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MVG/MVGP - Mvelaphanda Group - Unbundling of ordinary shares in Health Strategic Investments Limited- apportionment ratio for South African taxation Purposes MVELAPHANDA GROUP LIMITED (Incorporated in the Republic of South Africa) (Registration number: 1995/004153/06) Ordinary share code: MVG ISIN: ZAE000060737 Preference share code: MVGP ISIN: ZAE000073540 ("Mvela Group" or the "Company") UNBUNDLING OF ORDINARY SHARES IN HEALTH STRATEGIC INVESTMENTS LIMITED ("HEALTH") - APPORTIONMENT RATIO FOR SOUTH AFRICAN TAXATION PURPOSES 1 INTRODUCTION In the circular issued to holders of ordinary shares ("Mvela Group Ordinary Shares"), redeemable option-holding shares and convertible perpetual cumulative preference shares in Mvela Group (collectively the "Shareholders") on Monday, 28 June 2010 (the "Circular"), the finalisation announcement published on the securities exchange news service ("SENS") operated by the JSE Limited ("JSE") on Thursday, 5 August 2010 and the announcement released on SENS on Monday, 16 August 2010, Shareholders were informed, inter alia, of the proposed unbundling by Mvela Group of all of the ordinary shares held by it in Health ("Health Shares") to holders of Mvela Group Ordinary Shares (the "Unbundling") recorded in the Company`s register as at the close of business on Friday, 20 August 2010 (the "Unbundling Record Date"). The Unbundling is to be effected by way of an unbundling transaction in terms of section 46 of the Income Tax Act, 1962 (No. 58 of 1962), as amended ("the Act"), and in compliance with Section 90 of the Companies Act (No 61 of 1973), in the ratio of 33.45335 Health Shares for every 100 Mvela Group Ordinary Shares held on the Unbundling Record Date. The purpose of this announcement is to notify holders of Mvela Group Ordinary Shares of the closing prices of Health and Mvela Group Ordinary Shares on the JSE on Friday, 20 August 2010, the Unbundling Record Date, and the cost apportionment ratio in which the expenditure incurred and/or the valuation of the Mvela Group Ordinary Shares must be allocated to the Health Shares received in terms of the Unbundling and the Mvela Group Ordinary Shares for South African taxation purposes (the "Apportionment Ratio"). The potential South African taxation considerations for holders of Mvela Group Ordinary Shares are set out in Annexure 11 of the Circular. Holders of Mvela Group Ordinary Shares are, however, advised in all circumstances to seek their own advice regarding taxation. 2 APPORTIONMENT RATIO AND CLOSING SHARE PRICES The Apportionment Ratio for purposes of section 46 of the Act is 53.56384% relating to a Mvela Group Ordinary Share and 46.43616% to a Health Share, based on the closing share prices of a Mvela Group Ordinary Share and a Health Share on the JSE on Friday, 20 August 2010 of R4.92 and R12.75, respectively. This Apportionment Ratio is to be used, after the Unbundling of the Health Shares, to apportion the expenditure incurred in respect of a Mvela Group Ordinary Share held. The expenditure must be apportioned between the Mvela Group Ordinary Share held after the Unbundling and the Health Share received in terms of the Unbundling, for purposes of determining the profits or losses, of a capital or trading nature, derived on any future disposal of the Mvela Group Ordinary Share or Health Share. Johannesburg 23 August 2010 Merchant bank, structuring adviser and transaction sponsor RAND MERCHANT BANK (A division of FirstRand Bank Limited) Sponsor Deutsche Securities (SA) (Proprietary) Limited Reporting Accountants PKF (Jhb) Inc. Attorneys Bowman Gilfillan Inc. Advisers to Mvela Group Afropulse Group (Proprietary) Limited Financial PR adviser College Hill Date: 23/08/2010 12:54:01 Supplied by www.sharenet.co.za 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.
