Small Related Party Transaction and Cautionary Announcement Bell Equipment Limited (Incorporated in the Republic of South Africa) Registration Number: 1968/013656/06 Share code: BEL ISIN: zae000028304 (“BEL” or “the Company”) SMALL RELATED PARTY TRANSACTION AND CAUTIONARY ANNOUNCEMENT 1. THE TRANSACTION Shareholders are hereby advised that Bell Equipment Company SA (Pty) Ltd (“BECSA”) Registration Number: 1966/004606/07, a wholly owned subsidiary of the Company, has reached agreement in principle to acquire the business (purchase of assets and take-on of employees) of Matriarch Equipment CC (“Matriarch”) Registration Number: 2009/128755/23, as a going concern (“the Transaction”). 2. RATIONALE FOR THE TRANSACTION Matriarch designs and manufactures a range of material handling products used predominantly in the forestry and sugar industries across local and international territories. The Intellectual Property (“IP”) of the products designed by Matriarch is aligned to the broader strategy of the Company to enhance IP ownership and to provide niche product solutions in the Forestry and Sugar industries. 3. SALIENT FEATURES OF THE BUSINESS ACQUIRED & PURCHASE CONSIDERATION In terms of the Transaction BECSA will, inter alia: a) acquire all the assets of Matriarch consisting of: - the inventory, the value whereof will be finalised at an inventory count to be conducted on or about 31 January 2019; - the operating assets to the value of c. R1.3 million, which approximates the net book value in Matriarch’s books of account; - the value of the IP which was determined by valuing the business of Matriarch on a discounted cash flow basis; and b) take-on the employees of Matriarch. BECSA will pay an initial consideration of R3.8 million for the Matriarch IP plus a Performance Based Consideration (“PBC”) based on future sales performance of Matriarch Products, retrospectively per quarter for 5 years. In addition to the 5-year time limit, the PBC has a monetary cap of R15 million. 4. SMALL RELATED PARTY TRANSACTION Matriarch is effectively controlled by Ashley Bell, currently a non-executive director of the Company. Therefore, in terms of the JSE Listings Requirements the Transaction is a small related party transaction. Ashley Bell will become an executive director of the BEL board post the Transaction. This change in status and changes to the BEL Board committees will be advised in a later SENS regarding details and effective date. Deloitte & Touche, an approved independent professional expert, has been engaged to provide an opinion on the fairness of the Transaction. The fairness opinion will be completed when the inventory count has been finalised on or about 31 January 2019, as the inventory value is a material factor to the purchase consideration. 5. CAUTIONARY: EFFECTIVE DATE OF THE TRANSACTION Shareholders are advised that if successfully concluded, this Transaction may have a material effect on the price at which the Company’s securities trade on the JSE. The inventory value, which is the only remaining element of the purchase consideration that is outstanding, will be finalised as at the effective date considering a final inventory count is required and the final fairness opinion will be issued thereafter. Considering the materiality of these key points, shareholders of BEL are advised to exercise caution when dealing in the Company’s securities until a further finalisation announcement is made. The finalisation announcement and withdrawal of cautionary are expected on or about 1 February 2019. Richards Bay 7 January 2019 Sponsor and corporate advisor: Investec Bank Limited Independent expert: Deloitte & Touche Date: 08/01/2019 08:00:00 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.