Apportionment of Tax Cost for South African Income Tax Purposes in respect of an Unbundling Pioneer Food Group Limited Incorporated in the Republic of South Africa Registration number: 1996/017676/06 Share code: PFG ISIN code: ZAE000118279 (“Pioneer Foods” or “the Company” or “the Group”) APPORTIONMENT OF TAX COST FOR SOUTH AFRICAN INCOME TAX PURPOSES IN RESPECT OF THE UNBUNDLING OF PIONEER FOODS INTERESTS IN QUANTUM FOODS HOLDINGS LIMITED (“Quantum Foods”) 1. Introduction Shareholders are referred to the SENS announcement of 18 September 2014 (“the SENS announcement”), relating to the unbundling by Pioneer Foods of 100% of the issued share capital of Quantum Foods (“Unbundling”), to its ordinary shareholders in the ratio of 1 Quantum Foods Share for every 1 ordinary share held in Pioneer Foods on 10 October 2014 (“Unbundling Record Date”) and to its Class A ordinary shareholders in the ratio of 0.3 Quantum Foods Shares for every 1 Class A ordinary share held in Pioneer Foods on the Unbundling Record Date, rounded to the nearest whole number. Shareholders are hereby advised that the Unbundling was implemented in terms of section 46 of the Companies Act No 71 of 2008 and section 46 of the Income Tax Act No 58 of 1962 (“Income Tax Act”). The purpose of this announcement is to notify shareholders of the apportionment ratio to be applied by shareholders in determining the portion of their past costs (and market value, if relevant) to be allocated to the unbundled Quantum Foods shares and the retained Pioneer Foods ordinary shares. 2. Apportionment tax principles Shareholders are referred to the SENS announcement where the tax implications for shareholders of the Unbundling were explained in more detail. As indicated in the SENS announcement, Pioneer Foods ordinary shareholders will have a combined expenditure in respect of the Pioneer Foods ordinary shares and the Quantum Foods shares received pursuant to the Unbundling. Pioneer Foods shares held as trading stock: Any Pioneer Foods shareholder holding Pioneer Foods shares as trading stock will be deemed to acquire the unbundled Quantum Foods shares as trading stock. The combined expenditure of such Pioneer Foods and Quantum Foods shares will be the amount taken into account by the shareholder in respect of those Pioneer Foods shares, as contemplated in section 11(a), section 22(1), or section 22(2) of the Income Tax Act. The portion of the above combined expenditure to be allocated to the unbundled Quantum Foods shares will be determined by applying the ratio that the market value of the Quantum Foods shares bears to the sum of the market value of Pioneer Foods and Quantum Foods shares at the end of the date of Unbundling, being 6 October 2014 (“Apportionment Ratio”). The expenditure so allocated to the unbundled Quantum Foods shares will reduce the expenditure of the Pioneer Foods shares held. Pioneer Foods shares held as capital assets: Any Pioneer Foods shareholder holding Pioneer Foods shares as capital assets will be deemed to acquire the unbundled Quantum Foods shares as capital assets. The combined expenditure of such Pioneer Foods and Quantum Foods shares will be the original expenditure incurred in respect of the Pioneer Foods shares, in terms of paragraph 20 of the Eighth Schedule to the Income Tax Act, and where the Pioneer Foods shares were acquired before 1 October 2001, the market value adopted or determined as contemplated in paragraph 29 of the Eighth Schedule to the Income Tax Act. The portion of the above combined expenditure to be allocated to the unbundled Quantum Foods shares will be determined by applying the ratio that the market value of Quantum Foods shares bears to the sum of the market value of Pioneer Foods and Quantum Foods shares at the end of the date of Unbundling, being 6 October 2014 (“Apportionment Ratio”). The expenditure and market value so allocated to the unbundled Quantum Foods shares will reduce the expenditure and market value of the Pioneer Foods shares held. Pioneer Foods shareholders are advised to consult their own professional tax advisors should they have any queries regarding the taxation consequences of the Unbundling and the calculation of their costs for taxation purposes. 3. Apportionment ratio Shareholders are hereby advised that the expenditure and market value of their Pioneer Foods shares as referred to above must be apportioned in the ratio of 97.02666% to a Pioneer Foods share held after the Unbundling and 2.97334% to an unbundled Quantum Foods share (“Apportionment Ratio”). The Apportionment Ratio is based on the closing price of R114.98 per Pioneer Foods share and R3.50 per Quantum Foods share on 6 October 2014, the date of the Unbundling. Bellville 8 October 2014 Transaction Adviser and Sponsor PSG Capital Proprietary Limited Date: 08/10/2014 04:02:00 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.