Directors: JS Boshoff, JV Carstens, MA Conradie CA(SA), AJ Herweg, CN Joubert and EE Visagie Page 1 City Capital SA Property Holdings Limited Reg. No. 2005/031237/06 PO Box 4166 Tyger Valley 7536 Office: 021 946 1946 Fax: 086 562 2814 Queries: [email protected]LETTER TO THE SHAREHOLDERS ANNUAL GENERAL MEETING OF CITY CAPITAL SA PROPERTY HOLDINGS LTD TO BE HELD ON 19 MARCH 2015 Dear Shareholder On behalf of the Board, I invite you to attend the annual general meeting of City Capital SA Property Holdings Limited to be held at the Durbanville Conference Centre, 1 st Floor The Town Centre, Wellington Road, Durbanville on Thursday 19 March 2015 at 11:00 am. I encourage you to attend and vote your shares at the annual general meeting as this is your opportunity to meet and question members of the Board. Voting will take place by way of a poll and shareholders present or represented by proxy will be entitled to votes equal to the number of shares held by such shareholder. The notice of the meeting, which is attached herewith, is accompanied by explanatory notes setting out the effects of all the proposed resolutions in the notice. There are some points that I would like to highlight in this letter. WEBSITE INFORMATION We provide a great deal of financial and other information regarding the company and its subsidiaries on the website of Grandstand Investments Consultants, www.grandstand.co.za, under the section for City Capital. Please register on the site to receive a password to access the more detailed financial and cash flow information. ANNUAL FINANCIAL STATEMENTS The financial records of the company and its subsidiaries are kept up-to-date on a monthly basis and management accounts are presented to the Board at every quarterly-held board meeting. The audits for the 2009 to 2013 financial years have been finalised and their annual financial statements are available to view on the website. The audits for the 2014 and 2015 financial years will be performed in April and May 2015 and a further annual general
Transcript
Directors: JS Boshoff, JV Carstens, MA Conradie CA(SA), AJ Herweg, CN Joubert and EE Visagie Page 1
ANNUAL GENERAL MEETING OF CITY CAPITAL SA PROPERTY HOLDINGS LTD TO
BE HELD ON 19 MARCH 2015
Dear Shareholder
On behalf of the Board, I invite you to attend the annual general meeting of City Capital SA Property Holdings Limited to be held at the Durbanville Conference Centre, 1st Floor The Town Centre, Wellington Road, Durbanville on Thursday 19 March 2015 at 11:00 am.
I encourage you to attend and vote your shares at the annual general meeting as this is your opportunity to meet and question members of the Board. Voting will take place by way of a poll and shareholders present or represented by proxy will be entitled to votes equal to the number of shares held by such shareholder.
The notice of the meeting, which is attached herewith, is accompanied by explanatory notes setting out the effects of all the proposed resolutions in the notice.
There are some points that I would like to highlight in this letter.
WEBSITE INFORMATION
We provide a great deal of financial and other information regarding the company and its subsidiaries on the website of Grandstand Investments Consultants, www.grandstand.co.za, under the section for City Capital.
Please register on the site to receive a password to access the more detailed financial and cash flow information.
ANNUAL FINANCIAL STATEMENTS
The financial records of the company and its subsidiaries are kept up-to-date on a monthly basis and management accounts are presented to the Board at every quarterly-held board meeting.
The audits for the 2009 to 2013 financial years have been finalised and their annual financial statements are available to view on the website. The audits for the 2014 and 2015 financial years will be performed in April and May 2015 and a further annual general
Directors: JS Boshoff, JV Carstens, MA Conradie CA(SA), AJ Herweg, CN Joubert and EE Visagie Page 2
meeting of the Company will be convened in September 2015 to approve these financial statements.
A summary of the annual financial statements for the 2007 to 2015 financial years is provided herewith to provide an overview of the financial performance of the group since inception.
You will notice the substantial loss that was incurred in 2009 when loans were made by the former directors without the authority of shareholders in general meeting.
Since then, the group has recovered steadily and business and liquidity risk has improved dramatically as levels of debt have been slashed. The group is currently profitable, is cash flow positive every month, is enjoying low levels of vacancies in its investment properties and is repaying its liabilities as they present themselves for repayment.
DIRECTORS’ FEES
We believe that directors’ fees should recognise the responsibilities of the directors to provide input and attendance at meetings. Therefore we are recommending a fee of R 2 500 per director per meeting attended.
The directors attended the following Board meetings since the last annual general meeting (as an example, 3/3 means that the director attended 3 out of 3 director’s meetings during that calendar year):
JV Carstens 2013: 4/4 2014: 4/4 2015: 1/1
MA Conradie 2013: 4/4 2014: 4/4 2015: 1/1
JS Boshoff 2013: 4/4 2014: 4/4 2015: 1/1
AJ Herweg 2013: 4/4 2014: 4/4 2015: 1/1
EE Visagie 2013: 3/4 2014: 3/4 2014: 0/1
CN Joubert 2013: 0/4 2014: 0/4 2015: 0/1
ELECTION OF DIRECTORS
The Memorandum of Incorporation of the Company requires that one third of directors retire by rotation at each Annual General Meeting and these directors may or may not make themselves available for re-election.
The Board has determined that Messrs Carstens and Conradie will retire by rotation. Messrs Herweg and Boshoff and Mrs Visagie will remain as shareholder-elected directors of the Company.
Please review the director meeting attendance statistics for assistance with regard to your decision whether or not to vote for the re-election of directors that offer themselves available for re-election.
Directors: JS Boshoff, JV Carstens, MA Conradie CA(SA), AJ Herweg, CN Joubert and EE Visagie Page 3
FINANCIAL ASSISTANCE TO RELATED ENTITIES
It is important that shareholders authorise the Board to assist related entities that may require financial assistance from time to time. A subsidiary company may require assistance where it has a single tenant and a replacement tenant is not found shortly after a lease terminates, or where a subsidiary requires assistance in the form of a holding company guarantee or suretyship to secure a mortgage bond.
Under no circumstances may a loan be made to a director in his/her personal capacity or to a company that is owned by a director.
LITIGATION CURRENTLY AFFECTING THE COMPANY
The Company is involved in the following litigation at this time:
Plaintiff in a consolidated claim for repayment of loans of approximately R 23,6 million owing by the so-called Dividend Investments companies to the Company.
Defendant in a Supreme Court Appeal against the R 3,3 million judgement in our favour against Midnight Storm Investments 150 (Pty) Ltd.
Defendant in a claim by the liquidators of Dividend Investment Scheme against the Company’s entitlement to a loan in the amount of R 1,1 million made to Dream World Investments 82 (Pty) Ltd.
Applicant for the setting aside of an order that pierced the corporate veil of the holding and property companies in the Zambezi Retail Park syndication and the establishment of the Dividend Investment Scheme.
ISSUE OF SHARE OPTIONS TO ACTIVE DIRECTORS
To maximise the growth potential of their share prices, many companies align the financial interests of their directors with those of their shareholders by issuing shares or share options to their directors.
In this manner, the board is motivated to optimise the investment property portfolio of the Company in the shortest possible time and thereby make the Company a takeover target to a listed property fund or facilitate its own listing on the Johannesburg Stock Exchange.
In this way shareholders will be able to realise, within a period of two to three years, their investments in the Company, on the open market, at the maximum possible price.
This strategy is dependent on the finalisation of all outstanding audit reports, the resolution of loan account disputes with the directors of the Dividend Investments property companies and the successful disposal or development of the vacant land outside Stellenbosch.
The abovementioned aspects significantly influence the share price at which shareholders would be able to exit the Company and accordingly need to be successfully managed and resolved to maximise the share price and the amounts that shareholders will receive on exit.
CITY CAPITAL SA PROPERTY HOLDINGS LIMITED Registered No. 2005/031237/06
(Incorporated in the Republic of South Africa)
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that an Annual General Meeting of members of the above Company as at
the record date set out below will be held at the Durbanville Conference Centre, 1st Floor The Town
Centre, Wellington Road, Durbanville on Thursday 19 March 2015 at 11h00am for the following
purposes:
AGENDA
1. To receive and consider the report from the Chairman of the Social and Ethics Committee.
2. To receive and consider the annual financial statements of the Company and the reports of the
directors and the auditors for the year’s ended 28 February 2009, 28 February 2010, 28 February
2011, 29 February 2012 and 28 February 2013.
3. To re-appoint Messrs Pierre R Retief & Co as the auditors for the Company’s financial year ended 28
February 2014.
4. To re-elect the directors who retire in accordance with the Memorandum of Incorporation and being
eligible, offers themselves for re-election.
5. To re-elect the members of the Audit committee who retire and being eligible, offers themselves for
re-election.
6. To authorize the Directors remuneration.
7. To authorize the provision of financial assistance to related or inter-related entities.
8. To approve the issue of share options to the active Directors.
9. To transact such other business as may be transacted at an annual general meeting.
At the meeting the members of the Company will be required to consider and, if thought fit, pass with or
without modification, in the manner required by the Companies Act No. 71 of 2008, as amended, (the
“Companies Act”) the following ordinary and special resolutions, namely:
APPROVAL OF ANNUAL FINANCIAL STATEMENTS – 28 FEBRUARY 2009
Ordinary Resolution Number 1
“Resolved that the audited financial statements of the Company and the Group for the year ended 28
February 2009 be accepted and approved”
APPROVAL OF ANNUAL FINANCIAL STATEMENTS – 28 FEBRUARY 2010
Ordinary Resolution Number 2
“Resolved that the audited financial statements of the Company and the Group for the year ended 28
February 2010 be accepted and approved”
APPROVAL OF ANNUAL FINANCIAL STATEMENTS – 28 FEBRUARY 2011
Ordinary Resolution Number 3
“Resolved that the audited financial statements of the Company and the Group for the year ended 28
February 2011 be accepted and approved”
APPROVAL OF ANNUAL FINANCIAL STATEMENTS – 29 FEBRUARY 2012
Ordinary Resolution Number 4
“Resolved that the audited financial statements of the Company and the Group for the year ended 29
February 2012 be accepted and approved”
APPROVAL OF ANNUAL FINANCIAL STATEMENTS – 28 FEBRUARY 2013
Ordinary Resolution Number 5
“Resolved that the audited financial statements of the Company and the Group for the year ended 28
February 2013 be accepted and approved”
APPOINTMENT OF AN AUDITOR
Ordinary Resolution Number 6
“Resolved that Pierre R Retief & Kie be re-appointed as the auditor of the Company for the financial year
ending on 28 February 2014 and that Mr Pierre R Retief, a registered auditor and member of Pierre R
Retief & Kie, shall be undertaking the audit of the Company’s financial statements”
Pierre R Retief & Kie have indicated their willingness to continue as external auditors of the company for
the 2014 financial year and ordinary resolution number 6 proposes the reappointment of this firm as the
company’s external auditor until the conclusion of the next annual general meeting.
RE-ELECTION OF DIRECTOR
Ordinary Resolution Number 7
“Resolved that the reappointment of Jacobus Vercueil Carstens as a Director, who retires by rotation,
but being eligible, offers himself for re-election for a further term of office be authorised and confirmed”
In accordance with the company’s Memorandum of Incorporation, one-third of the directors are required
to retire by rotation at each annual general meeting and may offer themselves for re-election.
Accordingly, Messrs Jacobus Vercueil Carstens and Marc Anton Conradie retire from the Board by
rotation in accordance with the Memorandum of Incorporation.
RE-ELECTION OF DIRECTOR
Ordinary Resolution Number 8
“Resolved that the reappointment of Marc Anton Conradie as a Director, who retires by rotation, but
being eligible, offers himself for re-election for a further term of office be authorised and confirmed”
RE-APPOINTMENT OF AUDIT COMMITTEE MEMBER
Ordinary Resolution Number 9
“Resolved that the reappointment of Johann Steyn Boshoff as an audit committee member, be
authorised and confirmed”
RE-APPOINTMENT OF AUDIT COMMITTEE MEMBER
Ordinary Resolution Number 10
“Resolved that the reappointment of Andrew John Herweg as an audit committee member, be
authorised and confirmed”
RE-APPOINTMENT OF AUDIT COMMITTEE MEMBER
Ordinary Resolution Number 11
“Resolved that the reappointment of Elna Elizabeth Visagie as an audit committee member, be
authorised and confirmed”
REMUNERATION FOR DIRECTORS
Special Resolution Number 1
“Resolved that the Company be and is hereby authorized to pay remuneration to the Directors for their
services as Directors as follows:
• in relation to services rendered from 30 November 2014 to the date of the Annual General
Meeting; and
• for a period of two years from the passing of this special resolution (unless such remuneration is
proposed to be amended at a subsequent meeting of shareholders) at a rate of R 2 500.00 per
Directors meeting attended”
Section 66(9) read with section 66(8) of the Companies Act, 2008, as amended (“Companies Act”)
requires that remuneration paid by a company to its directors for their service as directors may only be
paid in accordance with a special resolution approved by the shareholders of the company within the
previous two years.
Special resolution number 1 is required to obtain the approval of the company, in general meeting, of
remuneration payable to directors for the period 30 November 2014 to the date of the Annual General
Meeting, and for a period of two years from the passing of this special resolution. The approval of
shareholders is being sought to ensure that the remuneration paid to the directors of the company will
remain adequate for the purposes of attracting persons of sufficient calibre and skill to serve as directors
of the company.
FINANCIAL ASSISTANCE TO RELATED OR INTER-RELATED ENTITIES
Special Resolution Number 2
“Resolved that to the extent required in terms of, and subject to the provisions of, Section 45 of the
Companies Act, No 71 of 2008, as amended, (‘the Act’) that the shareholders of the Company hereby
approve of the Company providing, at any time and from time to time during the period of 2 (two) years
commencing on the date of this special resolution, any direct or indirect financial assistance as
contemplated in such section of the Act to any 1 (one) or more related or inter-related companies or
corporations of the Company and/or to any 1 (one) or more members of any such related or inter-
related company or corporation and/or to any 1 (one) or more persons related to any such company or
corporation, on such terms and conditions as the Board of directors of the Company, or any one or more
persons authorised by the Board of directors of the Company from time to time for such purpose, deems
fit”
Section 45 of the Companies Act authorises the company to provide direct or indirect financial assistance
to any one or more related or inter-related companies or corporations, directors or prescribed officers of
the company or of a related or interrelated company.
Section 45 of the Act further provides that the particular financial assistance must be provided only
pursuant to a special resolution of the shareholders, adopted within the previous two years, which
approved such assistance either for the specific recipient, or generally for a category of potential
recipients, and the specific recipient falls within that category and the Board of directors must be
satisfied that:
(a) immediately after providing the financial assistance, the company would satisfy the solvency and
liquidity test; and
(b) the terms under which the financial assistance is proposed to be given are fair and reasonable to the
company.
Special resolution number 2 is, accordingly, being proposed to grant the requisite authority for financial
assistance to related and inter-related companies only.
ISSUE OF SHARE OPTIONS TO DIRECTORS
Special Resolution Number 3
“Resolved that the Company be and is hereby authorized to issue share options to the active directors of
the Company to take up ordinary no par value shares in the Company on the following terms and
conditions:
• 150 000 (one hundred and fifty thousand) share options in the company will be issued to the
directors of the Company for each year, on a pro-rata basis, that they have actively participated
as directors of the company;
• The share options will be issued at 1 (one cent) per share option to the Director;
• The share options may only be exercised and converted into ordinary no par value shares upon
the two year anniversary of the issue of the share option, unless the Company is taken over by
another or liquidated.”
Section 41(1) of the Companies Act authorizes a Company to issue share options to a Director, future
Director, prescribed officer, or future prescribed officer of a Company pursuant to a special resolution of
the shareholders.
The effect of Special resolution number 3 is that as at 28 February 2015 the qualifying active Directors
will receive a cumulative 4 086 986 ordinary no par value shares (817 397 ordinary no par value shares
per Director) for nominal value. The net asset value per share of the Company at 30 November 2014 is
102 cents per share. The net asset value per share of the Company after the proposed issue of share
options in the Company will be 100 cents per share, a reduction of 2 cents per share.
The advantages of the share option issue are:
• The effective alignment of the financial interests of the shareholders and directors of the
Company,
• Compensation of the current active directors for the risks that they have borne on a personal
basis since their appointment, and
• No cash outflow for, nor financial cost to, the Company.
The disadvantage of the share option issue is:
• A slight reduction of 2 (two) cents in the net asset value per share of the Company on issue of
the share options in the Company.
ENABLING RESOLUTION
Ordinary Resolution Number 12
“Resolved that each and every director of the Company and the Company Secretary be and is hereby
authorised to do all such things and sign all such documents as may be necessary for or incidental to the
implementation of the resolutions passed in terms of this notice convening the annual general meeting”
EXPLANATORY NOTES
The reasons for and the effect of the resolutions contained in this notice are set out in the explanatory
notes forming part of this notice of annual general meeting read with the Chief Executive Officer’s letter
to shareholders.
A special resolution requires the support of at least 75 % of the votes exercised in order to be adopted
and an ordinary resolution requires the support of at least 50.1 % of the votes exercised in order to be
adopted.
IDENTIFICATION OF MEETING PARTICIPANTS
Every shareholder of the company present in person or represented by proxy shall be required to
provide reasonable identification at the meeting in order that the Chairman of the meeting is satisfied
that the right of that person to participate and vote, either as a shareholder or as a proxy for a
shareholder, has been reasonably verified. Forms of identification include valid identity documents,
driver’s license and passports.
CITY CAPITAL SA PROPERTY HOLDINGS LIMITED
Registered No. 2005/031237/06 (Incorporated in the Republic of South Africa)
PROXY FORM I/we ________________________________________________________________________________________________________ (full name) Of __________________________________________________________________________________________________________ (address) being a holder/s of _____________ ordinary shares in the Company (delete whichever is inapplicable), hereby appoint: 1. ____________________________________________________ of ___________________________________________ (or failing him/her)
2. ____________________________________________________ of __________________________________________ (or failing him/her)
3. the Chairman of the annual general meeting as my/our proxy to attend and vote for me/us on my/our behalf at the annual general meeting of
the Company to be held at the Durbanville Conference Centre, 1st Floor The Town Centre, Wellington Road, Durbanville on Thursday 19 March 2015 at 11h00am and at every adjournment thereof, as follows:
For Against Abstain
Ordinary Resolution Number 1: “Resolved that the audited financial statements of the
Company and the Group for the year ended 28 February 2009 be accepted and approved”
Ordinary Resolution Number 2: “Resolved that the audited financial statements of the
Company and the Group for the year ended 28 February 2010 be accepted and approved”
Ordinary Resolution Number 3: “Resolved that the audited financial statements of the
Company and the Group for the year ended 28 February 2011 be accepted and approved”
Ordinary Resolution Number 4: “Resolved that the audited financial statements of the
Company and the Group for the year ended 29 February 2012 be accepted and approved”
Ordinary Resolution Number 5: “Resolved that the audited financial statements of the
Company and the Group for the year ended 28 February 2013 be accepted and approved”
Ordinary Resolution Number 6: “Resolved that Pierre R Retief & Kie be re-appointed as the
auditors of the Company for the financial year ending on 28 February 2014 and that Mr Pierre R
Retief, a registered auditor and member of Pierre R Retief & Kie, shall be undertaking the audit of
the Company’s financial statements”
Ordinary Resolution Number 7: “Resolved that the reappointment of Jacobus Vercueil
Carstens as a Director, who retires by rotation, but being eligible, offers himself for re-election
for a further term of office be authorised and confirmed”
Ordinary Resolution Number 8: “Resolved that the reappointment of Marc Anton Conradie as
a Director, who retires by rotation, but being eligible, offers himself for re-election for a further
term of office be authorised and confirmed”
Ordinary Resolution Number 9: “Resolved that the reappointment of Johann Steyn Boshoff as
an audit committee member, be authorised and confirmed”
Ordinary Resolution Number 10: “Resolved that the reappointment of Andrew John Herweg
as an audit committee member, be authorised and confirmed”
Ordinary Resolution Number 11: “Resolved that the reappointment of Elna Elizabeth Visagie
as an audit committee member, be authorised and confirmed”
Special Resolution Number 1: “Resolved that the Company be and is hereby authorized to pay
annual remuneration to the Non-Executive Directors for their services as Directors as follows:
• in relation to services rendered from 30 November 2014 to the date of the Annual General
Meeting; and
• for a period of two years from the passing of this special resolution (unless such
remuneration is proposed to be amended at a subsequent meeting of shareholders) at a
rate of R 2 500.00 per Directors meeting attended”
Special Resolution Number 2: “Resolved that to the extent required in terms of, and subject to the provisions of, Section 45 of the Companies Act, No 71 of 2008, as amended, (‘the Act’) that the shareholders of the Company hereby approve of the Company providing, at any time and from time to time during the period of 2 (two) years commencing on the date of this special resolution, any direct or indirect financial assistance as contemplated in such section of the Act to any 1 (one) or more related or inter-related companies or corporations of the Company and/or to any 1 (one) or more members of any such related or inter-related company or corporation and/or to any 1 (one) or more persons related to any such company or corporation, on such terms and conditions as the Board of directors of the Company, or any one or more persons authorised by the Board of directors of the Company from time to time for such purpose, deems fit”
Special Resolution Number 3: “Resolved that the Company be and is hereby authorized to
issue share options to the active directors of the Company to take up ordinary no par value
shares in the Company on the following terms and conditions:
• 150 000 (one hundred and fifty thousand) share options in the company will be issued to
the directors of the Company for each year, on a pro-rata basis, that they have actively
participated as directors of the company;
• The share options will be issued at 1 (one cent) per share option to the Director;
• The share options may only be exercised and converted into ordinary no par value shares
upon the two year anniversary of the issue of the share option, unless the Company is
taken over by another or liquidated”
Ordinary Resolution Number 12: “Resolved that each and every director of the Company and
the Company Secretary be and is hereby authorised to do all such things and sign all such
documents as may be necessary for or incidental to the implementation of the resolutions
passed in terms of this notice convening the annual general meeting”
Insert an “X” in the relevant spaces above according to how you wish your votes to be cast. Unless otherwise instructed, my
proxy may vote as he thinks fit.
Signed at _______________________________________________ this ___________ day of ________________________ 2015.
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