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HIS - Health Strategic Investments Limited - Unbundling Announcement Health Strategic Investments Limited (formerly Newshelf 776 (Proprietary) Limited) (incorporated in the Republic of South Africa) (Registration number: 2005/012471/06) JSE share code: HSI ISIN: ZAE000146742 ("Health" or the "Company") UNBUNDLING BY HEALTH OF LIFE HEALTHCARE GROUP HOLDINGS LIMITED ("LIFE HEALTHCARE") ORDINARY SHARES - APPORTIONMENT RATIO FOR SOUTH AFRICAN TAXATION PURPOSES 1. INTRODUCTION In the circular issued to holders of ordinary shares in Health ("Health Shares") ("Shareholders") on Thursday, 28 October 2010 (the "Circular") and the finalisation announcement published on the securities exchange news service ("SENS") operated by the JSE Limited ("JSE") on Thursday, 2 December 2010, Shareholders were informed, inter alia, of the proposed unbundling by Health of its entire 26.60% shareholding in the issued share capital of Life Healthcare ("Life Healthcare Shares") to Shareholders (the "Unbundling") recorded in the Company`s register as at the close of business on Friday, 17 December 2010 (the "Unbundling Record Date"). The Unbundling was 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 1 Life Healthcare Share for every 1 Health Share held on the Unbundling Record Date. The purpose of this announcement is to notify Shareholders of the cost apportionment ratio in which the expenditure incurred and/or the valuation of the Health Shares must be allocated to the Life Healthcare Shares received in terms of the Unbundling and the Health Shares for South African taxation purposes (the "Apportionment Ratio"). 2. APPORTIONMENT RATIO The Health shares were suspended on the JSE`s trading system on Friday, 10 December 2010. Accordingly the net asset value of a Health Share on Friday, 17 December 2010 was used to determine the market value in order to calculate the apportionment ratio for tax purposes (the "Health Share Market Value"). The ratio of the Health Share Market Value after the Unbundling and the market value of an unbundled Life Healthcare Share on the JSE as at close of trade on Friday, 17 December 2010 was 0.00025% relating to a Health Share held after the Unbundling and 99.99975% relating to a Life Healthcare Share received in terms of the Unbundling. This Apportionment Ratio is to be used, after the Unbundling of the Life Healthcare Shares, to apportion the expenditure incurred in respect of a Health Share held. The expenditure must be apportioned between the Health Share held after the Unbundling and the Life Healthcare 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 Health Share or Life Healthcare Share. The indicative South African taxation considerations for Shareholders are set out in Annexure 2 of the Circular. Shareholders are advised to consult their own tax advisors should they have any queries regarding the taxation consequences of the Unbundling and the calculation of their costs for taxation purposes. Newlands 21 December 2010 Merchant bank and sponsor RAND MERCHANT BANK (a division of FirstRand Bank Limited) Attorneys Edward Nathan Sonnenbergs Inc Date: 21/12/2010 16:16:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department.
