MINUTES OF THE ANNUAL GENERAL MEETING HELD AT KLEINKAAP BOUTIQUE HOTEL, 87 JIM VAN DER MERWE STREET, CENTURION, ON MONDAY 31 OCTOBER 2016 AT 14:00.

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1 MINUTES OF THE ANNUAL GENERAL MEETING HELD AT KLEINKAAP BOUTIQUE HOTEL, 87 JIM VAN DER MERWE STREET, CENTURION, ON MONDAY 31 OCTOBER 2016 AT 14:00. ATTENDANCE Directors present: Secretariat: Members: Apologies: By invitation: Minutes: TI Mvusi (Chairperson), BP Botha, AM Mukhuba, LM De Villiers, W Van Heerden, JSJ Nel, TD O Connell and PD Wolmarans PDF van Dyk 65 members present at the meeting and 22 by way of proxy M Piater and V Sampula by prior arrangement M Meyer from PwC EC van der Merwe 1. OPENING AND WELCOME The Chairman welcomed all members present to the 2016 Annual General Meeting (AGM). He confirmed that the meeting was convened on authority of the Iemas Board and that he will proceed with the meeting as per the agenda. The agenda as well as the notice of the meeting was distributed prior to the meeting to all members of the Co-operative as prescribed by Co-operatives Act QUORUM The Secretariat confirmed to the Chairperson that the minimum number of 50 members required by the Iemas Constitution, was present at the meeting to form a quorum and that the meeting was thus properly constituted VOTING PROCEDURES The Chairman announced that, except for the election of a Non-Executive Director, voting at the AGM will take place by a show of hands. However, members were reminded of their right to cast their votes by way of ballot paper if so requested by five or more members present at the meeting. No such request was made. Representatives of the Internal Audit Department were appointed by the Chairperson to deal with the counting of votes.

2 2. NOTICE OF MEETING AND AGENDA The notice of the 2016 AGM, including the matters to be discussed and decisions to be taken, was distributed to members within the prescribed timeframes as required by the Co-operative s Act and the Iemas Constitution. It was confirmed that the Board did not receive any matters from members which needed to be tabled for consideration and discussion by the meeting. The agenda was accepted as presented in the notice to members. 3. PREVIOUS MINUTES An overview of the minutes of the AGM held in 2015 was presented to the meeting. An extract of the draft minutes was communicated to members via Iemas website and other social media platforms after the conclusion of the meeting in The draft minutes of the meeting was tabled and considered by the Iemas Board and was recommended for final approval to the AGM. The Chairperson confirmed that he has inspected the minutes and was satisfied that it accurately reflects the processes, matters discussed and decisions taken at the 2015 AGM. The minutes of the AGM held on 29 October 2015 were approved without any amendments. 4. ELECTION OF A NON-EXECUTIVE DIRECTOR In the absence of the Human Resources Chairperson, Ms Retha Piater, the Chairman requested the Board Secretariat to deal with the election of a Non-Executive Director to the Iemas Board. The Secretariat informed the members of the AGM that the nomination, selection and election of members to the Board are governed by the requirements of the Co-operatives Act, as well as the requirements of the Iemas Constitution. Skills, experience and demographic profile of the Board are regularly reviewed by the Human Resources Committee to ensure that the Board s composition remained appropriate to support the strategy of the Co-operative. After the approval of the special resolution taken by the members at the 2015 meeting, an exemption under the current Co-operatives Act was obtained from the Registrar of Co-operatives to extend the maximum term of office of Non-Executive Directors from a maximum of four years to seven years. The Secretariat further advised that the Board defined and adopted a formal rotation plan whereby existing Non-Executive Directors will retire to achieve the seven-year cycle of retirements and to ensure corporate knowledge is retained. Mr Eric Visser volunteered to resign from the Iemas Board with effect 31 October 2016, to give effect to the aforementioned plan. Due to his resignation a vacancy exists and a new Board member needed to be elected to fill this vacancy. The Board Secretariat discussed the nomination process followed and advised that three nominations were received, of which two nominations were from members, and one nomination was made by the Iemas Board. Mr Francois van Zyl did not meet the minimum qualifying criteria for the vacancy, as it was a requirement that the candidate should be qualified as a Chartered Accountant. The other two candidates Page 2 of 5

3 met the minimum criteria and their eligibility to be appointed were confirmed by the sub-committee of the Human Resources Committee on 5 October The Secretariat advised that the Board considered and recommended the two candidates, Ms Prudence Lebina and Ms Kelebogile Sibanda, for election at its meeting of 13 October The Secretariat gave a brief overview of the CV s of the two qualifying candidates, after which the members of the Co-operative were given the opportunity to cast their votes by way of a ballot paper. The majority of the votes casted were in favour of Ms Prudence Lebina to be appointed to fill the vacancy as Non-Executive Director on the Board. 5. REPORT BY THE IEMAS BOARD OF DIRECTORS AND FUTURE BUSINESS OF THE CO-OPERATIVE The Chief Executive Officer provided an overview of the Directors Report as incorporated in the 2016 Annual Report. He mentioned that the Co-operative experienced a challenging year due to the impact that various macro- and socio-economic factors had on Iemas participating employers, specifically the mining and manufacturing sectors. Due to the increased pressure on the consumers, the deterioration of the quality of the Iemas debtors book as well as the general over-indebtedness of South African consumers, Iemas amended its credit policy to take these factors into consideration. Iemas has also implemented stricter affordability assessment rules, processes and qualifying criteria to curtail increases in arrears and bad debts. Due to the above there was a decline in the debtors book from R 5,3 billion at 31 August 2015 to R 4,7 billion at the end of August The decline in vehicle and unsecured loan applications also impacted negatively on the insurance business. It also became more challenging to sign on new employers. In order to improve on operational efficiency due to a decrease in finance applications received, an organisational restructuring in the sales division was required. Iemas strategy was to maintain momentum with the business modernisation programme and 9 of the 15 projects in the programme were completed and successfully implemented. Iemas also expanded on the loan product offering with the introduction of an educational product, GradUcare. The Chief Executive Officer also mentioned that negotiations with the banks to secure funding and to amend the previous covenants were successful. In terms of Corporate Governance, Iemas complied with King III principles as far as it was practical for the Co-operative and its stakeholders and the last four outstanding elements of the code was addressed during the 2015 financial year. Iemas has already conducted a high-level assessment of the requirements of King IV and the implications thereof on Iemas will be considered by the Board during the next year. The Co-operative continued to execute on its risk management policy and guidelines whereby risk assessments are done continuously and bi-annual formal risk reviews are conducted. Page 3 of 5

4 Iemas involvement in communities was clearly illustrated by the successes achieved with its corporate social responsibility programme. Various initiatives were undertaken during the year, including the participation in wellness days and fun days at employer groups. Going forward on new business ventures, the Chief Executive Officer advised that the Board approved a decision to transfer short-term insurance and financial advisory business of Iemas to a wholly-owned subsidiary company in order to comply with fit and proper requirements of the Financial Services Board. Good progress was already made with the establishment and registration of this new company The Board also approved the establishment of a subsidiary company to do finance business with non-salary deduction private members/clients. In response to a motion tabled by the Chairman, the members approved the report by the Board for the financial year ended on 31 August 2016 by a show of hands. 6. ANNUAL FINANCIAL STATEMENTS AND AUDITOR S REPORT FOR THE YEAR ENDED 31 AUGUST 2016 An overview of the financial results of the Co-operative, as contained in the Annual Financial Statements, was presented by the Chief Financial Officer. The audited Annual Financial Statements were available to members more than 14 days prior to the meeting and were also available on request by members at the Iemas Regional and Branch Offices. The Annual Financial Statements were prepared on the going-concern basis. The Audit and Risk Committee had considered the Annual Financial Statements at its meeting on 6 October 2016 and it was finally approved for recommendation to the Annual General Meeting by the Board on 13 October An unqualified report was issued by PricewaterhouseCoopers (PwC). In response to a motion tabled by the Chairman, the members approved the Annual Financial Statements and Auditor s Report for the financial year ended on 31 August 2016 by a show of hands. 7. APPROPRIATION OF THE DISTRIBUTABLE SURPLUS FOR 2016 The proposed appropriation of the surplus for 2016 was dealt with by the Chief Financial Officer. The distribution of the surplus by means of an allocation of bonuses and payment of interest on members funds amounted to R123,46 million for 2016, compared to R135,15 million in An analysis of the proposed allocation per product was presented to the meeting. An increase in the interest rate payable to members on their member s funds from 6.50% to 7.00% was proposed. Page 4 of 5

5 The main considerations which the Board took into account in proposing the changes were to ensure sustainability of the Co-operative in retaining more income should the economic conditions deteriorate further and negatively impact the ability of members to honour their financial commitments. In response to a motion tabled by the Chairman, the members approved the Board s proposal for the appropriation of the distributable surplus for 2016 by a show of hands. 8. APPOINTMENT OF EXTERNAL AUDITORS FOR THE 2017 FINANCIAL YEAR The Board proposed the re-appointment of PwC as external auditors for the 2017 financial year. PwC has an in-depth knowledge of the financial services sector and performed the audits of a large number of financial institutions and has over the years gained excellent knowledge of Iemas business model as well as the Co-operative s Act. PwC also has a rotation policy to rotate the responsible partner/director every five years and the audit manager every eight years to ensure independence. PwC has a level 2 B-BBEE score. In response to a motion tabled by the Chairman, the members approved the re-appointment of PwC as external auditors for the 2017 financial year by a show of hands. 9. CLOSURE The Chairman thanked the participants for their attendance and declared the meeting closed at 15:30. Minutes approved by: Page 5 of 5