Voluntary Operational Update CALGRO M3 HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration Number 2005/027663/06) Share code: CGR ISIN: ZAE000109203 (“Calgro M3” or “the company”) VOLUNTARY OPERATIONAL UPDATE The Board of Calgro M3 would like to provide stakeholders with an update on the operations and the environment in which the Group currently operates. In addition, we would like to provide an update on the impact that amendments to the accounting standards (IFRS 15) will have on revenue recognition for the Group. Historically, the revenue on certain contracts within the integrated development environment was accounted for by the Group through combining contracts into a single overarching integrated contract due to the cross-subsidisation nature of these developments, with most of the revenue being accounted for on a percentage of completion basis in terms of IAS 11. With the application of IFRS 15 (Revenue from contracts with customers) from 1 March 2018, all contracts will be dealt with as separate standalone contracts which will result in revenue recognition being delayed on certain contracts. The Group will follow a modified retrospective approach when accounting for any adjustments to retained earnings because of these changes. It is however important to note that the application of IFRS 15 will not affect the cash flow or overall profitability of the projects negatively. Although tough economic trading conditions persist, the Group is optimistic about the future but remain cautious and have continued conducting operations in a controlled, sustainable manner through protecting its cash flow. Calgro M3 Memorial Parks business continues to grow monthly and the incorporation of the Durbanville and Bloemfontein Memorial Parks (previously known as Avalon) are well underway. The sales performance at Durbanville is also looking very promising with a notable increase since acquisition. Investigations with strategic partners are also underway to develop more annuity-based income. The Residential Rental Investment business is well underway with a total of 1,140 units handed over to the consortium. The balance of the first 3,842 units are being delivered on a staggered, monthly basis. The handover of the first units acquired by the consortium from a third-party developer, located in Ruimsig, Johannesburg, will commence in October 2018, also on a staggered basis. The Residential Developments business has experienced delays on circa 4,000 of the 7,093 units under construction and/or ready for construction in the Fleurhof, Belhar, and Scottsdene developments. These delays have been brought about by illegal, and attempted illegal, occupation of partially and fully completed units, electrification and water shortages. Management has resolved certain of these issues, with the remainder being attended to. Sales performance in the private sector has been affected by the decrease in activity on site and has also come under pressure. Sales at the Belhar project are however showing high demand with 124 units sold within the first 18 days of marketing. The Group has received the final tranche of Proparco funding (R109 million) after the Health, Safety and Environmental audit was completed. The Group will continue its focus on these areas to ensure continued compliance and create a safe working environment for all. The appointment of personnel in specific departments to ensure sufficient capacity is available, is well underway. The company did not undertake any corporate action during the current financial year when compared to the prior year and the financial effect of this operational performance is not yet clear because of the new IFRS 15 accounting treatment. Johannesburg 31 July 2018 Sponsor Grindrod Bank Limited Date: 31/07/2018 09:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.