors of the Company subject to the limitations set out above and in compliance with section 48 of the Companies Act.

Percentage voting rights

The minimum percentage of voting rights that is required for this resolution to be adopted is 75% (seventy five percent) of the voting rights to be cast on the resolution.
10.

Ordinary Resolution Number 7: Authority to sign all documents required to give effect to all resolutions in this Notice

"Resolved that any one of the directors of the Company or Company Secretary be and hereby is authorised to do all such things and sign all such documents and procure the doing of all such things and the signature for all such documents as may be necessary or incidental to give effect to all ordinary and special resolutions passed at the Annual General Meeting."
11.

General

To transact such other business that may be transacted at an Annual General Meeting.
12.

Actions required by Merafe Resources’ shareholders

12.1 The actions, which shareholders of the Company are required to take in order to follow their rights, to pass and adopt, with or without modification, the ordinary and special resolutions set out in this Notice are as set out below. If you are in any doubt as to the action you should take in relation to this Notice, please contact your stockbroker, Central Securities Depository Participant (CSDP), legal advisor, accountant, banker or other professional advisor immediately.
12.2

Record dates

12.2.1 The record date for shareholders to be recorded on the securities register of the Company in order to receive notice of the Annual General Meeting is Friday, 18 March 2016.
12.2.2 The record date for shareholders to be recorded on the securities register of the Company in order to be able to attend, participate in and vote at the Annual General Meeting is Friday, 29 April 2016 (record date).
12.2.3 The last day to trade in the Company’s shares in order to be recorded on the securities register of the Company in order to be able to attend, participate in and vote at the Annual General Meeting is Thursday, 21 April 2016.