CIRCULAR TO ALERT STEEL SHAREHOLDERS - jse.co.za · Claw-back Offer may be affected by the laws of...

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

The definitions commencing on page 3 of this Circular have been used on this front cover.

ACTION REQUIRED

• Detailed action required by shareholders is set out on page 2 of this Circular.

DISCLAIMER• Alert Steel does not accept responsibility and will not be held liable for any failure on the part of the CSDP or broker of a dematerialised shareholder to

notify such Shareholder of the details of this Circular.• The summary of the Exchange Control Regulations detailed in paragraph 11 of this circular is intended only as a guide and is therefore not a

comprehensive statement of the Exchange Control Regulations. Alert Steel shareholders who are in any doubt as to the appropriate course of action to take should consult their professional advisors.

JURISDICTION

All transactions arising from the provisions of this circular and the form of instruction shall be governed by and be subject to the laws of South Africa. The Claw-back Offer may be affected by the laws of the relevant jurisdictions of foreign shareholders. Such foreign shareholders should inform themselves about and observe any applicable legal requirements of such jurisdictions in relation to all aspects of this circular that may affect them, including the Claw-back Offer. It is the responsibility of any foreign shareholder to satisfy himself/herself as to the full observation of the laws and regulatory requirements of the relevant jurisdiction in connection with the Claw-back offer, including the obtaining of any governmental, exchange control or other consent or the making of any filings which may be required, the compliance with other necessary formalities, the payment of any issue, transfer or other taxes or requisite payments due in such jurisdiction. The Claw-back Offer is further subject to any other applicable laws and regulations, including the Exchange Control Regulations. Any foreign shareholder who is in doubt as to his/her position, including without limitation his/her tax status, should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.

The rights that are represented by the form of instruction in respect of the Letters of allocation are valuable and may be sold on the JSE. Letters of allocation can, however, only be traded in dematerialised form and accordingly, all Letters of allocation have been issued in dematerialised form.

Alert Steel Holdings LimitedIncorporated in the Republic of South Africa

(Registration number 1999/009701/06)Share code: AET ISIN: ZAE000170395

(“Alert Steel” or “the company”)

CIRCULAR TO ALERT STEEL SHAREHOLDERSregarding:

• a renounceable Claw-back offer to Alert Steel shareholders of 48 000 000 Claw-back shares of no par value in the share capital of Alert Steel at a Subscription Price of 200 cents per Claw-back share, in the ratio of 92.44345 Claw-back shares for every 100 Alert Steel shares held at the close of trade on Friday, 14 February 2014;

and enclosing:

• a form of instruction in respect of a Letter of allocation providing for the acceptance and/or renunciation and/or sale of all or part of the Claw-back Entitlement(s) embodied in the Letter of allocation in terms thereof for the use of certificated shareholders only; and

• revised listings particulars.

Claw-back offer opens at 09:00 on Monday, 17 February 2014Claw-back offer closes at 12:00 on Friday, 7 March 2014An English copy of this circular, together with the Letter of allocation and the documents referred to in paragraph 23 of this circular, have been approved by the JSE as required by section 95(1)(k) of the Companies Act.

Designated Adviser Auditors Attorneys

Date of issue: 17 February 2014This circular is available in English only. Copies of this circular may be obtained from the office of the company from the date of issue until Friday, 28 February 2014, or it can be downloaded from the company’s website at www.alertsteel.co.za from Monday, 17 February 2014.

CORPORATE INFORMATION

Registered office of Alert Steel

Corner of Engelbrecht and Lanham StreetsEast LynnePretoria, 0186(PO Box 29607, Sunnyside, 0132)Telephone: (012) 800 0000Facsimile: (012) 800 0013

Transfer secretaries

Computershare Investor Services Proprietary Limited(Registration number 2004/003647/07)Ground Floor70 Marshall StreetJohannesburg, 2001(PO Box 61051, Marshalltown, 2107)Telephone: (011) 370 5000Facsimile: (011) 688 5210

Reporting accountants

KPMG Incorporated(Registration number 1999/021543/21)KPMG Crescent85 Empire RoadParktown, 2193(Private bag X9, Parkview, 2122)Telephone: (011) 647 7111Facsimile: (011) 647 8000

Date of incorporation: 3 July 2003

Place: Pretoria

Company secretary

M Pretorius (BCom (Law) LLB)Corner of Engelbrecht and Lanham StreetsEast LynnePretoria, 0186(PO Box 29607, Sunnyside, 0132)Telephone: (012) 800 0000Facsimile: 086 696 1270

Designated Adviser

Exchange Sponsors (2008) Proprietary Limited(Registration number 2008/019553/07)44a Boundary RoadInanda, 2196(PO Box 411216, Craighall, 2024)Telephone: (011) 880 2113Facsimile: (011) 447 4824

Attorneys

Fluxmans Inc.(Registration number 2000/024775/21)11 Bierman AvenueRosebank, 2196Telephone: (011) 328 1725Facsimile: (011) 880 2261

1

TABLE OF CONTENTS

Page

COrpOrATE iNFOrmATiON Inside front cover

ACTiON rEquirEd By ShArEhOLdErS 2

dEFiNiTiONS 3

SALiENT dATES ANd TimES 6

CirCuLAr TO ShArEhOLdErS1. Introduction 72. Purpose and rationale of the Claw-back offer 83. Terms of the Claw-back offer 84. Directors and executive management 95. Major and controlling shareholders 96. JSE listings 107. Financial information 108. Share capital 119. Claw-back Entitlement 1110. Procedure for acceptance, renunciation and sale of Claw-back Entitlement 1211. Exchange Control Regulations 1412. Tax consequences of Claw-back offer 1613. Jurisdiction 1614. Opinion and recommendations 1615. Directors’ authority to issue shares 1616. Directors’ responsibility statement 1717. Litigation statement 1718. Corporate governance 1719. Material contracts 1720. Expenses of the Claw-back offer 1721. Consents 1722. Material changes 1823. Documents and consents available for inspection 18

Annexure 1 Proforma consolidated financial information of Alert Steel 19Annexure 2 Independent reporting accountants’ report on the compilation of proforma

consolidated financial information 22Annexure 3 Table of Entitlement 24Annexure 4 Price history of Alert Steel shares on the JSE 25Annexure 5 Corporate Governance 26Annexure 6 Information relating to the directors 36Annexure 7 Information on the Subscriber 40

Revised listing particulars 41

LETTEr OF ALLOCATiON Enclosed

2

ACTiON rEquirEd By ShArEhOLdErS

The definitions commencing on page 3 of this circular apply to this section.

1. dEmATEriALiSEd ShArEhOLdErS

If you hold Alert Steel shares in dematerialised form (including where you have elected own-name registration) you will not receive a printed form of instruction.

Your CSDP or broker will contact you to ascertain:

• whether you wish to follow all or some of your Entitlements in terms of the Claw-back offer and in respect of how many Claw-back offer shares;

• whether you wish your CSDP or broker to endeavour to procure the sale of your Entitlements on the JSE on your behalf and if so, in respect of how many rights;

• whether you wish to renounce your Entitlements and if so, how many Entitlements you wish to renounce and the details of the renouncee; or

• whether you wish for your Entitlements in respect of the Claw-back offer to lapse.

Your CSDP or broker will credit your account with the number of Entitlements to which you are entitled in terms of the Claw-back offer. If you do not hear from your CSDP or broker, you should contact them and furnish them with your instructions. If your CSDP or broker does not obtain instructions from you, they are obliged to act in terms of the custody agreement entered into between you and them.

2. CErTiFiCATEd ShArEhOLdErS

A form of instruction is enclosed for use by certificated shareholders only. The rights in respect of such forms are renounceable and can be sold on the JSE.

If you hold your Alert Steel shares in certificated form and you wish to subscribe for some or all of the Claw-back offer shares allocated to you, you must complete the form of instruction enclosed herewith in accordance with the instructions contained therein and lodge it, together with payment for the amount due in respect thereof, with the transfer secretaries, whose details are set out on the inside front cover of this circular, by not later than 12:00 on Friday, 7 March 2014.

If you do not wish to subscribe for all or some of the Claw-back offer shares allocated to you, you may sell or renounce your Entitlements or allow them to lapse. In such event, you must complete the relevant section of the form of instruction and return it to the transfer secretaries to be received not later than 12:00 on Friday, 28 February 2014, if you wish to sell, and by no later than 12:00 on Friday, 7 March 2014, if you renounce your Entitlements. If you intend to allow your Entitlements to lapse, you need not take any action.

3. iF yOu hAVE diSpOSEd OF yOur ShArES

If you have disposed of your Alert Steel shares, please forward this circular to the purchaser of such shares or to the broker or agent through whom the disposal was effected.

Note:

If you are in any doubt as to the action you should take, please consult your CSDP, broker, banker, legal advisor, accountant or other professional advisor immediately. Alert Steel does not accept responsibility and will not be held liable for any failure on the part of the CSDP or broker of a dematerialised shareholder to notify such shareholder of the Claw-back offer.

3

dEFiNiTiONS

In this circular, unless otherwise stated or the context so requires, the words in the first column have the meanings stated opposite them in the second column, words in the singular shall include the plural and vice versa,words denoting one gender include the other and expressions denoting natural persons include juristic persons and associations of persons:

“Alert Steel” or “the company” Alert Steel Holdings Limited (Registration number 2003/005144/06), a public company incorporated in accordance with the laws of South Africa and the shares of which are listed on the Altx of the JSE;

“Alert Steel shareholders” or “shareholders”

the registered holders of Alert Steel shares as appearing on the Alert Steel register;

“Altx” the Alternative Exchange of the JSE;

“business day” any day other than a Saturday, Sunday or public holiday in the Republic;

“Cannistraro” Cannistraro Investments 282 Proprietary Limited (Registration number 2011/008136/07), a private company incorporated in accordance with the laws of South Africa, the sole shareholder of which is Mr Rayhaan Hassim;

“Capital Africa Steel” or “CAS” Capital Africa Steel Proprietary Limited (Registration number 2003/008668/07), a private company incorporated in accordance with the laws of South Africa, the shares in which are owned by WBHO Limited and Brait Private Equity;

“certificated shareholders” Alert Steel shareholders who have not dematerialised their Alert Steel share certificates in terms of the Strate system;

“circular” all the documents and annexures contained in this bound circular, dated 17 February 2014, including the form of instruction;

“Claw-back offer” a renounceable Claw-back offer to Alert Steel shareholders of 48 000 000 Claw-back shares at a Subscription Price of 200 cents per Claw-back share in the ratio of 92.44345 Claw-back shares for every 100 ordinary shares held at the close of trade on the Record Date;

“Claw-back shares” 48 000 000 new ordinary shares which are the subject of the Claw-back offer;

“common monetary area” South Africa, the Republic of Namibia and the Kingdoms of Lesotho and Swaziland;

“CSDP” Central Securities Depository Participant accepted as a participant in terms of the Financial Markets Act, 2012 (Act 19 of 2012), as amended, appointed by an individual shareholder for purposes of the dematerialisation of documents of title for purposes of incorporation into the Strate system;

“Companies Act ” the Companies Act, 2008 (Act 71 of 2008), as amended;

“dematerialisation” the process by which certificated shares are converted to an electronic form as uncertificated shares and recorded in the sub-register of shareholders maintained by a CSDP;

“dematerialised shareholders” Alert Steel shareholders who hold shares which have been incorporated into the Strate system and which are no longer evidenced by physical documents of title in terms of the Custody and Administration of Securities Act, 1992 (Act 85 of 1992), as amended;

4

“directors” or “board of directors”

the board of directors of Alert Steel, further details of whom appear in Annexure 6 of this circular;

“Designated Adviser” Exchange Sponsors (2008) Proprietary Limited (Registration number 2008/019553/07), a private company registered and incorporated under the laws of South Africa, the Designated Advisor of Alert Steel;

“emigrants” former residents of the common monetary area;

“Entitlement” or “Claw-back Entitlement(s)”

a Shareholder’s Entitlement to subscribe for Claw-back shares in the ratio of 92.44345 Claw-back shares for every 100 ordinary shares held on the Record Date, which Entitlement arises as a result of the Claw-back offer;

“form of instruction” form of instruction (attached to this circular in the case of certificated shareholders) in respect of the Letters of allocation reflecting the Entitlement of certificated shareholders and on which certificated shareholders are required to indicate whether they wish to take up, sell or renounce their Claw-back Entitlement;

“Group” Alert Steel and its subsidiaries, all incorporated in accordance with the laws of South Africa;

“incorporation” the date of incorporation of Alert Steel, being 3 July 2003;

“ independent reporting accountants” and/or “auditors”

KPMG Incorporated. (Registration number 1999/021543/21), a company incorporated in accordance with the laws of South Africa;

“JSE” the JSE Limited (Registration number 2005/022939/06), a limited liability public company incorporated in accordance with the laws of South Africa which operates a securities exchange licensed in terms of the Financial Markets Act, 2012 (Act 19 of 2012);

“the last practicable date” the last practicable date prior to the finalisation of this circular, which date was 15 February 2014;

“Listings Requirements” the Listings Requirements of the JSE, as amended from time to time;

“Letter/s of allocation” or “LAs” renounceable (nil paid) letters of allocation to be issued to Alert Steel shareholders pursuant to the Claw-back offer, conferring a Claw-back Entitlement on the holder to subscribe for Claw-back shares in terms of the Claw-back offer;

“Record Date” last date for Alert Steel shareholders to be recorded in the register in order to participate in the Claw-back offer, being the close of trade on Friday, 14 February 2014;

“ Revised Build Kwik Sale Agreement”

the Sale Agreement between Build Kwik Wholesalers Proprietary Limited and Alert Steel Proprietary Limited, dated 27 November 2013, for the purchase of furniture, fixtures, fittings and other moveable assets for R6 300 000;

“SARS” the South African Revenue Services;

“SENS” The Stock Exchange News Service;

“shares” the issued ordinary no par value shares in the share capital of the company;

“South Africa” the Republic of South Africa;

“Strate” the settlement and clearing system used by the JSE, managed by Strate Limited (Registration number 1998/022242/06), a company incorporated in accordance with the laws of South Africa;

5

“the Subscriber” Cannistraro Investments 282 Proprietary Limited (Registration number 2011/008136/07), a private company incorporated in accordance with the laws of South Africa and which is 100% owned by Mr Rayhaan Hassim;

“Subscription Agreement” the Subscription Agreement dated 27 November 2013, entered into between Alert Steel and the Subscriber in terms of which the Subscriber has, subject to the rights of Alert Steel shareholders in terms of the Claw-back offer, agreed to subscribe for 48 000 000 new ordinary shares of no par value in the share capital of Alert Steel at a Subscription Price of 200 cents per Claw-back share for the total amount of R96 000 000 (ninety six million Rand);

“Subscription Amount” the amount of R96 000 000 (ninety six million Rand) payable by the Subscriber for the Claw-back shares in terms of the Subscription Agreement;

“Subscription Price” a subscription price of 200 cents per Claw-back share;

“Southern Palace” Southern Palace Investments 265 Proprietary Limited (Registration number 2005/005086/07), a company duly registered and incorporated with limited liability in accordance with the laws of South Africa and which is 100% owned by Mr Rayhaan Hassim;

“transfer secretaries” Computershare Investor Services Proprietary Limited (Registration number 2004/003647/07), a private company duly incorporated in accordance with the laws of South Africa;

“VAT” value-added tax levied in terms of the Value-Added Tax Act, 1991 (Act 89 of 1991), as amended from time to time; and

“ZAR” or “Rand” or “R” South African Rand.

6

SALiENT dATES ANd TimES

2014

Last day to trade in Alert Steel shares in order to qualify to participate in the Claw-back offer (cumEntitlement) on Friday, 7 February

Listing of Letters of allocation on the JSE under the JSE code AETN and ISIN ZAE000187357 at commencement of trading on Monday,10 February

Allotment of Claw-back shares to Subscriber Monday, 10 February

record date for participation in the Claw-back offer at the close of trade on Friday, 14 February

Claw-back offer Circular and form of instruction posted to shareholders, where applicable Monday, 17 February

Claw-back offer opens at commencement of trading on Monday, 17 February

Dematerialised shareholders’ accounts at their CSDP or broker automatically credited with their Entitlement Monday, 17 February

Certificated shareholders’ Entitlements will be credited to an account held with the transfer secretaries Monday, 17 February

Last day to trade in Letters of allocation on the JSE on Friday, 28 February

Trade in Claw-back shares commences Monday, 3 March

Claw-back offer closes – payments to be made and form of instruction in respect of Letters of allocation lodged by certificated shareholders by 12:00 (see note 5) on Friday, 7 March

record date for Letters of allocation Friday, 7 March

Claw-back shares not accepted in terms of the Claw-back offer issued to the Subscriber Monday, 10 March

Dematerialised shareholders’ accounts updated with Claw-back shares to the extent accepted and debited with the relevant costs by their CSDP or broker and new Alert Steel share certificates posted to certificated shareholders (see note 5) on Monday, 10 March

Results of Claw-back offer announcement released on SENS on or about Monday, 10 March

Notes:

1. Dematerialised shareholders are required to notify their duly appointed CSDP or broker of their acceptance or otherwise of the Claw-back offer in the manner and time stipulated in the agreement governing the relationship between such shareholder and their CSDP or broker.

2. All times indicated are South African times unless otherwise stated.

3. Share certificates may not be dematerialised or rematerialised between Monday, 10 February 2014, and Friday, 14 February 2014, both days inclusive.

4. The CSDP/broker accounts of dematerialised shareholders will be automatically credited with new Alert Steel shares to the extent to which they have accepted the Claw-back offer. Alert Steel share certificates will be posted, by registered post at the shareholders’ risk, to certificated shareholders in respect of the Claw-back shares which have been accepted.

5. CSDPs or brokers effect payment in respect of dematerialised shareholders on a delivery versus payment method.

7

Alert Steel holdings LimitedIncorporated in the Republic of South Africa



directors

Non-executive

MM Patel(Independentnon-executivechairman)WP van der Merwe(Independentnon-executivedirector)BS Mahuma (Independentnon-executivedirector)AE Loonat (Independentnon-executivedirector)

Executive

PN Dodson(ChiefExecutiveOfficer)MSI Gani(ChiefFinancialOfficer)MJ Gani (ChiefOperatingOfficer)

All directors are South African.

CirCuLAr TO ALErT STEEL ShArEhOLdErS

1. iNTrOduCTiON

1.1 Shareholders of Alert Steel were informed on 4 February 2013 that Nedbank had assigned all of its rights and obligations under a 5-Year Term Loan Agreement, to Southern Palace.

1.2 On 8 February 2013, Cannistraro entered into an agreement with Capital Africa Steel, in terms of which Cannistraro agreed to acquire 47.5% of the shares in issue in Alert Steel from Capital Africa Steel for R6 million and also undertook to procure the release of Capital Africa Steel from a bank guarantee of R7.5 million. Therefore the aggregate purchase consideration in respect of the sale equated to a price of 54.58 cents per share.

1.3 On 15 February 2013, Cannistraro entered into the Nedbank Sale with Nedbank in terms of which Cannistraro agreed to acquire a further 19.78% of the shares in issue in Alert Steel from Nedbank for R1 million (and therefore at a purchase price of 9.72 cents per share).

On 11 April 2013, it was announced, inter alia, that Southern Palace informed Alert Steel that it had assigned the rights and obligations which it had acquired from Nedbank (referred to in paragraph 1.1 above) to Cannistraro, with effect from 27 February 2013.

1.4 On 15 July 2013, Cannistraro made an unconditional mandatory offer to all of the shareholders other than CAS and Nedbank at 54.58 cents per share. 239 189 ordinary shares at an offer price of 54.58 cents were acquired by Cannistraro from Alert Steel shareholders in pursuance of such mandatory offer.

1.5 On 11 April 2013, it was announced that Alert Steel had decided to change the previously announced subscription and claw-back offer to a specific issue of shares for cash to Cannistraro. The Specific Issue Agreement was concluded on the 19 August 2013, subject to the fulfilment of certain conditions precedent.

1.6 On 17 September 2013, Alert Steel issued a circular to shareholders for the approval of interalia, the specific issue of 48 000 000 shares to Cannistraro at 200 cents per share for cash to raise R96 million. At the general meeting of shareholders to approve the resolutions pertaining, inter alia, to the specific issue, the resolutions were withdrawn and not voted on by shareholders.

8

1.7 In an announcement released on SENS on 28 November 2013, shareholders were advised that the company and the Subscriber entered into the Subscription Agreement which provides for the subscription by the Subscriber of 48 000 000 new ordinary shares of no par value in the share capital of Alert Steel at a Subscription Price of 200 cents per share for the total Subscription Amount, which subscription is subject to the rights of Alert Steel shareholders in terms of the Claw-back offer.

1.8 The Subscription Price represents a premium of approximately 30% to the 30-day volume weighted average share price of Alert Steel over the 30 days ended 11 April 2013, which was the date on which the issue price for the specific issue of shares for cash as announced on SENS was agreed upon by the board of Alert Steel. The Subscription Price represents a discount of approximately 28% to the 30-day volume weighted average share price of Alert Steel over the 30 days ended 28 November 2013, which was the date on which the Claw-back offer was announced on SENS. There is no subscription or other fee payable to the Subscriber.

1.9 Alert Steel has received the Subscription Amount from the Subscriber. The amount is held in Alert Steel’s bank account.

1.10 The attached form of instruction in respect of the Letters of allocation contains details of the Claw-back Entitlement to which certificated shareholders are entitled, as well as the procedures for acceptance, sale or renunciation of that Claw-back Entitlement.

1.11 Dematerialised shareholders will be advised by their CSDP or broker of the Claw-back Entitlement to which they are entitled as well as the procedure for acceptance, sale or renunciation of those Claw-back Entitlement.

1.12 The JSE has approved the listings of the:

1.12.1 Claw-back shares from the commencement of trade on Monday, 3 March 2014; and

1.12.2 Letters of allocation from the commencement of trade on Monday, 10 February 2014, until the close of trade on Friday, 28 February 2014, both days inclusive.

1.13 Upon allotment and issue, the Claw-back shares will rank pari passu in all respects including dividends with the ordinary shares currently in issue.

1.14 The Claw-back shares will not have any convertibility or redemption provisions.

1.15 The purpose of this circular is to furnish shareholders with relevant information concerning the Claw-back offer and the implications thereof in accordance with the Listings Requirements and the Companies Act. Included in the circular are revised listing particulars as the Claw-back offer of 48 000 000 shares equates to more than 50% of the shares in issue.

2. purpOSE ANd rATiONALE OF ThE CLAW-BACK OFFEr

2.1 The purpose of the Claw-back offer is to redeem debt owing by Alert Steel to Cannistraro. This will be redeemed from the subscription amount received from the Claw-back offer. Refer to paragraph 1.9 above.

2.2 The Claw-back shares, upon their issue, will be issued under the general authority of directors to issue unissued, but authorised shares for cash which was authorised at the annual general meeting of shareholders held on 15 November 2013.

2.3 In terms of a special resolution passed on 9 January 2014, shareholders approved the issue of 48 000 000 new ordinary no par value shares at 200 cents per ordinary share in terms of section 41(3) of the Companies Act (which represent more than 30% of the shares in issue prior to such issue) to enable the company to implement the Claw-back offer.

3. TErmS OF ThE CLAW-BACK OFFEr

3.1 particulars of the Claw-back offer

3.1.1 Alert Steel shareholders and/or their renouncees are hereby offered for subscription, by way of a renounceable Claw-back offer, a total of 48 000 000 Claw-back shares at a Subscription Price of 200 cents per Claw-back share in the ratio of 92.44345 Claw-back shares for every 100 ordinary shares held in Alert Steel at the close of trade on the Record Date, upon the terms and conditions set out in this circular.

9

3.1.2 The issue by the company of the Subscription Shares to be issued by the company in terms of the Claw-back offer was approved by the shareholders at the general meeting held on 9 January 2014, in accordance with the provisions of section 41(3) of the Act.

3.1.3 The Subscription Price is payable in ZAR and in full upon acceptance by certificated shareholders, or on a delivery versus payment basis by the CSDP or broker of dematerialised shareholders who have accepted the Claw-back offer.

3.1.4 Holders of dematerialised shares who wish to accept the Claw-back offer should ensure that the necessary funds are deposited with the relevant CSDP or broker.

3.1.5 The Subscription Price represents a premium of approximately 30% to the 30-day volume weighted average share price of Alert Steel shares over the 30-day period ended on 11 April 2013, which was the date on which the issue price for the specific issue of shares for cash as announced on SENS was agreed upon by the board of Alert Steel.

3.1.6 Alert Steel shareholders (recorded in the register at the close of trade on the Record Date) or their renouncees in terms of the Claw-back offer will be entitled to participate in the Claw-back offer. The Letters of allocation may only be traded in dematerialised form and, accordingly, Alert Steel has issued all Letters of allocation in dematerialised form.

3.1.7 The Claw-back shares issued to the Subscriber on Monday, 10 February 2014 will be issued in certificated format and held by the transfer secretaries.

3.2 Opening and closing dates of the Claw-back offer

The Claw-back offer will open at the commencement of trade on Monday, 17 February 2014 and will close at 12:00 on Friday, 7 March 2014.

3.3 Excess applications

The Claw-back offer does not include the right for shareholders to apply for excess Claw-back offer shares.

4. dirECTOrS ANd EXECuTiVE mANAGEmENT

Details of the directors and executive management, including the appointment, remuneration, borrowing powers of directors, and director’s interests and declarations are set out in Annexure 6 to this circular.

5. mAJOr ANd CONTrOLLiNG ShArEhOLdErS

Set out below are the names of those shareholders that, directly or indirectly, are beneficially interested in 5% or more of the total shares in the company in issue at the last practicable date:

Name %

Cannistraro 67.35WF&JC Familie Trust 11.70

5.1 Should no shareholder, apart from Cannistraro, Claw-back any of the Claw-back shares, resulting in the Subscriber subscribing for all the Claw-back shares, the shareholding of Cannistraro will increase as a result of the implementation of the Claw-back offer as follows:

Number of shares

percentage shareholding

%

Cannistraro before Claw-back offer 35 021 939 67.35Claw-back offer 48 000 000

Cannistraro after Claw-back offer* 83 021 939 83.02

Total shares in issue after Claw-back offer 99 999 636 100

* BasedontheassumptionthatnoneoftheshareholderswillfollowtheirEntitlementsintermsoftheClaw-backoffer.

10

5.2 Should all shareholders, including Cannistraro, follow their Entitlements in terms of the Claw-back, the percentage shareholding of Cannistraro will remain the same as a result of the implementation of the Claw-back offer as follows:

Number of shares

percentage shareholding

%

Cannistraro before Claw-back offer 35 021 939 67.35Claw-back offer 48 000 000

Cannistraro after Claw-back offer* 67 349 939 67.35

Total shares in issue after Claw-back offer 99 999 636 100

* Based on the assumption that all of the shareholders including Cannistraro will follow theirEntitlementsintermsoftheClaw-backoffer.

There will not be a change in the controlling shareholder of Alert Steel resulting from the Claw-back offer, which will be Cannistraro both before and after the implementation of the Claw-back offer.

Insofar as the directors of Alert Steel are aware, no other shareholder will hold, directly or indirectly, 5% or more of the issued share capital of Alert Steel following the Claw-back offer save for WF&JC Familie Trust who will own 6.08% of the issued shares should it not follow its Entitlement in terms of the Claw-back offer.

6. JSE LiSTiNGS

The JSE has granted listings for the Letters of allocation and the Claw-back shares as follows:

6.1 48 000 000 new Alert Steel shares will be issued and listed with effect from the commencement of business on Monday, 3 March 2014;

6.2 Letters of allocation in respect of 48 000 000 new Alert Steel shares will be listed from the commencement of business on Monday, 10 February 2014, to close of business on Friday, 28 February 2014, both days inclusive; and

6.3 as the Claw-back offer is fully subscribed, no minimum subscription is required.

7. FiNANCiAL iNFOrmATiON

The table below sets out the summary of the proforma financial effects of the Claw-back offer on Alert Steel’s, on basic loss, headline loss, net asset value and net tangible asset value per share.

The summary of the proforma financial effects have been prepared to illustrate the impact of the Claw-back offer on the audited published financial information of Alert Steel for the year ended 30 June 2013, had the Claw-back offer occurred on 1 July 2012 for the purpose of the statement of comprehensive income and on 30 June 2013 for the purpose of the statement of financial position.

The summary of the pro forma financial effects have been prepared using accounting policies that comply with International Financial Reporting Standards and that are consistent with those applied in the audited, published financial statements of Alert Steel for the year ended 30 June 2013.

The summary of the proforma financial effects set out below are the responsibility of the directors and have been prepared for illustrative purposes only and because of their nature may not fairly present the financial position, changes in equity, and results of operations or cash flows of Alert Steel after the Claw-back offer.

The reporting accountants’ report on the compilation of the proforma financial information of Alert Steel is set out in Annexure 2 to this circular.

11

“Before the Claw-back

offer” audited results for

the year ended

30 June 2013

Pro forma “After the

Claw-back offer”

unaudited 30 June 2013 % change

Basic loss per share (cents) (106.10) (44.77) 58Headline loss per share (cents) (132.90) (58.20) 56Net asset value per share (cents) (48.64) 72.00 248Net tangible asset value per share (cents) (60.50) 66.28 209Weighted average number of shares 48 238 204 96 238 204Shares in issue as at 30 June 2013 (including shares held by the share option scheme) 51 999 636 99 999 636

Detailed assumptions in respect of the above financial effects are included in Annexure 1 to this circular.

8. ShArE CApiTAL

The authorised stated capital and issued stated capital of Alert Steel, before and after the Claw-back offer, will be as follows:

Authorised stated capital – before the Claw-back offer rand

400 000 000 ordinary shares of no par value –

issued share capital – before51 999 636 ordinary no par value shares 51 999 636Less: 76 000 treasury shares (76 000)

Total issued share capital 51 923 636

Authorised share capital – after Claw-back offer rand400 000 000 ordinary shares of no par value –

issued share capital – after99 999 636 ordinary no par value shares 99 999 636Less: 76 000 treasury shares (76 000)


* TheJSEhasgrantedthelistingoftheClaw-backshares,subsequenttotheClaw-backoffer.

9. CLAW-BACK ENTiTLEmENT

9.1 Alert Steel shareholders will receive the right to subscribe for 92.44345 new Alert Steel shares for every 100 shares held on the initial Record Date, being Friday, 14 February 2014.

9.2 Alert Steel shareholders are entitled to participate in the Claw-back offer in accordance with Annexure 3 to this circular.

9.3 The allocation of Claw-back shares will be such that shareholders will not be allocated a fraction of a Claw-back share and as such, any Entitlement to receive a fraction of a Claw-back shares which:

9.3.1 is less than one-half of a Claw-back share, will be rounded down to the nearest whole number; and

9.3.2 is equal to or greater than one-half of a Claw-back share but less than a whole Claw-back share will be rounded up to the nearest whole number.

9.4 Certificated shareholders will have their Entitlements credited to a nominee account in electronic form, which will be administered by the transfer secretaries on their behalf. The enclosed form of instruction reflects the number of shares for which the certificated shareholder is entitled to subscribe. The procedure to be followed by certificated shareholders for the acceptance, sale or renunciation of their Entitlements is reflected on the form of instruction.

12

9.5 Dematerialised shareholders will have their Entitlements to subscribe for Claw-back shares credited in electronic form to their account held by their appointed CSDP or broker. The CSDP or broker will advise dematerialised shareholders of the procedure to be followed and the timing for the acceptance, sale, renunciation or lapsing of such Entitlements.

9.6 The Letters of allocation to which the forms of instruction relate are negotiable and can be sold on the JSE.

10. prOCEdurE FOr ACCEpTANCE, rENuNCiATiON ANd SALE OF CLAW-BACK ENTiTLEmENT

10.1 Certificated shareholders

The Claw-back Entitlement of certificated shareholders will be credited to an account in electronic form, which will be administered by the transfer secretaries on their behalf. The enclosed form of instruction reflects the number of Claw-back shares for which the certificated shareholder is entitled to subscribe. Any instruction by certificated shareholders to accept, sell or renounce all or part of the Claw-back shares allocated to them may only be made by means of the form of instruction.

10.1.1 Acceptance

Full details of the procedure for acceptance of the Claw-back offer by certificated shareholders are contained in the form of instruction enclosed with this circular. It should be noted that:

10.1.1.1 acceptances are irrevocable and may not be withdrawn;

10.1.1.2 acceptances may be made only by means of the form of instruction;

10.1.1.3 any instruction to sell or renounce all or part of the Claw-back shares may only be made by means of the form of instruction;

10.1.1.4 the properly completed form of instruction and a banker’s draft or cheque in ZAR crossed “not transferable” and “or bearer” deleted in payment of the Subscription Price payable for the relevant Claw-back shares must be received by the transfer secretaries at either of the addresses referred to in paragraph 10.1.3.2 by not later than 12:00 on Friday, 7 March 2014. No late postal acceptances will be accepted;

10.1.1.5 the form of instruction to take up the Claw-back Entitlement in question will be regarded as complete only when the cheque or banker’s draft has been cleared for payment;

10.1.1.6 such payment will constitute an irrevocable acceptance of the Claw-back offer upon the terms and conditions set out in this circular and in the form of instruction once the banker’s draft or cheque has been cleared for payment;

10.1.1.7 if any form of instruction is not received as set out above, the Claw-back offer will be deemed to have been declined and the Claw-back Entitlement to subscribe for the Claw-back shares in terms of the form of instruction will lapse regardless of who holds it; and

10.1.1.8 no acknowledgement of receipt will be given for a cheque or banker’s draft received in respect of the Claw-back offer.

10.1.2 Renunciation or sale of Claw-back Entitlement

10.1.2.1 Alert Steel has issued the LAs in dematerialised form and the electronic record for certificated shareholders is being maintained by the transfer secretaries.

10.1.2.2 The LAs to which the form of instruction relates are negotiable and can be traded on the JSE.

10.1.2.3 Certificated shareholders who do not wish to subscribe for all, or some of the Claw-back shares allocated to them as reflected in the form of instruction, may sell or renounce or lapse their Claw-back Entitlement.

10.1.2.4 In addition, certificated shareholders who wish to sell the Claw-back Entitlement allocated to them as reflected in the form of instruction must complete the relevant section of the form of instruction and return it to the transfer secretaries

13

in accordance with the instructions contained therein, to be received by not later than 12:00 on Friday, 7 March 2014.

10.1.2.5 The transfer secretaries will endeavour to procure the sale of the Claw-back Entitlement on the JSE on behalf of such certificated shareholders and will remit the proceeds in accordance with the payment instructions reflected in the form of instruction, net of brokerage charges and associated expenses. Neither the transfer secretaries nor the company nor any broker appointed by either of them will have any obligation or be responsible for any loss or damage whatsoever in relation to or arising out of the timing of such sales, the price obtained or any failure to sell such Claw-back Entitlement. References in this paragraph to a certificated shareholder include references to the person or persons executing the form of instruction and any person or persons on whose behalf such person or persons executing the form of instruction is/are acting and in the event of more than one person executing the form of instruction, the provisions of this paragraph shall apply to them, jointly and severally.

10.1.2.6 Certificated shareholders who do not wish to sell the Claw-back Entitlement allocated to them as reflected in the form of instruction, and who do not wish to subscribe for the Claw-back shares offered in terms of the form of instruction but who wish to renounce their Claw-back Entitlement, should complete the relevant section of the form of instruction and return it to the transfer secretaries in accordance with the instructions contained therein, to be received by no later than 12:00 on Friday, 7 March 2014.

10.1.2.7 Certificated shareholders who wish to subscribe for only a portion of the Claw-back Entitlement allocated to them must indicate on the form of instruction the number of Claw-back shares for which they wish to subscribe.

10.1.2.8 Certificated shareholders wishing to sell their Claw-back Entitlement will be liable to pay the transfer secretaries an amount of R131.10 (one hundred and thirty one Rand and 10 cents) (all inclusive) for trades having a value of less than or equal to R40 000 and an amount equal to R131.10 (one hundred and thirty one Rand and 10 cents) plus 0.25% of the value of the trade for trades with a value of R40 000 (forty thousand Rand) or more.

10.1.3 Payment

10.1.3.1 Currency

The amount due on acceptance of the Claw-back offer is payable in ZAR.

10.1.3.2 Paymentterms

A banker’s draft drawn on a registered bank or a cheque drawn on a South African bank (either of which should be crossed and marked “not transferable” and, in the case of a cheque, with the words “or bearer” deleted) in favour of “Alert Steel Holdings Limited – Claw-back offer” in respect of the amount due, together with a properly completed form of instruction, must be lodged by certificated shareholders and/or their renouncees by no later than 12:00 on Friday, 7 March 2014, in accordance with the instructions contained in the form of instruction and clearly marked “Alert Steel Holdings Limited – Claw-back offer”.

By hand to:

Computershare Investor Services Proprietary LimitedGround Floor, 70 Marshall StreetJohannesburg2001

or

14

sent by post, at the risk of the shareholder or renouncee concerned, to:

Computershare Investor Services Proprietary LimitedPO Box 61763Marshalltown2107

All cheques or banker’s drafts received by the transfer secretaries will be deposited immediately for payment.

In the event that any cheque or banker’s draft is dishonoured, Alert Steel, in its sole discretion, may treat the relevant acceptance as void or may tender delivery of the relevant Claw-back shares to which it relates against payment in cash of the Subscription Price for such Claw-back shares.

10.1.3.3 Sharecertificates

Where applicable, share certificates in respect of Claw-back shares will be posted, by registered post, by the transfer secretaries, at the risk of the certificated shareholders concerned, on or about Monday, 10 March 2014. As Alert Steel uses the “certified transfer deeds and other temporary documents of title” procedure approved by the JSE, only “block” certificates will be issued in respect of Claw-back shares.

Certificated shareholders receiving Claw-back shares in certificated format must note that such shares cannot trade on the JSE until they have been dematerialised. This could take between one and ten days.

10.2 dematerialised shareholders

10.2.1 Acceptance, renunciation or sale of Claw-back Entitlement

The CSDPs or brokers appointed by dematerialised shareholders should contact them to ascertain:

10.2.1.1 whether the shareholder concerned wishes to follow his Claw-back Entitlement in terms of the Claw-back offer (in which case CSDPs effect payment on a delivery versus payment basis) and if so, in respect of how many Claw-back shares;

10.2.1.2 whether the shareholder concerned wishes to renounce his Claw-back Entitlement and if so, in respect of how many Claw-back shares;

10.2.1.3 whether the shareholder concerned wishes to sell those Claw-back Entitlement which he/she does not wish to follow or renounce and if so, how many Claw-back Entitlement are to be sold. Shareholders not contacted by their CSDPs or brokers should contact them and furnish them with their instruction; and

10.2.1.4 should a CSDP or broker not obtain instructions from a dematerialised shareholder, they are obliged to act in terms of the mandate entered into between them and the dematerialised shareholder, or if the mandate is silent in this regard, not to accept the Claw-back Entitlement on behalf of such shareholder.

10.2.2 Payment

The CSDP or broker will effect payment directly on behalf of dematerialised shareholders in respect of Claw-back Entitlement followed, in ZAR, on Friday, 7 March 2014, on a delivery versus payment basis. Holders of dematerialised shares who wish to accept the Claw-back offer should ensure that the necessary funds are deposited with the relevant CSDP or broker.

10.2.3 Claw-back shares

Dematerialised shareholders’ accounts will be credited with the Claw-back shares subscribed for in terms of the Claw-back offer, on Monday, 10 March 2014.

11. EXChANGE CONTrOL rEGuLATiONS

The following summary is intended only as a guide and is therefore not a comprehensive statement of the Exchange Control Regulations. Alert Steel shareholders who are in any doubt as to the appropriate course of action to take should consult their professional advisors.

15

The new Alert Steel shares to be issued pursuant to the Claw-back offer are not freely transferable from South Africa and must be dealt with in terms of the Exchange Control Regulations.

Alert Steel shareholders who are not resident in the common monetary area should obtain advice as to whether any governmental and/or other legal consent is required and/or whether any other formality must be observed to follow their rights in terms of the Claw-back offer.

11.1 Non-resident of the common monetary area

11.1.1 In terms of the Exchange Control Regulations, non-residents of the common monetary area will be allowed to:

11.1.1.1 take up rights allocated to them in terms of the Claw-back offer;

11.1.1.2 purchase Letters of allocation; and

11.1.1.3 subscribe for the new Alert Steel shares in terms of the Claw-back offer, provided payment is received in foreign currency through normal banking channels or in ZAR from a non-resident account.

11.1.2 Share certificates issued pursuant to the application must be endorsed “non-resident”. In respect of Alert Steel shareholders taking up their rights in terms of the Claw-back offer:

11.1.2.1 a “non-resident” endorsement will be applied to forms of instruction issued to non-resident certificated shareholders; or

11.1.2.2 a “non-resident” annotation will appear in the CSDP or broker’s register for non-resident dematerialised shareholders.

11.1.3 All applications by non-residents for the above purposes must be made through a South African authorised dealer. Where rights are sold on the JSE on behalf of non-residents, the proceeds of such sale are freely remittable through a South African authorised dealer in foreign exchange.

11.2 Former residents of the common monetary area (“emigrants”)

11.2.1 Where an Entitlement in terms of the Claw-back offer falls due to an emigrant, which right is based on shares blocked in terms of Exchange Control Regulations, only then may blocked funds be used to:

11.2.1.1 take up rights allocated to such emigrant in terms of the Claw-back offer;

11.2.1.2 purchase Entitlements on the JSE; and

11.2.1.3 subscribe for new Alert Steel shares in terms of the Claw-back offer.

11.2.2 Applications by emigrants using blocked ZAR for the above purposes must be made through the South African authorised dealer controlling their blocked assets. Alert Steel share certificates issued pursuant to blocked ZAR transactions must be endorsed “non-resident” and placed under the control of the authorised dealer through whom the payment was made.

11.2.3 In respect of Alert Steel shareholders taking up their Entitlement in terms of the Claw-back offer:

11.2.3.1 a “non-resident” endorsement will be applied to forms of instruction issued to non-resident certificated shareholders; or

11.2.3.2 a “non-resident” annotation will appear in the CSDP or broker’s register for non-resident dematerialised shareholders.

11.2.4 Where Entitlements are sold on the JSE on behalf of emigrants, which Entitlement are based on an investment which is blocked in terms of the South African Exchange Control Regulations, the proceeds of such sales will be credited to the blocked ZAR accounts of the Alert Steel shareholders concerned.

11.2.5 Non-resident and emigrant dematerialised shareholders will have all aspects relating to exchange control managed by their CSDP or broker.

16

12. TAX CONSEquENCES OF ThE CLAW-BACK OFFEr

The directors of the issuer are of the opinion that the purchase, holding and disposal of the Letters of allocation or Claw-back shares should, for taxation purposes, be treated according to the usual rules relating to the categorisation of an asset and its return as capital or revenue and accordingly Alert Steel shareholders are advised to consult their professional advisors regarding the tax consequences of the Claw-back offer.

13. JuriSdiCTiON

The distribution of this circular and/or accompanying documents and/or the transfer of the new Alert Steel shares and/or the rights to subscribe for new Alert Steel shares in jurisdictions other than South Africa may be restricted by law and failure to comply with any of those restrictions may constitute a violation of the laws of any such jurisdiction in which it is illegal to make such a Claw-back offer. In such circumstances this circular is not addressed to such shareholders and the Claw-back offer is made only to qualifying shareholders.

Any shareholder resident outside the common monetary area who receives the circular and form of instruction, should obtain advice as to whether any governmental and/or any other legal consent is required and/or any other formality must be observed to enable such a subscription to be made in terms of such form of instruction.

The Claw-back offer does not constitute and offer in any jurisdiction in which it is illegal to make such an offer and the circular and form of instruction should not be forwarded or transmitted by recipients thereof to any person in any territory other than where it is lawful to make such an offer.

The Claw-back offer shares have not been and will not be registered under the Securities Act of the United States of America. Accordingly, the Claw-back offer shares may not be offered, sold, resold, delivered or transferred, directly or indirectly, in or into the United States or to, or for the account or benefit of, United States persons, except pursuant to exemptions from the Securities Act. The circular and the accompanying documents are not being, and must not be, mailed or otherwise distributed or sent in, into or from the United States. The circular does not constitute an offer of any securities for sale in the United States or to United States persons.

The Claw-back offer contained in the circular does not constitute an offer in the District of Colombia, the United States, the Dominion of Canada, the Commonwealth of Australia, Japan or in any other jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer. Non-qualifying shareholders should consult their professional advisers to determine whether any governmental or other consents are required or other formalities need to be observed to allow them to take up he Claw-back offer, or trade their Entitlement. Shareholders holding Alert Steel shares on behalf of persons who are non-qualifying shareholders are responsible for ensuring that taking up the Claw-back offer, or trading in their Entitlements under that offer, do not breach regulation in the relevant overseas jurisdictions.

To the extent that non-qualifying shareholders are not entitled to participate in the Claw-back offer as a result of the aforementioned restrictions, the allocated rights in respect of such non-qualifying shareholders shall revert to Alert Steel who shall be entitled to sell or place same or failing which such rights will lapse.

14. OpiNiONS ANd rECOmmENdATiONS

14.1 The board of directors have considered the terms and conditions of the Claw-back offer and are of the opinion that such terms and conditions are fair and reasonable to Alert Steel shareholders.

14.2 Shareholders are recommended to consult their professional advisers regarding the action to be taken in relation to the Claw-back offer.

15. dirECTOrS’ AuThOriTy TO iSSuE ShArES

15.1 Section 41(3) of the Act requires that shareholders approve by way of special resolution, an issue of shares if the voting power of the class of shares that are to be issued will be equal to or exceed 30% of the voting powers of all the shares of that class already issued immediately before the issue.

15.2 The section 41(3) special resolution was passed at the general meeting held on Thursday, 9 January 2014.

17

16. dirECTOrS’ rESpONSiBiLiTy STATEmENT

The directors, whose names are given in Annexure 6 to this circular, collectively and individually, accept full responsibility for the accuracy of the information given and certify that to the best of their knowledge and belief there are no facts which have been omitted which would make any statement in the circular false or misleading and that all reasonable enquiries to ascertain such facts have been made by them and that the circular contains all information required by law and the Listings Requirements.

17. LiTiGATiON STATEmENT

The Group is not party to any legal or arbitration proceedings, nor, as far as the directors of the Group are aware are there any legal or arbitration proceedings pending or threatened against Alert Steel, which may have, or have had in the 12 months preceding the date of this circular, a material effect on the Group’s financial position.

18. COrpOrATE GOVErNANCE

The Group’s corporate governance policy is set out in Annexure 5.

19. mATEriAL CONTrACTS

There have been no materials contracts entered into by the company, other than in the ordinary course of business, two years prior to this circular, that contains an obligation or settlement that is material to Alert Steel at the last practical date save for:• the Subscription Agreement; and• Alert Steel Tshwane, a subsidiary of Alert Steel Holdings, has entered into a three year supply

contract with Transnet from 1 July 2012. The contract entails the supply of Carbon steel to Transnet’s Koedoespoort and Germiston plants for a three-year period. The total contract value is estimated to be at least R90 000 000 over the contract period.

20. EXpENSES OF ThE CLAW-BACK OFFEr

The following expenses and provisions are expected or have been provided for by the company in connection with the Claw-back offer and will be settled out of the proceeds received in accordance with the Subscription Agreement or pursuant to the Claw-back offer. All costs are stated exclusive of VAT:

r

Corporate advisory fee - Exchange Sponsors 200 000Independent reporting accountants’ fee – KPMG Inc 50 000Transfer secretaries fees – Computershare Investor Services Proprietary Limited 50 000Legal fees – Fluxmans 100 000Printing and other related costs 50 000JSE documentation fee 21 873JSE listing fees 69 180

541 053

The company has not incurred any preliminary expenses within the three years preceding the date of this document.

21. CONSENTS

Each of the company’s advisors as listed on the inside front cover of this circular have consented in writing to act in the capacities stated and to their names appearing in this circular and have not withdrawn their consent prior to the publication of this circular.

The Independent reporting accountants have consented to the inclusion of their reports in the form and context in which it is included in the circular, which consent has not been withdrawn prior to the publication of this circular.

18

22. mATEriAL ChANGES

The directors report that no material changes in the affairs or financial position of the Group have taken place since the publication of the audited financial results for the year ended 30 June 2013, save for:

• On 19 August 2013, Cannistraro entered into a specific issue of shares for cash agreement, subject to the fulfilment of the conditions precedent, to issue 48 million shares at 200 cents per share for cash. At the general meeting of shareholders to approve the resolutions pertaining to, interalia, the specific issue, the resolutions were withdrawn and not voted on by shareholders.

• In an announcement released on SENS on 28 November 2013, shareholders were advised that the company and the Subscriber entered into the Subscription Agreement which provides for the subscription by the Subscriber of 48 000 000 new ordinary shares of no par value in the share capital of Alert Steel at a Subscription Price of 200 cents per share for the total Subscription Amount, subject to the rights of shareholders in terms of the Claw-back offer.

23. dOCumENTS ANd CONSENTS AVAiLABLE FOr iNSpECTiON

The following documents, or copies thereof, will be available for inspection during normal business hours at the registered office of Alert Steel or its Designated Advisor’s office, from Monday, 17 February 2014, up to and including Friday, 28 February 2014:

23.1 a signed copy of this circular;

23.2 the current memorandum of incorporation of Alert Steel and its subsidiaries;

23.3 the audited financial statements of Alert Steel for all the years since incorporation until 30 June 2013;

23.4 the signed Subscription Agreement;

23.5 a signed copy of the supply contract with Transnet;

23.6 the letters of consent referred to in paragraph 21 of this circular;

23.7 the Independent reporting accountants’ signed report included in Annexure 2 to this circular; and

23.8 copies of service agreements with directors entered into during the last three years.

Signed by PN Dodson on behalf of the directors of Alert Steel in terms of the powers of attorney granted to him by the board.

By order of the board

________________________17 February 2014

19

ANNEXurE 1

PRO FORMA CONSOLidATEd FiNANCiAL iNFOrmATiON

The definitions and interpretations commencing on page 3 of the circular apply throughout this annexure.

This proforma financial information has been prepared for illustrative purposes only and because of its nature may not fairly present Alert Steel’s financial position, changes in equity, results of operations or cash flows.

The proforma financial information has been prepared to illustrate the impact of the Claw-back offer, on the audited, published financial information of Alert Steel for the year ended 30 June 2013, had the Claw-back offer occurred on 1 July 2012 for the purpose of the statement of comprehensive income and on 30 June 2013 for the purpose of the statement of financial position.

The proforma financial effects have been prepared using accounting policies that comply with IFRS and that are consistent with those applied in the audited annual financial statements of Alert Steel’s for the year ended 30 June 2013.

The reporting accountants’ report on the compilation of proforma financial information of Alert Steel’s is set out in Annexure 2 to this circular.

The proforma financial information is the responsibility of the directors of Alert Steel.

20

PRO FORMA CONSOLidATEd STATEmENT OF FiNANCiAL pOSiTiON

FiguresinR

“Before Claw-back offer”

30 June 2013(1)“Claw-back

offer”“After Claw-back offer”

ASSETS

Non-current assets 60 493 806 60 493 806

Property, plant and equipment 54 773 370 54 773 370Goodwill 5 720 436 5 720 436

Current assets 176 536 634 176 536 634

Inventories 119 572 890 119 572 890Trade and other receivables 45 256 837 45 256 837Amounts owing by associate 5 575 020 5 575 020Taxation receivable 201 392 201 392Assets held for sale 294 000 294 000Cash and cash equivalents 5 636 495 5 636 495

Total assets 237 030 440 – 237 030 440

EquiTy ANd LiABiLiTiES

Equity attributable to equity holders of the company (23 461 573) 95 458 947 71 997 374

Share capital(2) 269 719 677 95 528 127 365 247 804Share-based payment reserve 311 921 311 921Accumulated loss (293 493 171) (69 180) (293 562 351)

Non-current liabilities 141 142 962 (96 000 000) 45 142 962

Loans and borrowings(3) 136 809 704 (96 000 000) 40 809 704Straight-line lease accrual 4 333 258 4 333 258

Current liabilities 119 349 051 541 053 119 890 104

Trade and other payables(3) 117 574 892 541 053 118 115 945Straight-line lease accrual 550 324 550 324Provisions 1 223 835 1 223 835

Total equity and liabilities 237 030 440 – 237 030 440

Shares in issue at year-end(4) 51 999 636 48 000 000 99 999 636Net asset value per share (cents) (45.18) 72.00Net tangible asset value per share (cents) (56.20) 66.28

Notes:1. The “Before the Claw-back offer” column has been extracted, without adjustment, from the audited results for the year ended

30 June 2013.

2. Share capital has been adjusted for the following assumptions:

• the issue of the 48 million ordinary shares in terms of the Claw-back offer at 200c per share; and

• the incurrence of estimated transaction costs of R471 873,relating directly to the issue of shares and written off against share capital. These costs equate to 87% of the total transaction costs of R541 053 per paragraph 20 of the circular.

3. Current and non-current liabilities have been reduced by the cash received as a result of the Claw-back offer. Accounts payable has been adjusted to include amounts owing in respect of the total estimated transaction costs amounting to R541 053.

4. The number of shares in issue has been adjusted to include the issue of 48 million Claw-back offer shares based on the assumption that the Claw-back offer was fully subscribed for at a price of 200 cents per share.

5. All the above adjustments with the exception of transaction costs, are expected to have a continuing effect.

21

PRO FORMA CONSOLidATEd STATEmENT OF COmprEhENSiVE iNCOmE

FiguresinR

“Before Claw-back offer”

30 June 2013(1)“Claw-back

offer”“After Claw-back offer”

Revenue 716 780 430 716 780 430Cost of sales (561 788 858) (561 788 858)

Gross profit 154 991 572 154 991 572Other income 3 093 410 3 093 410Operating expenses(4) (198 018 833) (69 180) (198 088 013)

Operating loss (39 933 851) (69 180) (40 003 031)Investment revenue 2 239 718 2 239 718Finance costs(2) (13 866 803) 8 160 000 (5 706 803)

Loss before taxation (51 560 936) 8 090 820 (43 470 116)Taxation 380 280 380 280

Loss from continuing operations (51 180 656) 8 090 820 (43 089 836)discontinued operationsProfit from discontinued operations –

Loss for the year (51 180 656) 8 090 820 (43 089 836)

reconciliation of headline lossBasic loss attributable to ordinary shareholders (51 180 656) 8 090 820 (43 089 836)Profit on sale of business (15 456 306) (15 456 306)Losses arising from the impairment of goodwill 500 000 500 000Losses arising from the impairment of investment property 206 000 206 000Adjusted for loss arising on discontinuance of operations 1 965 016 1 965 016Adjusted for profit on disposal of property, plant and equipment (135 600) (135 600)

Headline Loss attributable to ordinary shareholders (64 101 546) 8 090 820 (56 010 726)

Weighted average shares in issue on which earnings are based(3) 48 238 204 48 000 000 96 238 204

Fully diluted weighted average shares in issue 48 238 204 48 000 000 96 238 204

Loss per share (cents) (106.10) (44.77)Headline loss per share (cents) (132.90) (58.20)

Notes:1. The “Before the Claw-back offer” column has been extracted, without adjustment, from the audited results for the year ended

30 June 2013.

2. Finance cost has been adjusted to include the assumption that the after interest saving on the reduction of the interest-bearing debt calculated at the prime interest rate of 8.5%.

3. The weighted average number of shares has been adjusted to include the issue of 48 million Claw-back shares based on the assumption that the Claw-back offer was fully subscribed for at a price of 200 cents per share.

4. Transaction costs of R69 180 equating to 13% of the total transaction costs of R541 053 per paragraph 20 of the circular, that do not relate directly to the issue of shares, has been expensed. The balance of estimated transaction costs of R471 873 have been written off against share capital.

5. All the above adjustments with the exception of transaction costs, are expected to have a continuing effect.

22

ANNEXurE 2

iNdEpENdENT rEpOrTiNG ACCOuNTANTS’ rEpOrT ON ThE COmpiLATiON OF PRO FORMA CONSOLidATEd FiNANCiAL iNFOrmATiON

The directorsAlert Steel Holdings LimitedCorner of Engelbrecht and Lanham StreetsEast LynnePretoria, 0186PO Box 29607Sunnyside, 0132

27 January 2014

Dear Sirs

rEpOrT ON ThE COmpiLATiON OF ThE PRO FORMA FiNANCiAL iNFOrmATiON

The definitions commencing on page 3 of the circular have been used in this report.

We have completed our assurance engagement to report (“Report”) on the compilation of proforma loss and headline loss, net asset value and net tangible asset value per Alert Steel share, pro forma statement of financial position of Alert Steel, the pro forma statement of comprehensive income of Alert Steel and the related notes, including a reconciliation showing all of the proforma adjustments to the share capital, reserves and other equity items relating to Alert Steel, (collectively, “Proforma Financial Information”). The Proforma Financial Information is set out in paragraph 7 and Annexure 1 of the circular.

The Proforma Financial Information has been compiled by the directors of Alert Steel to illustrate the impact of the proposed Claw-back offer as detailed in the circular on Alert Steel financial position and changes in equity as at 30 June 2013 and Alert Steel’s financial performance for the period ended 30 June 2013 .

As part of this process, Alert Steel’s basic loss and headline loss per share, statement of comprehensive income and statement of financial position have been extracted by the directors from Alert Steel published financial statements for the period ended 30 June 2013 (“Published Financial Information”), on which an audit report has been published. In addition, the directors have calculated the net asset value and net tangible asset value per share as at 30 June 2013 based on financial information extracted from the Published Financial Information.

directors’ responsibility for the Pro forma Financial information

The directors are responsible for compiling the Proforma Financial Information on the basis of the applicable criteria as detailed in paragraphs 8.15 to 8.33 of the Listings Requirements and the SAICA Guide on Proforma Financial Information, revised and issued in September 2012 (“Applicable Criteria”).

reporting accountants’ responsibility

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

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

For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any Published Financial Information used in compiling the Proforma Financial Information, nor have we, in the

23

course of this engagement, performed an audit or review of the Published Financial Information used in compiling the Proforma Financial Information.

The purpose of Proforma Financial Information included in the circular is solely to illustrate the impact of the amendments on the unadjusted Published Financial Information as if the Claw-back offer had been undertaken on 1 July 2013 for purposes of the pro forma loss, headline loss per Alert Steel share and the pro forma statement of comprehensive income and on 30 June 2013 for purposes of the net asset value and net tangible asset value per share and statement of financial position. Accordingly, we do not provide any assurance that the actual outcome of the amendments, subsequent to its implementation, will be as presented in the Pro forma Financial Information.

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

• the related proforma adjustments give appropriate effect to the Applicable Criteria; and

• the Proforma Financial Information reflects the proper application of those proforma adjustments to the unadjusted Published Financial Information.

The procedures selected depend on the reporting accountants’ judgement, having regard to the reporting accountants’ understanding of the nature of Alert Steel, the Claw-back offer in respect of which the Proforma Financial Information has been compiled and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the Proforma Financial Information.

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

Opinion

In our opinion, the Proforma Financial Information has been compiled, in all material respects, on the basis of the Applicable Criteria.

Yours faithfully

KpmG inc.

Per Pierre FourieChartered Accountants (SA)Director”

24

ANNEXurE 3

TABLE OF ENTiTLEmENT

No fractions of Claw-back shares will be issued to shareholders and the Claw-back shares will be issued based on the rounding principle (up or down, as the case may be). The table of Entitlement of shareholders to receive Claw-back shares in the ratio of 92.44345 Claw-back shares for every 100 Alert Steel shares held is set out below:

Number of existing ordinary shares held

Number of Claw-back shares to which a shareholder recorded on the record date is entitled





1 1 37 34 73 672 2 38 35 74 683 3 39 36 75 694 4 40 37 76 705 5 41 38 77 716 6 42 39 78 727 6 43 40 79 738 7 44 41 80 749 8 45 42 81 7510 9 46 43 82 7611 10 47 43 83 7712 11 48 44 84 7813 12 49 45 85 7914 13 50 46 86 8015 14 51 47 87 8016 15 52 48 88 8117 16 53 49 89 8218 17 54 50 90 8319 18 55 51 91 8420 18 56 52 92 8521 19 57 53 93 8622 20 58 54 94 8723 21 59 55 95 8824 22 60 55 96 8925 23 61 56 97 9026 24 62 57 98 9127 25 63 58 99 9228 26 64 59 100 9229 27 65 60 1 000 92430 28 66 61 10 000 9 24431 29 67 62 100 000 94 44332 30 68 6333 31 69 6434 31 70 6535 32 71 6636 33 72 67

25

ANNEXurE 4

priCE hiSTOry OF ALErT STEEL ShArES ON ThE JSE

dailyhigh

(cents)Low

(cents)Close (cents) Volume

15/01/2014 135 135 135 31214/01/2014 130 130 130 –13/01/2014 130 130 130 –10/01/2013 130 130 130 –09/01/2014 130 130 130 1 00008/01/2014 155 155 155 –07/01/2014 155 155 155 –06/01/2014 155 155 155 1 10503/01/2014 155 140 155 1 03502/01/2014 125 125 125 –31/12/2013 125 125 125 4 00030/12/2013 130 130 130 3 00027/12/2013 140 140 140 60624/12/2013 140 140 140 5 84623/12/2013 140 140 140 69520/12/2013 140 140 140 3 31219/12/2013 130 130 130 –18/12/2013 130 130 130 –17/12/2013 130 130 130 3 035

monthlyhigh

(cents)Low

(cents)Close

(cents) Volume

October 2013 155 140 140 123 056September 2013 190 175 175 265 873August 2013 139 138 138 353 668July 2013 110 95 95 271 582June 2013 110 110 110 116 711May 2013 102 102 102 311 850April 2013 140 102 102 205 894March 2013 180 136 136 399 560February 2013 179 175 175 877 294January 2013 218 175 175 250 564December 2012 249 218 218 390 120November 2012 300 200 300 59 685 239

quarterlyhigh

(cents)Low

(cents)Close (cents) Volume

December 2012 300 300 300 32 769 704September 2012 400 100 300 137 417 500June 2012 800 200 400 29 844 706March 2012 1 000 600 700 27 637 666December 2011 1 000 400 800 28 164 850September 2011 2 700 1 100 1 200 4 835 951June 2011 2 300 1 500 2 000 2 875 576March 2011 3 100 1 500 2 000 2 326 277December 2010 2 400 1 500 1 700 1 191 277

26

ANNEXurE 5

COrpOrATE GOVErNANCE

Sound corporate governance is a vital ingredient for ensuring that all dealings and decisions of the business are conducted with honesty and fairness.

During a difficult trading year, which included major internal restructuring, this remained a vital element of Alert Steel’s business. Every employee remains committed to acting in line with the company’s values of integrity, respect, transparency and accountability.

STATEmENT OF COmpLiANCE

During the year under review, the board materially complied with the King III Report recommendations, as outlined in the code of corporate practices and conduct. All areas of improvement that have been identified are being actively dealt with. Shareholders are referred to an analysis of the application of the 75 corporate governance principles, as recommended in the King III Report, which is published on the company’s website at www.alertsteel.co.za/wp-contents/uploads/CorporateGovernance.pdf.

BOArd OF dirECTOrS

The board consists of four independent non-executive directors and three executive directors. All the directors are high-merit objective individuals who collectively contribute a wide range of skills and knowledge to the decision-making processes of the board and who also ensure proper deliberation of all matters requiring the board’s attention.

The board subscribes to a unitary board structure with a balance of executive and non-executive directors. There is a clear division of responsibilities between the executive running of the company’s business and the leadership of the board, such that no individual has unfettered decision-making powers. The two primary tasks of the running of the board and the executive responsibility of the day to day running of the business are managed by the chairperson and CEO, respectively.

The chairman of the board is Mitesh Patel, an independent non-executive director. The chairman provides leadership and guidance to the board as a whole and encourages proper deliberation of all matters requiring the board’s attention.

CEO Peter Dodson ensures sound and efficient operation of the business as well as the implementation of all strategies and policies adopted by the board. He is responsible for clearly conveying communication from the board to the executive management. He is assisted by CFO Mahomed Gani and an executive committee consisting of strategic head office employees who take responsibility for the smooth daily running of the business.

The CEO, CFO and executive management team meet collectively on a weekly basis and more frequently on an individual basis when more intensive focus is required.

In terms of the board charter, the board meets no less than once each quarter, and more frequently if circumstances require. When necessary, they also confer through round robin deliberations.

Meetings are conducted in accordance with formal agendas and annual work plans, ensuring that all substantive matters are properly addressed. Any director may request that additional matters be added to the agenda. Copies of board papers are circulated to the directors well in advance of board meetings to ensure proper preparation to enhance the constructive and informed nature of deliberations. A representative from the company’s Designated Advisor attends the board meetings as required in terms of the JSE Listings Requirements.

Attendance by directors at board meetings during the reporting period is provided below. Owing to the restructuring of the company, the number of meetings held increased substantially in the past year.

27

rOLE ANd rESpONSiBiLiTiES OF ThE ChAirmAN

The chairman ensures, among other things:

• the overall effectiveness of the board and its committees;

• that the board provides effective leadership, maintains ethical standards and is responsible, accountable, fair and transparent; and

• that strategies are developed and implemented according to the company’s objective of achieving sustainable economic, social and environmental performance.

To achieve this, the chairman fosters a culture of openness and constructive challenge within the board, which allows for the expression of diverse views and effective debate and discussion. He also makes himself available to shareholders for discussions about key corporate governance matters and matters of concern to shareholders and other stakeholders.

rOLES ANd rESpONSiBiLiTiES OF ThE BOArd

The duties of the board are comprehensively set out in the board charter and include the following matters that are specifically reserved for board decisions:

• approval of the group’s strategy and annual budget;

• review of the Group’s performance;

• formulation of strategy and the provision of direction to the business;

• approval of significant matters relating to finance;

• approval of major capital expenditure or disposals, material contracts, material acquisitions and developments;

• ensuring sustainable leadership;

• approval of annual financial statements, interim reports, the valuation of unlisted investments, the declaration of dividends and the forfeiture of unclaimed dividends;

• monitoring of the review of internal control effectiveness and the risk management system;

• recommendation of amendments to the company’s Memorandum of Incorporation;

• confirmation of the appointment, removal or replacement of the company’s external auditor;

• approval of terms and conditions of any right issues, public offers, capital issues or issues of convertible securities including share or convertible securities issued for acquisitions;

• appointments to and removals from the board, including the appointment of the chairperson, Chief Executive Officer, executive directors, non-executive directors and the company secretary;

• approval of nominations of alternate directors (if any);

• determination and approval of board committees’ terms and reference;

• monitoring activities of the executive management; and

• the board ensures that there is an appropriate balance of power and authority on the board so that no one director has unfettered powers of decisionmaking.

SummAry OF ChANGES TO ThE BOArd

The following changes to the board took place during the previous audited financial year:

• E Hewitt (Non-executive director) – Resigned on 12 November 2012;

• N Cresswell (Financial Director) – Resigned with effect from 10 January 2013;

• J du Toit (Chief Executive Officer) – Resigned on 6 February 2013;

• J du Toit (Chief Financial Officer) – Appointed on 20 February 2013;

• J du Toit (Chief Financial Officer) – Resigned on 27 June 2013;

• MW McCulloch (Non-executive chairman) – Resigned on 9 February 2013;

28

• PN Dodson (Chief Executive Officer) – Appointed on 11 February 2013;

• A Loonat (Independent non-executive director) – Appointed on 11 February 2013;

• WF Schalekamp (Non-executive director) – Resigned on 18 December 2012;

• WF Schalekamp (Executive Director: Steel Operations) – Appointed on 11 February 2013;

• WF Schalekamp (Executive Director: Steel Operations) – Resigned on 27 June 2013;

• MSI Gani (Chief Financial Officer) – Appointed 30 July 2013; and

• MJ Gani (Chief Operating Officer) – Appointed 10 December 2013.

BOArd prOCESSES

Board charter

The board charter sets out specific responsibilities to be discharged by the board, and every member of the board, in accordance with King III. The board charter has been reviewed during the past financial year to align the content thereof with the recommendations of King III and the Companies Act. The objectives of the board charter are to ensure that all board members are aware of their duties and responsibilities as board members and to ensure that the principles of good corporate governance are applied in all their dealings in respect, and on behalf, of the business. The board charter is reviewed on an annual basis.

BOArd GOVErNANCE prOCESSES

process Approach

Appointment of directors Directors are appointed by means of a transparent and formal procedure, which is governed by the mandate and terms of reference of the board charter and the social, ethics and remuneration committee. A director’s skills, knowledge, experience in relevant sectors, qualifications, availability, number of external board appointments and diversity contribution are among the selection considerations. All appointments are considered in the context of the company’s strategies.

Rotation of directors In terms of the company’s Memorandum of Incorporation, at least one third of the directors retire by rotation every year and may offer themselves for re-election by shareholders at the annual general meeting.

Directors’ conflicts of interest In terms of the Companies Act, King III and the board charter, a director of a company must avoid a situation in which he/she has, or can have, a direct or indirect personal financial interest that conflicts, or possibly may conflict, with the interests of the company. The board has established procedures to enable its directors to notify the company of any actual or potential conflict situations and to declare any personal financial interests.

If directors find that a conflict of interest is unavoidable then they must disclose it and recuse themselves from any decisions regarding matters where this interest may impair their judgement.

The policy governing the group declaration of interests regulates the behaviour of all other group employees.

Induction and training of directors When new directors are appointed to the board they receive a formal induction to the Group which includes their expected duties as directors of Alert Steel Holdings. The board of directors recognises that even the most seasoned professionals may, on occasion, feel the need to seek advice from independent professionals regarding the discharge of their duties. The board charter encourages the directors to seek independent advice funded by the company.

29

process Approach

Board effectiveness Board members performed self-evaluations of our board and its committees. These evaluations confirmed that the members of both the board and its committees believe that they are functioning effectively. Any suggestions that members made that they believed could further improve their functioning were acted on.

Dealing in securities The company has a policy in place to guide directors and designated employees on dealing in the company’s securities. The JSE Listings Requirements specifically prohibit directors or senior employees from buying or selling a company’s shares during a closed period.

Closed periods Closed periods are exercised from the date of the financial year-end until the company’s results are released on SENS. Additional closed periods are enforced as required in terms of any corporate activity or when directors are in possession of price-sensitive information. Directors of the company and the company secretary, their associates or members or immediate family are not allowed to deal directly or indirectly, at any time, in the securities of the company on the basis of unpublished price-sensitive information regarding the company’s business or affairs. These individuals are made aware of restricted or closed periods for dealings and the provision of insider trading legislation.

BOArd COmmiTTEES

Board committees currently comprise three sub-committees, namely the audit committee, the risk committee and the social, ethics and remuneration committee. The sub-committees have formally determined terms of reference, clearly agreed upon reporting procedures and written scope of authority, which are reviewed on an annual basis and approved by the board. Since the structure and composition of the board does not warrant a separate nominations committee, the functions of this committee are included under the ambit of the social, ethics and remuneration committee.

AudiT COmmiTTEE

The audit committee comprises of the following three independent non-executive members: Wessel van der Merwe (chairman), Afzal Loonat and Gwen Mahuma.

The board is satisfied that the members of the audit committee are highly qualified individuals who, on a collective basis, have sufficient qualifications and experience to fulfil its duties. The members of the committee are also permitted by the board to consult with specialists when required.

The primary role of the audit committee is to ensure the integrity of the financial reporting, the audit process and that a sound risk management and internal control system is maintained. In pursuing these objectives the audit committee oversees relations with the external auditors and reviews the effectiveness of the internal audit function. Although the board has delegated certain auditing and financial functions to the audit committee, it remains accountable and responsible for the performance and affairs of the company. The minutes of the audit committee meeting are made available to the board. The chairman of the audit committee reports to the board at each board meeting.

The board is satisfied that the audit committee has complied with its terms and references during the year under review.

The CFO and the CEO attend all the meetings by invitation. The JSE-Designated Advisor attends all audit committee meetings in compliance with the JSE Listings Requirements. The external auditors attend the meetings and also have unrestricted access to the chairman of the audit committee.

The audit committee has carried out its functions in terms of the JSE Listings Requirements by:

• confirming the nomination of KPMG Inc. as the company’s auditors, being satisfied that they are independent of the company;

• approving the terms of engagement and fees to be paid to the external auditors;

30

• determining the nature and extent of any non-auditing services which the external auditors may provide to the company;

• satisfying itself as to the appropriateness of the expertise and experience of the company’s CFO, Mr Mahomed Gani, and of the company’s finance function;

• the audit committee has considered the adequacy of the Group’s system of internal control and recommended the financial statements and going-concern position for approval by the board;

• reviewing the effectiveness of the internal audit function; and

• Carrying out its statutory duties set out in section 90 of the Companies Act, 2008.

EXTErNAL AudiTOr

• The audit committee formally evaluates the performance and effectiveness of its external auditor. The most recent evaluation was conducted in September 2013 when, in compliance with King III and the JSE Listings Requirements, the audit committee confirmed, among others, the suitability and effectiveness of the external auditor.

• The committee determines and carefully monitors the use of the external auditor for non-auditing-related services. It is guided by a formal policy that precludes the auditor from providing services, which could impair audit independence.

• At its September 2013 meeting the committee nominated KPMG Inc. for re-appointment as external auditor for the coming financial year and satisfied itself that the firm and its individual auditors are properly accredited. The committee also:

– noted or ratified the summary of non-audit related services performed during the period under review, of which there were none; and

– reviewed the expertise, resources and experience of the Group’s finance capability and agreed to an action plan in respect of those areas of the Group where its finance skills and/or procedures are inadequate.

riSK COmmiTTEE

The risk committee consists of a combination of executive and non-executive directors. The risk committee is chaired by Wessel van der Merwe. Afzal Loonat, Peter Dodson (CEO) and Mahomed Gani (CFO) are the other members.

The internal audit function had previously been outsourced to KPMG Services Proprietary Ltd. As a result of the company’s recent restructuring, the risk committee has decided to suspend this outsourced function for the remainder of 2013. The decision will be reviewed in early 2014. Notwithstanding this, the company continues to monitor all internal controls to ensure that all branches and employees comply with company policies, standards, procedures, and applicable laws and regulations.

The committee:

• assists the board with the discharge of its duties relating to the identification of risk and the assessment of the effectiveness of risk management within the company;

• reviews and confirms the company’s levels of risk tolerance and its risk profile;

• co-ordinates the company’s risk management efforts, reviews their results and ensures that appropriate action is taken;

• reviews and assesses the integrity of the risk control systems and ensures that the risk policies and strategies are effectively managed;

• monitors external developments relating to corporate accountability including emerging and prospective impacts;

• reviews and discusses the Group risk register; and

• the executive committee of the company regularly tracks and updates the company’s risk register and gives feedback in this regard to the risk committee.

31

iT riSK

The risk committee assists the board with its responsibility for IT governance by ensuring that the group manages its information assets effectively, that an IT governance framework is in place, and that management is implementing the framework. The committee also monitors and evaluates significant IT investments and expenditure.

STATEmENT OF iNTErNAL CONTrOL

The board acknowledges overall responsibility for the group’s system of internal controls. This includes the establishment of an appropriate control environment and framework, as well as reviewing the effectiveness, adequacy and integrity of this system.

The company’s internal control policy is based on policies that have been implemented to efficiently, effectively and economically manage risk in the company. The system of internal controls is designed to manage rather than to eliminate risk. Accordingly, the system can only provide reasonable and not absolute assurance against the occurrence of any material misstatement or loss.

The Group has an ongoing process for identifying, evaluating, monitoring and managing the principal risks affecting the achievement of its business objectives, which is embedded in the Group’s processes and structures.

SOCiAL, EThiCS ANd rEmuNErATiON COmmiTTEE

The committee consists of Gwen Mahuma (chairperson), Wessel van der Merwe, Mitesh Patel, Peter Dodson and Mahomed Gani. The committee formally meets twice a year and on an adhoc basis when necessary.

The role of the committee is to assist the board in ensuring that the company remunerates directors and executives fairly and responsibly; and that the disclosure of directors’ remuneration is accurate, complete and transparent.

The committee performs, among others, the following functions:

remuneration responsibilities of the committee

• oversees the establishment of a remuneration policy that will promote the achievement of strategic objectives at all levels in the company and encourages individual performance;

• ensures that the remuneration policy is put to a non-binding advisory vote at the general meeting of shareholders once every year;

• reviews the outcomes of the implementation of the remuneration policy on an annual basis;

• ensures that the mix of fixed and variable pay, in cash, shares and other elements, meets the company’s needs and strategic objectives;

• satisfies itself as to the accuracy of recorded performance measures that govern the vesting of incentives;

• ensures that all benefits, including retirement benefits and other financial arrangements, are justified and correctly valued;

• considers the results of the evaluation of the performance of the CEO and other executive directors, both as directors and as executives, in determining remuneration;

• regularly reviews incentive schemes to ensure continued contribution to shareholder value and the correct administration of these in terms of the rules; and

• advises on the remuneration of non-executive directors.

Nomination responsibilities of the committee

In addition to its remuneration responsibilities, the committee’s responsibilities include setting the criteria for board nominations, identifying, evaluating and recommending suitable candidates to the board for appointment to the Alert Steel Holdings board, as well as succession planning. It also sets the criteria for board nominations.

The committee also ensures that:

• the company’s leadership is representative of all race groups and is in accordance with the spirit and targets set out in the Department of Trade and Industry’s Codes of Good Practice;

32

• the appointment of our directors is transparent and governed by the formal procedures set out in the committee’s mandate, the terms of reference and the board charter;

• directors retire and are re-elected in accordance with the mandate and the company’s Memorandum of Incorporation; and

• succession planning is reviewed.

The committee also fulfils the following statutory duties in compliance with Regulation 43 of the 2008 Companies Act:

• making recommendations on the empowerment credentials of the Group;

• monitoring the corporate social responsibilities of the Group;

• monitoring social and economic development in terms of goals, including the United Nations Global, Compact Principles, the OECD regarding corruption, Employment Equities Act, and B-BBEE;

• overseeing good corporate citizenship;

• overseeing environmental, health and public safety;

• overseeing consumer relationships including the company’s advertising, public relations, investor relations and compliance with consumer protection laws; and

• overseeing labour and employment.

COmpANy SECrETAry

The company secretary is responsible for administering the proceedings and affairs of the directorate, the company and, where appropriate, owners of securities in the company, in accordance with the relevant laws. The company secretary is available to assist all our directors with advice on their responsibilities, their professional development and any other relevant assistance they may require.

Monika Pretorius is the duly appointed company secretary of Alert Steel Holdings. She is neither a director nor a shareholder of Alert Steel Holdings Limited. The board is comfortable that Ms Pretorius maintains an arm’s length relationship with the executive team, the board and the individual directors in terms of section 3.84 (j) of the JSE Listings Requirements.

The company secretary has provided the board with documentary evidence of her levels of competence in terms of fulfilling her responsibilities as company secretary, which included proof of her qualifications and experience. Ms Pretorius has over six years’ experience as the company secretary of a listed company and has a BCom LLB qualification. She has never been censured by the JSE, penalised or fined for any misconduct. The board, having assessed her abilities based on her qualifications, experience and the level of competence she has demonstrated as Alert Steel Holdings’ company secretary as required in terms of section of 3.84(i) of the JSE Listings Requirements, agreed that Ms Pretorius is sufficiently qualified, competent and experienced to act as company secretary. This was endorsed and confirmed by the board at its meeting held on 19 September 2013. Ms Pretorius recused herself from that portion of the meeting while the board deliberated on her suitability to act and perform the role and duties of the group company secretary.

All policies and terms of reference of the company are available from the company secretary.

prESCriBEd OFFiCErS

Prescribed officers are those who exercise general control over the whole or a significant portion of the business and activities of the company or who regularly participate to a material degree in the exercise of general executive control over, and management of, the whole or a significant portion of the business and activities of the company. The company does not have any prescribed officers in accordance with the above definition in the Companies Act, since all controls of the company reside with the executive directors.

rELATiONS WiTh ShArEhOLdErS

The company adopts a proactive stance in timely dissemination of appropriate information to shareholders through the JSE Limited’s SENS portal, electronic news releases where applicable and statutory publication of the company’s financial performance.

The company’s website provides the latest and historical financial and other information, including financial reports.

33

The board encourages shareholders to attend its annual general meeting, notice of which is contained in this annual report, where shareholders have the opportunity to put questions to the board, including the chairmen of the board committees. Shareholders are able to provide feedback to Alert Steel Holdings via the website at www.alertsteel.co.za.

FrAud ANd iLLEGAL ACTS

The board and executive management do not accept any illegal acts in the conduct of the business. The directors’ policy is to actively pursue and prosecute the perpetrators of fraudulent or other illegal activities, should they become aware of any such acts.

iNSidEr TrAdiNG

No employee may deal, directly or indirectly, in company shares on the basis of unpublished price-sensitive information regarding the business or affairs of the business.

riSK mANAGEmENT

Approach

Alert Steel is exposed to a number of risks arising from its daily activities. These risks include changes in the economic climate, interest rates and steel price volatility.

The company has an established risk management policy. The objective of this policy is to assist management in making informed decisions that will improve the organisation’s performance with regard to decisionmaking and planning, promoting a more innovative, less risk averse culture in which the taking of calculated risks in pursuit of opportunities to benefit the organisation is encouraged, and providing a sound basis for integrated risk management and internal control as components of good corporate governance.

Our risk management principles are based on the principles of King III. Risk analysis forms part of the organisation’s strategic planning, business planning and investment/project appraisal procedures. Risk management is founded on a risk-based approach to internal control, which is embedded into the day-to-day operations of the organisation. Managers and staff at all levels are responsible for identifying, evaluating and managing or reporting risks, and will be equipped to do so. We foster a culture that assists in the effective execution of best practice, learned experiences and expertise acquired from our risk management activities across the organisation, for the benefit of the entire organisation.

A risk workshop was held during which the risk register was updated with changes regarding strategic and operational risks applicable to the changing environment in which the business operates.

The most noticeable change in the identified strategic risks of the company is that there is no longer risk related to cross border markets as the company does not trade, or intend to trade, outside of South Africa in the foreseeable future.

rESpONSiBiLiTiES

Executive committee (EXCO)

The total process of risk management, which includes a related system of internal controls, is the responsibility of the EXCO. Among other things, they are responsible for:

• developing and communicating organisational policy and information about the risk management program to all staff and, where appropriate, to other stakeholders;

• defining the organisation’s risk tolerance (the overall level of exposure and nature of risks that are acceptable to the organisation);

• setting policies on internal control based on the organisation’s risk profile, its ability to manage the risks identified and the cost/benefit of related controls; and

• seeking regular assurance that the system of internal control is effective in managing risks in accordance with the established organisational policies.

Alert Steel management

Management is accountable to the EXCO for implementing and monitoring the process of risk management and integrating it into the day-to-day activities of the organisation.

34

risk committee

The audit and risk committee will monitor the risk management process and will provide the board with feedback every quarter. The audit and risk committee performs the following risk management functions:

• evaluating the internal processes for identifying, assessing, monitoring and managing key risk areas;

• detailing material financial and non-financial risk profiles; and

• advising on the effectiveness of the organisation’s implementation of the risk management system, including that management have confirmed the proper operation of agreed risk mitigation strategies and controls.

Unfortunately during the current financial year, due to the significant focus given to the business’ going-concern risk and the capital raising process, this process was not strictly adhered to. This will, however, be addressed in the new financial year.

internal audit function

Internal auditing is responsible for assisting the organisation in accomplishing its objectives by bringing a systematic and disciplined approach to evaluating and improving the effectiveness of risk management, control and governance processes. The internal audit function ceased in March 2013, but will be implemented again in this financial year.

KEy STrATEGiC riSK

A summary of the identified top strategic risks (this table sets out the key strategic risks and their mitigating actions, in no particular order):

risk description mitigation strategy

Key supplier dependence: As a going concern, the risk that a key supplier’s failure to deliver or perform could severely impact the business’s ability to continue. Some key suppliers account for a significant portion the products procured by Alert Steel. The business has a limited product range based on its current strategy of selling only steel and steel related products. Facility constraints due to cash guarantees given to suppliers.

• Centralised procurement performing demand analysis (fast flowing items)

• Approved facility with supplier and credit insurance allocation

• Regular meetings with suppliers (at least monthly)• Evaluation of alternative suppliers

Solvency: The risk that the business has inadequate reserves to sustain it through the current period of poor market conditions. Poor trading results due to poor market conditions.

• Conversion of shareholder loans into equity• Cost management• Constant communication of financial position with

the board and credit insurers• Monthly monitoring of budget vs actual

Of being listed: The risk that onerous listings requirements and the inflexibility of JSE regulations will hamper the business’ turn-around plan. The business is in a position where quick decisions need to be made and, where necessary, quick access to capital funding. Being listed reduces business agility as these processes take time, which hampers management’s decision making capacity. The JSE offers very limited support and understanding of these issues. Significant listing costs are unavoidable when corporate action is undertaken and this can also hamper recovery.

• Advisors are utilised to ensure JSE requirements are identified, monitored and controlled

• A fulltime company secretary is engaged to inform management of all changes to regulations and to monitor compliance

• Limited meetings with the JSE on concerns and issues where possible

35

risk description mitigation strategy

inability to reach expansion targets of the turn-around strategy: The risk that the current poor market conditions will leave management without sufficient resources to pursue the expansion strategy which is a key part of the turn-around plan.

• Target locations identified and a roll-out plan in place

• Reduction in cost constantly monitored and improved

• Less profitable branches have been converted to Express Stores (smaller, quick-stop shops)

inability to manage change effectively: The risk of customer dissatisfaction due to the changes in our trading environment and personnel structures.

• CSI results monitored and followed through to address customers concerns

• Procedures reviewed to ensure that they are updated with changes in structure and to accommodate the changing environment

36

ANNEXurE 6

iNFOrmATiON rELATiNG TO ThE dirECTOrS

1. dirECTOrS ANd EXECuTiVE mANAGEmENT OF ALErT STEEL ANd iTS mAJOr SuBSidiAriES

director Age Occupation Address Brief curriculum vitae

MM Patel 38 Independent non-executive director

3 Simba RoadCnr Nanyuki RoadSunninghill2191

CA(SA). Mitesh is an audit partner of Nkonki Inc. Mitesh qualified as a chartered accountant in 2002. He has been in the audit and advisory profession for the past 12 years. Mitesh is also the chairperson of the audit committee of WG Wearne Limited.

WP van der Merwe 44 Independent non-executive director

39 First RoadHyde Park2196

CA(SA). Wessel has been involved with Alert Steel since its initial listing and brings a wealth of experience and knowledge to the board.He has served as a member of the AltX Advisory Committee since 2007 and previously headed a corporate advisory business for more than 14 years. His directorships include Imbalie Beauty Limited, Taste Holdings Limited, WG Wearne Limited and Moneyweb Holdings Limited.

BS Mahuma 41 Independent non-executive director

373 Rivonia BoulevardRivonia2128

BCom (Hons). Gwen is CEO of Mahuma Investment Holdings, an investment vehicle with interests in the steel, concrete and the infrastructure sector. Previously, she was the managing director of a supplier of roof bolts to the mining industry. Her current directorships include Capital Africa Steel, WSP Africa, CAS Enviro and Alert Steel Tshwane.

AE Loonat 34 Independent non-executive director

128 Peter RoadBlock 5Grayston Office ParkSandown2196

CA(SA). Afzal is an audit partner at Bismilla CA Inc and has been actively involved in audit and related services for the past 10 years.

37

director Age Occupation Address Brief curriculum vitae

PN Dodson 62 Chief Executive Officer

Corner of Engelbrecht and Lanham Streets East Lynne Pretoria, 0186

Peter Dodson started in retailing in 1974 with Pick n Pay and over the past 38 years has been a director of Pick n Pay and OK Bazaars and was a founder shareholder and director of the Pie City Group. Mr Dodson was more recently employed as the chief executive officer of the Metro Cash & Carry Group. He took over the reign as Chief Executive Officer of Alert Steel in February 2013.

MSI Gani 60 Chief Financial Officer


CA(SA). Mr Gani is a qualified chartered accountant as well as a member of SAICA and IRBA. He was a partner at PWC from 2003, until his retirement in June 2013 and prior to that he had been a partner at MSGM Auditors.

MJ Gani 27 Chief Operating Officer


Javed, a local entrepreneur, started BuildKwik in 2009 with one store in Pretoria West. Within four years he had established seven stores which he subsequently sold to Alert Steel. Prior to starting BuildKwik, Javed worked in the family-owned business, Kit-Kat Cash & Carry.

All directors are South African.

2. ChANGES TO ThE BOArd OF dirECTOrS

The following changes to the board took place during the previous audited financial year and up to the last practicable date:

• N Cresswell (Financial Director) – Resigned with effect from 10 January 2013;

• J du Toit (Chief Executive Officer) – Resigned on 6 February 2013;

• J du Toit (Chief Financial Officer) – Appointed on 20 February 2013;

• J du Toit (Chief Financial Officer) – Resigned on 27 June 2013;

• MW McCulloch (Non-executive Chairman) – Resigned on 9 February 2013;

• PN Dodson (Chief Executive Officer) – Appointed on 11 February 2013;

• A Loonat (Independent Non-executive director) – Appointed on 11 February 2013;

• WF Schalekamp (Non-executive director) – Resigned on 18 December 2012;

• WF Schalekamp (Executive director: Steel Operations) – Appointed on 11 February 2013;

• WF Schalekamp (Executive director: Steel Operations) – Resigned on 27 June 2013;

• MSI Gani (Chief Financial Officer) – Appointed on 30 July 2013;

• MJ Gani (Chief Operating Officer) – Appointed on 10 December 2013; and

No changes are expected to the board as a result of the Claw-back offer.

38

3. dirECTOrS’ ANd ThEir ASSOCiATES’ iNTErESTS iN SECuriTiES ANd iN TrANSACTiONS

None of the directors has a direct interest in Alert Steel shares. The table below sets out the indirect beneficial interests of the directors in Alert Steel shares as at the last practicable date:

Current directors

Beneficially indirect

directorNumber of

sharespercentage

(%)

WP van der Merwe 1 420 011 2.73BS Mahuma 153 572 0.29

24 734 906 47.57

24 888 478 47.86

The interests of all persons who are directors of the company, or were directors of the company during the last 18 months, in the issued ordinary share capital of the company as at the last practicable date are set out below:

Former directors

Beneficially indirect

directorNumber of

sharespercentage

(%)

WF Schalekamp 6 062 562 11.65

M McCulloch 24 734 906 47.56

2 501 454 4.81

27 236 360 52.37

E Hewitt 24 734 906 47.56

O Jevon 336 807 0.65

The company has not been advised of any changes in the above interest of the directors or former directors between the year-end and the date of this circular.

No director has or had any interest, directly or indirectly, in any transaction, which is, or was, material to the business of Alert Steel and which was effected by the company in the current or preceding financial year or during an earlier financial year, which remains in any respect outstanding or underperformed.

4. dirECTOrS’ rEmuNErATiON

Remuneration and benefits paid to directors, all of which were paid by Alert Steel, for the year ended 30 June 2013 were as follows:

Executive directors

personsBasic salary

(r)

performance bonus (r’000)

retrenchment package

(r)Total

(r)

PN Dodson 689 369 – – 689 369J du Toit * 1 895 294 – – 1 895 294N Cresswell ^ 704 416 – – 704 416

Total 3 289 079 – – 3 289 079

Notes:* Resigned on 6 February 2013^ Resigned on 10 January 2013

39

Non-executive directors

persons

directors and attendance

fees (r)

Total (r)

MW McCulloch# 100 000 100 000WP van der Merwe 210 000 210 000MM Patel 165 000 165 000BS Mahuma 115 000 115 000AE Loonat 50 000 50 000

Total 640 000 640 000

Note:# Resigned on 9 February 2013

No options were issued to directors during the year ended 30 June 2013 and the latest practicable date.

No shares were awarded to or purchased by directors under the Alert Steel share Incentive Scheme during the current or previous financial year.

There will be no variation in the remuneration receivable by any of the directors as a direct consequence of the Claw-back offer.

No director has any material beneficial interest, direct or indirect, in the promotion of Alert Steel or in any property acquired by Alert Steel during the three years preceding the date of this circular.

5. dirECTOrS’ SErViCE CONTrACTS

Each of the executive directors has entered into a service contract with Alert Steel, containing such terms that are normal for such contracts and the terms relating to the remuneration of which are set out in paragraph 4 above. There have been no amendments to any of these contracts in the preceding six months.


The directors of the Group, whose names appear on page 7 of this circular, collectively and individually, accept full responsibility for the accuracy of the information given and certify that, to the best of their knowledge and belief, there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that this circular contains all information required by law and the Listings Requirements.

40

ANNEXurE 7

iNFOrmATiON ON ThE SuBSCriBEr

The following information on the Subscriber is disclosed in accordance with the JSE Listings Requirements:

Company name Cannistraro Investments 282 Proprietary Limiteddate of incorporation 12 April 2011place of incorporation Pretoriaregistration number 2011/008136/07director Mr Rayhaan HassimCompany secretary n/aBankers Standard BankAuthorised share capital 1 000 sharesissued share capital R100

41




rEViSEd LiSTiNG pArTiCuLArSprepared in terms of the Listings requirements of the JSE

The definitions set out on page 3 of this circular apply mutatismutandis to these revised listing particulars.

These revised listing particulars are not an invitation to the public to subscribe for ordinary shares in Alert Steel but are issued for the purpose of giving information to shareholders with regard to the company.

These revised listing particulars have been prepared on the assumption that the issue of new ordinary shares referred to in this circular to which these revised listing particulars are attached will have taken place and the conditions precedent will have been fulfilled.

The authorised ordinary share capital of Alert Steel comprises 400 000 000 ordinary shares having no par value and the issued ordinary share capital of the company will comprise of 99 999 636 ordinary shares of no par value. There are 76 000 treasury shares in issue.

The directors, whose names are set out on page 7 of this circular, accept, collectively and individually, full responsibility for the accuracy of the information given herein and certify that, to the best of their knowledge and belief, no facts have been omitted which would make any statement false or misleading, and that they have made all reasonable enquiries to ascertain such facts and that this circular contains all information required by law and the Listings Requirements.

The Designated Adviser and attorneys, whose names are included in this circular, have given and have not, prior to the issue, withdrawn their written consents to the inclusion of their names in the capacities stated and, where applicable, to their reports being included in this circular, including the revised listing particulars.

designated Adviser Attorneys

Date of issue: 17 February 2014

42

TABLE OF CONTENTS

The definitions set out on pages 3 of this circular apply mutatismutandis to the revised listing particulars, the annexures hereto and to following table of contents:

Page

rEViSEd LiSTiNG pArTiCuLArS

1. Incorporation and history 43

2. Nature of business 43

3. Prospects 43

4. Alert Steel Group structure 44

5. Major shareholders 44

6. Directors and executive management 44

7. Share capital 45

8. Historical Financial Information, Proforma Financial Information and dividend policy 46

9. Material changes 48

10. Material commitments, Lease payments and contingent liabilities 49

11. Details of material loans and borrowing powers 49

12. Loans receivable 49

13. Fixed assets acquired during the prior three years 50

14. Fixed assets disposed of during the prior three years 50

15. Ordinary shares issued, other than for cash 50

16. Immovable property owned and leased 50

17. Subsidiary companies 50

18. Material contracts 50

19. Options and preferential rights in respect of ordinary shares 51

20. Litigation statement 51

21. Corporate Governance 51

22. Consents 51

23. Preliminary expenses 51

24. Material inter-company transactions 51

25. Brokerages and commissions 51

26. Directors’ interests in transactions 51

27. Directors’ responsibility statement 51

28. Working capital statement 51

29. Documents available for inspection 52

Annexure A Extracts from Memorandum of Incorporation 53

Annexure B Other directorships held by directors of the Alert Steel Group 56

Annexure C Information relating to leases 59

Annexure d Schedule of subsidiary companies and material inter-company balances 63

43




rEViSEd LiSTiNG pArTiCuLArS

1. iNCOrpOrATiON ANd hiSTOry

Date of incorporation: 3 July 2003.

Wynand Schalekamp, an entrepreneur, established Alert 31 years ago as a small one-man business operating from a garage providing a variety of steel products to the building industry. The Group, through its operating branches/subsidiaries, is currently a distributor of steel and steel-related products.

The Alert Steel Group listed on the JSE AltX on 1 March 2007. Thereafter several acquisitions were made that increased Alert’s national footprint to 16 retail branches/subsidiaries situated in Gauteng, North West, Mpumalanga and Limpopo.

Save as set out in paragraph 7 of the circular, there have been no alterations in the company’s capital during the past three years.

2. NATurE OF BuSiNESS

The Group, through its 52 operations in Gauteng, North West, Limpopo, and Mpumalanga, is a large retailer of prime steel and steel-related products. Approximately 70% of the Group’s revenue is derived from the sale of approximately 6 000 tonnes of steel per month. With an experienced team and a fleet of 200 vehicles, the Group is well equipped to meet the needs of its growing customer base. The Group does not receive any government protection and there is no investment encouragement law affecting the Group’s businesses.

The Group’s footprint is made up as follows:

• 12 Alerts Steel branches;• 10 Alert Express stores; and• 30 Alert Steel containers.

Alert Steel deploys container depots in strategic locations to serve rural areas. The Alert Express containers stock all fast moving steel and steel-related items.

Alert Steel’s customers consist of all sectors of the market such as engineering, fabrication, manufacturing, construction, agricultural, mining and parastatals and rural markets through the Alert Steel containers. Its products and services are distributed mainly through the retail, wholesale and contract sectors of the economy.

There has been no major changes in the business, trading objectives and controlling shareholders during the past five years.

3. prOSpECTS

In ensuring that the return to health of the company is achieved, the following initiatives have been planned for immediate implementation:

• further cost cutting is in progress, including the outsourcing of non-core activities like transport, the renegotiating of computer hardware, software and printer contracts and the reduction of staff at the various operating units;

44

• expansion of Express stores to be implemented;• cash flow improvement through a further cash injection of R30 million by the major shareholder to the

company to meet its operational cash flow requirements;• restructuring of the company’s balance sheet via the conversion of R96 million debt to equity through

the Claw-back offer;• debt will be at R67 375 540 by 30 June 2014; and• the introduction of building materials and hardware and plumbing products into all Alert Steel stores.A major redesign of the 10 main Alert Steel branches is underway to cater for the new product categories and this will contribute to bringing more customers into the stores.

4. ALErT STEEL GrOup STruCTurE

=Dormantcompany

Alert Steel Holdings Limited

Alert Steel Corporate Services (Pty) Ltd

Alert Steel (Pty) Ltd

Alert Steel Polokwane (Pty) Ltd

Born Free Investments 661 (Pty) Ltd

Alert Steel Brits (Pty) Ltd

Xebura Investments (Pty) Ltd

Alert Steel North West (Pty) Ltd

Arrow Creek Investments 177 (Pty) Ltd

Alert Rebar (Pty) Ltd

Carlson Machine Manufacturers (Pty) Ltd

Alert Steel Tshwane (Pty) Ltd

100%

100%

100%

100%

100%

100% 51%

100%

100%

100%

100%

5. mAJOr ShArEhOLdErS

Refer to paragraph 5 of the circular which accompanies these revised listing particulars.

6. dirECTOrS ANd EXECuTiVE mANAGEmENT

6.1 details and experience of directors

Refer to Annexure 6 of the circular which accompanies these revised listing particulars.

6.2 qualification, appointment, remuneration and borrowing powers of directors

6.2.1 Qualification and appointment

The relevant provisions of the Memorandum of Incorporation of Alert Steel relating to the qualification, appointment, remuneration, borrowing powers of directors and any power enabling the director to vote remuneration to themselves or any member of their board is set out in Annexure A.

6.3 remuneration of directors


6.4 directors’ interests in securities


45

6.5 directors’ service contracts


6.6 Other directorships held by directors

Details of other directorships held by the directors of Alert Steel are contained in Annexure B. There is no conflict between each director’s duty to the company and his private interests.

7. ShArE CApiTAL

7.1 Authorised and issued ordinary share capital

The authorised stated capital and issued stated capital of Alert Steel, before and after the Claw-back offer, will be as follows:

Authorised stated capital – before the Claw-back offer rand


issued share capital – before51 999 636 ordinary no par value shares 51 999 636Less: 76 000 treasury shares (76 000)


Authorised share capital – after Claw-back offer rand


issued share capital – after99 999 636 ordinary no par value shares 99 999 636Less: 76 000 treasury shares (76 000)


*TheJSEhasgrantedthelistingoftheClaw-backshares,subsequenttotheClaw-backoffer.

All the authorised and issued ordinary shares are of the same class and rank paripassu in every respect.

There were no changes in the authorised share capital of the company since it listed on the JSE, save for the increase in the authorised share capital from 100 000 000 ordinary shares of no par value to 400 000 000 ordinary shares of no par value on 16 October 2013.

All authorised but unissued shares have been placed under the control of the directors until the next annual general meeting subject to the provisions of the Act and the Listings Requirements.

The company issued the following shares during the previous three years:

• on 10 October 2011, a rights offer was successfully concluded with shareholders, in proportion to their holdings. 1 515 515 151 shares were issued at 3.3 cents per share. All shares were fully paid resulting in a cash inflow of R50 million;

• on 28 June 2012, a further rights offer was concluded with shareholders, in proportion to their holdings. A further 2 321 370 482 shares were issued at 2.8 cents per share. All shares were fully paid resulting in a cash inflow of R65 million;

• on 28 November 2012, a further 1 108 840 297 shares were issued, of which 894 554 583 were issued to Capital Africa Steel and 214 285 714 were issued to Nedbank, in relation to a debt to equity conversion at 2.8 cents per share; and

• on 10 December 2012, the company consolidated its shares at a ratio of 100:1. As a result of such conversion, the issued share capital was reduced by 5 149 379 648 shares.

All the authorised and issued shares are of the same class and rank paripassu to the rights to dividends, profits and capital, including rights on liquidation and distribution of capital assets. There are no preferential rights as to profits or capital or any other rights, including rights on liquidation or distribution of capital assets.

46

A special resolution is required to be passed by shareholders at general meeting for the variation of rights attaching to shares.

No share repurchases have taken place during the three-year period preceding the date of issue of the circular.

The issued ordinary shares of Alert Steel are listed on JSE. No other ordinary shares of Alert Steel are listed on any other stock exchange.

Refer to Annexure 6 of the attached circular for the price history of Alert Steel shares on the JSE.

8. hiSTOriCAL FiNANCiAL iNFOrmATiON, PRO FORMA FiNANCiAL iNFOrmATiON ANd diVidENd pOLiCy

8.1 historical financial information

The audited historical financial information of Alert Steel for the year ended 30 June 2013 is available on the company’s website at http://www.alertsteel.co.za/wp-content/uploads/2013/12/DOC.pdf.

The historical financial information is the responsibility of the directors of Alert Steel.

The definitions commencing on page 3 of the circular have been used in this report.

8.1.1 Financial commentary

The board of directors presented the audited financial results of Alert Steel for the year ended 30 June 2013.

8.1.2 Financial review

The Group incurred a loss for the year of R51.2 million (2012: R73.0 million) and as at 30 June 2013 the Group’s liabilities exceeded its assets by R23.5 million (2012: R2.1 million).

Notwithstanding the loss for the year there have been considerable improvements in the group’s financial performance, cash flows and its financial position:

• in the current year cash utilised in operating activities improved from R48.5 million to R23.0 million; and

• net current assets were R57.2 million compared to net current liabilities of R71.1 million in the previous year.

Revenue decreased by 13.0 % to R716.8 million (2012: R824.6 million). The main reasons for the decrease in revenue were the difficult trading conditions that prevailed during the year, particularly in the Limpopo Province where the company has significant presence. The difficult trading conditions are mainly due to the central government freezing the awarding of public works contracts in that Province and the strike action at the Medupi construction site.

Accordingly, gross profit decreased by 8.82 % to R155 million (2012: R170 million). However, the gross profit percentage increased from 20.6 % to 21.6 %, mainly as a result of an increase in cash sales in the rural areas in both the branches and express stores.

Operating expenses were reduced by 11.2 % to R198.0 million (2012: R223.0 million). This decrease was a result of the restructuring measures implemented by management, including branch closures and retrenchments. Management implemented further restructuring measures and the full impact of this will only be seen in the 2014 financial year.

As a result of the increase in the gross profit margin and the decrease in operating expenses, the net loss from operations reduced to R40.0 million from R48.5 million.

Included in operating expenses are depreciation, amortisation and impairments, which accounted for 2.7% of revenue (2012: 3.4%).

During the year investments held in Aquarella Investments 454 Proprietary Limited, Anchor Park Investments 114 Proprietary Limited and Dual Intake Investments 24 Proprietary Limited were sold to Cannistraro Investments 282 Proprietary Limited.

The directors have assessed the Group’s cash flows requirements for the next 12 months. At present even under the current market conditions, the earnings before tax and depreciation

47

is covering the interest burden. The cash flows indicate that the Group has sufficient cash resources to meet its obligations as they fall due.

8.1.3 Prospects

Refer to paragraph 3 above.

8.1.4 International Financial Reporting Standards and Companies Act Requirements

The audited financial statements for the year ended 30 June 2013 have been prepared in accordance with International Financial Reporting Standards (IFRS) and SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the JSE Listings Requirements and the Companies Act of South Africa. The accounting policies adopted are consistent with those of the annual financial statements for the year ended 30 June 2012.

8.1.5 Corporate governance

The Group subscribes to the principles of, and implements where possible, the recommendations of the King III Code on Corporate Governance.

8.1.6 Dividends

The directors do not recommend the payment of a dividend.

8.1.7 Share capital

On 28 November 2012, 1 108 840 297 shares were issued to Capital Africa Steel (894 554 583 shares) and Nedbank (214 285 714 shares) in a debt to equity conversion at 2.8 cents per share.

On 10 December 2012, the company consolidated its shares at a ratio of 100:1. The issued share capital was reduced with 5 149 376 948 shares due to the impact of the consolidation.

On 14 January 2013, a total of 14 279 shares, which resulted from the fractional shareholders were bought back and cancelled.

The summary of share capital is depicted in paragraph 8 of the circular.

8.1.8 Principal activities

The Group is a retailer of steel, steel related products and building materials and operates principally in South Africa.

No material change has taken place in the nature of the business of Alert Steel.

8.1.9 Post-balance sheet events

Refer to paragraph 22 of the circular.

8.1.10 Plant and equipment

There have been no material additions to plant and equipment during the year and no changes in the policy relating to their use.

8.1.11 Details of material loans receivable

Alert Steel has not advanced any material loans as at 30 June 2013 and until the last practicable date.

Alert Steel has not made any loans to or for the benefit of any director, or manager or any associate or any director or manager of Alert Steel.

8.1.12 Directors’ emoluments

Directors’ emoluments for the year ended 30 June 2013 are summarised in Annexure 6 of the circular.

There are no schemes involving the staff of Alert Steel as at 30 June 2013.

There have been no changes in the nature of the business of Alert Steel and its subsidiaries since 30 June 2013.

48

8.1.13 Material borrowings

Refer to paragraph 11 of the revised listing particulars.

8.1.14 Financial ratios

30 June 2013

Net asset value per share (cents) (45.18)Net tangible asset value per share (cents) (56.20)Loss per share (cents) (106.1)Diluted loss per share (cents) (106.1)Headline loss per share (cents) (132.9)

8.1.15 Group structure

The Group consists of Alert Steel and the following subsidiaries as at 30 June 2013:

issued sharecapital

percentageheld by Group

%Share of net

profits/(losses)

Alert Steel Proprietary Limited R5 389 923 100 (R63 192 798)Alert Steel Brits Proprietary Limited R100 100 –Alert Steel Hazyview Proprietary Limited R100 51 –Alert Steel Corporate Services Proprietary Limited R100 100 (R99)Carlson Machine Manufacturers Proprietary Limited R100 100 (R246 818)Alert Steel Polokwane Proprietary Limited R440 002 100 R1 424 861Alert Steel North West Proprietary Limited R100 100 –Alert Rebar Proprietary Limited R100 100 –Born Free Investments 661 Proprietary Limited R100 100 (R191 926)Xebura Investments Proprietary Limited R100 100 –Arrow Creek Investments 117 Proprietary Limited R100 100 (R180 881)

8.2 Pro forma statement of consolidated comprehensive income and statement of comprehensive financial position reflecting the acquisition

The proforma consolidated statement of comprehensive income and comprehensive statement of financial position, is set out in Annexure 1 of the circular.

The proforma consolidated statement of comprehensive income and statement of financial position should be read in conjunction with the independent reporting accountants’ report thereon as set out in Annexure 2 of the circular.

8.3 dividend policy

There is no arrangement under which future dividends will be waived or agreed to be waived. There are no fixed dates on which entitlement to dividends arise. Unclaimed dividends shall be held by Alert Steel in trust until claimed, provided that dividends unclaimed for a period of three years may be forfeited for the benefit of Alert Steel, subject to the laws of prescription.

9. mATEriAL ChANGES


49

10. mATEriAL COmmiTmENTS, LEASE pAymENTS ANd CONTiNGENT LiABiLiTiES

10.1 material commitments

At the last practical date, Alert Steel had no material capital commitments relating to any material capital expenditure.

10.2 Leases

Refer to Annexure C.

10.3 Contingent liabilities

At the last practical date, Alert Steel had no contingent liabilities.

11. dETAiLS OF mATEriAL LOANS ANd BOrrOWiNG pOWErS

11.1 details of material loans as at 30 June 2013

Total (r)

Loans and borrowingsSouthern Palace Investments 265 Proprietary Limited 127 004 208Cannistraro Investments 282 Proprietary Limited 9 805 496

Total 136 809 704

Total (r)

Non-current liabilities 136 809 704Current liabilities –

Total 136 809 704

• During February 2013, Nedbank Limited assigned the rights and obligations under its Banking Facilities, Property Loan Agreement and Securities to Southern Palace Investments 265 Proprietary Limited.

• Loans and borrowings from Cannistraro Investments 282 Proprietary Limited and Southern Palace Investments 265 Proprietary Limited bear interest at the prime lending rate and are repayable on 31 October 2014, using existing cash resources. Should the Group not be able to repay the loan on 31 October 2014, the loan can be repaid over a period of nine months thereafter. Loans are secured with sessions over all assets.

• The loans arose from the funding of assets.• There are no conversion or redemption rights on the above loans.

11.2 In terms of the Memorandum of Incorporation of the company, the borrowing powers of the directors shall be unlimited.

11.3 The borrowing powers of Alert Steel have not been exceeded during the three years preceding the date of this circular.

11.4 The borrowing powers of the directors are set out in Annexure A.

11.5 No loan capital is outstanding.

11.6 The inter-company balances within the Group are included in Annexure D.

12. LOANS rECEiVABLE

12.1 Alert Steel has not advanced any material loans as at 30 June 2013 and until the last practicable date.

12.2 Alert Steel has not made any loans to or for the benefit of any director, or manager or any associate or any director or manager of Alert Steel.

50

13. FiXEd ASSETS ACquirEd duriNG ThE priOr ThrEE yEArS

13.1 Alert Steel has made no material acquisitions during the prior three years.

13.2 Details of Alert Steel and its subsidiaries are set out in paragraph 17 below.

14. FiXEd ASSETS diSpOSEd OF duriNG ThE priOr ThrEE yEArS

Alert Steel has not disposed of any material fixed assets or immovable property during the prior three years.

15. OrdiNAry ShArES iSSuEd, OThEr ThAN FOr CASh

No ordinary shares have been issued or agreed to be issued by the company or any of its subsidiaries since incorporation, other than for cash.

16. priNCipAL immOVABLE prOpErTy OWNEd ANd LEASEd

16.1 Alert Steel does not own or lease any investment property.

17. SuBSidiAry COmpANiES

17.1 Details of subsidiary companies for Alert Steel is detailed in Annexure D.

17.2 There is no government protection or any investment encouragement law affecting the Alert Steel Group business.

17.3 No material changes have taken place in the nature of the business of Alert Steel and its subsidiaries during the past five years.

18. mATEriAL CONTrACTS

18.1 Alert Steel has not, other than as disclosed in paragraphs 11 above and 18.2 below, have entered into any material contracts, other than in the ordinary course of business, any time either verbally or in writing, which contain an obligation or settlement that is material to either Alert Steel or any of its subsidiaries at the date of the circular and revised listing particulars or during the three-year period preceding the date of the circular and revised listing particulars.

18.2 No other material contracts have been entered into (either verbally or in writing) by Alert Steel and/or its subsidiaries, other than in the ordinary course of business, during the two years preceding the last practicable date save for:

• The Subscription Agreement;

• Alert Steel Tshwane, a subsidiary of Alert Steel Holdings, has entered into a three-year supply contract with Transnet from 1 July 2012. The contract entails the supply of Carbon steel to Transnet’s Koedoespoort and Germiston plants for a three-year period. The total contract value is estimated to be at least R90 000 000 over the contract period.

18.3 Alert Steel is not subject to any management or royalty agreements or payments of a similar nature. The company has not paid any material technical or secretarial fees during the period of two years preceding the issue of this revised listings particulars.

18.4 Alert Steel has not entered into any promoters’ agreements with any director or promoter during the three years preceding the date of this revised listings particulars.

18.5 Alert Steel has not paid any commission in respect of underwriting during the period of three years preceding the issue of this revised listings particulars.

18.6 No sums have been paid or agreed to be paid, within three years preceding the date of this revised listings particulars, to any director or to any company in which he is beneficially interested, directly or indirectly, or of which he is a director (“the associate company”) or to any partnership, syndicate or other association of which he is a member (“the associate entity”), in cash, securities or otherwise, by any person, either to induce him to become, or to qualify him as a director or otherwise for services rendered by him or by the associate company or the associate entity in connection with the promotion or formation of Alert Steel.

51

19. OpTiONS ANd prEFErENTiAL riGhTS iN rESpECT OF OrdiNAry ShArES

There are no contracts or arrangements, either actual or proposed, whereby any option or preferential right of any kind has been or will be given to any person to subscribe for any ordinary shares in the company or its subsidiaries.

20. LiTiGATiON STATEmENT

Refer to paragraph 17 of the circular for the particulars of any litigation.

21. COrpOrATE GOVErNACE

The company’s corporate governance report is set out in Annexure 5 of the circular.

22. CONSENTS

Each of the company’s advisers and reporting accountants have consented in writing to act in the capacities stated and to their names appearing in this circular and have not withdrawn their consent prior to the publication of this circular.

23. prELimiNAry EXpENSES

23.1 All of the estimated expenses will be written-off against the stated capital account to the extent permissible by the Act.

23.2 No commissions have been paid in the past three years to any person for subscribing or agreeing to subscribe, or procuring or agreeing to procure subscriptions for any of the securities of the applicant.

24. mATEriAL iNTEr-COmpANy TrANSACTiONS

Other than disclosed in Annexure D, there are no material inter-company balances in the Alert Steel Group.

25. BrOKErAGES ANd COmmiSSiONS

Since incorporation, no commission has been paid or is payable in respect of underwriting.

No commissions, discounts, brokerages or other special terms have been granted during the three years preceding the date of this document in connection with the issue of any securities or stock of Alert Steel, where this has not been disclosed in any audited annual financial statement.

26. dirECTOrS’ iNTErESTS iN TrANSACTiONS

Refer to Annexure 6 of the circular.


The directors of the Alert Steel group, whose names are given in Annexure 6 to the circular, collectively and individually, accept full responsibility for the accuracy of the information given and certify that to the best of their knowledge and belief there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that the circular contains all information required by law and Listings Requirements.

28. WOrKiNG CApiTAL STATEmENT

The directors of the Alert Group, having considered the effect of the Claw-back offer, consider that there are reasonable grounds for believing that:

• Alert and its subsidiaries will be able, in the ordinary course of business, to pay its debts for a period of 12 months after the date of the JSE approval of this circular;

52

• the assets of Alert and its subsidiaries will exceed its liabilities of the group for a period of 12 months after the date of the JSE approval of this circular. For this purpose, the assets and liabilities have been recognised and measured in accordance with the accounting policies used in the latest audited Alert financial statements;

• the ordinary share capital and reserves of Alert and its subsidiaries shall be adequate for ordinary business purposes for a period of 12 months after the date of the JSE approval of this circular; and

• the working capital available to Alert and its subsidiaries is sufficient for the Group’s present requirements, which is at least the next 12 months from the date of approval of this circular.

The Designated Adviser has provided the JSE with a sign-off on the working capital statement in compliance with the Listings Requirements.

29. dOCumENTS AVAiLABLE FOr iNSpECTiON


Signed at Pretoria on 17 February 2014 on behalf of all the directors in terms of a directors’ resolution by:

pN dodsonInhiscapacityasCEO

53

ANNEXurE A

EXTrACTS FrOm ThE mEmOrANdum OF iNCOrpOrATiON

1. Extracts from the memorandum of incorporation of Alert Steel are set out below.

“dirECTOrS – NumBEr, quALiFiCATiON ANd rEmuNErATiON

89. The number of directors shall be not less than four.

90. A director shall not be obliged to hold any qualification shares.

91. The remuneration of the directors for their services as such shall be determined from time to time by a general meeting.

92. The directors shall be paid all travelling, subsistence, and other expenses properly incurred by them in the execution of their duties in or about the business of the company and which are authorised or ratified by a disinterested quorum of the directors, which may be in addition to or in substitution for any other remuneration.”

“BOrrOWiNG pOWErS

95. The directors may exercise all the powers of the company to borrow money and to mortgage or encumber its undertaking, property or any part thereof and to issue debentures or debenture stock, whether secured or unsecured, and other securities (with such special privileges, if any, as to allotment of shares or stock, attending and voting at general meetings, appointment of directors or otherwise as may be sanctioned by a general meeting) whether outright or as security for any debt, liability or obligation of the Group or of any third party.

96. For the purpose of the provisions of article 99, the borrowing powers of the directors shall be unlimited.

97. Subject to Article 105, the directors may give pensions, gratuities and allowances to and make payments for or towards the insurance of any employees or ex-employees, including directors or ex-directors, of the Group, or of any company which is or was a subsidiary of the Group or is or was in any way allied to or associated with it or any such subsidiary, and the wives, widows, families and dependants of such persons and may establish and maintain any non-contributory pension, superannuation, provident and benefit funds for the benefit of any such persons and make contributions to any such funds and pay premiums for the purchase of any such gratuity, pension, allowance, life assurance or other benefit.”

“diSquALiFiCATiON ANd priViLEGES OF dirECTOrS

102. The office of a director shall ipsofactobe terminated and vacated if the director:

• ceases to be a director by virtue of any of the provisions of the Act, or is disqualified from acting as, or becomes prohibited from being a director by reason of any order made under the Act; or

• files a petition for the surrender of his estate, or an application for an administration order, or if his estate is sequestrated, or if he commits an act of insolvency as defined in the insolvency law for the time being in force or if he makes any arrangement, compromise or composition with his creditors generally; or

• is found to be lunatic or becomes of unsound mind; or• is removed by a resolution of the company in terms of section 220 of the Act with effect from the date

of, or such later date as is provided for in, such resolution; or• resigns his office by notice in writing to the company with effect from the date of, or such later date

as is provided for in, such notice; or• absents himself from meetings of directors for six consecutive months without special leave of

absence from the other directors who resolve that his office shall be vacated, provided that this provision shall not apply to a director who is represented by an alternate who does not so absent himself; or

• becomes retired in terms of Articles 117 to 124 inclusive.

54

103. No director or prospective director shall be disqualified by his office from contracting with the company either as vendor, purchaser, lender, underwriter, guarantor for commission or profit on any shares or securities or liability of the company, or of any Company in which the company may be interested, or in any other manner whatsoever. No such contract or arrangement entered into by or on behalf of the company in which any director shall be in any way interested, nor any contract or agreement entered into with any company or partnership of or in which any director shall be a member, director or partner or otherwise interested, shall be or be liable to be invalidated or voided by any such reason or by reason of the board of directors of the company not constituting an independent executive or disinterested quorum.

104. Any director so contracting or being so interested or acquiring any benefit under any contract or arrangement made or entered into by or on behalf of any person, company or partnership in relation to the affairs of the company shall not be liable to account to the company for any profits or benefits realised by or under such contract or arrangement by reason of such director holding that office or by reason of the fiduciary relationship thereby established.

105. Any director so interested or acquiring any such benefits shall not be entitled to vote at any board meeting or otherwise in relation to such contract.

106. Notwithstanding the aforegoing, any director so interested or acquiring any such benefit shall disclose the fact of his possessing any interest, whether as director or member or otherwise, whether or not it appears on the face of the contract or arrangement, in accordance with the provisions of sections 234 and 240 of the Act. Subject to the provisions of section 234(3) of the Act and the Listings Requirements of the JSE, a general notice in writing given to the directors by a director to the effect that he is a member of a specified company or firm and is to be regarded as interested in any contract which may, after the date of the notice, be made with that Group or firm, shall be deemed to be a sufficient disclosure in relation to any contract or proposed contract so made or to be made.

107. Without detracting from the generality of Articles 110 to 113 inclusive, a director (and, in the case of Article 113 any firm of which he is a member) may, subject to the provisions of the Act:

• be employed by or hold any other office or place of profit in the company, or any holding or subsidiary company of the company or any company controlled by the company, other than that of auditor, in conjunction with his directorship, and upon such terms as to appointment, and subject to the provisions of section 225 of the Act, remuneration and tenure of office and otherwise as a disinterested quorum of directors may determine;

• act in a professional capacity for the company, and he or such firm shall be entitled to remuneration for those professional services as if he were not a director, provided that nothing herein contained shall authorise a director or any firm of which he is a member, to act as auditor of the company or of any holding or subsidiary company of the company;

• be or become a director of any subsidiary or other company promoted by the company or in which it may be interested as vendor, shareholder or otherwise;

• represent the company in the management of any business operation or concern in which the company may be interested as a partner or otherwise.

108. Notwithstanding any such interest, any such director may be counted in the quorum present at any meeting at which any such matter is being considered and vote thereon as though he had no interest therein, and no such director shall be accountable to the company for any remuneration, profit, gain or other benefit received in any capacity as aforesaid, subject to the Listings Requirements of the JSE.

109. Any voting power conferred by the shares in a company referred to in Article 114.2, or exercisable by the directors as directors of such company, may be exercised by the directors in such manner in all respects as they think fit, including the exercise thereof in favour of any resolution appointing themselves or any of them directors or other officers of such company. Any director may vote in favour of the exercise of such voting rights in such manner, notwithstanding that he may be, or about to be, appointed a director or other officer of such company and as such, or in any other manner, is or may become interested in the exercise of such voting rights in the manner aforesaid, save that any resolution relating to the payment of remuneration to the directors or officers of such company shall be voted on by a disinterested quorum of directors.”

55

2. rELEVANT prOViSiONS OF ThE mEmOrANdum OF iNCOrpOrATiON OF ThE COmpANy’S WhOLLy-OWNEd SuBSidiAriES prOVidiNG FOr ThE BOrrOWiNG pOWErS OF ThE dirECTOrS OF ThE SuBSidiAriES

An extract from the Memorandum of Incorporation of Alert’s wholly-owned subsidiaries are set out below:

“BOrrOWiNG pOWErS OF ThE dirECTOrS OF WhOLLy-OWNEd SuBSidiAriES

62. Subject to Article 63, the directors may:

62.1 raise or borrow such sums of money without limitation for the purposes of the company as they think fit; and

62.2 secure the payment or repayment of any sums at money borrowed or raised in terms of the preceding Article or the payment of any debt, liability or obligation whatsoever of the company or of a third party, in such manner and upon such terms and conditions in all respects as they think fit, and in particular by the execution of bonds or the issue of debentures or debenture stock of the company charged upon all or any part of the property and rights of the company, both present and future.

63. For so long as the company has listed holding company, Article 62 is subject to the provision that the total amount owing by the company in respect of monies so raised, borrowed or secured shall not exceed the amount authorised by its listed holding company.”

56

ANNEXurE B

OThEr dirECTOrShipS hELd By dirECTOrS OF ALErT STEEL GrOup

director directorships/memberships

MM Patel Current Nature of the businessAlert Steel Holdings Limited Steel, Steel Related and Hardware ProductsImbalie Beauty Cosmetic and Franchise BusinessNkonki Institute of Training TrainingNkonki Praxley Corporate Finance Corporate FinanceStratequity Empowerment Investments 3 Investment CompanyTahin Properties Investment CompanyTiya Property Development Property Holdings CompanyVerimark Holdings Product InnovationWG Wearne Aggregate and Ready-mix Business

W van der Merwe Current Nature of the businessDirectorships 39 1st Road Hyde Park Property Holding Company

Alert Steel Holdings Limited Steel, Steel Related and Hardware ProductsCannistraro Investments 219 Investment Holding CompanyImbalie Beauty Cosmetic and Franchise BusinessJR 158 Investments Investment Holding CompanyMoneyweb Holdings Financial Publication BusinessSA Madiba Investments Investment CompanyTaste Holdings Food and Jewelry Franchise BusinessWG Wearne Aggregate and Ready-mix Business

Memberships MMW Management Services Professional advisory business

BS Mahuma Current Nature of the businessDirectorships 3Q Mahuma Concrete Joint Venture (Pty) Ltd Supply of Ready-mix Concrete

3Q Mahuma Crushing (Pty) Ltd Supply of AggregatesCAS Enviro (Pty) Ltd Trading in Ferrous and Non-ferrous

Scrap MetalKrost Shelving (Pty) Ltd Manufacturers of Shelving and RackingMahuma Investment Holding (Pty)Ltd Investment CompanySYMO Steel Trading in Steel and Steel Products3Q Concrete Holdings (Pty) Ltd Supply of Ready-mix ConcreteAE Software Solutions (Pty) Ltd Supplier of IT SolutionsAlert Steel Holdings Limited Steel, Steel Related and Hardware ProductsAlert Steel Tshwane (Pty) Ltd Processing and Supply of SteelBalmoral Crushers (Pty) Ltd Supply of AggregatesBBD Steel Suppliers (Pty) Ltd Investment CompanyCapital Africa Steel (Pty) Ltd Investment CompanyDywidag-Systems International (Pty) Ltd Supplier of Mining Roof SupportLephalale Aggregates (Pty) Ltd Supplier of AggregatesLilibo Fishing Company (Pty) Ltd FishingLilibo Minerals and Energy (Pty) Ltd Supplies Energy SolutionsMIH Steel (Pty) Ltd Investment CompanyReyajala Women’s Consortium Holdings (Pty) Ltd

Investment Company

Mecca Steel (Pty) Ltd t/a 3Q Motlokwa Concrete

Steel Trading

WSP Group Africa (Pty) Ltd Engineering Services

57

director directorships/memberships

Memberships Afrobase Investments CC Investment CompanyBara Investments CC Property Rentals

Trustee Marentia 0026 CC Property Rentals and Project Management

AE Loonat Current Nature of the businessDirectorships Alert Steel Holdings Limited

Ahmed Bismilla Consultants Accounting Tax and Secretarial Services CC

Steel, Steel Related and Hardware ProductsSecretarial Services

Memberships Ahmed Bismilla Consultants Accounting Tax and Secretarial Services CC

Secretarial Services

Picrobyte CC Restructuring ServicesIncorporator Ahmed Bismilla Consultants Accounting

Tax and Secretarial Services CCSecretarial Services

PN Dodson Current Nature of the businessDirectorships Windy Bay Properties 101 Property

Alert Steel Tshwane (Pty) Ltd Steel, Steel Related and Hardware ProductsBlue Cloud Investments 86 PropertyAlert Steel (Pty) Ltd Steel, Steel Related and Hardware ProductsAlert Steel Corporate Services (Pty) Ltd Steel, Steel Related and Hardware ProductsAlert Steel Holdings Limited Steel, Steel Related and Hardware ProductsAlert Steel North West (Pty) Ltd Steel, Steel Related and Hardware ProductsAlert Steel Polokwane (Pty) Ltd Steel, Steel Related and Hardware ProductsAnchor Park Investments 114 (Pty) Ltd PropertyAquarella Investments 454 (Pty) Ltd PropertyBorn Free Investments 661 (Pty) Ltd PropertyMetcash Trading Wholesale & Retail TradeSumer Properties Private households, exterritorial

organisations, representatives of foreign governments

Tralee Court Private households, exterritorial organisations, representatives of foreign governments

Uniron Property Investments Investment in movable and immovable property

Rapid Dawn 1228 Property

MSI Gani Current Nature of the businessDirectorships Alert Steel (Pty) Ltd Steel, Steel Related and Hardware Products

Alert Steel Corporate Services (Pty) Ltd Steel, Steel Related and Hardware ProductsAlert Steel Holdings Limited Steel, Steel Related and Hardware ProductsAlert Steel Tshwane (Pty) Ltd Steel, Steel Related and Hardware ProductsBorn Free Investment 661 (Pty) Ltd Investment CompanyCarlson Machine Manufacturers (Pty) Ltd Manufacture of steel and steel related

productsCeltic Manor Home Owners Association Home owners associationPricewaterhouseCoopers Africa JV Auditing Firm

MJ Gani Current Nature of the businessDirector BuildKwik Trading (Pty) Ltd Wholesale & Retail Trade

Kwik Property Holdings (Pty) Ltd Wholesale & Retail Trade

58

None of the directors:

1. were involved in any bankruptcies, insolvencies or individual voluntary compromise arrangements;

2. were involved in any business rescue plans and/or resolution proposed by any entity to commence business rescue proceedings, application having been made for any entity to begin business rescue proceedings, notices having been delivered in terms of section 129(7) of the Act, receiverships, compulsory liquidations, creditors’ voluntary liquidations, administrations, company voluntary arrangements or any compromise or arrangement with creditors generally or any class of creditors of any company; where such person is or was a director, with an executive function within such company at the time of, or within the 12 months preceding, any such event(s);

3. were involved in any compulsory liquidation, administration or partnership, or was a partner at the time of or within the 12 months preceding such event(s);

4. received any asset(s) of such person or of a partnership of which the person is or was a partner at the time of, or within the 12 months preceding, such event;

5. were criticised publicly by statutory or regulatory authorities, including recognised professional bodies, nor were they ever been disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of any company;

6. committed acts of dishonesty;

7. were removal from an office of trust, on the grounds of misconduct and involving dishonesty; and

8. were declared delinquent or placed under probation in terms of section 162 of the Act and/or section 47 of the Close Corporations Act, 1984 (Act No. 69 of 1984), or disqualified to act as a director in terms of section 219 of the Companies Act, 1973 (Act No. 61 of 1973).

59

ANNEXurE C

iNFOrmATiON rELATiNG TO LEASES

The company’s lease commitments as at 30 June 2013 are set out below:

Landlord Locationpropertydescription

unexpiredperiod ofthe lease

monthlyrent

(excl VAT)

Escalationper

annum % m²

CH Gouws Trust 21 van Deventer Street, Brits

Retail shop 31 Mar 16 14 784.48 10

400

Paul Kruger Street390 Investments(Pty) Ltd

21 van Deventer Street, Brits

Retail shop 31 Mar 15 44 000.00 7

Ultimite IncomeInvestments

Erf 690 Van deventer Straat Brits

Retail shop 30 Jun 15 12 695.00 8

Business PartnersLimited

Ptn 63 of 297 Leeu Valley Dirk Winterbach Street Leeuvalley Burgersfort

Retail shop 30 Nov 13 39 877.97 10 480

IPS Investments(Pty) Ltd

Shop 0011 Lenchen Centre 9 Jakaranda Street Hennopspark

Retail shop 30 Jun 16 96 000.00 9 1 412

East & WestInvestments (Pty) Ltd

17 Kobalt Street Polokwane

Retail shop 31 Oct 17 196 947.53 8 2 173

Schallies Beleggings

Erf 227, East Lynn Pretoria

Admin/Retail n/a 238 001.00

n/a 1.8642 hAquarella Investments

Erf 227, East Lynn Pretoria

Admin/Retail n/a 400 000.00

LimpopoEconomic Dev. Ent

Factory Units at Stand 2,3 & 6 Thohoyandou Industrial Area

Retail shop 31 Oct 14 20 124.72 10 1 890

V & W Trust Portion 10 Erf 1446 Mopane Extension 6

Express 31 Aug 16 27 143.75 8 900

Erf 2043 Tzaneen (Pty) Ltd

Erf 2043 Tzaneen (Pty) Ltd 18 Kudu street

Retail shop 30 Jun 16 32 120.00 7 750

Zeranza 26 (Pty) Ltd

Portion 1 van Stand 2627 Extension 16

Retail shop 1 Dec 18 129 246.45 8 5 079

Bitflow Investments 191(Pty) Ltd

Rietvlei 13 Lephalale

Warehouse 31 Aug 14 96 216.56 8 2 728

60



monthlyrent

(excl VAT)

Escalationper

annum % m²

Hentiq 2165 Erf 222 Areus Express 31 Aug 14 30 484.74 0 3 980

CM Grobbelaar Portion 4 Erf 1777 Lichtenburg

Express 31 Dec 13 9 443.23 0 1 487

Amore-Rhyn Beleggings

23 Waterfall Ave Rustenburg

Retail shop 30 Jun 17 63 640.00 10 3 200

Phineas Shabangu

Contract with Burgersfort – month to month

Stand/Container

n/a 4 000.00 n/a 350

Raphiri Tokotse Victor

Stand 6 GA Nchabeleng Mashung, Limpopo

Stand/Container

30 Sep 14 4 500.00 InflationIndex

300

Mafo Driving School

Stand 001 Motong Section Bakenberg 0611

Stand/Container

30 Apr 14 2 500.00 InflationIndex

600

Corne Strydom Unit 1 Prozel Gebou Erf 1347 Sutter Road Bela Bela

Express 31 May 16 15 000.00 10 250

Daniel Mmatlow Raletjewa

276 Bochum Ext 3 Stand/Container

31 Mar 14 5 000.00 InflationIndex

300

Bungeni TraditionalAffairs/Mdaka

Stand 28 Bungeni Limpopo

Stand/ Container

31 May 14 3 000.00 InflationIndex

400

Masindi Supermarket

Erf 121 1289 Machado Street Dzanani

Stand/Container

31 Dec 13 5 000.00 InflationIndex

400

MK Mohlala Stand 398 Ga Mashishi Burgersfort 1150

Stand/Container

31 Jul 14 6 000.00 InflationIndex

300

Clear Moon Trading & Projects CC

Stand BA65 Giyani Limpopo

Stand/Container


300

Lodestone Investments

Shop 2 Town Talk Cnr Voortrekker and Van Riebeeck Streets Groblersdal

Express 31 Jan 16 10 000.00 10 401

Betty Installation & Maintenance

Stand 9 Jane Furse Main Road, Limpopo

Stand/Container


400

Matsea Alfheli Stand next to Khubvi Filling station

Stand/Container

30 Nov 14 4 050.00 InflationIndex

300

Kilofield Properties (Pty) Ltd

Stand 4 Kwagga C Express n/a 2% of MTbefore VAT

0 216

Michael Nkosi Stand 6678 Ext 6 Kwa Guqa, Witbank

Stand/Container

31 May 14 2 000.00 InflationIndex

400

61



monthlyrent

(excl VAT)

Escalationper

annum % m²

Ida Tshensile Magamba

Stand 904 Mandela VillageKwamhlanga

Stand/Container


630

Komana Modupi William

Shop 5 Stand 61 ba Lebowakgomo

Express 31 Dec 13 16 845.00 10 70

Modise Josiah Matshe

2011 Cross Road Ledig

Stand/Container

31 Oct 14 3 000.00 Inflation Index 400

Augusto Carlos Honwana

393 Thabeng Section Lerome Moruleng

Stand/Container


Shouneez and Junaid Mally

Stand 41/43 James Watt Crescent Industrial Site Mafikeng

Express 31 Aug 14 10 395.00 10 231

MH Mangani T/A Gandlanani Welding & Glazing

Stand 778 Shitlhelani Malamulele

Stand/Container


Oceanside Trading Site 1197 Syferkuil 992LS Gathoka Mankweng

Express 31 Aug 14 5 000.00 Inflation Index 1 020

Michael Amos Katale Molai

Stand 2823 Neuhalle Section Marapyane

Stand/Container

31 May 14 2 000.00 Inflation Index 400

Matsheyas Transport

Stand 63 Marite Limpopo

Stand/Container

31 Jul 14 5 000.00 Inflation Index 400

SNK Cleaning Enterprise CC

Stand 500 N1 North Botlokwa Matoks

Stand/Container

31 Aug 15 5 000.00 Inflation Index 300

Julie Mosam 10 Neptune Street Modimolle

Express 31 Dec 15 5 000.00 10 286

Mathlo Mosibudi Daphney Matshidiso

Stand 1220 Turkey Village Limpopo

Stand/Container

31 Dec 13 3 800.00 Inflation Index 800

Ma-Elly’s CC Stand 1109 Section F Ekangala

Stand/Container

30 Nov 13 3 000.00 Inflation Index 300

Tebogo Restaurant Stand 1907 Pankop Trust Mpumalanga

Stand/Container

30 Nov 13 2 000.00 Inflation Index 400

Raditloo Handelaars CC

390 Modimeleng Village Modjadi

Stand/Container

30 Jun 14 5 500.00 Inflation Index 400

Richardt Mogomani Stand 31 Punda Maria Road Ximixoni Village Saselamani

Stand/Container

28 Feb 14 4 510.00 Inflation Index 300

Jaca Properties BK Winkel nr 36 Euphorbia Park Winkelsentrum

Express 31 Jan 15 6 300.00 8 180

62



monthlyrent

(excl VAT)

Escalationper

annum % m²

Johannes Abram van Wyk

4C Harry Townsend Street Musina

Stand/Container

31 Mar 14 5 500.00 10 440

Hlongwane Makasani Daniel T/A Hlongwane General Dealer

Stand 11 Roerfontein Limpopo

Stand/Container

31 Mar 14 3 100.00 Inflation Index 400

Masekane Bar Lounge

Stand 73 K.T Sekororo Head Kraal Naphuno Limpopo

Stand/Container

30 Apr 14 3 289.47 Inflation Index 950

Nomvula Evelina Masilela

601 Siyabuswa Stand/Container

28 Feb 14 4 500.00 Inflation Index 300

Motempane Johannes Phala

Z1D 283 Umgababa New Stand Tafelkop

Stand/Container

31 May 14 2 200.00 Inflation Index 600

God’s Pride Business Centre

Stand 189 Tweefontein A (Phumala)

Stand/Container

31 Jan 14 5 000.00 Inflation Index 300

Nkhele Motor Spares

Stand 2 Moletlane Zebedelia

Stand/Container

30 Sep 14 7 000.00 Inflation Index 400

Infoteam Investements 2 CC

Erf 59 and 61 Church Street Zeerust

Express 31 Oct 14 25 000.00 n/a 360

63

ANNEXurE d

SChEduLE OF SuBSidiAry COmpANiES ANd mATEriAL iNTEr-COmpANy BALANCES

1. Alert Steel’s subsidiaries:

Name

date of incorpo-ration

place of incorpo-ration

registration number

Nature of business

date of becoming a subsidiary

issued ordinary share capital

% holding

Alert Steel (Pty) Ltd

15/09/1988 Pretoria 1988/005284/07 Manufacture and sale of steel and steel products

15/09/1988 330 100

Alert Steel Brits (Pty) Ltd

08/10/1998 Pretoria 1998/020011/07 To act as an investment company for principal use only

08/10/1998 100 100

Alert Steel Hazyview (Pty) Ltd

17/05/2002 Pretoria 2002/011674/07 General trading in all aspects

17/05/2002 100 100

Alert Steel Corporate Services (Pty) Ltd


04/04/2007 100 100

Carlson Machine Manufacturers(Pty) Ltd


06/05/2008 100 100

Alert Steel Polokwane (Pty) Ltd

07/04/1997 Pretoria 1997/004936/07 Property development in all its aspects

07/04/1997 4 100

Alert Steel North West (Pty) Ltd

04/02/2011 Pretoria 2011/000561/07 Suppliers of steel, hardware, building material, plumbing services and all allied thereto

04/02/2011 100 100

Alert Rebar (Pty) Ltd


10/06/2008 100 100

Born Free Investments 661 (Pty) Ltd

04/06/2008 Pretoria 2008/013935/07 Investment in movable and immovable property as principal

04/06/2008 100 100

Xebura Investments (Pty) Ltd


18/07/2008 100 100

Arrow Creek Investments 117 (Pty) Ltd


30/05/2008 100 100

Note:

None of the above subsidiaries are listed.

64

2. Material intercompany balances between Alert Steel and its subsidiaries:

Subsidiary name30 June 2013

r

Alert Steel Proprietary Limited 157 451 785

The above loan bears no interest, has no fixed terms of repayment and is unsecured.

3. There were no other material inter-company financial and other transactions that occurred during the year ended 30 June 2013.

CIRCULAR TO ALERT STEEL SHAREHOLDERS - jse.co.za · Claw-back Offer may be affected by the laws of...

Documents

Transcript of CIRCULAR TO ALERT STEEL SHAREHOLDERS - jse.co.za · Claw-back Offer may be affected by the laws of...