ANNUAL FINANCIAL STATEMENTSIN TERMS OF SECTION 15 OF THE PENSION FUNDS ACT NO 24, 1956AS AMENDED (PENSION FUNDS ACT)NAME OF RETIREMENT FUND: PHUMULA RETIREMENT FUNDFINANCIAL SECTOR CONDUCT AUTHORITYREGISTRATION NUMBER: 12/8/390FOR THE PERIOD: 1 JULY 2017 to 30 JUNE 2018CONTENTSSchedule Page Schedule PageAB C DEFG

Regulatory Information *Statement of responsibility by theBoard of Fund *Statement of responsibility by thePrincipal Officer *Report of the Independent AuditorsReport of the Board of Fund *Statement of net assets and fundsStatement of changes in net assetsand funds1 - 45 - 678 - 1011 - 192021

HA HBIIA IBNotes to the Annual FinancialStatementsReport of the Valuator *Report of the Independent Auditorson factual findings to the Board ofFund and Registrar of Pension FundsInvestment schedule pertaining to theAnnual Financial Statements *Assets held in compliance withRegulation 28Independent Auditor's report onassets held in compliance withRegulation 28 to the Board of Fund

22 - 3637 - 3839 - 4950 - 5859 - 6364 - 65* Not subject to any engagement by an auditor

PHUMULA RETIREMENT FUNDSCHEDULE AREGULATORY INFORMATIONFOR THE YEAR ENDED 30 JUNE 2018REGISTERED OFFICE OF THE FUNDPostal address: PO Box 2611Johannesburg2001Physical address: 2nd Floor, North WingOakhurst Building11-13 St. Andrews RoadParktown2193FINANCIAL REPORTING PERIODSCurrent year: 1 July 2017 to 30 June 2018Prior year: 1 July 2016 to 30 June 2017BOARD OF FUNDFull name E-mail Address Capacity Date appointed/re-appointed Date resigned /deceasedG Luden grahaml@jmpf.co.za M & C 12 March 2016J Eagle janee@jmpf.co.za M 12 March 2016L de Bruyn leond@jmpf.co.za M 12 March 2016P Louwrens pieterl@jmpf.co.za M 12 March 2016R Knight rosek@jmpf.co.za M,A 12 March 2016M Kruger markk@jmpf.co.za M,A 12 March 2016V Pryke vernonp@jmpf.co.za M,A 12 March 2016R Mathlo raynaldm@jmpf.co.za M,A 12 March 2016F D R Kinnear florencek@jmpf.co.za P 12 March 2016S Verrier stanleyv@jmpf.co.za P 12 March 2016M van der Merwe martinv@jmpf.co.za P 12 March 2016 10 November 2017G Mohohlo glorinam@jmpf.co.za P 12 March 2016M Watson melvynw@jmpf.co.za P 12 March 2016 24 November 2017G Kyzer gloriak@jmpf.co.za P 12 March 2016P Brockmann peterb@jmpf.co.za P 12 March 2016M Muller morlandm@jmpf.co.za P 12 March 2016C Wiltshire clairew@jmpf.co.za P,A 12 March 2016A Galt alastairg@jmpf.co.za P,A 12 March 2016 24 November 2017M Coetzee michielc@jmpf.co.za P,A 12 March 2016 24 May 2018P Feig francesf@jmpf.co.za P,A 12 March 2016A Pretorius dinp@jmpf.co.za P,A 12 March 2016J Laas joannel@jmpf.co.za P,A 12 March 2016C Bösenberg chrisb@jmpf.co.za I 23 May 2018Prof B Marx profmarx@jmpf.co.za I 23 May 2018D Fox davidf@jmpf.co.za P,A 12 March 2016 2 February 2018D Fox davidf@jmpf.co.za P 2 February 2018A Galt alastairg@jmpf.co.za P 24 November 2017- 'M' denotes member elected- 'A' denotes alternate- 'C' denotes chairperson- 'I' denotes independent- 'P' denotes pensioner electedGovernance note: schedule of meetings* held by the Board of Fund in terms of the rules of the fundMeeting date Place of meeting Quorum(yes/no)18 August 2017 JMPF Boardroom, 2nd Floor, Oakhurst Offices, Parktown Yes24 November 2017 Phumula Retirement Fund Boardroom, 2nd Floor, Oakhurst Offices, Parktown Yes2 February 2018 Phumula Retirement Fund Boardroom, 2nd Floor, Oakhurst Offices, Parktown Yes18 May 2018 Phumula Retirement Fund Boardroom, 2nd Floor, Oakhurst Offices, Parktown Yes* Only meetings held by the Board of Fund and does not include meetings held by the sub-committees- 1 -

PHUMULA RETIREMENT FUNDSCHEDULE AREGULATORY INFORMATION (continued)FOR THE YEAR ENDED 30 JUNE 2018 FUND OFFICERS Principal Officer ActuaryFull name: A Pretorius Jeanine Astrup (née Schubach)Postal address: PO Box 2611Johannesburg2001 Private Bag X24 Sandton2146Physical address: 2nd Floor, North Wing Oakhurst Building 11-13 St. Andrews Road Parktown2193 Cadiant Partners Actuarial and Consulting Solutions (Pty) Ltd 2nd Floor 3 Gwen lane Sandton2196Telephone number: (011) 551 9540 (011) 783 1620Email address: dinp@telkomsa.net jeanines@cadiant.co.zaAuditor Benefit administratorFull name: SizweNtsalubaGobodo Grant Thornton NMG Consultants and Actuaries Administrators (Pty) LtdPostal address: PO Box 2191Saxonwold2132 PO Box 1778 Randburg2125Physical address: 20 Morris Street EastWoodmead2191 411 Main Avenue Randburg2194Telephone number: (011) 231 0600 (011) 509 3000Registration no. in termsof Section 13B: 24/307Fund consultant Investment administratorFull name: Cadiant Partners Actuarial and Consulting Solutions (Pty) Ltd Taquanta Asset Managers (Pty) LtdPostal address: Private Bag X24 Sandton2146 PO Box 23540 Claremont7735Physical address: 2nd Floor 3 Gwen lane Sandton2196 7th Floor, Newlands Terraces 8 Boundary RoadNewlands7700Telephone number: (011) 783 1620 (021) 681 5175FAIS registration no.: 44415 618Investment administrator Investment administratorFull name: Boutique Collective Investments Futuregrowth Asset Management (Pty) LtdPostal address: Private Bag X6 Newlands7725 Private Bag X6 Newlands7725Physical address: Catnia Building, Bella Rosa Village Bella Rosa Street Bellville Cape Town7530 3rd Floor, Great Westerford Building 240 Main Road Rondebosch Cape Town7700Telephone number: (021) 007 1500 (021) 659 5300FAIS registration no.: 35113 520Investment administrator Investment administratorFull name: Momentum Asset Management (Pty) Ltd Prescient Investment Management (Pty) LtdPostal address: Private Bag 9959 Sandton 2146 PO Box 31142 Tokai7956Physical address: 268 West Avenue Centurion 0157 Prescient House Westlake Business Park Otto Close, Cape Town7945Telephone number: (012) 673 7561 (021) 700 3600FAIS registration no.: 623 612- 2 -

PHUMULA RETIREMENT FUNDSCHEDULE AREGULATORY INFORMATION (continued)FOR THE YEAR ENDED 30 JUNE 2018 PROFESSIONAL SERVICE PROVIDERS (continued)Investment administrator Investment administratorFull name: Ashburton Investor Services (Pty) Ltd Atlantic Asset Management (Pty) LtdPostal address: PO Box 653780 Benmore2010 Suite 152 Private Bag X3 Roggebaai8012Physical address: 5 Buitengracht Street Portside Tower Cape Town8001 10th Floor 22 Bree Street Cape Town8001Telephone number: (0) 87 335 6900 (021) 418 7801FAIS registration no.: 44341 31756Investment administrator Investment administratorFull name: Investec Asset Management (Pty) Ltd Russell Investments Ireland Ltd (Old Mutual)Postal address: PO Box 1655 Cape Town8000 Rex House10 Regent StreetLondonSW1Y 4PEUK Physical address: 36 Hans Strijdom Avenue Foreshore Cape Town8001 Rex House10 Regent StreetLondonSW1Y 4PEUK Telephone number: (021) 416 2000 (020) 7205 6000FAIS registration no.: 587 721Investment administrator Investment administratorFull name: Marathon Asset Management LLP Standard Bank of SA Ltd Postal address: Orion House5 Upper St, Martin�s LaneLondon WC2H 9EA9999 30 Baker StreetRosebank2196 Physical address: Orion House5 Upper St, Martin�s LaneLondon WC2H 9EA9999 PO Box 6702Johannesburg2000Telephone number: (020) 7497 2211 (011) 636 8975FAIS registration no.: 42011 11287Investment administrator Investment administratorFull name: Stanlib Asset Management (Pty) Ltd Satrix Managers (Pty) LtdPostal address: PO Box 202Melrose Arch2076 PO Box 30Sanlamhof 7536Physical address: 17 Melrose BoulevardMelrose Arch 2196 2 Strand RoadBellville7530Telephone number: (011) 448 6000 0860 111 401FAIS registration no.: 719 15658- 3 -

PHUMULA RETIREMENT FUNDSCHEDULE AREGULATORY INFORMATION (continued)FOR THE YEAR ENDED 30 JUNE 2018 PROFESSIONAL SERVICE PROVIDERS (continued)Investment administrator Investment administratorFull name: Sanlam Investment Management (Pty) Ltd Visio Capital Management (Pty) Ltd Postal address: Private Bag X8Tyger Valley7536 The Place1 Sandton DriveGround Floor, South WingSandton2146Physical address: 55 Willie Van Schoor RoadBellville7536 The Place1 Sandton DriveGround Floor, South WingSandton2146 Telephone number: (021) 950 2695 (011) 245 8900FAIS registration no.: 579 871Investment administrator CustodianFull name: ABSA Bank Ltd Nedbank LtdPostal address: 1st Floor, Block B Barclays Pretoria Campus270 Maggs StrWaltlooPretoria0184 PO Box 1144 Johannesburg 2000Physical address: 1st Floor, Block B Barclays Pretoria Campus270 Maggs StrWaltlooPretoria0184 33 Hoofd Street Braampark, Forum 4 3rd Floor, Braamfontein 2001Telephone number: (011) 354 5787 (011) 667 1210FAIS registration no.: 292Investment advisor Investment advisorFull name: Cadiant Partners Consultants and Actuaries (Pty) Ltd Gray Swan Financial Services (Pty) LtdPostal address: Private Bag X24 Sandton2146 Private Bag X34 Somerset West 7129Physical address: 2nd Floor 3 Gwen lane Sandton2196 Ground Floor, Building 5299 Pendoring RoadBlackheath2195Telephone number: (011) 783 1620 (021) 852 9092FAIS registration no.: 32409 42290Bond ManagerFull name: Colourfield Liability Solutions (Pty) LtdPostal address: 16B 3rd Floor 3 Melrose Boulevard Melrose Arch 2077Physical address: 16B 3rd Floor 3 Melrose Boulevard Melrose Arch 2077Telephone number: (011) 883 4692FAIS registration no.: 35113PARTICIPATING EMPLOYERSFrom 1 October 2008 there are no participating employers in the fund due to the fund being a closed fund from the effective date of the new rules. - 4 -

PHUMULA RETIREMENT FUNDSCHEDULE BSTATEMENT OF RESPONSIBILITY BY THE BOARD OF FUNDFOR THE YEAR ENDED 30 JUNE 2018ResponsibilitiesThe Board of Fund hereby confirm to the best of their knowledge and belief that, during the year under review, in the executionof their duties they have complied with the duties imposed by Pension Funds Act and the rules of the fund, including thefollowing:- ensured that proper registers, books and records of the operations of the fund were kept, inclusive of proper minutes of allresolutions passed by the Board of Fund;- ensured that proper internal control systems were employed by or on behalf of the fund;- ensured that adequate and appropriate information was communicated to the members of the fund, informing them of theirrights, benefits and duties in terms of the rules of the fund;- took all reasonable steps to ensure that contributions, where applicable, were paid timeously to the fund or reported wherenecessary, in accordance with section 13A and regulation 33 of the Pension Funds Act in South Africa;- obtained expert advice on matters where they lacked sufficient expertise;- ensured that the rules and the operation and administration of the fund complied with the Pension Funds Act and allapplicable legislation;- ensured that fidelity cover was maintained and that this cover was deemed adequate and in compliance with the rules ofthe fund; and- ensured that investments of the fund were implemented and maintained in accordance with the fund's investment strategy.Approval of the annual financial statementsThe annual financial statements of Phumula Retirement Fund are the responsibility of the Board of Fund. The Board of Fundfulfils this responsibility by ensuring that the implementation and maintenance of accounting systems and practices areadequately supported by internal financial controls. These controls, which are implemented and executed by the fund and/or itsbenefit administrators, provide reasonable assurance that:- the fund's assets are safeguarded;- transactions are properly authorised and executed; and - the financial records are reliable.The annual financial statements set out on pages 11 to 36 have been prepared for regulatory purposes in accordance with theRegulatory Reporting Requirements for Retirement Funds in South Africa, the Rules of the fund and the Pension Funds Act. TheBoard of Fund is not aware of any instances of non-compliance during the financial year nor during the year up until thesignature of these financial statements.These annual financial statements have been reported on by the independent auditors, SizweNtsalubaGobodo Grant Thornton,who were given unrestricted access to all financial records and related data, including minutes of all relevant meetings. TheBoard of Fund believes that all representations made to the independent auditors in the management representation letter andduring their audit were valid and appropriate. The report of the independent auditors is presented on page 8 - 10.Instances of non-complianceThe following instances of non-compliance with Acts, Legislation, Regulations and Rules, including the provisions of laws andregulations that determine the reported amounts and disclosures in the financial statements came to our attention and wererectified before the Board of Fund�s approval of the financial statements:Nature and cause of non-compliance Impact of non-compliance matter onthe fund Corrective course of action taken toresolve non-compliance matterIn February 2018, the Board ofTrustees became aware of the factthat deductions were not being madefor Unemployment Insurance Fund(�UIF�) contributions in respect ofPension Fund Office staff. The Fund and its members were notnegatively impacted by this non-compliance. The Fund immediately rectified theproblem and contributions have beenmade from March 2018.The Fund hasagreed to retain the services of a labourconsultant to ensure that in future allemployment-related responsibilities aremet. The auditors identified, as part of theiraudit, that a divorce case processedduring the financial year was not paidwithin the legislated 60 days. The member and the spouse were notnegatively impacted by the delay. The Fund�s administrator has investigatedthe matter and put processes in place toensure that this failure to comply with thePension Funds Act does not re-occur.- 5 -

SNG Grant Thornton 20 Morris Street East

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SCHEDULE D PHUMULA RETIREMENT FUND REGISTRATION NUMBER: 12/8/20791 INDEPENDENT AUDITOR’S REPORT TO THE BOARD OF FUND OF PHUMULA RETIREMENT FUND Opinion We have audited the annual financial statements of Phumula Retirement Fund the Fu d set out on pages 20 to 36, which comprise the statement of net assets and funds as at 30 June 2018 and the statement of changes in net assets and funds for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. The financial statements are prepared for the purpose of reporting to the Registrar of Pension Funds. In our opinion, the financial statements of Phumula Retirement Fund for the year ended 30 June 2018 are prepared, in all material respects, in accordance with Regulatory Reporting Requirements for Retirement Funds in South Africa. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Respo si ilities for the Audit of the Fi a ial State e ts section of our report. We are independent of the Fund in accordance with the Independent Regulatory Board for Auditors Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performing audits of financial statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of matter – Financial reporting framework and restriction on use We draw attention to the basis of preparation on page 20, which describes the principal accounting policies in which the applicable financial reporting framework is identified, as prescribed by the Registrar. Consequently, the financial statements and related auditor's report may not be suitable for another purpose. Our opinion is not qualified in respect of this matter.

SCHEDULE D PHUMULA RETIREMENT FUND REGISTRATION NUMBER: 12/8/390

9

Other information The Board of Fund is responsible for the other information. The other information comprises the following schedules as required by the Pension Funds Act: Schedule A – Regulatory information Schedule B – Statement of responsibility by the Board of Fund Schedule C – Statement of responsibility by the Principal Officer Schedule E – Report of the Board of Fund Schedule HB – Report of the Valuator Schedule IA – Investment schedule pertaining to annual financial statements Othe i fo atio does ot i lude the fi a ial state e ts a d ou audito ’s epo t the eo . Our opinion on the financial statements does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. Responsibilities of the Board of Fund for the Financial Statements The Board of Fund is responsible for the preparation of the financial statements in accordance with the Regulatory Reporting Requirements for Retirement Funds in South Africa and for such internal control as the Board of Fund determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. I p epa i g the fi a ial state e ts, the Boa d of Fu d is espo si le fo assessi g the Fu d’s a ilit to o ti ue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the Board of Fund either intends to liquidate the Fund or to cease operations, or has no realistic alternative but to do so. Auditor’s Respo si ilities for the Audit of the Fi a ial State e ts Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from

ate ial isstate e t, hethe due to f aud o e o , a d to issue a audito ’s epo t that i ludes ou opi io . Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit 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 Fu d’s i te al o t ol.

SCHEDULE D PHUMULA RETIREMENT FUND REGISTRATION NUMBER: 12/8/390

10

Auditor’s Respo si ilities for the Audit of the Fi a ial State e ts o ti ued • Co lude o the app op iate ess of the Boa d of Fu d’s use of the goi g o e asis of a ou ti g a d, ased on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Fund’s a ilit to o ti ue as a goi g o e . If e o lude that a ate ial

u e tai t e ists, e a e e ui ed to d a atte tio i ou audito ’s epo t to the elated dis losu es i the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit e ide e o tai ed up to the date of ou audito ’s epo t. Ho e e , futu e e e ts o o ditio s a cause the Fund to cease to continue as a going concern.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Fund. We communicate with the Board of Fund regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Report on Other Legal and Regulatory Requirements The Statement of Responsibility by the Board of Fund describes instances of non-compliance with laws and regulations, including those that determine the reported amounts and disclosures in the financial statements that have come to the attention of the Board of Fund and the corrective action taken by the Board of Fund. The following instances of material non-compliance with the Pension Funds Act and related laws and regulations that came to our attention during the course of our audit of the financial statements: Failure to pay Unemployment Insurance Fund Contributions The Fund, as an employer, has failed, to deduct and pay employer and employee contributions in respect of each employee in the employ of the Fund. This is a breach of the Section 8(1) of the Unemployment Insurance Contributions Act, No.4 of 2002. In accordance with our responsibilities in terms of sections 44(2) and 44(3) of the Auditing Profession Act, responsibilities beyond those required under the International Standards on Auditing, we report that we have identified the matter described in the preceding paragraph as a reportable irregularity in terms of the Auditing Profession Act. We have reported such matter to the Independent Regulatory Board for Auditors. Management took corrective action in February 2018 thereby ensuring compliance with the aforementioned legislation. Therefore, the reportable irregularity is not continuing. Refer to Note 10 in the Financial Statements for further details. Darshen Govender SizweNtsalubaGobodo Grant Thornton Inc. Director Registered Auditor 12 December 2018 20 Morris Street East Woodmead

PHUMULA RETIREMENT FUNDSCHEDULE EREPORT OF THE BOARD OF FUNDFOR THE YEAR ENDED 30 JUNE 20181. DESCRIPTION OF FUND1.1. Type of fund in terms of the Income Tax Act, 1962In terms of section 1 of the Income Tax Act 1962, the fund is classified as a pension fund. The fund is a defined benefit fund.1.2. BenefitsIn terms of the rules of the fund the following definitions were applicable from 1 July 2017 to 30 June 2018:a. The normal retirement age is 63 years.b. The pension factor is 2.0108% for each year of pensionable service. c. A lump sum award is calculated at 7% of the final pensionable emoluments for each year of pensionable service. Amember who has attained the age of 55 years and has not less than 10 years' contributory service may elect to receiveon any date the lump sum equal to 7% of his final pensionable emoluments per year of contributory service. d. Pensions are based on the final pensionable emoluments which are:- If he has been a member continuously since 30 June 1984, his pensionable emoluments on 30 September 2008increased annually in July each year thereafter by the percentage increase in the Headline Consumer Price Index forthe twelve month period 31 May to the 31 May preceding the July in which the increase is given, until he becomesentitled to payment of a pension.- If he has not been a member continuously since 30 June 1984, his annual average pensionable emoluments over theyear preceding 1 October 2008 increased annually in July each year thereafter by the percentage increase in theHeadline Consumer Price Index for the twelve month period 31 May to the 31 May preceding the July in which theincrease is given. For the increase as at 1 July 2009, the percentage increase shall be 75% of the increase in CPI andthereafter, 100% of the increase in CPI until he becomes entitled to the payment of a pension. e. In the event of the death of a member in service the member's actuarial reserve value at the date of death will betransferred to the City of Johannesburg Pension Fund and will be combined with the death benefit payable from theCity of Johannesburg Pension Fund. f. A member whose employment is terminated due to incapacity will be eligible to an early retirement benefit. This willbe a lump sum benefit equal to his actuarial interest in the fund or his minimum benefit prescribed by the Act,whichever is the greater. Alternatively, if the member has attained the age of 45 years and has not less than 15 years�contributory service or has attained the age of 55 years and has not less than 10 years� contributing service, he mayelect to receive a retirement lump sum and annual pension benefit from the fund, on a basis such that the total value ofthe benefits is equal to the member�s actuarial interest in the fund.g. In lieu of receiving a cash termination benefit, a member who has attained the age of 45 years and has not less than15 years� contributory service or who has attained the age of 55 years and has not less than 10 years� contributingservice, may elect to defer payment of such benefit to his pensionable age. Unclaimed benefitsStrategy of the fund towards unclaimed benefits:Retirement and withdrawal benefits will become unclaimed after 24 months as per Rule 38 as well as the PensionFunds Act. Death benefits are transferred to the City of Johannesburg Pension Fund for distribution.1.3. ContributionsFrom 1 October 2008 the fund became a closed fund both in respect of new members and further accruals ofpensionable service. From then on there were no contributions to the fund. - 11 -

PHUMULA RETIREMENT FUNDSCHEDULE EREPORT OF THE BOARD OF FUND (continued)FOR THE YEAR ENDED 30 JUNE 20181.4. Rule AmendmentsRuleamendmentNo. Description and motivation Date ofBoard of Fundresolution Effectivedate Date registered bythe FinancialSector ConductAuthority8 The fund rules were amended to cater for thefollowing: 1. To change the name of the fund andrelated references to "JMPF". 2. To change the address of the registeredoffice of the fund. 3. To allow the Committee to delegatefunctions to sub-committees other than theExecutive Committee. 4. To allow the Executive Committtee todelegate investigative functions to sub-committees. 5. To correct an unintended conflict betweenthe previous Rule 5(2) (approved as part ofRule Amendment no.6 that amended thequorum of the Executive Committee to threeand the previous Rule 5(4) (that still includeda reference to a quroum of four. 6. To allow in service members to transfertheir fund benefits to another fund where theycurrently participate in order to consolidatetheir retirement funding. 7. To add back the provision in Rule 25(4)that eligible child pensions shall be doubled ifthere is no surviving spouse. 8. To make clear in Rule 27(2) that thebenefit is only payable on death of a memberwho has elected to defer payment of hisbenefit and provided that a surviving spouseand eligible child pension is not payable. 9.To allow members to convert a portion oftheir lump sum into an enhanced pensionguarantee benefit. 10. To specify how the assets backing theBonus Reserve Account should be invested.

18 August 2017 1 September 2017 12 January 2018

9 The fund rules were amended to cater for thefollowing: 1. To extend the representatives' term ofoffice to five years to ensure that experiencegained over the term of office remains withthe fund for an extended period. 2. To allow appointed alternates to act in theplace of any representative or his/heralternate where simultaneous or consecutivevacancies in both offices arise during thesame term of office. 3. To align the rules of the fund with theregulatory requirements in terms of thesigning of fund documents.18 August 2017 1 September 2017 23 November 2017

10 The fund rules were amended to cater for thefollowing: 1. To allow retiring members to transfer theirretirement benefit to a registered insurer,thereby receiving a future retirement benefitfrom the registered insurer and not the fund.2. To allow retiring members to transfer theirretirement benefit to the City ofJohannesburg Pension Fund in order toconsolidate their retirement benefits accruedin the fund with their benefits accruing in theCity of Johannesburg Pension Fund.18 August 2017 1 September 2017 Pending.

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PHUMULA RETIREMENT FUNDSCHEDULE EREPORT OF THE BOARD OF FUND (continued)FOR THE YEAR ENDED 30 JUNE 2018All rule amendments are available for inspection at the fund�s registered office.1.5. Reserves and specified accounts established in terms of the rules of the fundPensions Funding AccountExpense Reserve AccountBonus Reserve AccountSolvency Reserve AccountGuarantee Reserve Account1.5.1. Pensions Funding Accounta.The Pensions Funding Account shall be credited with the actuarial interest of each pensioner's pension or amember's deferred pension, less the actuarial interest of each pensioner's current or each member's deferred benefitpayable in terms of Rule 30(6), at the effective date.b. Every payment of an exit benefit, excluding that portion of the benefit paid in respect of benefits payable inaccordance with Rule 30(6), pension or gratuity shall be debited to the Pensions Funding Account. c. At the end of each calendar month an amount equal to the transfer value received in terms of Rule 13, excludingthe value transferred in respect of benefits payable in accordance with Rule 30(6), shall be credited to the PensionsFunding Account. d. At the end of each month the Pensions Funding Account shall be credited with gains (whether positive or negative)calculated on investments allocated to the Pensions Funding Account.e. Following completion of the annual valuation of the fund in accordance with Rule 52, the Pensions Funding Account shall be debited or credited by such experience gains and/or losses as determined by the actuary.Expense Reserve Accounta.The Expense Reserve Account shall be credited with the actuarial interest, as determined by the actuary, of futureanticipated fund expenses at the effective date.b. Every expense paid by the fund shall be debited to the Expense Reserve Account. c. At the end of each month the Expense Reserve Account shall be credited with gains (whether positive or negative)calculated on investments allocated to the Expense Reserve Account.d. Following completion of the annual valuation of the fund in accordance with Rule 52, the Expense Reserve Account shall be debited or credited by such experience gains and/or losses as determined by the actuary.Solvency Reserve Accounta. The Solvency Reserve Account shall be credited with such amount, as determined by the actuary, at the effectivedate. b. The Solvency Reserve Account shall be debited with such amount, as determined by the actuary, required to betransferred to the City of Johannesburg Pension Fund at the effective date in respect of members transferring to theCity of Johannesburg Pension Fund in accordance with Rule 9(6).c. At the end of each month the Solvency Reserve Account shall be credited with gains (whether positive or negative)calculated on investments allocated to the Solvency Reserve Account.d. Following completion of the annual valuation of the fund in accordance with Rule 52, the Solvency Reserve Accountshall be debited or credited by the amount credited or debited to the Pensions Funding Account, Bonus ReserveAccount and Expense Reserve Account in respect of experience gains and/or losses determined by the actuary.Bonus Reserve Accounta. The Bonus Reserve Account shall be credited with the actuarial interest, as determined by the actuary, of eachpensioner's current or each member's deferred benefit payable in terms of Rule 30(6) at the effective date.b. Every payment of the capital value of the portion of an exit benefit payable in terms of Rule 30(6) shall be debited tothe Bonus Reserve Account. - 13 -

PHUMULA RETIREMENT FUNDSCHEDULE EREPORT OF THE BOARD OF FUND (continued)FOR THE YEAR ENDED 30 JUNE 2018c. Every payment of a bonus payable in accordance with Rule 30(6) shall be debited to the Bonus Reserve Account.d. At the end of each calendar month an amount equal to the portion of the transfer value received in terms of Rule 13in respect of benefits payable in accordance with Rule 30(6), shall be credited to the Bonus Reserve Account.e. At the end of each month the Bonus Reserve Account shall be credited with gains (whether positive or negative)calculated on investments allocated to the Bonus Reserve Account. f. Following completion of the annual valuation of the fund in accordance with Rule 52, the Bonus Reserve Account shall be debited or credited by such experience gains and/or losses as determined by the actuary.Guarantee Reserve Accounta. At the end of each calendar month an amount equal to the lump sum converted by the member into an enhancedguarantee benefit, for all members who made this option during the calendar month in terms of Rule 27(5), shall becredited to the Guarantee Reserve Account.b. At the end of each calendar month every amount by which the expected value of the lump sum payable in terms ofRule 27(5) is reduced due to the survival of the pensioner entitled thereto to that date, shall be noted and theaggregate of such reductions debited to the Guarantee Reserve Account.c. An amount equal to the capital value, as determined by the actuary or according to tables furnished by the actuary,of every lump sum that became payable in terms of the provisions of Rule 27(5) read with the provisions of Rule31(2), during that month, shall be credited to the Guarantee Reserve Account.d. Every payment of lump sum in terms of the provisions of Rule 27(5) shall be debited to the Guarantee ReserveAccount.e. Any balance standing to the credit of the Guarantee Reserve Account at the end of any calendar month shall bedeemed to be a liability of the fund for the purposes of the provisions of Rule 45(1).f. At the end of each financial year the state of the Guarantee Reserve Account shall be investigated by the actuarywho shall report his findings to the committee with recommendations as to measures to be taken, if any, to ensureand mantain fairness in the basis of conversation of lump sums in terms of the provisions of Rule 31(2), between themembers concerned and the fund.g. Following completion of the annual valuation of the fund in accordance with Rule 52, the Guarantee ReserveAccount shall be debited or credited by such experience gains and/or losses as determined by the actuary.

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PHUMULA RETIREMENT FUNDSCHEDULE EREPORT OF THE BOARD OF FUND (continued)FOR THE YEAR ENDED 30 JUNE 20182. INVESTMENTS2.1. Investment strategyFollowing registration of the Revised Rules effective 1 October 2008, the fund is a closed fund that has defined benefitliabilities to existing and future pensioners. The fund has implemented a matched investment strategy relative to itsbasic, 13th cheque and expense liability and has adopted a more discretionary policy for the assets backing thesolvency reserves of the fund. Colourfield Liability Solutions (Pty) Ltd has been appointed to manage the core portfolio (matched portfolio) whichcomprises mainly of inflation-linked government bonds and other fixed interest rate assets designed to produce anincome stream to meet the fund�s liabilities to pensioners and deferred pensioners. Colourfield Liability Solutions (Pty)Ltd is required to produce a monthly report which analyses whether the fund�s objectives are being achieved. The discretionary portfolio (balanced portfolio) has been invested in a combination of active and passive investmentstrategies comprising of local equity, offshore equity and property. These various portfolios are managed by variousprofessional investment managers. The fund recognises that it may miss out on investment opportunities within the balanced portfolio given the relativelylong periods of time between meetings and has accordingly appointed GraySwan Investment Consultants (Pty) Ltd asOutsourced Chief Investment Officer. Their role is to make quick, small, tactical investment decisions, includinghedging if required, within certain prescribed limits. Changes outside of these limits continue to be considered andapproved by the Executive Committee and the Board of Fund. 2.1.1. GeneralThe fund is a closed fund that does not receive contribution income after 1 October 2008, which is the effective dateof the revised rules. Pension payments and benefit payments in respect of deferred pensioners who exit the fund priorto retirement are affected by realisation of current assets as determined by the fund's matched investment strategy.The discretionary portfolio (balanced portfolio) investment strategy adopted by the Board of Fund is derived with theuse of Asset Liability Modelling (ALM). The output of the ALM process determines the appropriate strategic assetallocation over time. The current investment strategy of the balanced portfolio is based on the following strategic assetallocation: 35% local equity, 15% local listed property, 35% foreign developed market equity and 15% foreignemerging market equity.2.1.2. Unclaimed benefitsUnclaimed benefits are invested in the bank account.2.1.3. Reserve accountsThe Pensions Funding Account, Bonus Reserve Account and Expense Reserve Account are invested in the matchedportfolio, with the Solvency Reserve Account invested in the balanced portfolio. There are currently no assets in theGuarantee Reserve Account.2.1.4. Derivative InstrumentsThe Board of Fund utilises derivative instruments as part of their investment strategy. The Board of Fund ensures thatthe following has been complied with:The exposure of the asset class does not exceed the maximum percentages as prescribed to the underlying asset asset out in Regulation 28. The investment mandate is in place and reviewed by the Board of Fund on a regular basis to ensure compliance withthe requirements as prescribed by Regulation 28 and the relevant Notice. The investments are monitored for compliance with the provisions of Regulation 28 and adherence to the investment mandate.2.1.5. Hedge FundsThe Board of Fund utilises hedge funds as part of its investment strategy. The Board of Fund ensures that thefollowing has been complied with:The exposure of the asset class does not exceed the maximum percentages as prescribed to the underlying asset asset out in Regulation 28. The investment mandate is in place and reviewed by the Board of Fund on a regular basis to ensure compliance with- 15 -

PHUMULA RETIREMENT FUNDSCHEDULE EREPORT OF THE BOARD OF FUND (continued)FOR THE YEAR ENDED 30 JUNE 2018the requirements as prescribed by Regulation 28 and the relevant notice.The investments are monitored for compliance with the provisions of Regulation 28 and adherence to the investment mandate.2.1.6. Private Equity FundsThe Board of Fund does not utilise private equity funds as part of its investment strategy.2.1.7. Securities Lending TransactionsAccording to the Investment Policy Statement, securities lending may be allowed. In each case, specific guidelinesand mandates will be implemented. Such guidelines and mandates will stipulate the types of counterparties to beutilised as well as the limits relating to the lending of securities.

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PHUMULA RETIREMENT FUNDSCHEDULE EREPORT OF THE BOARD OF FUND (continued)FOR THE YEAR ENDED 30 JUNE 20182.2. Management of investmentsThe fund's investments consist of listed equities, bonds, collective investment schemes, deposit and call accounts andderivative market instruments. Derivative contracts are entered into mainly to hedge against foreign exchangemovements. The investments were selected in accordance with the parameters that are defined in terms of theinvestment policy statement approved by the Board of Fund. The investments of the fund are safeguarded by theinvestment administrators appointed by the fund and these assets are registered in the name of the fund. Overallresponsibility for the investment and performance lies with the Board of Fund. The Board meet from time to time toconduct the business of the fund and review the investment performance achieved by the appointed investment administrators.The fair value of the fund's investments, administered by the investment administrators at the end of the year were:30 June 2018R 30 June 2017RBoutique Collective Investments 80 778 999 89 100 077Taquanta Asset Managers (Pty) Ltd 412 084 105 368 461 887Momentum Asset Management (Pty) Ltd 2 612 846 16 103 395Atlantic Asset Management (Pty) Ltd 200 278 481 182 992 484Growthpoint Properties Ltd 305 042 387 319 776 098Prescient Investment Management (Pty) Ltd 107 369 633 98 338 675Futuregrowth Asset Management (Pty) Ltd 76 865 099 68 746 353Investec Asset Management (Pty) Ltd 71 141 327 78 218 795Ashburton Investor Services (Pty) Ltd 514 461 811 470 904 809ABSA Bank Ltd - Current account - 1 360 853Nedbank Ltd - Current account 156 092 946 93 976 864RSA Bonds 3 909 823 919 4 828 331 471Corporate bonds - Eskom 586 042 507 396 957 670Corporate bonds - African Bank 138 406 348 76 111 803Corporate bonds - Firstrand Bank Ltd 61 736 934 62 732 235Corporate bonds - SA Road Agency 570 452 880 571 914 106Stanlib Asset Management (Pty) Ltd 176 883 207 163 073 324Marathon Asset Management LLP 177 069 380 156 625 514Satrix Management (Pty) Ltd 16 379 891 18 239 833Sanlam Investment Management (Pty) Ltd 93 721 196 84 695 121Oakhurst Property ** - 7 200 000Standard Bank of SA Ltd 5 605 820 2 585 322Russell Investment Ireland Ltd (Old Mutual) 416 207 231 361 585 042Visio Capital Management (Pty) Ltd 102 893 924 95 837 835Total value of investments managed 8 181 950 871 8 613 869 566NOTEOakhurst Property **The Oakhurst property was incorrectly classified as investment property in the prior year. This is now correctlyclassified under Property, Plant and Equipment.

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PHUMULA RETIREMENT FUNDSCHEDULE EREPORT OF THE BOARD OF FUND (continued)FOR THE YEAR ENDED 30 JUNE 20183. MEMBERSHIP Deferredpensioners Pensioners UnclaimedbenefitsNumber at the beginning of year 2 590 7 227 530Adjustments 3 - 1Additions - 224 9Suspensions & terminations - (452) -Withdrawals (102) - -Retirements (103) - -Deaths (19) - -Unclaimed benefits paid - - (77)Number at the end of the year 2 369 6 999 463Number at end of year(South African citizen) 2 273 6 988 463Number at end of year(non-South African citizen) 96 11 -Adjustments:Prior year closing membership was incorrectly stated.4. ACTUARIAL VALUATIONThe financial statements summarise the transactions and net assets of the fund. They do not take account of liabilitiesto pay pensions and other benefits in the future. In accordance with the rules of the fund, the statutory actuarialposition of the fund, which does take account of such liabilities, is examined and reported on by the actuary at intervalsnot exceeding three years. The latest statutory actuarial valuation which was completed prior to signing thesefinancials, was performed as at 30 June 2017 in which the valuator reported that the fund was in a sound financialposition. The statutory actuarial valuation was submitted on 31 December 2017 and was approved by the Financial Sector Conduct Authority on 24 October 2018.5. SURPLUS APPORTIONMENT OR NIL SCHEMENil schemeThe fund submitted a nil surplus application in relation to the statutory surplus apportionment valuation as at 30 June2002. The Financial Sector Conduct Authority has confirmed that it has recorded this as a nil scheme submission and it has been approved.6. HOUSING LOAN FACILITIESHousing loans are granted to members in terms of the rules of the fund and Section 19(5) of the Pension Funds Act in South Africa. No new loans were granted since 2008.7. INVESTMENTS IN PARTICIPATING EMPLOYERSThe fund holds no direct investments in the participating employer.8. SIGNIFICANT MATTERS No significant matters were noted for the period under review.- 18 -

PHUMULA RETIREMENT FUNDSCHEDULE EREPORT OF THE BOARD OF FUND (continued)FOR THE YEAR ENDED 30 JUNE 20189. ADDITIONAL DISCLOSUREGood governance of the fundThe Board of Fund acknowledges and applies, where necessary, PF130 and the Principles of Treating CustomersFairly as prescribed by the Financial Sector Conduct Authority and the King IV Principles of Good CorporateGovernance as set out by the Institute of Directors in Southern Africa. The Board of Fund has therefore implemented, and review from time to time, the following policies: - Code of Conduct for the Board of Fund - Communication policy- Investment policy statement - Risk management policy - Trustees' gift policy - Trustees' training policy - Trustees' remuneration policy. 10. SUBSEQUENT EVENTSNo subsequent events have occurred since the financial year end that may materially affect the financial statements.

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PHUMULA RETIREMENT FUNDSCHEDULE FSTATEMENT OF NET ASSETS AND FUNDSAS AT 30 JUNE 2018 Note 30 June 2018R 30 June 2017RASSETSNon-current assets 8 189 454 199 8 613 886 628Plant and equipment 2 7 490 000 -Investments 3 8 181 950 871 8 613 869 566Housing loans 4 13 328 17 062Current assets 25 110 036 21 408 733Accounts receivable 5 13 929 064 13 438 114Cash at bank 11 180 972 7 970 619Total assets 8 214 564 235 8 635 295 361FUNDS AND LIABILITIESReservesReserve accounts 17 8 101 367 544 8 501 928 583Total funds and reserves 8 101 367 544 8 501 928 583Non-current liabilitiesUnclaimed benefits 9 63 957 467 68 881 207Current liabilities 49 239 224 64 485 571Transfers payable 7 4 323 835 9 183 919Benefits payable 8 41 354 769 52 185 124Accounts payable 10 3 560 620 3 116 528Total funds and liabilities 8 214 564 235 8 635 295 361

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PHUMULA RETIREMENT FUNDSCHEDULE GSTATEMENT OF CHANGES IN NET ASSETS AND FUNDSFOR THE YEAR ENDED 30 JUNE 2018 Accumulated Funds Reserve accountsRefer note 17 Current year2018 Previous year2017Note R R R RNet investment income 11 - 316 383 555 316 383 555 10 151 630Allocated to unclaimed benefits 9 - (1 808 253) (1 808 253) (3 173 486)Other income 12 - 26 330 26 330 2 311 894Less:Administration expenses 13 - (11 287 055) (11 287 055) (13 257 058)Net income/(loss) before transfers and benefits - 303 314 577 303 314 577 (3 967 020)Transfers and benefits - (703 875 616) (703 875 616) (783 786 337)Transfer from other funds 6 - 18 488 182 18 488 182 25 747 701Transfer to other funds 7 - (69 251 576) (69 251 576) (53 456 509)Benefits 8 - (653 112 222) (653 112 222) (756 077 529)Net loss after transfers and benefits - (400 561 039) (400 561 039) (787 753 357)Funds and reservesBalance at the beginning of the year 17 - 8 501 928 583 8 501 928 583 9 112 678 095Prior period adjustments 14 - - - 6 981 894Retirement benefit accrual 17 - - - 170 021 951Balance at the end of the year - 8 101 367 544 8 101 367 544 8 501 928 583

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PHUMULA RETIREMENT FUNDSCHEDULE HANOTES TO THE ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 20181. PRINCIPAL ACCOUNTING POLICIESThe following are the principal accounting policies used by the fund. These policies have been applied consistently to allyears presented, except for the Oakhurst property that was incorrectly classified as investment property instead ofclassifying it as property, plant and equipment.1.1. PURPOSE AND BASIS OF PREPARATION OF ANNUAL FINANCIAL STATEMENTSThe annual financial statements are prepared in accordance with the Regulatory Reporting Requirements for RetirementFunds in South Africa, the rules of the fund and the provisions of the Pension Funds Act.The annual financial statements are prepared on the historical cost and going concern bases, except where specificallyindicated otherwise in the accounting policies below:1.2. FINANCIAL INSTRUMENTSMeasurementA financial instrument is any contract that gives rise to both a financial asset of one entity and a financial liability or equityinstrument of any other entity. A financial asset or a financial liability is recognised when its contractual arrangementsbecome binding and is derecognised when the contractual rights to the cash flows of the instrument expire or when suchrights are transferred in a transaction in which substantially all risks and rewards of ownership of the instrument aretransferred.Financial instruments carried on the statement of net assets and funds include cash and bank balances, investments,housing loans, receivables and accounts payable.Financial instruments are recognised on acquisition using trade date accounting, which includes transaction costs. Uponinitial recognition financial instruments are designated at fair value through the statement of changes in net assets andfunds as the assets or liabilities are managed, evaluated and reported internally on a fair value basis and/or thedesignation eliminates or significantly reduces an accounting mismatch which would otherwise arise.Subsequent to initial recognition, these instruments are measured as set out below.1.2.1. InvestmentsInvestments are classified at fair value through the statement of changes in net assets and funds and are measured at fairvalue.Loans (other than housing loans) � loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determined payments that are not quoted in anactive market other than those that the fund intends to sell in the short term or that is designated as at fair value throughthe statement of changes in net assets and funds. Loans and receivables are measured at fair value.Bills and bondsBills and bonds comprise investments in government or provincial administration, local authorities, participatingemployers, subsidiaries or holding companies and corporate bonds.Listed bills and bondsThe fair value of listed bills and bonds traded on active liquid markets is based on regulated exchange quoted rulingclosing prices at the close of business on the last trading day on or before the statements of net assets and funds date.Unlisted bills and bondsA market yield is determined by using appropriate yields of existing bonds and bills that best fit the profile of the instrumentbeing measured and based on the term to maturity of the instrument. Adjusting for credit risk, where appropriate, adiscounted cash flow model is then applied, using the determined yield, in order to calculate the fair value.Investment property and owner occupied propertyInvestment properties are held to earn rental income and appreciate capital value. Owner-occupied properties are held foradministrative purposes. This distinguishes owner-occupied properties from investment properties. Investment propertiesare accounted for by means of the fair value model and are carried at market value determined annually by externalindependent professional valuers. Fair value adjustments are included in the net surplus or deficit for the period.Investment properties are not subject to depreciation.- 22 -

PHUMULA RETIREMENT FUNDSCHEDULE HANOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 30 JUNE 20181.2.1. Investments (continued)EquitiesEquity instruments consist of equities with primary listing on the Johannesburg Stock Exchange, equities with secondarylisting on the Johannesburg Stock Exchange, foreign listed equities and unlisted equities. Equity instruments designated as fair value through the statement of changes in net assets and funds by the fund areinitially recognised at fair value on trade date.Listed equitiesEquity instruments are subsequently measured at fair value and the fair value adjustments are recognised in the statementof changes in net assets and funds. The fair value of equity instruments with standard terms and conditions and traded onactive liquid markets is based on regulated exchange quoted ruling closing prices at the close of business on the lasttrading day on or before the statements of net assets and funds date.Unlisted equitiesIf a quoted closing price is not available i.e. for unlisted instruments, the fair value is estimated using pricing models, or byapplying appropriate valuation techniques such as discounted cash flow analysis or recent arm�s length markettransactions in respect of equity instruments.Insurance policiesNon-linked insurance policiesNon-linked insurance policies with insurers are valued on the basis of the policyholder�s retrospective contribution toassets (i.e. accumulation at the actual investment return achieved on gross premiums).Linked or market-related policiesIf the policy is unitised, the value is equal to the market value of the underlying units. Other linked or market-relatedpolicies are valued at the market value of the underlying assets for each policy, in line with the insurer�s valuationpractices.Collective investment schemeInvestments in collective investment schemes are valued at fair value which is the quoted unit values, as derived by thecollective investment scheme manager with reference to the rules of each particular collective investment scheme,multiplied by the number of units. Investment in participating employersInvestments in participating employer(s) comprise loans, investments in listed and unlisted equities and other investments.Refer to respective policies for basis of accounting.1.2.2. Housing loansHousing loans are measured at fair value. Housing loans are derecognised when the right to receive cash flows from themember has expired or been transferred and the fund has also transferred substantially all risks and rewards of ownership.1.2.3. Accounts receivableAccounts receivable are financial assets measured at fair value.1.2.4. Cash and cash equivalentsCash and equivalents comprise cash in hand, deposits held at call with banks, and other short-term highly liquidinvestments with original maturities of three months or less. Cash and cash equivalents are measured at fair value.1.2.5. Accounts payableAccounts payable are financial liabilities measured initially at fair value, net of transaction costs that are directlyattributable to the liability.1.3. RESERVESReserve accounts comprise particular amounts of designated income and expenses as set out in the rules of the fund andare recognised in the year in which such income and expenses accrue to the fund.- 23 -

PHUMULA RETIREMENT FUNDSCHEDULE HANOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 30 JUNE 20181.4. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETSProvisionsProvisions are recognised when the fund has a present legal or constructive obligation as a result of past events, for whichit is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate of theamount of the obligation can be made. Where the effect of discounting to present value is material, provisions are adjustedto reflect the time value of money.Contingent liabilitiesA contingent liability is not recognised in the statement of net assets and funds, but disclosed in the notes to the financialstatements, unless the possibility of an outflow of resources embodying economic benefits is remote.Contingent assetsA contingent asset is not recognised in the statement of net assets and funds, but disclosed in the notes to the financialstatements when an inflow of economic benefits is probable.1.5. FOREIGN CURRENCIESTransactions in foreign currencies are accounted for at the ruling rate of exchange on the transaction date. Assets andliabilities in foreign currencies are converted at the ruling rate of exchange on the statements of net assets and funds date.Gains and losses on conversion are dealt with in the statement of changes in net assets and funds.Income and expenditure relating to foreign investments are converted to South African currency at appropriate weightedaverage exchange rates, for the period.1.6. INVESTMENT INCOMEInvestment income comprises of dividends, interest and adjustment to fair value.DividendsDividend income is recognised in the statement of changes in net assets and funds when the right to receive payment isestablished � this is the last date to trade for equity securities. For financial assets designated at fair value through thestatement of changes in net assets and funds, the dividend income forms part of the fair value adjustment.InterestInterest income in respect of financial assets held at amortised cost is accounted for in the statement of changes in netassets and funds using the effective interest rate method.Collective investment schemes� distributionDistribution from collective investment schemes are recognised when the right to receive payment is established.Income from policies with insurance companiesIncome from investment policies from insurance companies is included in the adjustment to the movement of the financialasset.Adjustment to fair valueGains or losses arising from changes in the fair value of financial assets through the statement of changes in net assetsand funds are presented in the statement of changes in net assets and funds in the year in which they arise.Expenses incurred in managing investmentsExpenses in respect of the management of investments are recognised as the service is rendered.- 24 -

PHUMULA RETIREMENT FUNDSCHEDULE HANOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 30 JUNE 20181.7. BENEFITSBenefits payable and pensions are measured in terms of the rules of the fund.Benefit payments and monthly pension payments are recognised as an expense when they are due and payable in termsof the rules of the fund. Any benefits not paid at the end of the reporting year are recognised as a current liability � benefitspayable / due.Reinsurance proceedsReinsurance proceeds are measured at the fair value of the consideration received or receivable and are accrued andrecognised as income at the same time as the recognition of the related claim.1.8. TRANSFERS TO AND FROM THE FUNDSection 14 and 15B transfers to or from the fund are recognised on the date of approval of the scheme/arrangement oftransfer of business by the Financial Sector Conduct Authority, as contained in the approval certificate from theCommissioner. Individual transfers (Section 13A(5) transfers) are recognised on the earlier of receipt of the written notice of transfer(Recognition of Transfer) or receipt of the actual transfer value.All the above transfers are measured at the values as per the section 14 application or the value of the transfer at effectivedate of transfer adjusted for investment return or late payment interest as guided by the application.1.9. ADMINISTRATION EXPENSESExpenses incurred in the administration of retirement funds are recognised in the statement of changes in net assets andfunds in the reporting year to which they relate.In the event that an expense has not been paid at the end of a reporting year, the liability will be reflected in the accountspayable note. If the expense was paid in advance or an overpayment occurred, the applicable amount will be disclosedunder the accounts receivable note.1.10. RELATED PARTIESIn considering each possible related-party relationship, attention is directed to the substance of the relationship and notmerely the legal form. If there have been transactions between related parties, the fund shall disclose the nature of therelated party relationship as well as the following information for each related party relationship: - the amount of the transactions;- the amount of outstanding balances;- their terms and conditions, including whether they are secured, and the nature of the consideration to be provided inthe settlement;- details of guarantees given or received;- provisions for doubtful debts related to the amount of outstanding balances; and- the expense recognised during the year in respect of bad or doubtful debts due from related parties.1.11. ACCOUNTING POLICIES, CHANGING IN ACCOUNTING ESTIMATES AND ERRORSThe fund applies adjustments arising from changes in accounting policies and errors prospectively. The adjustmentrelating to a change in the accounting policy or error is therefore recognised in the current and future years affected by thechange.- 25 -

PHUMULA RETIREMENT FUNDSCHEDULE HANOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 30 JUNE 20181.12. PROPERTY AND LANDProperty is initially recorded at cost. Land and buildings are subsequently shown at market value, based on triennialvaluations by external independent valuers, less subsequent depreciation. The remaining plant and equipment is stated athistorical cost less depreciation. Increases in the carrying amount arising on revaluation are credited to the revaluationreserve.Decreases that offset previous increases of the same asset are charged against the revaluation reserve; all otherdecreases are charged to the income statement. Each period the difference between depreciation based on the revaluedcarrying amount of the assets (the depreciation charged to the Statement of Changes in Net Assets and Funds) anddepreciation based on the asset�s original cost is transferred from the revaluation reserve to accumulated funds.Depreciation is calculated on the straight-line method to write off the cost of each asset, or the re-valued amounts, to theirresidual values over their estimated useful life as follows: Buildings 25 - 40 years.Land is not depreciated as it is deemed to have an indefinite life.Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately toits recoverable amount. Impairment losses are recognised.Gains and losses on disposal of plant and equipment are determined by reference to their carrying amount and are takeninto account in determining the net surplus or deficit. Maintenance and repairs, which neither materially add to the value ofassets nor appreciably prolong their useful lives, are charged against income.2. PLANT AND EQUIPMENT2.1. Current yearGross carrying amount PlantR TotalRCost at beginning of year - -Additions ** 7 490 000 7 490 000At end of year 7 490 000 7 490 000Accumulated depreciation and impairmentNet carrying amount at end of year 7 490 000 7 490 000NOTEAdditions ** R7 490 000 recorded under Property and Equipment Note is in respect of the Oakhurst property that was incorrectly classifiedas investment property in the prior year.

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PHUMULA RETIREMENT FUNDSCHEDULE HANOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 30 JUNE 20183.3.1. INVESTMENTSInvestment summary Note Local R Foreign R Total currentyearR Total previousyearR Fair valuecurrent yearRCash 202 056 697 - 202 056 697 102 877 715 202 056 697Commodities 798 534 - 798 534 825 561 798 534Debt instruments including Islamic debt instruments 5 410 006 328 - 5 410 006 328 5 937 051 639 5 410 006 328Investment properties and Owner occupied properties 3.2. 310 388 633 - 310 388 633 331 488 657 310 388 633Equities (including demutualisation shares) 60 367 160 239 507 60 606 667 66 921 644 60 606 667Insurance policies 488 535 179 414 029 488 949 208 437 208 241 488 949 208Collective investment schemes 1 118 441 818 593 331 571 1 711 773 389 1 737 496 109 1 711 773 389Derivative market investments (2 929 924) - (2 929 924) - (2 929 924)Other 301 339 - 301 339 - 301 339Total 7 587 965 764 593 985 107 8 181 950 871 8 613 869 566 8 181 950 871

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PHUMULA RETIREMENT FUNDSCHEDULE HANOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 30 JUNE 20183.2. Investment properties and owner occupied investments 3.2.1. Current yearInstrument Address Valuationmethod Date of lastvaluation Pledged asa guarantee At beginningof yearR RevaluationReserveR Transferto/fromowneroccupiedpropertiesR OtherR At end ofyearRInvestment PropertiesThe Bridge Property Cape Road andCJLangenhovenDriveNewton Park Port Elizabeth 2018/07/01 Yes 319 776 098 (14 733 711) - - 305 042 387Oakhurst Property Unit 8 - SSOakhurst 6 Oxford Road,Parktown,Johannesburg 2018/06/30 Yes 7 200 000 - (7 200 000) - -Investec and Stanlib Yes 4 512 559 - (4 512 559) 5 346 246 5 346 246Total of properties 331 488 657 (14 733 711) (11 712 559) 5 346 246 310 388 6334. HOUSING LOAN FACILITIES4.1. Housing loans At beginningyear Repaid At end of yearR R RLoans granted in terms of the rules of the Fund and section 19(5) of the Pension Funds Act 17 062 (3 734) 13 328Total 17 062 (3 734) 13 328The security for the housing loans granted to members is the members' withdrawal benefit. The interest rate charged is 6.50%, 6.25% and 6%. The repayments are made monthly. Overpayments of housing loans of R35 866 reflects under accounts payable, as these amounts need to be refunded to the members. - 28 -

PHUMULA RETIREMENT FUNDSCHEDULE HANOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 30 JUNE 20185. ACCOUNTS RECEIVABLE 30 June 2018R 30 June 2017RReceivable from NMG in respect of Professional Indemnity Claim 674 491 1 830 762South African Revenue Service - PAYE 95 169 453 703Distribution from Growthpoint 13 000 000 11 003 149Prepaid - Fidelity Insurance premiums 159 404 150 500Total 13 929 064 13 438 114

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PHUMULA RETIREMENT FUNDSCHEDULE HANOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 30 JUNE 20186. TRANSFERS FROM OTHER FUNDS Effectivedate At beginning ofyear Transfersapproved Return onTransfers Assetstransferred At end ofyearR R R R RTransfers from City of Johannesburg Pension Fund - Retirements - 18 488 182 - (18 488 182) -Total - 18 488 182 - (18 488 182) -Transfers approved 18 488 182Return on transfers -Statement of changes in net assets and funds 18 488 1827. TRANSFERS TO OTHER FUNDS Effectivedate No. ofmembers At beginning ofyear Transfersapproved Return onTransfers Assetstransferred At end ofyearR R R R RIndividual transfers out Various 65 9 183 919 68 425 044 826 532 (74 111 660) 4 323 835Total 65 9 183 919 68 425 044 826 532 (74 111 660) 4 323 835Transfers approved 68 425 044Return on transfers 826 532Statement of changes in net assets and funds 69 251 576- 30 -

PHUMULA RETIREMENT FUNDSCHEDULE HANOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 30 JUNE 20188. BENEFITS8.1. Benefits - current members At beginning ofyear Benefits forcurrent period Return allocated Payments Transferred tounclaimed benefits At end of yearR R R R R RMonthly Pensions 8 356 534 527 146 703 - (522 730 487) - 12 772 750Lump sums on retirements - Full benefit 13 108 022 56 519 901 712 327 (52 718 136) (472 715) 17 149 399Lump sums before retirement - Early payment of lumpsum retirement benefit 8 913 557 16 228 004 28 749 (24 490 533) (113 127) 566 650 - Death benefits 7 549 432 22 264 154 680 043 (24 336 843) - 6 156 786 - Withdrawal benefits 14 257 579 23 288 401 530 752 (33 877 931) 510 383 4 709 184Other- Divorce - 5 713 188 - (5 713 188) - -Total 52 185 124 651 160 351 1 951 871 (663 867 118) (75 459) 41 354 769Benefits for current year 651 160 351Return allocated 1 951 871Statement of changes in net assets and funds 653 112 2229. UNCLAIMED BENEFITS 30 June 2018R 30 June 2017RBalance at the beginning of the year 68 881 207 83 882 552Transferred from benefits payable 75 459 4 499 179Investment income allocated 1 808 253 3 173 486Less:� Benefits paid (6 807 452) (22 674 010)Balance at the end of the year 63 957 467 68 881 207- 31 -

PHUMULA RETIREMENT FUNDSCHEDULE HANOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 30 JUNE 201810. ACCOUNTS PAYABLE 30 June 2018R 30 June 2017RAudit fee 376 165 376 200South African Revenue Service - PAYE/IT88/Provisional tax 1 395 855 1 629 949Investment consulting fees - Gray Swan Financial Services 115 122 -Administration fee 27 773 72 802Asset management fee - Colourfield 768 689 803 160Bonus provision - 40 000Overpaid housing loan repayments 35 866 91 454Overpayment of additional service purchased - 25 819Board of Fund expense - 37 479South African Reserve Bank reporting cost - 6 276Early payment lumpsum fee - NMG 1 469 1 469Building levies 18 967 -Board of Fund IT expense 3 604 -Office IT expense 7 634 -Catering expense 980 -Pensioner administration fees 216 291 -Regulation 28 reporting cost - 31 920Unidentified deposits 585 826 -UIF funds payable ** 6 379 -Total 3 560 620 3 116 528NOTEUIF Funds payable** The Fund's employees are now registered for UIF and deductions were made since March 2018.11. NET INVESTMENT INCOME 30 June 2018R 30 June 2017RIncome from investments 260 796 937 177 638 587- Dividends 2 364 536 -- Interest 9 171 184 9 822 355- Rentals 28 500 000 26 003 149- Collective investment schemes distribution 176 592 151 101 415 200- Income from insurance policies 44 169 066 40 397 883Interest on bonds 76 399 506 28 652 362Adjustment to fair value 479 114 (178 077 053)337 675 557 28 213 896Less: Expenses incurred in managing investments (9 570 821) (6 360 758)Less: Asset Management Fees (11 721 181) (11 701 509)Total 316 383 555 10 151 62912. OTHER INCOME 30 June 2018R 30 June 2017RProfessional indemnity claim - NMG - 2 312 542Interest received - purchased service (34) (648)Housing loan refund (5 248) -Purchased service 31 612 -Total 26 330 2 311 894- 32 -

PHUMULA RETIREMENT FUNDSCHEDULE HANOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 30 JUNE 201813. ADMINISTRATION EXPENSES 30 June 2018R 30 June 2017RActuarial fees 3 082 486 3 962 025Administration fees 613 328 780 781Audit fees - Expenses 291 805 299 564South African Reserve Bank reporting cost 13 710 11 987Property valuation expense 12 608 -Housing loan refund - 32 955Building levies 195 472 67 260Fidelity Insurance Premium 150 500 150 500Financial Sector Conduct Authority levies 209 650 151 602Bank charges 258 607 370 737Catering expense 108 527 104 587Cleaning expense 59 749 58 017Conference expense 85 638 51 041Tax consulting fee 48 868 -Communication expense - 110Computer equipment - 11 176Purchased service - 63 174Fund rebranding 34 770 102 600Legal fee 128 221 2 716Office expenditure 28 933 976 619Office IT expense 113 134 27 056Office insurance premium 25 554 8 396Pensioner administration fee 2 609 990 2 880 238Petty cash expense 3 542 522Filing expense 70 975 87 790Postage and telephone expense 67 077 78 116Printing and stationery expense 93 969 121 249Regulation 28 reporting cost 32 832 73 872Board of Fund IT expense 80 638 -Photocopy rental expense 74 694 63 426Municipal expenses 96 518 92 595Tracing fee 13 292 45 063Staff expenses 13.1 1 366 135 1 051 577Board of Fund expenses 13.2 358 330 377 593Principal Officer expenses 13.3 957 503 1 152 114Total 11 287 055 13 257 05813.1. Staff expenses 30 June 2018R 30 June 2017RRemuneration 1 353 609 1 051 577Staff training 12 526 -Total 1 366 135 1 051 57713.2. Board of Fund expenses 30 June 2018R 30 June 2017RTrustee Training 89 957 32 147Remuneration 152 369 291 449Institute of Retirement Funds fee 17 100 -Travel and accomodation expense 98 904 53 997Total 358 330 377 59313.3. Principal Officer expenses 30 June 2018R 30 June 2017RPrincipal officer expenses - Remuneration 954 870 1 149 481Principal officer expenses - Batseta Annual Subscription 2 633 2 633Total 957 503 1 152 114- 33 -

PHUMULA RETIREMENT FUNDSCHEDULE HANOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 30 JUNE 201814. PRIOR PERIOD ADJUSTMENTS 30 June 2018R 30 June 2017RPrior period adjustment Oakhurst Property - 6 981 894Total - 6 981 89415. RISK MANAGEMENT POLICIESRisk management frameworkThe Board of Fund has overall responsibility for the establishment and oversight of the fund�s risk management policies. TheBoard of Fund has established the Risk and Audit Sub-Committee, which is responsible for developing and monitoring thefund�s risk management policies. The committee reports regularly to the Board of Fund on its activities.The fund�s risk management policies are established to identify and analyse the risks faced by the fund, to set appropriate risklimits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewedregularly to reflect changes in market conditions and the fund�s activities.� Solvency riskSolvency risk is the risk that the investment returns on assets will not be sufficient to meet the fund's contractualobligations to members.Continuous monitoring by the Board and the fund�s actuary takes place to ensure that appropriate assets are heldwhere the fund's obligation to members are dependent upon the performance of specific portfolio assets and that asuitable match of assets exists for all other liabilities.� Credit riskCredit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation and cause theFund to incur a financial loss.The Board of Fund monitors receivable balances on an ongoing basis with the result that the Fund�s exposure to baddebts is not significant. An appropriate level of provision is maintained.Housing loan guarantees granted are secured by the after tax withdrawal benefit of the respective members on whosebehalf the guarantees were granted. The amount of the guarantee may not exceed 60% of the fund credit of therespective members. Housing loan guarantees granted are renewed annually to ensure that the general terms andconditions are still applicable.The Fund's assets are only invested through investment managers who are Financial Advisory and IntermediaryServices compliant. The Fund's investment mandate stipulates that the investment manager should monitor the risksassociated with the Fund's investments on a regular basis.Credit risk is managed by the Fund's outsourced investment managers by investing in well-researched institutions andwithin the parameters of the investment mandate. The investment manager must report annually on the steps taken toidentify and manage the credit risk, in terms of the Fund's Risk management policy.� Legal riskLegal risk is the risk that the fund will be exposed to contractual obligations which have not been provided for. Legalrepresentatives of the fund monitor the drafting of contracts to ensure that rights and obligations of all parties areclearly set out.� Cash flow riskCash flow risk is the risk that future cash flows associated with monetary financial instrument will fluctuate in amount.In the case of a floating rate debt instrument, for example, such fluctuations result in a change in the effective interestrate of the financial instrument, usually without a corresponding change in its fair value.The Board of Fund monitors cash flows by using monthly cash flow projections.- 34 -

PHUMULA RETIREMENT FUNDSCHEDULE HANOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 30 JUNE 201815. RISK MANAGEMENT POLICIES (continued)� Currency riskCurrency risk is the risk that the value of an instrument will fluctuate in Rands owing to changes in foreign exchangerates. The Fund�s exposure to currency risk is mainly in respect of foreign investments made on behalf of members ofthe Fund for the purpose of seeking desirable international diversification of investments. The Board of Fund monitors this aspect of the Fund's investments and limits it to South African Reserve Bank limitsof total assets.The foreign currency exposure of the Fund is monitored each quarter with the submission of the quarterly assetallocation reports to the South African Reserve Bank. Investment managers invest the Fund's assets according to theinvestment mandate that stipulates the foreign exposure strategy of the Fund.� Liquidity riskLiquidity risk is the risk that the fund will encounter difficulty in raising funds to meet commitments associated withfinancial instruments.The fund�s liabilities are backed by appropriate assets and it has significant liquid resources.� Market riskMarket risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market prices.� Price riskPrice risk is the risk that the value and/or future cash flows of a financial instrument will fluctuate as a result ofchanges in market prices.� Interest rate riskInterest rate risk is the risk that the value and/or future cash flows of financial instruments will fluctuate as a result ofchanges in interest rates.The Board of Fund monitors exposures to interest rate risk by using monthly cash flow projections.16. RELATED PARTY TRANSACTIONSThe fund has made payments to NMG Consultants and Actuaries (Pty) Ltd for administration fees amounting to R 658 357.The fund owes NMG Consultants and Actuaries (Pty) Ltd R 27 773 in respect of the administration fees. NMG Consultants and Actuaries (Pty) Ltd owes the fund R674 491 in respect of the Professional Indemnity Claim.

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PHUMULA RETIREMENT FUNDSCHEDULE HANOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 30 JUNE 201817. SURPLUS AND RESERVE ACCOUNTS ReserveAccounts Total Expensereserve Bonus reserve Solvencyreserve Pensionfunding reserveR R R R RAt beginning of year 8 501 928 583 189 596 081 576 770 669 511 527 533 7 224 034 300Actuarial adjustment - (18 352 511) (10 455 824) 89 949 182 (61 140 847)Net investment income 316 383 555 7 286 563 21 035 268 12 257 231 275 804 493Allocated to unclaimed benefits (1 808 253) - - - (1 808 253)Other income: 26 330 - - - 26 330- Interest received - purchased service (34) - - - (34)- Housing loan refund (5 248) - - - (5 248)- Purchased service 31 612 - - - 31 612Less: (11 287 055) (11 287 055) - - -- Administration costs (11 287 055) (11 287 055) - - -Net income before transfers and benefits 8 805 243 160 167 243 078 587 350 113 613 733 946 7 436 916 023Transfers and benefits (703 875 616) - (76 049 498) - (627 826 118)Transfers from other funds 18 488 182 - 1 422 168 - 17 066 014Transfers to other funds (69 251 576) - - - (69 251 576)Benefits (653 112 222) - (77 471 666) - (575 640 556)Net income after transfers and benefits 8 101 367 544 167 243 078 511 300 615 613 733 946 6 809 089 905Transfer between reserve accounts - - 34 641 193 (51 541 193) 16 900 000At end of year 8 101 367 544 167 243 078 545 941 808 562 192 753 6 825 989 905

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Victor Sekese [Chief Executive] A comprehensive list of all Directors is available at the company offices or registered office

SNG Grant Thornton are a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. Services are delivered independently by the member firms. GTIL and its member firms are not agents of, and do not obligate, o e a other a d are ot lia le for o e a other’s a ts or o issio s. SizweNtsalubaGobodo Grant Thornton Incorporated Registration Number: 2005/034639/21

sng-grantthornton.co.za

SNG Grant Thornton 20 Morris Street East Woodmead, 2191 P.O. Box 2939 Saxonwold, 2132 T +27 (0) 11 231 0600

SCHEDULE I PHUMULA RETIREMENT FUND Registration number: 12/8/390 REPORT OF THE INDEPENDENT AUDITORS OF PHUMULA RETIREMENT FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS We have performed the procedures agreed with the Registrar of Pe sio Fu ds the Registrar a d set out elo ith respe t to the audited fi a ial state e ts a ual fi a ial state e ts a d other i for atio i the ge eral ledger and management information comprising the accounting records of Phumula Retirement Fund the Fu d for the year ended 30 June 2018. Our engagement was undertaken in accordance with the International Standard on Related Services (ISRS) 4400 Engagements to perform agreed-upon procedures regarding financial information. Our procedures were performed solely to assist the Registrar in evaluating whether any instances of non-compliance with the requirements of the relevant sections of the Pension Funds Act of South Africa (the Act), regulations and Rules of the Fund were identified. The responsibility for determining the adequacy or otherwise of the procedures agreed to be performed, is that of the Registrar. Procedures and findings Our procedures performed are set out in the numbered paragraphs (not bold) in the attached table, which forms part of our report, together with our findings thereon. Unless otherwise indicated, all balances, lists, schedules etc. referred to in the table relate to the accounts/balances reflected in the annual financial statements of the Fund for the year ended 30 June 2018. Because the procedures do not constitute an audit, a review or other assurance engagement performed in

a orda e ith the IAASB s I ter atio al Sta dards, e do ot e press a assura e. Had e perfor ed additio al procedures, or had we performed an audit, a review, or other assurance engagement, other matters might have come to our attention that would have been reported. Restriction on use and distribution Our report is solely for the purpose set out in the first paragraph of this report and for the information of the Registrar and accordingly may not be suitable for any other purpose and distributed to other parties. This report relates only to the information specified and does not extend to the annual financial statements of the fund taken as a whole. Darshen Govender SizweNtsalubaGobodo Grant Thornton Inc. Director Registered Auditor 12 December 2018 20 Morris Street Woodmead

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REPORT OF THE INDEPENDENT AUDITORS OF PHUMULA RETIREMENT FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings Our procedures and the corresponding findings thereon are summarised in the table below: Procedures Findings Statement of Net Assets and Funds 1 Investments 1.1 Inspected the list of investment balances reflected in the general ledger of the Fund as at 30 June 2018 for any investments in accordance with the terms of section 19(4) of the Act. We found that the fund does not hold investments prohibited in terms of section 19(4) of the Act. 1.1.1 Agreed details of the written confirmations obtained from the investment managers/insurers to the investment balances reflected in the general ledger. We found that the details of the written confirmations obtained from the investment managers/insurers agreed to the investment balances reflected in the general ledger. 1.1.2 Where investments held in the participating Employer exceed 5% of the total assets as reflected in the financial statements, inspected the appropriate approval of the Registrar. Not applicable to the fund as no investments are held in the participating employer. 1.2 Obtained the signed investment policy statement and, where applicable, the portfolio management agreement/investment mandate between the Fund and the investment administrator(s), and performed the following procedures on a sample of 10 mandates (comprising the 3 largest by value of investments at year end and 7 other randomly selected mandates): 1.2.1 Inspected whether the underlying investments are in compliance with the signed investment policy statement and, where applicable, the portfolio management agreement/investment mandates. We found that the underlying investments were in compliance with the signed investment policy statement. 1.2.2 Inspected whether the investment mandate and the investment policy statement provide for securities lending transactions and investments in hedge funds, private equity funds and derivatives, as prescribed. We found that the investment policy statement provides for investments in hedge funds, private equity funds and derivatives, as prescribed. 1.2.3 Inspected whether the collateral and counterparty requirements as prescribed are complied with. Not applicable as the fund did not undertake transactions in securities lending transactions. 1.2.4 For segregated portfolios, confirmed directly with the investment administrator(s): (a) whether scrip lending took place during the year and, if so, (b) whether there was collateral provided by the counterparty/(ies) for any scrip lending activities and, if so, (c) the percentage exposure covered by the collateral. Report on the amount for a). We confirmed directly from the investment administrators that scrip lending did not take place during the year.

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REPORT OF THE INDEPENDENT AUDITORS OF PHUMULA RETIREMENT FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings (continued) Procedures Findings Statement of Net Assets and Funds (continued) 2 Member individual accounts (defined contributions funds as well as defined contribution section of hybrid funds) 2.1 Obtained a list of member individual accounts as reflected on the Statement of Net Assets and funds as at 30 June 2018. 2.2 Selected a random sample of the lesser of 50 or 10% of the number of members from the list of members and performed the following procedures: 2.2.1 Compared the member and employer contributions received and allocated for the members selected as reflected on the ad i istrator s s ste , to information supplied by the participating employers for those members selected, for a randomly selected period of five months (including the last month of the year under review). There were no member contributions received from participating employers as the Fund is a closed fund. 2.2.2 Compared the member and employer contribution rates for the members selected as reflected on the ad i istrator s s ste , to the Rules of the Fu d, for a randomly selected period of 3 months (including the last month of the year under review). Not applicable to the Fund. 2.2.3 In respect of unitised investment products, for the five months selected in 2.2.1 and 2.2.2, calculated the conversion of the contributions at the unit price per the administration system on the dates that the contributions were invested and compared the units recalculated to the administration system units for the selected members. Inspected that the units were added to the existing units for that member.

Not applicable to the Fund. 2.2.4 In respect of unitised investment products, calculated the conversion of units at the end of the year, at the year-end unit price per the administration system and agreed the calculated

a ou t to the e er s fu d redit a ou t recorded in each member's record. Not applicable to the Fund. 2.2.5 In respect of unitised investment products, compared the unit price(s) as per investment manager/actuary/other authorised party at the [period/year-end] to the unit prices on the administration system used to calculate each e er s redits at ear-end. Not applicable to the Fund.

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REPORT OF THE INDEPENDENT AUDITORS OF PHUMULA RETIREMENT FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings (continued) Procedures Findings Statement of Net Assets and Funds (continued) 2 Member individual accounts (defined contributions funds as well as defined contribution section of hybrid funds) (continued) 2.2.6 In respect of non-unitised investment products, compared the interim and/or final return allocated to each individual member's account in the administrator's records for the year under review to the return approved in accordance with a resolution of the Board of Fund or the Rules of the Fund or approved recommendation by the investment consultant/asset manager/fund valuator. Not applicable to the Fund.

2.3 Obtained a list of members who switched investment portfolios during the year from the Fund/administrator, selected a random sample of the lesser of 50 or 10% of members who switched between investment portfolios during the year, and performed the following procedures: 2.3.1 Inspected evidence that the portfolios were switched in accordance with notification of the e er s i stru tio /i est e t strateg (including life stage models) of the fund and within a timeframe as specified in the service level agreement or client mandate between the administrator and the fund. Not applicable to the Fund as there were no member switches. 2.3.2 Inquired as to whether any fees relating to switches were deducted, and if so, inspected evidence of the approval by the Board of Fund and/or in terms of a service level agreement or client mandate. Not applicable to the Fund as there were no member switches. 2.4 For investment products obtained the Asset Liability Match (ALM) reconciliation per investment portfolio, excluding the reserve accounts, for member individual accounts from the administrator, and performed the following procedures:

2.4.1 Compared the investments per product on the ALM reconciliation to the investment certificates in total. Not applicable as the Fund is structured as a defined benefits Fund. 2.4.2 Compared the member individual accounts on the ALM reconciliation per investment portfolio to the administration system and to the total member individual accounts as disclosed in the Statement of Net Assets and Funds. Not applicable to the Fund. 2.4.3 Inspected whether the total mismatch (in Rand) for all portfolios was within the range as prescribed by the Registrar. Not applicable to the Fund.

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REPORT OF THE INDEPENDENT AUDITORS OF PHUMULA RETIREMENT FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings (continued) Procedures Findings Statement of Net Assets and Funds (continued) 3 Accumulated funds (for defined benefit funds as well as defined benefit sections of hybrid funds) 3.1 Selected a sample of the lesser of 50 or 10% of the number of members from the list of members provided by the administrator and performed the following procedures for each member selected: 3.1.1 Compared the member contributions received and allocated for the members selected as reflected on the ad i istrator s s ste , to i for atio supplied by the participating employers for those members selected, for a randomly selected period of five months (including the last month of the period under review). Not applicable as the Fund is structured as a defined benefits Fund. 4 Surplus apportionment scheme 4.1 If a surplus apportionment scheme was approved by the Registrar in the current year or if allocation and/or payments to members were made during the year, performed the following procedures: 4.1.1 Active members: Selected a random sample of the lesser of 50 or 10% of number of active members to whom surplus has been apportioned in the approved surplus apportionment scheme and performed the following procedures: 4.1.1.1 Agreed the original surplus amount allocated to the selected member to the individual allocation on the member records per the administration system. Not applicable as there were no surplus apportionment in the year under review. 4.1.1.2 Inspected whether the calculation of the relevant investment return from surplus apportionment date to date of allocation was in accordance with the requirements of the Act and allocated to the member records in the administration system. Not applicable as there were no surplus apportionment in the year under review. 4.1.2 Former members and pensioners: Selected a random sample of the lesser of 50 or 10% of number of former members and pensioners as defined by the surplus apportionment scheme from the surplus schedules attached to the approved surplus apportionment scheme and performed the following procedures: 4.1.2.1 Agreed the original surplus amount allocated to the selected member and/or pensioner to the individual allocation on the member records per the administration system. Not applicable as there were no surplus apportionment in the year under review.

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REPORT OF THE INDEPENDENT AUDITORS OF PHUMULA RETIREMENT FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings (continued) Procedures Findings Statement of Net Assets and Funds (continued) 4 Surplus apportionment scheme (continued) 4.1.2.2 Inspected whether the calculation of the relevant investment return from surplus apportionment date to date of allocation was in accordance with the requirements of the Act and allocated to the member records in the administration system. Not applicable to the Fund as no surplus apportionment was approved by the Financial Sector Conduct Authority for the period ended 30 June 2018. 4.1.2.3 Agreed the total of the amount calculated in 4.1.2.1 and 4.1.2.2 to the surplus benefit paid per selected member and to the applicable amount per the administration system and other authorised supporting documentation. Not applicable to the fund as no surplus apportionment was approved by the Financial Sector Conduct Authorityw for the period ended 30 June 2018. 5 Member and employer surplus accounts 5.1 Obtained the analysis of the transactions in the member and/or employer surplus account per the annual financial statements, and performed the following procedure: 5.1.1 Inspected that the transactions are permitted in terms of the registered Rules of the Fund and/or the Act. Not applicable as the Fund does not have member or employer surplus accounts. 6 Reserves 6.1 Obtained the list of reserves and other related accounts (e.g. pensioner accounts) and the movements per the financial statements and/or in the actuarial valuation, and performed the following procedures: 6.1.1 Inspected whether the reserve and other related accounts (e.g. pensioner accounts) held by the Fund and/or reflected in the actuarial valuation are in accordance with the registered Rules of the Fund. The reserves account held by the Fund and reflected in the actuarial valuation are in accordance with the registered Rules of the Fund. 6.1.2 Inspected that the movements in reserves and other related accounts as set out in 6.1 are permitted in terms of the registered Rules of the Fund and/or the Act. The movements in the reserves account as disclosed in the annual financial statements were permitted in terms of the registered Rules of the Fund and / or the Act. 7 Other assets, liabilities and guarantees 7.1 Obtained the list of housing loans granted to members by the Fund in terms of section 19(5) of the Act as at 30 June 2018, and performed the following procedure: 7.1.1 Agreed the total loans on the above list to the corresponding account in the annual financial statements. Not applicable as there were no housing loans granted in the year under review.

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REPORT OF THE INDEPENDENT AUDITORS OF PHUMULA RETIREMENT FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings (continued) Procedures Findings Statement of Net Assets and Funds (continued) 7 Other assets, liabilities and guarantees (continued) 7.2 From the list in 7.1, randomly selected a sample of the lesser of 50 or % of the u er of e ers housing loans granted and performed the following procedures: 7.2.1 Inspected evidence that the value of the housing loan provided does not exceed the amount permitted by the Rules and the home loan agreement. Not applicable as there were no housing loans granted in the year under review. 7.2.2 Inspected evidence that the housing loan has been granted in terms of Section 19(5) (a). Not applicable as there were no housing loans granted in the year under review. 7.2.3 Inspected evidence that repayments are being made in accordance with the housing loan agreement. Not applicable as there were no housing issued by the fund in the period under review. 7.2.4 Inspected the interest charged on the outstanding housing loan and compared the rate used to the prescribed rate. Not applicable as there were no housing issued by the fund in the period under review. 7.2.5 If the Fund issued more than 100 housing loans or the total principal debt of all outstanding housing loans exceeded R500 000, inquired whether the Fund was registered as a credit provider under the National Credit Act, 2005 (the NCA). Not applicable as there were no housing issued by the fund in the period under review. 7.3 Obtained the list of housing loan guarantees and selected a sample of the lesser of 50 or 10% of the number of housing loan guarantees and performed the following procedures: 7.3.1 For the sample selected, determined that each selected housing loan guarantee did not exceed the value of the benefit that the member would become entitled to had they withdrawn, as at the year end, in terms of the Act, the loan agreement and/or the Rules of the Fund. Not applicable as there were no housing loan guarantees granted in the year under review. 7.3.2 Inspected evidence that the housing loan guarantee has been granted in terms of Section 19(5)(a). Not applicable as there were no housing loan guarantees granted in the year under review. 7.4 Obtained a list of other loans per the general ledger of the Fund as at 30 June 2018 and performed the following procedure: 7.4.1 Confirmed that no loans were granted and/or investments made as prohibited in terms of section 19(5)B. Not applicable as there were no other loans that were granted in terms of the requirements of section 19 (5)B. 8 Contributions 8.1 Selected a sample of the lesser of 50 or 10% of the number of participating employers from a list of participating employer supplied by the Fund/administrator and performed the following procedures:

SCHEDULE I PHUMULA RETIREMENT FUND Registration number: 12/8/390

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REPORT OF THE INDEPENDENT AUDITORS OF PHUMULA RETIREMENT FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings (continued) Procedures Findings Statement of Changes in Net Assets and Funds(continued) 8 Contributions(continued) 8.1.1 Compared, in total, the contributions received by or on behalf of the Fund to the remittance advices from the participating employer/pay-point. There were no Member contributions from participating employers as the Fund is a closed Fund. 8.1.2 Inspected the bank statements for the date on which the cash was received to determine whether the contributions were deposited with a registered bank in accordance with section 13A of the Act and whether late payment interest has been raised in terms of regulation 33, where applicable. There were no Member contributions from participating employers as the Fund is a closed Fund. 8.2 Selected a sample of the lesser of 50 or 10% of the number of participating employers which reflect arrear contributions at year-end from a list supplied by the Fund/administrator and performed the following procedure: 8.2.1 Inspected the accounting records of the Fund to determine whether amounts disclosed as arrear contributions at year-end have been paid to the Fund within the prescribed period in accordance with the requirements of section 13A of the Act. Where the amounts were received after the prescribed period, reported the date of receipt and where they were not received, indicate as such. There were no Member contributions received from participating employers as the Fund is a closed Fund. 9 Benefits 9.1 Obtained a list from the administration system of lump sum benefits reflected as expenses in the Fu d s State e t of Cha ges i Net Assets a d Funds for the year under review and performed the following procedure: 9.1.1 Compared the list to the respective general ledger benefit expense accounts reconciliation. We found that the list agreed to the respective general ledger benefit expense accounts reconciliation. 9.2 Selected a sample of the lesser of 50 benefits or 10% of the total number of benefits from the list and performed the following procedures: 9.2.1 Compared the benefit per selected member to the administration system and authorised supporting documentation in accordance with the procedures of the Fund. We found that the benefit paid agreed to the administration system and authorized supporting documentation in accordance with the procedures of the Fund.

SCHEDULE I PHUMULA RETIREMENT FUND Registration number: 12/8/390

47

REPORT OF THE INDEPENDENT AUDITORS OF PHUMULA RETIREMENT FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings (continued) Procedures Findings Statement of Changes in Net Assets and Funds(continued) 9.2.2 For death benefits, where a portion of the benefit had been reinsured by the Fund, inspected a bank deposit or an accrual raised for the recovery from the insurer. We found that the Fund does not insure a portion of the death benefits. 9.2.3 For a defined contribution fund Agreed the opening fund credit for the member to the opening fund credit report and determined whether contributions were added every month until the date of exit (either by Rand amount or in the case of unitised funds, by units). Agreed the balance paid out to the member (inclusive of late payment interest where applicable) to the fund credit report or administration system as at the date of exit. Not applicable as the Fund is structured as a defined benefit Fund.

9.3 Obtained a list of all benefits not yet paid at year-end, selected a sample of the lesser of 50 benefits or 10% of the total number of benefits from the list and performed the following procedures: 9.3.1 Agreed whether the benefits that are older than the period as set out in the Act or a shorter period defined by the Rules are classified as unclaimed benefits. We found that the benefits that were older than the period as set out in the Act or a shorter period defined by the Rules were classified as unclaimed benefits. 10 Transfers 10.1 Compared the list of total section 14 transfers to and from the Fund to the corresponding accounts in the general ledger. 10.2 We compared the above list of total section 14 transfers to and from the Fund to the corresponding accounts in the general ledger. We found that there were no section 14 transfers. 10.2.1 We agreed the sample of section 14 transfers to and from the Fund to: a) the section 14(1) documentation as approved by the Registrar in respect of each transfer; and/or b) the section 14(8) documentation as prescribed. Not applicable as there were no section 14 transfers. 10.2.2 We inspected whether the transfers to and from the Fund were received/paid within 60 days of Registrar approval for section 14(1) transfers and 180 days from the application date for section 14(8) transfers and whether the growth and investment return had been allocated from the effective date of the transfer to the date of final settlement. Not applicable as there were no section 14 transfers.

SCHEDULE I PHUMULA RETIREMENT FUND Registration number: 12/8/390

48

REPORT OF THE INDEPENDENT AUDITORS OF PHUMULA RETIREMENT FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings (continued) Procedures Findings Statement of Changes in Net Assets and Funds (continued) Transfers (continued) 10.2.3 In respect of unitised funds, selected a sample of the lesser of 50 or 10% of the number of members transferred from other funds and recalculated the purchase of units for the amount received using the unit price per the administration system on the date of receipt. (Where units were purchased after date of receipt, investment return was added from the date of receipt to the date of purchase). Not applicable as there were no section 14 transfers. 10.3 Individual transfers Obtained the list of individual transfers throughout the year ended 30 June 2018, selected a sample of the lesser of 50 or 10% of the number of individual transfers, and performed the following procedures: 10.3.1 Agreed the transfers to the approved recognition of transfer documentation. The transfers agreed to the approved recognition of transfer documentation. 10.3.2 For individual transfers in selected In respect of unitised funds, recalculated the purchase of units for the amount received using the unit price per the administration system on the date of receipt. (Where units were purchased after date of receipt investment return was added from the date of receipt to the date of purchase). Not applicable as the Fund is not unitised. 11 Pensioners paid 11.1 Obtained a copy of the list of pensioners and amounts paid for the year from the administration system and/or, for outsourced pensioners, confirmation from the insurer and performed the following procedure: 11.1.1 Agreed the total pensions paid for the year ended 30 June 2018 to the corresponding account reconciliation in the general ledger balance. Total pensioners paid agreed to the corresponding account reconciliation in the general ledger balance. 11.2 Selected a sample of the lesser of 50 or 10 % of the number of pensioners from the above list and performed the following procedures: 11.2.1 Inspected the pensioner increases for authorisation by the Board of Fund. We found that pensioner increases were authorized in terms of Rule 30 of the Rules of the Fund. 11.2.2 Inspected evidence obtained by the administrator/Fund supporting the fact that the pensioners selected exist. We inspected evidence obtained by the administrator and we found that pensioners selected still exist. 11.3 Where the Fund has purchased an annuity in the name of the Fund, obtained a written confirmation from the annuity provider summarising movements from opening market value to closing market value and performed the following procedures:

SCHEDULE I PHUMULA RETIREMENT FUND Registration number: 12/8/390

49

REPORT OF THE INDEPENDENT AUDITORS OF PHUMULA RETIREMENT FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings (continued) Procedures Findings Statement of Changes in Net Assets and Funds (continued) 11 Pensioners paid (continued) 11.3.1 Agreed the closing market value of the annuity to the annual financial statements. Not applicable as the Fund did not purchase an annuity. 11.3.2 Agreed the pensioner payment per the confirmation from the insurer to the pensions paid disclosed in the notes to the annual financial statements. Not applicable as the Fund did not purchase an annuity. 12 General 12.1 I spe ted e ide e that the Fu d s fidelit insurance cover was in place throughout the year ended 30 June 2018, that the Fu d s fidelit insurance cover extends after year-end and report the date to which the subsequent fidelity insurance cover extends. The Fu d s fidelit i sura e o er as i place throughout the year ended on 30 June 2018. 12.2 Co fir ed ith the Fu d s GLA i surer as to whether the GLA policy has lapsed at year ended 30 June 2018. Not applicable as there was no GLA policy in place as at year ended 30 June 2018. 12.3 Obtained the most recent statutory valuation as at 30 June 2018 signed and submitted by the valuator and performed the following procedures: 12.3.1 Reported the funding status of the Fund per the report (whether the Fund was under-funded or fully funded). We inspected the actuarial valuation report as at 30 June 2017 and we found that the Fund is in sound financial position. 12.3.2 Where the Fund is under-funded, obtained evidence as to whether a scheme, as required in terms of section 18 of the Act in South Africa, has been approved by the Registrar. The Fund is fully funded.

PHUMULA RETIREMENT FUNDSCHEDULE IA - SCHEDULES PERTAINING TO THE ANNUAL FINANCIAL STATEMENTSAT 30 JUNE 2018INVESTMENTS Notes DirectInvestments Non-compliantCollectiveinvestmentschemesNote M1 Non-compliantInsurancepolicesNote M2 Derivativepositionswithoutresidual riskNote G1 Total Local Foreign Total Foreign Totalpercentage offoreignexposure TOTAL as perRegulation 28(Schedule IB)R R R R R R R R % RCash (including cash atbank) A 213 237 668 128 255 511 44 980 256 (2 929 924) 383 543 511 383 214 298 329 213 329 213 0,09 383 543 511Commodities B 798 534 - - - 798 534 798 534 - - - 798 534Housing loans 13 328 - - - 13 328 13 328 - - - 13 328Debt instruments includingIslamic debt Instruments C 5 410 006 328 672 697 258 441 977 477 - 6 524 681 063 6 524 681 063 - - - 6 524 681 063Investment and owneroccupied properties D 310 388 633 23 984 295 - - 334 372 928 334 372 928 - - - 334 372 928Equities E 60 606 667 886 836 326 1 851 698 - 949 294 691 355 778 573 593 516 118 593 516 118 62,52 949 294 691Other assets I 301 339 - 139 777 - 441 116 441 116 - - - 441 116Total investments 5 995 352 497 1 711 773 390 488 949 208 (2 929 924) 8 193 145 171 7 599 299 840 593 845 331 593 845 331 7,25 8 193 145 171A CASHInstrumentLocal Fair ValueRLocal notes, deposits, money market instruments issued by a South African Bank, margin accounts, settlement accounts with an exchange and Islamicliquidity management financial instruments 213 237 668Notes and coins, any balance or deposit in an account held with a South African bank - exceeding 5% of total assets 213 237 668Nedbank 156 092 949Various 57 144 719Total 213 237 668- 50 -

PHUMULA RETIREMENT FUNDSCHEDULE IA - SCHEDULES PERTAINING TO THE ANNUAL FINANCIAL STATEMENTS (continued)AT 30 JUNE 2018B COMMODITIESInstrument Holding number Holding% Fair valueRLocalGold (including Kruger Rands)Newplat ETF - 0,01 798 534798 534798 534Total 798 534

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PHUMULA RETIREMENT FUNDSCHEDULE IA - SCHEDULES PERTAINING TO THE ANNUAL FINANCIAL STATEMENTS (continued)AT 30 JUNE 2018C DEBT INSTRUMENTS INCLUDING ISLAMIC DEBT INSTRUMENTSInstrument Local or foreign Secured/ Unsecured Issued/Guaranteed RedemptionvalueR Fair valueRGovernment debt:Debt instruments issued by an loans to the government of the Republic and anydebt or loan guaranteed by the RepublicNedbank Ltd - RSA bonds Local Secured Issued 3 909 823 918Corporate Bonds Local Secured Issued 1 356 638 670Stanlib - various Local Secured Issued 12 875 576Total 5 279 338 164Debt instruments issued or guaranteed by the government of a foreign country:Various Local Secured Issued 386 818Total 386 818Bank debt :Debt instruments issued or guaranteed by a South African Bank against its balance sheet:-Listed on an exchange with an issuer market capitalisation of R20 billion ormore, or an amount or conditions as prescribedVarious Local Secured Issued 47 524 368Total 47 524 368Listed on an exchange with an issuer market capitalisation of less than R2billion, or an amount or conditions as prescribed Local Secured Issued 2 505 650Total 2 505 650Not listed on an exchangePublic debt:Debt instruments issued or guaranteed by a public entity under the PublicFinance Management Act, 1999 (Act No. 1 of 1999) as prescribed:-Various - listed on an exchange Local Secured Issued 38 514 766Various - Not listed on an exchange Local Secured Issued 6 809 774Total 45 324 540OtherListed on an exchange:Various Local Secured Issued 24 168 763Total 24 168 763Not listed on an exchangeVarious Local Secured Issued 10 758 025Total 10 758 025Total debt instruments including Islamic debt instruments 5 410 006 328- 52 -

PHUMULA RETIREMENT FUNDSCHEDULE IA - SCHEDULES PERTAINING TO THE ANNUAL FINANCIAL STATEMENTS (continued)AT 30 JUNE 2018D INVESTMENT AND OWNER OCCUPIED PROPERTIESInstrument Fair valueRInvestment propertiesIntu Properties Plc Local 2 913 621Hospitality Property Fund Ltd Local 133 609Arrowhead Properties Ltd Local 1 247 771The Bridge Local 305 042 387Stenprop Ltd Local 1 051 245Total of issuer/entity more than 5% of total assets 310 388 633Total 310 388 633InstrumentShares and linked units in property companies, or units in acollective investment scheme in property, listed on an exchange: Local/ Foreign Issued shares Holding number Ordinary/Preferenceshares Holding% Fair valueRTotal 310 388 633

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PHUMULA RETIREMENT FUNDSCHEDULE IA - SCHEDULES PERTAINING TO THE ANNUAL FINANCIAL STATEMENTS (continued)AT 30 JUNE 2018E EQUITIESInstrument Local/ Foreign Issued shares Ordinary/Preferenceshares Holding number Holdinginissuer/entity% Fair valueRListed equitiesIssuer market capitalisation of R20 billion or more, or an amount orconditions as prescribedVarious Local - - 30 258 647Total 30 258 647Issuer market capitalisation of between R2 billion and R20 billion, oran amount or conditions as prescribedVarious Local - Ordinary - 27 984 972Total 27 984 972Issuer market capitalisation of less than R2 billion, or an amount orconditions as prescribedVarious Local - Ordinary - 2 123 541Foreign - Ordinary - 239 507Total 2 363 048Total equities 60 606 667- 54 -

PHUMULA RETIREMENT FUNDSCHEDULE IA - SCHEDULES PERTAINING TO THE ANNUAL FINANCIAL STATEMENTS (continued)AT 30 JUNE 2018G DIRECT DERIVATIVE MARKET INSTRUMENTSG1 DERIVATIVE POSITIONS WITHOUT RESIDUAL RISKInstrument Local orForeign Listed orUnlisted Strikeprice Cost orPremium Fair value EffectiveEconomicExposure Potential Loss Potential Gain Fixed rateor Variablerate Expiry date HoldingnumberR Net R RPut Local Listed 13 (2 322 353,00) (2 085 529) (9 059 780) (2 322 353) 102 986 571 Fixed 2018/09/17 (7 931)Put Local Listed 12 265 250,00 95 547 3 849 174 (54 722 950) 265 250 Fixed 2018/12/14 (4 080)Put Local Listed 13 1 939 352,00 (724 717) (18 146 106) (1 939 352) 53 048 848 Fixed 2018/12/14 4 080Call Local Listed 16 799 705,00 (215 225) (11 547 522) - 799 705 Fixed 2018/12/14 (4 080)Total (2 929 924)I OTHER ASSETSInstrument Fair valueRLocalStanlib - ZAR Outstanding Settlements_ZAROSTINC 301 339Total local portfolio assets 301 339Total portfolio assets 301 339

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PHUMULA RETIREMENT FUNDSCHEDULE IA - SCHEDULES PERTAINING TO THE ANNUAL FINANCIAL STATEMENTS (continued)AT 30 JUNE 2018M REGULATION 28 NON-COMPLIANT INVESTMENTSM1 NON-COMPLIANT COLLECTIVE INVESTMENT SCHEMESInstrumentLocal Holding% Fair valueRBoutique Collective Investments 2,24 183 672 923Sanlam Investment Management (Pty) Ltd 1,14 93 721 194Satrix Management (Pty) Ltd 0,20 16 379 891Prescient Investment management (Pty) Ltd 1,31 107 369 633Momentum Asset Managers (Pty) Ltd 0,03 2 612 846Atlantic Asset Management (Pty) Ltd 2,44 200 278 481Ashburton Investor Services (Pty) Ltd 6,28 514 461 8111 118 496 779ForeignRussell Investments Ireland 5,08 416 207 231Marathon Asset Management LLP 2,16 177 069 380593 276 611Total Non-compliant collective investment schemes 1 711 773 390M2 NON- COMPLIANT INSURANCE POLICIESInstrumentLinked policiesLocal Holding% Fair valueRFuture Growth Asset Management (Pty) Ltd 0,94 76 865 099Taquanta Asset Managers (Pty) Ltd 5,03 412 084 109488 949 208Total linked policies 488 949 208Total certified Regulation 28 non-compliant investments 2 200 722 598

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PHUMULA RETIREMENT FUNDSCHEDULE IA - SCHEDULES PERTAINING TO THE ANNUAL FINANCIAL STATEMENTS (continued)AT 30 JUNE 2018O ENTITY / COUNTERPARTY EXPOSURECredit / Counterparty riskCounterparty Direct investmentin counterpartyR Open financialinstruments markto market value R Total percounterpartyR Exposure tocounterpartyas a % of the fair value of theassets of thefundBanks 167 273 918 - 167 273 918 2,04%First National bank 11 180 972 - 11 180 972 0,14%Nedbank 156 092 946 - 156 092 946 1,91%Asset managers - local 5 605 820 7 426 975 494 7 432 581 314 90,72%Boutique Collective Investments - 183 672 923 183 672 923 2,24%Taquanta Asset Managers (Pty) Ltd - 412 084 105 412 084 105 5,03%Momentum Asset Management (Pty) Ltd - 2 612 846 2 612 846 0,03%Atlantic Asset Management (Pty) Ltd - 200 278 481 200 278 481 2,44%Growthpoint Properties Ltd - 305 042 387 305 042 387 3,72%Prescient Investment Management (Pty) Ltd - 107 369 633 107 369 633 1,31%Futuregrowth Asset Management (Pty) Ltd - 76 865 099 76 865 099 0,94%Investec Asset Management (Pty) Ltd - 71 141 327 71 141 327 0,87%Ashburton Investor Services (Pty) Ltd - 514 461 811 514 461 811 6,28%RSA Bonds - 3 909 823 919 3 909 823 919 47,72%Corporate bonds - Eskom - 586 042 507 586 042 507 7,15%Corporate bonds - African Bank - 138 406 348 138 406 348 1,69%Corporate bonds - Firstrand Bank Ltd - 61 736 934 61 736 934 0,75%Corporate bonds - SA Road Agency - 570 452 880 570 452 880 6,96%Stanlib Asset Management (Pty) Ltd - 176 883 207 176 883 207 2,16%Satrix Management (Pty) Ltd - 16 379 891 16 379 891 0,20%Sanlam Investment Management (Pty) Ltd - 93 721 196 93 721 196 1,14%Standard Bank of SA Ltd 5 605 820 - 5 605 820 0,07%Asset managers - foreign - 593 276 611 593 276 611 7,24%Marathon Asset Management LLP - 177 069 380 177 069 380 2,16%Russell Investment Ireland Ltd (Old Mutual) - 416 207 231 416 207 231 5,08%Other funds 13 328 - 13 328 -%Housing loan 13 328 - 13 328 -%Accounts receivable - - - -%172 893 066 8 020 252 105 8 193 145 171 %100,00- 57 -

PHUMULA RETIREMENT FUNDSCHEDULE IA - SCHEDULES PERTAINING TO THE ANNUAL FINANCIAL STATEMENTS (continued)AT 30 JUNE 2018P RECONCILIATION BETWEEN THE INVESTMENTS IN SCHEDULE HA AND SCHEDULE IAFair valuecurrentperiod (asper ScheduleHA 3.1) Amortisedcost currentperiod Cash at bank Non-compliantCIS Non-compliantInsurancePolicies Derivativeswith residualrisk TotalR R R R R R RCash 202 056 697 - 11 180 972 128 255 510 44 980 256 (2 929 924) 383 543 511Commodities 798 534 - - - - - 798 534Housing loans - 13 328 - - - - 13 328Debt instruments including Islamic debt instruments 5 410 006 328 - - 672 697 258 441 977 477 - 6 524 681 063Investment properties and Owner occupied properties 310 388 633 - - 23 984 295 - - 334 372 928Equities 60 606 667 - - 886 836 326 1 851 698 - 949 294 691Derivative market investments (2 929 924) - - - - 2 929 924 -Collective investment schemes 1 711 773 389 - - (1 711 773 389) - - -Insurance policies 488 949 208 - - - (488 949 208) - -Other assets 301 339 - - - 139 777 - 441 116Total investments 8 181 950 871 13 328 11 180 972 - - - 8 193 145 171

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PHUMULA RETIREMENT FUNDSCHEDULE IB - ASSETS HELD IN COMPLIANCE WITH REGULATION 28AS AT 30 JUNE 2018 Fair valueRA Total assets (Schedule IA -Total investments) 8 193 145 171B1 Less: Reg 28 compliant investments(certificate received from issuing entity):- -B.1.1 Collective Investment Schemes (Reg 28(8)(b)(i)) -B.1.2 Linked Policies (Reg 28(8)(b)(ii)) -B.1.3 Non-Linked policies (Reg 28(8)(b)(iii)) -B.1.4 Entity regulated by FSCA (Reg 28(8)(b)(iv))) -B2 Less: Reg 28 excluded investmentsB2.1 Insurance Policies ( Reg 28(3)(c)) -C Less: Investments not disclosed /data not available for disclosure[Refer to schedule IAN] -D TOTAL ASSETS FOR REGULATION 28 DISCLOSURE 8 193 145 171Categories of kinds of assets % Fair valueR Fair value%1 CASH 383 543 511 4,68%1.1 Notes, deposits, money market instruments issued bya South African Bank, margin accounts, settlementaccounts with an exchange and Islamic liquiditymanagement financial instruments 100% 383 214 298 4,68%(a) Notes and coins; any balance or deposit in an accountheld with a South African bank; 228 381 031 2,79%Nedbank Ltd 25% 161 137 247 1,97%Other issuers 25% 67 243 784 0,82%(b) A money market instrument issued by a South Africanbank including an Islamic liquidity management financialinstrument 158 403 008 1,93%Nedbank Ltd 25% 20 612 848 0,25%Other issuers 25% 137 790 160 1,68%(c) Any positive net balance in a margin account with anexchange 6 787 0,00%(d) Any positive net balance in a settlement account with anexchange, operated for the buying and selling of assets (3 576 528) (0,04)%1.2 Balances or deposits, money market instrumentsissued by a foreign bank including Islamic liquiditymanagement financial instruments SARBmax.limits 329 213 0,00%(a) Any balance or deposit held with a foreign bank 54 973 0,00%(b) Any balance or deposit held with an African bank 274 240 0,00%(c) A money market instrument issued by a foreign bankincluding an Islamic liquidity management financialinstrument - 0,00%2 DEBT INSTRUMENTS INCLUDING ISLAMIC DEBTINSTRUMENTS 6 524 681 063 79,64%2.1 Inside the Republic 100% 6 524 681 063 79,64%(a) Debt instruments issued by, and loans to, the governmentof the Republic, and any debt or loan guaranteed by theRepublic 100% 3 952 315 580 48,24%Government Bonds 100% 3 909 823 918 47,72%Other issuers 100% 42 491 662 0,52%(b) Debt instruments issued or guaranteed by the governmentof a foreign country 75% 386 818 0,00%(c) Debt instruments issued or by a South African bankagainst its balance sheet 75% 220 229 663 2,69%c(i) Listed on an exchange with an issue market capitalisationof R20 billion or more, or an amount or conditions asprescribed 75% 192 934 930 2,35%The Standard Bank of South Africa Limited 25% 51 962 952 0,63%Carried forward 4 391 062 571 53,59%- 59 -

PHUMULA RETIREMENT FUNDSCHEDULE IB - ASSETS HELD IN COMPLIANCE WITH REGULATION 28AS AT 30 JUNE 2018Categories of kinds of assets % Fair valueR Fair value%Brought forward 4 391 062 571 53,59%Other issuers 25% 140 971 978 1,72%c(ii) Listed on an exchange with an issuer market capitalisationof between R2 billion and R20 billion, or an amount orconditions as prescribed 75% - 0,00%c(iii) Listed on an exchange with an issuer market capitalisationof less than R2 billion, or an amount or conditions asprescribed 75% 19 446 510 0,24%African Bank Limited 10% 19 446 510 0,24%c(iv) Not listed on an exchange 25% 7 848 223 0,10%Standard Bank of South Africa Limited 5% 5 071 497 0,06%Other issuers 5% 2 776 726 0,03%(d) Debt instruments issued or guaranteed by an entity thathas equity listed on an exchange, or debt instrumentsissued or guaranteed by a public entity under the PublicFinance Management Act, 1999 (Act No. 1 of 1999) asprescribed 50% 235 358 000 2,87%d(i) Listed on an exchange 50% 126 602 883 1,55%Barclays Africa Group Ltd 10% 28 715 202 0,35%Other issuers 10% 97 887 681 1,19%d(ii) Not listed on an exchange 25% 108 755 117 1,33%Calgro M3 5% 19 151 403 0,23%Other issuers 5% 89 623 714 1,09%(e) Other debt instruments:- 25% 2 116 391 002 25,83%e(i) Listed on an exchange 25% 1 430 956 905 17,47%Corporate bonds 5% 1 356 638 670 16,56%Other issuers 5% 74 318 235 0,91%e(ii) Not listed on an exchange 15% 685 434 097 8,37%MPACT OPERATIONS (PTY) LTD 5% 22 356 711 0,27%2.2 Foreign SARBmax.limits - 0,00%(a) Debt instruments issued by, and loans to, the governmentof the Republic, and any debt or loan guaranteed by theRepublic SARBmax.limits - 0,00%(b) Debt instruments issued or guaranteed by the governmentof a foreign country SARBmax.limits - 0,00%(c) Debt instruments issued or guaranteed by a South AfricanBank against its balance sheet:- SARBmax.limits - 0,00%c(i) Listed on an exchange with an issuer market capitalisationof R20 billion or more, or an amount or conditions asprescribed SARBmax.limits - 0,00%c(ii) Listed on an exchange with an issuer market capitalisationof between R2 billion and R20 billion, or an amount orconditions as prescribed SARBmax.limits - 0,00%c(iii) Listed on an exchange with an issuer market capitalisationof less than R2 billion, or an amount or conditions asprescribed SARBmax.limits - 0,00%c(iv) Not listed on an exchange - 0,00%(d) Debt instruments issued or guaranteed by an entity thathas equity listed on an exchange SARBmax.limits - 0,00%d(i) Listed on an exchange SARBmax.limits - 0,00%d(ii) Not listed on an exchange 25% - 0,00%(e) Other debt instruments 25% - 0,00%e(i) Listed on an exchange 25% - 0,00%e(ii) Not listed on an exchange 15% - 0,00%Carried forward 6 248 020 898 76,24%- 60 -

PHUMULA RETIREMENT FUNDSCHEDULE IB - ASSETS HELD IN COMPLIANCE WITH REGULATION 28AS AT 30 JUNE 2018Categories of kinds of assets % Fair valueR Fair value%Brought forward 6 248 020 898 76,24%3 EQUITIES 949 294 691 11,59%3.1 Inside the Republic 75% 355 778 573 4,34%(a) Preference and ordinary shares in companies, excludingshares in property companies, listed on an exchange:- 75% 354 106 642 4,32%a(i) Issuer market capitalisation of R20 billion or more, or anamount or conditions as prescribed 75% 314 582 695 3,84%Visio 15% 102 893 924 1,26%Other issuers 15% 211 688 771 2,58%a(ii) Issuer market capitalisation of between R2 billion and R20billion, or an amount or conditions as prescribed 75% 37 329 409 0,46%Brait S.A. 10% 6 793 937 0,08%Other issuers 10% 30 535 472 0,37%a(iii) Issuer market capitalisation of less than R2 billion, or anamount or conditions as prescribed 15% 2 194 538 0,03%(b) Preference and ordinary shares in companies, excludingshares in property companies, not listed on an exchange 15% 1 671 931 0,02%2,5% 826 020 0,01%2,5% 845 911 0,01%3.2 Foreign 593 516 118 7,24%(a) Preference and ordinary shares in companies, excludingshares in property companies, listed on an exchange:- SARBmax.limits 593 516 118 7,24%a(i) Issuer market capitalisation of R20 billion or more, or anamount or conditions as prescribed SARBmax.limits - 0,00%a(ii) Issuer market capitalisation of between R2 billion and R20billion, or an amount or conditions as prescribed SARBmax.limits 593 516 118 7,24%Russel Investments 10% 416 207 231 5,08%Other issuers 10% 177 308 887 2,16%a(iii) Issuer market capitalisation of less than R2 billion, or anamount or conditions as prescribed SARBmax.limits - 0,00%(b) Preference and ordinary shares in companies, excludingshares in property companies, not listed on an exchange 10% - 0,00%4 IMMOVABLE PROPERTY 334 372 928 4,08%4.1 Inside the Republic 25% 334 372 928 4,08%(a) Preference shares, ordinary shares and linked unitscomprising shares linked to debentures in propertycompanies, or units in a Collective Investment Scheme inProperty, listed on an exchange 25% 29 330 541 0,36%a(i) Issuer market capitalisation of R10 billion or more, or anamount or conditions as prescribed 25% 25 198 683 0,31%Growthpoint properties 15% 6 230 485 0,08%Other issuers 15% 18 968 198 0,23%a(ii) Issuer market capitalisation of between R3 billion and R10billion, or an amount or conditions as prescribed 25% 4 131 858 0,05%Arrowhead Properties Ltd 10% 1 247 771 0,02%Other issuers 10% 2 884 087 0,04%a(iii) Issuer market capitalisation of less than R3 billion or anamount or conditions as prescribed 25% - 0,00%(b) Immovable property, preference and ordinary shares inproperty companies, and linked units comprising shareslinked to debentures in property companies, not listed onan exchange 15% 305 042 387 3,72%The Bridge 5% 305 042 387 3,72%4.2 Foreign 25% - 0,00%Carried forward 7 529 493 979 91,88%- 61 -

PHUMULA RETIREMENT FUNDSCHEDULE IB - ASSETS HELD IN COMPLIANCE WITH REGULATION 28AS AT 30 JUNE 2018Categories of kinds of assets % Fair valueR Fair value%Brought forward 7 529 493 979 91,88%(a) Preference shares, ordinary shares and linked unitscomprising shares linked to debentures in propertycompanies, or units in a Collective Investment Scheme inProperty, listed on an exchange 25% - 0,00%a(i) Issuer market capitalisation of R10 billion or more, or anamount or conditions as prescribed 25% - 0,00%a(ii) Issuer market capitalisation of between R3 billion and R10billion, or an amount or conditions as prescribed 25% - 0,00%a(iii) Issuer market capitalisation of less than R3 billion or anamount or conditions as prescribed 25% - 0,00%(b) Immovable property, preference and ordinary shares inproperty companies, and linked units comprising shareslinked to debentures in property companies, not listed onan exchange 15% - 0,00%5 COMMODITIES 798 534 0,01%5.1 Inside the Republic 10% 798 534 0,01%(a) Kruger Rands and other commodities on an exchange,including exchange traded commodities 10% 798 534 0,01%a(i) Gold (including Kruger Rands) 10% 798 534 0,01%Newplat Etf 10% 798 534 0,01%a(ii) Other commodities 5% - 0,00%5.2 Foreign 10% - 0,00%(a) Gold and other commodities on an exchange, includingexchange traded commodities 10% - 0,00%a(i) Gold 10% - 0,00%a(ii) Other commodities 5% - 0,00%7 HOUSING LOANS GRANTED TO MEMBERS INACCORDANCE WITH THE PROVISIONS OF SECTION19(5) 95% 13 328 0,00%8 HEDGE FUNDS, PRIVATE EQUITY FUNDS AND ANYOTHER ASSET NOT REFERRED TO IN THISSCHEDULE 441 116 0,01%8.1 Inside the Republic 15% 441 116 0,01%(a) Hedge fund 10% - 0,00%a(i) Funds of hedge funds 10% - 0,00%a(ii) Hedge funds 10% - 0,00%(b) Private equity funds 10% - 0,00%b(i) Funds of private equity funds 10% - 0,00%b(ii) Private equity funds 10% - 0,00%(c) Other assets not referred to in this schedule and excludinga hedge fund or private equity fund 2,5% 441 116 0,01%Future growth 2,5% 139 777 0,00%ZAR Outstanding Settlements_ZAROSTINC - stanlib 2,5% 301 339 0,00%8.2 Foreign 15% - 0,00%(a) Hedge fund 10% - 0,00%a(i) Funds of hedge funds 10% - 0,00%a(ii) Hedge funds 10% - 0,00%(b) Private equity funds 10% - 0,00%b(i) Funds of private equity funds 10% - 0,00%b(ii) Private equity funds 10,0% - 0,00%(c) Other assets not referred to in this schedule and excludinga hedge fund or private equity fund 2,5% - 0,00%TOTAL ASSETS � REGULATION 28 8 193 145 171 100,00%- 62 -

PHUMULA RETIREMENT FUNDSCHEDULE IB - ASSETS HELD IN COMPLIANCE WITH REGULATION 28AS AT 30 JUNE 2018INVESTMENT SUMMARY (Regulation 28) Local Fair value Foreign(Excluding Africa) Fair value Africa Fair value TotalR % R % R % R1 Balances or deposits, money market instrumentsissued by a bank including Islamic liquiditymanagement financial instruments 383 214 298 4,68 54 973 - 274 240 - 383 543 5112 Debt instruments including Islamic debt instruments 6 524 681 063 79,64 - - - - 6 524 681 0633 Equities 355 778 573 4,34 593 516 118 7,24 - - 949 294 6914 Immovable property 334 372 928 4,08 - - - - 334 372 9285 Commodities 798 534 0,01 - - - - 798 5347 Housing loans granted to members - section 19(5) 13 328 - - - - - 13 3288 Hedge Funds, private equity funds and any otherassets not referred to in this schedule 441 116 0,01 - - - - 441 116TOTAL 7 599 299 840 92,75 593 571 091 7,24 274 240 - 8 193 145 171BREACHES IN TERMS OF SUB REGULATION 3 OF REGULATION 28Table 1items Asset Limits in terms of sub regulation 3(f) Total (Inside &Foreign)R Percentage ofFair value% Regulation 28limits2.1(e)(ii) Other debt instruments not listed 685 434 097 8,37 3.1(b) Equities not listed 1 671 931 0,02 8 Hedge funds , Private Equity funds and other assets 441 116 0,01 TOTAL 687 547 144 8,40 35Table 1items Asset Limits in terms of sub regulation 3(g) Fair valueR Fair value% Regulation 28limits3.1(b) Equities not listed 1 671 931 0,02 TOTAL 1 671 931 0,02 15- 63 -

SNG Grant Thornton 20 Morris Street East

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INDEPENDENT AUDITOR’S REPORT ON ASSETS HELD IN COMPLIANCE WITH REGULATION 28 TO THE BOARD OF FUND Opinion We ha e audited S hedule IB Assets held i o plia e ith Regulatio 28 of Phumula Retirement Fund the Fu d at 30 June 2018 the S hedule fo o plia e ith the e ui e e ts of Regulatio 28 of the Pe sio Fu ds A t of South Africa (the Regulation), as set out on pages 59 to 63. Our engagement arises from our appointment as auditor of the Fund and is for the purpose of assisting the Board of Fund to report to the Registrar of Pension Funds (the Regist a .

I ou opi io , S hedule IB Assets held i o plia e ith Regulatio 28 at 30 June 2018 of the Fund is prepared, in all material respects, in accordance and in compliance with the Regulation. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsi ilities for the S hedule section of our report. We are independent of the Fund in accordance with the Independent Regulatory Board for Auditors Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performing audits of financial statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of matter - Financial reporting framework and restriction on use We draw attention to the purpose of our report as indicated in the opinion paragraph, and the basis of accounting. Co se ue tl , the S hedule a d ou audito ’s epo t a ot e suita le fo a othe pu pose. Ou opi io is ot qualified in respect of this matter. Other matter The i fo atio o tai ed i S hedule IB has ee e t a ted f o the Fu d’s u de l i g a ou ti g e o ds that e e the subject of our audit engagement on the annual financial statements and forms the subject matter of this engagement. Our audit of the annual financial statements of the Fund for the year ended 30 June 2018 was conducted in accordance with International Standards on Auditing and in our report, we expressed an unmodified opinion , and therefore the annual financial statements are prepared, in all material respects, with the Regulatory Reporting Requirements for Retirement Funds in South Africa.

SCHEDULE IB PHUMULA RETIREMENT FUND REGISTRATION NUMBER: 12/8/390

65

Responsibilities of the Board of Fund for the Schedule The Board of Fund is responsible for the preparation of the Schedule in accordance with the Regulatory Reporting Requirements for Retirement Funds in South Africa and in compliance with the Regulation, and for such internal control as the Board of Fund determines is necessary to enable the preparation of the Schedule that is free from material misstatement, whether due to fraud or error. Auditor’s Responsi ilities for the Audit of the S hedule Our objectives are to obtain reasonable assurance about whether the Schedule as a whole are free from material

isstate e t, hethe due to f aud o e o , a d to issue a audito ’s epo t that i ludes ou opi io . Reaso a le assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Schedule. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the Schedule, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit 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 Fu d’s i te al o t ol. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Fund. We communicate with the Board of Fund regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Darshen Govender SizweNtsalubaGobodo Grant Thornton Inc. Director Registered Auditor 12 December 2018 20 Morris Street Woodmead