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MVG/MVGP - Mvela Group - Mvelaserve Unbundling - Apportionment Ratio for South African Taxation Purposes Mvelaphanda Group Limited Registration Number: 1995/004153/06 (Incorporated in the Republic of South Africa) Ordinary share code: MVG ISIN: ZAE000060737 Preference share code: MVGP ISIN: ZAE000073540 ("Mvela Group" or "the Company") MVELASERVE UNBUNDLING - APPORTIONMENT RATIO FOR SOUTH AFRICAN TAXATION PURPOSES 1. Introduction Holders of ordinary shares ("Mvela Group Shares"), redeemable option-holding shares and convertible perpetual cumulative preference shares in Mvela Group (collectively "Shareholders") are referred to the announcement by Mvela Group released on the Securities Exchange News Service on Wednesday, 27 October 2010 and the circular to Shareholders dated Wednesday, 27 October 2010 ("the Circular") regarding the proposed separate listing of the ordinary shares in Mvelaserve Limited ("Mvelaserve") ("Mvelaserve Shares") on the securities exchange operated by JSE Limited (the "JSE") ("the Mvelaserve Listing") and the subsequent unbundling by Mvela Group of all of its ordinary shares in Mvelaserve ("the Unbundling") . 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 ("Income Tax Act"), and in compliance with section 90 of the Companies Act (No. 61 of 1973), as amended, in the ratio of 25.034 Mvelaserve Shares for every 100 Mvela Group Shares held on Friday, 3 December 2010, the unbundling record date ("Record Date"). The purpose of this announcement is to notify holders of Mvela Group Shares of the closing prices of Mvelaserve Shares and Mvela Group Shares on the JSE on the Record Date, and the cost apportionment ratio in which the expenditure incurred and/or the valuation of Mvela Group Shares must be allocated to the Mvelaserve Shares received in terms of the Unbundling and the Mvela Group Shares for South African taxation purposes (the "Apportionment Ratio"). 2. Apportionment Ratio and closing share prices The Apportionment Ratio for purposes of Section 46 of the Income Tax Act is 46.08135% relating to a Mvela Group Share and 53.91865% to a Mvelaserve Share, based on the closing share prices of a Mvela Group Share and a Mvelaserve Share on the JSE on the Record Date of R2.76 and R12.90, respectively. The Apportionment Ratio is to be used, after the Unbundling, to apportion the expenditure incurred in respect of a Mvela Group ordinary share held. The expenditure must be apportioned between the Mvela Group Share held after the Unbundling and the Mvelaserve Share received in terms of the Unbundling for the purposes of determining the profits or losses, of a capital or trading nature, derived from any future disposal of the Mvela Group Share or Mvelaserve Share. A summary of the South African tax considerations relating to the Unbundling is set out on pages 41 to 43 of the Circular. Holders of Mvela Group Ordinary Shares are, however, advised in all circumstances to seek their own advice regarding taxation. Johannesburg 6 December 2010 Corporate adviser and transaction sponsor to Mvela Group Investec Bank Limited Legal adviser to Mvela Group and Mvelaserve Limited Cliffe Dekker Hofmeyr Inc Sponsor to Mvela Group Deutsche Securities (SA) (Proprietary) Limited Date: 06/12/2010 16:37:02 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.
