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PEREGRINE HOLDINGS LIMITED - Tax apportionment ratio in respect of the unbundling

Release Date: 30/11/2017 11:24
Code(s): PGR     PDF:  
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Tax apportionment ratio in respect of the unbundling

PEREGRINE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1994/006026/06)
Share code: PGR ISIN: ZAE000078127
(“Peregrine”)


TAX APPORTIONMENT RATIO IN RESPECT OF THE UNBUNDLING


Shareholders are referred to the announcement released on SENS on 14 November 2017 regarding the proposed
unbundling by Peregrine, by way of a distribution in specie, of the 226 065 696 Sandown Capital Limited (“Sandown
Capital”) shares held by Peregrine (being 100% of the issued share capital of Sandown Capital) to its shareholders, in
the ratio of one Sandown Capital share for every one Peregrine share held at close of trade on Friday,
1 December 2017, being the unbundling record date (the “unbundling”), with the last day to trade (“LDT”), being
Tuesday, 28 November 2017.

In terms of section 46 of the Income Tax Act No. 58 of 1962 (the “Income Tax Act”), each holder of Peregrine shares
on the unbundling record date must allocate a portion of the expenditure (being the base cost where the Peregrine
shares are held as capital assets, or the cost price where the Peregrine shares are held as trading stock) and any market
value (being the market value adopted as the valuation date value where the Peregrine shares held as capital assets
were acquired before 1 October 2001) attributable to the Peregrine shares held by it to the Sandown Capital shares
acquired by it pursuant to the unbundling in accordance with the apportionment ratio set out below. Furthermore, each
such holder of Peregrine shares must reduce the expenditure and any market value attributable to its Peregrine shares
by the amount so allocated to the Sandown Capital shares.

The purpose of this announcement is to advise the holders of Peregrine shares on the unbundling record date of the
apportionment ratio.

Apportionment ratio

In terms of section 46 of the Income Tax Act, read with the South African Revenue Service’s Binding General Ruling
(Income Tax) 29 (Issue 2), the portion of the base cost (capital assets) or cost price (trading stock) of the Peregrine
shares that should be allocated to the Sandown Capital shares distributed to a Peregrine shareholder is determined as
the ratio of the closing price of the Sandown Capital shares on LDT + 1 (being Wednesday, 29 November 2017) to the
sum of the closing price of the Sandown Capital shares and the Peregrine shares on LDT + 1.

The Peregrine shareholders are accordingly hereby advised that 12.54019% (the “apportionment ratio”) of the base
cost (capital assets) or cost price (trading stock) of their Peregrine shares should be allocated to the Sandown Capital
shares distributed to them, and that 87.45981% of the base cost (capital assets) or cost price (trading stock) of their
Peregrine shares should be allocated to their Peregrine shares.

The apportionment ratio is based on the closing share price of R27.20 per Peregrine share and the closing share price
of R3.90 per Sandown Capital share on Wednesday, 29 November 2017.

Peregrine shares held as trading stock

Any Peregrine shareholder holding Peregrine shares as trading stock will be deemed to acquire its proportional
number of unbundled Sandown Capital shares as trading stock. The expenditure to be allocated to the unbundled
Sandown Capital shares will be determined by applying the apportionment ratio to the cost price taken into account
prior to the unbundling in respect of the Peregrine shares for purposes of section 11(a), section 22(1), or section 22(2)
of the Income Tax Act. The cost price of the Peregrine shares held as trading stock must accordingly be reduced by
the amount of expenditure so allocated to the unbundled Sandown Capital shares. Peregrine shareholders will be
deemed to have incurred the expenditure allocated to the unbundled Sandown Capital shares on the date on which the
expenditure was incurred in respect of the Peregrine shares.
Peregrine shares held as capital assets

Any Peregrine shareholder holding Peregrine shares as capital assets will be deemed to have acquired its proportional
number of unbundled Sandown Capital shares as capital assets. The expenditure or any market value to be allocated to
the unbundled Sandown Capital shares will be determined by applying the apportionment ratio to the base cost of the
Peregrine shares in the hands of the Peregrine shareholder. The base cost of the Peregrine shares held as capital assets
must accordingly be reduced with the amount of expenditure or any market value so allocated to the unbundled
Sandown Capital shares. Peregrine shareholders will be deemed to have incurred any expenditure so allocated to the
unbundled Sandown Capital shares on the date on which the expenditure was incurred in respect of the Peregrine
shares and the Sandown Capital shares must, other than for purposes of determining whether a share has been held for
a period of at least 3 years for purposes of section 9C(2) of the Income Tax Act, be deemed to have been acquired by
that shareholder on the same date as the shares held in Peregrine.

THIS ANNOUNCEMENT IS NOT INTENDED TO BE A COMPLETE ANALYSIS OF THE TAX IMPLICATIONS OF THE UNBUNDLING. IT IS NOT INTENDED 
TO BE, NOR SHOULD IT BE CONSIDERED TO BE, LEGAL OR TAX ADVICE. PEREGRINE SHAREHOLDERS ARE ADVISED TO CONSULT THEIR OWN 
PROFESSIONAL TAX ADVISORS ON THE TAXATION CONSEQUENCES OF THE UNBUNDLING IN BOTH SOUTH AFRICA AND THEIR JURISDICTION OF 
RESIDENCE AND THE CALCULATION OF THEIR COSTS FOR TAX PURPOSES.

30 November 2017


Corporate advisor and joint sponsor
Java Capital


Joint sponsor
Deloitte & Touche Sponsor Services (Proprietary) Limited

Date: 30/11/2017 11:24:00 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
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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.

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