MAHUBE INFRASTRUCTURE LIMITED — Proxy Solicitation & Information Statement 2016

Sep 20, 2016

GAIA INFRASTRUCTURE CAPITAL LIMITED

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(previously GAIA Capital Proprietary Limited) (Incorporated in the Republic of South Africa) (Registration number 2015/115237/06) (Share Code: GAI, ISIN ZAE000210555) (“ GAIA ” or “ the Company ”)

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

The definitions commencing on page 7 of this Circular apply mutatis mutandis to this cover page.

ACTION REQUIRED BY GAIA SHAREHOLDERS

• This entire Circular is important and should be read with particular attention to the section titled “Action required by GAIA Shareholders” on page 5. If you are in any doubt as to what action you should take, you should consult your CSDP, Broker, banker, legal adviser, accountant or other professional adviser immediately.

• If you have disposed of all of your Shares, please forward this Circular together with the attached form of proxy (yellow), to the purchaser to whom, or the CSDP, Broker or other agent through whom, the disposal was effected.

• GAIA does not accept responsibility and will not be held liable for any failure on the part of the CSDP or Broker of any holder of Dematerialised Shares to notify such Shareholder of the transactions and actions set out in this Circular.

CIRCULAR TO GAIA SHAREHOLDERS

Relating to:

• the approval of the Acquisition by GAIA, which Acquisition constitutes the acquisition of a Viable Asset, and category 1 acquisition with a related party in terms of the JSE Listings Requirements;

• the use and retention of the Residual Capital;

• the General Issue;

• the General Repurchase;

• the Control over Unissued Shares;

• the approval of the Investment Policy,

and incorporating:

• Revised Listing Particulars in respect of GAIA;

• the Notice of General Meeting; and

• a form of proxy (yellow) in respect of the General Meeting (for use by Certificated Shareholders and Dematerialised Shareholders with “own-name” registration only).

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Transaction Advisor and Sponsor Independent Expert
Attorneys Independent Reporting Accountant and Auditor
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Date of issue: 19 September 2016

Copies of this Circular, incorporating the Revised Listing Particulars, are available in English only and may, from 19 September 2016 until 18 October 2016 (both days inclusive), be obtained from the registered office of GAIA, the Transaction Advisor and Sponsor and the Transfer Secretaries, at the addresses set out in the “Corporate Information” section of this Circular. A copy of this Circular will also be available on GAIA’s website (www.gaia-ic.com).

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 1

FORWARD-LOOKING STATEMENT DISCLAIMER

The definitions commencing on page 7 of this Circular apply mutatis mutandis to this forward-looking statement disclaimer.

This Circular contains statements about GAIA that are or may be forward-looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. These forward-looking statements are not based on historical facts, but rather reflect current expectations concerning future results and events and generally may be identified by the use of forward-looking words or phrases such as “believe”, “aim”, “expect”, “anticipate”, “intend”, “foresee”, “forecast”, “likely”, “should”, “planned”, “may”, “will”, “outlook”, “project”, “estimated”, “potential” or similar words and phrases.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. GAIA cautions that forward-looking statements are not guarantees of future performance. Actual results, financial and operating conditions, liquidity and the developments within the industry in which GAIA operates may differ materially from those made in, or suggested by, the forward-looking statements contained in this Circular.

All these forward-looking statements are based on estimates and assumptions made by GAIA, as communicated in publicly available documents by GAIA, all of which estimates and assumptions, although GAIA believes them to be reasonable, are inherently uncertain. Such estimates, assumptions or statements may not eventuate. Factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied in those statements or assumptions include other matters not yet known to GAIA or not currently considered material by GAIA.

Shareholders should keep in mind that any forward-looking statement made in this Circular or elsewhere is applicable only at the date on which such forward-looking statement is made. New factors that could cause the business of GAIA not to develop as expected may emerge from time to time and it is not possible to predict all such factors. Further, the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statement are not known. GAIA has no duty to, and does not intend to, update or revise the forward-looking statements contained in this Circular after the date of this Circular, except as may be required by law.

2 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

CORPORATE INFORMATION

The definitions commencing on page 7 of this Circular apply mutatis mutandis to this Corporate Information section.

Company Secretary

Exceed (Cape Town) Inc. (Registration number 2000/011257/21)

Registered office

37 Vineyard Road Claremont, 7700 (PO Box 44721, Claremont, 7735)

Date of incorporation of GAIA

16 April 2015

Place of incorporation of GAIA

South Africa

Directors

L de Wit (Executive Chairman) MM Nieuwoudt (Executive Director) T Soudien-Witten (Financial Director) PB Schabort[] C Ferreira[] KP Lebina (Lead Independent Director)[#] N Kimber[#] KE Mbalo[*#]

• Non-executive # Independent

Attorneys

Edward Nathan Sonnenbergs Inc. (Registration number 2006/018200/21) La Gratitude, 2nd Floor 97 Dorp Street Stellenbosch, 7600 (PO Box 940, Stellenbosch, 7599)

Transaction Advisor and Sponsor

PSG Capital Proprietary Limited (Registration number 2006/015817/07) 1st Floor, Ou Kollege 35 Kerk Street Stellenbosch, 7600 (PO Box 7403, Stellenbosch, 7599)

and

1st Floor, Building 8 Inanda Greens Business Park 54 Wierda Road West Wierda Valley Sandton, 2196 (PO Box 650957, Benmore, 2010)

Transfer Secretaries

Computershare Investor Services Proprietary Limited (Registration number 2004/003647/07) Ground Floor 70 Marshall Street Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107)

Independent Expert

Ernst & Young Advisory Services Proprietary Limited (Registration number 2006/018260/07) La Gratitude, 1st Floor 97 Dorp Street Stellenbosch, 7600 (PO Box 656, Cape Town, 8000)

Independent Reporting Accountant and Auditor

KPMG Inc. (Registration number 1999/021543/21) MSC House, 1 Mediterranean Street Cape Town City Centre Cape Town, 8001 (PO Box 4609, Cape Town, 8000)

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 3

TABLE OF CONTENTS

The definitions and interpretations commencing on page 7 of this Circular apply mutatis mutandis to this table of contents.

Page FoRwARD-LookING STATEMENT DISCLAIMER 2 CoRPoRATE INFoRMATIoN 3 ACTIoN REqUIRED by GAIA ShAREhoLDERS 5 SALIENT DATES AND TIMES 6 DEFINITIoNS AND INTERPRETATIoN 7 CIRCULAR To GAIA ShAREhoLDERS 11 1. Introduction and purpose of this Circular 11 2. Details of the Acquisition 12 3. The IK Option Agreement, IK Asset for Share Agreement and DK Option Agreement 16 4. Residual Capital 16 5. Additional Resolutions 17 6. The business of the GAIA Group 17 7. Financial Information of Dorper 17 8. Pro forma fnancial information 17 9. Information relating to the Directors 19 10. Information relating to GAIA 19 11. General Meeting and voting 20 12. Working Capital Statement 20 13. Litigation Statement 20 14. Expenses 20 15. Directors’ recommendation 21 16. Advisors’ consents 21 17. Directors’ responsibility statement 21 18. Documents available for inspection 21

Page

ANNExURES Annexure 1 Pro forma Financial Information of GAIA 22 Annexure 2 Independent Reporting Accountant’s report on the pro forma fnancial information 27 Annexure 3 Report of Historical Financial Information of Dorper for the fnancial years ended 28 February 2014, 28 February 2015 and 29 February 2016 29 Annexure 4 Independent Reporting Accountant’s report on the Historical Financial Information of Dorper 57 Annexure 5 Fairness opinion 59 Annexure 6 Vendors 63 Annexure 7 Revised Listing Particulars 64 Annexure 8 Investment Policy 120 ENCLoSURES Notice of General Meeting of Shareholders 121 Form of Proxy 125

4 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

ACTION REQUIRED BY GAIA SHAREHOLDERS

The definitions commencing on page 7 of this Circular apply mutatis mutandis to this section on the action required by GAIA Shareholders. Please take careful note of the following provisions regarding the action required by GAIA Shareholders.

1. If you are in any doubt as to what action to take, please consult your CDSP, Broker, banker, attorney, accountant or other professional adviser immediately.

2. If you have disposed of all your Shares in GAIA, please forward this Circular together with the attached form of proxy (yellow), to the purchaser of such Shares or to the CSDP, Broker, banker or other agent through whom the disposal was effected.

3. The General Meeting of GAIA Shareholders will be held at 10:00 on 18 October 2016 at Edward Nathan Sonnenbergs Inc, La Gratitude, 2nd Floor, 97 Dorp Street, Stellenbosch, at which General Meeting GAIA Shareholders will be requested to consider and, if deemed fit, to pass the resolutions set out in the Notice of General Meeting attached to and forming part of this Circular.

4. GENERAL MEETING

• 4.1 If you hold any Dematerialised Shares:

• 4.1.1 Own-name registration

  • You are entitled to attend, or be represented by proxy, and may vote at the General Meeting. If you are unable to attend the General Meeting, but wish to be represented thereat, you must complete and return the attached form of proxy (yellow), in accordance with the instructions contained therein, to be received by the Transfer Secretaries at Ground Floor, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) by no later than 10:00 on 14 October 2016 (it being deemed, for purposes hereof, that the General Meeting will commence at 10:00 on 18 October 2016.

• 4.1.2 Other than own-name registration

  • If your CSDP or Broker does not contact you, you are advised to contact your CSDP or Broker and provide them with your voting instructions. If your CSDP or Broker does not obtain instructions from you, they will be obliged to vote in accordance with the instructions contained in the Custody Agreement concluded between you and your CSDP or Broker. You must not complete the attached form of proxy (yellow). In accordance with the Custody Agreement between you and your CSDP or Broker you must advise your CSDP or Broker timeously if you wish to attend, or be represented at the General Meeting. Your CSDP or Broker will be required to issue the necessary letter of representation to you to enable you to attend, or to be represented at the General Meeting.

• 4.2 If you hold Certificated Shares

• You are entitled to attend, or be represented by proxy, and may vote at the General Meeting. If you are unable to attend the General Meeting, but wish to be represented thereat, you must complete and return the attached form of proxy (yellow), in accordance with the instructions contained therein, to be received by the Transfer Secretaries at Ground Floor, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) by no later than 10:00 on 14 October 2016 (it being deemed, for purposes hereof, that the General Meeting will commence at 10:00 on 18 October 2016.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 5

SALIENT DATES AND TIMES

The definitions and interpretations commencing on page 7 of this Circular apply mutatis mutandis to these salient dates and times.

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2016
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Circular Record Date	9 September
Circular posted to Shareholders on	19 September
Announcement providing the salient dates, advising of the posting of this Circular and giving the date and place
of the General Meeting released on SENS on	19 September
Announcement providing the salient dates, advising of the posting of this Circular and giving the date and place
of the General Meeting published in the press on	20 September
Last day to trade in Shares in order to be reflected in the Register on the General Meeting Record Date	4 october
General Meeting Record Date	7 october
Last day for receipt of forms of proxy (yellow) in respect of the General Meeting by 10:00 on	14 october
General Meeting of Shareholders to be held at 10:00 on	18 october
Results of General Meeting released on SENS on	18 october
Results of General Meeting published in the press on	19 october
Transaction expected to be implemented on or about	20 october

Notes

1. All of the above dates and times are subject to change. Any changes made will be notified to Shareholders by release on SENS.

2. Shareholders should note that, as transactions in shares are settled in the electronic settlement system used by Strate, settlement of trades takes place 3 (three) Business Days after such trade. Therefore, persons who acquire Shares after the last day to trade as detailed in the table above, will not be able to vote thereat.

3. A Shareholder may submit the form of proxy (yellow) at any time before the commencement of the General Meeting (or any adjournment of the General Meeting) or hand it to the chairperson of the General Meeting before the appointed proxy exercises any of the relevant Shareholders’ rights at the General Meeting (or any adjournment of the General Meeting), provided that, should a Shareholder lodge the form of proxy (yellow) with the Transfer Secretaries less than 48 (forty eight) hours before the General Meeting, a Shareholder will also be required to furnish a copy of such form of proxy (yellow) to the chairperson of the General Meeting before the appointed proxy exercises any of such Shareholder’s rights at the General Meeting (or any adjournment of the General Meeting).

4. If the General Meeting is adjourned or postponed, forms of proxy (yellow) submitted for the initial General Meeting will remain valid in respect of any such adjournment or postponement. All times given in this Circular are local times in South Africa.

6 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

DEFINITIONS AND INTERPRETATION

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 following words and expressions bear the meanings assigned to them below:

“Acquisition” “Acquisition Agreements” “Acquisition Consideration” “Act” or “Companies Act” “Available Cash” “Business Day” “Certificated Shareholders” “Certificated Shares” “Conditions Precedent” “Circular” “Circular Record Date” “ Computershare” or “the Transfer Secretaries” “ Control over Unissued Shares” “Convertible Loan” “ Convertible Loan Agreement” “CPI” “CSDP” “DD Investigation” “Dematerialised Shares” “ Dematerialised Shareholders” “ Dematerialised own-name Shareholders” “Directors” or “GAIA Board” “Documents of Title”

the proposed acquisition by GAIA, through GFS, of an effective see-through economic interest of 25.2% (twenty-five point two percent) in Dorper, which will be implemented in the manner set out in paragraph 2.3.2 of this Circular; the Subscription Agreement and the Convertible Loan Agreement; the amount set out paragraph 2.4 of this Circular, which shall be paid to Newco in respect of the Acquisition; the Companies Act No 71 of 2008, as amended; the cash available to Newco from time to time to pay to its shareholders in respect of distributions on Newco Shares and payment of loan claims which any shareholder of Newco has against Newco; any day, other than a Saturday, Sunday or official public holiday in South Africa; GAIA Shareholders who hold Certificated Shares; GAIA Shares which have not been dematerialised, title to which is represented by a share certificate or other document of title; the conditions precedent to the Acquisition Agreements set out paragraph 2.6 of this Circular; this document distributed to Shareholders and dated 19 September 2016, containing the circular to Shareholders, annexures, the Notice of General Meeting, a form of proxy (yellow) and Revised Listing Particulars; the date upon which Shareholders must be registered in the Register in order to be eligible to receive a copy of this Circular; Computershare Investor Services Proprietary Limited, registration number 2004/003647/07, a private company duly incorporated in accordance with the laws of South Africa; the authority sought in terms of the MOI to place unissued Shares under the control of the Directors, in accordance with the terms set out in the Notice of General Meeting; a loan in an amount of R235 963 820.59 (two hundred and thirty-five million nine hundred sixty-three thousand eight hundred and twenty Rand and fifty-nine cents) to be advanced by GFS to Newco, which amount may be converted into Newco Shares, subject to the terms set out in paragraph 2.3.3.3 of this Circular; the agreement concluded between Newco and GFS on 26 August 2016 governing the terms of the Convertible Loan; the Consumer Price Index for all urban areas published by Statistics South Africa from time to time; a central securities depository participant registered in terms of the Financial Markets Act, with whom a holder of Dematerialised Shares holds a dematerialised share account; the due diligence investigation which GFS is entitled to undertake in relation to the affairs of Newco and Dorper in terms of the Subscription Agreement; GAIA Shares which are not evidenced by certificates or other physical documents of title and which have been incorporated into the securities depository system operated by Strate; GAIA Shareholders who hold Dematerialised Shares; GAIA Shareholders who hold Dematerialised Shares and who have instructed their CSDP to hold their GAIA Shares in their own name on the sub-register; the board of directors of GAIA, details of whom are set out in paragraph 9.1 of the Circular; share certificates, certified transfer deeds, balance receipts or any other physical documents of title pertaining to the GAIA Shares in question, acceptable to the GAIA Board;

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 7

DEFINITIONS AND INTERPRETATION (continued)

“Dorper” “Dorper Board” “DK Company” “DK Option” “DK Option Agreement” “DWF Project” “Energy Assets” “ENS” “Financial Markets Act” “GAIA” or “the Company” “GAIA Group” or “Group” “ GAIA Infrastructure Partners” “GAIA Shareholders” or “Shareholders” “GAIA Shares” or “Shares” “General Issue” “General Meeting” “ General Meeting Record Date” “General Repurchase” “GFS” “Government” “GFS Board” “IFRS” “ IK Asset for Share Agreement” “IK Company”

Dorper Wind Farm (RF) Proprietary Limited, registration number 2009/022085/07, a private company duly incorporated in accordance with the laws of South Africa, with its place of incorporation being Porterville and its address being 3rd Floor, South Tower, Nelson Mandela Square, Sandton; the board of directors of Dorper; Renewable Energy D Proprietary Limited, registration number 2014/158670/07, a private company duly incorporated in accordance with the laws of South Africa and whose economic interests are majority owned by and controlled by TriAlpha; the Subscription Option and the Repurchase Option; the agreement concluded between GFS, Newco and DK Company on 26 August 2016 governing the terms of the DK Option; the Dorper Wind Farm project, the underlying asset of Dorper; 100% (one hundred percent) of IK Company’s shares in and loan claims against the special purpose vehicle that owns an indirect minority interest in 3 (three) renewable energy projects; Edward Nathan Sonnenbergs Incorporated, registration number 2006/018200/21, a personal liability company duly incorporated in accordance with the laws of South Africa; the Financial Markets Act No 19 of 2012, as amended; GAIA Infrastructure Capital Limited, registration number 2015/115237/06, a special purpose acquisition company duly incorporated in accordance with the laws of South Africa and whose ordinary shares are listed on the JSE; GAIA and its subsidiaries; GAIA Infrastructure Partners Proprietary Limited, registration number 2012/093632/07, a private company duly incorporated in accordance with the laws of South Africa; a holder of Shares whose name is reflected in the Register; an ordinary no par value share in the share capital of GAIA; the general authority sought by GAIA to authorise it to issue Shares for cash in terms of the JSE Listings Requirements, as detailed in the Notice of General Meeting; the General Meeting of GAIA Shareholders to be held at 10:00 on 18 October 2016 at Edward Nathan Sonnenbergs Inc, La Gratitude, 2nd Floor, 97 Dorp Street, Stellenbosch, convened in terms of the Notice of General Meeting; the date upon which Shareholders must be registered in the Register in order to be eligible to attend and vote at the General Meeting; the general authority sought by GAIA to authorise it or its subsidiaries to repurchase Shares in terms of the JSE Listings Requirements, as detailed in the Notice of General Meeting; GAIA Financial Services Proprietary Limited, registration number 2015/212709/07, a private company duly incorporated in accordance with the laws of South Africa and a wholly owned subsidiary of GAIA; the national government of the Republic of South Africa; the board of directors of GFS; International Financial Reporting Standards; the agreement to be concluded between Newco and IK Company pursuant to the exercise of the option contemplated in the IK Option Agreement, in terms of which Newco will, subject to obtaining all required regulatory and contractual consents and approvals, issue ordinary shares in the capital of Newco to IK Company in exchange for the acquisition of the Energy Assets by Newco; Renewable Energy I Proprietary Limited, registration number 2014/158795/07, a private company duly incorporated in accordance with the laws of South Africa and whose economic interests are majority owned by and controlled by TriAlpha;

8 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

“IK Option” “IK Option Agreement” “Independent Expert” “ Independent Reporting Accountants” “Investment Policy” “JSE” “ JSE Listings Requirements” “Last Practicable Date” “Listing” “Listing Date” “MAC Event” “Management Agreement” “Manager” “MOI” “MW” “Newco” “Newco Board” “Newco Loan” “Newco Loan Agreement” “Newco Shares” “Notice of General Meeting”

the option granted to Newco in terms of the IK Option Agreement; the agreement concluded between IK Company and Newco on 26 August 2016 in terms of which, inter alia, IK Company grants to Newco the option to elect whether or not to require IK Company to enter into and implement the IK Asset for Share Agreement; Ernst & Young Advisory Services Proprietary Limited, registration number 2006/018260/07, a personal liability company incorporated in accordance with the laws of South Africa being the independent expert of GAIA; KPMG Inc., chartered accountants (SA), registration number 1999/021543/21, a company duly incorporated in accordance with the laws of South Africa, appointed as auditors and independent reporting accountants of GAIA; the investment policy of GAIA as set out inAnnexure 8; the exchange operated by the JSE Limited, registration number 2005/022939/06, a public company duly incorporated in accordance with the laws of South Africa and licensed as an exchange under the Financial Markets Act; the Listings Requirements of the JSE; the last practicable date before finalisation of this Circular, which date was 9 September 2016; the listing of GAIA on the JSE as a SPAC and the concurrent private placement, whereby it raised an amount of R551 000 000 (five hundred and fifty-one million Rand); the date upon which the GAIA Shares were listed on the JSE, being 12 November 2015; a material adverse change event, being any event which: • frst occurs after 8 July 2016 but before the implementation date of the Subscription Agreement; and • causes a material adverse effect on the cash-fows attributable to Dorper and/or assumptions underpinning the fnancial model agreed between the parties to the Subscription Agreement in relation to the Subscription Consideration, it being agreed that: • no event or effect shall be regarded as materially adverse unless it results in an aggregate reduction of at least 5% (fve percent)) in (i) the total aggregate future (after 1 August 2016, or such other date as agreed between the parties to the Subscription Agreement) cash-fows attributable to Dorper and/or (ii) the net asset value of Dorper; and • no effect which is attributable to natural resource (wind or solar) variability shall be taken into account for this purpose; the agreement entered into between GAIA, GFS and the Manager on or about October 2015 in terms of which the Manager provides certain services to GAIA and GFS; GAIA Infrastructure Partners; GAIA’s memorandum of incorporation; Megawatts; K2016223637 Proprietary Limited, registration number 2016/223637/07, a private company duly incorporated in accordance with the laws of South Africa and a wholly owned subsidiary of DK Company; the board of directors of Newco; the loan in an amount of R401 000 000 (four hundred and one million Rand) that will be made by Newco to DK Company, as set out in paragraph 2.7 of this Circular; the agreement concluded between DK Company and Newco on 26 August 2016 governing the terms of the Newco Loan; ordinary no par value shares in the share capital of Newco; the notice of the General Meeting attached to and forming part of this Circular;

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 9

DEFINITIONS AND INTERPRETATION (continued)

“Own-name Registration” “ Permissible Adjustment Event” “PPA” “Pre-Listing Statement” “ PSG Capital” or “Sponsor” or “Transaction Advisor” “Rand” or “R” “Register” “REIPPPP” “Repurchase Option” “Residual Capital” “ Revised Listing Particulars” “SENS” “SPAC” “Strate” “Subscription” “Subscription Agreement” “ Subscription Consideration” “Subscription Option” “Subscription Shares” “TriAlpha” “Viable Asset”

the registration of GAIA Shareholders who hold GAIA Shares that have been dematerialised and are recorded by the CSDP on the sub-register kept by that CSDP in the name of such Shareholder; means: • the occurrence of a MAC Event; or • GFS requiring an adjustment to the Subscription Consideration pursuant to the results of the DD Investigation; a power purchase agreement; the GAIA Pre-Listing Statement issued on 2 November 2015; PSG Capital Proprietary Limited, registration number 2006/015817/07, a private company duly incorporated in accordance with the laws of South Africa; South African Rand; the register of Certificated Shareholders maintained by the Transfer Secretaries on behalf of GAIA and the sub-register of Dematerialised Shareholders maintained by the relevant CSDP in terms of the Companies Act; the Renewable Energy Independent Power Producers Procurement Programme currently managed by the Department of Energy of the Government; the right granted to Newco by DK Company to require DK Company to sell certain of the Newco Shares held by DK Company back to Newco; the residual amount of R49 434 952 (forty-nine million four hundred and thirty-four thousand nine hundred and fifty-two Rand) of the capital raised on Listing that will not be utilised for the Acquisition; the revised listing particulars of GAIA, as required by the JSE Listings Requirements and as set out in Annexure 7, which will only be effective if the Acquisition is implemented; the Stock Exchange News Service of the JSE; a Special Purpose Acquisition Company as defined in the JSE Listings Requirements; Strate Proprietary Limited, registration number 1998/022242/07, a private company duly incorporated in accordance with the laws of South Africa, being a registered central securities depository in terms of the Financial Markets Act; the proposed subscription by GFS for the Subscription Shares; the agreement concluded between Newco, GFS and DK Company on 26 August 2016 governing the terms of the Subscription; the aggregate subscription consideration to be paid by GFS in respect of the subscription for the Subscription Shares, which amount shall be R265 036 179.41 (two hundred and sixty-five million thirty- six thousand one hundred and seventy-nine Rand and forty-one cents), provided that such amount may be amended to a higher or lower amount by agreement between GFS and DK Company pursuant to the occurrence of a Permissible Adjustment Event; the option granted by Newco to GFS to subscribe for ordinary shares in the capital of Newco for an aggregate subscription price which is equal to the sum of all amounts due and payable by Newco to GFS in terms of the Convertible Loan Agreement at the relevant time; the Newco Shares which are to be issued to GFS in terms of the Subscription Agreement, and which will constitute 34.9% (thirty-four point nine percent) of the issued share capital of Newco at the time of their issue; the trustees from time to time of the TriAlpha Specialised Investments Trust III, a trust duly registered with the Master of the High Court of South Africa (Master’s Reference number IT3288/2010); and an asset that will, on its own, enable GAIA as a special purpose vehicle, to qualify for a main board listing pursuant to the JSE listing criteria of the main board.

10 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

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GAIA INFRASTRUCTURE CAPITAL LIMITED

(previously GAIA Capital Proprietary Limited) (Incorporated in the Republic of South Africa) (Registration number 2015/115237/06) (Share Code: GAI, ISIN ZAE000210555) (“ GAIA ” or “ the Company ”)

DIRECTORS

L de Wit (Executive Chairman) MM Nieuwoudt (Executive Director) T Soudien-Witten (Financial Director) PB Schabort[*]

C Ferreira[] KP Lebina (Lead Independent Director)[#] N Kimber[#] KE Mbalo[#]

• Non-executive

Independent

CIRCULAR TO GAIA SHAREHOLDERS

1. INTRODUCTION AND PURPOSE OF THIS CIRCULAR

• 1.1 Shareholders are referred to the announcement released by GAIA on SENS on 12 July 2016, advising Shareholders of the proposed acquisition by GAIA, through GFS, of an effective see-through economic interest of 25.2% (twenty-five point two percent) in Dorper.

• 1.2 Dorper owns a fully operational wind farm located in the Eastern Cape, with a contracted generating capacity of approximately 98MW, which forms part of the REIPPPP.

• 1.3 GAIA listed as a SPAC and is therefore, in terms of the JSE Listings Requirements, required to complete the acquisition of a Viable Asset within 24 (twenty four) months of the Listing Date. The Acquisition, if implemented, will constitute the acquisition of a Viable Asset and will result in GAIA being classified, in terms of the JSE Listings Requirements, as an investment entity and no longer as a SPAC, provided that the Investment Policy is approved by Shareholders as set out in the Notice of General Meeting. Given that GAIA listed as a SPAC, and not as an investment entity, the JSE requires Shareholders to approve the Investment Policy before GAIA can be classified as an investment entity. In addition, the Acquisition constitutes a category 1 acquisition with a related party. Accordingly, in terms of the JSE Listings Requirements, the Acquisition requires the approval of GAIA Shareholders by way of an ordinary resolution.

• 1.4 In terms of the JSE Listings Requirements, the use and retention of the Residual Capital requires the approval of GAIA Shareholders by way of an ordinary resolution. Should Shareholders not approve the resolution dealing with the further use and retention of the Residual Capital after the Acquisition has been approved, then such Residual Capital will be returned to Shareholders within 60 (sixty) calendar days after the date of the General Meeting.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 11

CIRCULAR TO GAIA SHAREHOLDERS (continued)

1. INTRODUCTION AND PURPOSE OF THIS CIRCULAR (continued)

• 1.5 Subject to the Acquisition being implemented, GAIA will no longer be a SPAC. Accordingly, GAIA wishes to obtain the authority of Shareholders to:

• 1.5.1 undertake the General Issue;

• 1.5.2 undertake the General Repurchase;

• 1.5.3 place unissued GAIA Shares under the control of the Directors; and

• 1.5.4 approve the Investment Policy.

• 1.6 The purpose of this Circular is to:

• 1.6.1 provide Shareholders with the requisite information regarding the Acquisition, the use of the Residual Capital, the General Issue, the General Repurchase, the Control over the Unissued Shares and the Investment Policy to enable them to make an informed decision in respect of the resolutions set out in the Notice of the General Meeting;

• 1.6.2 convene the General Meeting in order to consider and, if deemed fit, approve the resolutions set out in the Notice of the General Meeting; and

• 1.6.3 issue Revised Listing Particulars pursuant to and conditional upon the successful implementation of the Acquisition.

2. DETAILS OF THE ACQUISITION

2.1 Summary

• 2.1.1 In terms of the Acquisition, GAIA, acting through GFS, will acquire an effective see-through economic interest of 25.2% (twenty-five point two percent) in Dorper. The Acquisition entails the subscription for the Subscription Shares in Newco (equal to 34.9% (thirty-four point nine percent) economic and voting interest of the issued share capital of Newco) and the advancing of the Convertible Loan to Newco (the terms of which equate to an additional economic interest of 49.3% (forty-nine point three percent) in Newco), which will effectively give GAIA an economic interest of 84.2% (eighty-four point two percent) in Newco. Given that Newco will hold 30% (thirty percent) of the issued share capital in Dorper, the 84.2% (eighty-four point two percent) economic interest in Newco equates to a 25.2% (twenty-five point two percent) effective see-through economic interest in Dorper.

• 2.1.2 As further detailed in paragraph 2.3.3.3 below, the Convertible Loan may be settled in a number of ways, which could potentially trigger the acquisition of additional assets by Newco (in terms of IK Option and the IK Asset for Share Agreement) or the conversion of the Convertible Loan into additional shares in Newco (in terms of the DK Option).

  • In this Circular, Shareholder approval is being sought only in respect of the Acquisition and not in respect of the additional acquisitions that may occur when the Convertible Loan is settled (which will occur if either the IK Option or DK Option are exercised). No approval is being sought at this time regarding the IK Option Agreement or the DK Option Agreement.

• 2.1.3 If the IK Option is exercised, Newco will acquire a minority interest in 3 (three) additional renewal energy projects and GAIA, through GFS, will retain an approximate 34.9% (thirty-four point nine percent) voting and economic interest in Newco, assuming that the respective values of Newco, Dorper and the Energy Assets on the date of implementation of the IK Option are the same as at Last Practicable Date. The IK Option cannot be exercised without the consent of GFS. To the extent that Shareholder approval is required in terms of the JSE Listings Requirements, GFS will not provide consent unless Shareholders approve the exercise of the IK Option by GFS.

• 2.1.4 If the DK Option is exercised, Newco will issue additional shares to GAIA, through GFS, in settlement of the Convertible Loan, so that after the issue, GFS will hold an approximate 84.2% (eighty-four point two percent) economic and voting interest in Newco, assuming that the respective values of Newco and Dorper on the date of implementation of the DK Option are the same as at the Last Practicable Date. The DK Option cannot be exercised without the consent of GFS and is subject to Shareholder approval, if required (the DK Option will be categorised in terms of the JSE Listings Requirements when exercised).

• 2.1.5 The details of the IK Option, the IK Asset for Share Agreement and the DK Option have been included in the Circular for information purposes only in order to provide Shareholders with a complete picture of the manner in which the Convertible Loan may be settled, however the exercise and implementation of the IK Option or the DK Option, as the case may be, are independent of the Acquisition and Shareholder approval for such exercise and implementation is not sought in terms of this Circular. Further details of the IK Option, the IK Asset for Share Agreement and the DK Option are detailed in paragraph 3 below.

• 2.2 Rationale of the Acquisition

• 2.2.1 As stated in paragraph 3.2.2 of the Pre-Listing Statement, GAIA will, in accordance with its aim to be a diversified infrastructure investment company, initially look to invest in renewable energy projects in South Africa.

• 2.2.2 In terms of the Acquisition, GAIA is pursuing an investment into the DWF Project. The DWF Project is a REIPPPP project that has a 20-year Government backed PPA signed with Eskom. The DWF Project, situated outside of Molteno in the Eastern Cape, is a successful Round 1 project in South Africa’s REIPPPP, which achieved commercial operation in 2014, is fully operational and is delivering electricity into the South African grid. The REIPPPP is an internationally acclaimed private-public partnership and legal framework through which more than R200 billion Rand has been invested into the renewable energy industry in South Africa. The REIPPPP provides projects with a 20-year PPA at a set price that escalates annually with inflation.

12 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

• 2.2.3 The investment opportunity provides GAIA and its Shareholders with an operational and appropriately de-risked secondary investment opportunity. The projected cash flows are uncorrelated to the market (due to the nature of the PPA) and provide GAIA and its Shareholders with consistent and stable inflation-linked cash distributions.

• 2.2.4 The Manager has intimate knowledge of the DWF Project. The Manager completed a detailed and thorough due diligence on the DWF Project, through a previous secondary investment into the DWF Project. The Manager further also acquired 3 (three) seats on the Dorper Board and has formed part of the Dorper Board since June 2015.

• 2.2.5 The DWF Project investment opportunity is aligned with GAIA’s investment mandate and presents a good investment opportunity to both GAIA and its Shareholders.

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Investment Policy as per the Pre-Listing Statement Comments
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Invest in operational or near operational projects, being	Supported. The DWF Project is appropriately
projects not more than 6 (six) months from operation	de-risked and has been operational since 2014.
Target investments which will generate returns of CPI	Supported by applying a discounted cash flow
plus 6% (six percent) gross of fees	methodology and using appropriate assumptions, it
	is expected that the investment will generate a
	return of CPI+ 6.8% (six point eight percent) gross
	of ongoing fees.
	The nett yield after ongoing management fees of
	CPI +6% (six percent) equals the benchmark gross
	return, thereby outperforming the stated target
	return.
Invest in assets with visible environmental, social and	Supported. Very direct and measurable
governance policy appreciation	environmental, social and governance impact,
	especially through the REIPPPP rules and
	regulations.
Target investments with low risk and attractive long-	Supported. 20-year PPA with Government-backed
term inflation-linked predictable cash generation profile	guarantee.
Invest in assets of not less than R200 000 000 (two	Supported. The Acquisition Consideration amounts
hundred million Rand) per investment in the case where	to R501 000 000 (five hundred and one million
the assets have not been evaluated previously; and	Rand), which is therefore above the
investments of not less than R100 000 000 (one hundred	R200 000 000 (two hundred million Rand)
million Rand) per investment in the case where the	threshold.
assets have been evaluated previously
Strive to ensure management value add and	Supported. 3 (three) seats on the Dorper Board.
directorship roles to further optimise the
underlying assets
Target investments in underlying projects which have a	Management team vetted during the detailed due
strong and well aligned management team with clear	diligence process.
operational and corporate strategies
Acquire a minimum of 15% (fifteen percent) equity	Supported. Acquiring a 34.9% (thirty-four point nine
interest, with minority protections	percent) interest in Newco, which is above the 15%
	(fifteen percent) minimum threshold.
Make investments with acceptable third party credit	Supported. 20-year PPA with a Government-backed
risk exposure	guarantee.

2.2.6 Furthermore, the salient contractual agreements, all of which are in place and have passed the requisite legal due diligence, provide additional confidence in the operational characteristics of the DWF Project. The salient contractual arrangements consist of the following:

2.2.6.1 engineering, procurement and construction agreements, with appropriate guarantees and warranties from vendors and contractors;

2.2.6.2 operation and maintenance agreements, with appropriate guarantees and warranties from vendors; 2.2.6.3 an insurance agreement insuring the property and relevant equipment; and 2.2.6.4 financing agreements at serviceable debt levels.

2.3 Terms of the Acquisition

2.3.1 TriAlpha holds 94% (ninety-four percent) of the economic interests in and has control over all material decisions of DK Company, which in turn holds 100% (one hundred percent) of Newco. Newco will hold 30% (thirty percent) of the issued shares in Dorper before the Acquisition is implemented.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 13

CIRCULAR TO GAIA SHAREHOLDERS (continued)

2. DETAILS OF THE ACQUISITION (continued)

• 2.3.2 The Acquisition will be implemented through the:

• 2.3.2.1 subscription by GFS for the Subscription Shares at the Subscription Consideration; and 2.3.2.2 advance by GFS of the Convertible Loan to Newco.

• 2.3.3 The terms of the Convertible Loan are detailed in the Convertible Loan Agreement and are summarised as follows: 2.3.3.1 The Convertible Loan shall bear interest from the advance date until the final payment date in accordance with the following formula: Interest = AC – AC x 24.32%

where

• “Interest” is the amount payable to GFS in respect of interest on the Convertible Loan; and “AC” is Available Cash.

• 2.3.3.2 Through the interest it receives on the Convertible Loan and its holding of the Subscription Shares, GFS will receive 84.2% (eighty-four point two percent) of all amounts paid to holders of Newco Shares from time to time, whether in respect of interest or as distributions on Newco Shares, which is equivalent to an effective see-through economic interest of 25.2% (twenty-five point two percent) in Dorper.

• 2.3.3.3 The Convertible Loan may be settled:

• 2.3.3.3.1 by the issue of additional Newco Shares to GFS in terms of the provisions of the IK Asset for Share Agreement (if the option in terms of the IK Option Agreement is exercised), as set out in paragraph 3.4.2; or

• 2.3.3.3.2 if the IK Asset for Share Agreement is not implemented, by GFS subscribing for Newco Shares for a subscription price which is equal to the amounts due and payable to GFS by Newco in terms of the Convertible Loan Agreement in accordance with the DK Option Agreement.

• 2.3.3.4 No demand for repayment of the Convertible Loan may be made by GFS prior to 31 December 2017.

• 2.3.3.5 Further detail regarding the IK Option Agreement, the IK Asset for Share Agreement and the DK Option Agreement is detailed in paragraph 3 below.

2.4 Acquisition Consideration

• 2.4.1 The aggregate Acquisition Consideration is the amount of R501 000 000 (five hundred and one million Rand) and comprises of R265 036 179.41 (two hundred and sixty five million thirty six thousand one hundred and seventy nine Rand and forty-one cents) being the Subscription Consideration and R235 963 820.59 (two hundred and thirty-five million nine hundred sixty-three thousand eight hundred and twenty Rand and fifty-nine cents) being the Convertible Loan.

• 2.4.2 The Acquisition Consideration will be settled in cash and will be funded by utilizing funds raised during the Listing.

2.5 The effective date of the Acquisition

The subscription by GFS for the Subscription Shares and the advance of the Convertible Loan will be implemented on the 5th (fifth) Business Day after the fulfilment or waiver, as the case may be, of the last condition precedent.

2.6 The Conditions Precedent

2.6.1 The Subscription Agreement is subject to the following conditions precedent to be fulfilled or waived, as the case may be, by no later than 1 July 2017, namely:

• 2.6.1.1 all applicable contractual consents for the implementation of the Subscription are obtained;

• 2.6.1.2 the Department of Energy gives its written approval for the Subscription;

• 2.6.1.3 the Convertible Loan Agreement is concluded and becomes unconditional;

• 2.6.1.4 GFS confirms in writing to DK Company and Newco that is it satisfied with the results of such DD Investigation;

• 2.6.1.5 the constitutional documentation of Newco will be amended to the satisfaction of DK Company and GFS; and

• 2.6.1.6 GAIA Shareholders have approved the conclusion and implementation of the Acquisition.

• 2.6.2 The condition precedent in paragraph 2.6.1.4 has been stipulated for the benefit of GFS who shall be entitled to waive fulfilment thereof.

• 2.6.3 The conditions precedent in paragraphs 2.6.1.1, 2.6.1.3 and 2.6.1.5 have been stipulated for the benefit of both parties who shall be entitled to waive fulfilment thereof.

• 2.6.4 The parties shall further be entitled to extend the date for fulfilment of any condition precedent by written agreement.

• 2.6.5 The Convertible Loan Agreement is subject to the following conditions precedent to be fulfilled or waived, as the case may be, by no later than 1 July 2017, namely:

• 2.6.5.1 all applicable contractual consents required for the implementation of the Convertible Loan are obtained; and

• 2.6.5.2 the constitutional documentation of Newco is amended to the satisfaction of GFS to provide for the payment of interest to GFS in accordance with the Convertible Loan Agreement.

14 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

• 2.6.6 The conditions precedent in paragraphs 2.6.5.1 and 2.6.5.2 have been stipulated for the benefit of both parties who shall be entitled to waive fulfilment thereof.

• 2.6.7 The parties shall further be entitled to extend the date for fulfilment of any condition precedent by written agreement.

• 2.7 Distribution by Newco and advance of the Newco Loan

• 2.7.1 The terms of the Newco Loan Agreement are summarised below and are for information purposes only. Shareholder approval is not required in terms of the JSE Listings Requirements for the conclusion of Newco Loan Agreement. Following the receipt of the Acquisition Consideration, Newco shall distribute R100 000 000 (one hundred million Rand) to DK Company in the form of a dividend and advance a loan in an amount of R401 000 000 (four hundred and one million Rand) to DK Company.

• 2.7.2 The terms of the Newco Loan are detailed in the Newco Loan Agreement and are summarised as follows: 2.7.2.1 the Newco Loan shall be interest free if it is settled pursuant to paragraphs 2.7.2.3.1 or 2.7.2.3.2 below;

  • 2.7.2.2 the Newco Loan shall bear interest at 13% (thirteen percent) per annum from the date that the loan was advanced until it is settled in full, if it is not settled pursuant to paragraphs 2.7.2.3.1 or 2.7.2.3.2 below; and it is

  • 2.7.2.3 the obligation of DK Company to repay the Newco Loan may:

    • 2.7.2.3.1 if the IK Option is exercised, be discharged in cash within 2 (two) Business Days of the exercise of the IK Option and in fulfilment of the relevant conditions precedent in the IK Asset for Share Agreement; or

    • 2.7.2.3.2 if the DK Option is exercised, be discharged by set-off against the obligation of Newco to pay the repurchase price due to DK Company pursuant to the Repurchase Option.

  • 2.7.2.4 No demand for repayment of the Newco Loan may be made by GFS prior to 31 December 2017 save in accordance with the IK Option Agreement or the DK Option Agreement, as the case may be.

2.8

Other significant terms of the Acquisition Agreements

• 2.8.1 The Subscription Agreement contains the following significant terms:

• 2.8.1.1 the Subscription Agreement contains indemnities that are customary for an agreement of this nature;

• 2.8.1.2 the Subscription Agreement contains representations and warranties that are customary for an agreement of this nature; and

• 2.8.1.3 Newco is prohibited from declaring or making any distributions to DK Company or repaying any shareholder loans during the period commencing on 1 August 2016 and terminating on the date the Acquisition Agreements are implemented, save for the distribution referred to in paragraph 2.7 above. GFS will accordingly share in an 84.2% (eighty-four point two percent) economic benefit of Newco (and its holding of shares in Dorper) with effect from 1 August 2016.

• 2.8.2 The Convertible Loan Agreement contains the following significant terms:

• 2.8.2.1 the Convertible Loan Agreement contains events of default provisions that are customary for an agreement of this nature; and

• 2.8.2.2 the Convertible Loan Agreement contains representations and warranties that are customary for an agreement of this nature.

2.9 Related party and categorisation of the Acquisition

• 2.9.1 The Acquisition will be effected through the acquisition by GFS of an interest in Newco, which in turn will hold 30% (thirty percent) of the issued shares in Dorper. TriAlpha holds 94% (ninety-four percent) of the economic interests in Newco through DK Company and controls Newco.

• 2.9.2 Given that TriAlpha holds 94% (ninety-four percent) of the economic interests in Newco and controls Newco, TriAlpha is deemed to be a material shareholder of GAIA as defined in terms of section 10.1(b) of the JSE Listings Requirements and is accordingly a related party in terms of the JSE Listings Requirements.

• 2.9.3 The GAIA Board has, in terms of the JSE Listings Requirements, appointed the Independent Expert to provide it with a fairness opinion in relation to the Acquisition. The Independent Expert has concluded that the terms and conditions of the Acquisition are fair to Shareholders.

• 2.9.4 The GAIA Board, taking into account the fairness opinion of the Independent Expert, is unanimously of the opinion that the terms and conditions of the Acquisition are fair to Shareholders and, accordingly, recommends that Shareholders vote in favour of the Acquisition at the General Meeting.

• 2.9.5 The fairness opinion is provided in Annexure 5 to this Circular.

• 2.9.6 In addition, the Acquisition constitutes a category 1 acquisition in terms of the JSE Listings Requirements, and requires the approval of GAIA Shareholders by way of an ordinary resolution. The related party and its associates (to the extent that any own shares in GAIA on the date of the General Meeting), will not be permitted to vote on the resolution to approve the Acquisition.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 15

CIRCULAR TO GAIA SHAREHOLDERS (continued)

3. THE IK OPTION AGREEMENT, IK ASSET FOR SHARE AGREEMENT AND DK OPTION AGREEMENT

• 3.1 The terms of the IK Option Agreement and the IK Asset for Share Agreement are summarised below and are for information purposes only. Shareholder approval is not required in terms of the JSE Listings Requirements for the conclusion of the IK Option Agreement or the DK Option Agreement. If GAIA elects to exercise the IK Option, GAIA will seek Shareholder approval prior to the exercise of same, to the extent that Shareholder approval is required in terms of the JSE Listings Requirements.

• 3.2 In terms of the IK Option Agreement, IK Company has granted Newco the option to elect whether or not to require IK Company to enter into and implement the IK Asset for Share Agreement.

• 3.3 The IK Option may not be exercised:

• 3.3.1 without the consent of GFS;

• 3.3.2 unless GAIA Shareholder approval is obtained to the extent that Shareholder approval is required in terms of the JSE Listings Requirements;

• 3.3.3 if the DK Option is implemented; and

• 3.3.4 later than 31 December 2017.

• 3.4 In terms of the IK Asset for Share Agreement (read with the Convertible Loan Agreement) and subject to obtaining all required regulatory and contractual consents and approvals:

• 3.4.1 Newco will issue Newco Shares to IK Company in exchange for the acquisition of the Energy Assets by Newco from IK Company; and

• 3.4.2 in conjunction with the aforementioned sale, Newco will settle the Convertible Loan through the issue of additional Newco Shares to GFS.

• 3.5 If implemented, the IK Asset for Share Agreement will result in GAIA diversifying its portfolio of investments by reducing its exposure to Dorper through the acquisition of minority interests in 3 (three) additional renewable projects.

• 3.6 After the implementation of the IK Asset for Share Agreement and conversion of the Convertible Loan into additional Newco Shares and assuming that the respective values of Newco and the Energy Assets on the date of implementation of the IK Asset for Share Agreement are the same as at the Last Practicable Date, GAIA’s economic and voting interest in Newco through GFS will be approximately 34.9% (thirty-four point nine percent) of the issued shares of Newco.

• 3.7 The terms of the DK Option are detailed in the DK Option Agreement and are summarised as follows:

• 3.7.1 In terms of the DK Option Agreement:

  • 3.7.1.1 Newco has irrevocably granted GFS the option to subscribe for Newco Shares for an aggregate subscription price which is equal to the sum of all amounts due and payable by Newco to GFS in terms of the Convertible Loan Agreement at the relevant time (“the Subscription Option”); and

  • 3.7.1.2 DK Company has irrevocably granted to Newco the right, to require DK Company to sell certain of the Newco Shares held by DK Company back to Newco (“the Repurchase Option”).

• 3.7.2 The Repurchase Option and the Subscription Option must be exercised and implemented simultaneously and cannot be exercised or implemented separately.

• 3.7.3 The options granted to Newco in the DK Option Agreement may not be exercised without the consent of GFS. If exercised, the DK Option will be categorised in terms of the JSE Listings Requirements.

• 3.7.4 The DK Option cannot be exercised if the IK Asset for Share Agreement has been concluded and become unconditional.

• 3.7.5 The DK Option may not be exercised prior to 1 July 2017 or later than 31 December 2017.

• 3.7.6 The DK Option is subject to conditions precedent that are customary for an agreement of this nature, including specifically GAIA Shareholder approval, to the extent required.

• 3.7.7 If the DK Option is exercised and implemented and assuming that the value of Newco on the date of implementation of the DK Option Agreement is the same as at the Last Practicable Date, GFS will hold an approximate voting and economic interest of 84.2% (eighty-four point two percent) of the issued shares of Newco.

4. RESIDUAL CAPITAL

4.1 The total amount raised during the Listing, net of the cost of Listing was R545 851 762 (five hundred and forty-five million, eight hundred and fifty-one thousand, seven hundred and sixty-two Rand).

• 4.2 Investment revenue earned from the date of Listing to 31 August 2016 amounted to R30 999 544 (thirty million nine hundred and ninety-nine thousand five hundred and forty-four Rand). The operational costs and expenses for the same period amounts to R14 272 564 (fourteen million two hundred and seventy two thousand five hundred and sixty four Rand) resulting in an accumulated profit for the relevant period of R16 726 979 (sixteen million seven hundred and twenty-six thousand nine hundred and seventy-nine Rand).

• 4.3 The Acquisition Consideration amounts to R501 000 000 (five hundred and one million Rand) and the related costs of the transaction to R11 643 700 (eleven million six hundred and forty-three thousand seven hundred Rand). If the Acquisition is implemented and following payment of the Acquisition Consideration and related costs (on implementation of the Acquisition), GAIA will retain a residual amount of R49 434 952 (forty-nine million four hundred and thirty-four thousand nine hundred and fifty-two Rand) of the capital raised on Listing.

16 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

• 4.4 GAIA intends to use the Residual Capital to source new investments and for working capital purposes.

• 4.5 The use and retention of the Residual Capital requires the approval of GAIA Shareholders by way of an ordinary resolution.

5. ADDITIONAL RESOLUTIONS

• 5.1 If the Acquisition is implemented and the Investment Policy approved, GAIA will no longer be a SPAC and will be classified in the “Investment Companies” sub sector of the FTSE Global Classification System, Accordingly, GAIA wishes to obtain the authority of Shareholders to:

• 5.1.1 undertake the General Issue;

• 5.1.2 undertake the General Repurchase;

• 5.1.3 place unissued Shares under the control of the Directors; and

• 5.1.4 approve the Investment Policy.

• 5.2 Additional information, including the requisite voting thresholds, in relation to the above resolutions is contained in the Notice of General Meeting.

6. THE BUSINESS OF THE GAIA GROUP

• 6.1 GAIA aims to be a diversified infrastructure investment company, and will invest in large-scale energy, transport and water related infrastructure projects (being projects with a value in excess of R1 billion Rand) in a responsible and transparent manner. In so doing, GAIA will provide investors with predictable, inflation linked, liquid and long-term yielding investments whilst providing investors with liquidity to exit their investments. GAIA will continue to focus on making investments in various infrastructure projects through equity and debt instruments that meet the required returns.

• 6.2 GAIA intends building a portfolio of operational infrastructure assets that present low investment risk and are income generating. Whilst initially focusing on utility scale renewable energy, GAIA’s diversified portfolio will over time span energy, transport and water related infrastructure. This will provide an investment vehicle for investors to access attractive South African and sub-Saharan African growth opportunities. GAIA offers a listed, long-term investment solution to the institutional savings industry, which has had, up to now, limited exposure to benefit from infrastructure opportunities.

• 6.3 The Acquisition, if implemented, will be GAIA’s 1st (first) investment within its stated investment strategy.

7. FINANCIAL INFORMATION OF DORPER

• 7.1 Extracts of the audited historical financial information of Dorper for the last 3 (three) financial years ended 28 February 2014, 28 February 2015 and 29 February 2016 are annexed at Annexure 3 . Copies of the extracts for those periods will be available for inspection in terms of paragraph 18 below.

• 7.2 The Independent Reporting Accountants’ report on the historical financial information of Dorper appears in Annexure 4 to this Circular.

• 7.3 The aforementioned historical financial information of Dorper is the responsibility of the Directors of GAIA.

8. PRO FORMA FINANCIAL INFORMATION

• 8.1 The pro forma financial effects of the Acquisition, as set out in the table below, are the responsibility of the Directors. The pro forma financial effects are presented in a manner consistent with the basis on which the historical financial information has been prepared and in terms of GAIA’s accounting policies. The pro forma financial effects have been presented for illustrative purposes only and, because of their nature, may not fairly present GAIA’s financial position, changes in equity, results of operations or cash flows post the implementation of the Acquisition.

• 8.2 The unaudited pro forma financial effects set out below should be read in conjunction with the unaudited pro forma statement of comprehensive income and the statement of financial position as set out in Annexure 1 , together with the assumptions upon which the financial effects are based, as indicated in the notes thereto in Annexure 1 .

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|||||
|---|---|---|---|
|Results for the|Pro forma|
|year ended|results|
|29 February|after the|Change|
|2016|Acquisition|%|
|Net asset value per Share (cents)|997|997|–|
|Net tangible asset value per Share (cents)|997|997|–|
|Earnings per Share (cents)|2 154|8 034|273.0|
|Headline earnings per Share (cents)|2 154|8 034|273.0|
|Number of Shares in issue net of treasury shares (’000)|55 151 000|55 151 000|–|
|Weighted number of Shares in issue (’000)|18 845 357|18 845 357|–|

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Note

1. The detailed notes and assumptions to the pro forma financial information are set out in Annexure 1 .

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 17

CIRCULAR TO GAIA SHAREHOLDERS (continued)

8. PRO FORMA FINANCIAL INFORMATION (continued)

• 8.3 The Independent Reporting Accountants’ report on the unaudited pro forma financial information appears in Annexure 2 to this Circular.

9. INFORMATION RELATING TO THE DIRECTORS

• 9.1 Details of Directors

The full names, age, capacity and business address of the Directors of GAIA are outlined below:

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Full Name Age Designation business Address
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MM Nieuwoudt	44	Executive Director	37 Vineyard Road, Claremont, 7700
T Soudien-Witten	39	Financial Director	37 Vineyard Road, Claremont, 7700
L de Wit	61	Executive chairman	37 Vineyard Road, Claremont, 7700
PB Schabort	58	Non-executive Director	37 Vineyard Road, Claremont, 7700
C Ferreira	64	Non-executive Director	2nd Floor, Katherine and West, 114 West
			Street, Sandown, Sandton
RB Makhubela¹	49	Independent non-executive Director	1006 T Knightsbridge Apartments,
			Century City, Cape Town
KP Lebina	35	Lead Independent non-executive Director	58 Cowley Road, Bryanston, Johannesburg
KE Mbalo	53	Independent non-executive Director	59 Glanville, Crescent, Wendywood, Sandton
N Kimber	44	Independent non-executive Director	42 Smits Road, Dunkeld, Johannesburg

Note

1. Ceased to be a Director on 31 July 2016.

9.2 Directors’ remuneration

• 9.2.1 A breakdown of the remuneration and benefits paid or accrued as payable to Directors by the GAIA Group for the year ended 29 February 2016, is set out in the Revised Listing Particulars in Annexure 7 to this Circular.

• 9.2.2 For the year ended 29 February 2016, no Director has received management, consulting or technical fees from the GAIA Group nor any part of any other fees for such services rendered, directly or indirectly, including payments to management companies.

• 9.2.3 For the year ended 29 February 2016, no Director has received any commission, gain or entered into any profitsharing arrangement with the GAIA Group.

• 9.2.4 The remuneration of the Directors will not be varied as a result of the Acquisition.

• 9.2.5 The fees that have been approved for the non-executive Directors (retainer and meeting fees) of GAIA for the year ended 29 February 2016, is set out in the Revised Listing Particulars in Annexure 7 to this Circular.

9.3 Service contracts of Directors

• 9.3.1 Each of the executive Directors has concluded a service contract with terms and conditions that are standard for such appointments, which are available for inspection in terms of paragraph 18 below.

• 9.3.2 No restraints of trade have been imposed by GAIA on any Directors in respect of the business conducted by GAIA and the contracts of all executive Directors are terminable on 3 (three) months’ notice.

• 9.3.3 There are no service contracts between GAIA and any of its non-executive Directors.

9.4 Directors’ interests

9.4.1 The direct and indirect interests of the Directors and their associates (including a director who has resigned during the last 18 (eighteen) months) in the Share capital of GAIA as at the Last Practicable Date, are set out below:

beneficial	Direct	Indirect1	Total Shareholding 2016	% shareholding
L de Wit		1 179 222	1 179 222	2.14
PB Schabort	104 829	1 179 222	1 284 051	2.33
C Ferreira	461 100		461 100	0.84
Total Shareholding	565 929	2 358 444	2 924 373	5.31

Note

1. Includes Shares held in trusts of which the Directors are discretionary beneficiaries.

2. 9.4.2 Save as set out below, there has been no change in the shareholding of the Directors between the end of the financial year ended 29 February 2016 and the Last Practicable Date:

3. 9.4.2.1 PB Schabort purchased 10 000 Shares on 18 July 2016 (direct, beneficial interest); 16 098 Shares on 21 July 2016 (direct, beneficial interest); 63 658 Shares on 26 July 2016 (indirect, beneficial

18 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

interest through his associate, Schabort Family Trust); 2 000 Shares on 28 July 2016 (direct, beneficial interest); 3 000 Shares on 29 July 2016 (direct, beneficial interest); 858 Shares on 23 August 2016 (indirect, beneficial interest through his associate, Schabort Family Trust); 2 191 Shares on 24 August 2016 (indirect, beneficial interest through his associate, Schabort Family Trust); 2 829 Shares on 25 August 2016 (indirect, beneficial interest through his associate, Schabort Family Trust); 2 000 Shares on 26 August 2016 (indirect, beneficial interest through his associate, Schabort Family Trust); 3 000 Shares on 29 August 2016 (indirect, beneficial interest through his associate, Schabort Family Trust); and

• 9.4.2.2 C Ferreira purchased 1 000 Shares on 25 July 2016 (direct, beneficial interest).

• 9.4.3 Save for being a Shareholder of GAIA, no Director of GAIA and no director of any of its subsidiaries (including a director who has resigned during the last 18 (eighteen) months), has or had any material beneficial interest, directly or indirectly, in any transactions that were effected by GAIA:

• 9.4.3.1 during the current or immediately preceding financial year; or

• 9.4.3.2 in any previous financial year which remains in any respect outstanding or unperformed.

10. INFORMATION RELATING TO GAIA

• 10.1 Major Shareholders and interests

• 10.1.1 As far as the Directors are aware, as at the Last Practicable Date the following persons, other than Directors, are beneficially interested, directly or indirectly, in 5% (five percent) or more of the Shares in issue:

Name of Shareholder	Number of Shares	% of Shares in issue
TriAlpha	20 000 000	36.26
Government Employee Pensions Fund (Public Investment Corporation)	22 700 000	41.16
Total	42 700 000	77.42

• 10.1.2 There has been no change in the controlling Shareholder nor trading objects of GAIA from the Listing Date to the Last Practicable Date, and there will be no change in the shareholding in GAIA as a result of the Acquisition.

10.2 Material changes

• 10.2.1 There have been no material changes in the financial or trading position of the GAIA Group or Dorper since 29 February 2016, being the most recent financial year-end of GAIA, until the Last Practicable Date.

• 10.3 Prospects

• 10.3.1 Infrastructure as an asset class is one that requires capital to develop. It is uncertain whether the Government will have sufficient funding required to meet its infrastructure needs and therefore private capital will fulfil a complimentary role. In order to fulfil its development mandate, the Government must partner with the private sector. The overwhelming success of the REIPPPP is testament to the success that can be achieved in such public-private partnerships.

• 10.3.2 The Directors believe that the GAIA Group has good prospects, based on numerous investment opportunities which exist in the sector, spurred on by current market conditions and the Government’s need for public-private partners and access to future deal flow. The Directors believe that Dorper has good prospects, based on the attractiveness of the assets owned by Dorper and the PPA in place with a Government backed guarantee. In addition to the Acquisition, various potential opportunities have been identified and are at different stages of due diligence investigation and negotiation. The Directors believe these factors will provide returns in line with GAIA’s investment return expectations and targets detailed above.

10.4 Material Borrowings

• 10.4.1 As at the Last Practical Date, no material borrowings have been made to the GAIA Group or any of their subsidiaries and no loan capital is currently outstanding. There has been no material change in borrowings in Dorper since 29 February 2016 until the Last Practicable Date.

10.5 Material contracts

• 10.5.1 There have been no material contracts, other than the Acquisition Agreements, the DK Option Agreement and the IK Option Agreement, entered into either verbally or in writing by GAIA, Newco or Dorper, being restrictive funding arrangements and/or a contract entered into otherwise than in the ordinary course of the business carried on or proposed to be carried on by GAIA, Newco and/or Dorper within the 2 (two) years preceding the date of this Circular, or concluded at any time, and which contain an obligation or settlement that is material to GAIA at the date of this Circular.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 19

CIRCULAR TO GAIA SHAREHOLDERS (continued)

10. INFORMATION RELATING TO GAIA (continued)

10.6 Acquisition of material assets

No material assets have been acquired by the GAIA Group or Newco during the last 3 (three) years preceding the date of this Circular.

11. GENERAL MEETING AND VOTING

• 11.1 The General Meeting will be held at 10:00 on 18 October 2016 at Edward Nathan Sonnenbergs Inc, La Gratitude, 2nd Floor, 97 Dorp Street, Stellenbosch, at which General Meeting GAIA Shareholders will be requested to consider and, if deemed fit, to pass, with or without modification, the requisite resolutions set out in the Notice of General Meeting.

• 11.2 The Notice of General Meeting is attached hereto and forms part of this Circular and contains the resolutions to be considered at the General Meeting. Full details of the action required by Shareholders are set out in the “Action required by Shareholders” section of this Circular.

12. WORKING CAPITAL STATEMENT

The Directors are of the opinion that the working capital available to the GAIA Group is sufficient for the GAIA Group’s present working capital requirements and will, post-implementation of the Acquisition and assuming the proposed resolution regarding the use and retention of the Residual Capital is adopted, be adequate for at least 12 (twelve) months from the date of issue of this Circular.

13. LITIGATION STATEMENT

There are no legal or arbitration proceedings (including any such proceedings that are pending or threatened) of which GAIA is aware, which may have or have, over the previous 12 (twelve) months, had a material effect on the financial position of the GAIA Group or of Dorper.

14. EXPENSES

The estimated costs of preparing and distributing this Circular and all its annexures, holding the General Meeting and implementing the Acquisition, including the fees payable to professional advisors, are approximately R11 643 700, including Value Added Tax, and include the following:

Added Tax, and include the following:
Expenses	R
Transaction Advisor and Sponsor – PSG Capital 1 254 000 Attorneys – ENS 3 306 000 Independent Expert – EY 205 200 Independent Reporting Accountants – KPMG 285 000 GAIA Management Fee 5 711 400 JSE documentation fees 159 600 Printing, publications and announcements 200 000 Other expenses 342 500 Contingency 180 000
Estimated total 11 643 700
Note

1. Other than as set out above, GAIA has incurred no preliminary expenses in relation to the Acquisition during the 3 (three) years preceding this Circular.

15. DIRECTORS’ RECOMMENDATION

• 15.1 The Directors have considered the terms and conditions of the Acquisition and are of the opinion that the Acquisition is in the interests of GAIA Shareholders.

• 15.2 The Directors recommend that Shareholders vote in favour of the resolutions to be proposed at the General Meeting, as detailed in the Notice of General Meeting.

• 15.3 The Directors, in their personal capacities, intend to vote the Shares held by them in favour of the resolutions to be proposed at the General Meeting.

16. ADVISORS’ CONSENTS

The parties referred to in the Corporate Information section of this Circular have consented in writing to act in the capacities stated and to their names being stated in the Circular and, in the case of the Independent Expert and the Independent Reporting Accountants, have consented to the inclusion of their reports, and to the references to their reports, in the form and context in which they appear, and have not withdrawn their consents prior to the publication of the Circular.

20 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

17. DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors, whose names are given in the Corporate Information section of this Circular, collectively and individually accept full responsibility for the accuracy of the information furnished relating to the GAIA Group 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 JSE Listings Requirements.

18. DOCUMENTS AVAILABLE FOR INSPECTION

The following documents, or copies thereof, will be available for inspection by Shareholders during normal business hours at GAIA’s registered office and at the offices of the Sponsor, the details of which are provided in the Corporate Information section of this Circular, from 19 September 2016 until 18 October 2016 (both days inclusive):

• 18.1 the MOI of GAIA and GFS;

• 18.2 the Acquisition Agreements;

• 18.3 Independent Reporting Accountant’s report on the pro forma financial information, as reproduced at Annexure 2 of this Circular;

• 18.4 Independent Reporting Accountant’s report on the historical financial information of Dorper, as reproduced at Annexure 4 of this Circular;

• 18.5 Independent Experts’ fairness opinion, as reproduced at Annexure 5 of this Circular;

• 18.6 the extracts of the audited annual extracts of Dorper for the last 3 (three) financial years, being the financial year ended 28 February 2014, 28 February 2015 and 29 February 2016, as set out in Annexure 3 ;

• 18.7 the written consent letters by experts and advisers as referred to in paragraph 16 of the Circular;

• 18.8 the Management Agreement;

• 18.9 the service contracts of the executive Directors; and

• 18.10 a copy of this Circular, including the Revised Listing Particulars and all applicable annexures.

SIGNED AT CAPE TowN oN 16 SEPTEMbER 2016 oN bEhALF oF ALL ThE DIRECToRS oF GAIA INFRASTRUCTURE CAPITAL LIMITED, AS LISTED bELow, IN TERMS oF PowERS oF ATToRNEy SIGNED by SUCh DIRECToRS.

==> picture [61 x 52] intentionally omitted <==

L de wit Chairman

MM Nieuwoudt T Soudien-Witten L de Wit PB Schabort C Ferreira KP Lebina N Kimber KE Mbalo

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 21

ANNEXURE 1 – PRO FORMA FINANCIAL INFORMATION ON GAIA

BASIS OF PREPARATION

The definitions commencing on page 7 of the Circular have been used throughout this Annexure 1.

The Pro forma Financial Information of GAIA (“ Pro forma Financial Information ”) has been prepared for illustrative purposes only and because of its nature may not fairly present GAIA’s financial position, changes in equity and results of operations or cash flows.

The Pro forma Financial Information is based on the audited historical financial information of GAIA as at and for the period ended 29 February 2016, as presented in the Annual Financial Statements of GAIA (“ historical Financial Information ”).

The Pro forma Financial Information has been prepared to illustrate the impact of the Acquisition on the Historical Financial Information of GAIA on the assumption that the Acquisition occurred on 16 April 2015 for statement of comprehensive income purposes and on 29 February 2016 for statement of financial position purposes.

The Pro forma Financial Information has been prepared using the accounting policies of GAIA which comply with IFRS and are consistent with those applied in the Historical Financial Information.

The Pro forma Financial Information is the responsibility of the directors.

KPMG’s independent reporting accountant’s report on the Pro forma Financial Information is set out in Annexure 2 to this Circular.

22 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

PRO FORMA STATEMENT OF COMPREHENSIVE INCOME

for the eleven months ended 29 February 2016

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----- Start of picture text -----

|||||
|---|---|---|---|
|Column 1|Column 2|Column 3|
|before|Post|
|income|Acquisition|acquisition|
|statement|adjustments|results|
|audited|pro forma|pro forma|
|R’000|R’000|R’000|
|Dividend Income|–|18 352 904|18 352 904|
|Net gain from financial instruments at fair value through profit or loss|–|–|–|
|Total revenue|–|18 352 904|18 352 904|
|Operating expenses|(5 236 221)|–|(5 236 221)|
|operating loss|(5 236 221)|18 352 904|13 116 683|
|Investment revenue|9 992 043|(9 329 605)|662 438|
|Fair value adjustments|825 077|(770 378)|54 699|
|Profit before interest and tax|5 580 899|8 252 921|13 833 820|
|Finance costs|(45 768)|–|(45 768)|
|Profit before tax|5 535 131|8 252 921|13 788 052|
|Taxation|(1 476 603)|2 828 000|1 351 397|
|Profit for the period|4 058 528|11 080 921|15 139 449|
|Other comprehensive income|–|–|–|
|Total comprehensive income for the period|4 058 528|11 080 921|15 139 449|
|Number of Shares in issue|55 151 000|55 151 000|
|Weighted number of Shares in issue|18 845 357|18 845 357|
|Basic and headline earnings per share (cents)|21.54|80.34|
|Diluted basic and headline earnings per share (cents)|21.54|80.34|
|Dividends per share (cents)|

----- End of picture text -----

NOTES TO THE PRO FORMA STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME OF GAIA

for the eleven months ended 29 February 2016

1. GAIA is an investment entity in terms of IFRS 10 and therefore qualifies for the investment entity exemption, whereby an investment entity does not consolidate its subsidiaries, but rather account’s for them as investments at fair value through profit or loss.

2. Column 1 presents the historical statement of comprehensive income of GAIA, which has been extracted, without adjustment, from the audited statement of comprehensive income of GAIA for the eleven months ended 29 February 2016, as presented in the Annual Financial Statements of GAIA.

3. Column 2 presents the financial effects on the statement of comprehensive income of:

4. a. The decrease in investment revenue (consisting of both interest income and fair value gains/losses), amounting to R9 329 605 and the fair value adjustment reversal amounting to R770 378, as a result of the partial disposal by GAIA of its investment in the Coronation Jibar Plus Fund. At 29 February 2016, GAIA held its investment in Coronation Jibar Plus Fund. Subsequent to year end the funds were switched to Coronation Money Market Fund. As a result, the reversal of the investment revenue relates to the Coronation Jibar Plus Fund.

   • The Convertible Loan will be financed by GAIA using the proceeds from the disposal of the investment in the Coronation Money Market Fund.

The reversal of the investment revenue will have a continuing effect on the statement of comprehensive income of GAIA. The tax effects on the investment revenue has also been removed; and

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 23

ANNEXURE 1 – PRO FORMA FINANCIAL INFORMATION ON GAIA (continued)

• b. GAIA’s investment in 100% of the ordinary shares of GFS which will be accounted for as an investment at fair value through profit and loss, as follows:

  • Revenue has been adjusted for the flow through income attributable to the Acquisition, amounting to R29 996 604. The increase in revenue as a result of this income will have a continuing effect on the statement of comprehensive income of GAIA. The income from GFS is as a result of GFS’s investment in Newco and Convertible Loan to Newco. Newco will in turn receive distributions from Dorper. Income is, therefore, made up of:

    • Dividend income earned by GFS on its 34.9% shareholding in the ordinary shares of shares of Newco, amounting to R3 021 551;

    • Interest income earned by GFS on the Convertible loan to Newco, amounting to R26 975 053;

    • The amount available for distribution by GFS of the dividend income and interest income set out above will be decreased by any transaction costs paid by GFS, net of tax, amounting to R11 643 700. This will not have a continuing effect on the statement of comprehensive income;

    • The above distributions are based on the distributions made by Dorper in the past as extracted from the Dorper Historical Financial Information.

• c. Fair value adjustments have been adjusted for the increase in fair value of GAIA’s investment in GFS. As there was no increase in GFS’s fair value in the current year, the adjustment amounts to R0.

  • GFS is making a substantial acquisition in an investment Newco amounting to R501 000 000 (consisting of a R265 036 179 Investment in Newco and a R253 963 821 convertible loan to Newco, they also now have a loan (refer to point 2 above) of R512 643 700 from GAIA that would be offset against the investment in Newco and this would result in there being no change in GFS’s fair value in the current year. The change in fair value in future periods will have a continuing effect on the statement of comprehensive income of GAIA;

• Column 3 presents the Pro forma Statement of Comprehensive Income of GAIA subsequent to the Acquisition.

24 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

PRO FORMA STATEMENT OF FINANCIAL POSITION

as at 29 February 2016

PRO FORMA STATEMENT OF FINANCIAL POSITION as at 29 February 2016
	Column 1 Column 2 Column 3 before balance sheet Acquisition adjustments Post acquisition results audited pro forma pro forma R’000 R’000 R’000
Assets
Non-current assets
Current assets	552 361 271 – 552 361 271
Financial asset at fair value through profit or loss	– 501 000 000 501 000 000
Loans receivable	– 11 643 700 11 643 700
Financial assets	549 042 504 (512 643 700) 36 398 804
Current tax receivable	971 588 – 971 588
Cash and cash equivalents	2 347 179 – 2 347 179
Total assets	552 361 271 – 552 361 271
Equity and liabilities
Equity	549 910 290 – 549 910 290
Share capital	545 851 762 – 545 851 762
Retained income/(loss)	4 058 528 – 4 058 528
Liabilities
Non-current liabilities	146 030 – 146 030
Deferred tax	146 030 – 146 030
Current liabilities	2 304 951 – 2 304 951
Trade and other payables	1 717 885 – 1 717 885
Loans from related party	587 066 – 587 066
Total liabilities	2 450 981 – 2 450 981
Total equity and liabilities	552 361 271 – 552 361 271
Number of Shares in issue	55 151 000 55 151 000
Weighted number of Shares in issue	18 845 357 18 845 357
Net asset value per Share (cents)	9.97 9.97
Tangible net asset value per Share (cents)	9.97 9.97

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 25

ANNEXURE 1 – PRO FORMA FINANCIAL INFORMATION ON GAIA (continued)

NOTES TO THE PRO FORMA STATEMENT OF FINANCIAL POSITION

as at 29 February 2016

1. GAIA is an investment entity in terms of IFRS 10 and therefore qualifies for the investment entity exemption, whereby an investment entity does not consolidate its subsidiaries, but rather account’s for them as investments at fair value through profit or loss;

2. Column 1 presents the historical statement of financial position of GAIA, which has been extracted, without adjustment, from the audited statement of financial position, as presented in the Annual Financial Statements of GAIA;

3. Column 2 presents the financial effects of:

4. The GFS Loan which will be financed using the proceeds from the partial disposal of GAIA’s investment with the result that investments in financial assets will decrease and the financial assets through profit and loss and loans receivable will increase by the amounts of the Acquisition Consideration and the transaction costs payable by GAIA, respectively;

5. a. The GFS loan amounting to R512 643 700, will be utilised by GFS as follows:

   • To fund GFS’s investment in Newco. GFS will acquire 34.9% of the ordinary shares of Newco for a purchase consideration of R265 036 179. GFS’s investment in Newco will be accounted for as an investment at fair value through profit and loss in the books of GFS;

   • To fund GFS’s Convertible Loan to Newco amounting to R235 963 821. The Convertible Loan will be accounted for as a current asset and effectively gives GFS the equivalent of an additional 49.3% shareholding in Newco. At the conversion date, GFS shall be issued an appropriate number of Newco Shares, having regard to the value of the Newco Shares at the time of issue. GFS’s obligation to settle the subscription price for such Newco Shares shall be set off against Newco’s obligation to repay the Convertible Loan to GFS; and

   • To settle the transaction costs borne by GFS, amounting to R11 643 700, included as a loan receivable.

6. b. GAIA’s investment in GFS at fair value through profit and loss, amounting to R501 000 000, as follows:

   • There is no fair value adjustment as there was no increase in GFS’s fair value in the current year (the adjustment, therefore, amounts to R0). Even though GFS is making a substantial acquisition in an investment Newco, amounting to R501 000 000 (consisting of a R265 036 179 Investment in Newco and a R253 963 821 convertible loan to Newco, this investment in Newco off-sets against the GFS Loan for the same amount (refer to point 2 above) with the result that there is no change in GFS’s fair value in the current year;

7. Column 3 presents the Pro forma Statement of Financial Position of GAIA subsequent to the Acquisition and the Convertible Loan.

26 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

ANNEXURE 2 – INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE PRO FORMA FINANCIAL INFORMATION

The Directors

GAIA Infrastructure Capital Limited 37 Vineyard Road Claremont, Cape Town South Africa, 7700

14 September 2016

REPORTING ACCOUNTANT’S REPORT ON THE COMPILATION OF THE PRO FORMA FINANCIAL INFORMATION OF GAIA

The definitions commencing on page 7 of the Circular to which this letter is attached apply mutatis mutandis to this report.

We have completed our assurance engagement to report on the compilation of the pro forma earnings and diluted earnings, net asset value and net tangible asset value per share of GAIA, pro forma statement of financial position of GAIA, the pro forma statement of comprehensive income of GAIA and the related notes, including a reconciliation showing all of the pro forma adjustments to the share capital, reserves and other equity items relating to GAIA (collectively “ Pro forma Financial Information of GAIA ”). The Pro forma Financial Information of GAIA is set out in the Salient Features, paragraph 8 and Annexure 1 of the Circular.

The Pro forma Financial Information of GAIA has been compiled by the Directors to illustrate the impact of the Acquisition and Convertible Loan (collectively “ Transactions ”) on GAIA’s financial position and changes in equity as at 29 February 2016 and GAIA’s financial performance for the period ended 29 February 2016.

As part of this process, GAIA’s earnings, diluted earnings, headline earnings, diluted headline earnings, net asset value, net tangible asset value per share, statement of comprehensive income and statement of financial position for the period ended 29 February 2016 have been extracted by the Directors from the Extracts of the Annual Financial Statements of GAIA (“ Audited Financial Information ”).

DIRECTORS’ RESPONSIBILITY FOR THE PRO FORMA FINANCIAL INFORMATION OF GAIA

The Directors are responsible for compiling the Pro forma Financial Information of GAIA on the basis of the applicable criteria as detailed in paragraphs 8.15 to 8.33 of the JSE Listings Requirements and the SAICA Guide on Pro forma Financial Information, revised and issued in September 2014 (“ Applicable Criteria ”).

REPORTING ACCOUNTANT’S INDEPENDENCE AND QUALITY CONTROL

We have complied 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 International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Part A and B).

The firm applies 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 ACCOUNTANT’S RESPONSIBILITY

Our responsibility is to express an opinion about whether the Pro forma Financial Information of GAIA has been compiled, in all material respects, by the Directors on the basis of the Applicable Criteria, based on our procedures performed.

We conducted our engagement in accordance with International Standard on Assurance Engagements (“ ISAE ”) 3420, Assurance Engagements to Report on the Compilation of Pro forma Financial Information Included in a Prospectus, issued by the International Auditing and Assurance Standards Board. This standard requires that the reporting accountants comply with ethical requirements and plan and perform procedures to obtain reasonable assurance about whether the Directors have compiled, in all material respects, the Pro forma Financial Information of GAIA on the basis of the Applicable Criteria.

For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on the Audited Financial Information used in compiling the Pro forma Financial Information of GAIA, 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 of GAIA.

The purpose of the Pro forma Financial Information of GAIA included in the Circular is solely to illustrate the impact of the Transactions on the unadjusted Audited Financial Information as if the Transactions had been undertaken on 16 April 2015 for purposes of the pro forma earnings, diluted earnings and the pro forma statement of comprehensive income and on 29 February 2016 for purposes of the pro forma net asset value and net tangible asset value per share and pro forma statement of financial position. Accordingly, we do not provide any assurance that the actual outcome of the Transactions, subsequent to its implementation, will be as presented in the Pro forma Financial Information of GAIA.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 27

ANNEXURE 2 – INDEPENDENT REPORTING ACCOUNTANTS’ REPORT ON THE PRO FORMA FINANCIAL INFORMATION (continued)

A reasonable assurance engagement to report on whether the Pro forma Financial Information of GAIA has been properly compiled, in all material respects, on the basis of the Applicable Criteria involves performing procedures to assess whether the Applicable Criteria used by the Directors in the compilation of the Pro forma Financial Information of GAIA provide a reasonable basis for presenting the significant effects directly attributable to the Transactions and to obtain sufficient appropriate evidence about whether:

• The related pro forma adjustments give appropriate effect to the Applicable Criteria; and

• The Pro forma Financial Information of GAIA reflects the proper application of those pro forma adjustments to the unadjusted Audited Financial Information.

The procedures selected depend on the reporting accountant’s judgment, having regard to the reporting accountant’s understanding of the nature of GAIA, the Transactions in respect of which the Pro forma Financial Information of GAIA has been compiled and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the Pro forma Financial Information of GAIA.

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 of GAIA has been compiled, in all material respects, on the basis of the Applicable Criteria.

Yours faithfully

==> picture [60 x 62] intentionally omitted <==

Per Ivan Engels Chartered Accountant (SA) Registered Auditor

KPMG

MSC House, 1 Mediterranean Street Cape Town City Centre Cape Town, 8001

28 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

ANNEXURE 3 – REPORT OF HISTORICAL FINANCIAL INFORMATION OF DORPER FOR THE FINANCIAL YEARS ENDED 28 FEBRUARY 2014, 28 FEBRUARY 2015 AND 29 FEBRUARY 2016

INTRODUCTION

The definitions commencing on page 7 of the Circular have been used throughout this Annexure 3.

The information below are extracts from the audited financial statements of Dorper Wind Farm RF (Proprietary) Limited for the financial years ended 29 February 2016, 28 February 2015 and 28 February 2014 on which Dorper Wind Farm RF (Proprietary) Limited’s auditors issued unqualified audit reports. The information below has been prepared from the signed 2014, 2015 and 2016 financial statements.

Aforementioned financial statements were prepared by the financial manager, Mamoso Dikgale.

The principal policies applied in preparation of the historical financial information are set out below and have been prepared in accordance with the accounting policies of Dorper Wind Farm RF (Proprietary) Limited. These policies have been applied consistently to all years presented.

BASIS OF PREPARATION

The statements of comprehensive income, statements of cash flows and the statements of changes in equity for the three years ended 29 February 2016, the statements of financial position as at 29 February 2016, 28 February 2015 and 28 February 2014, accounting policies and the notes thereto (“ historical Financial Information of Dorper ”) have been extracted from the audited financial statements of Dorper for the years ended 29 February 2016, 28 February 2015 and 28 February 2014 respectively (“ Audited Financial Statements ”). The Audited Financial Statements were prepared in accordance with IFRS and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and the Financial Pronouncements as issued by Financial Reporting Standards Council. The Report of Historical Financial Information of Dorper was prepared in accordance with IFRS and the JSE Listings Requirements, for the purpose of providing financial information to satisfy the requirements of Section 8 of the JSE Listings Requirements, except that Historical Financial Information of Dorper for the year ended 28 February 2014 does not present comparative figures.

The additional disclosure required in terms of paragraphs 8.11 and 8.12 of the JSE Listings Requirements has been included in the Report of Historical Financial Information of Dorper.

The Audited Financial Statements were audited by KPMG Inc and unqualified audit opinions were issued in respect thereof. KPMG Inc is also the independent reporting accountant to GAIA and has issued the reporting accountant’s report on this Report of Historical Financial Information of Dorper which is included as Annexure 4 to this Circular.

The directors of GAIA are responsible for the Report of Historical Financial Information of Dorper.

DIRECTORS’ COMMENTARY

Dorper engages in the design, development, engineering, procurement, construction, financing, commissioning, operation and maintenance of an onshore wind energy generation facility.

Dorper was selected as a preferred bidder as one of eight wind energy independent power producers in the first round of the Department of Energy’s Renewable Energy Independent Power Producers Procurement Programme in December 2011. Dorper’s shareholding includes Rainmaker Energy Projects (Proprietary) Limited (through its subsidiary Dorper Wind Development Proprietary Limited), Sumitomo Corporation of Japan (through its subsidiary Sumitomo Corporation Africa (Proprietary) Limited) and black economic empowerment partners.

Dorper entered into a 20 year power purchase agreement with state owned energy provider Eskom Holding SOC Limited (“Eskom”) and associated implementation agreement with Department of Energy in November 2012 and reached financial close in the same month.

Dorper will generate 97.53MW of electricity which will be supplied to Eskom.

In the prior year, 60% of Dorper’s shares were held by Summit Wind Power South Africa (Proprietary) Limited (“SWPSA”). On 26 March 2015, SWPSA and Sumitomo Corporation Africa (Proprietary) Limited (“ SCAF ”) merged, with SCAF being the surviving company. On 26 June 2015 SCAF obtained approval from Department of Energy for the sale of 50% of the shareholding in Dorper to K2014158670 (Proprietary Limited), which is the SPV of TriAlpha Specialised Investment Trust III and which has since been renamed as Renewable Energy D Proprietary Limited. SCAF now has a 30% interest in Dorper.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 29

STATEMENT OF FINANCIAL POSITION

Note	2016 2015 2014 R R R
Assets Non-current assets Property, plant and equipment 4 Derivative financial instruments 5 Intangible assets 6 Deferred tax asset 7 Current assets	1 674 495 225 1 790 601 973 1 327 973 125
	1 531 983 521 1 613 224 144 1 180 468 402 13 761 810 15 993 456 – 128 749 894 135 138 595 140 403 735 – 26 245 778 7 100 988
	255 362 828 245 402 784 60 493 902
Trade and other receivables 8 Cash and cash equivalents 9 Derivative financial instruments 5	46 216 355 57 991 446 15 607 930 186 467 416 187 411 338 44 885 972 22 679 057 – –
Total assets	1 929 858 053 2 036 004 757 1 388 467 027
Equity and liabilities Equity and reserves Share capital 10 Accumulated loss Hedging reserve Share-based payment reserve 11 Non-current liabilities Interest-bearing borrowings 12 Shareholders’ loans 13 Provisions 14 Deferred tax liability 7 Current liabilities	191 241 243 89 084 128 145 880 006
	166 500 500 166 500 500 166 500 500 (12 399 273) (58 555 263) (32 006 336) 25 754 174 (30 246 951) – 11 385 842 11 385 842 11 385 842
	1 573 050 044 1 514 852 188 1 182 275 166
	1 239 747 399 1 107 971 931 869 790 866 271 196 221 366 325 393 273 316 300 42 353 629 40 554 864 39 168 000 19 752 795 – –
	165 566 766 432 068 441 60 311 855
Trade and other payables 15 Derivative financial instruments 5 Interest-bearing borrowings 12 Shareholders’ loans 13 Bank overdraft 9	22 286 047 92 222 243 3 249 447 – 58 746 992 – 68 323 292 163 566 989 25 821 134 74 957 427 117 532 217 31 241 259 – – 15
Total liabilities	1 738 616 810 1 946 920 629 1 242 587 021
Total equity and liabilities	1 929 858 053 2 036 004 757 1 388 467 027

30 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

STATEMENT OF COMPREHENSIVE INCOME

Note	2016 2015 2014 R R R
Revenue Cost of sales	414 065 440 210 930 164 – (125 944 467) (87 593 242) –
Gross profit Other income 16 Administrative costs	288 120 973 123 336 922 – 19 148 428 5 557 584 – (35 952 940) (21 523 153) (6 471 720)
operating profit 17 Net finance costs Finance income 18.1 Finance expenses 18.2 Profit/(loss) before taxation Income tax (expense)/credit 19	271 316 461 107 371 353 (6 471 720) (200 940 117) (141 302 367) (15 923 237)
	4 852 620 510 810 154 681 (205 792 737) (141 813 177) (16 077 918)
	70 376 344 (33 931 014) (22 394 957) (24 220 354) 7 382 087 6 061 810
Profit/(loss) for the year	46 155 990 (26 548 927) (16 333 147)
other comprehensive income Items that are or may be reclassified subsequently to profit or loss Cash flow hedges – effective portion of changes in fair value Related tax 19	77 779 344 (42 009 654) – (21 778 219) 11 762 703 –
other comprehensive income, net of tax	56 001 125 (30 246 951) –
Total comprehensive income	102 157 115 (56 795 878) (16 333 147)

STATEMENT OF CHANGES IN EQUITY

	Share capital R	Share-based payment reserve R*	hedging reserve R*	Accumulated loss R	Total R
Balance at 28 February 2013	166 500 500	11 385 842	–	(15 673 189)	162 213 153
Loss for the year	–	–	–	(16 333 147)	(16 333 147)
balance at 28 February 2014	166 500 500	11 385 842	–	(32 006 336)	145 880 006
Loss for the year	–	–	–	(26 548 927)	(26 548 927)
Cash fow hedge – effective portion of changes in fair
value, net of tax	–	–	(30 246 951)	–	(30 246 951)
balance at 28 February 2015	166 500 500	11 385 842	(30 246 951)	(58 555 263)	89 084 128
Proft for the year	–	–	–	46 155 990	46 155 990
Cash fow hedge – effective portion of changes in fair
value, net of tax	–	–	56 001 125	–	56 001 125
balance at 29 February 2016	166 500 500	11 385 842	25 754 174	(12 399 273)	191 241 243

• Reserve can be recycled through retained earnings.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 31

STATEMENT OF CASH FLOWS

		2016 2015	2014
	Note	R R	R
Cash flows from operating activities
Cash generated by operations	20.1	306 817 717 219 445 124	33 110 778
Finance income	18.1	4 852 620 510 810	154 681
Finance expenses		(206 580 181) (82 099 796)	(111)
Net cash inflow from operating activities		105 090 156 137 856 138	33 265 348
Cash flows from investing activities
Acquisition of plant and equipment – expansion	4	(2 426 410) (490 994 348)	(891 397 150)
Acquisition of intangible assets		(692 039) –	–
Proceeds on disposal of property, plant and equipment		– 150 001	–
Net cash outflow from investing activities		(3 118 449) (490 844 347)	(891 397 150)
Cash flows from financing activities
Shareholders’ loans – raised		26 131 446 136 375 624	190 027 408
Shareholders’ loans – repaid		(156 031 296) –	–
Interest-bearing borrowings – raised		136 992 990 347 243 675	703 598 930
Interest-bearing borrowings – repaid		(110 008 769) (3 791 127)	–
Premium payment on interest-bearing borrowings		– 15 685 418	–
Net cash (outflow)/inflow from financing activities		(102 915 629) 495 513 590	893 626 338
Net (decrease)/increase in cash and cash equivalents		(943 922) 142 525 381	35 494 536
Cash and cash equivalents at beginning of year		187 411 338 44 885 957	9 391 421
Cash and cash equivalents at end of year	9	186 467 416 187 411 338	44 885 957

32 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

NOTES TO THE FINANCIAL STATEMENTS

1. REPORTING ENTITY

Dorper Wind Farm RF (Proprietary) Limited is a company registered in South Africa. The registered address is 3rd Floor, South Tower, Nelson Mandela Square, corner 5th and Maude Streets, Sandton. The company is engaged in the design, development, engineering, procurement, construction, financing, commissioning, operation and maintenance of an onshore wind energy generation facility.

2. BASIS OF PREPARATION

The financial statements have been prepared in accordance with International Financial Reporting Standards (“ IFRS ”) and the requirements of the Companies Act of South Africa.

• 2.1 Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following:

• derivative financial instruments are measured at fair value.

• financial instruments at fair value through profit or loss are measured at fair value.

The methods used to measure fair values are discussed further in note 23.7.

• 2.2 Functional and presentation currency

These financial statements are presented in South African Rand, which is the company’s functional currency.

2.3 Use of estimates and judgements

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Judgements made by management in the application of IFRS that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in note 28.

• 2.4 Significant accounting policies

• The financial statements are prepared on the going concern basis and the accounting policies have been applied consistently with the prior years.

3. SIGNIFICANT ACCOUNTING POLICIES

3.1 Property, property, plant and equipment

Recognition and measurements

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the following:

• the cost of materials and direct labour;

• any other costs directly attributable to bringing the assets to a working condition for their intended use;

• when the company has an obligation to remove the asset or restore the site, an estimate of the costs of dismantling and removing the items and restoring the site on which they are located; and

• capitalised borrowing costs.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain and loss on disposal of an item of property, plant and equipment (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss.

Depreciation

Depreciation is the systematic allocation of the depreciable amount of an item of property, plant and equipment over its estimated useful life. Depreciation is charged on the depreciable amount, to the statement of comprehensive income, on a straight line basis over the estimated useful lives of items of property, plant and equipment.

The depreciable amount is the difference between the cost of an item of property, plant and equipment and its residual value.

Residual value is the estimated amount that the company would currently obtain from disposal of an item of property, plant and equipment, after deducting the estimated costs of disposal, if the item were already of age and in the condition expected at the end of its useful life.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 33

NOTES TO THE FINANCIAL STATEMENTS (continued)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

3.1 Property, property, plant and equipment (continued)

Recognition and measurements (continued)

The estimated useful lives for	the current year of signifcant items of property, plant and equipment are as follows:
Land	–
Buildings	20 years
Plant and machinery	20 years
Leasehold improvements	25 months
Furniture and fttings	5 years
Computer equipment	3 years
Motor vehicles	3 years

The residual value, if not insignificant, depreciation method and useful lives of property, plant and equipment are reassessed annually.

Routine maintenance costs are charged to the statement of comprehensive income as it is incurred. The costs of major maintenance or overhaul of an item of plant or equipment are recognised as an expense, except if the cost had been recognised as a separate part of the cost of the asset, and that amount has already been depreciated to reflect the benefits that had been replaced or restored.

Subsequent expenditure

Subsequent expenditure relating to an item of property, plant and equipment is capitalised when it is probable that future economic benefits from the use of the asset will be increased. All other subsequent expenditure is recognised as an expense in the period in which it is incurred.

3.2 Intangible assets

An intangible asset is an identified, non-monetary asset that has no physical substance. An intangible asset is recognised when it is identifiable; the company has control over the asset; it is probable that economic benefits will flow to the company; and the cost of the asset can be measured reliably.

Research and development

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in profit or loss as incurred.

Development activities involve a plan or design for the production of new or substantially improved products and processes. Development expenditure is capitalised only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the company intends to and has sufficient resources to complete development and to use or sell the asset. The expenditure capitalised includes the cost of materials, direct labour, overhead costs that are directly attributable to preparing the asset for its intended use, and capitalised borrowing costs. Other development expenditure is recognised in profit and loss as incurred.

Capitalised development expenditure is measured at cost less accumulated amortisation and any accumulated impairment losses.

other intangible assets

Other intangible assets that are acquired by the company and have finite useful lives are measured at cost less accumulated amortisation and any accumulated impairment losses.

Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated brands, is recognised in profit or loss as incurred.

Amortisation

Intangible assets are amortised on a straight-line basis in profit or loss over their estimated useful lives, from the date that they are available-for-use.

The estimated useful lives for the current and comparative years are as follows:

Capitalised development costs 20 years

Amortisation methods, useful lives and residual values are reviewed at reporting date and adjusted if appropriate.

3.3 Financial instruments

The company classifies its financial instruments into the following categories:

• loans and receivables;

• derivative instruments;

• liabilities at amortised cost.

34 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

The classification is dependent on the purpose for which the financial instrument is acquired. Management determines the classification of its financial instrument at the time of the initial recognition and re-evaluates such designation at least at each reporting date.

Non-derivative financial instruments

Non-derivative financial instruments comprise trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.

Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs. Subsequent to initial recognition non-derivative financial instruments are measured as described below.

Interest-bearing borrowings

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the statement of comprehensive income over the period of the borrowings on an effective interest basis.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects.

Trade and other receivables

Trade receivables are initially recognised at fair value, and are subsequently classified as loans and receivables and measured at amortised cost using the effective interest rate method, less any impairment loss.

The impairment of trade receivables is established when there is objective evidence that the company will not be able to collect all amounts due in accordance with the original terms of the credit given and includes an assessment of recoverability based on historical trend analysis and events that exist at reporting date. The impairment adjustment is the difference between the carrying value and the present value.

Trade and other payables

Trade and other payables are liabilities to pay for goods or services that have been received or supplied and have been invoiced or formally agreed with the supplier. Trade payables are initially recognised at fair value, and are subsequently classified as non-trading financial liabilities and carried at amortised cost using the effective interest rate method.

Cash and cash equivalents

Cash and cash equivalents are measured at amortised cost using the effective interest method. Cash and cash equivalents comprise cash balances and call accounts with original maturities of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the company’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Cash and cash equivalents are measured at amortised cost which approximates their fair value.

Derivative financial instruments

Derivatives (other than those designated for hedging purposes) are recognised initially at fair value; directly attributable transaction costs are recognised in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognised in profit or loss.

offset

Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position when the company has a legally enforceable right to set off the recognised amounts, and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

3.4 Foreign currency transactions

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to Rand at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the statement of comprehensive income. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to Rand at foreign exchange rates ruling at the dates the fair value was determined.

3.5 Impairment

Financial assets measured at amortised cost

The company considers evidence of impairment for financial assets measured at amortised cost (loans and receivables) at both a specific asset and collective level. All individually significant assets are assessed for specific impairment. Those found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Assets that are not individually significant are collectively assessed for impairment by grouping together assets with similar risk characteristics.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 35

NOTES TO THE FINANCIAL STATEMENTS (continued)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

• 3.5 Impairment (continued)

Financial assets measured at amortised cost (continued)

In assessing collective impairment, the company uses historical trends of the probability of default, the timing of recoveries and the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or lesser than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account against loans and receivables. Interest on the impaired asset continues to be recognised. When an event occurring after the impairment was recognised causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

Non-financial assets

The carrying amounts of the company’s non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill and indefinite-lived intangible assets are tested annually for impairment. An impairment loss is recognised if the carrying amount of an asset or cash-generating unit (“ CGU ”) exceeds its recoverable amount.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Subject to an operating segment ceiling test, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to benefit from the synergies of the combination.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

3.6 Taxation

Income taxation on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the statement of comprehensive income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current taxation is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the statement of financial position liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: goodwill not deductible for tax purposes, the initial recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the reporting date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Dividends withholding tax

Dividends withholding tax is a tax on shareholders receiving dividends and is applicable to all dividends declared on or after 1 April 2012.

The company withholds dividends tax on behalf of its shareholders on dividends declared. Amounts withheld are not recognised as part of the company’s tax charge but rather as part of the dividend paid recognised directly in equity.

Where withholding tax is withheld on dividends received, the dividend is recognised at the gross amount with the related withholdings tax recognised as part of tax expense unless it is otherwise reimbursable in which case it is recognised as an asset.

36 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

3.7 Employee benefits

Short-term employee benefits

The cost of all short-term employee benefits is recognised during the year in which the employee renders the related service.

The accruals for employee entitlements to wages, salaries and annual leave represent the amount which the company has a present obligation to pay as a result of employees’ services provided to the reporting date. The accruals have been calculated at undiscounted amounts based on current wage and salary rates.

Retirement benefits

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

3.8 Share-based payment transactions

Equity-settled share-based payment

The grant-date fair value of share-based payment awards granted to the shareholders is recognised as an expense, with a corresponding increase in equity. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

3.9 Derivatives held for risk management purposes and hedge accounting

Derivatives held for risk management purposes include all derivative assets and liabilities that are not classified as trading assets or liabilities. Derivatives held for risk management purposes are measured at fair value in the statement of financial position.

The company designates certain derivatives held for risk management as well as certain non-derivative financial instruments as hedging instruments in qualifying hedging relationships. On initial designation of the hedge, the company formally documents the relationship between the hedging instruments and hedged items, including the risk management objective and strategy in undertaking the hedge, together with the method that will be used to assess the effectiveness of the hedging relationship. The company makes an assessment, both at inception of the hedge relationship and on an ongoing basis, of whether the hedging instruments are expected to be highly effective, the changes in the fair value or cash flows of the respective hedged items during the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80% – 125%. The company makes an assessment for a cash flow hedge of a forecast transaction, of whether the forecast transaction is highly probable to occur and presents an exposure to variations in cash flows that could ultimately affect profit or loss.

Cash flow hedges

When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows attributable to a particular risk associated with a recognised asset or liability that could affect profit or loss, the effective portion of changes in the fair value of the derivative is recognised in OCI and presented in the hedging reserve within equity. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in profit or loss. The amount recognised in OCI is reclassified to profit or loss as a reclassification adjustment in the same period as the hedged cash flows affect profit or loss, and in the same line item in the statement of profit or loss and OCI.

If the hedging derivative expires or is sold, terminated or exercised, or the hedge no longer meets the criteria for cash flow hedge accounting, or the hedge designation is revoked, then hedge accounting is discontinued prospectively. However, if the derivative is novated to a central counterparty by both parties as a consequence of laws or regulations without changes in its terms except for those that are necessary for the novation, then the derivative is not considered as expired or terminated.

3.10 Share capital

ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the share issue of ordinary shares and share options are recognised as a deduction from equity, net of any taxation affects.

3.11 Cash and cash equivalents

For the purpose of the statement of cash flows, cash and cash equivalents comprise cash on hand, deposits held on call with banks, and investments in money market instruments, net of bank overdrafts, all of which are available for use by the company unless otherwise stated. Bank overdrafts that are repayable on demand and form an integral part of the company’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 37

NOTES TO THE FINANCIAL STATEMENTS (continued)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

• 3.12 Provisions

A provision is recognised when the company has a present legal or constructive obligation and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-taxation rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. The unwinding of the discount is recognised as finance expense in profit or loss.

onerous contracts

A provision for onerous contracts is recognised when the expected benefits to be derived by the company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is recognised, the company recognises any impairment loss on the assets associated with that contract.

Decommissioning

In accordance with the company’s environmental policy and applicable legal requirements a provision for decommissioning in respect of contaminated land, and the related expense, is recognised when the land is contaminated.

3.13 Net financing costs

Net financing costs comprise interest payable on borrowings calculated using the effective interest rate method, interest receivable on funds invested, foreign exchange gains and losses, and gains and losses on hedging instruments that are recognised in the statement of comprehensive income.

Interest income is recognised in the statement of comprehensive income as it accrues, using the effective interest method.

• 3.14 Lease payments

operating lease payments

Lessee

Leases of assets under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under an operating lease are recognised in profit or loss over the lease term on a straightline basis unless another basis is more representative of the pattern of use.

The land and buildings elements of a lease are considered separately for the purpose of lease classification as a finance or an operating lease.

3.15 Revenue recognition

Revenue is measured at fair value of the consideration received or receivable. Revenue is recognised when the amount of revenue can reliably be measured, it is probable that future economic benefits will flow to the company and specific criteria have been met for the sale of electricity. The revenue for the sale of electricity shall be recognised when all the following conditions have been met:

• i. the company has transferred to the buyer the significant risks and rewards of the ownership of the electricity;

• ii. the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the electricity sold;

iii. the amount of revenue can be measured reliably;

• iv. it is probable that the economic benefits associated with the transaction will flow to the company; and

• v. the costs incurred or to be incurred, by the company, in respect of the transaction can be measured reliably.

3.16 Related parties

Related parties are considered to be related if one party has the ability to control or jointly control the other party or exercise significant influence over the other party in making financial and operational decisions. Key management personnel are also regarded as related parties. Key management personnel are those persons having authority and responsibility for planning.

3.17 Contingent assets

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company. In the ordinary course of business the company may pursue a claim against a customer.

3.18 Contingent liabilities

A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company, or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or the amount of the obligation cannot be measured with sufficient reliability.

If the likelihood of an outflow of resources is remote, the possible obligation is neither a provision nor a contingent liability and no disclosure is made.

38 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

4.	Cost Accumulated depreciation Carrying amount R R R
	PROPERTY, PLANT AND EQUIPMENT 2016 Land and buildings 79 313 (2 644) 76 669 Plant and machinery 1 672 587 300 (141 442 977) 1 531 144 323 Computer equipment 128 005 (84 438) 43 567 Furniture and fittings 286 971 (94 514) 192 457 Leasehold improvements 255 923 (61 952) 193 971 Motor vehicles 499 979 (167 445) 332 534
	1 673 837 491 (141 853 970) 1 531 983 521
	2015 Under construction 39 196 045 – 39 196 045 Plant and machinery 1 631 263 177 (57 985 795) 1 573 277 382 Computer equipment 113 386 (54 093) 59 293 Furniture and fittings 286 971 (51 664) 235 307 Leasehold improvements 255 923 (46 121) 209 802 Motor vehicles 295 579 (49 264) 246 315
	1 671 411 081 (58 186 937) 1 613 224 144
	2014 Under construction 1 180 210 507 – 1 180 210 507 Computer equipment 63 336 (28 991) 34 345 Furniture and fittings 99 538 (18 249) 81 289 Leasehold improvements 43 352 (17 341) 26 011 Motor vehicles 155 000 (38 750) 116 250
	1 180 571 733 (103 331) 1 180 468 402

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 39

NOTES TO THE FINANCIAL STATEMENTS (continued)

4.	opening balance Additions Disposals Transfers Depreciation Closing balance R R R R R R
	PROPERTY, PLANT AND EQUIPMENT (continued) 2016 Reconciliation of property, plant and equipment Land and buildings 39 196 045 – – (39 196 045) – – Under construction – 79 313 – – (2 644) 76 669 Plant and machinery 1 573 277 382 2 128 077 – 39 196 045 (83 457 181) 1 531 144 323 Computer equipment 59 293 14 620 – – (30 346) 43 567 Furniture and fittings 235 307 – – – (42 850) 192 457 Leasehold improvements 209 802 – – – (15 831) 193 971 Motor vehicles 246 315 204 400 – – (118 181) 332 534
	1 613 224 144 2 426 410 – – (83 667 033) 1 531 983 521
	2015 Under construction 1 180 210 507 246 325 945 – (1 387 340 407) – 39 196 045 Plant and machinery – 243 922 770 – 1 387 340 407 (57 985 795) 1 573 277 382 Computer equipment 34 345 50 050 – – (25 102) 59 293 Furniture and fittings 81 289 187 433 – – (33 415) 235 307 Leasehold improvements 26 011 212 571 – – (28 780) 209 802 Motor vehicles 116 250 295 579 (99 029) – (66 485) 246 315
	1 180 468 402 490 994 348 (99 029) – (58 139 577) 1 613 224 144
	2014 Under construction 249 967 528 930 242 979 – – – 1 180 210 507 Computer equipment 36 885 24 281 – – (26 821) 34 345 Furniture and fittings – 99 538 – – (18 249) 81 289 Leasehold improvements – 43 352 – – (17 341) 26 011 Motor vehicles – 155 000 – – (38 750) 116 250 250 004 413 930 565 150 – – (101 161) 1 180 468 402

Property, plant and equipment under construction

Included in the above are capitalised borrowing costs related to the construction of its wind farm amounting to R34 439 903 (2015: R34 116 357) as well as a provision for restoration amounting to R35 740 800 (2015: R37 699 200).

Securities

Refer to note 12 for securities given for interest-bearing borrowings.

40 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

5.		2016 2015 2014 R R R
	DERIVATIVE FINANCIAL INSTRUMENTS Assets Recognition of day one loss at inception of hedge – cash flow hedge Amortisation of day one loss over the life of the hedging instrument for the year Interest rate swap**	14 877 633 15 993 456 –
		15 993 456 16 737 338 – (1 115 823) (743 882) –
		21 563 234 – –
		36 440 867 15 993 456 –
	Non-current Current	13 761 810 15 993 456 – 22 679 057 – –
		36 440 867 15 993 456 –
	Liabilities Interest rate swap**	– (58 746 992) –

• Day one calculation – A calculation of the hypothetical derivative was performed to solve the value of the derivative to zero at the inception date of the hedge (1 July 2014). This identified a fixed interest rate for the hypothetical derivative of 8.20%, representing a difference of 0.256% to the fixed interest rate of 8.45% per the interest rate swap contracts.

• The hypothetical rate will be kept constant for the remainder of the life of the hedge, to be used in all retrospective hedge effectiveness calculations for the hypothetical derivative in future.

The loss is as a result of the credit risk and the bank’s margin on the deal being priced into the fixed rate, resulting in this rate having been traded away from the quoted interest rate at inception.

• ** Cash flow hedges for interest-bearing borrowings:

The company uses interest rate swaps to hedge their interest rate risks arising from entering into various interest-bearing borrowings. The fair values of derivatives designated as cash flow hedges are represented by their carrying values.

6.	Cost Accumulated depreciation Carrying Amount R R R
	INTANGIBLE ASSETS 2016 Development costs 141 095 774 (12 345 880) 128 749 894
	2015 Development costs 140 403 735 (5 265 140) 135 138 595
	2014 Development costs 140 403 735 – 140 403 735

Reconciliation of intangible assets

	opening balance R	Additions R	Amortisation R*	Closing balance R
2016
Development costs	135 138 595	692 039	(7 080 740)	128 749 894
2015
Development costs	140 403 735	–	(5 265 140)	135 138 595
2014
Development costs	–	140 403 735	–	140 403 735

• Amortisation

• The amortisation of the development costs commenced once the construction of the wind farms (note 4) was completed and commercial operation commenced on 9 August 2014, over a period of 20 years which is in line with the power purchase agreement.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 41

NOTES TO THE FINANCIAL STATEMENTS (continued)

7. 8. 9. 10.	2016 2015 2014 R R R	2016 2015 2014 R R R
	DEFERRED TAX ASSET/(LIABILITY) Asset/(liability) Balance at beginning of year 26 245 778 7 100 988 1 039 178 Movement recognised in profit or loss (24 220 354) 7 382 087 6 061 810 Recognised in other comprehensive income (21 778 219) 11 762 703 –
	Balance at end of period (19 752 795) 26 245 778 7 100 988
	Deferred tax comprises – pre-trade expenditure – – 7 071 513 – provisions and accruals 58 230 27 763 (13 868) – plant and machinery (318 498 462) (216 047 731) – – rehabilitation provision 11 859 016 11 355 362 – – derivative financial instrument (31 981 658) 11 970 990 – – assessed loss 319 346 919 218 939 394 – – prepayments (536 840) – 193 945 – other – – (150 602)
	(19 752 795) 26 245 778 7 100 988
	The directors have reviewed the company’s future taxable proft forecasts and have concluded that the company will make suffcient taxable profts in the foreseeable future to utilise the assessed losses. A deferred taxation asset has therefore been raised. The directors are satisfed that the deductible temporary differences will be utilised in the short-term. 2016 2015 2014 R R R
	TRADE AND OTHER RECEIVABLES Trade receivables Delay damages Receivables Impairment Deposits and prepayments Sundry receivables VAT receivable	33 112 905 55 760 194 – 7 172 610 – –
		14 345 220 – – (7 172 610) – –
		5 927 971 2 129 624 767 660 2 869 101 628 8 009 – – 14 832 261
		46 216 355 57 991 446 15 607 930
	CASH AND CASH EQUIVALENTS Call deposit Bank balances	100 679 130 2 896 800 2 752 089 85 788 286 184 514 538 42 133 883
	Bank overdraft	186 467 416 187 411 338 44 885 972 – – (15)
		186 467 416 187 411 338 44 885 957
	SHARE CAPITAL Authorised 1 000 ordinary shares of no par value Issued 500 ordinary shares of R1 each 500 ordinary shares of R333 000 each	1 000 1 000 1 000 500 500 500 166 500 000 166 500 000 166 500 000
		166 500 500 166 500 500 166 500 500

The directors have reviewed the company’s future taxable profit forecasts and have concluded that the company will make sufficient taxable profits in the foreseeable future to utilise the assessed losses. A deferred taxation asset has therefore been raised. The directors are satisfied that the deductible temporary differences will be utilised in the short-term.

42 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

11. SHARE-BASED PAYMENT RESERVE

Dorper Wind Farm RF (Pty) Ltd (“Dorper”) responded to a request for proposal for a power purchase agreement to supply electricity to Eskom for a period of 20 years. The power purchase agreement required that the project maintain Black Economic Empowerment Credentials (equity participation by historically disadvantaged South Africans). The Black Economic Empowerment (“BEE”) companies were identified before the proposal was submitted. The BEE and BBBEE companies were required to fund 93% of their portion of the capital contribution and shareholder loans required to operate the company. The BEE and BBBEE portion was funded by the Industrial Development Corporation’s preferential shares. The other shareholders paid the 7% contribution on behalf of the BEE and BBBEE companies. As a result of the payment on behalf of the BEE and BBBEE companies, Dorper is required to recognise an expense for the amount paid for the BEE credentials.

The value of the BEE credentials was determined using the value of the capital contribution required by the company as all the shareholders were required to contribute to the company in relation to their shareholding. The expense is therefore measured as the 7% paid on behalf of the BEE and BBBEE companies.

12.		2016 2015 2014 R R R
	INTEREST–BEARING BORROWINGS Disclosed as Non-current – Commercial facility – Hermes facility Current	1 239 747 399 1 107 971 931 869 790 866
		129 881 653 127 260 150 250 287 301 1 109 865 746 980 711 781 619 503 565
		68 323 292 163 566 989 25 821 134
	– Commercial facility – Hermes facility	11 869 477 145 517 650 14 403 637 56 453 815 18 049 339 11 417 497
		1 308 070 691 1 271 538 920 895 612 000
	Non-current portion of interest-bearing borrowings Commercial facility Loan advanced Interest accrued Capitalised finance costs Interest rate swap	137 906 236 112 653 853 241 894 976 – 21 374 170 17 316 381 (8 024 583) (8 670 308) (9 976 509) – 1 902 435 1 052 453
		129 881 653 127 260 150 250 287 301

The commercial facility loan of R242 million from ABSA Bank Limited and Nedbank Limited bears interest at JIBAR +3.3% per annum up to 14 April 2015 and JIBAR + 3.1% per annum from 15 April 2015. The loan is repayable semi–annually commencing 31 December 2014 and expiring on 31 December 2023.

31 December 2014 and expiring on 31 December 2023.
	2016	2015	2014
	R	R	R
hermes facility Loan advanced Interest accrued Premium payment Capitalised finance costs	1 250 319 464 – (99 168 285) (41 285 433)	1 129 238 771 121 122 (107 336 688) (44 626 551)	785 155 894 – (115 386 933) (50 265 396)
Interest rate swap	–	3 315 127	–
	1 109 865 746	980 711 781	619 503 565

The Hermes facility of R1.335 million from ABSA Bank Limited, Nedbank Limited and Sumitomo Mitsui Banking Corporation Europe Limited bears interest at JIBAR +2% per annum. The loan is repayable semi–annually commencing 31 December 2014 and expiring on 29 June 2029.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 43

NOTES TO THE FINANCIAL STATEMENTS (continued)

12.	2016 2015 2014 R R R
	INTEREST–BEARING BORROWINGS(continued) Current portion of interest–bearing borrowings Commercial facility Loan advanced 9 828 848 129 298 020 3 848 024 Interest accrued 2 361 738 16 875 189 10 555 613 Capitalised finance costs (650 642) (655 559) – Interest rate swap 329 533 – –
	11 869 477 145 517 650 14 403 637
	hermes facility Loan advanced 46 579 114 13 905 455 10 744 657 Interest accrued 18 387 492 15 013 555 8 723 091 Premium payment (8 050 248) (8 050 248) (8 050 251) Capitalised finance costs (3 337 891) (2 819 423) – Interest rate swap 2 875 348 – –
	56 453 815 18 049 339 11 417 497
	Currency Nominal interest rate % Fair value Carrying value
	2016 Terms and conditions of loans Commercial facility ZAR JIbAR +3.1% 150 096 822 141 751 130 Hermes facility ZAR JIbAR +2.0% 1 315 286 070 1 166 319 561
	2015 Terms and conditions of loans Commercial facility ZAR JIBAR +3.3% 280 201 232 272 777 800 Hermes facility ZAR JIBAR +2.0% 1 158 278 903 998 761 120

Securities and guarantees on interest-bearing borrowings

The following securities are currently in place:

• Notarial bond over movable assets and mortgage bond over fixed assets.

• Cession of all material contracts including the Power Purchase Agreement.

• Cession of insurance policies.

• Cession of all consents, permits and licences.

• Cession of debt service, maintenance and all other project reserve.

The following guarantees were in place during the year:

Business Venture Investments No 1615 (RF) (Proprietary) Limited

• Guarantee over the outstanding hedge liability including any fees or penalties that become payable under the agreement. The guarantee is valid for the period of financing.

• Guarantee over the outstanding balance on the Hermes and Commercial facilities including and fees or penalties that became payable under this agreement. The guarantee is valid for the period of financing.

Externally imposed debt covenants

Under the common terms agreement, Dorper Wind Farm RF (Proprietary) Limited is required to comply with certain financial covenants. At 29 February 2016, the following covenants were applicable:

• historic debt service cover ratio;

• forecast debt service cover ratio;

• loan life cover ratio; and

• debt to equity ratio.

The company was not in breach of the financial covenants at year end.

44 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

13.	2016 2015 2014 R R R
	SHAREHOLDERS’ LOANS Non-current portion of shareholders’ loans Summit Wind Power South Africa (Proprietary) Limited (“SWPSA”) – – 164 014 808 Sumitomo Corporation Africa (Proprietary) Limited (“SCAF”) 80 402 322 220 062 397 – K2014158670 (Proprietary) Limited (“KCO”) 80 402 322 – – Dorper Wind Development (Proprietary) Limited (“DWD”) 41 978 290 55 005 815 40 982 940 Dorper Wind Farm BEE Holdings (Proprietary) Limited (“DWFBEE”) 34 588 434 44 533 504 33 339 454 Dorper Wind Farm BBBEE Holdings (Proprietary) Limited (“DWFBBBEE”) 33 824 853 46 723 677 34 979 098
	271 196 221 366 325 393 273 316 300

The shareholders’ loans bear interest at 5% plus monthly JIBAR. The interest rate cannot exceed prime +2% at any point. The loan is repayable on a semi-annual basis with the first repayment date being 30 June 2016 and final repayment date being 30 June 2020.

30 June 2020.
	2016	2015	2014
	R	R	R
Non-current portion of shareholders’ loans
Summit Wind Power South Africa (Proprietary) Limited (“SWPSA”)	–	–	18 746 861
Sumitomo Corporation Africa (Proprietary) Limited (“SCAF”)	23 467 913	70 274 894	–
K2014158670 (Proprietary) Limited (“KCO”) Dorper Wind Development (Proprietary) Limited (“DWD”) Dorper Wind Farm BEE Holdings (Proprietary) Limited (“DWFBEE”)	23 467 913 9 931 282 8 085 344	17 554 212 14 495 118	– 4 684 969 3 811 001
Dorper Wind Farm BBBEE Holdings (Proprietary) Limited (“DWFBBBEE”)	10 004 975	15 207 993	3 998 428
	74 957 427	117 532 217	31 241 259

These loans have been subordinated by the shareholders in favour of all other entities.

The balances include accrued interest of R1 456 688 in SCAF, R1 456 688 in KCO, R727 986 in the DWD balance, R590 973 in the DWFBEE balance and R614 797 in the DWFBBBEE balance.

14. PROVISIONS

In March 2013, the Dorper Wind Farm RF (Proprietary) Limited (“Dorper”) commenced construction on a 97.53MW wind farm with an estimated useful life of 20 years. Dorper has entered in to various lease agreements in respect of land on which the wind turbines are built. The lease agreements are for a period of 25 years and the agreements place include a legal obligation on the company to dismantle the wind farm and its components at the end of the lease period. In accordance with IAS 37, the value of the liability for the obligation is R42 353 629. The company has capitalised R39 168 000 as part of the wind turbine costs, which, once brought in to use will be depreciated on a straight-line basis over 20 years.

Subsequent to initial recognition, the amount of the decommissioning provision will generally change due to:

• changes in the estimate of the amount or timing of expenditure required to settle the obligation;

• change in the market based discount rate; and

• the unwinding of discount.

15.	2016 2015 2014 R R R
	Balance at beginning of year 40 554 864 39 168 000 – Additions – – 39 168 000 Unwinding of provision 1 798 765 1 386 864 –
	Closing balance 42 353 629 40 554 864 39 168 000
	TRADE AND OTHER PAYABLES Trade payables 823 667 2 828 480 1 122 149 VAT payable 2 961 607 2 392 669 – Sundry payables and accruals 18 500 773 87 001 094 2 127 298
	22 286 047 92 222 243 3 249 447

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 45

NOTES TO THE FINANCIAL STATEMENTS (continued)

16. 17. 18. 19.			2016 2015 2014 R R R
	OTHER INCOME Delay damages Insurance proceeds Profit on disposal of property, plant and equipment Sundry income		14 345 220 5 480 289 – 4 803 208 – – – 50 972 – – 26 323 –
			19 148 428 5 557 584 –
	OPERATING PROFIT Operating profit is stated after taking into account Amortisation of intangible assets Asset decommissioning expense Depreciation of plant and equipment Enterprise development initiatives Foreign exchange loss Impairment of delay damages receivable Consulting fees Legal fees Payroll costs Rent paid Socio-economic development initiatives		7 080 740 5 265 140 – 1 798 765 1 386 864 – 83 667 033 58 139 577 101 161 2 124 636 644 433 – 87 509 43 347 76 835 7 172 610 – – 3 184 200 612 578 – 791 139 2 274 969 740 636 3 757 472 2 105 489 1 346 400 5 558 085 3 006 786 180 202 5 311 589 1 610 823 –
	FINANCE INCOME AND FINANCE EXPENSES 18.1 Finance income Interest received • bank 18.2 Finance expenses Interest expense • bank • shareholder loans • Interest-bearing borrowings – commercial facility – Hermes facility – interest rate hedge • derivative fnancial instrument		4 852 620 510 810 154 681
		Finance expenses Interest expense • bank • shareholder loans • Interest-bearing borrowings – commercial facility – Hermes facility – interest rate hedge • derivative fnancial instrument	190 273 111 50 728 535 42 924 428 16 077 807 156 479 071 98 144 594 –
			15 704 423 18 290 464 – 117 804 963 63 130 053 – 22 969 685 16 724 077 –
			(1 415 059) 743 882 –
			205 792 737 141 813 177 16 077 918
	INCOME TAX (EXPENSE)/CREDIT Amounts recognised in profit or loss South African normal tax – deferred – current year		(24 220 354) 7 382 087 6 061 810

The company had no current tax charge during the year (2015: Rnil) as it has an estimated tax loss of R1 140 524 709 (2015: R781 926 410) which has been accounted for in deferred tax.

46 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

19. 20.	2016 2015 2014 R R R	2016 2015 2014 R R R
	INCOME TAX (EXPENSE)/CREDIT(continued) Amounts recognised in OCI Cash flow hedges (21 778 219) 11 762 703 –
	Reconciliation between applicable tax rate and effective tax rate % % % Standard tax rate 28.00 28.00 28.00 Exempt income 6.42 28.44 – Non-deductible expenses Under-provision prior year – (0.01) – Items recognised in OCI – (34.67) –
	Current year’s charge as a percentage of profit before taxation 34.42 21.76 28.00
	NOTES TO THE STATEMENT OF CASH FLOWS 20.1 Cash generated by operations Profit/(loss) before taxation 70 376 344 (33 931 014) (22 394 957) Adjusted for: • fnance expenses 205 792 737 141 813 177 16 077 918 • fnance income (4 852 620) (510 810) (154 681) • depreciation and amortisation 90 747 773 63 404 717 101 161 • impairment of delay damages receivable 7 172 610 – – • amortisation of derivative 1 115 823 743 882 – • proft on sale of plant and equipment – (50 972) – • increase in provisions 1 798 765 1 386 864 – 372 151 432 172 855 844 (6 370 559) Changes in working capital: Decrease/(increase) in trade and other receivables 4 602 481 (42 383 516) 38 453 869 (Decrease)/increase in trade and other payables (69 936 196) 88 972 796 1 027 468
		372 151 432 172 855 844 (6 370 559)
		Changes in working capital: Decrease/(increase) in trade and other receivables 4 602 481 (42 383 516) 38 453 869 (Decrease)/increase in trade and other payables (69 936 196) 88 972 796 1 027 468
		306 817 717 219 445 124 33 110 778

21. OPERATING LEASES

The company has entered into various operating lease agreements in respect of land on which the wind turbines are built. Leases on these are contracted for periods of 25 years. The company does not have an option to acquire the land at the termination of the leases. There are no escalation clauses. Management also entered into a three year lease agreement for office space.

22.	2016 2015 2014 R R R
	Total future minimum lease payments under operating leases Not later than 1 year 2 076 891 2 076 891 1 658 897 Between 1 and 5 years 8 282 480 8 200 005 8 226 895 More than 5 years 26 095 849 34 729 188 36 304 189
	36 455 220 45 006 084 46 189 981
	COMMITMENTS, BANKING FACILITIES AND GUARANTEES Commitments Authorised within 1 year • contracted for – 81 651 468 450 370 342 Banking facilities Derivative facility (unutilised) 400 000 000 400 000 000 – Loan facilities (unutilised) 750 000 000 750 000 000 – Guarantees Performance guarantee as per EPC contract 145 000 000 145 000 000 – Guarantee in favour of Eskom Holdings SOC Limited 2 600 000 2 600 000 –

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 47

NOTES TO THE FINANCIAL STATEMENTS (continued)

23. FINANCIAL RISK MANAGEMENT

23.1 Overview

The entity has exposure to the following risks from its use of financial instruments:

• credit risk;

• liquidity risk; and

• interest rate risk.

This note presents information about the entity’s exposure to each of the above risks, the entity’s objectives, policies and processes for measuring and managing risk, and the entity’s management of capital. Further quantitative disclosures are included throughout these financial statements.

The board of directors has overall responsibility for the establishment and oversight of the entity’s risk management framework. The board is responsible for developing and monitoring the entity’s risk management policies.

The entity’s risk management policies are established to identify and analyse the risks faced by the entity, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the entity’s activities.

The board oversees how management monitors compliance with the entity’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the entity.

23.2 Treasury risk management

Senior management analyse currency and interest rate exposures and re-evaluate treasury management strategies against revised economic forecasts. Compliance with company policies and exposure limits are reviewed on a periodic basis.

23.3 Capital management

The entity’s policy is to maintain a strong capital base so as to maintain creditor and shareholder confidence and to sustain future development of the business. Management monitors the return on capital, which the entity defines as net operating income divided by total shareholders’ equity. Management also monitors the level of dividends to ordinary shareholders.

There were no changes in the entity’s approach to capital management during the year.

23.4 Exposure to credit risk

Credit risk is the risk of financial loss to the entity if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the entity’s receivables from customer cash and short-term deposits. The entity’s cash equivalents and short-term deposits are placed with high credit quality financial institutions.

Trade and other receivables

The entity’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the entity’s customer base, including the default risk of the industry and country in which customers operate, has less of an influence on credit risk. Credit risk with respect to trade receivables is high due to a small number of customers comprising the entity’s customer base and their concentration in industries and geographical areas.

The entity establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets.

The carrying amount of financial assets represents the maximum exposure to credit risk.

48 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

23.	2016 2015 2014 R R R	2016 2015 2014 R R R
	FINANCIAL RISK MANAGEMENT(continued) 23.4 Exposure to credit risk (continued) Trade and other receivables 46 216 355 57 991 446 15 607 930 Cash and cash equivalents 186 467 416 187 411 338 44 885 957 232 683 771 245 402 784 60 493 887 At 29 February 2016, the maximum credit risk for trade receivables by category was as follows: • Geographic region – South Africa 33 112 905 55 760 194 – • Counterparty: SOC 33 094 779 55 517 113 – Other 18 126 243 081 – 33 112 905 55 760 194 – At 29 February 2016, the ageing of trade receivable that were not impaired was as follows: Neither past due nor impaired 33 112 905 27 628 722 – Past due 1 – 30 days – 28 131 472 – 33 112 905 55 760 194 –
		232 683 771 245 402 784 60 493 887
		At 29 February 2016, the maximum credit risk for trade receivables by category was as follows: • Geographic region – South Africa 33 112 905 55 760 194 –
		• Counterparty: SOC 33 094 779 55 517 113 – Other 18 126 243 081 –
		33 112 905 55 760 194 –
		At 29 February 2016, the ageing of trade receivable that were not impaired was as follows: Neither past due nor impaired 33 112 905 27 628 722 – Past due 1 – 30 days – 28 131 472 –
		33 112 905 55 760 194 –

No impairment allowance is required at year end, as all amounts are deemed recoverable.

At 29 February 2016, the company’s most significant customer, a South African SOC, accounted for R33 094 779 (2015: R55 517 113) of the trade receivable carrying amount.

23.5 Liquidity risk

Liquidity risk is the risk that the entity will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivery of one or another financial asset. The entity’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the entity’s reputation.

Typically the entity ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 90 days, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

Dorper Wind Farm RF (Proprietary) Limited has the facility loans with the following parties: Commercial facility

ABSA Capital Nedbank Limited Hermes facility ABSA Capital Nedbank Limited Sumitomo Mitsui Banking Corporation Europe Limited

Refer to note 12 for relevant disclosure of current utilisation.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 49

NOTES TO THE FINANCIAL STATEMENTS (continued)

23. FINANCIAL RISK MANAGEMENT (continued)

23.5 Liquidity risk (continued)

The following are the contractual maturities of financial liabilities.

	Carrying amount R	Contractual cash flows R	1 year R	2 – 5 years R	More than 5 years R
2016 Non-derivative liabilities • interest-bearing borrowings • trade and other payables • shareholders’ loans	1 308 070 691 22 286 047 346 153 648	2 360 991 013 22 286 047 430 505 233	181 528 196 22 286 047 107 113 244	837 698 653 – 323 391 989	1 341 764 164 – –
	1 676 510 386	2 813 782 293	310 927 487	1 161 090 642	1 341 764 164
2015
Non-derivative liabilities
• interest-bearing borrowings	1 271 538 920	2 671 361 915	265 022 298	873 901 021	1 532 438 596
• trade and other payables	92 222 243	92 222 243	92 222 243	–	–
• shareholders’ loans	483 857 610	684 574 453	138 810 880	482 523 463	63 240 110
	1 847 618 773	3 448 158 611	496 055 421	1 356 424 484	1 595 678 706
Derivative liabilities at fair value
• derivative fnancial instruments	58 746 922	58 746 922	58 746 922	–	–
2014
Non-derivative liabilities
• interest-bearing borrowings	895 612 000	1 834 528 268	82 214 869	612 480 584	1 139 832 815
• trade and other payables	3 249 447	3 249 447	3 249 447	–	–
• shareholders’ loans	304 557 559	402 548 428	31 241 259	273 729 085	97 578 084
	1 203 419 006	2 240 326 143	116 705 575	886 209 669	1 237 410 899
Derivative liabilities at fair value
• interest rate swap used
for hedging	1 052 453	1 052 453	1 052 453	–	–

The contractual maturity of Interest-bearing borrowings is disclosed in note 12 and shareholders loans is disclosed in note 13.

23.6 Interest rate risk

The entity’s long-term loans are at market-related rates agreed with the financial institutions, there is therefore no material interest rate risk pertaining to the entity’s financial liabilities due to the hedges.

Profile

The interest rate risk profile of the Interest-bearing financial instruments was:

	Interest 2016	Interest	2015	Interest	2014
	% R	%	R	%	R
Variable rate
instruments
Commercial facility	JIbAR + 3.3 (141 751 130)	JIBAR +3.3	(272 777 800)	JIBAR +3.3	(245 743 000)
Hermes facility	JIbAR + 2.0 (1 166 319 561)	JIBAR +2.0	(998 761 120)	JIBAR +2.0	(795 900 551)
Shareholders’ loans	JIbAR + 5.0 (346 153 648)	JIBAR +5.0	(483 857 610)	JIBAR +5.0	(304 557 559)
Cash and cash
equivalents	Various 186 467 416	Various	187 411 338	Various	44 885 957

50 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

23. FINANCIAL RISK MANAGEMENT (continued)

23.6 Interest rate risk (continued)

Sensitivity analysis

A charge of 100 basis points in interest rates on the reporting date would have increased/(decreased) profit or loss as follows:

23.7	2016 2015 2014 100 bp increase 100 bp decrease 100 bp increase 100 bp decrease 100 bp increase 100 bp decrease R R R R R R
	Profit/(loss) before taxation (14 677 569) 14 677 569 (16 815 237) 16 815 237 (9 369 469) 9 369 469
	2016 2015 2014 Carrying value Fair value Carrying value Fair value Carrying value Fair value R R R R R R
	Fair value analyses Assets Trade and other receivables 46 216 355 46 216 355 57 991 446 57 991 446 15 607 930 15 607 930 Cash and cash equivalents 186 467 416 186 467 416 187 411 338 187 411 338 44 885 957 44 885 957 Derivative financial instruments 36 440 867 36 440 867 15 993 456 15 993 456 – –
	Liabilities Interest-bearing 1 308 070 691 1 465 379 918 1 271 538 920 2 283 072 078 895 612 000 1 077 874 636 Trade and other payables 22 286 047 22 286 047 92 222 243 92 222 243 3 249 449 3 249 449 Shareholders’ loans 346 153 648 346 153 648 483 857 610 483 857 610 304 557 559 304 557 559 Derivative financial instruments – – 58 746 922 58 746 922 – –

Estimation of fair values

The following summarises the major methods and assumptions used in estimates the fair values of financial instruments reflected in the table.

Interest-bearing borrowings/shareholders’ loans

Fair value calculated based on discounted expected future principal and interest cash flows.

Trade and other receivables/payables

For receivables/payables with a remaining life of less than one year, the notional amount is deemed to reflect the fair value. All other receivables/payables are discounted to determine the fair value.

Trade receivables, trade payables and cash and cash equivalents are classified as level 1.

Derivative financial instruments

The current loan funding exposes the company to interest rate cash flow risk. The risk management strategy adopted is to hedge all interest rate risk with the use of interest rate swap derivative contracts. The company has elected to apply cash flow hedge accounting to this relationship, as from inception of the current outstanding loan.

The dollar offset method has been used in testing the retrospective effectiveness of the derivative instrument, specifically making use of the hypothetical derivative method, i.e. comparing the cumulative fair value changes of the cash flows of the hedging instrument to the cumulative fair value changes of the cash flows of the hedging item. The hedge was found to be 100% effective.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 51

NOTES TO THE FINANCIAL STATEMENTS (continued)

23. FINANCIAL RISK MANAGEMENT (continued)

23.8 Fair value hierarchy

The company measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:

• Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.

• Level 2: Valuation techniques based on observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

• Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

	2016 2015 2014 R R R
Level 2
Cash fow hedge	14 877 633 15 993 456 –
Interest rate swap asset	21 563 234 – –
	36 440 867 15 993 456 –
Interest rate swap liability	– (58 746 992) (1 052 453)

Derivative assets and liabilities designated as cash flow hedges

The following table indicates the periods in which the cash flows associated with cash flow hedges are expected to occur and the carrying amounts of the related hedging instruments.

and the carrying amounts of the related hedging instruments.
		Expected
		cash flows
	Carrying	12 months	More than
	amount	or less	one year
2016
Financial instruments
Assets	36 440 867	22 679 057	13 761 810
Liabilities	–	–	–
	36 440 867	22 679 057	13 761 810
2015
Financial instruments
Assets	15 993 456	1 115 456	14 878 000
Liabilities	(58 746 992)	(58 746 992)	–
	(42 753 536)	(57 631 536)	14 878 000

The following table indicates the periods in which the cash flows associated with cash flow hedges are expected to impact profit or loss and the carrying amounts of the related hedging instruments:

		Carrying amount	Expected cash flows 12 months or less	More than one year
2016
Financial	instruments
Assets		14 877 633	1 115 823	13 761 810
2015
Financial	instruments
Assets		15 993 456	1 115 456	14 878 000

52 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

23. FINANCIAL RISK MANAGEMENT (continued)

23.8 Fair value hierarchy (continued)

Sensitivity analysis

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity and profit or loss by amounts shown below. This analysis assumes that all other variable remains constant.

	Profit or loss 100 bp decrease 100 bp decrease R R	Profit or loss 100 bp decrease 100 bp decrease R R	100 bp increase R	Equity 100 bp decrease R
2016
Assets	(148 776)	(148 776)	215 523	(215 523)
2015
Assets	(159 935)	(159 935)	–	–
Liabilities	–	–	(587 470)	587 470

24. RELATED PARTIES

24.1 Identity of related parties

Directors

The following acted as directors during the year: Humphrey Mathe (resigned 30 June 2015) Miyuki Wakabayashi (resigned 30 June 2015) Naoki Murakata (resigned 30 June 2015) Akira Node (resigned 30 June 2015) Kyo Onojima (resigned 30 June 2015) Taizo Hayakawa Keiichi Mihara Gavin Francis James William Luke Callcott-Stevens Ntombi Langa Royds Kgathola Ngoasheng Deon Cloete Koji Endo* Botha Schabort (appointed 30 June 2015) Matthys Nieuwoudt (appointed 30 June 2015) Kasper van Rooyen (appointed 22 January 2016) Thomas van Wyk (appointed 30 June 2015, resigned 22 January 2016) Doug Jenman (alternate director) Nonhlanhla Mabusela (alternate director)

• Japanese

Shareholders

The company is directly owned by five shareholders in the following proportions:

Shareholders The company is directly owned by fve shareholders in the following proportions:
	%
Sumitomo Corporation Africa (Proprietary) Limited	30.0
K2014158670 (Proprietary) Limited	30.0
Dorper Wind Development (Proprietary) Limited	15.0
Dorper Wind Farm BEE Holdings (Proprietary) Limited	12.2
Dorper Wind Farm BBBEE Holdings (Proprietary) Limited	12.8

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 53

NOTES TO THE FINANCIAL STATEMENTS (continued)

24. RELATED PARTIES (continued)

• 24.2 Related party transactions and balances for the year ended 29 February 2016

Transactions

Certain shareholder loans were advanced to the company during the year under review, refer note 13 and related interest paid to them, refer note 18.2.

interest paid to them, refer note 18.2.
	2016 2015 2014 R R R
Interest expense
Sumitomo Corporation Africa (Proprietary) Limited	20 790 860 25 750 248 9 673 824
K2014158670 (Proprietary) Limited	9 673 275 – –
Dorper Wind Development (Proprietary) Limited	7 613 370 6 435 774 2 395 946
Dorper Wind Farm BEE Holdings (Proprietary) Limited	6 203 800 5 240 342 1 955 927
Dorper Wind Farm BBBEE Holdings (Proprietary) Limited	6 447 230 5 498 064 2 052 110
	50 728 535 42 924 428 16 077 807
Service fees
Sumitomo Corporation Africa (Proprietary) Limited	300 000 1 938 648 1 538 646
Dorper Wind Development (Proprietary) Limited	266 667 800 000 533 333
Administrative expense
Sumitomo Corporation Africa (Proprietary) Limited	280 900 330 457 250 020

No directors’ emoluments or prescribed officer remuneration were paid during the year (2015: Rnil). The following compensation was paid to key management personnel during the year:

	Short-term employee benefits R	Post- employment benefits R	Total R
key management personnel – 2016
D Rothero	1 514 087	–	1 514 087
M Dikgale	942 390	56 003	998 393
	2 456 477	56 003	2 512 480
key management personnel – 2015
D Rothero	440 000	–	440 000
M Dikgale	677 000	101 550	778 550
	1 117 000	101 550	1 218 550

No directors’ emoluments were paid during 2014.

25. SUBSEQUENT EVENTS

The directors are not aware of any matter arising since the end of the financial year to the date of this report which requires adjustment to or disclosure in these financial statements.

26. GOING CONCERN

The company entered into a 20 year power purchase agreement with the state owned energy provider Eskom Holdings SOC Limited (“Eskom”) and associated implementation agreement with the Department of Energy in November 2012. The company will generate 97,53MW of electricity which will be supplied to Eskom. The completion of construction and commencement of commercial operation occurred on 9 August 2014.

The directors are of the opinion that there is sufficient funding available to enable the company to meet its obligations as they become due and the financial statements are prepared on the basis of accounting policies applicable to a going concern.

54 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

27. STANDARDS AND INTERPRETATIONS NOT YET EFFECTIVE

At the date of authorisation of the financial statements of Dorper Wind Farm RF (Proprietary) Limited for the year ended 29 February 2016, the following standards and interpretations were in issue but not yet effective:

Effective for the financial year commencing 1 January 2016

• Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38)

• Disclosure Initiative (Amendments to IAS 1)

• IFRS 15 Revenue from Contracts with Customers

• IFRS 9 Financial Instruments

Effective for the financial year commencing 1 January 2019

• IFRS 16 Leases

All standards and interpretations will be adopted at their effective date.

The directors are of the opinion that the impact of the application of the remaining standards and interpretations will be as follows:

Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38)

The amendments to IAS 16 Property, Plant and Equipment explicitly state that revenue-based methods of depreciation cannot be used for property, plant and equipment.

The amendments to IAS 38 Intangible Assets introduce a rebuttable presumption that the use of revenue-based amortisation methods for intangible assets is inappropriate. The presumption can be overcome only when revenue and the consumption of the economic benefits of the intangible asset

Dorper Wind Farm RF (Proprietary) Limited currently depreciates property, plant and equipment and amortises intangible assets on a straight-line basis. This will therefore not affect the company.

Disclosure Initiative (Amendments to IAS 1)

The amendments provide additional guidance on the application of materiality and aggregation when preparing financial statements. The amendments also clarify presentation principles applicable to of the order of notes, OCI of equity accounted investees and subtotals presented in the statement of financial position and statement of profit or loss and other comprehensive income.

The amendments apply for annual periods beginning on or after 1 January 2016 and early application is permitted. This is not expected to have a significant impact on the company.

Effective for the financial year commencing 1 January 2018

IFRS 15 Revenue from contracts with customers

This standard replaces IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfer of Assets from Customers and SIC-31 Revenue – Barter of Transactions Involving Advertising Services.

The standard contains a single model that applies to contracts with customers and two approaches to recognising revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognised.

This new standard may have an impact on the company, which will include a possible change in the timing of when revenue is recognised and the amount of revenue recognised. The company is currently in the process of performing a more detailed assessment of the impact of this standard on the company and will provide more information in the year ending 28 February 2017 financial statements.

The standard is effective for annual periods beginning on or after 1 January 2018, with early adoption permitted.

Effective for the financial year commencing 1 January 2018

IFRS 9 Financial Instruments

On 24 July 2014, the IASB issued the final IFRS 9 Financial Instruments Standard, which replaces earlier versions of IFRS 9 and completes the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement.

This standard may have an impact on the company, which will include changes in the measurement bases of the company’s financial assets to amortised cost, fair value through other comprehensive income or fair value through profit or loss. Even though these measurement categories are similar to IAS 39, the criteria for classification into these categories are significantly different. In addition, the IFRS 9 impairment model has been changed from an “incurred loss” model from IAS 39 to an “expected credit loss” model, which is expected to increase the provision for bad debts recognised in the company.

The standard is effective for annual periods beginning on or after 1 January 2018 with retrospective application, early adoption is permitted.

IFRS 16 Leases

IFRS 16 was published in January 2016. It sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract, i.e. the customer (“lessee”) and the supplier (“lessor”). IFRS 16 replaces the previous leases Standard, IAS 17 Leases, and related interpretations. IFRS 16 has one model for lessees which will result in almost all leases being included on the statement of financial position. No significant changes have been included for lessors.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 55

NOTES TO THE FINANCIAL STATEMENTS (continued)

27. STANDARDS AND INTERPRETATIONS NOT YET EFFECTIVE (continued)

IFRS 16 Leases (continued)

The standard is effective for annual periods beginning on or after 1 January 2019, with early adoption permitted only if the entity also adopts IFRS 15. The transitional requirements are different for lessees and lessors. The company is assessing the potential impact on the financial statements resulting from the application of IFRS 16.

28. CRITICAL ACCOUNTING ESTIMATES, jUDGEMENTS AND KEY ASSUMPTIONS

Estimates, judgements and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Although these estimates are based on management’s best knowledge of current events and actions, actual results may ultimately differ from these estimates.

The company makes estimates, judgements and assumptions concerning the future. Those that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

• 28.1 Impairment of long outstanding trade receivables

Management identifies impairment of trade receivables on an ongoing basis. The estimation of the requirement of impairment is based on the current collectability of the trade receivables, as well as their experience of the collection history of the trade receivables. Management believes that the impairment write off is conservative and there are no significant trade receivables that are doubtful and have not been impaired.

• 28.2 Plant and equipment

The residual values of the plant and equipment are reviewed annually after considering future market conditions, the remaining life of the asset and projected disposal values. The estimation of the useful lives is based on historic performance as well as expectation about future use and, therefore, requires a degree of judgement to be applied. The depreciation rates represent management’s current best estimate of the useful lives of the assets.

28.3 Deferred taxation

Deferred tax assets are recognised to the extent it is probable that the taxable income will be available against which they can be utilised. Future taxable profits are estimated based on business plans which include estimates and assumptions regarding economic growth, interest, inflation and taxation rates and competitive forces.

• 28.4 Intangible assets

The estimation of the useful life is based on the expected future use, and requires a degree of judgment to be applied. The amortisation values represents management’s current best estimate of the useful lives of the assets.

28.5 Share-based payment reserve

The value of the BEE credentials was determined using the value of the capital contribution required by the company as all the shareholders were required to contribute to the company in relation to their shareholding. The expense is therefore measured as the 7% paid on behalf of the BEE and BBBEE companies.

28.6 Decommissioning provision

The decommissioning provision is reviewed annually after considering the labour costs to dismantle and restore the site to its original state, the leasing of capital equipment as well as the re-vegetation of the land occupied by the wind turbines.

The amount of the decommissioning provisions will generally change due to:

• changes in the estimate of the amount or timing of expenditure required to settle the obligation;

• changes in the market based discount rate; and

• the unwinding of discount.

29. CONTINGENT LIABILITY

Nordex Energy South Africa (Proprietary) Limited (“Nordex”) is claiming against the company for breach of the EPC contract insofar as CAR insurance cover was not in place but rather property damage cover was in place. The amount of the claim approximates R42 million. Nordex has not yet substantiated how the quantum of the claim is arrived at.

Subsequent to year end, Nordex informed the company that it has been able to claim against their own insurance in order to cover some of the losses, which was subject to substantial deductibles and a potential of increased premiums for their parent company. In order to cover these costs, Nordex has proposed that their claim against the company will now be limited to an amount equal to the delay damages due amounting to R14.3 million. The commercial settlement between the company and Nordex has not been reached and therefore the company has, conservatively, decided to impair half of its receivable from Nordex in preparation for further legal discussions.

56 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

ANNEXURE 4 – INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF DORPER

The Directors

GAIA Infrastructure Capital Limited 37 Vineyard Road Claremont, Cape Town South Africa, 7700 14 September 2016

Dear Sirs

INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE REPORT OF HISTORICAL FINANCIAL INFORMATION OF DORPER

Introduction

The definitions commencing on page 8 of the Circular to which this letter is attached apply mutatis mutandis to this report.

At your request, and for the purposes of the Circular, we have audited the historical financial information of Dorper for the years ended 29 February 2016 and 28 February 2015 and 2014 presented in the Report of Historical Financial Information of Dorper attached as Annexure 4 to the Circular, which comprises the statements of financial position as at 29 February 2016 and 28 February 2015 and 2014, statements of comprehensive income for the years ended 29 February 2016 and 28 February 2015 and 2014, statement of changes in equity and statements of cash flows and the related accounting policies and notes of Dorper (“ Report of historical Financial Information of Dorper ”), in compliance with the JSE Listings Requirements. The Report of Historical Financial Information of Dorper has been prepared for the purposes of providing financial information to satisfy the requirements of Section 8 of the JSE Listings Requirements and for no other purpose.

KPMG Inc. is the independent auditor and is the independent reporting accountant to GAIA in respect of the Circular.

Responsibility of the directors

The Directors are responsible for the compilation, contents and preparation of the Circular, including the Report of Historical Financial Information of Dorper in accordance with the JSE Listings Requirements.

The Dorper directors are responsible for the preparation and fair presentation, in accordance with IFRS and the Listings Requirements, except that the Historical Financial Information of Dorper for the period ended 28 February 2014 does not include comparative figures, of the Report of Historical Financial Information of Dorper contained therein to which this independent reporting accountant’s report relates and for such internal control as the Dorper directors determine is necessary to enable the preparation of the Report of Historical Financial Information of Dorper that is free from material misstatement, whether due to fraud or error.

Responsibility of the Independent Reporting Accountants

Our responsibility is to express an audit opinion on the Report of Historical Financial Information of Dorper included as Annexure 4 to the Circular, based on our audits.

REPORT OF HISTORICAL FINANCIAL INFORMATION OF DORPER

Introduction

We have audited the Report of Historical Financial Information of Dorper attached as Annexure 4 to the Circular, prepared in accordance with IFRS and the JSE Listings Requirements.

Responsibility of the independent reporting accountant’s for the Report of Historical Financial Information of Dorper

Our responsibility is to express an opinion on the Report of Historical Financial Information of Dorper based on our audits. We conducted our audits in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Report of Historical Financial Information of Dorper is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Report of Historical Financial Information of Dorper. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the Report of Historical Financial Information of Dorper, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and presentation of the Report of Historical Financial Information of Dorper in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the Report of Historical Financial Information of Dorper.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. The evidence included which we previously obtained during the conduct of our audits of financial statements of Dorper, from which this Report of Historical Financial Information of Dorper has been derived.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 57

ANNEXURE 4 – INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF DORPER (continued)

Basis for Qualified Opinion on the Historical Financial Information of Dorper for the period ended 28 February 2014

Paragraph 8.4 of the JSE Listings Requirements requires the Report of Historical Financial Information of Dorper to present the historical financial information for the three periods ended 28 February 2016. In addition, IAS 1 Presentation of Financial Statements requires a company to present comparative information in respect of the preceding period for all amounts reported in the current period’s financial statements. Dorper has, therefore, not presented comparative information for the period ended 28 February 2014 as required by International Financial Reporting Standards.

Qualified Opinion on the Report of Historical Financial Information of Dorper for the period ended 28 February 2014

In our opinion, except for the omission of the comparative information described in the preceding paragraph, the historical financial information of Dorper for the twelve months ended 28 February 2014 presented in the Report of Historical Financial Information of Dorper Group presents fairly, in all material respects, the financial position of the Dorper at 28 February 2014, and its financial performance and cash flows for the period then ended in accordance with IFRS and the JSE Listings Requirements.

Unqualified Opinion on the Report of Historical Financial Information of Dorper for the years ended 29 February 2016 and 28 February 2015

In our opinion the historical financial information of Dorper for the years ended 29 February 2016 and 28 February 2015 presented in the Report of Historical Financial Information of Dorper presents fairly, in all material respects, the financial position of Dorper at 29 February 2016 and 28 February 2015, and its financial performance and cash flows for the years then ended in accordance with IFRS and the JSE Listings Requirements.

Yours faithfully

==> picture [60 x 50] intentionally omitted <==

Per David Read

Chartered Accountant (SA) Registered Auditor

KPMG KPMG Crescent 85 Empire Road, Parkview Johannesburg, 2193

58 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

ANNEXURE 5 – FAIRNESS OPINION

==> picture [77 x 84] intentionally omitted <==

Attention: Ms Tamee Soudien-Witten

14 September 2016

The Board GAIA Infrastructure Capital Limited (“GAIA”) 37 Vineyard Road Claremont, Cape Town South Africa, 7700

INDEPENDENT EXPERT OPINION ON THE RELATED PARTY ACQUISITION BY GAIA

Dear Tamee

1. INTRODUCTION

GAIA, acting through its wholly-owned subsidiary, GAIA Financial Services Proprietary Limited (“ GFS ”), has entered into agreements to acquire an effective see-through economic interest of 25.2% (twenty five point two percent) in Dorper Wind Farm (RF) Proprietary Limited (“ Dorper ”) (“ Acquisition ”).

Dorper is the owner of a fully operational wind farm located in the Eastern Cape, South Africa, with a contracted generating capacity of approximately 97.53MW, which forms part of the Renewable Energy Independent Power Producer Procurement Program.

The TriAlpha fund (“ TriAlpha ”) is comprised of various investment vehicles, including TriAlpha Specialised Investments Trust III, Specialised Investments Equity En Commandite Partnership, Specialised Investments Debt En Commandite Partnership and certain special purpose vehicles (“ Newco ”) through which TriAlpha’s investment in project companies such as Dorper are held. TriAlpha holds 94% (ninety four percent) of the economic interests in Newco and controls Newco. Newco will own 30% (thirty percent) of the issued shares in Dorper before the acquisition is implemented. In terms of the Acquisition, GAIA will (through GFS) acquire an effective economic interest of 84.2% (eight-four point two percent) in Newco (which is equivalent to an effective see-through economic interest of 25.2% (twenty five point two percent) in Dorper.

The Acquisition will be implemented through the:

• subscription by GFS for 34.9% (thirty four point nine percent) of the issued share capital of Newco for a subscription consideration of R265 036 179.41 (two hundred and sixty five million thirty six thousand one hundred and seventy nine Rand and forty one cents) (“ Subscription Consideration ”); and

• advance by GFS of a loan in an amount of R235 963 820.59 (two hundred and thirty-five million nine hundred sixty-three thousand eight hundred and twenty Rand and fifty-nine cents) to Newco, which amount may be converted into Newco shares (“ Convertible Loan ”).

The aggregate acquisition consideration is the amount of R501 000 000 (five hundred and one million Rand) (“ Acquisition Consideration ”) and comprises of the Subscription Consideration and the Convertible Loan.

Full details of the acquisition are contained in the circular issued to GAIA shareholders on 19 September 2016 (“ Circular ”), to which this opinion forms annexure 5. TriAlpha is deemed to be a material shareholder of GAIA and is accordingly a related party in terms of the Listings Requirements of the JSE (“ JSE Listings Requirements ”). In addition, the Acquisition constitutes a category 1 acquisition, in terms of the JSE Listings Requirements.

Save where the context indicates otherwise, terms appearing in title case in this letter and that are not otherwise defined herein, shall bear the meanings assigned to those terms in the Circular.

2. SCOPE

The Acquisition constitutes a Category 1 Related Party transaction in terms of Section 10.1(b) (i) of the JSE Listings Requirements and as such an Independent Expert’s opinion is required to be obtained by the GAIA board of directors (“ board ”).

Ernst & Young Advisory Services (Proprietary) Limited (“ Ey ”) has been appointed by the Board as the Independent Expert to advise on whether the terms and conditions of the Acquisition are fair to the shareholders of GAIA.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 59

ANNEXURE 5 – FAIRNESS OPINION (continued)

3. RESPONSIBILITY

The compliance with the JSE Listing Requirements is the responsibility of the Board. Our responsibility is to report on the terms and conditions of the Acquisition in compliance with the JSE Listing Requirements. We confirm that our fairness opinion has been provided to the Board for the sole purpose of assisting them in forming and expressing an opinion for the benefit of GAIA shareholders.

4. DEFINITION OF THE TERMS “FAIRNESS”

A transaction will generally be considered fair to the company’s shareholders if the benefits received by shareholders, as a result of a corporate action, are equal to or greater than the value surrendered.

The assessment of fairness is primarily based on quantitative considerations. The Acquisition would be considered fair if the value of GAIA’s shareholding in Dorper is equal to, or exceeds, the Acquisition Consideration. We have applied the aforementioned principle in preparing our opinion for the Acquisition.

5. INFORMATION UTILISED

We relied on financial and other information, including prospective financial information, obtained from Dorper (including its underlying investments) and Dorper’s management team, together with industry-related and other information in the public domain in developing our valuation model. Our conclusion is dependent on such information being complete and accurate in all material respects.

The principal sources of information used in performing our independent valuation and in formulating our opinion regarding the terms and conditions of the Acquisition include:

• the Circular, for details of the Acquisition;

• Dorper financial forecast model (“ Dorper Model ”), updated for actual results for the period ended 30 June 2016, to understand key value drivers, for forecast cash flows and to run valuation sensitivities;

• TriAlpha’s combined valuation model (“ Valuation Model ”), to understand the allocation of cash flows and return calculations of TriAlpha and GAIA;

• Financial, technical and legal due diligence reports (“ Due Diligence Reports ”), to obtain an understanding of Dorper and identify project specific risks;

• Monthly Dorper performance reports that document the operational performance (“ Performance Reports ”), that include actual energy production and availability;

• Audited annual financial statements of Dorper for the periods ending 28 February 2014, 28 February 2015 and 29 February 2016 (“ Annual Financial Statements ”); and

• Representations and assumptions made available by, and discussions held with, the management of GAIA and Dorper (that include the relevant underlying investments).

Where practical, we have corroborated the reasonableness of the information provided to us for the purpose of our opinion, whether in writing or obtained through discussions with the respective management teams.

6. PROCEDURES PERFORMED

We have undertaken the following procedures in evaluating the fairness of the Acquisition:

• Reviewed GAIA’s pre-listing statement issued on 2 November 2015;

• Reviewed and analysed the Annual Financial Statements;

• Reviewed and assessed the reasonableness of the forecast assumptions used to update the Dorper Model, including inter alia:

• Wind energy forecasts;

• Tariff;

• Inflation;

• Interest rates;

• EUR/ZAR exchange rate; and

• Operating costs.

• Reviewed and analysed the Performance Reports;

• Reviewed the technical due diligence report prepared by the lender’s advisor (GL Garrad Hassan);

• Supplemented our knowledge and understanding of GAIA and other South African renewable energy assets;

• Held discussions with GAIA and Dorper management;

• Prepared a Discounted Cash Flow (“ DCF ”) valuation of Dorper;

• Corroborated the above value to the required internal rate of return expectations of both GAIA and TriAlpha;

• Examined the Circular to shareholders and considered the terms and conditions contained in the Circular, as well as the commercial issues relating to the Acquisition; and

• Considered any other/qualitative aspects which we believe are of importance.

We have not interviewed any of the shareholders of GAIA or investors of TriAlpha to obtain their views on the Acquisition.

60 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

We have further assumed that, as at the Last Practicable Date:

• Dorper is not involved in any legal proceedings that would have a material adverse effect on its value;

• Dorper (including its underlying investments) has no material outstanding disputes with the South African Revenue Service; and

• There are no other contingencies that could affect the value of Dorper.

7. VALUATION OF DORPER

In considering the Acquisition, we performed an independent valuation of Dorper. For the purposes of our valuation, our methodology included:

• Applying the income approach by way of a DCF valuation and applying:

• Cash flows to equity using the P50 wind energy scenario; and

• A cost of equity discount rate that appropriately captures Dorper’s stage-of-life, using South Africa data, substantiated by international findings.

• The key internal value drivers for the business of Dorper are highlighted below:

• Ongoing operational efficiency and availability of all 40 turbines; and

• Refinancing of current debt instruments.

• The key external value drivers for the business of Dorper are highlighted below:

• Ability of Eskom to pay monthly energy tariffs;

• Consumer price index (“ CPI ”) impact on the power purchase agreement (“ PPA ”) tariff and South African operating costs;

• EUR/ZAR exchange rate impact on the Euro denominated forecast operational and maintenance costs; and

• Interest rate cycle on unhedged portion (25%) of JIBAR linked debt facilities.

Below is a summary of our critical valuation assumptions applied:

• P50 wind energy forecast and post-availability factors, totalling 5 306 668 648 kWh over the contracted period of Dorper;

• Final date of cash flows (PPA expiry date) being 30 June 2034;

• Starting tariff of R1.192 per kWh;

• Long term South African inflation of 6.9% per annum;

• EBITDA margin of 83%;

• Dorper is not refinanced, and the current facilities and terms remain in place;

• The formulae used to develop the Dorper Model are mathematically and logically correct and robust and correctly calculate the forecast cash flows to shareholders, which we use as the base for our valuation;

• Reliance can be placed on the historical and forecast financial information as contained in the Dorper Model; and

• There are no undisclosed contingencies that could impact the value of Dorper.

8. SENSITIVITY ANALYSIS

A sensitivity analysis performed on the key value drivers of Dorper is summarised in the table:

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----- Start of picture text -----

Change to value
Sensitivity description %
----- End of picture text -----

P50 capacity factor less 5%	(7.1)
P50 capacity factor plus 5%	6.8
Long-term ZAR infation less 40 bps	(3.4)
EUR infation increases by 0.50% across project life	(0.1)
10% increase in devaluation of ZAR against EUR	(1.3)
USD infation increases by 0.50% across project life	–
10% increase in devaluation of ZAR against USD	–
3-month JIBAR increases by 100bps across debt tenor	(0.5)
Discount rate (Ke) increases by 100 bps	(6.8)
Discount rate (Ke) decreases by 100 bps	7.7

9. SHAREHOLDER RIGHTS

There would be no material change in the rights of the GAIA shareholders as a result of the Acquisition.

10. OPINION

In undertaking the valuation exercise above, we are of the opinion that the value is greater than the Acquisition Consideration and that the Acquisition is fair to the shareholders of GAIA.

11. CONCLUSION

Based on the results of our procedures performed, our detailed valuation work and other considerations, subject to the foregoing assumptions, we are of the opinion that the Acquisition is fair to GAIA shareholders.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 61

ANNEXURE 5 – FAIRNESS OPINION (continued)

12. LIMITING CONDITIONS

The valuation above is provided solely in respect of this Independent Expert opinion and should not be used for any other purposes. Our opinion is based upon the information available to us up to 5th August 2016, including in respect of the financial, regulatory, securities market and other conditions and circumstances existing and disclosed to us at the date thereof. We have furthermore assumed that all conditions precedent, including any material regulatory, other approvals and consents required in connection with the Proposed Transaction have been or will be timeously fulfilled and/or obtained. Accordingly, it should be understood that subsequent developments may affect this opinion, which we are under no obligation to update, revise or re-affirm.

This opinion does not purport to cater for each individual shareholder’s circumstances and/or risk profile, but rather that of the general body of shareholders taken as a whole. Each shareholder’s decision will be influenced by such shareholder’s particular circumstances and, accordingly, shareholders should consult with an independent adviser if they are in any doubt as to the merits or otherwise of the Acquisition.

This opinion is provided solely for the use of the Board and GAIA shareholders for the sole purpose of assisting the Board in forming and expressing an opinion on the Acquisition for the benefit of the shareholders. Unless as stipulated in this letter, this opinion shall not, in whole or in part, be disclosed, reproduced, disseminated, quoted, summarised or referred to at any time, in any manner or for any purpose, nor shall any public references to EY or Ernst & Young Advisory Services (Proprietary) Limited be made by GAIA or any of its affiliates, without the prior consent of Ernst & Young Advisory Services (Pty) Limited.

We have relied upon the accuracy of the information used by us in deriving our opinion albeit that, where practicable, we have corroborated the reasonableness of such information through, amongst other things, reference to work performed by independent third party/ies, historic precedent or our own knowledge and understanding. While our work has involved an analysis of the Valuation Model and other information provided to us, our engagement does not constitute, nor does it include, an audit conducted in accordance with generally accepted auditing standards. Accordingly, we assume no responsibility and make no representations with respect to the accuracy of any information provided to us in respect of Dorper.

Forecasts relate to uncertain future events and are based on assumptions, which may not remain valid for the whole of the forecast period. Consequently, forecast financial information cannot be relied upon to the same extent as that derived from audited financial statements for completed accounting purposes. We express no opinion as to how closely actual results will correspond to projections made by the management of Dorper (including its underlying investments) and made available to us during the course of our review.

13. INDEPENDENCE, COMPETENCE AND FEES

We confirm that we have no direct or indirect interest in GAIA (including underlying investments) shares or the Acquisition. We also confirm that we have the necessary qualifications and competence to provide the independent opinion on the Acquisition.

Our fees amount to R175 000 excluding VAT and disbursements. Furthermore, we confirm that our professional fees are not contingent upon the success of the Acquisition.

14. CONSENT

We consent to the use of our name, the inclusion of this letter and the reference to our opinion in the Circular to be issued to the shareholders of GAIA in the form and context in which it appears and in any required regulatory announcement or documentation.

Yours faithfully

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hannes boshoff Director Ernst & Young Advisory Services (Proprietary) Limited

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Steve Alt Director Ernst & Young Advisory Services (Proprietary) Limited

62 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

ANNEXURE 6 – VENDORS

Details of TriAlpha, the vendor in respect of the Acquisition are set out below:

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Name of vendor TriAlpha Specialised Investments Trust III
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Address of vendor	G05A Ground Floor, La Gratitude Offices,
	97 Dorp Street, Stellenbosch
Asset acquired from vendor	84.2% economic interest in Newco which equates to a 25.2%
	economic interest in Dorper
Date asset originally acquired by the vendors	8 January 2015
Price paid to the vendor including transaction costs plus	R501 million
deferred and contingent considerations
Effective date of acquisition of the asset	Fifth Business Day after Fulfilment of Conditions Precedent
Were book debts guaranteed by the vendor?	No
Were normal warranties provided by the vendor?	Yes
Were restraints imposed on the vendor under the acquisition?	No
Did the acquisition involve any liability for accrued taxation?	No
Has the asset to be acquired been transferred into the name of	No
GAIA or one of its subsidiaries?
Has the asset to be acquired been ceded or pledged?	Yes
Details of how the value of the securities was determined?	Valuation undertaken by Directors
The beneficial interest, direct or indirect, of any promoter or	Save for certain directors being shareholders in the Manager,
director in any transaction?	none
The amount of any cash or securities paid or benefit given or	Not applicable
proposed to be paid or given, to any promoter, not being a
director?

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 63

GAIA INFRASTRUCTURE CAPITAL LIMITED

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(previously GAIA Capital Proprietary Limited) (Incorporated in the Republic of South Africa) (Registration number 2015/115237/06) (Share Code: GAI, ISIN ZAE000210555) (“ GAIA ” or “ the Company ”)

ANNEXURE 7 – REVISED LISTING PARTICULARS

The definitions and interpretations commencing on page 67 of these Revised Listing Particulars apply mutatis mutandis to this cover.

These Revised Listing Particulars should be read together with the Circular.

These Revised Listing Particulars are not an invitation to the public to subscribe for securities, but are issued in compliance with the JSE Listings Requirements, for the purpose of providing information to the public and Shareholders with regard to GAIA following the implementation of the Acquisition.

As at the date of these Revised Listing Particulars, the authorised share capital of GAIA consists of 6 000 000 000 (six billion) Shares and the issued share capital of GAIA consists of 55 151 000 (fifty five million one hundred and fifty-one thousand) Shares. The total value of GAIA’s issued share capital is R545 851 762 (five hundred and forty-five million eight hundred and fifty-one thousand seven hundred and sixty-two Rand). All Shares rank pari passu in respect of all rights. As at the date of these Revised Listing Particulars, GAIA has no treasury Shares in issue.

Following the implementation of the Acquisition, the authorised and issued share capital of GAIA will remain unchanged.

Shareholders are advised that their Shares will only be traded on the JSE in dematerialised form and accordingly, if any Shareholders hold their Shares in certificated form, they will have to dematerialise their share certificates in order to trade their Shares on the JSE. Such Shareholders must make necessary arrangements with their CDSP or Broker, in terms of the Custody Agreement with their CSDP or Broker.

The Directors, whose names are given in paragraph 6.1.1 of these Revised Listing Particulars, collectively and individually accept full responsibility for the accuracy of the information furnished relating to the GAIA Group and certify that, to the best of their knowledge and belief, there are no facts which 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 these Revised Listing Particulars contain all information required by law and the JSE Listings Requirements.

The Auditor and Independent Reporting Accountant, the Independent Expert and each of the experts, whose names appear in the “Corporate Information” section of these Revised Listing Particulars, have given and have not, prior to the formal approval of these Revised Listing Particulars by the JSE, withdrawn their written consents to the inclusion of their names, and acting in the capacities stated and, where applicable, to their reports, being included in these Revised Listing Particulars.

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Transaction Advisor and Sponsor Independent Expert
Attorneys Independent Reporting Accountant and Auditor
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Date of issue: 19 September 2016

Copies of the Circular incorporating these Revised Listing Particulars, are available in English only and may, from 19 September 2016 until 18 October 2016 (both days inclusive), be obtained from the registered office of GAIA, the Transaction Advisor and Sponsor and the Transfer Secretaries, at the addresses set out in the “Corporate Information” section of the Revised Listing Particulars Circular. A copy of the Revised Listing Particulars Circular will also be available on GAIA’s website (www.gaia-ic.com).

64 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

CORPORATE INFORMATION

The definitions commencing on page 67 of these Revised Listing Particulars apply mutatis mutandis to this Corporate Information section.

Directors Transaction Advisor and Sponsor

L de Wit (Executive Chairman) MM Nieuwoudt (Executive Director) T Soudien-Witten (Financial Director) PB Schabort[] C Ferreira[] KP Lebina (Lead Independent Director)[#] N Kimber[#] KE Mbalo[*#] * Non-executive # Independent

Company secretary

Exceed (Cape Town) Inc. (Registration number 2000/011257/21)

Registered office

37 Vineyard Road Claremont, 7700 (PO Box 44721, Claremont, 7735)

Date of incorporation of GAIA

16 April 2015

Place of incorporation of GAIA South Africa

Auditor and Independent Reporting Accountant

KPMG Inc. (Registration number 1999/021543/21) MSC House, 1 Mediterranean Street Cape Town City Centre Cape Town, 8001 (PO Box 4609, Cape Town, 8000)

PSG Capital Proprietary Limited (Registration number 2006/015817/07) 1st Floor, Ou Kollege 35 Kerk Street Stellenbosch, 7600 (PO Box 7403, Stellenbosch, 7599) and 1st Floor, Building 8 Inanda Greens Business Park 54 Wierda Road West Wierda Valley Sandton, 2196 (PO Box 650957, Benmore, 2010)

Transfer Secretaries

Computershare Investor Services Proprietary Limited (Registration number 2004/003647/07) Ground Floor 70 Marshall Street Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107)

Attorneys Edward Nathan Sonnenbergs Incorporated (Registration number 2006/018200/21) La Gratitude, 2nd Floor 97 Dorp Street Stellenbosch, 7600 (PO Box 940, Stellenbosch, 7599)

Independent Expert

Ernst & Young Advisory Services Proprietary Limited (Registration number 2006/018260/07) La Gratitude, 1st Floor 97 Dorp Street Stellenbosch, 7600 (PO Box 656, Cape Town, 8000)

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 65

CONTENTS

The definitions commencing on page 67 of these Revised Listing Particulars apply mutatis mutandis to this table of contents.

		Page			Page
CORPORATE INFORMATION		65	Section three – Additional material information
			20.	Promoters’ and other interests	90
DEFINITIONS AND INTERPRETATIONS		67	21.	Government protection and investment
				encouragement law	90
REVISED LISTING PARTICULARS		70	22.	Litigation	90
			23.	Material contracts	90
Section one – Information on GAIA			24.	Experts’ consents	90
1.	Introduction	71	25.	Responsibility statement	90
2.	Investment opportunity	78	26.	King Code and corporate governance	91
3.	Information relating to GAIA	80	27.	Documents available for inspection	91
4. 5. 6. 7.	Prospects Management of GAIA Directors The Manager	80 81 84 86	ANNExURES Annexure RLP1 Relevant provisions of the MOI of GAIA and the memorandum of incorporation of GFS 92
8. Share capital Section two – Financial information 9. Expenses		88 88	Annexure RLP2 Relevant provisions of the Management Agreement Annexure RLP3 Director and senior		98
10.	Borrowings and loans receivable	88		management profles	101
	Amounts paid to promoters, brokerages		Annexure RLP4 Other directorships		104
11.	and commissions	88	Annexure RLP5 King Code and corporate governance		107
12. 13.	Working capital Historical fnancial information of GAIA	88 88	Annexure RLP6 Share trading history of GAIA		116
14.	Pro forma Financial Information of GAIA	88
15.	Material changes	89
16.	Principal immovable property owned and leased	89
17.	Inter-company fnancial and other transactions	89
18.	Material acquisitions	89
19.	Property disposed of or to be disposed of	89

66 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

DEFINITIONS AND INTERPRETATIONS

In these Revised Listing Particulars and annexures hereto, unless the context indicates otherwise, words and expressions defined in the Circular, bear the same meaning in these Revised Listing Particulars and 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 following words and expressions bear the meanings assigned to them below:

“Acquisition” “Acquisition Agreements” “Act” or Companies Act” “Broker” “Business Day” “ Code for Responsible Investing in South Africa” “CIPC” “Circular” “CPI” “CSDP” “Custody Agreement” “Dematerialised Shares” “ Dematerialised Shareholders” “ Dematerialised own-name Shareholders” “Directors” or “Board” “Documents of Title” “DK Option Agreement” “Escrow Agent” “Escrow Agreement” “Eskom”

the acquisition as defned in the Circular; the agreements as defned in the Circular; the Companies Act No. 71 of 2008, as amended; a “stockbroker” as defned in the Financial Markets Act, or its nominee; any day, other than a Saturday, Sunday or offcial public holiday in South Africa; the code issued by the Committee on Responsible Investing by Institutional Investors in South Africa in February 2012, a forum formed by stakeholder members of the Institute of Directors in Southern Africa, giving guidance on how institutional investors should execute investment analysis and investment activities and exercise rights so as to promote good corporate governance; the Companies and Intellectual Property Commission established in terms of section 185 of the Companies Act; the document distributed to Shareholders, dated 19 September 2016 containing the circular to Shareholders and annexures thereto, the Notice of General Meeting, form of proxy and incorporating these Revised Listing Particulars; means the Consumer Price Index for all urban areas published by Statistics South Africa from time to time; a central securities depository participant registered in terms of the Financial Markets Act, with whom a holder of Dematerialised Shares holds a dematerialised share account; a custody mandate agreement between a person and a CSDP or Broker, regulating their relationship in respect of Dematerialised Shares held on GAIA’s uncertifcated securities register and administered by a CSDP or Broker on behalf of that person; GAIA Shares which are not evidenced by certifcates or other physical documents of title and which have been incorporated into the securities depository system operated by Strate; GAIA Shareholders who hold Dematerialised Shares; GAIA Shareholders who hold Dematerialised Shares and who have instructed their CSDP to hold their GAIA Shares in their own name on the sub-register; the directors of GAIA, details of whom are set out in paragraph 6 of the Revised Listing Particulars; share certifcates, certifed transfer deeds, balance receipts or any other physical documents of title pertaining to the GAIA Shares in question acceptable to the Board of GAIA; the agreement as defned in the Circular; ENS, the Attorneys of GAIA whose detail appears in the “Corporate Information” section of these Revised Listings Particulars; the escrow agreement entered into between the Escrow Agent and GAIA on or about October 2015, as amended from time to time, which governs, inter alia, the terms on which the capital raised by GAIA in terms of the Private Placement is held in escrow and invested in either (i) investment grade bonds (being debt securities with a rating of “BBB” or above as rated by Standard and Poor’s Corporation or an equivalent rating by any similar institution); or (ii) bank deposits with a recognised bank, by the Escrow Agent, and the terms of the release of such capital which is to be utilised to cover GAIA’s operating expenses, acquire Viable Assets and/or be distributed to Shareholders, as envisaged in the JSE Listings Requirements; Eskom Holdings SOC Limited, registration number 2002/015527/06, a public company incorporated in accordance with the laws of South Africa;

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 67

DEFINITIONS AND INTERPRETATION (continued)

“Financial Markets Act” “Founders” “GAIA” or “the Company” “GFS” “GAIA Group” or “Group” “ GAIA Infrastructure Partners” “GAIA Shareholders” or “Shareholders” “General Meeting” “GDP” “Government” “Green Fields” “IFRS” “Independent Expert” “ Independent Reporting Accountants” “JSE” “JSE Listings Requirements” “King Code” “Last Practicable Date” “Listing” “Listing Date” “Management Agreement” “Manager” “MOI” “MW” “ National Infrastructure Plan”

the Financial Markets Act, No. 19 of 2012, as amended; the founders of GAIA Infrastructure Partners, being PB Schabort and L de Wit; GAIA Infrastructure Capital Limited, registration number 2015/115237/06, a public company incorporated and registered in accordance with the laws of South Africa; GAIA Financial Services Proprietary Limited, registration number 2015/212709/07, a private company incorporated in accordance with the laws of South Africa on 22 July 2015, being a wholly owned subsidiary of GAIA with 1 000 (one thousand) ordinary no par value shares in issue and which was acquired as a shelf company by GAIA on 4 August 2015; GAIA and its subsidiaries; GAIA Infrastructure Partners Proprietary Limited, registration number 2012/093632/07, a private company incorporated in accordance with the laws of South Africa; a holder of Shares whose name is refected in the Register; the general meeting of GAIA Shareholders to be held on 18 October 2016; gross domestic product; the national government of South Africa; a plant, production facility or asset that is in the development or construction phase and has not yet reached commercial operation; International Financial Reporting Standards; Ernst & Young Advisory Services Proprietary Limited, registration number 2006/018260/07, a personal liability company incorporated in accordance with the laws of South Africa being the independent expert of GAIA; KPMG Inc., chartered accountants (SA), registration number 1999/021543/21, a company duly incorporated in accordance with the laws of South Africa being the auditors and independent reporting accountants of GAIA; the exchange operated by the JSE Limited, registration number 2005/022939/06, a public company duly incorporated in accordance with the laws of South Africa and licensed as an exchange under the Financial Markets Act; the Listings Requirements of the JSE; the King Report on Corporate Governance for South Africa, as amended or replaced from time to time; the last practicable date prior to the fnalisation of these Revised Listing Particulars, which date was 9 September 2016; the listing of GAIA on the JSE as a SPAC and the concurrent private placement, whereby it raised an amount of R551 000 000 (fve hundred and ffty-one million Rand); the date upon which the GAIA Shares were listed on the JSE, being 12 November 2015; the management agreement entered into between GAIA, GFS and the Manager on or about October 2015 in terms of which the Manager provides the Services to GAIA and GFS, details of which are set out in paragraph 7 andAnnexure RLP2of these Revised Listing Particulars; GAIA Infrastructure Partners; GAIA’s memorandum of incorporation; megawatts; the programme adopted by the Government in 2012 that aims to facilitate fast tracked Government-led infrastructure investment in South Africa;

68 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

“ National Transport Master Plan 2050” “NERSA” “Notice of General Meeting” “ Principles for Responsible Investment” “Private Placement” “PSG Capital” or “ Transaction Advisor and Sponsor” “Rand” or “R” “REIPPPP” “ Revised Listing Particulars” “SENS” “Services” “Shares” “South Africa” “SPAC” “Strate” “Computershare” or “Transfer Secretaries” “TriAlpha” “Viable Asset”

a statutory national plan adopted by the Department of Transport that aims to develop a dynamic, long-term and sustainable land use/multi-modal transportation system framework for the development of infrastructure facilities in South Africa; the National Energy Regulator of South Africa, a regulatory authority established as a juristic person in terms of section 3 of the National Energy Regulator Act, No. 40 of 2004; the notice of the General Meeting attached to and forming part of the Circular; the principles for responsible investment as adopted by a United Nations supported initiative comprised of an international network of investors that aims to achieve sustainable global fnancial systems through fostering good governance, integrity and accountability; the private placement by GAIA in terms whereof GAIA raised R551 000 000 (fve hundred and ffty-one million Rand) by way of an offer to invited investors to subscribe for Shares; PSG Capital Proprietary Limited, registration number 2006/015817/07, a private company duly incorporated in accordance with the laws of South Africa; South African Rand; the Renewable Energy Independent Power Producers Procurement Programme currently managed by the Department of Energy of the Government; these revised listing particulars, as required by the JSE Listings Requirements, which will only be effective if the Acquisition is implemented; the Stock Exchange News Service of the JSE; means the services to be provided by the Manager in terms of the Management Agreement, details of which are set out inAnnexure RLP2to these Revised Listing Particulars; ordinary no par value shares in the share capital of GAIA; the Republic of South Africa; a Special Purpose Acquisition Company as defned in the JSE Listings Requirements; Strate Proprietary Limited, registration number 1998/022242/07, a private company incorporated in accordance with the laws of South Africa, a central securities depository licensed in terms of the Financial Markets Act and responsible for the electronic clearing and settlement system provided to the JSE; Computershare Investor Services Proprietary Limited, registration number 2004/003647/07, a private company incorporated in accordance with the laws of South Africa; the trustees from time to time of the TriAlpha Specialised Investments Trust III, a trust duly registered with the Master of the High Court of South Africa (Master’s Reference number IT3288/2010); and an asset which, if acquired, will enable GAIA to qualify for a main board listing, pursuant to the main board listing criteria of the JSE.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 69

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GAIA INFRASTRUCTURE CAPITAL LIMITED

( previously GAIA Capital Proprietary Limited ) (Incorporated in the Republic of South Africa) (Registration number 2015/115237/06) (Share Code: GAI, ISIN ZAE000210555) (“ GAIA ” or “ the Company ”)

DIRECTORS

L de Wit (Executive Chairman) MM Nieuwoudt (Executive Director) T Soudien-Witten (Financial Director) PB Schabort[*]

C Ferreira[] KP Lebina (Lead Independent Director)[#] N Kimber[#] KE Mbalo[#]

• Non-executive

Independent

REVISED LISTING PARTICULARS

70 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

SECTION ONE – INFORMATION ON GAIA

1. INTRODUCTION

• 1.1 The Manager, GAIA Infrastructure Partners, was formed and incorporated in Cape Town, South Africa, in 2012, by the Founders for the purpose of facilitating the investment of long-term capital in infrastructure projects in Southern Africa, with an initial focus on the renewable energy sector. The focus has subsequently been broadened to include other infrastructure sectors. The Manager introduced GAIA to the public in order to facilitate the public’s exposure to investments in infrastructure in Southern Africa. The Board is responsible for GAIA’s objectives and its business and investment strategies as well as its overall supervision. GAIA has appointed the Manager to render the Services in terms of the Management Agreement. The Manager has extensive expertise and knowledge of and experience in investments in the infrastructure and renewable energy sectors.

• 1.2 GAIA was listed as a SPAC on the main board of the JSE on 12 November 2015 following the successful raising by GAIA of R551 000 000 (five hundred and fifty-one million Rand) through the Private Placement in order to, inter alia, invest in its strong pipeline of infrastructure and renewable energy projects.

• 1.3 In accordance with its investment policy as stipulated in GAIA’s Pre-Listing Statement, GAIA was targeting investments in assets with a benchmark gross investment return on initial investments of CPI plus 6% (six percent) and was targeting a subsequent dividend distribution rate of CPI plus 2.5% (two and a half percent). The Acquisition is consistent with the investment policy and targeted returns of GAIA as stipulated in the Pre-Listing Statement.

• 1.4 The salient details relating to the Acquisition are set out in paragraph 2 of the Circular.

• 1.5 Should the Acquisition be implemented and the Investment Policy be approved, GAIA will no longer be listed as a SPAC and will be listed as an investment entity on the main board of the JSE in terms of section 15 of the JSE Listings Requirements.

• 1.6 The purpose of these Revised Listing Particulars are to:

• 1.6.1 provide Shareholders, both existing and potential, with the relevant information relating to the GAIA Group, its assets, liabilities and its Directors and the Manager following the implementation of the Acquisition and following GAIA becoming an Investment Entity; and

• 1.6.2 provide Shareholders, both existing and potential, with information on the strategy and vision of the GAIA Group following the implementation of the Acquisition and following GAIA becoming an Investment Entity.

2. INVESTMENT OPPORTUNITY

• 2.1 South African infrastructure investment

• 2.1.1 South Africa has the most developed economy, and the second largest GDP, in Africa. The country is widely acknowledged to be a key emerging market to act as a “spring board” into Africa. Despite this, the infrastructure in South Africa is still significantly lagging and requires vast amounts of funding to catalyse and develop the country’s economic and socio-economic potential and objectives.

• 2.1.2 Post 1994, South Africa has seen an increase in the percentage of the population serviced by its existing infrastructure. For example, the percentage of households connected to the electricity grid has increased from 77% (seventy-seven percent) in 2002 to 86% (eighty-six percent) in 2015, while the percentage of households with access to water and sanitation has increased to 90% (ninety percent) and 76% (seventy-six percent), respectively, from access rates in 2002 of 56.3% (fifty-six point three percent) and 62.3% (sixty-two point three percent), respectively (Source: “General household survey” – Statistics SA; 2014).

• 2.1.3 In addition, South Africa’s infrastructure in general is, in most cases, beyond its economically useful lifespan and has deteriorated significantly. The 2013 transportation and logistics industry report published by PricewaterhouseCoopers Incorporated indicates that up to 78% (seventy-eight percent) of South African road networks are older than their original 20 (twenty)-year design lifespan and approximately 96% (ninety-six percent) of all exports are transported by sea from South Africa’s 2 (two) major ports, namely Cape Town and Durban. The current “Demand to Capacity” ratios for these ports are estimated at more than 75% (seventy-five percent) in aggregate. Once this ratio of throughput to design capacity rises above the 75% (seventy-five percent) level, ports tend to become congested and less efficient in operational performance, necessitating large-scale upgrades. In other words, the volume of goods that are shipped through these ports could be substantially increased if the ports’ infrastructure were able to accommodate the flow of goods. The strain placed on South Africa’s major ports by these significant increases in demand is evident in the current capacity constraints experienced by South Africa across different infrastructure sub-sectors (Source: “Handbook on Infrastructure Statistics” – African Development Bank Group; 2011).

• 2.1.4 The Government has identified infrastructure as a strategic investment area, and infrastructure is seen as a critical success factor in ensuring, amongst others:

  • 2.1.4.1 balanced economic development;

  • 2.1.4.2 the unlocking of economic opportunities;

  • 2.1.4.3 the addressing of socio-economic needs; and

  • 2.1.4.4 job creation.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 71

SECTION ONE – INFORMATION ON GAIA (continued)

2. INVESTMENT OPPORTUNITY (continued)

• 2.1 South African infrastructure investment (continued)

• 2.1.5 In 2012, South Africa’s Cabinet established a Presidential Infrastructure Coordinating Commission (“ PICC ”). The PICC has, as its mandate, the planning and coordinating of the National Infrastructure Plan, a program aimed at facilitating fast tracked Government-led infrastructure investment across a number of key sectors. This, together with other development initiatives, has culminated in a stated planned Government infrastructure capital spend, from 2013 to 2016, of over R800 billion from the state (Source: “2013 Budget Review” – National Treasury, 2013). Figure 1 below divides the planned Government spend across 3 (three) main infrastructure sub-sectors, being (i) energy; (ii) water and sanitation; and (iii) transport and logistics.

Figure 1: Planned Government infrastructure spend for 2013 to 2016

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30%
Transport and logistics
42%
Water and sanitation
Energy
Other
14%
14%
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• 2.1.6 While the Government has indicated its support for this sector and infrastructure investment as a whole (as evidenced by the National Infrastructure Plan and the PICC), the fiscus cannot fund the capital requirements on its own. While infrastructure investments could be funded through State Owned Enterprises (“ SoE ”), the balance sheets of South Africa’s SOEs are stretched, triggering the need for Government to enable private sector investment in infrastructure.

• 2.1.7 The involvement of the private sector in infrastructure investment has two major advantages for South Africa, namely: 2.1.7.1 increased access to capital for maintenance and expansion; and 2.1.7.2 improved management and higher efficiencies.

• 2.1.8 The 2 (two) variables mentioned above interact so as to present profitable opportunities for both private sector investors and management teams, while simultaneously helping Government to fast-track delivery of the economic infrastructure needed to promote sustainable economic growth in South Africa.

• 2.1.9 South Africa has a relatively well developed institutional savings industry, but little of this private sector capital has previously participated in infrastructure development in the country. Banking institutions have participated in the REIPPPP as lenders to development projects, but these funders cannot hold investments over a long term due to the restrictive nature of banking regulations and, in particular, the Basel III requirements.

• 2.1.10 Figure 2 below gives a graphic representation of the institutional savings market in South Africa, based on 3 (three) major categories, namely (i) private retirement funds; (ii) Government retirement funds; and (iii) unit trusts and other voluntary savings.

Figure 2: Institutional savings market in South Africa

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R1,0tn
17%
R3,5tn
59% Private retirement funds
Government and parastatal retirement funds
Unit trusts and other voluntary savings
R1,4tn
24%
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• 2.1.11 The retirement industry has significant amounts of available capital, but little of this has been utilised for longterm infrastructure investments. This is unfortunate as infrastructure investments present an ideal anchor from which pension funds and other long-term investors could diversify their investment strategies, given the characteristics of capital preservation and inflation-hedged income generation. Amendments made to

72 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

Regulation 28 of the Pension Funds Act, No. 24 of 1956, in 2011 provide for greater scope for investment by pension funds in alternative investment asset classes, such as infrastructure, creating an enabling environment for the natural fit between investors and opportunities.

• 2.1.12 Globally, institutional investors have been mobilising progressively more private infrastructure investments. While these investment models have traditionally been structured around conventional private equity mechanisms, the institutional investors have in recent times evolved their investment mandates to reflect the assets they are looking to hold. Increasingly, institutional investors are looking for direct investments in the underlying assets, allowing for better returns, lower fees and better control of their investments. These investment models have further evolved to offer additional exit strategy options, further increasing institutional uptake. This investment model is well established in countries/regions such as Canada, Asia and Australia through infrastructure real estate investment trusts.

• 2.1.13 One reason for the dearth in participation by the private institutional investors in infrastructure opportunities in South Africa is an absence of experienced and technically proficient investment managers in the infrastructure space. Most finance institutions, whether banking institutions or asset management firms, are restricted by regulatory requirements, lack of buy-side expertise with respect to long-term infrastructure investments and limited investment mandates.

• 2.1.14 GAIA wishes to bridge this void and become the foremost capital allocator to the institutional and retail investor community in the infrastructure asset class. GAIA believes that an infrastructure-focused fund will enable institutional investors such as pension funds to pursue investments directly through their listed equity portfolios, thereby unlocking a potentially higher investment allocation to infrastructure investments. In addition, GAIA believes that an infrastructure-focused fund will be suitable for retail investors with similar risk profiles.

2.2 Energy and energy-related infrastructure

• 2.2.1 The South African energy sector presents a particular opportunity for discerning long-term investors. Energy and electricity supply are currently widely regarded as South Africa’s biggest infrastructure challenge. A number of historic factors have contributed to South Africa having a weak and intermittent electricity supply, including:

• 2.2.1.1 the lack of proactive investment into electricity generation assets and transmission infrastructure; 2.2.1.2 the poor maintenance of existing assets; and

• 2.2.1.3 the ever-increasing cost of production.

• 2.2.2 The table below shows the aging of Eskom’s existing coal-fired power stations. More than 60% (sixty percent) of the power stations are older than their design lifespan of 30 (thirty) years and should be decommissioned (Source: “GDP growth threatened by electricity shortage: Eskom – seeking growth in the dark” Renaissance Capital, 8 April 2015).

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Nominal capacity Age in 2014
Station Location (Mw) (design life 30 years)
Arnot Middelburg 2 232 38
Camden Ermelo 1 480 42
Duhva Witbank 3 450 34
Grootvlei Balfour 1 090 44
Hendrina Mpumalanga 1 865 43
Kendal Witbank 3 840 25
Komati Middelburg 791 52
Kriel Bethal 2 850 34
Lethabo Viljoensdrift 3 558 28
Majuba Volksrust 3 558 17
Matimba Lephalale 3 690 27
Matla Bethal 3 450 34
Tutuka Standerton 3 510 28
----- End of picture text -----

2.2.3 On a conservative calculation, at least R737 billion is needed to replace the total capacity of the 13 (thirteen) power stations listed in the Table 1 above.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 73

SECTION ONE – INFORMATION ON GAIA (continued)

2. INVESTMENT OPPORTUNITY (continued)

2.2 Energy and energy-related infrastructure (continued)

• 2.2.4 There have been significant budget overruns by Eskom on new-build coal-fired plants Medupi and Kusile, which have resulted in a lack of confidence in Eskom’s ability to address the problem economically.

• 2.2.5 The constrained electricity supply presents risks to South Africa’s economic growth prospects. It is estimated that load shedding cost the South African economy R98.5 billion between January and June of 2015 (Source: CSIR Energy Centre Report – 2015).

• 2.2.6 In response to these escalating difficulties and in line with the global movement towards clean energy generation solutions, the Government has endorsed South Africa’s renewable energy industry through, inter alia, the REIPPPP. South Africa currently boasts the fastest growing renewable energy industry in the world. South Africa’s recently updated Integrated Resource Plan (2010 – 2030) forecasts at least a further 19 500 MW of renewable energy development within the next 15 (fifteen) years. In 2012, South Africa embarked on the REIPPPP. The REIPPPP has resulted in the commissioning of more than 5 000 MW of clean energy within 3 (three) years alone.

• 2.2.7 It is estimated that the aggregate investment in the REIPPPP in the past 4 (four) years amounts to more than R162 billion, in 2014 constant prices. Of the R162 billion spent to date, 60% (sixty percent) was invested in the form of debt instruments and 40% (forty percent) in the form of equity instruments. Furthermore, up to 25% (twentyfive percent) of the debt instruments and up to 50% (fifty percent) of the equity investments have originated from foreign countries, again illustrating the low participation by South African institutional and retail investors in this sector. The REIPPPP capital expenditure is depicted below (Source: “Renewable Energy IPP Procurement Programme, Bid Window 4, Preferred Bidders’ Announcement” – Department of Energy, 16 April 2015).

REIPPP capital expenditure (R’bn)

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----- Start of picture text -----

80
70 46
60
50
40 33 26
30
20 17 27
10 13 11 17
0
R1 R2 R3 Remain (avg)
Wind capex Solar capex
----- End of picture text -----

• 2.2.8 With these estimates and the Integrated Resource Plan (2010 – 2030) projections in mind, the renewable energy industry in South Africa is likely to attract more than R525 billion in the next 15 (fifteen) years.

• 2.2.9 The Minister of Finance and the Minister of Energy again affirmed Government’s commitment to the Independent Power Producers Programme during the last week of July 2016, despite negative comments from the management of Eskom.

• 2.3 REIPPPP opportunity landscape and mechanics

• 2.3.1 The REIPPPP presents opportunities for both South Africa and infrastructure industry through the introduction of new electricity generation capacity and replacement capacity. The REIPPPP also presents an opportunity for institutional and retail investors, particularly through the secondary refinancing market.

• 2.3.2 Although traditionally energy infrastructure investments have not been expansively financed by institutional or public money, GAIA believes that there are a number of factors which position the institutional market as an integral role-player in unlocking this rapid economic development potential within the energy infrastructure space. These factors include:

  • 2.3.2.1 improvements in efficiencies and costs related to technology;

  • 2.3.2.2 greater understanding of the cash flow and return profiles; and

  • 2.3.2.3 maturing markets providing attractive long-term inflation-linked returns.

• 2.3.3 The REIPPPP is structured as a competitive bidding process whereby developers tender for the right to build utility-scale power plants which, if successful, have the right to conclude a power purchase agreement with Eskom.

74 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

• 2.3.4 Various risk elements are addressed as part of the programme structure and as part of industry practice. The off-take (power purchase) agreement, whereby electricity is purchased over the 20 (twenty) year term, is backed by explicit Government guarantees. The resource prediction (for example wind and/or sunshine) is verified by independent verification companies. Typically, the construction- and operations’ risk is contracted out to the technology suppliers and specialist operating firms. The linking of the tariff to CPI provides a further risk mitigation measure to the financial performance of these projects.

• 2.3.5 The REIPPPP program initially envisioned the procurement of 3 625 MW of power over a maximum of 5 (five) tender rounds. Another 100 MW was reserved for small projects (below 5 MW) which participated in a separate, small projects independent power producer program. Further allocations of 8 100 MW were subsequently made. Caps were set on the total capacity to be procured from individual technologies – the largest allocations were for wind and photovoltaics, with smaller amounts allocated for concentrated solar, biomass, biogas, landfill gas, and hydro. The rationale for these caps was to limit the supply to be bid out and therefore to increase the level of competition among the different technologies and potential bidders (Source: “Renewable Energy IPP Procurement Programme, Bid Window 4, Preferred Bidders’ Announcement” – Department of Energy, 16 April 2015).

• 2.3.6 Successful bidders concluded project contracts with the Department of Energy, were issued power generation licences by NERSA, and concluded power purchase agreements with Eskom’s single buyer office.

• 2.3.7 The diagram below depicts the contracting framework and typical funding mix of renewable energy projects:

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----- Start of picture text -----

Implementation Equity Funding
Agreement (usually 20% to 30%)
Renewable Energy
Mezzanine Funding
Independent Power
(usually 0% to 10%)
Producer (REIPP)
Generation Debt Funding
Licence 20-Year (usually 70% to 80%)
Power Electricity
Purchase
Agreement
Payments
Consumer
Electricity Single Buyer O ce
----- End of picture text -----

• 2.3.8 Investment risks related to the REIPPPP:

• 2.3.8.1 Projects have different risk profiles, depending on the stage of their lifecycle, commencing with Green Fields development and stretching through to mature commercial production.

• 2.3.8.2 The initial stages of project development include soliciting permits and consents and conducting various resource assessment studies. There is significant uncertainty in this period of project development, in relation to obtaining the requisite permits and consents and the results of the assessment studies. As a result, the early stages of project development represent high risk levels for investors and project developers.

• 2.3.8.3 Investment risk is reduced once a project is selected as a preferred bidder under the REIPPPP. After financial close has been achieved, the construction- and project management aspects of the project, related to bringing the project to commercial operation, present risks in relation to the timing and extent of revenues and costs related to the project. However, post commercial operation, projects represent lower risk profiles that are well suited to the institutional investor market and retail investors with similar risk appetites.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 75

SECTION ONE – INFORMATION ON GAIA (continued)

2. INVESTMENT OPPORTUNITY (continued)

2.3 REIPPPP opportunity landscape and mechanics (continued)

• 2.3.8 Investment risks related to the REIPPPP (continued):

• 2.3.8.4 The diagram below reflects the different investment stages in the REIPPPP, and the related risk return profiles in each stage.

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----- Start of picture text -----

Risk High Medium Low
Equity IRR 100%+ CPI + 9% CPI + 6%
Debt n/a Jibar/CPI + 4.5% Jibar/CPI + 2.5%
REIPPPP Financial Commercial
preferred close operation
bidder date
Development Funding Construction Commercial production
-2y 0 1y 3y 23y
Red Stage: Orange Stage: Green Stage:
Private Equity/Angel Private Equity with Bank Debt Mix of Institutional Investors with Debt
Investors. during construction from Banks and institutions.
High Risk Medium Risk Strong contracts normally mitigate
(Project Development largely (Risk of project delays during operational risk.
binary) construction)
----- End of picture text -----

• 2.3.8.5 As set out in its investment policy in paragraph 3.3 of these Revised Listing Particulars, GAIA will pursue investments where projects have reached commercial operation or are near to commercial operation, being projects not more than 6 (six) months from commercial operation.

• 2.3.9 Opportunities for institutional and retail investors:

• 2.3.9.1 Investments in infrastructure in general and renewable energy projects in particular have various advantages for institutional and retail investors.

• 2.3.9.2 The financial returns of the projects are attractive due to the following factors: • cash flows are assured over a long-term through power purchase agreements, being 20 (twenty) years in the case of renewable energy projects;

  • returns are in the form of cash distributions; and

  • returns are linked to CPI through the explicit linkage of revenues to CPI.

• 2.3.9.3 The above factors are important elements in providing liability-matched income streams to institutional investors who are pursuing liability-driven investment strategies, such as pension funds.

• 2.3.9.4 Furthermore, a lack of investment in infrastructure has deleterious effects on the South African economy as a whole. The rest of the economy has been adversely affected by the lack of investments in electricity generation assets by Eskom.

• 2.3.9.5 Investment in renewable energy projects also contributes to the greening of the economy, job creation, social upliftment and rural development, all of which are important elements for institutional and retail investors to consider in their responsible investment strategies.

• 2.3.10 Current landscape of REIPPPP projects: Thus far, around 6 000 MW has been commissioned in terms of the REIPPPP for a total spend of approximately R162 billion. Assuming that a project finance structure is in place for most of the projects, this presents an equity investment size of R40.5 billion. The secondary equity market size is therefore significant, considering the existing project base, and will continue to grow as further rounds of projects are brought into the market (Source: “Renewable Energy IPP Procurement Programme, Bid Window 4, Preferred Bidders’ Announcement” – Department of Energy, 16 April 2015).

Landscape of available projects

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----- Start of picture text -----

REIPPP summary Round 1 Round 2 Round 3 Round 4a Round 4b (est) Total
TotalMWs 1 416 1 044 1 438 1 121 1 000 6 019
Total project spend (Rm) 47 792 28 059 43 324 23 077 20 000 162 252
Project debt to equity (%) 75 75 75 75 75 75
Total project equity (Rm) 11 948 7 015 10 831 5 769 5 000 40 563
Minimum BEE ownership (12%) 1 434 842 1 300 692 600 4 868
Maximum BEE ownership (40%) 4 779 2 806 4 332 2 308 2 000 16 225
----- End of picture text -----

76 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

2.4 Transport and logistics

• 2.4.1 The status of South Africa as the “spring board” into Africa for global investors necessitates good road, rail, port, and air infrastructure development. Improved transport infrastructure will promote transport and trade in goods and services, improve tourism and facilitate a productive transactional environment, while simultaneously improving the standard of living of those living in the country. The Government has disclosed some of its required transport-related strategic investment projects, which include the following initiatives:

• 2.4.1.1 the “Durban – Free State – Gauteng logistics and industrial corridor” upgrade – strengthen logistics and transport corridor, new port and port upgrades;

• 2.4.1.2 unlocking of raw materials in the northern belt – rail, pipeline, logistics corridor to connect Mpumalanga and Gauteng;

• 2.4.1.3 South-Eastern node and corridor development – dams, highway, increased rail capacity, port and rail upgrades;

• 2.4.1.4 unlocking of economic opportunities in the North West Province – accelerated road and rail infrastructure; and

• 2.4.1.5 Saldanha-Northern Cape development corridor – integrated rail and port expansion and increased port capacity.

• 2.4.2 Roads and railways

• 2.4.2.1 A historical lack of proactive transport-related infrastructure investment in South Africa has resulted in deteriorating road networks. For example, up to 78% (seventy-eight percent) of South African road networks are older than their original design lifespan (Source: “Africa Gearing Up – Future prospects in Africa for the transport and logistics industry” – PricewaterhouseCoopers; 2013). The impact of this deterioration can be seen in the difficulties experienced in long freight corridors, such as the GautengDurban road network. As 35.6% (thirty-five point six percent) of the country’s GDP is generated in Gauteng, which is 500 (five hundred) km away from the nearest local port in Durban, it is imperative that such infrastructure is properly maintained and free from congestion.

• 2.4.2.2 Considering such constraints, the Government issued the National Transport Master Plan 2050 which sets the framework for the transport infrastructure development plans. The National Transport Master Plan envisions a major shift from road transport to rail transport for both freight and passenger travel.

• 2.4.3 Ports

• 2.4.3.1 In South Africa, 96% (ninety six percent) of all exports are conveyed by sea. Additionally, port and cargo traffic has significantly increased, promoting the need to expand port capacity. South Africa’s two major ports, Cape Town and Durban, currently have a “Demand to Capacity” ratio of more than 75% (seventy-five percent), indicating growing congestion and necessitating large-scale upgrades either at the source or through new build capacity. Although significant investments have been made, South Africa’s port productivity and efficiency remains lower than its global competitors (Source: “Handbook on Infrastructure Statistics” – African Development Bank Group; 2011).

• 2.4.3.2 Considering the current state of the South African Transport industry, 54% (fifty-four percent) of the Government’s spending budget over the next three years has been allocated to Transport related infrastructure development. From a long-term perspective, Transport and Logistics in South Africa clearly provides numerous financing opportunities which, in turn, ensures more efficient tradability, increasing South Africa’s global competitiveness.

• 2.4.4 Transport and logistics opportunity GAIA foresees that private capital will be deployed in this sector along the same lines as the process followed in the energy sector. GAIA intends to be in a favourable position to participate in opportunities therein.

2.5 Water and sanitation

• 2.5.1 Although the provision of safe, clean, reliable potable water is the most essential human right, ever increasing urbanisation, industrialisation, mining activities, energy demand, and agricultural activities all contribute to South Africa’s declining water resources.

• 2.5.2 South Africa is described as a “water stressed” country. It is estimated that US$68 billion (approximately R952 billion) needs to be invested over the next 15 (fifteen) years in order to ensure that South Africa’s water needs are adequately addressed. In addition to the significant underinvestment in new infrastructure, there is large-scale neglect in the maintenance of existing water infrastructure (Source: “African Infrastructure Review – September – November 2013” – Nedbank Capital; 2013).

• 2.5.3 Although historically, water- and sanitation-related infrastructure has not been largely financed by institutional and retail investors, GAIA believes that the institutional and retail market is perfectly positioned to play a significant role in developing this industry. Water-related infrastructure development is a mature market with conventional equipment and operating systems, the combination of which results in a long-term, low risk investment with predictable cash flows.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 77

SECTION ONE – INFORMATION ON GAIA (continued)

2. INVESTMENT OPPORTUNITY (continued)

• 2.5 Water and sanitation (continued)

• 2.5.4 As with energy infrastructure, the opportunities in this sector originate through new production capacity and the replacement capacity while, from an investment perspective, opportunity exists in both the primary and the secondary “buy and lease-back” refinancing market.

• 2.5.5 There are numerous water and sanitation related infrastructure funding opportunities in South Africa and by supporting the development of water infrastructure, investors will support the provision of and increased access to clean water while developing local infrastructure capabilities in a sustainable manner. Sustainable development translates directly into development of skills in the local labour market and improved employment opportunities.

3. INFORMATION RELATING TO GAIA

• 3.1 Structure

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----- Start of picture text -----

Gaia Infrastructure
Capital Limited
(Co. listed on the JSE)
100%
Gaia Financial
Gaia Infrastructure
Investment Services Proprietary
Partners Proprietary
Limited management Limited
agreement (Co. to hold underlying
(Investment manager)
projects)
Investee company 1
2
3
----- End of picture text -----

3.2 Investment strategy

• 3.2.1 GAIA aims to be a diversified infrastructure investment company, investing in large-scale (being projects with a value in excess of R1 billion) energy, transport and water related infrastructure projects in a responsible and transparent manner. In so doing, GAIA will provide shareholders with predictable, inflation linked, liquid and long-term yielding investments which are liquid and allow shareholders to exit their investments. GAIA’s focus is on making investments in various infrastructure projects through equity and debt instruments that give rise to the required returns.

• 3.2.2 GAIA will initially focus on investing in renewable energy projects in South Africa through the REIPPPP and will later expand its portfolio to include other sectors of infrastructure. Although GAIA’s primary focus is in projects in South Africa, it may consider opportunities in the rest of Africa in the future.

• 3.2.3 GAIA adheres to the United Nations backed Principles for Responsible Investment and the Code for Responsible Investing in South Africa.

• 3.2.4 GAIA and GFS have appointed the Manager to render the Services to the GAIA Group. The Board is responsible for GAIA’s objectives, business and investment strategies and its overall supervision, while the Manager will identify, assess, structure and negotiate the resultant acquisition by GAIA, as well as the potential disposal, of Viable Assets in terms of the Management Agreement. The Manager has extensive expertise and knowledge of and experience in investments in the infrastructure and renewable energy sectors. The Manager will analyse all relevant factors, present proposed investment opportunities to GAIA’s Board and, where relevant, ensure that the necessary due diligence investigations are carried out prior to investment by GAIA. Notwithstanding the Services rendered by the Manager, the ultimate responsibility for and decisions regarding all investments and divesture resides with the Directors.

3.3 Investment policy

• 3.3.1 GAIA’s investment policy is to invest in infrastructure projects in South Africa and meet the following investment criteria:

• 3.3.1.1 investments in operational or near operational projects, being projects not more than 6 (six) months from commercial operation;

• 3.3.1.2 investments with a targeted return of CPI plus 6% (six percent) before costs;

• 3.3.1.3 investments with visible environmental, social and governance policy appreciation;

• 3.3.1.4 investments with low risk and attractive long-term inflation-linked predictable cash generation profiles; 3.3.1.5 investments of not less than R50 000 000 (fifty million Rand) per investment;

78 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

  - 3.3.1.6 ensuring management value-add and directorship roles to further optimise the underlying assets; 3.3.1.7 investments into ordinary equity or any other financial instruments giving economic benefits and returns that meet the target investment returns; and

  - 3.3.1.8 investments with acceptable third party credit risk exposure.

• 3.3.2 Shareholders should note that the criteria set out above has been updated from what was stated in the policy disclosed in the Pre-Listing Statement in order to provide GAIA with greater flexibility.

• 3.3.3 All acquisitions, disposals and related party transactions will be categorised and implemented in accordance with the JSE Listings Requirements.

• 3.3.4 Shareholders should note that any material change to the Investment Policy will require Shareholder approval in terms of the JSE Listings Requirements.

• 3.3.5 There are no restrictions on the number of projects that GAIA may invest in.

• 3.4

Investment risks

• 3.4.1 The risks of an investment in infrastructure may be divided into 2 (two) categories, namely those specific to the infrastructure asset and those affecting the broader asset class.

• 3.4.2 The asset-specific risks encompass risks pertaining to the design, construction and operation of the infrastructure asset; while the asset-class risks include economic risk and regulatory and political risk.

• 3.4.3 Asset-specific risks largely depend on the maturity of the particular asset. In the construction phase, there is considerable risk associated with the construction process, such as construction period and budget overruns. Importantly, a key feature of infrastructure assets is that as an asset matures, its risk profile declines and its valuation increases, all other things remaining equal. GAIA will invest in operational or near-operational assets to mitigate the construction risk on the asset.

• 3.4.4 Of the more generic risks affecting the infrastructure asset class, perhaps the most pertinent is interest rate risk. The prevailing level of interest rates can have an impact on the discount rates applied to the valuation of infrastructure investments, and on the debt portion of the investment structure; such that as interest rates rise, the valuation of an infrastructure investment will generally fall. This is typically a short-term phenomenon. Over the medium to longer-term, this initial fall in value is mitigated as revenue from the underlying asset grows. Generally, revenue increases are derived from CPI-linked pricing increases (CPI generally increases in a higher growth environment) and the volume increases that occur in a growing economy.

3.5 jSE approval of the acquisition of Viable Assets

• 3.5.1 In terms of paragraph 4.35 of the JSE Listings Requirements, the Acquisition must be approved by a majority of disinterested Directors and the majority of the GAIA Shareholders at a general meeting.

• 3.5.2 As at the Last Practicable Date, GAIA is listed as a SPAC in the “Non-Equity Investment Instruments” sector of the main board of the JSE. Following the Acquisition, GAIA will be classified as an investment entity on the main board of the JSE in terms of section 15 of the JSE Listings Requirements.

3.6 Investment entity criteria and additional disclosure

• 3.6.1 The Manager and the Board have sufficient experience in the management of the types of investments in which GAIA wishes to invest.

• 3.6.2 It is the intention of GAIA that its income will be derived wholly or mainly from shares and other securities and neither GAIA, nor any of its subsidiaries, shall conduct any trading activity that is considered to be material to the GAIA Group as a whole.

• 3.6.3 The policies and objectives of the potential investee companies of GAIA, which forms part of the Acquisition, will conform to the principle investment objectives of GAIA.

• 3.6.4 To the extent that GAIA invests in other companies or funds, which in turn invest in a portfolio of investments, GAIA will ensure that the policies and objectives of the investee conform to the Investment Policy.

• 3.6.5 The Board acts independently of the Manager. GAIA currently has a board of directors comprised of 3 (three) executive directors and 5 (five) non-executives, of whom 3 (three) are independent non-executive directors. The majority of Board members are not employees of or professional advisors to the Manager or any other company falling within the group of the Manager.

• 3.6.6 It is noted that the Manager does not own 10% (ten percent) or more of GAIA, however the JSE is satisfied with the experience of the Manager and the Board and does not require that the Manager hold at least 10% (ten percent) of GAIA. Certain GAIA Directors together hold 5% (five percent) of the issued share capital of GAIA and are shareholders of the Manager.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 79

SECTION ONE – INFORMATION ON GAIA (continued)

3. INFORMATION RELATING TO GAIA (continued)

• 3.6 Investment entity criteria and additional disclosure (continued)

• 3.6.7 Post the Acquisition, GAIA will hold more than 50% (fifty percent) of its portfolio in investments other than cash or short-dated securities, and as such will not be required to disclose its portfolio to Shareholders on a quarterly basis.

• 3.6.8 Following the implementation of the Acquisition, GAIA’s sole investment will be its effective see-through economic interest of 25.2% (twenty five point two percent) in Dorper. Dorper is a project company in the renewable energy sector and its securities are unlisted.

• 3.6.9 GAIA’s indirect investment in Dorper will comprise of equity and debt, more specifically an amount of R265 036 179.41 (two hundred and sixty-five million thirty-six thousand one hundred and seventy-nine rand and forty-one cents) invested in Newco Shares and an amount of R235 963 820.59 (two hundred and thirty-five million nine hundred sixty-three thousand eight hundred and twenty Rand and fifty-nine cents) advanced to Newco as a Convertible Loan.

• 3.6.10 As the Acquisition has not yet been implemented, GAIA has not received any dividends, interest or other forms of income from its investments, as at the Last Practical Date.

• 3.6.11 Post the implementation of the Acquisition, the only investment of GAIA will be the investment in Dorper, which will accordingly be greater than 5% (five percent) of the equity value of GAIA. Full details of the investment in Dorper are contained in the Circular.

3.7 Gearing

• In addition to the use of its own resources, GAIA will employ external financing as a source of capital. GAIA will use borrowings to advance tail-end cash flows in order to increase overall returns. The Board will adopt policies from time to time to set limits on the extent of GAIA’s borrowings. Interest rate movement risk will be mitigated by using inflation-linked loans or other hedging instruments. The implementation of such policies and the use of such instruments largely serves to make interest on borrowings a known and controlled expense. Other than in exceptional circumstances, GAIA will use borrowings to fund acquisitions on a case by case basis and only where it is satisfied that the overall yield from a particular prospective acquisition is, or will be, greater than the cost of the borrowing required for that particular acquisition, or when the leveraging produces enhanced returns.

4. PROSPECTS

• 4.1 Infrastructure as an asset class is one that requires capital to develop. It is uncertain whether the Government will have sufficient funding required to meet its infrastructure needs and therefore private capital will fulfil a complimentary role. In order to fulfil its development mandate, the Government must partner with the private sector. The overwhelming success of the REIPPPP is testament to the success that can be achieved in such public-private partnerships.

• 4.2 The Directors believe that the GAIA Group has good prospects, based on numerous investment opportunities which exist in the sector, spurred on by current market conditions and the Government’s need for public-private partners and access to future deal flow. Various potential opportunities have been identified and are at different stages of due diligence investigation and negotiation. The Directors believe these factors will provide returns in line with GAIA’s investment return expectations and targets detailed above. GAIA intends to raise the necessary funds either by way of equity and/or debt capital raisings.

5. MANAGEMENT OF GAIA

• 5.1 The Board is responsible for the objectives, business and investment strategies of GAIA and its overall supervision, taking all decisions regarding investments and disinvestments.

• 5.2 The Board has appointed the Manager to render the Services on market-related terms. Salient details relating to the Manager and the Management Agreement are set out in paragraph 7 and Annexure RLP2 to these Revised Listing Particulars.

• 5.3 The Board, as a whole, considered and approved the terms and conditions of the Management Agreement prior to GAIA entering into same. The independent Directors of GAIA shall perform an annual review of the Manager’s performance and, if required, make appropriate recommendations to Shareholders. The Services to be provided by the Manager are listed and set out in Annexure A to the Management Agreement. These Services are objective criteria against which the Manager will be evaluated. In addition, the Directors of GAIA will assess the performance of the Manager based on the quality of the assets identified and investments made by GAIA, as well as the return on such investments to Shareholders. If poor investments result in poor returns to GAIA Shareholders, the independent Board may make appropriate recommendations to GAIA Shareholders to terminate the Management Agreement.

• 5.4 The instances in which the Management Agreement may be terminated are set out in Annexure RLP2 of these Revised Listing Particulars, together with the consequences of such termination. If the Management Agreement is terminated at any time and GAIA intends to appoint a new manager, the appointment of such new manager and new management agreement shall be subject to approval of GAIA Shareholders by ordinary resolution.

• 5.5 The Board is responsible for ensuring that GAIA complies with all of its statutory and regulatory obligations, as specified in the Companies Act, the MOI and the JSE Listings Requirements.

80 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

• 5.6 The GAIA executive committee meets monthly and has the following members:

Name	Position
L de Wit*	Executive Chairman
T Soudien-Witten	Financial Director
MM Nieuwoudt	Executive Director

• L de Wit is serving in an executive capacity on an interim basis, following the resignation of JR Oliphant (as detailed in paragraph 6.1.3.9 and 6.1.3.10 below).

• 5.7 Profiles of the members of the executive committee, detailing their experience, appear in Annexure RLP3 to these Revised Listing Particulars.

• 5.8 The Services to be rendered by the Manager are limited to corporate advisory services and specifically exclude services pertaining to matters such as corporate governance, finance and investor relations (“ excluded services ”). The Manager undertook these excluded services at its own cost during the period from the Listing Date to the Last Practical Date in order to ensure that the business and affairs of GAIA were managed correctly.

• 5.9 The Board has established a number of further committees to assist the Board in discharging its duties, with the particulars of such committees appearing in Annexure RLP5 to these Revised Listing Particulars.

6. DIRECTORS

6.1 Composition of the Board

• 6.1.1 The full names, ages, business address and designations of the Directors of GAIA are provided below:

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----- Start of picture text -----

Full Name Age Designation business Address
----- End of picture text -----

L de Wit1	61	Executive Chairman	37 Vineyard Road, Claremont, 7700
MM Nieuwoudt	44	Executive Director	37 Vineyard Road, Claremont, 7700
T Soudien-Witten	39	Financial Director	37 Vineyard Road, Claremont, 7700
PB Schabort2	58	Non-executive Director	37 Vineyard Road, Claremont, 7700
C Ferreira	64	Non-executive Director	2nd foor, Katherine and West, 114 West Street,
			Sandown, Sandton, 2146
KP Lebina	35	Lead independent non-	58 Cowley Road, Bryanston, Johannesburg, 2191
		executive Director
N Kimber	44	Independent non-	42 Smits Road, Dunkeld, Johannesburg, 2196
		executive Director
KE Mbalo	53	Independent non-	59 Glanville Crescent, Wendywood, Sandton, 2144
		executive Director

Notes

1. L de Wit is also a Founder of GAIA Infrastructure Partners; and

2. PB Schabort is also a Founder of GAIA Infrastructure Partners.

3. 6.1.2 The Board of directors of GFS is identical to the GAIA Board.

4. 6.1.3 The following changes occurred to the Board over the past 12 (twelve) months:

5. 6.1.3.1 T Soudien-Witten was appointed as financial Director on 1 October 2015;

6. 6.1.3.2 L de Wit was appointed as a non-executive Director on 1 October 2015;

7. 6.1.3.3 PB Schabort was appointed as a non-executive Director on 1 October 2015;

8. 6.1.3.4 C Ferreira was appointed as a non-executive Director on 1 October 2015;

9. 6.1.3.5 RB Makhubela was appointed as an independent non-executive Director on 1 October 2015 and resigned on 31 July 2016;

10. 6.1.3.6 KP Lebina was appointed as an independent non-executive Director on 1 October 2015;

11. 6.1.3.7 N Kimber was appointed as an independent non-executive Director on 1 October 2015;

12. 6.1.3.8 KE Mbalo was appointed as an independent non-executive Director on 1 October 2015;

13. 6.1.3.9 JR Oliphant resigned as managing Director on 19 April 2016;

14. 6.1.3.10 L de Wit’s role has been amended from non-executive chairman to executive chairman following the resignation of JR Oliphant, until such time as a suitable candidate has been appointed to fill the position of chief executive officer;

15. 6.1.3.11 GAIA has completed the process of recruiting a new chief executive officer, and appointed KP Lebina, with effect from 1 October 2016, as published on SENS on 30 August 2016; and

16. 6.1.3.12 The Board resolved to appoint KE Mbalo as the new independent non-executive chairman of the Board with effect from 19 October 2016. L de Wit will continue to serve on the Board as a non-executive Director.

6.1.4 Profiles of the Directors, detailing their experience, appear in Annexure RLP3 to these Revised Listing Particulars.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 81

SECTION ONE – INFORMATION ON GAIA (continued)

6. DIRECTORS (continued)

6.2 Additional information

• 6.2.1 Reference to the “Directors” in this paragraph 6.2 shall be deemed refer to the Directors in their capacities as directors of GAIA and as directors of GFS.

• 6.2.2 A list of other directorships held by the Directors is set out in Annexure RLP4 to these Revised Listing Particulars.

• 6.2.3 All of the Directors are South African citizens.

• 6.2.4 No Director is a partner with unlimited liability.

• 6.2.5 None of the Directors:

  • 6.2.5.1 have been declared bankrupt, insolvent or have entered into any individual voluntary compromise arrangements;

  • 6.2.5.2 have been directors with an executive function of any company put under, or proposed to be put under, any business rescue plans, or that is or was the subject of an application for business rescue, any notices in terms of section 129(7) of the Companies Act, receiverships, compulsory liquidations, creditors voluntary liquidations, administrations, company voluntary arrangements or any compromise or arrangements with creditors generally or any class of creditors, at the time of such event or within the 12 (twelve) months preceding any such event, save for KE Mbalo as set out in Annexure RLP3 ;

  • 6.2.5.3 have been partners in a partnership that was the subject of any compulsory liquidation, administration or partnership voluntary arrangement, at the time of such event or within the 12 (twelve) months preceding any such event;

  • 6.2.5.4 have entered into any receiverships of any asset(s) or of a partnership where such directors are or were partners during the preceding (twelve) months;

  • 6.2.5.5 have been publicly criticised by a statutory or regulatory authority, including recognised professional bodies, or been disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of any company;

  • 6.2.5.6 have been involved in any offence of dishonesty;

  • 6.2.5.7 have been removed from an office of trust, on the grounds of misconduct, involving dishonesty; or

  • 6.2.5.8 have been the subject of any court order declaring him delinquent or placing him under probation in terms of section 162 of the Companies Act and/or section 47 of the Close Corporations Act, No. 69 of 1984 or been disqualified by a court to act as a director in terms of section 219 of the Companies Act, No. 61 of 1973.

• 6.3 Chief financial officer

• T Soudien-Witten is the chief financial officer and financial Director of GAIA. The Audit Committee has considered and satisfied itself of the appropriateness of the expertise and experience of T Soudien-Witten.

• 6.4 Borrowing powers

• 6.4.1 The borrowing powers exercisable by Directors in the MOI are set out in Annexure RLP1 to these Revised Listing Particulars. The MOI does not provide for the borrowing powers of the Directors to be varied and any variation of such powers would accordingly require Shareholders to approve a special resolution amending the MOI. The borrowing powers of the directors of GFS are identical to those of GAIA.

• 6.4.2 The borrowing powers of the Directors of GAIA, and the directors of GFS, have not been exceeded during the 3 (three) years preceding the Last Practicable Date and no exchange control or other restrictions have been imposed on the GAIA Group’s borrowing powers in that period.

• 6.5 Appointment and qualification of Directors

• 6.5.1 The relevant provisions of the MOI regarding the term of office of Directors, the manner of their appointment and rotation and their retirement are set out in Annexure RLP1 to these Revised Listing Particulars. No person has the right in terms of any agreement in respect of the appointment of any Director or any number of Directors.

• 6.5.2 The relevant provisions of the MOI relating to the qualification of Directors appear in Annexure RLP1 to these Revised Listing Particulars. Apart from satisfying the qualification and eligibility requirements set out in section 69 of the Companies Act and the applicable provisions set out in paragraph 28 of the MOI (an extract of which appears in Annexure RLP1 to these Revised Listing Particulars), a person need not satisfy any eligibility requirements or qualifications to become or remain a Director of GAIA.

• 6.5.3 The relevant provisions of the memorandum of incorporation of GFS relating to the qualification and remuneration of the directors of GFS appear in Annexure RLP1 to these Revised Listing Particulars.

6.6 Remuneration of Directors

• 6.6.1 The relevant provisions of the MOI, which provide for the remuneration of GAIA’s Directors, are set out in Annexure RLP1 to these Revised Listing Particulars.

• 6.6.2 GAIA may pay remuneration to non-executive Directors for their services as directors in accordance with a special resolution approved by Shareholders within the previous two years, as set out in section 66(8) and (9) of the Companies Act, and the power of GAIA in this regard is not limited or restricted by the MOI.

82 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

• 6.6.3 Any Director who (i) serves on any executive or other committee of GAIA; (ii) devotes special attention to the business of GAIA; (iii) travels or resides outside South Africa for the purpose of GAIA; or (iv) otherwise performs or binds himself to perform services which, in the opinion of the Board, are outside the scope of the ordinary duties of a Director, may be paid such extra remuneration or allowances in addition to or in substitution of the remuneration to which he may be entitled as a Director, as a disinterested quorum of the Board may from time to time determine.

• 6.6.4 Directors may also be paid all their travelling and other expenses necessarily incurred by them in connection with the business of GAIA and attending meetings of the Directors or of committees of the Directors.

• 6.6.5 GAIA will not pay the executive Directors appointed by the Manager a salary as these executive Directors are employees of the Manager, who will pay their salaries from the fees it receives from the GAIA Group in terms of the Management Agreement.

• 6.6.6 The remuneration receivable by the Directors will not be varied following the implementation of the Acquisition.

• 6.6.7 No remuneration was paid to Directors prior to 16 April 2015. The remuneration of Directors (including any person who has resigned as a Director within the last 18 months) by the GAIA Group for the financial year ended 29 February 2016, is set out below:

• 6.6.7.1 Salary, fees and bonuses of executive Directors

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Fees for
Directors’ other
Salary [2] fees services bonuses [3]
(R) (R) (R) (R)
JR Oliphant [1] 1 800 000 – – –
T Soudien-Witten 641 666 – – –
MM Nieuwoudt 1 440 000 – – –
Total 3 881 666 – – –
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Notes

1. JR Oliphant resigned as managing Director of GAIA on 19 April 2016.

2. The GAIA Group did not pay the executive Directors a salary, as the Manager paid their salaries from the fees it received from the GAIA Group in terms of the Management Agreement.

3. A bonus pool arrangement is in place between the executive Directors and the Manager, but no bonuses were paid for the period in question.

4. 6.6.7.2 Contributions and expenses¹

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Provident
fund,
medical aid
and pension Expense Total
contributions allowance [1] remuneration
(R) (R) (R)
– – –
JR Oliphant
T Soudien-Witten – – –
MM Nieuwoudt – – –
Total – – –
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Note

1. There are no allowances for expenses outside the ambit of business expenses such as travel, accommodation and the like referred to in paragraph 6.6.4 of these Revised Listing Particulars.

2. 6.6.8 The non-executive Directors’ fees for the financial year ended 29 February 2016, are set out below: 6.6.8.1 Non-executive Directors’ fees

Non-executive Directors’ fees
	Directors’
	fees
	(R)
L de Wit	70 110
PB Schabort	51 300
C Ferreira	51 300
RB Makhubela	45 000
KP Lebina	62 700
N Kimber	62 700
KE Mbalo	62 700
Total	405 810

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 83

SECTION ONE – INFORMATION ON GAIA (continued)

6. DIRECTORS (continued)

6.6 Remuneration of Directors (continued)

• 6.6.9 The Directors are not entitled to any commission and are not party to any gain or profit-sharing arrangements with GAIA. Save for the emoluments set out in the tables at paragraphs 6.6.7 and 6.6.8 of these Revised Listing Particulars, no other material benefits were received by the Directors.

• 6.6.10 No fees have been paid to any third party in lieu of directors’ fees.

• 6.6.11 GAIA has not, in the 3 (three) years preceding the date of these Revised Listing Particulars, paid (or agreed to pay) any amounts (whether in cash or in securities or otherwise) or given any benefits to any Director or to any company in which he is beneficially interested, directly or indirectly, or of which he is a director (“ the associate company ”) or to any partnership, syndicate or other association of which he is a member (“ the associate entity ”), to induce him to become, or to qualify him as, a Director or otherwise for services rendered by him or by the associate company or the associate entity in connection with the promotion or formation of GAIA.

6.7 Interests of Directors

• 6.7.1 Save as set out below, no Director of GAIA (including any person who may have resigned as a Director within the last 18 (eighteen) months) has any material beneficial interest, directly or indirectly, in any transactions that were effected by GAIA (i) during the current or immediately preceding financial year; or (ii) during an earlier financial year and which remain in any respect outstanding or unperformed.

• 6.7.2 Save for being a Shareholder of GAIA (as set out in paragraph 6.7.4 of these Revised Listing Particulars) and a shareholder of the Manager (as set out in paragraph 7.3 of these Revised Listing Particulars), no Director has had any material beneficial interest, either direct or indirect, in any property acquired or to be acquired and no promoter or Director of GAIA is or was a member of a partnership, syndicate or other association of persons that has or had such an interest.

• 6.7.3 Save for being a Shareholder of GAIA (as set out in paragraph 6.7.4 of these Revised Listing Particulars) and a shareholder of the Manager (as set out in paragraph 7.3 of these Revised Listing Particulars), no Director has had any material beneficial interest, either direct or indirect, in the promotion of GAIA. No cash or securities have been paid and no benefit has been given to any promoter within the last three years.

• 6.7.4 The direct and indirect beneficial interests of the Directors (including any Directors who have resigned during the 18 (eighteen) months preceding the Last Practicable Date) and their associates in the issued share capital of GAIA, are set out below:

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Total
Shareholding %
beneficial Direct Indirect [1] 2016 shareholding
L de Wit 1 179 222 1 179 222 2.14
PB Schabort 104 829 1 179 222 1 284 051 2.33
C Ferreira 461 100 461 100 0.84
Total Shareholding 565 929 2 358 444 2 924 373 5.31
----- End of picture text -----

Note

1. Includes Shares held in trusts of which the Directors are discretionary beneficiaries.

6.8 Service contracts of Directors

Service contracts have been concluded between the Manager and each of GAIA’s executive Directors on terms and conditions that are standard for such appointments. There are no service contracts between GAIA and any of its nonexecutive Directors.

7. THE MANAGER

7.1 Overview of the Manager

• 7.1.1 The Manager was incorporated in Cape Town in 2012 as a private company under registration number 2012/093632/07. The Manager changed its name from “GAIA Energy Proprietary Limited” to “GAIA Infrastructure Partners Proprietary Limited” on 29 April 2015.

• 7.1.2 The Manager employs a combination of highly skilled actuarial, engineering, project development, and investment professionals who facilitate exposure for long-term investors to infrastructure investment opportunities. The Manager’s emphasis is on identifying and structuring investment models that present institutional and retail investors with investment opportunities in the underlying assets while introducing a more liquid instrument in the medium term to ensure maximum investment flexibility for institutional and retail investors.

• 7.1.3 The Manager provides the Services to GAIA and GFS in terms of Management Agreement. The Management Agreement was considered and approved by the Board as a whole and was entered into between GAIA, GFS and the Manager. The salient provisions of the Management Agreement are set out in Annexure RLP2 to these Revised Listing Particulars.

84 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

7.2 Expertise of the Manager

• 7.2.1 The Manager has a unique skill set and experience set in the following sectors:

  • technical and engineering;

  • project finance;

  • deal flow;

  • capital markets;

  • financial product development;

  • retirement fund industry; and

  • governance in the listed environment.

• 7.2.2 During 2014 and 2015, the Manager originated, placed and closed transactions totalling approximately R1.35 billion Rand in the secondary REIPPPP equity market (“ Existing Managed Assets ”). The transactions include significant stakes in 3 (three) solar photovoltaic projects and 1 (one) wind project, acquired in unlisted funds. The Manager will continue to render services similar to the Services in respect of several unlisted funds and the Existing Managed Assets, which are unrelated to GAIA.

• 7.2.3 GAIA has a right of first refusal in respect of all potential new investments identified by the Manager which meet the Company’s investment policy. When determining if a potential investment should be pursued, the Board will consider the size of the investment, diversification of risk and general risk profile thereof. Accordingly, the Directors may determine to place all or only a portion of the proposed investment into GAIA.

• 7.3 Shareholders of the Manager

The non-executive directors of the Manager, as listed below in paragraph 7.4 of these Revised Listing Particulars, collectively hold 74% (seventy-four percent) of the issued share capital of the Manager. The executive directors of the Manager, as listed below in paragraph 7.4 of these Revised Listing Particulars, collectively hold the remaining 13% (thirteen percent) of the issued share capital of the Manager.

7.4 Details of directors of the Manager

The full names, ages, business address and capacities of the directors of the Manager are outlined below:

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Full Name Age Designation business Address
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MM Nieuwoudt	44	Chief investment offcer	37 Vineyard Road, Claremont, 7700
PB Schabort	57	Chairman	37 Vineyard Road, Claremont, 7700
L de Wit	60	Non-executive director	37 Vineyard Road, Claremont, 7700
C Ferreira	63	Non-executive director	2nd foor, Katherine and West, 114 West Street, Sandown, Sandton

• 7.5 Experience of the directors of the Manager

• Profiles of the directors of the Manager, detailing their experience, appear in Annexure RLP3 to these Revised Listing Particulars.

• 7.6 Disclosures by the directors of the Manager

None of the directors of the Manager:

• 7.6.1 have been declared bankrupt, insolvent or have entered into any individual voluntary compromise arrangements;

• 7.6.2 have been directors with an executive function of any company put under, or proposed to be put under, any business rescue plans, or that is or was the subject of an application for business rescue, any notices in terms of section 129(7) of the Companies Act, receiverships, compulsory liquidations, creditors voluntary liquidations, administrations, company voluntary arrangements or any compromise or arrangements with creditors generally or any class of creditors, at the time of such event or within the 12 (twelve) months preceding any such event;

• 7.6.3 have been partners in a partnership that was the subject of any compulsory liquidation, administration or partnership voluntary arrangement, at the time of such event or within the 12 (twelve) months preceding any such event;

• 7.6.4 have entered into any receiverships of any asset(s) or of a partnership where such directors are or were partners during the preceding 12 (twelve) months;

• 7.6.5 have been publicly criticised by a statutory or regulatory authority, including recognised professional bodies, or been disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of any company;

• 7.6.6 have been involved in any offence of dishonesty;

• 7.6.7 have been removed from an office of trust, on the grounds of misconduct, involving dishonesty; or

• 7.6.8 have been the subject of any court order declaring him delinquent or placing him under probation in terms of section 162 of the Companies Act and/or section 47 of the Close Corporations Act, No. 69 of 1984 or been disqualified by a court to act as a director in terms of section 219 of the Companies Act, No. 61 of 1973.

• 7.7 Remuneration of the directors

• 7.7.1 The directors of the Manager are all Directors of GAIA and, accordingly, any and all remuneration and benefits received by such directors from GAIA and/or the Manager have been disclosed in paragraph 6.6 of these Revised Listing Particulars.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 85

SECTION ONE – INFORMATION ON GAIA (continued)

7. THE MANAGER (continued)

7.7 Remuneration of the directors (continued)

• 7.7.2 The directors of the Manager will not receive any remuneration from GAIA as a direct consequence of the Acquisition, however the Manager will receive a transaction fee as set out in Annexure RLP2 to these Revised Listing Particulars.

• 7.7.3 GAIA has not paid any amounts (whether in cash or in securities), nor given any benefits to any directors of the Manager or to any company in which the directors of the Manager are beneficially interested, or to any partnership, syndicate or other association of which the directors of the Manager are members, or to any director of the Manager as an inducement to become a director of GAIA or of the Manager or otherwise, or for services rendered by the directors of the Manager, or otherwise for services rendered by the directors of the Manager or by an associate company or associate entity in connection with the promotion or formation of GAIA.

7.8 Interests of the directors of the Manager in GAIA

• 7.8.1 All of the directors of the Manager are also Directors of GAIA. Accordingly, the direct and indirect beneficial interests of such directors (including any directors who have resigned during the 18 (eighteen) months preceding the Last Practicable Date) and their associates in the issued share capital of GAIA have been disclosed in paragraph 6.7.4 of these Revised Listing Particulars.

• 7.8.2 No director of the Manager has or had any interest, directly or indirectly, in any transaction which is, or was, material to the business of GAIA and which was effected by GAIA during the current financial year which remains in any respect outstanding or unperformed.

• 7.8.3 Save for being a Shareholder or a shareholder of the Manager, no director of the Manager has had any material beneficial interest, either direct or indirect, in the promotion of GAIA.

• 7.8.4 Save for being a Shareholder or a shareholder of the Manager, no director of the Manager has had any material beneficial interest, either direct or indirect, in any property acquired or to be acquired by GAIA.

8. SHARE CAPITAL

• 8.1 The authorised and issued share capital of GAIA as at the Last Practicable Date are as follows:

E CAPITAL The authorised and issued share capital of GAIA as at the Last Practicable Date are as follows:
		R
Stated capital
Authorised
6 000 000 000 Shares		–
Issued
55 151 000 Shares	545	851 762
Total	545	851 762

Note

1. As at the Last Practicable Date, no Shares were held in treasury.

2. 8.2 Following the implementation of the Acquisition, the authorised and issued share capital of GAIA will remain unchanged.

3. 8.2.1 As at the Last Practicable Date:

   • 8.2.1.1 no debentures have been created or issued by GAIA or GFS; and

   • 8.2.1.2 all Shares in issue are fully paid up and freely transferable.

4. 8.2.2 All Shares in issue rank pari passu with each other in all respects, including in respect of voting rights and dividends.

5. 8.2.3 There are no preferential conversion and/or exchange rights in respect of any Shares.

8.3 Major and controlling Shareholders

• 8.3.1 At the Last Practicable Date, those Shareholders (other than the Directors) who, insofar as is known to GAIA, directly or indirectly beneficially hold 5% (five percent) or more of the issued share capital of GAIA, are set out below.

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Number of % of Shares
Name of Shareholder Shares in issue
TriAlpha 20 000 000 36.26
Government Employee Pensions Fund (Public Investment Corporation) 22 700 000 41.16
Total 42 700 000 77.42
----- End of picture text -----

86 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

• 8.3.2 There has been no change in the controlling Shareholder of GAIA during the 5 (five) years preceding the Last Practicable Date, save for the original acquisition of GAIA as a shelf company by GAIA Infrastructure Partners on the date of incorporation, being 16 April 2015, and the subsequent subscription by the Public Investment Corporation and TriAlpha for Shares in GAIA pursuant to the Private Placement on the Listing Date.

8.4 Rights attaching to Shares

• The salient provisions of the MOI regarding the rights attaching to Shares are detailed in Annexure RLP1 to these Revised Listing Particulars.

8.5 Changes to share capital

There have been no changes to GAIA’s authorised share capital (including no share consolidations or subdivisions) during the previous 3 (three) years, save as set out below:

• 8.5.1 GAIA was incorporated with an authorised share capital of 1 000 (one thousand) Shares on 16 April 2015; and

• 8.5.2 GAIA increased its authorised share capital to 6 000 000 000 (six billion) Shares on 14 September 2015.

8.6 Options and preferential rights in respect of Shares

• There is no contract or arrangement, either actual or proposed, whereby any option or preferential right of any kind has been or will be given to any person to subscribe for any Shares or any shares in GFS.

• 8.7 Dividends

• 8.7.1 Following the implementation of the Acquisition, subject to section 46 of the Companies Act, GAIA’s targeted annualised dividend distribution rate shall be CPI plus 2.5% (two point five percent), which distribution rate shall be calculated with reference to GAIA’s net asset value as set out in the most recent annual financial statements of GAIA.

• 8.7.2 In terms of the MOI, all unclaimed monies that are due to any Shareholder pursuant to the declaration of a dividend shall be held by GAIA in trust until lawfully claimed by such Shareholder, or until the Shareholder’s claim to such money has prescribed in terms of the applicable laws of prescription.

• 8.7.3 No arrangements exist under which future dividends are waived or are agreed to be waived.

• 8.8 Other listings

The Shares of GAIA are not listed on any stock exchange other than the JSE.

• 8.9 Rights offer

Since GAIA’s incorporation, GAIA has not undertaken any rights offers.

• 8.10 Shares issued

Other than the issue of Shares to GAIA Infrastructure Partners pursuant to its initial incorporation (as detailed in paragraph 8.3.2 on the previous page) and the issue of Shares pursuant to the Private Placement, neither GAIA nor GFS has issued any shares since its incorporation.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 87

SECTION TWO – FINANCIAL INFORMATION

9. EXPENSES

The estimated costs of preparing and distributing the Circular, including these Revised Listing Particulars and all other annexures, holding the General Meeting and implementing the Acquisition, including the fees payable to professional advisors, are approximately R11 643 700 (eleven million six hundred and forty-three thousand seven hundred Rand), including VAT. The full particulars are presented in paragraph 14 of the Circular.

10. BORROWINGS AND LOANS RECEIVABLE

• 10.1 Loans to Directors

As at the Last Practicable Date, no loans have been made or security furnished by GAIA to or for the benefit of any Director, manager or any associate of a Director or manager of GAIA.

• 10.2 Material loans As at the Last Practicable Date, no material loans have been made to GAIA or GFS and no loan capital is currently outstanding. GAIA intends to fund the Acquisition through a loan in the amount of R512 643 700 (five hundred and twelve million six hundred and forty-three thousand seven hundred Rand) by GAIA to GFS.

• 10.3 Material commitments, lease payments and contingent liabilities

As at the Last Practicable Date, GAIA has no material capital commitments or contingent liabilities.

• 10.4 Loans receivable

As at the Last Practicable Date, neither GAIA nor GFS has any material loans receivable, save for inter-company loans.

• 10.5 Loans to Directors or managers The GAIA Group has not made any loans to, or furnished any security for the benefit of, any Director or manager of GAIA (or of any associate of any such Director or manager).

11. AMOUNTS PAID TO PROMOTERS, BROKERAGES AND COMMISSIONS

For the previous 3 (three) years:

• 11.1 no amounts have been paid to any promoter, partnership, syndicate or other association;

• 11.2 no Director, or any partnership, syndicate or any other association of which he is a member, or any of his associates, has been paid to induce, or qualify, him to become a Director, or for the promotion of GAIA;

• 11.3 no amount has been paid to any underwriter;

• 11.4 no commissions, discounts or brokerages were paid, or any special terms granted, to any person in connection with the issue or sale of any Shares; and

• 11.5 no royalties or items of a similar nature have been paid or are payable by GAIA.

12. WORKING CAPITAL

• The Directors are of the opinion that, following the implementation of the Acquisition and provided Ordinary Resolution Number 2 detailed in the Notice of General Meeting is passed:

• 12.1 the GAIA Group will be able, in the ordinary course of business, to pay its debts for a period of 12 (twelve) months after the date of these Revised Listing Particulars;

• 12.2 the assets of the GAIA Group will be in excess of the liabilities of the GAIA Group for a period of 12 (twelve) months after the date of these Revised Listing Particulars;

• 12.3 the share capital and reserves of the GAIA Group will be adequate for ordinary business purposes for a period of 12 (twelve) months after the date of these Revised Listing Particulars; and

• 12.4 the working capital of the GAIA Group will be adequate for ordinary business purposes for a period of 12 (twelve) months after the date of these Revised Listing Particulars.

13. HISTORICAL FINANCIAL INFORMATION OF GAIA

The historical financial information of GAIA showing the audited financial results of GAIA for the financial year ended 29 February 2016 is available on GAIA’s website at www.gaiaip.com, is the responsibility of the Directors and is hereby incorporated by reference.

14. PRO FORMA FINANCIAL INFORMATION OF GAIA

A pro forma statement of the financial position of GAIA, showing the pro forma financial position of GAIA, is presented in Annexure 1 to the Circular and is the responsibility of the Directors, while the Auditor and Independent Reporting Accountant’s report thereon is included as Annexure 2 to the Circular.

88 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

15. MATERIAL CHANGES

• 15.1 There have been no material changes in the financial or trading position of the GAIA Group since the end of its last financial year ended 29 February 2016.

• 15.2 There have been no material changes in the business or trading objects of the GAIA Group within the past 5 (five) years preceding these Revised Listing Particulars.

16. PRINCIPAL IMMOVABLE PROPERTY OWNED AND LEASED

As at the Last Practicable Date, neither GAIA nor GFS owns or leases any immovable property. Both will operate out of the Manager’s offices in Claremont, Cape Town. No separate leased offices are foreseen.

17. INTER-COMPANY FINANCIAL AND OTHER TRANSACTIONS

As at the Last Practicable Date, tthere are no material inter-company financial and other transactions. GAIA intends to fund the acquisition through a loan in the amount of R512 643 700 (five hundred and twelve million six hundred and forty-three thousand seven hundred Rand) by GAIA to GFS.

18. MATERIAL ACQUISITIONS

Neither GAIA nor GFS has undertaken any material acquisitions since its incorporation, respectively, and, save in respect of the Acquisition, is not currently contemplating any potential material acquisitions.

19. PROPERTY DISPOSED OF OR TO BE DISPOSED OF

Neither GAIA nor GFS has disposed of any material property since its incorporation and neither company is currently contemplating any material disposals.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 89

SECTION THREE – FINANCIAL INFORMATION

20. PROMOTERS’ AND OTHER INTERESTS

• 20.1 No amounts have been paid or accrued and no benefit was given or proposed to be given within the last 3 (three) years to any promoter or to any partnership, syndicate or other association of which any promoter is or was a member.

• 20.2 No Director or promoter has any material beneficial interest, direct or indirect, in the promotion of GAIA, save for being a Shareholder and/or a shareholder of the Manager.

• 20.3 No commissions were paid, or have accrued, by GAIA within the 3 (three) years preceding the date of these Revised Listing Particulars in respect of any underwriting.

• 20.4 No commissions, discounts, brokerages or other special terms have been granted by GAIA within the 3 (three) years preceding the date of these Revised Listing Particulars in connection with the issue or sale of any securities, stock or debentures in the capital of GAIA.

21. GOVERNMENT PROTECTION AND INVESTMENT ENCOURAGEMENT LAW

There is no Government protection or investment encouragement law affecting the GAIA Group.

22. LITIGATION

There are no legal or arbitration proceedings (including any such proceedings that are pending or threatened) of which GAIA is aware, which may have, or have during the 12 (twelve) months preceding the Last Practicable Date had, a material effect on the financial position of the GAIA Group.

23. MATERIAL CONTRACTS

Save for the Escrow Agreement, the Management Agreement, the Acquisition Agreements and the DK Option Agreement, no material contracts have been entered into by GAIA or GFS, being restrictive funding arrangement and/or contracts entered into other than in the ordinary course of business and (i) within the 2 (two) years prior to the date of these Revised Listing Particulars or, (ii) at any other time where such agreement contains an obligation or settlement that is material to GAIA as at the date of these Revised Listing Particulars.

24. EXPERTS’ CONSENTS

The Auditors and Independent Reporting Accountants, Independent Expert and each of the experts, whose names appear in the “Corporate Information” section of these Revised Listing Particulars, have given and have not, prior to the formal approval of these Revised Listing Particulars by the JSE, withdrawn their written consents to the inclusion of their names, and acting in the capacities stated and, where applicable, to their reports, being included in these Revised Listing Particulars.

25. RESPONSIBILITY STATEMENT

The Directors, whose names are set out in paragraph 6.1.1 of these Revised Listing Particulars, collectively and individually accept full responsibility for the accuracy of the information contained in these Revised Listing Particulars which relates to GAIA and, in this regard, 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 these Revised Listing Particulars contains all information required by the JSE Listings Requirements.

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26. KING CODE AND CORPORATE GOVERNANCE

Shareholders are referred to Annexure RLP5 to these Revised Listing Particulars, which concerns the application of the King Code and other corporate governance principles to GAIA.

27. DOCUMENTS AVAILABLE FOR INSPECTION

The documents listed in paragraph 18 of the Circular, or copies thereof, will be available for inspection by Shareholders during normal business hours at GAIA’s registered office and at the offices of the Sponsor, the details of which are provided in the “Corporate Information” section of this Circular, from 19 September 2016 until 18 October 2016 (both days inclusive).

SIGNED AT CAPE TowN oN 16 SEPTEMbER 2016 by L DE wIT oN bEhALF oF ALL ThE DIRECToRS oF GAIA, AS LISTED bELow, IN TERMS oF PowERS oF ATToRNEy SIGNED by SUCh DIRECToRS

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L de wit

Chairman

MM Nieuwoudt T Soudien-Witten PB Schabort C Ferreira KP Lebina N Kimber KE Mbalo

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 91

ANNEXURE RLP1

RELEVANT PROVISIONS FROM THE MOI OF GAIA AND THE MEMORANDUM OF INCORPORATION OF GFS

This Annexure RLP1 contains extracts of various provisions from the MOI of GAIA and the memorandum of incorporation of GFS, as required under the JSE Listings Requirements. In each case, the numbering and wording below matches that of the MOI of GAIA and the memorandum of incorporation of GFS, respectively.

MOI OF GAIA

For a full appreciation of the provisions of the MOI, Shareholders are referred to the full text of the MOI, which is available for inspection, as provided for in paragraph 18 of the Circular.

2. SPECIAL PURPOSE ACQUISITION PERIOD

• Notwithstanding anything to the contrary contained in this MOI, for as long as the Company is considered to be a SPAC:

• 2.1 the Holders shall be required to vote on and approve any proposed acquisition of Viable Assets by Ordinary Resolution; and 2.2 should an acquisition of Viable Assets not have been completed during the period of 24 (twenty four months commencing on the date upon which the Company’s Securities are first listed on the JSE, or any extended period granted by the JSE, the Holders of the Company shall be entitled to receive an amount equal to the aggregate amount held by the Company in escrow in accordance with the Listings Requirements (net of any applicable taxes and expenses related to the distribution and voluntary liquidation), plus the interest earned, divided by the aggregate number of Securities.

3. LISTING OF SECURITIES ON THE jSE

• 3.1 The Listings Requirements, including the provisions of the Listings Requirements in respect of SPACs, if applicable, apply to the Company for as long as the Securities of the Company are listed on the JSE and insofar as the Listings Requirements are applicable. Notwithstanding anything else to the contrary contained in this MOI, all references to the Listings Requirements in this MOI and compliance with the Listings Requirements shall only apply for as long as any Securities of the Company are listed on the JSE.

• 3.2 Furthermore, the application of, and compliance with, the Listings Requirements is subject to any exemptions that may be granted by the JSE. Any exemption granted will apply equally to this MOI.

8. AMENDMENTS TO THE MOI

• 8.1 Save for correcting errors substantiated as such from objective evidence or which are self-evident errors (including, but without limitation ejusdem generis, spelling, punctuation, reference, grammar or similar defects) in the MOI, which the Board is empowered to do in terms of section 17(1) subject to the provisions of the Listings Requirements, all other amendments of the MOI shall be effected in accordance with section 16(1) and section 16(4) and the Listings Requirements. All such other amendments shall be approved by a Special Resolution passed by the Holders of ordinary Shares, but subject to clause 9.4.

• 8.2 Notice of any corrections made in terms of clause 8.1 must be given to Holders which may be done by way of notification on the Company’s web-site, if any.

• 8.3 For the avoidance of doubt, amendments to the MOI shall include, without limitation:

• 8.3.1 the creation of any class of Shares;

• 8.3.2 the variation of any preferences, rights, limitations and other terms attaching to any class of Shares;

• 8.3.3 the conversion of one class of Shares into one or more other classes;

• 8.3.4 an increase in the number of authorised Securities of a class;

• 8.3.5 a consolidation of Securities;

• 8.3.6 a sub-division of Securities; and/or

• 8.3.7 the change of name of the Company.

9. AUTHORISED SECURITIES, ALLOTMENT AND ISSUE AND FINANCIAL ASSISTANCE

• 9.1 The Company is authorised to issue 6 000 000 000 (six billion) ordinary Shares with no par value (which includes Shares already issued at any time), which shall have Voting Rights in respect of every matter that may be decided by voting, as set out in clause 26.22, and which shall rank after all other classes of Shares in the Company which do not rank pari passu with the ordinary Shares as regards Distributions and returns of capital, but save as aforesaid shall be entitled to receive the net assets of the Company upon its liquidation.

• 9.2 Subject to clause 6.4, the Board shall have the power to amend the authorisation (including increasing or decreasing the number) and classification of Shares (including determining rights and preferences) as contemplated in section 36(2)(b) or 36(3) or to Convert ordinary Shares into redeemable preference Shares or to Convert Securities of any one class into Securities of any other class whether issued or not, provided that for as long as any Securities of the Company are listed on the JSE, the Board may only do so where it has complied with the Listings Requirements.

• 9.3 All Securities of a class shall rank pari passu in all respects.

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• 9.4 No rights, privileges or conditions for the time being attached to any class of Securities of the Company nor any interests of that class of Securities may (unless otherwise provided by the terms of issue of the Securities of that class), whether or not the Company is being wound up, be varied, nor may any variations be made to the rights, privileges or conditions of any class of Securities, unless the consent in Writing of the Holders of not less than 75% (seventy five per cent) of the issued Securities of that class has been obtained (provided that an amendment by written consent as aforesaid shall be valid only if permitted in terms of the Listings Requirements or with the consent of the JSE, for so long as any securities of the Company are listed on the JSE’s lists), or a Special Resolution has been passed by the Holders of that class of Securities at a separate meeting of the Holders of that class. The provisions of this MOI relating to Shareholders’ Meetings shall mutatis mutandis apply to any such separate meeting except that:

• 9.4.1 the necessary quorum to commence the meeting and consider the matter shall be sufficient Person/s Present and entitled to vote Securities of that class holding in aggregate at least 25% (twenty five per cent) of all the Voting Rights that are entitled to be exercised on the matter, provided that the meeting may not begin unless, in addition, if there are more than 3 (three) Securities Holders who Hold Securities of that class, at least 3 (three) Securities Holders entitled to vote are Present;

• 9.4.2 for so long as the Securities of the Company are listed on the JSE’s lists, once a quorum has been established, all the Securities Holders of that class constituting a quorum must be Present to hear the matter; and

• 9.4.3 if a quorum is not Present, the meeting shall be adjourned for 1 (one) week to the same day in the next week, or if that day is a public holiday, to the next succeeding day which is not a public holiday and if, at any such adjourned meeting of such Holders, the required quorum contemplated in clause 9.4.1 is not Present, those Persons entitled to vote who are Present shall be the requisite quorum.

• 9.5 For as long as Securities of the Company are listed on the JSE, no Shares may be authorised in respect of which the preferences, rights, limitations or any other terms of any class of Shares may be varied in response to any objectively ascertainable external fact or facts as provided for in sections 37(6) and 37(7), unless permitted by the JSE.

• 9.6 Notwithstanding any implication to the contrary in this MOI, the Board may not authorise any financial assistance by the Company in connection with the subscription for or purchase of its Securities or any options over Securities or those of a Related or Inter-Related company without complying with section 44(3).

11. AUTHORITY TO ISSUE SECURITIES

• 11.1 Except as may be permitted by (and in those circumstances, in compliance with) the Listings Requirements from time to time, the Board shall not have the power to issue authorised Securities (other than as contemplated in clause 11.7 or clause 12 (Pre-emption on Issue of Securities) or clause 13 (Other Issues of Shares)) without the prior approval contemplated in clause 11.2 (where required in terms of clause 11.2) and with the approval of the JSE (where such approval is required in terms of the Listings Requirements from time to time).

• 11.2 As regards the issue of:

• 11.2.1 Shares, other Securities convertible into Shares, options over Shares or Securities or a grant of any other right exercisable for Securities in the circumstances contemplated in sections 41(1) and (3), the Directors shall not have the power to allot or issue same without the prior approval of a Special Resolution except, in the circumstances contemplated by section 41(1) of the Companies Act, section 41(2) of the Companies Act applies;

• 11.2.2 other equity Securities not referred to in clause 11.2.1, and other equity Securities including options in respect thereof, the Directors shall not have the power to allot or issue same or grant options over same without the prior approval of an Ordinary Resolution of the Shareholders,

provided that such issue has been approved by the JSE. For the avoidance of doubt, no approval of shareholders shall be required in order for Directors to allot and issue shares in terms of a rights offer, a claw-back offer, an acquisition issue or a vendor consideration placing, save for in circumstances where section 41(3) is applicable.

• 11.3 No special privileges, such as attending and voting at general meetings and the appointment of directors, may be granted to secured and unsecured debt instruments as contemplated in section 43(3).

• 11.4 If the issue of any debt instrument, according to its terms, will or may result in the allotment or issue of Shares or substitution or conversion of the debt instrument for Shares of the Company, the provisions of clause 11.2.1 and/or clause 13 (Other Issues of Shares) shall apply at the time of issuing the debt instrument.

• 11.5 Any such approval contemplated above in this clause 11 (Authority to Issue Securities) may be in the form of a general authority to the Directors, whether conditional or unconditional, to allot or issue any such Securities contemplated in clauses 11.1, 11.2 and 11.4 in their discretion, or in the form of a specific authority in respect of any particular allotment or issue of such Securities contemplated in clauses 11.2 and 11.4. Such authority shall endure for the period provided in the Ordinary Resolution or Special Resolution in question, subject to the provisions of the Listings Requirements, but may be revoked by Ordinary Resolution (if initially approved by Ordinary Resolution) or Special Resolution (if initially approved by Special Resolution), as the case may be, at any time.

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ANNEXURE RLP1

RELEVANT PROVISIONS FROM THE MOI OF GAIA AND THE MEMORANDUM OF INCORPORATION OF GFS (continued)

11. AUTHORITY TO ISSUE SECURITIES (continued)

• 11.6 Notwithstanding anything to the contrary contained in this MOI, the Company may exclude from any rights offer any Holder or category of Holders:

• 11.6.1 in accordance with section 99(7) and with the approval of the JSE (to the extent necessary); or

• 11.6.2 if the Company is precluded by any law or regulatory requirement (including but not limited to anti-money laundering legislation) from extending such rights offer to such Holder or category of Holders.

• 11.7 The Board may issue capitalisation Shares or offer any qualifying Holder of Shares an election to instead receive a cash payment in lieu of awarding a capitalisation Share in accordance with section 47.

• 11.8 No Shares of a class which is listed may be issued other than as fully paid.

28. NUMBER OF DIRECTORS, ELECTION OF DIRECTORS, ALTERNATE DIRECTORS AND CASUAL VACANCIES

• 28.1 The minimum number of Directors shall be 5 (five). Subject to clause 28.10, any failure by the Company at any time to have the minimum number of Directors does not limit or negate the authority of the Board, or invalidate anything done by the Board or the Company.

• 28.2 At the first Annual General Meeting, all the Directors are to retire. Thereafter, at the Annual General Meeting held in each year, 1/3 (one-third) of the Directors, or if their number is not a multiple of 3 (three), then the number nearest to, but not less than, 1/3 (one-third) shall retire from office, provided that in determining the number of Directors and which to retire no account shall be taken of any Director who has been appointed as the chief executive officer or executive financial Director (as these offices are contemplated in the Listings Requirements, if applicable), managing Director, joint managing Director and/or to any other executive office for a fixed period and his contract provides that he is not subject to retirement during that fixed period.

• 28.2.1 The Directors so to retire at each Annual General Meeting shall be those who have been the longest in office since their last election;

• 28.2.2 As between Directors of equal seniority, the Directors to retire shall, in the absence of agreement, be selected from among them by lot; Provided that notwithstanding anything herein contained, if at the date of any Annual General Meeting, any Director will have;

• 28.2.3 held office for a period of 3 (three) years since his last election or appointment; or

• 28.2.4 reached 75 (seventy five) years of age since the previous Annual General Meeting, unless the Board resolves otherwise,

• he shall retire at such Annual General Meeting, either as one of the Directors to retire in pursuance of the foregoing or additionally thereto.

• 28.3 A retiring Director shall act as a Director throughout the Meeting at which he retires. The length of time a Director has been in office shall be computed from the date of his last election. Retiring Directors shall be eligible for re-election, unless they have reached the retirement age detailed in clause 28.2.4.

• 28.4 Each of the Directors and the Alternate Directors, other than a Director contemplated in clause 28.9, shall be elected (which, in the case of a vacancy arising, shall take place at the next Annual General Meeting) in accordance with the provisions of the Companies Act to serve for a maximum term of 3 (three) years as a Director or Alternate Director. An Alternate Director shall serve in the place of 1 (one) or more Director/s named in the resolution electing him during the Director’s/s’ absence or inability to act as Director. If a Person is an Alternate Director to more than 1 (one) Director or if an Alternate Director is also a Director, he shall have a separate vote, on behalf of each Director he is representing, in addition to his own vote, if any.

• 28.5 There are no general qualifications prescribed by the Company for a Person to serve as a Director or an Alternate Director in addition to the requirements of the Companies Act. The Board, with the assistance of the nominations committee, must make recommendations to the Holders regarding the eligibility of Persons nominated for election as Directors, taking into account their past performance and contribution, if applicable.

• 28.6 No Director shall be entitled to appoint any Person as an Alternate Director to himself without the prior approval of the Board, but the Board shall be entitled to appoint Alternate Directors provided that they do not constitute more than 50% (fifty percent) of all Alternate Directors in office.

• 28.7 In any election of Directors and Alternate Directors, the election is to be conducted according to the provisions set out in the Companies Act.

• 28.8 No Person shall be elected as a Director or Alternate Director, if he is Ineligible or Disqualified and any such election shall be a nullity.

• 28.9 For purposes of section 66(4)(a)(i) of the Companies Act, any vacancy occurring on the Board may be filled by the Board, but so that the total number of the Directors shall not at any time exceed the maximum number fixed, if any. The Individual so appointed shall cease to hold office at the termination of the first Shareholders’ Meeting to be held after the appointment of such Individual as a Director unless he is elected at such Shareholders’ Meeting.

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• 28.10 If the number of Directors falls below the minimum number fixed by or pursuant to this MOI, the continuing Directors (or sole continuing Director) must, as soon as possible and, in any event, not later than 3 (three) months from the date that the number of Directors falls below the minimum, fill the vacancies or call a Shareholders’ Meeting for the purpose of filling the vacancies. After the expiry of the aforesaid 3 (three) month period, the continuing Directors or Director may act only for the purpose of summoning a Shareholders’ Meeting or filling vacancies.

• 28.11 The office of Directors shall not be occupied for an indefinite period.

29. CESSATION OF OFFICE AS DIRECTOR OR ALTERNATE DIRECTOR

A Director or Alternate Director shall immediately cease to hold office as such:

• 29.1 if he becomes Ineligible or Disqualified in terms of the Companies Act; or

• 29.2 when he resigns by Written notice to the Company; or

• 29.3 if the Board determines that he has become incapacitated to the extent that the Person is unable to perform the functions of a director, and is unlikely to regain that capacity within a reasonable time, and the Director/Alternate Director has not within the permitted period filed an application for review or has filed such an application but the court has not yet confirmed the removal (during which period he shall be suspended); or

• 29.4 if he is removed by Ordinary Resolution; or

• 29.5 if he is removed by resolution of the Board for being negligent or derelict in performing the functions of a Director, and the Director/Alternate Director has not within the permitted period filed an application for review or has filed such an application but the court has not yet confirmed the removal (during which period he shall be suspended); or

• 29.6 if he files a petition for the surrender of his estate or an application for an administration order, or if he commits an act of insolvency as defined in the insolvency law for the time being in force, or if he makes any arrangement or composition with his creditors generally; or

• 29.7 for as long as the Securities of the Company are listed on the JSE, if he becomes ineligible in terms of the Listings Requirements or is declared ineligible by the JSE; or

• 29.8 at the end of the first Annual General Meeting held after he attains the age of 75 (seventy five) years, unless the Board resolves otherwise; or

• 29.9 if he is otherwise removed in accordance with the provisions of this MOI or the Companies Act.

30. REMUNERATION OF DIRECTORS AND ALTERNATE DIRECTORS AND MEMBERS OF BOARD COMMITTEES

• 30.1 The Directors or Alternate Directors or members of Board committees shall be entitled to such remuneration for their services as Directors or Alternate Directors or members of Board committees as may have been determined from time to time by Special Resolution within the previous 2 (two) years. In addition, the Directors and Alternate Directors shall be entitled to all reasonable expenses properly and necessarily incurred by them in travelling (including hotels) to and from meetings of the Directors and Holders, and the members of the Board committees shall be entitled to all reasonable expenses properly and necessarily incurred by them in travelling (including hotels) to and from meetings of the members of the Board committees, as determined by a disinterested quorum of Directors. The Company may pay or grant any type of remuneration contemplated in sections 30(6)(b) to (g) to any executive Directors.

• 30.2 A Director may be employed in any other capacity in the Company or as a director or employee of a company controlled by, or itself a major Subsidiary of, the Company and in that event, his appointment and remuneration in respect of such other office shall be determined by a disinterested quorum of Directors.

31. FINANCIAL ASSISTANCE FOR DIRECTORS AND PRESCRIBED OFFICERS AND THEIR RELATED AND INTER-RELATED PARTIES

• 31.1 The Board’s powers to provide direct or indirect financial assistance as contemplated in section 45(2) are not limited in any manner by this MOI.

• 31.2 If the Board adopts a resolution as contemplated in section 45(2) regarding financial assistance to the Directors/Prescribed Officers and others contemplated in that section, the Company shall comply with the provisions of section 45.

32. GENERAL POWERS AND DUTIES OF DIRECTORS

• 32.1 The business and affairs of the Company must be managed by or under the direction of its Board, which has the authority to exercise all the powers and perform any of the functions of the Company.

• 32.2 The Board must appoint a chief executive officer and an executive financial Director (as such offices are contemplated in the Listings Requirements, if applicable). The Board may from time to time appoint 1 (one) or more of the Directors to the office of managing Director or executive Director (provided always that the number of Directors so appointed by the Board as chief executive officer, executive financial Director, managing Director, joint managing Directors and/or the holders of any other executive office, including a chairperson who holds an executive office but not a chairperson who is a nonexecutive Director, shall at all times be less than ½ (one-half) of the number of Directors in office) for such period (not exceeding 3 (three) years) and at such remuneration (whether by way of salary or commission, or participation in profits or partly in one way and partly in another) and generally on such terms as they may think fit, and it may be made a term of his appointment that he be paid a pension, gratuity or other benefit on his retirement from office.

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ANNEXURE RLP1

RELEVANT PROVISIONS FROM THE MOI OF GAIA AND THE MEMORANDUM OF INCORPORATION OF GFS (continued)

32. GENERAL POWERS AND DUTIES OF DIRECTORS (continued)

• 32.3 The Board may from time to time entrust to and confer upon a chief executive officer or executive financial Director (as such offices are contemplated in the Listings Requirements, if applicable), or managing Director or executive Director for the time being such of the powers vested in the Directors as they may think fit, and may confer such powers for such time and to be exercised for such objects and upon such terms and with such restrictions as they may think expedient, and they may confer such powers either collaterally or to the exclusion of, and in substitution for, all or any of the powers of the Directors, and may from time to time revoke or vary all or any of such powers. A chief executive officer or executive financial Director (as such offices are contemplated in the Listings Requirements, if applicable) or managing Director or executive Director appointed pursuant to the provisions hereof shall not be regarded as an agent or delegate of the Directors and after powers have been conferred upon him by the Board in terms hereof he shall be deemed to derive such powers directly from this clause.

37. DISTRIBUTIONS

• 37.1 The Company, in compliance with the Companies Act and the Listings Requirements:

• 37.1.1 may make Distributions from time to time, provided that:

  • 37.1.1.1 any such Distribution:

    • 37.1.1.1.1 is pursuant to an existing legal obligation of the Company, or a court order; or

    • 37.1.1.1.2 has been declared, having been authorised by the Board in accordance with the Companies Act, by resolution of the Board (except a distribution which results in Shareholders holding Shares in an unlisted entity, which shall require the prior sanction of an Ordinary Resolution);

  • 37.1.1.2 it reasonably appears that the Company will satisfy the Solvency and Liquidity Test set out in section 4, immediately after completing the proposed Distribution; and

  • 37.1.1.3 the Board, by resolution, has acknowledged that it has applied the Solvency and Liquidity Test in the Companies Act and reasonably concluded that the Company will satisfy the Solvency and Liquidity Test immediately after completing the proposed Distribution.

• 37.1.2 must, before incurring any debt or other obligation for the benefit of any Holders, comply with the requirements in clause 37.1.1

and must complete any such Distribution fully within 120 (one hundred and twenty) Business Days after the acknowledgement referred to in clause 37.1.1.3, failing which it must again comply with clauses 37.1.1.1.2, 37.1.1.2 and 37.1.1.3. Dividends and other Distributions shall be paid to Holders registered as at a date subsequent to the date of declaration or date of confirmation of the dividend, or other Distribution, whichever is the later. Any dividend or other Distribution may be paid by electronic funds transfer or by cheque payable to the order of the Holder entitled thereto, or (in the case of joint Holders) of that Holder whose name stands first on the register in respect of the joint holding. Every such cheque shall (unless otherwise directed) be sent by post to the last registered address of the Holder entitled thereto, and the receipt of the Person whose name appears in the Securities Register, or in the case of joint Holders, of any one of such Holders, or of his or their agent duly appointed in Writing, shall be a good discharge to the Company for all dividends or other Distributions. Every such cheque shall be sent at the risk of the Person entitled to the money represented thereby.

• 37.2 No Distribution may be made if it is a Distribution of capital and an obligation is imposed that the Company is entitled to require the capital to be subscribed to the Company again.

• 37.3 No notice of change of address or instructions as to payment given after the determination of a dividend or other Distribution by the Company in terms of clause 37.1.1.1 shall become effective until after the dividend or other Distribution has been made, unless the Board so determines at the time the dividend or other Distribution is approved.

• 37.4 Subject to clause 37.5 and to the laws of prescription of South Africa in force from time to time, all unclaimed dividends or other Distributions as contemplated in this clause 37 shall be held in trust by the Company until claimed, without the payment of interest, provided that any dividend or other Distribution remaining unclaimed for a period of not less than 3 (three) years from the date on which it became payable, may be forfeited by resolution of the Directors for the benefit of the Company.

• 37.5 The Company shall be entitled at any time to delegate its obligations in respect of unclaimed dividends or other unclaimed Distributions or any other amounts payable to Holders in their capacity as such, to any one of the Company’s bankers from time to time.

• 37.6 The Board shall be entitled to determine that Distributions to Holders of ordinary Shares are paid in new ordinary Shares from time to time, provided that the terms thereof contain an election for qualifying Holders of Shares to receive a cash Distribution and the provisions of section 47(2) of the Companies Act shall apply with the necessary changes for the context.

• 37.7 The Directors may resolve that any Distribution or other payment made to all or any Securities Holders whose registered addresses are outside the Republic or who have given written instructions requesting payment at addresses outside the Republic, shall (subject to any exchange control regulations in force at that time) be paid in such other currency or

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currencies as may be stipulated by the Directors. The Directors may also stipulate the date (hereinafter referred to as the “Currency Conversion Date”) upon which, and a provisional rate of exchange at which, the currency of South Africa shall be converted into such other currency or currencies, provided that the currency conversion shall be within a period of 30 (thirty) days prior to the date of payment. If, in the opinion of the Directors, there is no material difference between the rate/s of exchange ruling on the Currency Conversion Date and the provisional rate/s of exchange stipulated by the Directors, then the currency of South Africa shall be converted at such provisional rate/s. If, in the opinion of the Directors, there is a material difference between the aforementioned rates, then the currency of South Africa shall be converted into such other currency or currencies at the rate/s of exchange ruling on the Currency Conversion Date, or at a rate or rates of exchange which, in the opinion of the Directors, is/are not materially different. Any subsequent rise or fall of rate/s of exchange determined as above shall be disregarded.

• 37.8 Subject to the provisions of this MOI, the Act and, for as long as the Securities of the Company are listed on the JSE, the Listings Requirements, to the extent applicable, the Company may, from time to time, in any manner as may be prescribed or permitted by law, reduce its issued share capital, stated capital, any share premium account and any capital redemption reserve fund and, in particular, without derogating from the generality of the power hereby conferred, may cancel any paid-up share capital which has been lost or is not represented by available assets or may pay off any paid-up share capital which is in excess of the requirements of the Company.

38. CAPITALISATION

• 38.1 The Company in Shareholders’ Meeting on recommendation of the Directors, or the Directors, may, without limitation to its powers, at any time and from time to time, subject to the fulfilment of the requirements in section 47 and the Listings Requirements, pass a resolution to capitalise any amounts or funds including:

• 38.1.1 any sum forming part of the undivided profits standing to the credit of the Company’s reserve fund;

• 38.1.2 any sum in the hands of the Company and available for distribution as a dividend and not required for payment or provision of dividends on preference Shares;

• 38.1.3 any sum carried to reserve as a result of a sale or revaluation of the assets of the Company or part thereof; or

• 38.1.4 any sum received by way of premium on the issue of any shares or debentures of the Company, provided that the Board shall require Shareholder approval by Ordinary Resolution for any capitalisation issue where Shareholders are not entitled to participate in the capitalisation in proportion to their shareholding in the Company.

GFS MEMORANDUM OF INCORPORATION

For a full appreciation of the provisions of the memorandum of incorporation of GFS, Shareholders are referred to the full text of the memorandum of incorporation, which is available for inspection, as provided for in paragraph 18 of the Circular.

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ANNEXURE RLP2

RELEVANT PROVISIONS OF THE MANAGEMENT AGREEMENT

The salient features of the Management Agreement are set out below.

For a full appreciation of the provisions of the Management Agreement, Shareholders are referred to the text of the Management Agreement, which is available for inspection as provided for in paragraph 18 of the Circular.

1. DEFINITIONS

• The definitions in the Management Agreement relevant to these Revised Listing Particulars and this Annexure RLP2 are found in clause 1 of the Management Agreement, and are follows:

• 1.1 “ Accounting Date ” means 29 February 2016 and 28 February (or the last day in February) in each year thereafter, or such other date as GFS may determine and notify to the Manager from time to time in accordance with this Management Agreement;

• 1.2 “ Accounting Period ” means a period of no more than 12 months ending on and including an Accounting Date and beginning on the day following the preceding Accounting Date or, in the case of the first Accounting Period, on the Commencement Date;

• 1.3 “ Commencement Date ” means the date upon which GAIA’s Shares were first admitted to listing on the JSE; 1.4 “ Enterprise Value ” shall bear the meaning ascribed thereto in clause 1.4 of Annexure B to this Management Agreement;

• 1.5 “ Event of Default ” shall bear the meaning ascribed thereto in clause 12.2 of the Management Agreement which reads that an Event of Default shall be deemed to have occurred upon the happening of any one or more of the following events (if it is not capable of remedy) or, if the event is capable of remedy, if it is not remedied within 21 days of its occurrence:

• 1.5.1 an arbitrator determines in terms of clause 16 of the Management Agreement that the Manager has committed fraud, acted recklessly, in bad faith or with wilful malfeasance in the performance of its obligations under the Management Agreement;

• 1.5.2 the Manager becomes subject to any judgement, consent, decree or interdict of a court of competent jurisdiction precluding it from discharging its obligations under the Management Agreement for a period in excess of 3 months; or

• 1.5.3 the Manager, GFS or GAIA are wound-up, liquidated or placed under business rescue (whether provisionally or finally and whether such winding-up is voluntary or compulsory) or the directors or members of the Manager, GFS or GAIA, as the case may be, pass a resolution for its winding-up.

• 1.6 “ Group ” means collectively GFS, GAIA and GAIA’s subsidiaries from time to time;

• 1.7 “ In Force Period ” means the period commencing on the day immediately following the end of the Interim Period and terminating on the date upon which this Management Agreement is terminated;

• 1.8 “ Interim Period ” means the period commencing on the Commencement Date and terminating on the date upon which the GAIA Group acquires a Viable Asset;

• 1.9 “ Interim Period quarter ” shall mean each period of 3 months during the Interim Period commencing on (and including) a Quarterly Date and ending on (but excluding) the next succeeding Quarterly Date provided that:

• 1.9.1 the first Interim Period Quarter shall commence on the Commencement Date and end on the earlier of first Quarterly Date thereafter or the last day of the Interim Period; and

• 1.9.2 the last Interim Period Quarter shall end on the last day of the Interim Period;

• 1.10 “ Management Fee ” has the meaning ascribed thereto in Annexure B of the Management Agreement;

• 1.11 “ quarter ” mean each period of 3 months commencing on (and including) a Quarterly Date and ending on (but excluding) the next succeeding Quarterly Date provided that:

• 1.11.1 the first Quarter shall commence on the first day of the In Force Period and end on the first Quarterly Date thereafter; and

• 1.11.2 the last Quarter shall end on the Termination Date; and

• 1.12 “ quarterly Date ” means 1 March, 1 June, 1 September and 1 December. “ Termination Date ” shall bear the meaning ascribed thereto in clause 12.1 of the Management Agreement;

• 1.13 “ Total Subscription Value ” means the aggregate amount received by GAIA from Shareholders in respect of the subscription price for Shares, from time to time; and

• 1.14 “ Trading Day ” means a day upon which the JSE is open for trade.

2. DURATION, TERM AND AMENDMENT

• 2.1 GFS has appointed GAIA Infrastructure Partners (the “ Manager ”) to render corporate finance and asset management services to the GAIA Group. The term for which the Manager has been appointed is a period of not less than five years commencing on the Commencement Date, after which 5 year period either party may give 12 months’ notice of termination of the agreement. If GFS wishes to terminate the Management Agreement on notice as aforesaid, it must obtain the approval of the shareholders of GAIA by ordinary resolution.

• 2.2 Notwithstanding the foregoing, the Management Agreement will terminate immediately (whether or not the five year period has expired) if an Event of Default occurs. The Management Agreement is also capable of termination (whether or not the five year period has expired) to the extent that any party breaches the Management Agreement and such breach is not remedied within 10 Business Days of receipt of written notice from the aggrieved party requiring the breach to be remedied.

• 2.3 If the Management Agreement is terminated for any reason, save where the Management Agreement is terminated by GAIA or GFS as a result of an Event of Default, a termination fee is payable to the Manager (“ Termination Fee ”). No such Termination Fee will accordingly be payable in the event where the Management Agreement is terminated as a result of an Event of Default, whether during or after the first five year period. The Termination Fee will be an amount which is equal to 5% of the Enterprise Value (calculated in accordance with clause 5.1.4 below) determined as at the Termination Date.

98 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

The Termination Fee shall be payable within 10 Business Days of the Termination Date. Accordingly, by way of example only, if the Management Agreement terminated and a Termination Fee is due and payable at a time that the Enterprise Value of GAIA is R1 billion, a Termination Fee of R50 million will be due and payable to the Manager.

• 2.4 Any material amendment of the Management Agreement must be approved by ordinary resolution of shareholders of GAIA.

3. THE SERVICES

The services to be rendered by the Manager in terms of the Management Agreement are detailed in Annexure A to the Management Agreement and include:

• 3.1 identifying, evaluating, screening and investigating (including the conduct of due diligence investigations) investment opportunities (including the products, services, markets, management, financial situation and competitive position of prospective Portfolio Companies) and exit strategies in respect of investments, and objectively presenting the outcome of such investigations to GAIA and/or GFS for review;

• 3.2 monitoring investments, reinvestments and divestments and providing factual responses and feedback to the GAIA Group regarding same;

• 3.3 investigating and considering potential realisation opportunities, including the identification of potential acquirers and the evaluation of offers made by potential acquirers, and reporting to GAIA and/or GFS in respect thereof;

• 3.4 negotiating, preparing and reviewing all documents required in connection with the acquisition or realisation of investments;

• 3.5 obtaining valuations of such of the investments as GAIA and/or GFS may from time to time require;

• 3.6 appointing, on behalf of GAIA and/or GFS, any professional consultants required by the GAIA Group from time to time, if and when requested to do so by the GAIA Group;

• 3.7 preparing factual material and analyses of information for inclusion in annual or other reports of the GAIA Group whenever the GAIA Group may reasonably require;

• 3.8 reporting on investments which GFS has made (and advising on operational interventions) and, where appropriate, providing general business management advice to the board of directors of Portfolio Companies for the duration of GFS’ investment in such Portfolio Companies;

• 3.9 from time to time, and as required by GFS’ Board, reporting to the Board of GFS in relation to the business of GFS the GAIA Group and the status and performance of the investments;

• 3.10 consulting with and assisting the auditors in accounting matters affecting the GAIA Group; and

• 3.11 calculating and submitting such calculations to the Board of GFS in respect of the subscription price payable by any person wishing to subscribe for shares in GAIA.

• RIGHTS, OBLIGATIONS AND DUTIES OF THE MANAGER, GAIA AND GFS

• 4.1 The Manager is obliged to render the services with due and professional care, skill and diligence.

• 4.2 The Manager is not a registered financial services provider in terms of the Financial Advisory and Intermediary Services Act, 2002 and accordingly any advice provided by the Manager is merely a recommendation and not an instruction or direction, and the Manager does not provide discretionary intermediary services (clause 3.2 of the Management Agreement).

• 4.3 Neither GAIA nor GFS may conclude an agreement with a third party which provides for the rendering of services similar to the services rendered by the Manager under the Management Agreement (clause 4.3.2 of the Management Agreement).

• 4.4 All capital raised by the GAIA Group and all proceeds from investments made by the GAIA Group must, after allowing for certain permissible deductions (including distributions to be made to shareholders of GAIA in accordance with GAIA’s distribution policy), be made available for investment in terms of the Management Agreement (clause 4.3.1 of the Management Agreement).

• 4.5 The Manager does not warrant the performance of any investment and is not liable for any losses suffered by the GAIA Group arising from the performance by it of the services under the Management Agreement save in respect of any matter resulting from the Manager’s fraud, wilful misconduct, bad faith, recklessness, gross negligence or a material breach of its obligations under the Management Agreement which is not remedied within a reasonable period (clause 13 of the Management Agreement).

5. FEES PAYABLE TO THE MANAGER

In addition to the Termination Fee detailed in paragraph 2.3 above, the fees payable to the Manager are detailed in Annexure B to the Management Agreement. The Manager will be paid two kinds of fees for the rendering of the services, namely a Management Fee and Transaction Fees (as detailed on the next page).

• 5.1 Management fee

• 5.1.1 The Manager shall be entitled to receive, for each Accounting Period, an annual fee payable in arrears in four quarterly instalments in Rand (the “Management Fee”). The Management Fee shall constitute an expense of GFS.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 99

ANNEXURE RLP2

RELEVANT PROVISIONS OF THE MANAGEMENT AGREEMENT (continued)

5. FEES PAYABLE TO THE MANAGER (continued) 5.1 Management fee (continued)

	5.1.2	For each Interim Period Quarter, the Management Fee shall be calculated in accordance with the following formula:
		n
		MF = TSV x R x 365
		where:
		MF = Management Fee
		TSV = Total Subscription Value
		R = a nominal annual rate of 0.5%
		n = the number of days in each Interim Period Quarter
	5.1.3	During the In Force Period, the Management Fee shall be calculated in accordance with the following formula:
		n
		MF = EV x R x 365
		where:
		MF = Management Fee
		EV = the Enterprise Value for the relevant Quarter determined in accordance with clause 5.1.4 below.
		R = a nominal annual rate of 0.8%
		n = number of days in each Quarter
	5.1.4	The Enterprise Value shall be calculated as follows:
		EV = AMC + D
		where:
		EV = the weighted Enterprise Value of GAIA for the relevant Quarter;
		AMC = is the Average Market Capitalisation for the relevant Quarter determined in accordance with clause
		5.1.5 below; and
		D = is the average debt balance due for the relevant Quarter.
	5.1.5	The Average Market Capitalisation shall be calculated as follows:
		AMC = DMC/n
		where:
		AMC = is the Average Market Capitalisation of GAIA for the relevant Quarter;
		DMC = is aggregate of the Daily Market Capitalisations for each Trading Day in the relevant Quarter, determined
		in accordance with clause 5.1.6 below; and
		n = is the number of Trading Days in the relevant Quarter.
		The Daily Market Capitalisation shall be calculated as follows:
		DMC =Xx Z
		Y
		where:
		DMC = Daily Market Capitalisation for each Trading Day in the Quarter
		X = the total aggregate Rand value of all on-market trades of Shares on the JSE on the relevant Trading Day
		Y = the total number of Shares traded on-market on the JSE on the relevant Trading Day
		Z = the number of Shares in issue at the end of the relevant Trading Day.
	5.1.6	The Manager shall calculate the Management Fee for each Quarter or Interim Period Quarter (as the case may
		be) and shall deliver an invoice for the Management Fee, together with a copy of such calculation to GFS within
		10 Business Days of the end of the relevant Quarter or Interim Quarter. GFS shall accept or dispute the calculation
		in writing within 5 Business Days of receipt thereof. Any dispute regarding the Manager’s calculation shall be
		resolved in accordance with clause 9.4 of the Management Agreement.
	5.1.7	Subject to clause 9.1 of the Management Agreement, GFS shall pay the Management Fee within 10 Business Days
		of the date of receipt of the invoice or the date upon which any dispute regarding the calculation of the Management
		Fee is resolved, whichever is later.
5.2	Transaction fees
	5.2.1	In addition to the Management Fee, the Manager is entitled to be paid transaction fees by GAIA Financial Service on
		the acquisition or disposal by GFS of an investment (“Transaction Fees”).
	5.2.2	In the case of an acquisition of an investment, the Transaction Fee shall be equal to 1% of the acquisition cost of
		the investment. The acquisition cost is the aggregate cost incurred by GFS in acquiring the relevant investment,
		including any equity and debt components of the investment, but excluding all transaction costs such as legal,
		accounting and advisory fees (including the Transaction Fee due to the Manager).
	5.2.3	In the case of a disposal, the Transaction Fee is equal to 1% of the disposal proceeds of the investment. The
		disposal proceeds are the aggregate proceeds received by GFS, in cash or in kind, from the realisation or disposal
		of an investment.

100 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

ANNEXURE RLP3

DIRECTOR AND SENIOR MANAGEMENT PROFILES

DIRECTORS

LEON DE WIT (LEON) (60)

Executive Chairman

BCom (Maths), Fellow of Institute of Actuaries in London, UK, Owner President Management Program – Harvard Executive Business School, Boston, USA

Leon qualified as an actuary whilst working for Sanlam Limited and is currently a director and shareholder of GAIA Infrastructure Partners and GAIA. In 1984, Leon relocated to Gauteng where he spent most of his professional career consulting to many of the largest retirement funds in South Africa. He joined PSG Group Limited in its early years, taking responsibility for Channel Life Limited and its subsidiaries and associates. After completing an Owner President Management Program at the Harvard Executive Business School in 2002, Leon decided to leave formal employment. He and his family moved to a boutique wine farm in Stellenbosch where he has since engaged in special projects and community development programs. Leon and PB Schabort have been working on the funding of renewable energy projects by South African institutions since 2011, culminating in the establishment of GAIA Infrastructure Partners.

MATTHYS MICHIEL NIEUWOUDT (MICH) (44)

Executive Director

Pr.Eng, B.Eng (Electronic), MBA

Mich is a qualified engineer and currently the chief investment officer, and a shareholder, of GAIA Infrastructure Partners and GAIA. Mich graduated from the University of Pretoria in 1995, majoring in Microwave Field Theory, Computers and Bio-Engineering. After stints in the petrochemical industry with Polifin and defence industry with Thales, he joined PSG Investment Bank in 1999. After completing his MBA at the University of Stellenbosch Business School in 2003, he joined Siemens Business Services (“ Siemens ”). While working for Siemens, he had the opportunity to gain international experience in Europe, consulting as far afield as Norway, the Netherlands and Germany. Mich joined the Square One Group in 2005 and was responsible for group operations. In 2008, Mich teamed up with PB Schabort. He worked on the Eden Island Project and mining operations in West Africa alongside Chinese partners before focusing on the build out of SAGIT Energy Ventures, a renewable energy developer.

As part of SAGIT Energy Ventures, he developed 2 Onshore Wind Farms in the Western Cape. These projects have been submitted in various rounds of the REIPPPP. In addition to these projects, he has led the SAGIT development team in the assessment of a number of other infrastructure projects including pumped storage projects, solar projects, biogas projects and further wind farm developments.

He was part of the founding team and is currently the chief investment officer of GAIA Infrastructure Partners. He serves on the boards of various operational REIPPPP projects.

TAMEE SOUDIEN-WITTEN (TAMEE) (38)

Financial Director

CA(SA), B.Comm (Honours)

Tamee obtained her B.Comm degree through the University of the Western Cape. Whilst completing her articles with Grant Thornton Kessel Feinstein, she obtained her B.Comm Honours degree through the University of Natal. In 2002, she passed her board examinations and qualified as a Chartered Accountant. Tamee has accumulated 12 years’ experience in the financial services industry. She spent 10 years at Old Mutual where she held a number of senior finance roles in the Employee Benefits Division. Tamee acquired a broad range of skills and experience in financial management, reporting as well as project management. Before joining GAIA, Tamee entered the renewable energy sector as Finance Executive to a construction company responsible for the construction of a wind and solar farm.

PHILIP BOTHA SCHABORT (BOTHA) (57)

Non-executive Director

Pr.Eng, Hons.B.Eng, MBA

Botha is a professional engineer and holds degrees in engineering from Stellenbosch University and an MBA from the University of Witwatersrand (“ wits ”). He is a director of various companies. He started his career in 1980 as a civil engineer where he specialised in project management and construction. After obtaining an MBA from Wits in 1986 he joined stock broking firm Senekal Mouton & Kitshoff (“ SMk ”) which is listed on the JSE, where he specialised in the bond- and money markets. From 1987 he served as director with SMK and Anderson Wilson & Partners. Botha was a founding shareholder and director of the JSE listed PSG Group Limited (“ PSG Group ”) in 1996. He was a founding director of separately listed PSG Investment Bank Holdings Limited (“ PSG Investment bank ”) where he served as managing director until 2000. He also served on the boards of a number of subsidiaries of PSG Group.

Botha has extensive investment experience in the areas of international property development, renewable energy projects, mining exploration, private equity and technology. Along with L de Wit, he founded GAIA Infrastructure Partners in 2011.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 101

ANNEXURE RLP3

DIRECTOR AND SENIOR MANAGEMENT PROFILES (continued)

CLIVE FERREIRA (CLIVE) (63)

Non-executive Director

B.Sc (Civil Eng), B.Comm, MBA

Clive was a founding director of Fieldstone Holdings SARL in 1995 and has 30 years’ experience in corporate and project finance. He holds a B.Sc. in Civil Engineering from Stellenbosch University, a degree in commerce from the University of South Africa and an MBA (Finance) from the University of Oregon.

Over the last 20 years he has travelled widely in the region focussing on energy and infrastructure related projects. The projects which Clive has been actively involved in, in a leading role, include: the restructuring of ownership of the 2 075 MW Cahora Bassa hydro-power station; the privatisation of Metrogas, the privatisation of the 600 MW coal-fired Kelvin power station; the concession of the Uganda hydro generation and distribution assets, the development of the 190 MW Ibom gas fired power plant in Nigeria, the bio-ethanol Grown energy project in Mozambique, the 360 MW Kariba North Bank Power extension and the 120MW Itezhi-Tezhi hydro projects in Zambia and the development of a new gas fired IPP in Ghana.

Clive also has significant renewable energy experience. In addition to various hydro projects, Clive led Fieldstone’s positioning as one of the premier financial advisors on the internationally acclaimed South African (“ REIPPP ”) renewable energy independent power producer programme. As such Clive was involved with three successful wind projects and a number of solar and wind bids that were not successful. Furthermore Clive has been involved with a new wind project in Namibia, a solar project in Zimbabwe and a number of hydro’s in Mozambique and Zambia.

KUBY PRUDENCE LEBINA (PRUDENCE) (34)

Independent non-executive Director

CA(SA), B.Comm, Hdip Accounting

Prudence is head of corporate development and investor relations at Atlatsa Resources Corporation (“ Atlatsa ”). She joined Atlatsa in mid-2014 and is part of the Atlatsa executive committee. Prudence is responsible for group communication, execution of corporate development opportunities in line with group strategy and overseeing stakeholder relations including communities and investors. Prudence was previously an investor relations manager and corporate finance principal analyst at Exxaro Resources Limited (“ Exxaro ”). She was part of the Exxaro corporate finance division responsible for group investment valuations and reviews in support of the investment review committee of the board. Prudence interacted regularly with research analysts as well as institutional and individual investors in presenting a consistent investment message to them.

From January 2006 to June 2010, Prudence was employed by Deutsche Bank SA Proprietary Limited in the Global Corporate Finance division. She worked on mergers and acquisitions advisory mandates including Black Economic Empowerment (“ bEE ”) transactions as well as the JSE Limited Sponsor services. Prudence qualified as a chartered accountant in December 2005 after serving her articles in the advisory department at PriceWaterhouseCoopers for 3 years. She passed both her Part 1 and Part 2 qualifying exams at first attempt. Her involvement on auditing projects included various external and internal audit assignments, IT system process assurance audits (application and general computer controls review) focusing on banking and financial services clients.

She holds a bachelor of commerce degree and a higher diploma in accounting qualification from the University of Witwatersrand. She also holds a certificate in business leadership from Columbia Business School in New York. She is a member of the South African Institute of Chartered Accountants, African Women Chartered Accountants and Business Women Association. Prudence is also a Student Sponsorship Programme volunteer where she mentors previously disadvantaged students in high schools.

NATHIERA KIMBER (NATHIERA) (43)

Independent non-executive Director

BA LLB, Hdip Tax, Master’s degree in Tax

Upon completion of her BA LLB at the University of the Western Cape in 1994, Nathiera completed her legal articles with Sonnenberg Hoffmann & Galombik and was admitted as an attorney. Nathiera joined the University of the Western Cape’s law faculty as a lecturer in Commercial Law in 1997 and commenced her Higher Diploma in Tax through the University of Cape Town. She lectured in Tax, Insolvency and Commercial Law.

During her academic career, Nathiera wrote various articles, one of which is published in the South African Law Journal. She was Top Achiever for the Higher Diploma in Tax for her year, was upgraded and requested to complete her Masters. In 1998 Nathiera completed her Masters in Tax through the University of Cape Town. In the interim she assisted with editing Juta’s tax law reports and research.

In June 1998 Nathiera joined Mettle (Proprietary) Limited as a legal advisor. During June 1999, PSG Investment Bank Limited (“ PSG Investment bank ”) presented Nathiera with an opportunity in investment banking, as the group secretary for PSG Investment Bank on an executive level. In January 2002 Nathiera resigned from PSG Investment Bank and rejoined the University of the Western Cape as a senior lecturer in the Mercantile Law department. Nathiera served as external examiner in the respective departments of Commercial Law for the Walter Sisulu University, the University of Cape Town and University of Stellenbosch.

In January 2008 Nathiera took a year sabbatical to join her husband in Kimberley in his business. In January 2009 Nathiera and her husband acquired the assets of the London listed Kimcor Group. Over the past six years those businesses forming part of the group have been restored to profitability. Whilst retaining her interest in the Kimberley business, Nathiera opened the first Barbour (the iconic British brand) store on the African continent, in Sandton City. Subsequent to the opening thereof she has now been awarded the Southern African distribution rights for the Barbour brand.

102 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

KHALIPHA EDWARD MBALO (EDDIE) (52)

Independent non-executive Director

Television Engineering Certificate – NHK Institute: Japan

Eddie was the chairman and interim chief executive officer of On Digital Media (“ oDM ”), the operator of Top TV, until the company was put through business rescue in 2013. He became the interim chief executive officer of StarSat, when it was rebranded after securing a strategic equity partner in Star Times Media of China in 2014. He is currently the executive consultant to the business rescue practitioner and the new chief executive officer of StarSat. He is also a non-executive director of the restructured ODM.

From 2001 to 2011, Eddie served as the chief executive officer of the National Film and Video Foundation (“ NFVF ”), a statutory body within the Ministry of Arts and Culture of South Africa, which is responsible for the promotion and development of South African film industry. During his tenure as chief executive officer, South African films received several international accolades.

Eddie started his own production company in 1984, working for high-profile foreign agencies such as ABC News (USA) and World Wide Television News, whilst being one of the main suppliers of an Anti-Apartheid News Magazine programme, “South Africa Now”, which was broadcast in 63 public broadcasting service television stations across the United States and around the world. Eddie trained as a television engineer at the NHK Institute in Japan and produced a number of documentaries; South Africa’s first TV Talk Show hosted by a black woman, “Top Level” (later to become “The Felicia Mabuza Suttle Show”); and a comedy series “Flat 27”, all for the SABC.

In 1998, Eddie joined South Africa’s first (and then newly licensed) commercial broadcaster, e.tv as its head of current affairs. He is best known for his current affairs show, “e.files”. On leaving the NFVF, he became a partner in Forefront Media Group with NFVF’s former head of production and development, Ryan Haidarian, and together they produced “Vehicle 19” (Paul Walker) and are currently in production with their second movie, “Accident”.

Eddie became involved in industry governance, playing a critical role in the drafting of the Broadcasting Act, as well as shaping the content development strategy with the Department of Arts and Culture, the Department of Communication and the Department of Trade and Industry (“ DTI ”) in South Africa. As head of the NFVF, Eddie was central to the creation of financial instruments that support the development of the film industry, such as the DTI rebates and section 12.0 of the Income Tax Act.

At the 64th Cannes Film Festival, Eddie was honoured with an African Vision Award by the Hollywood Reporter in association with Agoralumiere International, for his dedication as a creative defender of African Cinema alongside “Lumumba” star Eriq Ebouaney and journalist Marie-Roger Biloa.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 103

ANNEXURE RLP4

OTHER DIRECTORSHIPS

The table below sets out the names of the companies and other entities of which Directors are or have been directors, members or partners during the five years preceding the Last Practicable Date.

==> picture [505 x 656] intentionally omitted <==

----- Start of picture text -----

Director Name of Company or Entity Designation Active/Resigned
MM Nieuwoudt GAIA Infrastructure Partners Director Active
Bayes Holdings Director Active
Bayes Projects Director Active
GAIA Finance Director Active
GFS Director Active
GAIA Fund Managers Director Active
GAIA Infrastructure Capital Director Active
GAIA Infrastructure GP 1 Director Active
Hazika Holdings Director Active
Langhoogte Wind Farm Director Active
Nieuw Graan Member Active
Rietvlei Water Project Director Active
Sagit Energy Ventures Director Active
Thunderbird Logistics Member Active
Windgrow One Director Active
Wolseley Wind Farm Director Active
Suurvlakte Wind Energy Facility Director Active
Zenzisa 37 Member Active
Zenzisa 36 Member Active
Intikon Energy Director Active
Oakleaf Investment Holdings 83 Director Active
Oakleaf Investment Holdings 90 Director Active
Jasper Power Company Director Active
Oakleaf Investment Holdings 79 Director Active
Firefly Investments 253 Director Active
K2016223637 Director Active
Dorper Wind Farm Director Active
T Soudien-witten None – –
L de wit Africom Commodities Director Resigned
Amazink Live Director Active
Capcubed Investments Director Resigned
Compagnie Financiere Quantum Director Resigned
Eden Island Investments 10 Director Resigned
Familia Asset Managers Director Active
GAIA Infrastructure Partners Director Active
Kudu Khaya Properties Trustee Active
Leon De Wit Director Active
Marina Landscaping Director Active
Mec Landscapes Director Resigned
Novare CIS (RF) Director Active
PSG Channel Holdings Director Resigned
PSG Collective Investments Director Resigned
PSG Invest Director Resigned
PSG Invest Nominees Director Resigned
PSG Invest Services Director Resigned
PSG Konsult Director Resigned
PSG Life Director Resigned
PSG Wealth Nominees Director Resigned
Safrican Insurance Company Director Resigned
Statuo Wines Director Active
Tascali Investments 2 Director Resigned
The 19th Company Director Active
Triomf Fertilizer Director Resigned
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104 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

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----- Start of picture text -----

Director Name of Company or Entity Designation Active/Resigned
Pb Schabort Sagint Director Active
Bayes Holdings Director Active
Bayes Projects Director Active
Blue Planet Trading 18 Officer Resigned
Exact Africa Lease Management Outsourcing Director Resigned
Exact Africa Property Solution Company Director Resigned
FDP Kommersiele Beleggings No. 1 Member Resigned
Florensec Properties 25 Director Active
GAIA Infrastructure Partners Director Active
JFS Properties No. 9 Director Active
Langhoogte Wind Farm Director Active
Local and Overseas Leisure Corporation Company secretary Active
Marina Landscaping Director Resigned
Olivewood Resources Director Active
Rietvlei Water Project Director Active
Sable Metals and Minerals Director Resigned
Sable Platinum Holdings Director Active
Sagit Energy Ventures Director Active
Suurvlakte Wind Energy Facility Director Active
The South African General Investment and
Trust Company Director Active
Wild Dog Prospecting Director Active
Windgrow One Director Active
Wolseley Wind Farm Director Active
Structured and General Investment and
Trust Company Director Active
Local and Overseas Leisure Company Director Active
C Ferreira ABC Sodwana Director Active
GAIA Infrastructure Partners Director Active
C Ferreira and Associates Member Active
Fieldstone Africa Director Resigned
Fieldstone South Africa Director Resigned
Fixtrade 763 Director Resigned
Grown Energy Director Resigned
Mathopo Investments Director Resigned
Fieldstone Capital Holdings Director Resigned
Fieldstone Holdings SARL Director Resigned
Fieldstone Private Capital Holdings Director Resigned
FPCG Mauritius Director Resigned
Fieldstone Partners Director Resigned
Fieldstone Deutschland Director Resigned
kP Lebina African Premixes Member Active
Ndasele Director Active
Skyprops 112 Director Resigned
Waldobuzz Director Active
A Re Bjaleng Trade and General Projects Member Active
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GAIA Infrastructure Capital | Circular to Shareholders | September 2016 105

ANNEXURE RLP4

OTHER DIRECTORSHIPS (continued)

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----- Start of picture text -----

Director Name of Company or Entity Designation Active/Resigned
N kimber Anmic Diamonds Director Active
Koffiefontein Diamonds Director Active
Superkolong Holdings Director Active
Supermix Operations Director Active
Newlands Diamond Mine Director Active
Stone Path Trade Director Active
Supermix Construction Director Active
Supermix Industrial Director Active
Zevoware Director Active
Weypridge Properties Director Active
Blaauwbosch Diamond Mine Director Active
New Rush Diamonds Director Active
Kophia Diamonds Director Active
kE Mbalo Forefront Media Group Director Active
Khalipha Consulting Director Active
Transfontier Parks Destinations Director Active
Khaliphani Investment Holdings Director Active
On Digital Media Director Active
Diduscan Director Active
Unisa Foundation Trustee Resigned
Mbalo Family Trust Trustee Active
Mbalo Family Investment Trust Trustee Active
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106 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

ANNEXURE RLP5

KING CODE AND CORPORATE GOVERNANCE

PART A

GAIA is committed to the principles of transparency, integrity, fairness and accountability.

The King Code recognises that no “one size fits all” approach can be adopted in the application of its principles and that it may not be appropriate for entities to adopt all of its principles, in the context of its particular business and/or operational environment.

A full report is attached in Part B hereof which, to the best of the knowledge and belief of the Board, sets out the extent of GAIA’s current application of the principles of the King Code and explains the non-application of certain of its principles and/or where principles are not fully applied.

The key principles underpinning the corporate governance of GAIA and systems of control that form an integral part of corporate governance are set out hereunder.

1. THE BOARD

1.1 Introduction

The Board consists of eight members, of whom five are non-executive Directors and three are independent non-executive Directors (see Annexure RLP3 to these Revised Listing Particulars for their profiles). The changes to the Board during the 12 months prior to the Last Practicable Date are set out in paragraph 6.1.3 of these Revised Listing Particulars.

GAIA does not have a nomination committee and the appointment of Directors is considered to be a matter for the Board as a whole, with all appointments being made in a formal and transparent manner.

There is a policy evidencing a clear balance of power and authority at Board level, to ensure that no one Director has unfettered powers of decision making.

The key roles and responsibilities of the Board include the following:

• Approving and monitoring the implementation of the strategic plan developed by management;

• Responsible for governance and monitoring key risk areas;

• Monitoring compliance with all relevant laws, rules, codes and standards of business practice through a Compliance Framework;

• Monitoring performance through the various Board committees established to assist in the discharging of its duties while retaining full accountability and without abdicating its own responsibilities;

• Ensuring an effective and independent Audit Committee and Remuneration Committee;

• Ensuring that disputes are resolved effectively and efficiently;

• Appointing and evaluating the performance of the chief executive officer;

• Acting as the focal point for, and custodian of corporate governance;

• Monitoring open and prompt engagement with all key stakeholders; and

• Ensuring shareholders are treated equitably and equally

The Board considers it a good business imperative that all actions undertaken in GAIA’s name are executed ethically and professionally.

GAIA is committed to fostering a corporate culture that embraces diversity and, in particular, focuses on the composition of its Board. Diversity includes, but is not limited to gender, age, ethnicity and cultural background. In order to foster a corporate environment where Board diversity is achievable and maintained, GAIA has adopted a diversity policy which aims to promote an environment that is conducive to the appointment and retention of well qualified Board members to maximise the corporate goals of GAIA.

Directors disclose their personal financial interests at the start of every Board or committee meeting.

1.2 Composition of the Board

The Board consists of eight Directors, of whom five are non-executive Directors and three are independent non-executive Directors.

GAIA appointed an interim executive chairman, L de Wit following the resignation of JR Oliphant on 19 April 2016. GAIA has completed the process of recruiting a new chief executive officer and appointed KP Lebina as the new chief executive officer, with effect from 1 October 2016 as published on SENS on 30 August 2016.KP Lebina will relinquish her current position as lead independent Director when she assumes her new position as chief executive officer.

The interim executive chairman of the Board is not regarded as independent for purposes of the King Code. Accordingly, the Board resolved to appoint KE Mbalo as the new independent non-executive chairman with effect from 19 October 2016. L de Wit will continue to serve on the Board as a non-executive Director.

1.3 Expertise and experience of the chief financial officer

T Soudien-Witten is the chief financial officer of GAIA. The Audit Committee has considered and satisfied itself of the appropriateness of the expertise and experience of T Soudien-Witten.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 107

ANNEXURE RLP5

KING CODE AND CORPORATE GOVERNANCE (continued)

1. THE BOARD (continued)

1.4 Company secretary

All Board members have access to the advice and services of the company secretary which is responsible for the proper administration of the Board and the implementation of sound corporate governance procedures. This includes Board induction and training programmes and the supply of all information to assist Board members in the proper discharge of their duties.

The Board is of the opinion that the company secretary is suitably qualified and experienced to carry out their duties as stipulated under section 88 of the Companies Act.

The Board is satisfied that an arm’s length relationship exists.

2. BOARD COMMITTEES

2.1 Audit Committee

Following the Listing, GAIA is required to have an Audit Committee. The Board has appointed the following members to the Audit Committee, which members will be proposed for re-election by Shareholders at the General Meeting of Shareholders:

• KP Lebina;

• N Kimber; and

• KE Mbalo,

all of whom are independent non-executive Directors.

KP Lebina has been appointed as the chairperson of the Audit Committee.

The Audit Committee shall assist the Board by providing an objective and independent view on the GAIA Group’s finance, accounting and control mechanisms and by reviewing and ensuring that consideration is given to the following:

• the accounting policies of GAIA and any proposed revisions thereto;

• the effectiveness of GAIA’s information systems and internal controls;

• the appointment and monitoring of the effectiveness of the external auditors;

• the appropriateness, expertise and experience of the chief financial officer;

• setting the principles for recommending the use of external auditors for non-audit services and recommending that these be kept to a minimum;

• the annual report and, specifically, the annual financial statements included therein;

• the reports of the external auditors;

• GAIA’s going concern status; and

• compliance with applicable legislation and requirements of regulatory authorities.

In terms of risk management (through consultation with the external auditors), the Audit Committee ensures that management’s processes and procedures are adequate to identify, assess, manage and monitor group-wide risks.

The Audit Committee will hold a minimum of two meetings per year.

2.2 Remuneration Committee

The Board has appointed the following members to the Remuneration Committee on 2 September 2016:

• KP Lebina;

• N Kimber; and

• C Ferreira,

all of whom are non-executive Directors.

N Kimber has been appointed as the chairperson of the Remuneration Committee.

The Remuneration Committee will assist the Board in reviewing and making recommendations regarding non-executive Directors’ remuneration. In doing so, it will take cognisance of both local and international best practices to ensure that such total remuneration is fair and reasonable to both the Directors and GAIA.

2.3 Social and Ethics Committee

The Board has appointed the following members to the Social and Ethics Committee on 10 May 2016:

• KE Mbalo;

• N Kimber; and

• C Ferreira,

all of whom are non-executive Directors.

KE Mbalo has been appointed as the chairperson of the Social and Ethics Committee.

The purpose of the Social and Ethics Committee is:

• to monitor the Company’s activities with regards to:

• Social and economic standing and development;

• Good corporate citizenship;

108 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

• The environment, health and public safety;

• Consumer relationships and compliance laws;

• Report to Shareholders on matters within its mandate; and

• Draw matters within its mandate to the attention of the Board.

• The Social and Ethics Committee had it inaugural meeting in May 2016 and is scheduled to meet 2 times in the 2017 financial year.

3. LEGAL AND COMPLIANCE

The Board recognises its responsibility to ensure that GAIA complies with all applicable laws and considers adherence to all relevant industry charters, codes and standards. Board members are familiar with the industry and aware of the potential impact of legislative changes. The combined risk and internal audit function manages the process of compliance according to a framework that has been approved and is being monitored by the Audit Committee.

During the past financial year, no instances of material non-compliance were noted and no judgements, damages, penalties or fines were recorded or levied against GAIA, its Directors or employees for noncompliance with any legislation.

4. REMUNERATION REPORT

GAIA’s remuneration approach is and will continue to be aimed at remunerating Directors and employees fairly and responsibly. This approach takes cognisance of local and international remuneration best practices to ensure that GAIA, through the Manager, attracts and retains appropriate skills and talent.

Remuneration will be recommended by the Remuneration Committee, which will be mandated by and report to the Board, and which will oversee the setting and administration of remuneration. The committee will consider the holistic compensation model as well as the specific remuneration of all executive Directors paid by GAIA and prescribed officers, including the fees paid to all non-executive Directors. Fees payable (if any) to Directors are recommended by the Board to, and put forward for approval by, the GAIA Shareholders at annual general meetings.

5. IT GOVERNANCE REPORT

Information technology (“ IT ”) at GAIA is a strategic tool that facilitates the successful implementation of GAIA’s strategy and sustainable business performance. IT is governed on an operational level, through the Manager, and executive management ensures that GAIA complies with all relevant IT laws, rules, codes and standards.

The IT function at GAIA focuses on being an enabler to business, aligning with business initiatives, creating fluidity, and assisting in providing a competitive operational edge to business. GAIA has an IT policy that is implemented at an operational level, where there is a strong focus on change control processes and incident reporting systems The business currently does not have a Board-approved internal IT control framework, but an IT business continuity plan is in place. Going forward, it is the intention that an annual review will be done by an external company to test the strength and identify any vulnerabilities within the IT system security.

Going forward, it is the intention that independent external audits will be conducted to validate infrastructure and application security.

The IT function’s main areas of focus include the following:

• enhancing availability;

• performance and IT agility;

• continual refinement of security; and

• opportunity identification and implementation.

The most important risks associated with information technology in GAIA relate to the following:

• data leakage prevention;

• vendor compliance with legislation; and

• database administration and optimisation.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 109

ANNEXURE RLP5

KING CODE AND CORPORATE GOVERNANCE (continued)

PART B – APPLICATION OF PRINCIPLES IN THE KING CODE

Preamble

GAIA is committed to the principles of transparency, integrity, fairness and accountability. Areas of the King III Code that have been partially applied by GAIA are listed below. All other areas have been applied. The full GAIA King III application report can be viewed on its website www.gaia-ic.com.

Key – Level of compliance: Applied 

Partially applied * Not applicable 

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LEVEL oF
PRINCIPLE CoMPLIANCE CoMMENTS
1. Ethical leadership and corporate citizenship
1.1 The Board should provide effective leadership based Applied. Ethics form part of the values of GAIA and
on an ethical foundation  the Board. The Board provides effective leadership
based on an ethical foundation.
1.2 The Board should ensure that GAIA is, and is seen Applied. The Board ensures that GAIA is a responsible

to be, a responsible corporate citizen corporate citizen.
1.3 The Board should ensure that GAIA’s ethics are Applied. Ethical principles are applied during
managed effectively decision-making. A Social and Ethics Committee has
 been established which has social and ethics matters
as a standing agenda point and will meet at least
twice a year.
2. board and Directors
2.1 The Board should act as the focal point for and Applied. The Board as a whole is responsible for

custodian of corporate governance effective corporate governance.
2.2 The Board should appreciate that strategy, risk, Applied. Strategy, risk, performance and
performance and sustainability are inseparable sustainability are considered collectively by the Board

in the decision-making process and monitoring of the
GAIA Group’s performance.
2.3 The Board should provide effective leadership based Applied. Ethics form part of the values of GAIA and

on an ethical foundation the Board.
2.4 The Board should ensure that GAIA is and is seen to Applied. The Board ensures that GAIA is a responsible

be a responsible corporate citizen corporate citizen.
2.5 The Board should ensure that GAIA’s ethics are Applied. Ethics are the responsibility of the Board as

managed effectively a whole.
2.6 The Board should ensure that GAIA has an effective Applied. The Audit Committee consists of three
and independent Audit Committee independent non-executive Directors. The Audit

Committee members all have the necessary
experience and skills to serve on an Audit Committee.
2.7 The Board should be responsible for the governance Applied. The Board as a whole is responsible for risk

of risk governance.
2.8 The Board should be responsible for information Applied. The Board as a whole is responsible for

technology (IT) governance information technology (IT) governance.
2.9 The Board should ensure that GAIA complies with Applied. Compliance with all applicable laws and
applicable laws and considers adherence to non-  adherence to non-binding rules, codes and standards
binding rules, codes and standards form part of the values of GAIA.
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LEVEL oF
PRINCIPLE CoMPLIANCE CoMMENTS
2.10 The Board should ensure that there is an effective Partially applied. GAIA has appointed its own internal
risk-based internal audit auditors with effect from September 2015. At present
GAIA does not have any Viable Assets. When GAIA
is fully operational and has all the accompanying
procedures and controls in place, the Board will
ensure that an effective risk-based internal audit
in performed.
2.11 The Board should appreciate that stakeholders’ Applied. The Board monitors stakeholders’
perceptions affect GAIA’s reputation  perceptions, in light of the importance of
GAIA’s reputation.
2.12 The Board should ensure the integrity of GAIA’s Applied the Board has taken all necessary measures

integrated report to ensure the integrity of the integrated report.
2.13 The Board should report on the effectiveness of Once GAIA is fully operational and has all the
GAIA’s system of internal controls accompanying procedures and controls in place, the
Board will instruct the internal auditor to evaluate the

effectiveness of the internal controls. The Board will
then report on the effectiveness of GAIA’s system of
internal controls.
2.14 The Board and its directors should act in the best Applied. The Board acts in the best interests of GAIA.

interests of GAIA
2.15 The Board should consider business rescue Applied. This will be considered, if applicable.
proceedings or other turnaround mechanisms as

soon as GAIA is financially distressed as defined in
the Act
2.16 The Board should elect a chairman of the Board Applied. GAIA has appointed a separate chairman and
who is an independent non-executive director. The this role is not fulfilled by the chief executive officer.

chief executive officer of GAIA should not also fulfil The Board has appointed an independent
the role of chairman of the Board non-executive chairman, effective 19 October 2016.
2.17 The Board should appoint the chief executive officer Partially applied. The Board has appointed a chief
and establish a framework for the delegation executive officer and a framework for the delegation
of authority of authority has been established. On 19 April 2016
Mr J Oliphant resigned as chief executive officer of
the Company with effect from 19 April 2016 in order
to pursue his own business interests. The Chairman
of the Board, Mr Leon de Wit, assumed Mr Oliphant’s
duties and responsibilities pending the interim
appointment of an appropriate candidate. In this
regard, the Company has appointed KP Lebina as the
new chief executive officer with effect from
1 October 2016.
The Company’s daily operations are unaffected by
this development.
2.18 The Board should comprise a balance of power, with Applied. There is a balance between executive and
a majority of non-executive directors. The majority non-executive Directors with a majority of the Board

of non-executive directors should be independent being non-executive Directors and the majority of the
non-executive Directors being independent.
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ANNEXURE RLP5

KING CODE AND CORPORATE GOVERNANCE (continued)

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LEVEL oF
PRINCIPLE CoMPLIANCE CoMMENTS
2.19 Directors should be appointed through a Applied. All Directors are appointed through a formal
formal process process. Appointment of Directors is a matter for the
Board as a whole. The Board is of the view that prior
to acquisition of the viable asset, the size of GAIA
 does not justify a separate nominations committee.
In preparation for the acquisition of the viable asset.
The board has resolved to establish a nomination
committee which has been established on
11 August 2016.
2.20 The induction of and ongoing training and Partially applied. The Board has an informal induction
development of directors should be conducted process. New Directors have unlimited access to
through formal processes GAIA’s resources in order to familiarise themselves
with all matters related to GAIA. Consideration will be
given to a formal induction programme and ongoing
training and development for appointees.
2.21 The Board should be assisted by a competent, Applied. A competent, suitably qualified and
suitably qualified and experienced company  experienced company secretary has been appointed.
secretary
2.22 The evaluation of the Board, its committees and the Partially applied. The Board and its committees are
individual directors should be performed every year * newly appointed and constituted and will be evaluated
annually as provided for in the committee charters.
2.23 The Board should delegate certain functions to Applied. Committees make recommendations which
well-structured committees without abdicating its  are approved at Board level.
own responsibilities
2.24 A governance framework should be agreed between Partially applied. The Board will agree a governance
the GAIA Group and its subsidiary Boards * framework for GAIA and its subsidiaries within the
first financial year of GAIA following the Listing.
2.25 Companies should remunerate directors and Applied. The Board is of the view that executive
executives fairly and responsibly Directors are remunerated fairly and reasonably.
 Non-executive Directors’ fees are compatible with
what is deemed appropriate for the size and nature
of GAIA.
2.26 Companies should disclose the remuneration Applied. Remuneration has been disclosed in the
of each individual director and certain senior  integrated report.
executives
2.27 Shareholders should approve GAIA’s Applied. The remuneration policy and non-executive
remuneration policy directors’ fees for 2017, has been approved by the

Shareholders at the annual general meeting held on
11 August 2016.
3. Audit Committees
3.1 The Board should ensure that GAIA has an effective Applied. The Audit Committee consists of three

and independent Audit Committee independent non-executive Directors.
3.2 Audit Committee members should be suitably Applied. Audit Committee members are suitably
skilled and experienced independent, non-executive  skilled and experienced.
directors (subsidiary exemption)
3.3 The Audit Committee should be chaired by an Applied. The Audit Committee is chaired by an

independent non-executive director independent non-executive Director.
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LEVEL oF
PRINCIPLE CoMPLIANCE CoMMENTS
3.4 The Audit Committee should oversee the integrated Applied. GAIA has issued its first integrated report
reporting (integrated reporting, financial, and the Audit Committee ensured the integrity of the
sustainability and summarised information). integrated report.
The Audit Committee should be responsible for The Audit Committee will be responsible for
evaluating the significant judgements and reporting evaluating the significant judgements and reporting
decisions affecting the integrated report. decisions affecting the integrated report when GAIA
issues same in future.
The Audit Committee’s review of the financial

reports should encompass the annual financial The Audit Committee has reviewed all financial
statements, interim reports, preliminary or information included in the Circular and will review
provisional result announcements, summarised any annual financial statements, interim reports,
integrated information, any other intended release preliminary or provisional result announcements,
of price-sensitive financial information, trading summarised integrated information, any other
statements, circulars and similar documents intended release of price-sensitive financial
information, trading statements, circulars and similar
documents released by GAIA in future.
3.5 The Audit Committee should ensure that a Partially applied. The Audit Committee of GAIA
combined assurance model is applied to provide a has only recently been established. Following the
coordinated approach to all assurance activities Acquisition, the Audit Committee of GAIA will be
mandated to ensure that a combined assurance
model is applied. GAIA has also appointed an internal
auditor with effect from September 2015.
3.6 The Audit Committee should satisfy itself of the Applied. The Audit Committee has satisfied itself in
expertise, resources and experience of GAIA’s  this regard.
finance function
3.7 The Audit Committee should be responsible for Applied. GAIA has appointed an internal auditor with
overseeing of internal audit  effect from September 2015 that will report directly to
the Audit Committee.
3.8 The Audit Committee should be an integral Applied. Forms part of the role and responsibility of

component of the risk management process the Audit Committee.
3.9 The Audit Committee is responsible for Applied. Forms part of the role of the
recommending the appointment of the external  Audit Committee.
auditor and overseeing the external audit process
3.10 The Audit Committee should report to the Board Applied: a report on the activities of the Audit
and shareholders on how it has discharged  Committee is included integrated report.
its duties
4. The governance of risk
4.1 The Board should be responsible for the governance Applied. Governed by the Board as a whole.

of risk
4.2 The Board should determine the levels of risk Applied. Risk levels are discussed at Board level.

tolerance
4.3 The risk committee or Audit Committee Applied. The Audit Committee will assist the Board in
should assist the Board in carrying out its risk  carrying out its risk responsibility.
responsibilities
4.4 The Board should delegate to management the Applied. The Board has delegated the responsibility
responsibility to design, implement and monitor the  to management.
risk management plan
4.5 The Board should ensure that risk assessments are Applied. The Board performs risk assessment on a

performed on a continual basis continual basis.
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GAIA Infrastructure Capital | Circular to Shareholders | September 2016 113

ANNEXURE RLP5

KING CODE AND CORPORATE GOVERNANCE (continued)

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LEVEL oF
PRINCIPLE CoMPLIANCE CoMMENTS
4.6 The Board should ensure that frameworks and Applied. All risk factors within the current business
methodologies are implemented to increase the  model are continually monitored.
probability of anticipating unpredictable risks
4.7 The Board should ensure that management Applied. Responses are monitored and preventative
considers and implements appropriate  measures implemented to the extent possible.
risk responses
4.8 The Board should ensure continual risk monitoring Applied. Risk-monitoring forms part of planning and

by management decision-making.
4.9 The Board should receive assurance regarding the Applied. This occurs at Board level.

effectiveness of the risk management process
4.10 The Board should ensure that there are Applied. Risks will be disclosed in the integrated
processes in place enabling complete, timely, report and further disclosures will be assessed

relevant, accurate and accessible risk disclosure when needed.
to stakeholders
5. The governance of information technology
5.1 The Board should be responsible for information Applied. The Board is responsible for IT governance.

technology (“IT”) governance
5.2 IT should be aligned with the performance and Applied. Objectives are aligned.

sustainability objectives of GAIA
5.3 The Board should delegate to management the Partially applied. The Board is assisted by
responsibility for the implementation of an IT management and the Manager, in the implementation
governance framework * of an IT policy. A governance framework will be
considered for approval by the Board.
5.4 The Board should monitor and evaluate significant Applied. The Board receives the budget and progress

IT investments and expenditure reports for all material IT-related investments.
5.5 IT should form an integral part of GAIA’s risk Applied. IT is considered as part of risk management.

management
5.6 The Board should ensure that information assets Applied. The Board has appointed an Audit
are managed effectively  Committee which will assist it to carry out
its responsibilities.
5.7 A risk committee and Audit Committee Applied. The Board has appointed the Audit
should assist the Board in carrying out its IT  Committee which will assist it to carry out its
responsibilities IT responsibilities.
6. Compliance with laws, codes, rules and standards
6.1 The Board should ensure that GAIA complies with Applied. The Board considers applicable laws,
applicable laws and considers adherence to codes, rules and standards and changes thereto.
non-binding rules, codes and standards Compliance with laws is embedded within the
 internal controls and processes of the operations
of the business. Any material non-compliance is
reported to the Board as and when the executive
Directors become aware of same.
6.2 The Board and each individual director should Applied. The Board and each individual Director
have a working understanding of the effect of the have a working understanding of the effect of the

applicable laws, rules, codes and standards on GAIA applicable laws, rules, codes and standards on GAIA
and its business and its business.
6.3 Compliance risk should form an integral part of Applied. Compliance forms part of the process.

GAIA’s risk management process
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LEVEL oF
PRINCIPLE CoMPLIANCE CoMMENTS
6.4 The Board should delegate to management Applied. This is performed by the executive team.
the implementation of an effective compliance 
framework and processes
7. Internal audit
7.1 The Board should ensure that there is an effective Applied. GAIA has appointed internal auditors with

risk-based internal audit effect from September 2015.
7.2 Internal audit should follow a risk-based approach Applied. Compliance forms part of the process.

to its plan
7.3 Internal audit should provide a written assessment Applied. All the accompanying procedures and
of the effectiveness of GAIA’s system of internal controls are in place, the internal auditors have
control and risk management  evaluated the effectiveness of the internal controls
and risk management and provide a written
assessment of its findings.
7.4 The Audit Committee should be responsible for Applied. GAIA has appointed internal auditors with
overseeing internal audit  effect from September 2015. The Audit Committee
will oversee the internal audit.
7.5 Internal audit should be strategically positioned to  Applied. It is strategically positioned to achieve
achieve its objectives its objectives.
8. Governing stakeholder relationships
8.1 The Board should appreciate that stakeholders’ Applied. The Board monitors stakeholders’
perceptions affect a company’s reputation  perceptions in light of the importance of GAIA’s
reputation.
8.2 The Board should delegate to management to Applied. Stakeholder relationships are critical
proactively deal with stakeholder relationships  for GAIA and the executive team manages these
proactively.
8.3 The Board should strive to achieve the appropriate Applied. All stakeholders are considered during
balance between its various stakeholder groupings,  decision-making.
in the best interest of GAIA
8.4 Companies should ensure the equitable treatment Applied. Equitable treatment of Shareholders is

of shareholders important and considered during decision-making.
8.5 Transparent and effective communication Applied. Communication with stakeholders is the
with stakeholders is essential for building and  responsibility of the Board.
maintaining their trust and confidence
8.6 The Board should ensure that disputes are Applied. The Board remains informed of any disputes
resolved as effectively, efficiently and expeditiously  and strive to ensure that they are resolved efficiently.
as possible
9. Integrated reporting and disclosure
9.1 The Board should ensure the integrity of GAIA’s Applied. The Board has reviewed the Integrated

integrated report Annual Report and are satisfied with its integrity.
9.2 Sustainability reporting and disclosure should be * Partially applied. GAIA will evaluate the need for
integrated with GAIA’s financial reporting sustainability reporting and include sustainability
matters (if necessary) in the integrated report when
same is issued.
9.3 Sustainability reporting and disclosure should be * Partially applied. GAIA will evaluate the need
independently assured for sustainability reporting and, if included in
its integrated report, will have such disclosures
independently assured (to the extent necessary).
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GAIA Infrastructure Capital | Circular to Shareholders | September 2016 115

ANNEXURE RLP6

SHARE TRADING HISTORY OF GAIA

The high, low and closing prices and the volumes and value at which the GAIA Shares traded on the JSE monthly from November 2015 to August 2016 and for each trading day from November 2015 to the Last Practicable Date, are provided below:

		Close (cents)	high (cents)	Low (cents)	Value (R)	Volume (shares)
Monthly	2016/08/31	874	890	–	1 349 054	156 522
	2016/07/31	875	923	–	1 680 998	192 383
	2016/06/30	880	889	–	617 953	73 822
	2016/05/31	830	890	–	684 034	79 103
	2016/04/30	880	900	–	2 508 592	296 652
	2016/03/31	900	905	–	5 848 378	710 961
	2016/02/29	870	915	–	9 691 465	1 132 713
	2016/01/31	915	945	–	616 253	70 331
	2015/12/31	945	1 000	–	1 464 510	154 118
	2015/11/30	950	1 020	–	1 928 994	185 189
Daily	2016-09-09	859	860	859	57 499	6 693
	2016-09-08	860	–	–	–	–
	2016-09-07	860	–	–	–	–
	2016-09-06	860	860	860	90 403	10 512
	2016-09-05	855	855	855	10 465	1 224
	2016-09-02	855	855	855	846	99
	2016-09-01	869	869	850	40 426	4 706
	2016-08-31	874	–	–	–	–
	2016-08-30	874	875	850	62 844	7 185
	2016-08-29	875	890	865	63 777	7 350
	2016-08-26	865	865	825	20 262	2 410
	2016-08-25	890	890	875	27 393	3 129
	2016-08-24	860	860	860	18 842	2 191
	2016-08-23	859	860	840	46 525	5 432
	2016-08-22	860	860	860	791	92
	2016-08-19	831	–	–	–	–
	2016-08-18	831	–	–	–	–
	2016-08-17	831	850	830	474 463	56 564
	2016-08-16	850	880	850	282 564	32 537
	2016-08-15	875	890	875	100 717	11 337
	2016-08-12	890	890	890	73 629	8273
	2016-08-11	882	–	–	–	–
	2016-08-10	882	890	882	142 178	16 059
	2016-08-08	880	880	880	572	65
	2016-08-05	885	885	885	7 947	898
	2016-08-04	885	–	–	–	–
	2016-08-02	885	885	885	26 550	3 000
	2016-08-01	875	–	–	–	–
	2016-07-29	875	923	875	62 438	7 096
	2016-07-28	880	880	880	17 600	2 000
	2016-07-27	855	–	–	–	–
	2016-07-26	855	900	855	677 379	75 593
	2016-07-25	890	890	890	8 900	1 000
	2016-07-22	875	889	855	77 327	8 980
	2016-07-21	850	850	850	149 668	17 608
	2016-07-20	850	850	850	233 750	27 500
	2016-07-19	875	875	875	218 706	24 995
	2016-07-18	895	895	885	89 000	10 000
	2016-07-15	890	–	–	–	–
	2016-07-14	890	890	890	16 669	1873
	2016-07-13	850	850	850	17 501	2059
	2016-07-12	900	900	900	3 870	430
	2016-07-11	800	800	790	40179	5050

116 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

		Close (cents)	high (cents)	Low (cents)	Value (R)	Volume (shares)
Daily	2016-07-08	750	–	–	–	–
	2016-07-07	750	750	750	750	100
	2016-07-06	800	0	0	0	0
	2016-07-05	800	800	800	35 944	4 493
	2016-07-04	800	800	800	5 072	634
	2016-07-01	900	900	880	26 245	2 972
	2016-06-30	880	880	880	880	100
	2016-06-29	830	–	–	–	–
	2016-06-28	830	–	–	–	–
	2016-06-27	830	–	–	–	–
	2016-06-24	830	–	–	–	–
	2016-06-23	830	830	830	3 245	391
	2016-06-22	830	830	830	8 300	1 000
	2016-06-21	830	830	830	7 644	921
	2016-06-20	831	831	830	15 468	1 862
	2016-06-17	830	–	–	–	–
	2016-06-15	830	836	830	57 351	6 883
	2016-06-14	830	830	830	16 600	2 000
	2016-06-13	830	835	830	101 406	12 211
	2016-06-10	830	830	830	11 669	1 406
	2016-06-09	840	840	840	168 000	20 000
	2016-06-08	845	851	845	101 991	12 026
	2016-06-07	846	846	846	20 930	2 474
	2016-06-06	840	–	–	–	–
	2016-06-03	840	889	840	15 137	1 802
	2016-06-02	840	–	–	–	–
	2016-06-01	840	840	830	89 332	10 746
	2016-05-31	830	–	–	–	–
	2016-05-30	830	–	–	–	–
	2016-05-27	830	835	830	18 116	2 182
	2016-05-26	835	–	–	–	–
	2016-05-25	835	–	–	–	–
	2016-05-24	835	840	820	67 652	8 177
	2016-05-23	825	825	825	16 500	2 000
	2016-05-20	890	890	890	2 839	319
	2016-05-19	880	880	880	23 047	2 619
	2016-05-18	880	880	880	39 010	4 433
	2016-05-17	880	–	–	–	–
	2016-05-16	880	880	880	80 009	9 092
	2016-05-13	880	880	855	199 378	23 246
	2016-05-12	855	855	855	14 535	1 700
	2016-05-11	880	–	–	–	–
	2016-05-10	880	880	880	46 948	5 335
	2016-05-09	880	–	–	–	–
	2016-05-06	880	880	880	176 000	20 000
	2016-05-05	880	–	–	–	–
	2016-05-04	880	–	–	–	–
	2016-05-03	880	–	–	–	–
	2016-04-29	880	–	–	–	–
	2016-04-28	880	–	–	–	–
	2016-04-26	880	880	879	7 439	846
	2016-04-25	880	–	–	–	–
	2016-04-22	880	880	831	223 946	25 454
	2016-04-21	890	–	–	–	–
	2016-04-20	890	–	–	–	–

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 117

ANNEXURE RLP6

SHARE TRADING HISTORY OF GAIA (continued)

		Close (cents)	high (cents)	Low (cents)		Value (R)	Volume (shares)
Daily	2016-04-19	890	890	830		32 185	3 623
	2016-04-18	890	890	890		178	20
	2016-04-15	895	895	830		87 904	10 429
	2016-04-14	900	900	900		213 543	23 727
	2016-04-13	900	900	898		42 854	4 766
	2016-04-12	831	–	–		–	–
	2016-04-11	831	–	–		–	–
	2016-04-08	831	831	831		9 141	1 100
	2016-04-07	831	831	831		13 861	1 668
	2016-04-06	831	831	827	1	732 287	208 500
	2016-04-05	831	–	–		–	–
	2016-04-04	831	831	831		3 324	400
	2016-04-01	827	900	827		141 930	16 119
	2016-03-31	900	–	–		–	–
	2016-03-30	900	900	827		111 263	13 245
	2016-03-29	900	900	850		45 319	5 214
	2016-03-24	900	900	895		198 318	22 060
	2016-03-23	905	–	–		–	–
	2016-03-22	905	905	850		266 897	30 628
	2016-03-18	875	–	–		–	–
	2016-03-17	875	875	850		84 210	9 863
	2016-03-16	870	870	870		182 813	21 013
	2016-03-15	827	827	825		75 836	9 185
	2016-03-14	825	850	825		331 295	40 090
	2016-03-11	850	850	850		3 400	400
	2016-03-10	820	820	820		24 600	3 000
	2016-03-09	810	810	810		15 390	1 900
	2016-03-08	800	800	795		552 986	69 160
	2016-03-07	800	800	797	1	919 762	240 000
	2016-03-04	800	825	800		18 089	2 257
	2016-03-03	825	825	755		654 418	82 000
	2016-03-02	769	850	751		210 332	25 246
	2016-03-01	850	850	850	1	153 450	135 700
	2016-02-29	870	–	–		–	–
	2016-02-26	870	870	870		19 000	2 184
	2016-02-25	870	870	850	8	552 669	1 006 054
	2016-02-24	870	870	850		36 040	4 200
	2016-02-23	850	870	850		42 491	4 985
	2016-02-22	870	870	870		95 700	11 000
	2016-02-19	870	870	870		28 431	3 268
	2016-02-18	870	–	–		–	–
	2016-02-17	870	870	870		30 702	3 529
	2016-02-16	890	–	–		–	–
	2016-02-15	890	–	–		–	–
	2016-02-12	890	890	701		87 016	9 980
	2016-02-11	900	–	–		–	–
	2016-02-10	900	–	–		–	–
	2016-02-09	900	–	–		–	–
	2016-02-08	900	900	900		64 629	7 181
	2016-02-05	915	–	–		–	–
	2016-02-04	915	–	–		–	–
	2016-02-03	915	–	–		–	–
	2016-02-02	915	915	914		734 787	80 332
	2016-02-01	915	–	–		–	–
	2016-01-29	915	–	–		–	–

118 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

		Close (cents)	high (cents)	Low (cents)	Value (R)	Volume (shares)
Daily	2016-01-28	915	918	625	150 954	20 225
	2016-01-27	919	–	–	–	–
	2016-01-26	919	919	918	87 724	9 555
	2016-01-25	924	924	924	13 638	1 476
	2016-01-22	928	–	–	–	–
	2016-01-21	928	929	927	172 216	18 561
	2016-01-20	930	–	–	–	–
	2016-01-19	930	–	–	–	–
	2016-01-18	930	–	–	–	–
	2016-01-15	930	930	930	13 736	1 477
	2016-01-14	930	930	930	10 044	1 080
	2016-01-13	900	900	899	22 195	2 468
	2016-01-12	945	–	–	–	–
	2016-01-11	945	–	–	–	–
	2016-01-08	945	–	–	–	–
	2016-01-07	945	–	–	–	–
	2016-01-06	945	945	940	145 746	15 489
	2016-01-05	945	–	–	–	–
	2016-01-04	945	–	–	–	–
	2015-12-31	945	–	–	–	–
	2015-12-30	945	945	945	378	40
	2015-12-29	945	945	945	70 572	7 468
	2015-12-28	945	945	945	127 849	13 529
	2015-12-24	945	–	–	–	–
	2015-12-23	945	–	–	–	–
	2015-12-22	945	950	935	621 686	65 669
	2015-12-21	935	935	935	93	10
	2015-12-18	948	–	–	–	–
	2015-12-17	948	948	948	163 586	17 256
	2015-12-15	948	948	948	32 601	3 439
	2015-12-14	948	949	948	150 576	15 871
	2015-12-11	949	949	900	11 798	1 300
	2015-12-10	950	–	–	–	–
	2015-12-09	950	950	950	14 563	1 533
	2015-12-08	950	–	–	–	–
	2015-12-07	950	950	950	3 600	379
	2015-12-04	960	960	900	19 862	2 194
	2015-12-03	960	1 000	960	123 934	12 647
	2015-12-02	1 000	–	–	–	–
	2015-12-01	1 000	1 000	950	123 412	12 783
	2015-11-30	950	950	950	89 490	9 420
	2015-11-27	970	995	900	204 573	22 581
	2015-11-26	900	900	900	9 000	1 000
	2015-11-25	870	920	870	106 582	11 998
	2015-11-24	920	920	920	9 200	1 000
	2015-11-23	900	900	900	300 600	33 400
	2015-11-20	900	900	900	10 908	1 212
	2015-11-19	900	–	–	–	–
	2015-11-18	900	900	900	282 591	31 399
	2015-11-17	900	990	900	229 655	25 500
	2015-11-16	960	1 000	949	385 100	40 570
	2015-11-13	951	990	951	43 878	4 550
	2015-11-12	920	1 020	920	346 907	34 560

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 119

ANNEXURE 8 – INVESTMENT POLICY

1. GAIA’s Investment Policy is to invest in infrastructure projects in South Africa and meet the following investment criteria:

2. 1.1 investments in operational or near operational projects, being projects not more than 6 months from commercial operation;

3. 1.2 investments with a targeted return of CPI plus 6% (six percent) before costs;

4. 1.3 investments with visible environmental, social and governance policy appreciation;

5. 1.4 investments with low risk and attractive long-term inflation-linked predictable cash generation profiles;

6. 1.5 investments of not less than R50 000 000 (fifty million Rand) per investment;

7. 1.6 ensuring management value-add and directorship roles to further optimise the underlying assets;

8. 1.7 investments into ordinary equity or any other financial instruments giving economic benefits and returns that meet the target investment returns; and

9. 1.8 investments with acceptable third party credit risk exposure.

10. Shareholders should note that the criteria set out above has been updated from what was stated in the policy disclosed in the Pre-Listing Statement in order to provide GAIA with greater flexibility.

11. All acquisitions, disposals and related party transactions will be categorised and implemented in accordance with the JSE Listings Requirements.

12. Shareholders should note that any material change to the Investment Policy will require Shareholder approval in terms of the JSE Listings Requirements.

13. There are no restrictions on the number of projects that GAIA may invest in.

120 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

GAIA INFRASTRUCTURE CAPITAL LIMITED

==> picture [99 x 55] intentionally omitted <==

(previously GAIA Capital Proprietary Limited)

(Incorporated in the Republic of South Africa) (Registration number 2015/115237/06) (Share Code: GAI, ISIN ZAE000210555) (“GAIA” or “the Company”)

NOTICE OF GENERAL MEETING

NoTICE IS hEREby GIVEN that a General Meeting of GAIA’s Shareholders will be held at 10:00 on 18 October 2016 at Edward Nathan Sonnenbergs Inc, La Gratitude, 2nd Floor, 97 Dorp Street, Stellenbosch.

PURPOSE

The purpose of the General Meeting is to consider and, if deemed fit, to approve, with or without modification, the resolutions set out in this Notice of General Meeting.

Note:

• The definitions and interpretations commencing on page 7 of the circular to which this Notice of General Meeting is attached (“ Circular ”), apply mutatis mutandis to this Notice of General Meeting and to the resolutions set out below.

• For a special resolution to be approved by Shareholders, it must be supported by at least 75% (seventy five percent) of the voting rights exercised on the resolution. For an ordinary resolution to be approved by Shareholders, it must be supported by more than 50% (fifty percent) of the voting rights exercised on the resolution, save for Ordinary Resolution Number 3 which must be supported by at least 75% (seventy five percent) of the voting rights exercised on the resolution in terms of the JSE Listings Requirements.

• The Circular Record Date, being the date on which Shareholders must have been recorded as such in the Register for purposes of being entitled to receive the Circular and this notice, is Friday, 9 September 2016.

• The last day to trade in order to be reflected in the Register on the General Meeting Record Date, is Tuesday, 4 October 2016.

• The General Meeting Record Date, being the date on which Shareholders must be recorded in the Register for purposes of being entitled to attend and vote at the General Meeting, is Friday, 7 October 2016.

ORDINARY RESOLUTION NUMBER 1 – APPROVAL OF THE ACQUISITION

“ RESoLVED AS AN oRDINARy RESoLUTIoN , that subject to the approval of Ordinary Resolution Number 5, the Acquisition by the Company, through GFS, of an effective see through economic interest of 25.2% (twenty five point two percent) in Dorper, through the subscription by GFS for the Subscription Shares at the Subscription Consideration and the advance by GFS of the Convertible Loan to Newco, be and is hereby approved.”

Reason and effect

The reason for Ordinary Resolution Number 1 is that the Acquisition constitutes the acquisition of a Viable Asset and a category 1 acquisition with a related party, requiring Shareholder approval by way of an ordinary resolution, in terms of the JSE Listings Requirements. The effect of Ordinary Resolution Number 1 is to grant the requisite approval for the Acquisition in terms of the JSE Listings Requirements. To the extent that the Acquisition is successfully implemented, GAIA will no longer be classified as a SPAC and will be classified as an investment entity.

• Note: TriAlpha is deemed to be a material shareholder of GAIA and accordingly is a related party in terms of the JSE Listings Requirements. In terms of the JSE Listings Requirements TriAlpha and its associates (to the extent that any own shares in GAIA on the date of the General Meeting) will not be permitted to vote on the resolution to approve the Acquisition.

ORDINARY RESOLUTION NUMBER 2 – USE AND RETENTION OF RESIDUAL CAPITAL

“ RESoLVED AS AN oRDINARy RESoLUTIoN that, subject to the approval of Ordinary Resolution Number 1, the use and retention of the Residual Capital by the Company to source new investments and for working capital purposes, be and is hereby approved.”

Reason and effect

The reason for Ordinary Resolution Number 2 is that, in terms of paragraph 4.35(c) of the JSE Listings Requirements, the use and retention of the Residual Capital by GAIA requires Shareholder approval by way of an ordinary resolution. The effect of Ordinary Resolution Number 2 is to grant GAIA the requisite approval for the use and retention of the Residual Capital in terms of the JSE Listings Requirements.

ORDINARY RESOLUTION NUMBER 3 – GENERAL AUTHORITY TO ISSUE SHARES FOR CASH

“ RESoLVED AS AN oRDINARy RESoLUTIoN that, subject to the passing of Ordinary Resolution Number 1 and Ordinary Resolution Number 2, the Company be and is hereby authorised, by way of a general authority, to allot and issue any of the Company’s unissued Shares for cash as the directors, in their discretion may deem fit, without restriction, subject to the provisions of the MOI, the Companies Act and the JSE Listings Requirements, provided that:

• the approval shall be valid until the date of the next annual general meeting of the Company, provided it shall not extend beyond 15 (fifteen) months from the date of this resolution;

• the general issues of Shares for cash under this authority may not exceed, in the aggregate, 15% (fifteen percent) of the Company’s issued share capital (number of securities) of that class as at the date of this Notice of General Meeting, it being recorded that Shares

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 121

NOTICE OF GENERAL MEETING (continued)

issued pursuant to a rights offer to Shareholders shall not diminish the number of Shares that comprise the aforementioned 15% (fifteen percent) of the Shares that can be issued in terms of this ordinary resolution. As at the date of this Notice of General Meeting, 15% (fifteen percent) of the Company’s issued ordinary share capital (net of treasury shares) amounts to 8 272 650 Shares;

• in determining the price at which an issue of Shares will be made in terms of this authority, the maximum discount permitted will be 10% (ten percent) of the weighted average traded price of such Shares, as determined over the 30 (thirty) Business Days prior to the date that the price of the issue is agreed between GAIA and the party subscribing for the Shares. The JSE will be consulted for a ruling if the Shares have not traded in such 30 (thirty) Business Day period;

• any such issue will only be made to public Shareholders as defined in paragraphs 4.25 to 4.27 of the JSE Listings Requirements and not to related parties;

• any such issue will only be comprised of Shares of a class already in issue or, if this is not the case, will be limited to such securities or rights that are convertible into a class already in issue; and

• in the event that the Shares issued represent, on a cumulative basis, 5% (five percent) or more of the number of Shares in issue prior to that issue, an announcement containing the full details of such issue shall be published on SENS.”

Note: In terms of the JSE Listings Requirements, a 75% (seventy-five percent) majority of the votes cast by Shareholders present or represented by proxy at the General Meeting, must be cast in favour of Ordinary Resolution Number 3 for it to be approved.

Reason and effect

As a listed entity wishing to issue shares for cash, it is necessary for the GAIA Board to obtain the prior authority of the Shareholders in accordance with the JSE Listings Requirements. Accordingly, the reason for Ordinary Resolution Number 3 is to obtain a general authority from Shareholders to issue Shares for cash in compliance with the JSE Listings Requirements, the Companies Act and the MOI.

ORDINARY RESOLUTION NUMBER 4 – CONTROL OVER THE UNISSUED SHARES

“ RESoLVED AS AN oRDINARy RESoLUTIoN that, subject to the passing of Ordinary Resolution Number 1 and Ordinary Resolution Number 2, the unissued Shares in the Company, limited to 15% (fifteen percent) of the Shares in issue as at the date of this Notice of General Meeting, be and are hereby placed under the control of the Directors until the next annual general meeting and that the Directors be and are hereby authorised to issue any such Shares as they may deem fit subject to the Companies Act, the MOI, and the provisions of the JSE Listings Requirements, save that the aforementioned 15% (fifteen percent) limitation shall not apply to any Shares issued in terms of a rights offer.”

Reason and effect

The reason for Ordinary Resolution Number 4 is that GAIA requires authority from Shareholders in terms of its MOI to place Shares under the control of Directors prior to the issue of Shares by GAIA. This authority, once granted, allows the Directors from time to time, when it is appropriate to do so, to issue Shares as may be required, however always subject to the Companies Act, the MOI, and the provisions of the JSE Listings Requirements. This authority is subject to the restriction that it is limited to 15% (fifteen percent) of the Shares that are in issue on the date of this Notice of General Meeting. As at the date of this Notice of General Meeting, 15% (fifteen percent) of GAIA’s issued ordinary share capital (net of treasury shares) amounts to 8 272 650 (eight million two hundred and seventy two thousand six hundred and fifty) Shares.

ORDINARY RESOLUTION NUMBER 5 – APPROVAL OF THE INVESTMENT POLICY

“ RESoLVED AS AN oRDINARy RESoLUTIoN that the Investment Policy of the Company, as set out in paragraph 3.3 of the Revised Listing Particulars, be and is hereby approved by Shareholders.”

Reason and effect

The reason for Ordinary Resolution Number 5 is that the JSE requires Shareholders to approve the Investment Policy, given that GAIA initially listed as a SPAC and post the Acquisition, GAIA will be classified as an investment entity. The effect of Ordinary Resolution Number 5 is that Shareholders will have approved the Investment Policy. To the extent that the Acquisition is subsequently implemented, GAIA will no longer be classified as a SPAC and will be classified as an investment entity in terms of section 15 of the JSE Listings Requirements.

SPECIAL RESOLUTION NUMBER 1 – GENERAL AUTHORITY TO REPURCHASE SHARES

“ RESoLVED AS A SPECIAL RESoLUTIoN that, subject to the passing of Ordinary Resolution Number 1 and Ordinary Resolution Number 2, the Company and the subsidiaries of the Company be and are hereby authorised, as a general approval, to repurchase any of the Shares issued by the Company, upon such terms and conditions and in such amounts as the Directors may from time to time determine, but subject to the provisions of sections 46 and 48 of the Companies Act, the MOI and the JSE Listings Requirements, including, inter alia, that:

• the general repurchase of the Shares may only be implemented through the order book operated by the JSE trading system and without any prior understanding or arrangement between the Company and the counterparty;

• this general authority shall only be valid until the next annual general meeting of the Company, provided that it shall not extend beyond 15 (fifteen) months from the date of this resolution;

• an announcement must be published as soon as the Company has acquired Shares constituting, on a cumulative basis, 3% (three percent) of the number of Shares in issue prior to the acquisition, pursuant to which the aforesaid 3% (three percent) threshold is reached, containing full details thereof, as well as for each 3% (three percent) in aggregate of the initial number of Shares acquired thereafter;

122 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

• the general authority to repurchase is limited to a maximum of 20% (twenty percent) in the aggregate in any one financial year of the Company’s issued share capital at the time the authority is granted;

• a resolution has been passed by the GAIA Board approving the purchase, that the Company has satisfied the solvency and liquidity test as defined in the Companies Act and that, since the solvency and liquidity test was applied, there have been no material changes to the financial position of the Company and its subsidiaries;

• the general repurchase is authorised by the MOI;

• repurchases must not be made at a price more than 10% (ten percent) above the weighted average of the market value of the Shares for the 5 (five) Business Days immediately preceding the date that the transaction is effected. The JSE will be consulted for a ruling if the Company’s securities have not traded in such 5 (five) Business Day period;

• the Company may at any point in time only appoint 1 (one) agent to effect any repurchase(s) on the Company’s behalf; and

• the Company may not effect a repurchase during any prohibited period as defined in terms of the JSE Listings Requirements unless there is a repurchase programme in place, which programme has been submitted to the JSE in writing prior to the commencement of the prohibited period and executed by an independent third party, as contemplated in terms of paragraph 5.72(h) of the JSE Listings Requirements.”

Reason and effect

The reason for and effect of Special Resolution Number 1 is to grant a general authority to GAIA or any subsidiary of GAIA, in terms of the Companies Act, the MOI and the JSE Listings Requirements, for the acquisition by GAIA or its subsidiaries of GAIA’s Shares which authority shall be used at the Directors’ discretion during the course of the period authorised.

Additional information relating to Special Resolution Number 1

1. The directors of GAIA or its subsidiaries will only utilise the general authority to repurchase shares of GAIA as set out in Special Resolution Number 1 to the extent that the Directors, after considering the maximum number of Shares to be purchased, are of the opinion that the position of the GAIA Group would not be compromised as to the following:

2. the GAIA Group’s ability in the ordinary course of business to pay its debts for a period of 12 (twelve) months after the date of this General Meeting and for a period of 12 (twelve) months after the repurchase;

3. the consolidated assets of the Group will at the time of the General Meeting and at the time of making such determination be in excess of the consolidated liabilities of the Group. The assets and liabilities should be recognised and measured in accordance with the accounting policies used in the latest audited annual financial statements of the Group;

4. the ordinary capital and reserves of the Group after the repurchase will remain adequate for the purpose of the business of the Group for a period of 12 (twelve) months after the General Meeting and after the date of the share repurchase; and

5. the working capital available to the Group after the repurchase will be sufficient for the Group’s requirements for a period of 12 (twelve) months after the date of the notice of the General Meeting.

6. General information in respect of major shareholders, material changes and the share capital of GAIA is contained in the Circular of which this notice forms part.

7. The directors, whose names appear on page 3 of the Circular of which this notice forms part, collectively and individually accept full responsibility for the accuracy of the information given and certify that, to the best of their knowledge and belief, there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that this Notice of General Meeting contains all information required by the JSE Listings Requirements.

VOTING AND PROXIES

Section 63(1) of the Companies Act requires that meeting participants provide satisfactory identification. Accordingly, meeting participants will be required to provide proof of identification to the reasonable satisfaction of the chairman of the General Meeting and must, accordingly, bring a copy of their identity document, passport or drivers’ license to the General Meeting. If in doubt as to whether any document will be regarded as satisfactory proof of identification, meeting participants should contact the Transfer Secretaries for guidance.

A Shareholder entitled to attend, speak and vote at the General Meeting is entitled to appoint one or more proxies to attend, speak and vote in his/her stead. A proxy need not be a Shareholder of GAIA. For the convenience of Certificated Shareholders and Dematerialised Shareholders with “own-name” registration, a form of proxy (yellow) is attached hereto. Completion of a form of proxy (yellow) will not preclude such Shareholder from attending and voting (in preference to that Shareholder’s proxy) at the General Meeting.

Duly completed forms of proxy and the authority (if any) under which it is signed must reach the Transfer Secretaries of GAIA at the address given below by not later than 10:00 on 14 October 2016 (it being deemed, for purposes hereof, that the General Meeting will commence at 10:00 on 18 October 2016.

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 123

NOTICE OF GENERAL MEETING (continued)

Dematerialised Shareholders without “own-name” registration who wish to attend the General Meeting in person should request their CSDP or Broker to provide them with the necessary letter of representation in terms of their Custody Agreement with their CSDP or Broker. Dematerialised Shareholders without “own-name” registration who do not wish to attend but wish to be represented at the General Meeting must advise their CSDP or Broker of their voting instructions. Dematerialised Shareholders without “own-name” registration should contact their CSDP or Broker with regard to the cut-off time for their voting instructions.

SIGNED AT CAPE TowN oN 16 SEPTEMbER 2016 oN bEhALF oF ThE GAIA boARD oF DIRECToRS.

By order of the GAIA Board

==> picture [62 x 52] intentionally omitted <==

L de wit Chairman

Registered office

Exceed (Cape Town) Inc. (Registration number 2000/011257/21) 37 Vineyard Road Claremont, 7700 (PO Box 44721, Claremont, 7735)

Transfer secretaries

Computershare Investor Services Proprietary Limited (Registration number 2004/003647/07) Ground Floor 70 Marshall Street Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107)

124 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

GAIA INFRASTRUCTURE CAPITAL LIMITED

==> picture [99 x 55] intentionally omitted <==

(previously GAIA Capital Proprietary Limited) (Incorporated in the Republic of South Africa) (Registration number 2015/115237/06) (Share Code: GAI, ISIN ZAE000210555) (“ GAIA ” or “ the Company ”)

FORM OF PROXY (YELLOW) – ONLY FOR USE BY CERTIFICATED SHAREHOLDERS AND DEMATERIALISED SHAREHOLDERS WITH “OWN-NAME” REGISTRATION

For use by Shareholders at the General Meeting of GAIA, to be held at 10:00 on 18 October 2016 at Edward Nathan Sonnenbergs Inc, La Gratitude, 2nd Floor, 97 Dorp Street, Stellenbosch.

The definitions and interpretations commencing on page 7 of the circular to which this form of proxy (yellow) is attached (“ Circular ”) apply mutatis mutandis to this form of proxy.

If you are a Dematerialised Shareholder without “own-name” registration, you must not complete this form of proxy (yellow) but must instruct your CSDP or broker as to how you wish to vote. This must be done in accordance with the Custody Agreement between you and your CSDP or broker.

I/We (Please PRINT names in full)

of (address)

being the holder(s) of	Certifcated Shares or Dematerialised Shares with “own-name” registration
do hereby appoint (see notes 1 and 2):
1.	or failinghim/her,
2.	or failinghim/her,

1. the Chairman of the General Meeting

as my/our proxy to attend, speak and vote for me/us at the General Meeting (or any adjournment thereof) for purposes of considering and, if deemed fit, passing, with or without modification, the resolutions to be proposed thereat and at each 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):

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For Against Abstain
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ordinary Resolution Number 1 , Approval of the Acquisition ordinary Resolution Number 2 , Use and retention of Residual Capital ordinary Resolution Number 3 , General authority to issue shares for cash ordinary Resolution Number 4 , Control over the unissued shares ordinary Resolution Number 5 , Approval of Investment Policy Special Resolution Number 1 , General authority to repurchase shares

• One vote per Share held by Shareholders. Shareholders must insert the relevant number of votes they wish to vote in the appropriate box provided or “X” should they wish to vote all Shares held by them. If the form of proxy (yellow) is returned without an indication as to how the proxy should vote on any particular matter, the proxy will exercise his/her discretion as to whether, and if so, how he/she votes.

Signed at	on	2016
Signature
Capacityof signatory (where applicable)
Note:Authorityof signatoryto be attached – see notes 8 and 9
Telephone number
Cellphone number
Assisted byme(where applicable)
Full name
Capacity
Signature

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 125

SUMMARY OF RIGHTS CONTAINED IN SECTION 58 OF THE COMPANIES ACT

In terms of section 58 of the Companies Act:

• A Shareholder may, at any time and in accordance with the provisions of section 58 of the Companies Act, 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 such Shareholder.

• A Shareholder may appoint two or more persons concurrently as proxies, and may appoint more than one proxy to exercise voting rights attached to different securities held by the Shareholder.

• A proxy may delegate his authority to act on behalf of a Shareholder to another person, subject to any restriction set out in the instrument appointing such proxy.

• • Irrespective of the form of instrument used to appoint a proxy, the appointment of a proxy is suspended at any time and to the extent that the relevant Shareholder chooses to act directly and in person in the exercise of any of such Shareholder’s rights as a Shareholder.

• Any appointment by a Shareholder of a proxy is revocable, unless the form of instrument used to appoint such proxy states otherwise.

• If an appointment of a proxy is revocable, a 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 relevant company.

• A proxy appointed by a Shareholder is entitled to exercise, or abstain from exercising, any voting right of such Shareholder without direction, except to the extent that the relevant company’s memorandum of incorporation, or the instrument appointing the proxy, provides otherwise.

• If the instrument appointing a proxy or proxies has been delivered by a Shareholder to a company, then, for so long as that appointment remains in effect, any notice that is required in terms of the Companies Act or such company’s memorandum of incorporation to be delivered to a Shareholder must be delivered by such company to:

• the relevant Shareholder; or

• the proxy or proxies, if the relevant Shareholder has: (i) directed such company to do so, in writing and (ii) paid any reasonable fee charged by such company for doing so.

Notes :

1. Each Shareholder is entitled to appoint 1 (one) or more proxies (none of whom need be a Shareholder of GAIA) to attend, speak and vote in place of that Shareholder at the General Meeting.

2. A Shareholder may insert the name of a proxy or the names of two alternative proxies of the Shareholder’s choice in the space/s provided with or without deleting “the Chairman of the General Meeting,” but the Shareholder must initial any such deletion. The person whose name stands first on the form of proxy (yellow) and who is present at the General Meeting will be entitled to act as proxy to the exclusion of those whose names follow.

3. A Shareholder’s instructions to the proxy must be indicated by the insertion of the relevant number of votes exercisable by the Shareholder in the appropriate box provided or an “x” should the Shareholder wish the proxy to exercise all votes. Failure to comply with the above will be deemed to authorise and direct the chairman of the General Meeting, if the chairman is the authorised proxy, to vote or abstain from voting at the General Meeting as the chairman deems fit, or any other proxy to vote or abstain from voting at the General Meeting as he/she deems fit, in respect of all the votes of the Shareholder exercisable at the meeting.

4. Completed forms of proxy (yellow) and the authority (if any) under which they are signed must be lodged with or posted to the Transfer Secretaries at Ground Floor, 70 Marshall Street, Johannesburg, 2001 or PO Box 61051, Marshalltown, 2107, to be received by them by no later than 10:00 on 14 October 2016 (it being deemed, for purposes hereof, that the General Meeting will commence at 10:00 on 18 October 2016.

5. The completion and lodging of this form of proxy (yellow) will not preclude the relevant Shareholder from attending the General Meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof, should such Shareholder wish to do so.

6. The chairman of the General Meeting may accept or reject any form of proxy (yellow) not completed and/or received in accordance with these notes or with the MOI of GAIA.

7. Any alteration or correction made to this form of proxy (yellow) must be initialled by the signatory/ies.

8. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity (e.g. for a company, close corporation, trust, pension fund, deceased estate, etc.) must be attached to this form of proxy (yellow), unless previously recorded by GAIA or the Transfer Secretaries.

9. Where this form of proxy (yellow) is signed under power of attorney, such power of attorney must accompany this form of proxy (yellow), unless it has been registered by GAIA or the Transfer Secretaries or waived by the chairman of the General Meeting.

10. Where Shares are held jointly, all joint holders are required to sign this form of proxy (yellow).

11. A minor Shareholder must be assisted by his/her parent/guardian, unless the relevant documents establishing his/her legal capacity are produced or have been registered by GAIA or the Transfer Secretaries.

12. Dematerialised Shareholders who do not own Shares in “own-name” dematerialised form and who wish to attend the General Meeting, or to vote by way of proxy, must contact their CSDP or Broker who will furnish them with the necessary letter of representation to attend the General Meeting or to be represented thereat by proxy. This must be done in terms of the agreement between the Shareholder and his/her CSDP or Broker.

13. This form of proxy (yellow) shall be valid at any resumption of an adjourned meeting to which it relates although this form of proxy (yellow) shall not be used at the resumption of an adjourned meeting if it could not have been used at the General Meeting from which it was adjourned for any reason other than it was not lodged timeously for the meeting from which the adjournment took place. This form of proxy (yellow) shall, in addition to the authority conferred by the Companies Act except insofar as it provides otherwise, be deemed to confer the power generally to act at the General Meeting in question, subject to any specific direction contained in this form of proxy (yellow) as to the manner of voting.

14. A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the death or mental disorder of the principal or revocation of the proxy or of the authority under which the proxy was executed, or the transfer of the Share in respect of which the proxy is given, provided that no notification in writing of such death, insanity, revocation or transfer as aforesaid shall have been received by the Transfer Secretaries before the commencement of the meeting or adjourned meeting at which the proxy is used.

15. Any proxy appointed pursuant to this form of proxy (yellow) may not delegate her or his authority to act on behalf of the relevant Shareholder.

16. In terms of section 58 of the Companies Act, unless revoked, an appointment of a proxy pursuant to this form of proxy (yellow) remains valid only until the end of the General Meeting or any adjournment of the General Meeting.

17. The definitions commencing on page 7 of this Circular apply mutatis mutandis to this Form of Proxy.

126 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

NOTES

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 127

NOTES

128 GAIA Infrastructure Capital | Circular to Shareholders | September 2016

NOTES

GAIA Infrastructure Capital | Circular to Shareholders | September 2016 129

NOTES

130 GAIA Infrastructure Capital | Circular to Shareholders | September 2016