BALWIN PROPERTIES LIMITED — Proxy Solicitation & Information Statement 2021

Jul 27, 2021

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

The definitions and interpretations commencing on page 5 of this circular apply, mutatis mutandis , throughout this circular including this cover page.

ACTION REQUIRED BY SHAREHOLDERS:

If you are in any doubt as to what action to take in relation to this Circular, please consult your CSDP, broker, banker, attorney, accountant or other professional advisor immediately.

If you have disposed of all your Balwin Shares, please forward this Circular to the purchaser of such Balwin Shares or to the CSDP, broker, attorney, banker or other agent through whom the disposal was effected.

Shareholders are referred to page 2 of this Circular, which sets out the action required by them.

Balwin does not accept responsibility, and will not be held liable, for any action of, or omission by, any CSDP or broker including, without limitation, any failure on the part of the CSDP or broker of any beneficial owner of Balwin Shares to notify such beneficial owner of the transaction set out in this Circular.

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BALWIN PROPERTIES LIMITED

(Incorporated in the Republic of South Africa)

(Registration number 2003/028851/06)

JSE share code: BWN ISIN: ZAE000209532 (“ Balwin ” or “ the Company ”)

CIRCULAR TO BALWIN SHAREHOLDERS

relating to;

• a broad-based Black Economic Empowerment transaction incorporating:

• the issue of 47 219 259 Balwin shares as a specific issue for cash;

• the approval of any financial assistance to be provided by the Company, as contemplated in terms of section 44 of the Act, in relation to the BEE Transaction; and

• the potential future BEE Transaction Specific Repurchase of the Repurchase Shares;

and incorporating:

• a Notice of General Meeting; and

• a Form of Proxy (red) for purposes of the General Meeting (for use by Certificated Shareholders and Dematerialised Shareholders who have selected Own-name Registration only).

Transaction Sponsor

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Legal advisor to Balwin

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Legal Advisor to BEE SPV

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Reporting Accountant

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Date of issue: Monday, 26 July 2021

This Circular is available in English only. Copies may be obtained during normal business hours from the registered office of Balwin, whose address is set out in the “Corporate Information” section of this Circular from, Monday, 26 July to Monday, 6 September 2021 (both days inclusive). A copy of this Circular will also be available on Balwin’s website (www.balwin.co.za) from Monday, 26 July 2021.

CORPORATE INFORMATION

Company Secretary and Registered Office

Block 1 Townsend Office Park 1 Townsend Avenue Bedfordview 2007 (Private Bag X4, Garden view, 2047) Date and place of incorporation: 14 November 2003, South Africa

Company Secretary

FluidRock Co Sec Proprietary Limited (Registration number 2016/093836/07) Monument Office Park Block 5 Suite 201 77 Steenbok Avenue, Monument Park, 0181 (PO Box 25160, Monument Park, 0105)

Legal advisor to Balwin

Cliffe Dekker Hofmeyr Inc. 1 Protea Place Sandown Sandton 2196

Transaction Sponsor

Investec Bank Limited (Registration number 1969/004763/06) 2nd Floor, 100 Grayston Drive Sandown Sandton, 2196 (PO Box 785700, Sandton, 2146)

Independent reporting accountant

BDO South Africa Incorporated (Registration number 1995/002310/21) Wanderers Office Park 52 Corlett Drive Illovo, 2196 (Private Bag X60500, Houghton, 2041

Legal Advisor to BEE SPV

Padayachee Attorneys Incorporated Holding 30 Zinnia Road Door. No. 2 Glenferness Midrand 1685 (PO Box 78186, Sandton, 2146)

Transfer Secretaries

Computershare Investor Services Proprietary Limited Registration number 2004/003647/07 Rosebank Towers 15 Biermann Avenue Rosebank, 2196

Postal

Private Bag X9000 Saxonwold, 2132

or

Email

proxy@computershare.co.za

TABLE OF CONTENTS

The definitions and interpretations commencing on page 5 apply to the table of contents.

		Page
Corporate information		Inside front cover
Action required by Shareholders		2
Salient dates and times		4
Definitions and interpretations		5
Circular to Shareholders
1.	Introduction and purpose of this Circular	9
2.	The BEE Transaction	10
	2.1 Overview of the BEE Transaction	10
	2.2 BEE SPV and Partner	10
	2.3 Salient terms of the BEE Transaction Agreements	10
	2.4 Conditions precedent	12
3.	Transaction expenses	12
4.	Balwin overview	12
	4.1 Nature of business	12
	4.2 Prospects	12
	4.3 _Pro forma_financial information	13
	4.4 Share capital	13
	4.5 Major Shareholders and interests	14
	4.6 Material changes and litigation statement	14
5.	Information relating to the Directors of Balwin	14
	5.1 Director’s interests in the issued Shares of Balwin	14
	5.2 Director’s interests in the BEE Transaction	15
	5.3 Directors’ recommendation	15
	5.4 Directors’ responsibility statement	15
6.	Professional advisor’s consents	15
7.	Confirmation of independence	15
8.	Solvency and liquidity	15
9.	General meeting and voting	16
10.	Documents available for inspection	16
Annexure 1 _Pro Forma_Financial Information of Balwin		17
Annexure 2 Independent reporting accountant’s report on the_Pro Forma_Financial information		21
Annexure 3 Trading History of Balwin Shares on the JSE		23
Notice of General Meeting		24
Form of Proxy _(red)_for purposes of the General Meeting (for use by Certificated Shareholders and
Dematerialised Shareholders who have selected Own-name Registration only)		Enclosed

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ACTION REQUIRED BY SHAREHOLDERS

The definitions and interpretations commencing on page 5 apply to this “Action required by Shareholders” section.

This Circular is important and requires your immediate attention. Please take careful note of the following provisions regarding the action required by Shareholders. If you are in any doubt as to what actions to take, please consult your CSDP, Broker, banker, attorney, accountant or other professional advisor immediately.

If you have disposed of all of your Balwin Shares, please forward this Circular to the purchaser of such Shares or to the CSDP, Broker, banker or other agent through whom the disposal was effected.

The General Meeting will be held at 09:00 entirely via a remote interactive electronic platform, Microsoft Teams, on Monday, 6 September 2021 in which General Meeting Shareholders will be requested to consider and, if deemed fit, to pass, with or without modification, the Resolutions set out in the Notice of General Meeting attached to this Circular.

Shareholders who have dematerialised their Shares, other than those Shareholders who have dematerialised their Shares with own name registration, should contact their CSDP or broker in the manner and time stipulated in the agreement entered into between them and their CSDP or broker:

• to furnish them with their voting instructions; or

• in the event that they wish to attend the General Meeting, to obtain the necessary letter of representation to do so.

Shareholders wishing to participate electronically in the General Meeting are required to deliver written notice to the company at Block 1, Townsend Office Park, 1 Townsend Avenue, Bedfordview (marked for the attention of the chief financial officer), by no later than 09:00 on Friday, 27 August 2021, that they wish to participate via electronic communication at the General Meeting (“the electronic notice”).

In order for the electronic notice to be valid, it must contain:

• if the Shareholder is an individual, a certified copy of his/her identity document and/or passport;

• if the Shareholder is not an individual, a certified copy of a resolution by the relevant entity and a certified copy of the identity documents and/or passports of the persons who passed the relevant resolution. The relevant resolution must set out who from the relevant entity is authorised to represent the relevant entity at the General Meeting via electronic communication; and

• a valid email address and/or facsimile number (“the contact address/number”).

The Company shall use its reasonable endeavours to notify a Shareholder at its contact address/number who has delivered a valid electronic notice of the relevant details through which the Shareholder can participate via electronic participation.

Proxies

A Shareholder entitled to attend and vote at the General Meeting is entitled to appoint one or more proxies to attend, participate in and vote at the meeting in the place of the Shareholder. A proxy need not also be a Shareholder of the Company.

Shareholders who have not dematerialised their Shares or who have dematerialised their Shares with own name registration, and who are entitled to attend and vote at the General Meeting , are entitled to appoint one or more proxies to attend, speak and vote in their stead. A proxy need not be a Shareholder. It is requested that, for ease of administration, proxy forms be forwarded so as to reach the transfer secretaries no later than 09:00 on Thursday, 2 September 2021.

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The forms of proxy should be lodged at:

Address:

Computershare Investor Services Proprietary Limited Rosebank Towers 15 Biermann Avenue Rosebank 2196

Postal:

Private Bag X9000 Saxonwold, 2132

or

Email:

proxy@computershare.co.za

so as to be received by no later than 48 hours prior to the meeting for administrative purposes. Any forms of proxy not lodged by this time may still be lodged by email to proxy@computershare.co.za prior to the commencement of the General Meeting.

If Shareholders who have not dematerialised their Shares or who have dematerialised their Shares

with own name registration , and who are entitled to attend and vote at the General Meeting, do not deliver proxy forms to the transfer secretaries by 09:00 on Thursday, 2 September 2021, Shareholders will nevertheless at any time prior to the commencement of the voting on the resolutions at the General Meeting be entitled to lodge the form of proxy in respect of the General Meeting, in accordance with the instructions therein with the chairperson of the General Meeting. Forms of proxy must only be completed by Shareholders who have not dematerialised their Shares or who have dematerialised their Shares with own name registration.

Balwin does not accept responsibility, and will not be held liable, under any applicable law or otherwise, for:

• any action of, or omission by, the Transfer Secretaries; or

• any loss, damage, cost, expense or liability arising in any way directly or indirectly from the use of the platform or electronic facilities including, without limitation, any malfunctioning, delay or other total or partial failure thereof.

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SALIENT DATES AND TIMES

The definitions and interpretations commencing on page 5 apply to these salient dates and times.

Salient dates and times	2021
Notice record date, being the date on which a Shareholder must be registered in the
Register in order to be eligible to receive the Notice of General Meeting on	Friday, 16 July
Circular incorporating the Notice of General Meeting and Form of Proxy_(red)_, posted to
Shareholders on	Monday, 26 July
Announcement of posting of Circular and Notice convening the General Meeting released
on SENS on	Monday, 26 July
Last day to trade Shares in order to be recorded in the Register to vote at the General
Meeting (see note 3 below) on	Tuesday,24 August
General Meeting record date, being the date on which a Shareholder must be registered in
the Register in order to be eligible to attend and participate in the General Meeting and to
vote thereat, by close of trade on	Friday, 27 August
For administrative reasons to ensure an orderly arrangement of affairs on the day, Forms of
Proxy_(red)_in respect of the General Meeting may be emailed to proxy@computershare.
co.za or received via post by 09:00 on	Thursday, 2 September
Form of Proxy_(red)_in respect of the General Meeting to be emailed to the chairperson of
the General Meeting or to proxy@computershare.co.za at any time prior to the
commencement of the voting	Monday, 6 September
General Meeting held at 09:00 on	Monday, 6 September
Results of the General Meeting published on SENS on	Monday, 6 September

Notes:

1. All dates and times indicated above are South African Standard Time.

2. The above dates and times are subject to amendment at the discretion of Balwin. Any such amendment will be released on SENS.

3. Shareholders should note that as transactions in Shares are settled in the electronic settlement system used by Strate, settlement of trades takes place three Business Days after such trade. Therefore, Shareholders who acquire Shares after close of trade on Tuesday, 24 August 2021 will not be eligible to attend, participate in and vote at the General Meeting.

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DEFINITIONS AND INTERPRETATIONS

In this Circular, unless the context indicates otherwise, reference to the singular shall include the plural and vice versa , words denoting one gender include the others, words and expressions denoting natural persons include juristic persons and associations of persons and the words and expressions in the first column have the meanings stated opposite them in the second column.

“Balwin” or “the Company”

“B-BBEE Act”

“BEE Shares”

“BEE SPV”

means Balwin Properties Limited, registration number: 2003/028851/06, a public company duly registered and incorporated in accordance with the laws of South Africa and listed on the main board of the JSE;

means the Broad-Based Black Economic Empowerment Act, No. 53 of 2003, as amended from time to time;

47,219,259 shares which shall be equal to 10% of the issued shares in Balwin as at the Implementation Date;

Tatovect (RF) Proprietary Limited, registration number 2019/501382/07, a limited liability private company incorporated in accordance with the laws of the Republic of South Africa, being a 100% black-owned entity, owned by the BEE SPV Shareholders, who are family members of Mr Kukama, in the following proportions:

• Zeldadex – 51%.

• Tazinetix – 25%.

• Zeldacraft – 24%.

“BEE SPV Shareholders”

• “ BEE Transaction Specific Repurchase”

Zeldadex, Tazinetix; and Zeldacraft.

the potential specific repurchase/s that may occur if:

• BEE SPV has not repaid the Loan Outstandings in full by the 9th anniversary of the Implementation Date, and Balwin has exercised its rights in terms of an option granted by BEE SPV to Balwin under the Relationship Agreement to repurchase such number of shares from the BEE SPV as at that date have a value (determined with reference to the 30-day VWAP) equal to the Loan Outstandings. Upon exercise of this repurchase option, BEE SPV’s obligation to repay the Loan Outstandings to Balwin will be set-off against Balwin’s obligation to pay the repurchase consideration to BEE SPV; or

• in the event that BEE SPV has breached any of the secured obligations in terms of the Pledge and Cession Agreement, and Balwin elects to repurchase the Pledged Shares pursuant to the pledge, in which event the consideration payable shall be the lesser of:

• the 30-day VWAP price per Pledged Share; or

• the Loan Outstandings plus R20 million (provided the BEE SPV paid such amount in cash towards the Subscription Consideration on the Implementation Date).

After payment of the BEE SPV’s indebtedness to Balwin in respect of the secured obligations, and all costs and expenses in connection with the realisation of the Pledged Shares and legal proceedings (including any stamp duty, securities transfer tax, uncertificated securities tax, transfer duty or any other tax that may be imposed), the balance, if any, of such proceeds will be paid to BEE SPV;

“BEE Transaction” or

“Transaction”

“BEE” or “B-BBEE”

“Board” or “Directors”

the transaction contemplated in the Transaction Agreements, in terms of which, inter alia , the BEE SPV will subscribe for, and Balwin shall allot and issue to the BEE SPV, the BEE Shares for the Subscription Consideration;

means broad-based black economic empowerment as contemplated in the B-BBEE Act;

means the board of directors of Balwin reflected on page 9 of this Circular;

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“Broker”	any person registered as a “broking member (equities)” in accordance with the
	provisions of the Financial Markets Act;
“Business Day”	any day, other than a Saturday, Sunday or public holiday in South Africa;
“Certificated Shareholders”	Shareholders who hold Certificated Shares;
“Certificated Shares”	Shares which have not yet been Dematerialised, title to which is represented by a
	share certificate or other physical Documents of Title;
“Circular”	this bound document, dated Monday, 26 July 2021, including the annexures hereto;
“Companies Act”	the Companies Act, No. 71 of 2008, as amended, of South Africa;
“CSDP”	a central securities depository participant registered in terms of the Financial Markets
	Act, with whom a beneficial holder of shares holds a dematerialised share account;
“Dematerialised Shareholders”	those Shareholders who hold Dematerialised Shares;
“Dematerialised Shares”	Shares which have been incorporated into the Strate system and which are no longer
	evidenced by share certificates or other physical Documents of Title;
“Documents of Title”	share certificates, certified transfer deeds, balance receipts or any other documents of
	title to Certificated Shares acceptable to Balwin;
“Financial Markets Act”	the Financial Markets Act, No. 19 of 2012, as amended, of South Africa;
“Form of Proxy”	for purposes of the General Meeting, the form of proxy_(red)_for use only by
	Certificated Shareholders and Own-name Registered Dematerialised Shareholders;
“General Meeting”	the general meeting of Shareholders which will be held at 09:00 entirely via a remote
	interactive electronic platform, Microsoft Teams, on Monday, 6 September 2021, for
	the purpose of considering and if deemed fit, passing, with or without modification,
	the Resolutions;
“IFRS”	the International Financial Reporting Standards as issued from time to time by the
	International Accounting Standards Board or its successor body as adopted or applied
	in South Africa;
“Implementation Date”	the 5thbusiness day after the date on which the last of the conditions precedent to the
	Relationship Agreement has been fulfilled or waived, as the case may be, or such other
	date as may be agreed in writing between the Company, BEE SPV and Mr Kukama;
“Iron Man Trust”	the Iron Man Trust, Masters reference number IT 880/12, a trust in respect of which
	Mr Kukama is the sole beneficiary;
“JSE”	JSE Limited, a public company duly incorporated and registered in accordance with the
	company laws of South Africa, with registration number 2005/022939/06, which is
	licensed as an exchange in terms of the Financial Markets Act, or the securities
	exchange operated by the JSE Limited, as the context requires;
“Last Practicable Date”	the last practicable date before finalisation of this Circular, which date was Tuesday,
	20 July 2021;
“Listings Requirements”	the JSE Limited Listings Requirements, as amended from time to time;
“Loan Agreement”	a written loan agreement entered into between BEE SPV and the Company in terms
	of which,_inter alia,_the Company will advance the Loan Amount to BEE SPV for
	purposes of BEE SPV subscribing for the BEE shares;
“Loan Amount”	an amount equal to the Subscription Consideration less R20 million, to be lent and
	advanced by Balwin to the BEE SPV in terms of the Loan Agreement;
“Loan Outstandings”	the capital of the Loan Amount plus accrued interest which has not been repaid and
	remains outstanding at a particular point in time;
“Lock-in Period”	in relation to the BEE Parties, the period commencing on the Implementation Date
	and terminating on the date which is 10 years thereafter;

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“Long Stop Date”	the date which is three months after the Signature Date, or such other date as the
	Parties may agree in writing;
“MOI”	the memorandum of incorporation of Balwin;
“Mr Kukama”	Aobakwe Reginald Koketso Kukama who is not deemed a related party to Balwin in
	terms of the JSE Listings Requirements;
“Notice of General Meeting”	the notice of the General Meeting of Shareholders, forming part of this Circular;
“Own-name Registration” or	Shareholders who hold Dematerialised Shares that are recorded by the CSDP on the
“Own-name Registered”	sub-register kept by that CSDP in the name of such Shareholder;
“Pledge and Cession Agreement”	a written pledge and cession agreement entered into between BEE SPV and the
	Company in terms of which,inter alia, BEE SPV will pledge all of BEE Shares and cede
	_in securitatem debiti_all of its rights and interests in the BEE Shares to Balwin, under
	section 39 of the Financial Markets Act, as security for the due, proper and timeous
	payment and performance by BEE SPV of its obligations under the Loan Agreement;
“Pledge Shares”	the BEE Shares pledged to Balwin under the Pledge and Cession Agreement;
“Rand” or “R”	South African Rand;
“Register”	the register of Certificated Shareholders maintained by the Transfer Secretaries and
	the sub-register of Dematerialised Shareholders maintained by the relevant CSDPs;
“Relationship Agreement”	a written relationship agreement entered into between BEE SPV, Mr Kukama and the
	Company in terms of which,inter alia, the BEE-related benefits of the BEE Transaction
	are regulated, including in terms lock-in provisions and BEE-related undertakings and
	restrictions;
“Resolutions”	the resolutions as contained in the Notice of General Meeting to be considered and
	voted upon by Shareholders at the General Meeting;
“SENS”	the Stock Exchange News Service of the JSE;
“Shareholders”	the registered holders of Balwin Shares;
“Shares”	ordinary shares of no par value in the issued share capital of Balwin, which are listed
	on the JSE;
“Signature Date”	the date on which the Transaction Agreements were signed by the parties thereto,
	being 26 May 2021;
“South Africa”	the Republic of South Africa;
“Strate”	Strate Proprietary Limited, (registration number 1998/022242/07), a private company
	duly incorporated and registered under the company laws of South Africa, being a
	licensed central securities depository in terms of section 1 of the Financial Markets Act
	and the entity that manages the electronic custody, clearing and settlement
	environment for all share transactions concluded on the JSE and off-market, and in
	terms of which transactions in securities are settled and transfers of ownership in
	securities are recorded electronically;
“Subscription Agreement”	the written subscription agreement entered into or to be entered into, between the
	BEE SPV and the Company in terms of which,inter alia, the BEE SPV will subscribe for
	and the Company will allot and issue the BEE Shares to the BEE SPV;
“Subscription Consideration”	the subscription price payable for the BEE Shares which will be the VWAP of the
	Shares on the JSE less 20%, for the 30 trading days immediately preceding the Signature
	Date, being an aggregate amount of R214,375,437;

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• “Tazinetix” Tazinetix (RF) Proprietary Limited, registration number 2021/358035/07, a limited liability private company duly incorporated in accordance with the laws of the Republic of South Africa, 50% of which is owned by Mr Leruo Lentswe Kukama and 50% of which is owned by Mr Loungo Kukama, both of whom are black youth, (and which shareholding Mr Leruo Lentswe Kukama and Mr Loungo Kukama intend to transfer to a trust to be formed for their sole benefit);

“the Group” Balwin and its subsidiaries;

• “Transaction Agreements”

the agreements entered into in respect of the BEE Transaction which includes:

• the Subscription Agreement;

• the Loan Agreement;

• the Pledge and Cession Agreement;

• the Relationship Agreement;

“Transaction Documents”

the Transaction Agreements as well as a new, ring-fenced MOI and shareholders agreement for BEE SPV;

“Transfer Secretaries” Computershare Investor Services Proprietary Limited, (registration number 2004/003647/07), a private company registered and incorporated with limited liability according to the laws of South Africa and the transfer secretaries of Balwin;

• “Transaction Sponsor” or “Investec”

• “VWAP”

Investec Bank Limited, a company duly incorporated and registered in accordance with the company laws of South Africa, with (registration number 1969/004763/06), particulars of which appear in the “ Corporate Information ” section of the Circular;

• Volume Weighted Average Price per Share on the JSE;

“Zeldadex” Zeldadex (RF) Proprietary Limited, registration number: 2021/499430/07, a limited liability private company duly incorporated in accordance with the laws of the Republic of South Africa, 100% of which is owned by the Iron Man Trust; and

“Zeldacraft”

Zeldacraft (RF) Proprietary Limited, registration number: 2021/499407/07, a limited liability private company duly incorporated in accordance with the laws of the Republic of South Africa, 100% of which is owned by Mrs Tebogo Desiree Kukama, a black female (and which shareholding Mrs Tebogo Desiree Kukama intends to transfer to a trust to be formed for her sole benefit);

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BALWIN PROPERTIES LIMITED

(Incorporated in the Republic of South Africa)

(Registration number 2003/028851/06)

JSE share code: BWN ISIN: ZAE000209532

(“ Balwin ” or “ the Company ”)

Directors

Executive

Stephen Brookes (Chief executive officer) Jonathan Weltman (Chief financial officer)

Non-executive

Hilton Saven (Chairman) * Arnold Shapiro Duncan Westcott Julian Scher Kholeka Mzondeki Thoko Mokgosi-Mwantembe Tomi Amosun Ronen Zekry * Independent

CIRCULAR TO SHAREHOLDERS

1. INTRODUCTION

Shareholders are referred to the announcement released on SENS on 26 May 2021 detailing the terms of the proposed BEE Transaction. Balwin is committed to creating a business that is diverse in representation and transformation. In order to facilitate this commitment and Balwin’s continued growth, Balwin intends on embarking further advances in its empowerment objectives by increasing black participation within the Company.

Since its listing in 2015, Balwin has embraced transformation in its business in line with the Company’s objective of working together with the South African community rather than in isolation. Balwin has made considerable efforts in transforming its business over the past few years and supports the principles and objectives of the B-BBEE Act. A B-BBEE transformation charter has been developed which outlines Balwin’s B-BBEE strategy and which further sets out the structures and processes which are being implemented to enable Balwin to reach a compliant status this year.

While Balwin has made considerable progress on most of the B-BBEE pillars (i.e. Skills Development, Enterprise Development, Supplier Development, Preferential Procurement and Employment Equity), it understands that in order to further advance its empowerment objectives, it needs to increase black participation within the Balwin Group.

Accordingly, Balwin is proposing a BEE Transaction in terms of which it is:

• offering a measure of protection to BEE SPV Shareholders during the Lock-in Period, as outlined in paragraph 2.3.3;

• ensuring the participation of the BEE SPV Shareholders in distributions declared by Balwin from time to time during the funding period; and

• procuring the necessary undertakings and commitments from the BEE SPV Shareholders in respect of their funding obligations and ensuring the commercial interests of Balwin are protected.

Balwin hopes that the BEE Transaction will serve as a yardstick for the conclusion of similar transactions such as this in future.

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2. THE BEE TRANSACTION

2.1 Overview of the BEE Transaction

It is proposed that a 100% black-owned entity, the BEE SPV, will acquire 10% of the issued shares in Balwin on the terms as outlined in paragraph 2.3 below.

The BEE SPV is owned by three entities; namely (i) Zeldadex which owns 51% of BEE SPV, and which in turn is owned by the Iron Man Trust, a trust of which Mr Kukama is the sole beneficiary; (ii) Zeldacraft which owns 24% of BEE SPV, and which in turn is wholly-owned by Mrs Tebogo Desiree Kukama (Mrs Kukama intends to transfer all her shares in Zeldacraft to a trust of which she shall be the sole beneficiary); and (iii) Tazinetix which owns 25% of BEE SPV and which in turned is 50% owned by Mr Leruo Lentswe Kukama and 50% owned by Mr Loungo Kukama (Mr Leruo Lentswe Kukama and Mr Loungo Kukama intend to transfer their shares in Tazinetix to a trust of which they will be the sole and equal beneficiaries).

The BEE SPV will subscribe for the BEE Shares in Balwin. As a result of the BEE SPV Shareholders, Balwin will have increased ownership arising from black people, black woman and black youth.

2.2 BEE SPV and Partner

Balwin has considered the skills, qualifications, talents, interests, and abilities of Mr Kukama and it believes that Mr Kukama will be a value adding partner who possesses the functional and technical expertise to complement the existing management skillset and to achieve the ambition of growing the Balwin brand within the South African market.

Mr Kukama obtained a Bachelor of Architectural Studies (BAS) and Bachelor of Architecture (Hons.) Cum Laude , from the University of Cape Town. He also holds an MSc in Urban Design in Development from the University of London. After completion of his Master’s degree in London, he returned to South Africa, and was offered a position of Associate Director and Head of Urban Design at Stauch Vorster Architects in Cape Town.

During that period, he became an exchange employee to a leading retail architectural firm in Baltimore, Development Design Group, which at that time were designing Cavendish Square for Old Mutual Properties.

Mr Kukama founded Yaetsho Investments & Projects, which is a multi-disciplinary investment company that holds investments in agriculture, property, telecommunications and information technology.

Mr Kukama has extensive experience in a number of aspects of the property industry, including greenfields development, redevelopment of properties, education centres, student accommodation, healthcare properties, office accommodation, property banking and property equity investments in excess of R3 billion. Notably, he has overseen the following projects, namely:

the co-ordination of Project Management Resource Groups for various departmental projects on behalf of various Provincial Departments of Public Works; new and restorative schools and clinics for various Provincial Departments of Infrastructure Development, in particular:

• the construction of Bheki Mlangeni District Hospital being a 300-bed hospital in Soweto for the Gauteng Department of Infrastructure Development; and

• the development and maintenance of Provincial Roads for the Mpumalanga Department of Public Works, Roads and Transport.

Apart from his work in the property sector, Mr Kukama has invested in Swissport, Ad Outpost and Commco. Due to the success of these ventures and in particular Mr Kukama’s extensive property and project management experience, Waterfall Investment Company also collaborated with Mr Kukama in order to originate certain of their other Property Developments at Waterfall City. Mr Kukama is also undertaking a similar exercise at the Vaal River City Development.

Mr Kukama holds the following professional memberships:

• member of the South African Council for the Project and Construction Management Professions; and

• member of the Association of Construction Project Managers.

Mr Kukama and all the BEE SPV Shareholders are not considered a related party to Balwin.

2.3 Salient terms of the BEE Transaction Agreements

Balwin has concluded the following Transaction Agreements with the BEE SPV:

2.3.1 A Subscription Agreement in terms of which, inter alia:

• the BEE SPV will subscribe for 10% of the issued share capital of Balwin equating to 47,219,259

• subscription shares in Balwin;

• the price at which the Subscription Shares will be issued shall be the 30-day VWAP of Balwin’s listed shares on the Signature Date less a discount of 20%, resulting in a total Subscription Consideration of approximately R214,375,437;

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• the BEE SPV will contribute R20 million of its own capital towards the Subscription Consideration;

• the balance of the Subscription Consideration will be vendor financed by Balwin through the advance of the Loan Amount by Balwin to BEE SPV on the Implementation Date in terms of the Loan Agreement; and

• the Subscription Shares will be fully paid up on issue.

2.3.2 A Loan Agreement in terms of which, inter alia :

• Balwin will lend and advance the Loan Amount to BEE SPV to enable it to pay the balance of the Subscription Consideration on the Implementation Date;

• the Loan Amount will bear interest at the prime rate;

• the BEE SPV will be obligated to repay the Loan Outstandings over a nine-year period from the Implementation Date from the proceeds of the distributions it receives by virtue of its ownership of the BEE Shares, and as and when Balwin declares and pays distributions each year. If the amount of a distribution is insufficient at a given date to cover the capital and interest owed, then the BEE SPV will be required to make a top-up payment to Balwin to ensure that the repayment profile is adhered too;

• if the Loan Outstandings have not been paid in full to Balwin by the 9[th] anniversary of the Implementation Date (“ Maturity Date ”), BEE SPV will be in default of its obligations under the Loan Agreement and Balwin shall be entitled to exercise its rights under the Pledge and Cession Agreement to procure the sale of the Pledged Shares to settle the Loan Outstandings; and

• in addition, Balwin shall have the right and option (“ Repurchase Option ”) for a period of 60 business days following the Maturity Date to repurchase from BEE SPV such number of BEE Shares as calculated in terms of the following formula:

N = A/B

Where:

• N : the number of BEE Shares in respect of which the Repurchase Option may be exercised by the Company during the Repurchase Option Period;

• A : the Loan Outstandings as at the Maturity Date; and

• B : the VWAP for the 30 trading days immediately preceding the date on which the Repurchase Option is exercised (“ Repurchase Consideration ”).

Balwin’s obligation to pay the Repurchase Consideration to BEE SPV shall be set off against BEE SPV’s obligation to pay the Loan Outstandings to Balwin in terms of the Loan Agreement.

2.3.3 A Relationship Agreement in terms of which, inter alia :

• the BEE SPV will be subject to a 10-year Lock-in Period and may not dispose of or encumber the BEE Shares during the 10-year period following the issue date thereof without the prior consent of Balwin;

• during the 10-year period following the issue of the BEE Shares, the BEE SPV will be entitled to dividends to the extent that these are declared and paid on Balwin ordinary shares (subject to such dividends being applied to the reduction of the Loan Outstandings as contemplated in the Loan Agreement);

• the BEE SPV will be entitled to exercise all voting rights attached to the BEE Shares;

• the BEE SPV will be entitled to nominate one person for election as non-executive director to the board of Balwin; and

• subject to further terms and conditions as are customary for transactions of this nature.

2.3.4 A Cession and Pledge Agreement in terms of which, inter alia :

• the BEE SPV will cede and pledge the BEE Shares to Balwin as security for its obligations under the

• Loan Agreement.

• In the event that BEE SPV breaches any of the secured obligations in terms of the Pledge and Cession Agreement, Balwin may elect, amongst others, to repurchase the Pledged Shares pursuant to the pledge, in which event the consideration payable shall be the lesser of:

• the 30-day VWAP price per Pledged Share; and

• the Loan Outstandings plus R20 million (provided the BEE SPV paid such amount in cash

  • towards the Subscription Consideration on the Implementation Date).

• After payment of the BEE SPV’s indebtedness to Balwin in respect of the secured obligations, and all costs and expenses in connection with the realisation of the Pledged Shares and legal proceedings (including any stamp duty, securities transfer tax, uncertificated securities tax, transfer duty or any other tax that may be imposed), the balance, if any, of such proceeds will be paid to BEE SPV.

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2.4 Conditions precedent

The Transaction Agreements are subject to the fulfilment of the following conditions precedent:

• 2.4.1 The shareholders of Balwin passing all special and ordinary resolutions required to implement the Transaction Agreements, including the following resolutions:

• an ordinary resolution, supported by at least 75% of voting rights exercised, authorising the allotment and issue of the Subscription Shares to the BEE SPV pursuant to Subscription Agreement;

• a special resolution in terms of section 44 of the Companies Act authorising the provision of

  • financial assistance by Balwin to the BEE SPV for the acquisition of the Subscription Shares;

• a special resolution authorising the reacquisition of the Subscription Shares pursuant to any enforcement by Balwin under the Pledge and Cession Agreement; and

• each of the Transaction Documents is entered into and becomes unconditional in accordance with its terms.

• 2.4.2 Balwin has confirmed in writing to BEE SPV that the ownership structure of BEE SPV (including its ultimate beneficial shareholders) and the content of and principles underlying the BEE SPV MOI and BEE SPV Shareholders Agreements is satisfactory to Balwin and consistent with the BEE principles and BEE objectives.

• 2.4.3 Each of the BEE SPV Shareholders has signed a deed of accession to the Relationship Agreement.

• 2.4.4 Balwin has confirmed in writing to BEE SPV that no Material Adverse Change (as defined in the Transaction Agreements) has occurred between the Signature Date and Implementation Date.

3. TRANSACTION EXPENSES

The estimated costs of preparing and distributing this Circular, holding the General Meeting, implementing the BEE Transaction, including the fees payable to professional advisors, are approximately R1 366 million and include the following:

following:
Service	Provider	R’000
Transaction Sponsor	Investec	550
Printing, publication, distribution and advertising expenses	Ince	67
JSE documentation	JSE	49
Independent reporting accountant fees	BDO	100
Legal Advisors to Balwin	CDH	600
Total		1,366

All the fees payable to the parties above are exclusive of VAT. These expenses are one-off in nature.

Other than as set out above, Balwin has incurred no preliminary expenses in relation to the transaction, during the three years preceding this Circular.

4. BALWIN OVERVIEW

4.1 Nature of business

Balwin Properties is a specialist, national residential property developer of large-scale, sectional title estates for South Africa’s growing low-to-middle income population. Listed in the Real Estate Investment Sector on the JSE since 2015.

4.2 Prospects

The Balwin board believes that there are several positive factors which will continue to drive our performance, despite the economic challenges. First and foremost is the strength and resilience of the Balwin brand. Secondly, the sustained demand for the Balwin product which has been confirmed even during the pandemic. And thirdly, Balwin’s pre-sales and long-term development pipeline.

Balwin has 2,499 apartments which have been pre-sold for future financial years and a pipeline of 62,288 apartments with a development timeline of approximately 15 years in Gauteng, KwaZulu-Natal Natal and Western Cape. The investment in the development pipeline of the group has been a catalyst for the increase

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in the value of developments under construction at year-end. Cash management and cash utilisation continue to remain a priority focus area for the group and Balwin continues to engage with its funding partners to ensure that appropriate facilities and financial support remain in place.

In the macro environment, the current low interest rate environment will also support the group’s mediumterm prospects and has assisted with sales.

While the Green Collection (i.e. our entry level brand aimed at a lower LSM with apartments ranging between R499,900 to R999,900) return a lower selling price than the Classic Collection apartments, it still derives a similar gross profit margin. The Classic Collection (i.e., our core brand of apartments aimed at the middle income earners with apartments ranging between R699,900 to R1,999,900) will continue to provide the majority of the group’s revenue but the group expects the contribution of the Green Collection developments to continue to increase in the forthcoming financial year in line with the increased rollout of these developments.

Balwin continues to focus on reducing the environmental impact of construction activities through innovation in design and building techniques. Balwin is actively working towards ensuring that all apartments developed are registered for Excellence in Design for Greater Efficiency (EDGE) certification. Three lifestyle centres were awarded Six-Star Green rating from the Green Building Council of South Africa (GBCSA). Following the partnership with Absa Bank to offer green home loans to Balwin customers through the introduction of the innovative Absa Eco Home Loan, three other major institutions, First National Bank, Nedbank and Standard Bank have approved this concept as well. Through this initiative, Balwin’s customers will benefit financially by receiving a reduction in the offered interest rate to assist in unlocking investment potential of green infrastructure technologies and services while offering value to the customer through improved affordability. Low interest rates coupled with additional discounts on the interest rate for purchasing an “eco-friendly home” will take Balwin’s business to new heights.

4.3 Pro forma financial information of Balwin

The consolidated pro forma condensed statement of comprehensive income and the consolidated pro forma statement of financial position are set out in Annexure 1 , together with the assumptions upon which the financial effects are based and described in the notes thereto.

The pro forma financial effects have been presented for illustrative purposes only, to provide information on how the BEE Transaction may have affected the results and financial position of Balwin, because of its nature, the pro forma financial information may not fairly represent Balwin’s financial position, changes in equity, results of operations or cash flows post the implementation of the BEE Transaction.

The pro forma financial information, including the assumptions on which it is based and the financial information from which it has been prepared, is the responsibility of the Board. The pro forma financial information has been prepared in accordance with the JSE Listings Requirements, the Guide on Pro forma Financial Information issued by SAICA and Balwin’s accounting policies, which are in compliance with IFRS.

The report of the independent reporting accountant in respect of the pro forma financial statements referred to in the paragraph above, appears in Annexure 2 to this Circular.

4.4 Share capital

The authorised and issued Share capital of Balwin, as at the Last Practicable Date BEFORE the BEE Transaction, is set out below:

is set out below:
	Number
	of Shares
Authorised
Ordinary shares of no par value	1,000,000,000
Issued shares
Ordinary shares of no par value	472,192,592
Treasury shares
Ordinary shares of no par value	2,277,320
Number of share net of treasury	469,915,272

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The authorised and issued Share capital of Balwin, as at the Last Practicable Date after the BEE Transaction, is set out below:

is set out below:
	Number
	of Shares
Authorised
Ordinary shares of no par value	1,000,000,000
Issued shares
Ordinary shares of no par value	519,411,851
Treasury shares
Ordinary shares of no par value	2,277,320
Number of share net of treasury	517,134,531

4.5 Major Shareholders and interests

As at the Last Practicable Date, the following persons are directly beneficially interested in 5% or more of Balwin shares in issue:

Balwin shares in issue:
		% of shares
		held (net of
		treasury
Direct beneficial shareholders holding 5% or more	No. of Shares	shares)
Volker Holdings Proprietary Limited*	170,374,031	36.08
Rodna Investments Proprietary Limited**	47,221,798	10
GRE Africa Limited	36,418,425	7.71
Pershing LLC	32,618,871	6.91
Klipfontein Heights Proprietary Limited	23,929,009	5.07
Total	311,018,544	65.87

*The entity is controlled by SV Brookes

*The entity is controlled by RN Gray

Transaction will not result in a change in the controlling shareholder(s) of Balwin or any of its subsidiaries and there are no Balwin shares held indirectly.

4.6 Material changes and litigation statement

As at the Last Practicable Date, there have been no material changes in the financial or trading position of Balwin or its subsidiaries since the publication of its financial results issued on SENS on 17 May 2021 for the year ended 28 February 2021. There are no legal or arbitration proceedings of which Balwin is aware, which may have or have over the previous 12 months had a material effect on the financial position of the Group

5. INFORMATION RELATING TO THE BALWIN DIRECTORS

5.1 Directors’ interests in the issued shares of Balwin

As at the Last Practicable Date, the Directors (including directors that retired in the last 18 months) held, directly, beneficial interests in the Company’s issued Shares as reflected below:

			% holding of
	Direct	Indirect	total issued
Ordinary Shares	beneficial	beneficial	share capital
SV Brookes*	–	170,374,031	36.08
RN Gray	456,410	47,221,798	10.10
U Gschnaidtner	10,150,788		2.15
R Zekry	3,633,269		0.77
J Weltman	233,142		0.05
O Amosun	9,390		–

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5.2 Directors’ interests in the BEE Transaction

None of the current Directors nor any former Directors who have resigned as Directors of Balwin during the past 18 months have any interest in the BEE Transaction as contemplated in this Circular nor in any other transaction by Balwin that was effected during the current or immediately preceding financial year, which remains in any material respect outstanding or unperformed.

The Directors’ remuneration remains unchanged as a result of the BEE Transaction and is detailed in the 2021 annual financial statements available on the Company’s website.

5.3 Directors’ recommendation

The Directors have considered the terms and conditions of the BEE Transaction and have considered the resolutions set out in the Notice of General Meeting and are of the opinion that they are in the interest of Balwin Shareholders.

The Directors recommend that Shareholders vote in favour of the resolutions to be proposed at the General Meeting. Those Directors that hold Balwin Shares intend voting their Shares in favour of the resolution necessary to approve the BEE Transaction.

5.4 Directors’ responsibility statement

The Directors, whose names are listed on page 9 of this Circular, collectively and individually accept full responsibility for the accuracy of the information given in this Circular and certify that to the best of their knowledge and belief there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that this Circular contains all information required by law and the Listings Requirements.

6. PROFESSIONAL ADVISORS’ CONSENTS

Each of the professional advisors, whose names appear in the “ Corporate information ” section of this Circular, have consented in writing to act in the capacities stated and to the inclusion of their names and, where applicable, to the inclusion of their reports in this Circular in the form and context in which they appear and have not withdrawn their consent prior to the publication of this Circular.

7. CONFIRMATION OF INDEPENDENCE

In terms of the JSE Listings Requirements, Investec in its capacity as Sponsor to Balwin, is required to disclose details of all matters that might reasonably be expected to impair its independence and objectivity in its professional dealings with Balwin in relation to the BEE Transaction.

Investec confirms that acting as Transaction Sponsor to Balwin does not affect Investec’s independence as Sponsor to Balwin. Investec does not have a vested interest in the successful implementation of the transaction other than the agreed fee charged for the preparation of the Circular and ancillary documentation. This fee is not impacted by the success or otherwise of the BEE Transaction.

Investec has various standard internal procedures in place to ensure that its ability to act independently as JSE Sponsor is not compromised. Pursuant to these internal procedures, Investec has a compliance control room function that identifies and manages conflict risks and ensures that strict “Chinese walls” are maintained to ensure that, as JSE Sponsor, it is able to act independently from other divisions within Investec. Investec also enforces and implements physical and logical access restrictions to information, which is limited to deal teams for whom the information is relevant, for the purpose of fulfilling the client’s mandate.

8. SOLVENCY AND LIQUIDITY

The relevant provisions of sections 4, 46 and 48 of the Companies Act in relation to the Transaction have been complied with or will be complied with.

The Company and the Group will be able in the ordinary course of business to pay their debts for a period of 12 months after the date of approval of the circular.

The assets of the Company and the Group will be in excess of its liabilities for a period of 12 months from the date of approval of this Circular, where for this purpose, the assets and liabilities are recognised and measured in accordance with the accounting policies used in the latest audited consolidated annual financial statements of the Company.

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The share capital and reserves of the Company and the Group will be adequate for ordinary business purposes for a period of 12 months from the date of approval of this Circular; and the working capital of the Company and the Group will be adequate for ordinary business purposes for a period of 12 months from the date of approval of this Circular.

Furthermore, in terms of section 46 of the Companies Act and paragraph 5.69(d) of the Listings Requirements, the Board has, by resolution, authorised the repurchase.

In terms of section 46 of the Companies Act and paragraph 5.69 of the Listings Requirements, the Board has, by resolution, acknowledged that it has applied the Solvency and Liquidity Test, and reasonably concluded that Balwin will satisfy the Solvency and Liquidity Test immediately after completing the repurchase and that, since the Solvency and Liquidity Test was performed by the Board, there have been no material changes to the financial position of Balwin, including since the end of the 12-month period ended 28 February 2021 and the Last Practicable Date

9. GENERAL MEETING AND VOTING

The General Meeting will be held at 09:00 entirely via a remote interactive electronic platform, Microsoft Teams, on Monday, 6 September 2021 in which General Meeting Shareholders will be requested to consider and, if deemed fit, to pass, with or without modification, the Resolutions set out in the Notice of General Meeting attached to this Circular.

The ordinary resolution for the approval of the specific issue of shares for cash in terms of the Listings Requirements, set out in the Notice of General Meeting, is subject to the approval of at least 75% of the votes cast by the Shareholders, present in person or represented by proxy at the General Meeting and who are entitled to vote.

The special resolution for the approval of the potential BEE Transaction Specific Repurchase in terms of the Listings Requirements, as set out in the Notice of General Meeting, is subject to the approval of at least 75% of the votes cast by the Shareholders, present in person or represented by proxy at the General Meeting and who are entitled to vote.

The ordinary resolution for the approval of the Directors’ and/or company secretary’s authority to do all such things, sign all such documents and procure the doing of all such things and the signature of all such documents as may be necessary or incidental to give effect to the Resolutions set out in the Notice of General Meeting, is subject to the approval of more than 50% of the votes cast by the Shareholders, present in person or represented by proxy at the General Meeting and who are entitled to vote.

The special resolution for the approval of financial assistance in terms of section 44 of the Act, as set out in the Notice of General Meeting, is subject to the approval of at least 75% of the votes cast by the Shareholders, present in person or represented by proxy at the General Meeting and who are entitled to vote.

10. DOCUMENTS AVAILABLE FOR INSPECTION

The following documents, or copies thereof, will be available on request to the company secretary during normal business hours at caroline@fluidrockgovernance.com or on the Company’s website at www.balwin.co.za from Monday, 26 July 2021 until Monday, 6 September 2021 (both days inclusive):

• the MOI of the BEE SPV;

• the MOI of Balwin;

• Signed Transaction Documents;

• the pro forma financial information of Balwin, as reproduced in Annexure 1 ;

• the independent reporting accountant’s report on the pro forma financial information of Balwin, as reproduced in Annexure 2 ;

• the written consents from each of the professional advisors referred to in section 6 of this Circular; and

• a copy of this Circular and all annexures hereto.

Signed at Bedfordview on behalf of the Board on 19 July 2021

J Weltman Chief Financial Officer

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ANNEXURE 1

CONSOLIDATED PRO FORMA FINANCIAL INFORMATION

The tables below sets out the pro forma financial information of the BEE Transaction on the audited consolidated annual financial statements of Balwin for the financial year ended 28 February 2021. The pro forma consolidated statement of financial position has been prepared to show the financial effects of the proposed transaction. These pro forma financial effects are prepared for illustrative purposes only, to provide information about how the proposed transaction might have affected the financial information presented by Balwin and, because of their pro forma nature, may not give a fair reflection of Balwin’s pro forma consolidated statement of financial position and pro forma consolidated statement of comprehensive income after the Transaction. The pro forma statement of financial position has been prepared on the basis as if the Transaction took place on 28 February 2021 and the pro forma statement of comprehensive income has been prepared on the basis as if the proposed transaction took place on 1 March 2020.

The purpose of the pro forma financial information is to illustrate the impact of the BEE Transaction had it been effective 28 February 2021 for purposes of the pro forma consolidated statement of financial position and 1 March 2020 for purposes of the pro forma consolidated income statement and on the assumptions set out below. The pro forma financial information presented below does not purport to be indicative of the financial results and effects of the BEE Transaction if it had been implemented on a different date.

The Directors of Balwin are responsible for the preparation of the pro forma financial information. The pro forma financial information has been prepared using accounting policies that are consistent with IFRS and with the basis on which the historical financial information has been prepared in terms of the accounting policies adopted by Balwin as at 28 February 2021. The pro forma financial information has been prepared in accordance with the JSE Listings Requirements and the revised Guide on Pro Forma Financial Information issued by SAICA. The independent reporting accountants’ assurance report on the abovementioned pro forma financial information is included as Annexure 2 to this Circular and should be read in conjunction with the pro forma financial information. The pro forma financial information has been prepared in accordance with the accounting policies outlined in the Group’s annual financial statements for the year ended 28 February 2021, which are available for inspection as per paragraph X of this Circular.

Balwin Properties Limited

Pro forma consolidated statement of financial position

The pro forma consolidated statement of financial position below presents the effects of the BEE Transaction on the published audited consolidated financial statements of Balwin Group as at 28 February 2021 on the assumption that the BEE Transaction was effective 28 February 2021.

			Effects of the
Figures in R’000	Notes	Before(1)	P Transaction	After
Assets
Non-current assets
Property, plant and equipment		99,810	–	99,810
Intangible assets		15,256	–	15,256
Investment in associate		2,067	–	2,067
Loans to external parties		11,658	–	11,658
		128,791	–	117,133
Current assets
Developments under construction		4,121,257	–	4,121,257
Loans to related parties		14,112	–	14,112
Current tax receivable		5,865	–	5,865
Trade and other receivables		695,034	–	695,034
Development loans receivable		68,181	–	68,181
Restricted cash		31,390	–	31,390
Cash and cash equivalents	2	336,533	18,634	355,167
		5,272,372	18,634	5,291,006
Total assets		5,401,163	18,634	5,419,797

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			Effects of the
Figures in R’000	Notes	Before(1)	P Transaction	After
Equity and liabilities
Equity
Share capital	3	663,079	171,878	834,957
Treasury shares	4	–	(171,878)	(171,878)
Share-based payment reserve	5	6,778	57,970	64,748
Retained income	6	2,532,804	(39,336)	2,493,468
		3,202,661	18,634	3,221,295
Non-controlling interest		(41)	–	(41)
	7	3,202,620	18,634	3,221,254
Non-current liabilities
Development loans and facilities		225,605	–	225,605
Lease liabilities		2,170	–	2,170
Deferred taxation		159,659	–	159,659
		387,434	–	387,434
Current liabilities
Development loans and facilities		1,675,884	–	1,675,884
Trade and other payables		104,896	–	104,896
Lease liabilities		753	–	753
Employee benefits		29,576	–	29,576
		1,811,109	–	1,811,109
Total liability		2,198,543	–	2,198,543
Total equity and liabilities		5,401,163	18,634	5,419,797

1. Extracted from Balwin’s audited consolidated annual financial statements for the year ended 28 February 2021 and presented in accordance with IAS 1: Presentation of Financial Statements.

2. This is the subscription price from the BEE SPV which represents the premium paid of R20,000,000 for the in-substance option. Also included in

3. this amount is one-off transaction costs of R1,366,000 (including VAT).

4. The BEE SPV will subscribe for 47,219,259 ordinary shares in the issued share capital of Balwin which represents a 10% shareholding in Balwin. The subscription price payable for the subscription shares will be the Volume Weighted Average Price (“VWAP”) of Balwin ordinary shares on the exchange operated by the JSE less 20%, for the 30 trading days immediately preceding the date on which the last of the conditions precedent has been fulfilled or waived.

5. The VWAP at 20 May 2021 amounted to R4.56. The subscription price will therefore, amount to R3.64. This results in issued ordinary shares to the value of R171,878,103.

6. The shares issued to the BEE SPV are accounted for as treasury shares as the full risk and rewards have not been transferred to the BEE SPV. The shares act as security for the notional funding provided by Balwin to the BEE SPV and the BEE SPV is not allowed to encumber or dispose of the shares prior to the expiry of the lock-in period of 10 years.

7. The issue of shares to the BEE SPV is treated as an in-substance option which is within the scope of IFRS 2 – Share-based payments . The fair value of the option at grant date is R57,969,899. as determined based on the Black-Scholes model.

8. The issue of shares to the BEE SPV is treated as an in-substance option which is within the scope of IFRS 2. The fair value of the option at grant date is R57,969,899. The subscription price paid by the BEE SPV of R20,000,000 is a premium paid by the BEE SPV in order to acquire the insubstance option. The premium reduces the IFRS 2 expense to be recognised. One-off transaction costs of R1,366,000 (including VAT) will be incurred.

9. Represents the movement in total equity arising from the grant date fair value of the share option as well as the expenses relating to the one-off IFRS 2 charge and transaction costs.

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Balwin Properties Limited

Pro forma profit or loss and other comprehensive income

The pro forma consolidated income statement below presents the effects of the BEE Transaction on the published audited consolidated financial statements of the Balwin Group for the year ended 28 February 2021 on the assumption that the BEE Transaction was effective 1 March 2020.

BEE Transaction was effective 1 March 2020.
			Effects of the
Figures in R’000	Notes	Before(1)	Transaction	After
Revenue		2,700,574	–	2,700,574
Cost of sales		(1,979,598)	–	(1,979,598)
Gross profit		720,976	–	720,976
Other income		6,652	–	6,652
Share-based payment charge	2	–	(37,970)	(37,970)
Operating expense	3	(265,178)	(1,366)	(266,544)
Operating profit		462,450	(39,336)	423,114
Investment income		16,936	–	16,936
Finance costs		(14,079)	–	(14,079)
Share of profit of associate		1,744	–	1,744
Profit before taxation		467,051	(39,336)	427,715
Taxation	4	(130,686)	–	(130,686)
Profit for the year		336,365	(39,336)	297,029
Total comprehensive income for the year		336,365	(39,336)	297,029
Profit attributable to:
Owners of the parent		336,156	(39,336)	296,820
Non-controlling interest		209	–	209
		336,365	(39,336)	297,029
Total comprehensive income attributable to:
Owners of the parent		336,156	(39,336)	296,820
Non-controlling interest		209	–	209
		336,365	(39,336)	297,029
Basic, diluted and headline earning per share(5)
Basic (cents)		71.67	(8.39)	63.28
Diluted (cents)		71.19	(8.33)	62.86
Headline (cents)		71.47	(8.39)	63.08

1 Extracted from Balwin’s audited consolidated annual financial statements for the year ended 28 February 2021 and presented in accordance with IAS 1: Presentation of Financial Statements.

2 The issue of shares to the BEE SPV is treated as an in-substance option which is within the scope of IFRS 2. The fair value of the option at grand date is R57,969,899 which represents a one-off cost. The subscription price paid by the BEE SPV OF R20,000,000 is a premium paid by the BEE SPV in order to acquire the in-substance option. The premium reduces the IFRS 2 expense to be recognised. IFRS 9 excludes all transaction with the scope of IFRS 2, therefore, the premium would not be within the scope of IFRS 9 and is recognised directly in equity.

3 One-off transaction costs of R1,366,000 (including VAT) will be incurred. These have been assumed to not be deductible for tax purposes.

4 The issue of shares is not regarded as an expense incurred for Income Tax purposes and accordingly would not be tax deductible.

5 The above impact is based on the assumption that the transaction will be implemented in accordance with the Relationship Agreement. Should the shares be forfeited by the BEE SPV, there will be no further impact on the basic, diluted and headline earnings per share as the IFRS 2 charge represents a one-off cost and no further impact on profit or loss is expected.

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Balwin Properties Limited

Reconciliation of headline earnings

Balwin Properties Limited Reconciliation of headline earnings
			Effects of the
		Before(1)	Transaction	After
Basic and headline earnings per share
Basic	(cents)	71.67	(8.39)	63.28
Headline	(cents)	71.47	(8.39)	63.08
Diluted earnings	(cents)	71.19	(8.33)	62.86
Diluted headlines earnings	(cents)	70.99	(8.33)	62.66
Tangible net asset value per share*	(cents)	679.57	3.98	683.55
Net asset value per share**	(cents)	682.83	3.97	686.80
Weighted average number of shares in issue	(‘000)	469,024	–	469,024
Net asset value	(R’000)	3,202,620	18,634	3,221,254
Reconciliation of profit for the year to
headline earnings
Profit for the year attributable to owners of the
parent	(R’000)	336,156	(39,336)	296,820
Adjusted for:				–
• Loss/(Profit) on disposal of property, plant and
equipment	(R’000)	(347)	–	(347)
• Fair value adjustment on investment property
held by associate	(R’000)	(617)	–	(617)
Headline earnings		335,192	(39,336)	295,856
Weighted average number of shares				–
Weighted average number of shares in issue		469,024	–	469,024
Potential dilutive impact of share options	2	3,169	–	3,169
		472,193	–	472,193

• Calculated as total assets less intangible assets divided by the weighted average shares in issue.

** Calculated as the net asset value divided by the weighted average shares in issue.

1 Extracted from Balwin’s audited consolidated annual financial statements for the year ended 28 February 2021 and presented in accordance with IAS 1: Presentation of Financial Statements.

• 2 The potential dilutive impact of the share options is calculated based on the prescribed method as per IAS 33.45 – 46. For the purpose of calculating the diluted earnings per share the following steps have been followed:

Step 1: Calculated the proceeds assumed to be raised

Step 1: Calculated the proceeds assumed to be raised
Calculated as the exercise price x number of shares subject to the share option	(R’000)	171,877	a
Step 2 Calculate the new shares deemed to have been issued
Calculated as the assumed proceeds divided by the average market price (VWAP)	(‘000)	55,089	b
Step 3: Determine the bonus element
There is no dilutive impact on the share options	(‘000)	(7,870)	c
a) Calculated as 47,219 x R3.64 = R171,877

• b) Calculated as R171,877/R3.12 = 55,089

• c) Calculated as 47,219 – 55,089 = (7,870)

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ANNEXURE 2

INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE PRO FORM A FINANCIAL INFORMATION OF BALWIN

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Tel: +27 011 488 1700 Wanderers Office Park Fax: +27 010 060 7000 52 Corlett Drive www.bdo.co.za Illovo, 2196 Private Bag X60500 Houghton, 2041 South Africa

The Directors Balwin Properties Limited Block 1, Townsend Office Park No 1 Townsend Avenue Bedfordview Johannesburg

19 July 2021

Dear Sirs

INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE COMPILATION OF THE PRO FORMA FINANCIAL INFORMATION OF BALWIN PROPERTIES LIMITED (“THE COMPANY”)

We have completed our assurance engagement to report on the compilation of the pro forma financial information of the Company by the directors. The pro forma financial information, as set out in Annexure 1 of the circular to be issued on or about 23 July 2021 (“the Circular”), consists of the pro forma statement of financial position, the pro forma statement of comprehensive income and related notes. The applicable criteria on the basis of which the directors have compiled the pro forma financial information are specified in the Johannesburg Stock Exchange Limited (‘JSE’) Listing Requirements and described in Annexure 1.

The pro forma financial information has been compiled by the directors to illustrate the impact of the corporate action or event, described in Paragraph 2 of the Circular, on the company’s financial position as at 28 February 2021, and the company’s financial performance for the period then ended, as if the corporate action or event had taken place at 28 February 2021 and for the period then ended. As part of this process, information about the company’s financial position and financial performance has been extracted by the directors from the company’s financial statements for the year ended 28 February 2021, on which an auditor’s report was issued on 17 May 2021.

Directors’ responsibility for the pro forma financial information

The directors are responsible for compiling the pro forma financial information on the basis of the applicable criteria specified in the JSE Listing Requirements and described in Annexure 1 of the Circular.

Our independence and quality control

We are required to comply with the independence and other ethical requirements of the Code of Professional Conduct for Registered Auditors issued by the Independent Regulatory Board for Auditors (‘IRBA Code’), which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. The IRBA Code is consistent with the corresponding sections of the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) .

BDO South Africa Incorporated Registration number: 1995/002310/21 Practice number: 905526 VAT number: 4910148685

Chief Executive Officer: ME Stewart

A full list of all company directors is available on www.bdo.co.za

The company’s principal place of business is at The Wanderers Office Park, 52 Corlett Drive, Illovo, Johannesburg where a list of directors’ names is available for inspection. BDO South Africa Incorporated, a South African personal liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.

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The firm applies the International Standard on Quality Control 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Reporting Accountants’ responsibility

Our responsibility is to express an opinion about whether the pro forma financial information has been compiled, in all material respects, by the directors on the basis specified in the JSE Listing Requirements based on our procedures performed.

We conducted our engagement in accordance with the International Standard on Assurance Engagements (ISAE) 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus, which is applicable to an engagement of this nature, issued by the International Auditing and Assurance Standards Board. This standard requires that we plan and perform procedures to obtain reasonable assurance about whether the pro forma financial information has been compiled, in all material respects, on the basis specified in the JSE Listings Requirements.

For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the pro forma financial information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the pro forma financial information.

As the purpose of pro forma financial information included in the Circular is solely to illustrate the impact of a significant corporate action or event on unadjusted financial information of the entity as if the corporate action or event had occurred or had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the corporate action or event at 28 February 2021 would have been as presented.

A reasonable assurance engagement to report on whether the pro forma financial information has been compiled, in all material respects, on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used in the compilation of the pro forma financial information provide a reasonable basis for presenting the significant effects directly attributable to the corporate action or event, and to obtain sufficient appropriate evidence about whether:

• the related pro forma adjustments give appropriate effect to those criteria; and

• the pro forma financial information reflects the proper application of those adjustments to the unadjusted financial information.

Our procedures selected depend on our judgment, having regard to our understanding of the nature of the company, the corporate action or event in respect of which the pro forma financial information has been compiled, and other relevant engagement circumstances.

Our engagement also involves evaluating the overall presentation of the pro forma financial information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion, the pro forma financial information has been compiled, in all material respects, on the basis of the applicable criteria specified in the JSE Listing Requirements and described in Annexure 1 of the Circular.

Consent

This report on the pro forma statement of financial position is included solely for the information of the Shareholders. We consent to the inclusion of our report on the pro forma statement of financial position, pro forma statement of comprehensive income and the references thereto, in the form and context in which they appear.

Yours faithfully

BDO South Africa Incorporated

Paul Badrick Director Registered Auditor

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ANNEXURE 3

TRADING HISTORY OF BALWIN ON THE JSE

The daily closing share price, highest share price, lowest share price and volumes traded for the 30 trading days preceding the Last Practicable Date and for each month over the 12 months prior to the Last Practicable Date, is set out below.

					WEIGHTED
Months Ended	HIGH	LOW	CLOSE	VOLUME	AVERAGE
2/28/2020	365	342	350	1041100	350.26
3/31/2020	265	235	262	50448	254.88
4/30/2020	222	203	216	56349	218.22
5/29/2020	290	257	284	147526	281.77
6/30/2020	280	270	270	12267	276.08
7/31/2020	269	250	250	616369	250.89
8/31/2020	315	300	306	56680	311.00
9/30/2020	318	292	310	58195	313.21
10/30/2020	435	421	435	220315	431.22
11/30/2020	410	400	400	31008	405.06
12/31/2020	455	425	455	24485	444.45
1/29/2021	484	470	470	22857	470.44
2/26/2021	439	401	425	56290	420.54
3/31/2021	450	435	435	33076	444.65
4/30/2021	450	435	435	63187	439.91
5/31/2021	449	441	448	35771	447.62
6/30/2021	425	410	425	104120	423.12
Days Ended
7/1/2021	425	411	422	19423	424.91
7/2/2021	425	410	414	29593	417.93
7/5/2021	414	385	398	39762	400.71
7/6/2021	410	391	410	24417	408.28
7/7/2021	410	395	395	21165	399.70
7/8/2021	410	397	409	14150	400.74
7/9/2021	400	370	400	19129	389.79
7/12/2021	400	381	381	113171	398.82
7/13/2021	394	370	370	31354	383.20
7/14/2021	390	371	390	14134	387.19
7/15/2021	390	370	390	25048	382.42
7/16/2021	400	370	390	22129	387.17
7/19/2021	390	370	385	17794	381.37

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BALWIN PROPERTIES LIMITED

(Incorporated in the Republic of South Africa)

(Registration number 2003/028851/06) JSE share code: BWN ISIN: ZAE000209532

(“ Balwin ” or “ the Company ”)

NOTICE OF GENERAL MEETING

All terms defined in the Circular to which this Notice of General Meeting is attached, shall bear the same meanings where used in this Notice of General Meeting.

NOTICE IS HEREBY GIVEN that a General Meeting of Shareholders will be held entirely via a remote interactive electronic platform, Microsoft Teams, on Monday, 6 September 2021 at 09:00, for purposes of considering and, if deemed fit, pass, with or without modification, the resolutions set out hereunder.

1. ORDINARY RESOLUTION NUMBER 1 – APPROVAL OF THE SPECIFIC ISSUE OF SHARES FOR CASH

“RESOLVED AS AN ORDINARY RESOLUTION in accordance with the provisions of paragraph 5.51 of the Listings Requirements, that the BEE Transaction, being the issue of 47,219,260 shares at a subscription consideration equal to the volume weighted average price per share for the 30 trading days immediately preceding 26 May 2021, less 20%, being an aggregate amount of R214,375,437.00, is hereby approved by Shareholders.”

For ordinary resolution number 1 to be passed, votes in favour of the resolution must represent at least 75% of the votes rights exercised at the General Meeting in person or by proxy and who were entitled to exercise voting rights in respect of ordinary resolution number 1.

Reason and effect

The reason for this resolution is that the JSE Listings Requirements require shareholder approval for the company to issue equity shares for cash in a specific issuance transaction.

The effect of this resolution is that it enables the Company to issue shares for cash to the BEE SPV as an integral component of the BEE Transaction, with the required authority of the Shareholders of the Company.

In terms of the JSE Listings Requirements the party being issued shares in a specific issue for cash, as well as that party’s “associates” as defined therein, are excluded from the vote.

2. SPECIAL RESOLUTION NUMBER 1 – APPROVAL OF THE SPECIFIC REPURCHASE OF BEE SHARES

“RESOLVED AS A SPECIAL RESOLUTION that, in terms of the JSE Listings Requirements, section 48(8)(a) of the Companies Act (to the extent applicable) and the Company’s MOI, the Company or a third party or third parties, including any subsidiary of the Company as its nominee, be and is hereby authorised, in accordance with and to the extent it is entitled to do so in terms of the provisions of the BEE Transaction Agreements, to acquire or repurchase the BEE Shares as calculated or provided for in accordance with the Transaction Agreements, such specific authority being subject to the requirements of paragraph 5.69 of the Listings Requirements having been met in relation to the acquisition made by the Company or its nominee pursuant to this special resolution. Provided that no more than 5% of the total issued Shares of the Company, measured as at the date of repurchase, shall be directly reacquired by the Company under the Transaction Agreements, in a transaction or integrated series of transactions, unless the Company has at that stage additionally complied with section 48(8)(b) of the Companies Act.

The specific authority granted in terms of this special resolution shall be valid until such time as the potential acquisitions or repurchases contemplated in the Transaction Agreements have been implemented or it is amended or revoked by another special resolution.”

For special resolution number 1 to be passed, votes in favour of the resolution must represent at least 75% of the voting rights exercised at the General Meeting in person or by proxy and who were entitled to exercise voting rights in respect of special resolution number 1.

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Reason for and effect

In terms of the JSE Listings Requirements and the Companies Act, the acquisition by an issuer of its own securities or a purchase by a subsidiary of securities in its holding company (in accordance with section 48 of the Companies Act), including, inter alia, pursuant to the enforcement of a cession and pledge of the issuer’s shares, will be regarded as a repurchase of securities in terms of the JSE Listings Requirements and Companies Act, in which case such acquisition must be approved by a special resolution. The reason for and effect of this special resolution is to authorise the Company (or a third party or third parties, including any subsidiary of Balwin, as its nominee) in respect of any potential repurchase of the BEE Shares from the BEE SPV in terms of the BEE Transaction Agreements. If Mr Kukama or any of the other direct or indirect shareholders of BEE SPV happen to become a director of the Company in the future, and as a result any reacquisition of the BEE Shares by the Company from BEE SPV falls within section 48(8)(a) of the Companies Act (reacquisitions from Directors or their related persons), this special resolution shall be regarded as constituting the necessary shareholder approval under that section as well. However if the Company at any stage seeks to directly reacquire more than 5% of its issued Shares in a transaction or integrated series of transactions, it will at that stage additionally comply with section 48(8)(b) of the Companies Act which requires, inter alia, an independent expert’s report and a fresh special resolution of shareholders for such a reacquisition.

3. SPECIAL RESOLUTION NUMBER 2 – FINANCIAL ASSISTANCE

“RESOLVED AS A SPECIAL RESOLUTION that the provision by the Company of the financial assistance given by Balwin to the BEE SPV in terms of the Loan Agreement, which facilitates the acquisition of the BEE Shares pursuant to the BEE Transaction, be and is hereby approved in terms of section 44 of the Act.

For special resolution number 2 to be passed, votes in favour of the resolution must represent at least 75% of the voting rights exercised at the General Meeting in person or by proxy and who were entitled to exercise voting rights in respect of special resolution number 2.

Reason and effect

The reason for this resolution is that the Companies Act requires shareholder approval where a company provides financial assistance in connection with the acquisition of shares in the company. The aspects of the BEE Transaction as described in this resolution amount to such financial assistance by the company. The Act further requires that the Board be satisfied that the granting of such financial assistance will not place the Company in breach of the solvency and liquidity test as defined in the Companies Act, and that the terms of such financial assistance are fair and reasonable to the Company.

The Balwin Board shall ensure compliance with these provisions.

The effect of this resolution is that it enables the Company to financially facilitate the BEE Transaction, in particular the acquisition by BEE SPV of shares in the Company.

4. ORDINARY RESOLUTION NUMBER 2 – DIRECTORS AND/OR COMPANY SECRETARY AUTHORITY

“RESOLVED AS AN ORDINARY RESOLUTION that any Director and/or the company secretary of Balwin be and is hereby authorised and empowered to do all such things, sign all such documents and take all such actions as may be necessary for or incidental to give effect to ordinary resolution number 1 and special resolution numbers 1 and 2 set out in this Notice of General Meeting and anything already done in this respect be and is hereby ratified to the fullest extent permissible in law.”

For ordinary resolution 2 to be passed, votes in favour of the resolution must represent more than 50% of the voting rights exercised at the General Meeting in person or by proxy and who were entitled to exercise voting rights in respect of ordinary resolution number 2.

Reason and effect

The reason for and effect of ordinary Resolution number 2 is to authorise any Director or the company secretary of Balwin to do all such things and sign all such documents as are deemed necessary or desirable to implement ordinary resolution number 1 and special resolution numbers 1 and 2 set out in the Notice of General Meeting, which requires the approval of the Shareholders.

VOTING AND PROXIES

Every Shareholder present in person or represented by proxy and entitled to vote shall have only one vote irrespective of the number of shares such shareholder holds. On a poll, every Shareholder present in person or represented by proxy and entitled to vote shall be entitled to one vote for every Share held or represented by that Shareholder.

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On a poll taken at any such meeting, the Shareholder entitled to more than one vote need not, if he/she votes, use all of his/her votes, or cast all the votes he/she uses in the same way.

Shareholders who have dematerialised their Shares, other than those Shareholders who have dematerialised their Shares with own name registration, should contact their CSDP or broker in the manner and time stipulated in the agreement entered into between them and their CSDP or broker:

• to furnish them with their voting instructions; or

• in the event that they wish to attend the General Meeting, to obtain the necessary letter of representation to do so.

Shareholders wishing to participate electronically in the General Meeting are required to deliver written notice to the company at Block 1, Townsend Office Park, 1 Townsend Avenue, Bedfordview (marked for the attention of the chief financial officer), by no later than 09:00 on Monday, 6 September 2021, that they wish to participate via electronic communication at the General Meeting (“the electronic notice”).

In order for the electronic notice to be valid, it must contain:

• if the Shareholder is an individual, a certified copy of his/her identity document and/or passport;

• if the Shareholder is not an individual, a certified copy of a resolution by the relevant entity and a certified copy of the identity documents and/or passports of the persons who passed the relevant resolution;

• the relevant resolution must set out who from the relevant entity is authorised to represent the relevant entity at the General Meeting via electronic communication; and

• a valid email address and/or facsimile number (“the contact address/number”).

The Company shall use its reasonable endeavours to notify a Shareholder at its contact address/number who has delivered a valid electronic notice of the relevant details through which the Shareholder can participate via electronic participation.

Proxies

A Shareholder entitled to attend and vote at the General Meeting is entitled to appoint one or more proxies to attend, participate in and vote at the meeting in the place of the Shareholder. A proxy need not also be a Shareholder of the Company.

Shareholders who have not dematerialised their shares or who have dematerialised their shares with own name registration, and who are entitled to attend and vote at the General Meeting, are entitled to appoint one or more proxies to attend, speak and vote in their stead. A proxy need not be a Shareholder. It is requested that, for ease of administration, forms of proxy be forwarded so as to reach the transfer secretaries no later than 09:00 on Thursday, 2 September 2021. If Shareholders who have not dematerialised their Shares or who have dematerialised their Shares with own name registration, and who are entitled to attend and vote at the General Meeting, do not deliver forms of proxy to the transfer secretaries by 09:00 on Thursday, 2 September 2021, Shareholders will nevertheless at any time prior to the commencement of the voting on the Resolutions at the General Meeting be entitled to lodge the form of proxy in respect of the General Meeting, in accordance with the instructions therein with the chairperson of the General Meeting. Forms of proxy must only be completed by Shareholders who have not dematerialised their shares or who have dematerialised their Shares with own name registration.

By order of the Board

BALWIN PROPERTIES LIMITED

J WELTMAN Chief Financial Officer

(Being duly authorised hereto to sign this Circular for and on behalf of each and every Director in accordance with a round robin resolution of the Board signed by each and every Director).

19 July 2021

Registered office

Block 1 Townsend Office Park 1 Townsend Avenue Bedfordview

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BALWIN PROPERTIES LIMITED

(Incorporated in the Republic of South Africa) (Registration number 2003/028851/06) JSE share code: BWN ISIN: ZAE000209532

(“ Balwin ” or “ the Company ”)

FORM OF PROXY (RED) – FOR USE BY CERTIFICATED AND OWN-NAME REGISTERED DEMATERIALISED SHAREHOLDERS ONLY

All terms defined in the Circular, to which this Form of Proxy is attached, shall bear the same meanings when used in this Form of Proxy.

For use only by Shareholders holding Certificated Shares, nominee companies of CSDPs, Brokers’ nominee companies and Own-name Registered Dematerialised Shareholders at the General Meeting to be held on Monday, 6 September 2021 via MS Teams to consider and, if deemed fit, pass, with or without modification, the Resolutions set out hereunder.

Dematerialised Shareholders who are not Own-name Registered Dematerialised Shareholders must not complete this Form of Proxy and must provide their CSDP or Broker with their voting instructions, except for Own-name Registered Dematerialised Shareholders recorded in the subregister through a CSDP or Broker, which Shareholders must complete this Form of Proxy and lodge it with their CSDP or Broker in terms of the custody agreement entered into between them and their CSDP or Broker. Dematerialised Shareholders who are not Own-name Registered Dematerialised Shareholders wishing to attend and/or participate in the General Meeting must inform their CSDP or Broker of such intention and request their CSDP or Broker to issue them with the necessary letter of representation to attend and/or participate.

I/We (Full name in print)

of (address)
Telephone: (work) area code ( )		Telephone: (home) area code ( )
Cellphone number:		Email address:
being the holder of		Shares in Balwin, hereby appoint:
1.			or failing him/her
2.			or failing him/her

3. the chairperson of the General Meeting,

as my/our proxy to attend, speak and vote for me/us at the General Meeting for purposes of considering and, if deemed fit, passing, with or without modification, the Resolutions to be proposed thereat and at any adjournment thereof and to vote for and/or against the Resolutions and/or abstain from voting in respect of the Shares registered in my/our name(s), in accordance with the following instruction (see notes):

	Number of Shares
	For	Against	Abstain
ORDINARY RESOLUTION NUMBER 1 Approval of the specific issue of shares for cash
ORDINARY RESOLUTION NUMBER 2 Directors and/or company secretary authority
SPECIAL RESOLUTION NUMBER 1 Potential BEE Transaction Specific Repurchase of the BEE Shares
SPECIAL RESOLUTION NUMBER 2 Section 44: Financial Assistance

Please indicate your voting instruction by way of inserting the number of Shares or by a cross in the space provided should you wish all your Shares to be voted.

Signed at	on this day of	2021
Signature(s)

Assisted by (where applicable) (state capacity and full name)

Each Shareholder is entitled to appoint one or more proxy(ies) (who need not be Shareholder(s) of Balwin) to attend and/or participate and vote in his/her stead at the General Meeting.

Please read the notes on the reverse side hereof.

Notes:

1. A Shareholder holding Dematerialised Shares by Own-name Registration, or who holds Shares that are not dematerialised, is entitled to appoint any individual (including an individual who is not a Shareholder) as a proxy to participate in, and speak and vote at, a Shareholders meeting on behalf of the Shareholder. Such Shareholder may insert the name of a proxy or the names of two alternative proxies of the Shareholder’s choice in the space provided, with or without deleting ‘the Chairperson of the General Meeting’, provided that any such deletion must be signed in full by the Shareholder. The person whose name stands first on the form of proxy and who is present at the General Meeting will be entitled to act as proxy to the exclusion of those whose names follow. Should a proxy not be specified, this will be exercised by the Chairperson of the General Meeting. A proxy need not be a Shareholder of the Company.

2. All Resolutions put to the vote shall be decided by way of a poll. A Shareholder is entitled on a poll, to 1 (one) vote per Share held. A Shareholder’s instructions to the proxy must be indicated by inserting the relevant number of votes exercisable by the Shareholder in the appropriate box(es). An ‘X’ in the appropriate box indicates the maximum number of votes exercisable by that Shareholder. Failure to comply with the above will result in the proxy not being authorised to vote or to abstain from voting at the General Meeting in respect of the Shareholder’s votes, except in the case where the Chairperson of the General Meeting is the proxy. A Shareholder or his/her proxy is not obliged to use all the votes exercisable by the Shareholder, or to cast all those votes exercised in the same way, but the total of the votes cast and in respect whereof abstention is recorded may not exceed the total of the votes exercisable by the Shareholder.

3. A proxy appointment must be in writing, dated and signed by the relevant Shareholder.

4. Any alteration or correction made to this form of proxy must be signed in full and not initialled by the signatory.

5. Documentary evidence establishing the authority of a person signing the form of proxy in a representative capacity must be attached to this form, unless previously recorded by the Company or waived by the Chairperson of the General Meeting.

6. A minor must be assisted by his/her parent/guardian and the relevant documentary evidence establishing his/her legal capacity must be attached to this form of proxy unless previously recorded by the Company or waived by the Chairperson of the General Meeting.

7. When there are joint holders of Shares, any one holder may sign the form of proxy.

8. The Chairperson of the General Meeting may reject or accept any form of proxy which is completed and/or received other than in compliance with these notes.

9. A proxy may not delegate his/her authority to act on behalf of the Shareholder, to another person other than the Chairperson of the General Meeting.

10. The appointment of a proxy or proxies:

11. a. is suspended at any time to the extent that the Shareholder chooses to act directly and in person in the exercise of any rights as a Shareholder; b. is revocable in which case the Shareholder may revoke the proxy appointment by:

    • i. cancelling it in writing or making a later inconsistent appointment of a proxy; and

    • ii. delivering a copy of the revocation instrument to the proxy and to the Company.

12. Should the instrument appointing a proxy or proxies have been delivered to the Company, as long as the appointment remains in effect, any notice that is required by the Companies Act or the MOI to be delivered by such Company to the Shareholder, must be delivered by such Company to –

13. a. the Shareholder; or

14. b. the proxy or proxies, if the Shareholder has directed the Company to do so in writing and has paid any reasonable fee charged by the Company for doing so.

15. The proxy appointment remains valid only until the end of the relevant meeting at which it was intended to be used, unless revoked as contemplated in section 58(5) of the Companies Act.

16. It is requested that this form of proxy should be completed and returned to or emailed to the chairperson of the General Meeting or to proxy@computershare.co.za so as to reach them, for administrative purposes only, by no later than 09:00 on Thursday, 2 September 2021, alternatively to be emailed to the Chairperson of the General Meeting prior to its commencement via email, proxy@computershare.co.za on Monday, 6 September 2021.