ALEXANDER FORBES PREF SHARE INV LTD - Proposed settlement with South African Revenue Services

Proposed settlement with South African Revenue Services

Alexander Forbes Equity Holdings Proprietary Limited 
(Incorporated in the Republic of South Africa) 
Registration number: 2006/025226/07 
 
PROPOSED SETTLEMENT WITH SOUTH AFRICAN REVENUE SERVICES 
 
Shareholders of Alexander Forbes Equity Holdings Proprietary Limited (“AFEH”) and 
preference shareholders of Alexander Forbes Preference Share Investments Limited are 
referred to the results announcement for the year ended 31 March 2014 issued by AFEH on 
8 June 2014.   
 
The results announcement referred to the fact that the group received various requests for 
information from the South Africa Revenue Services (“SARS”) relating to the 2007 
acquisition of the group by a consortium of private equity investors and the associated 
interest deductions related to the debt introduced at the time.  As at the financial year-end 
and as at the date of finalising the financial statements, no findings were communicated by 
SARS to the group and the board remained confident that the interest claimed over the 
years was deductible for tax purposes.  However, at the initiative of the group and in order 
to bring finality to the matter, following recent discussions with SARS, Alexander Forbes has 
reached an in-principle agreement with SARS towards a full and final settlement of the 
matter and specifically to settle the tax issue relating to the deduction of interest claimed 
over the years since the transaction up to and including the financial year ended 31 March 
2014.  These settlement discussions occurred subsequent to the approval and 
announcement of the financial statements for the year-ended 31 March 2014. The 
conclusion of the proposed settlement will result in an additional assessment for cash taxes 
payable by AFEH in an amount not exceeding R60 million and the waiver of assessed losses 
carried forward which include assessed losses in respect of which an amount not exceeding 
R70 million of deferred tax assets were raised and held on the balance sheets of various 
subsidiaries of the group as at financial year-end.  The agreement will be implemented as 
soon as practicably possible. 
 
Johannesburg 
20 June 2014 
 
Sponsor 
RAND MERCHANT BANK (A division of FirstRand Bank Limited) 
 
 

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