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APA APB AXC
APA
ApexHi-Calculation of the base cost of the c units for capital gains tax
purposes
ApexHi Properties Limited
(Incorporated in the Republic of South Africa)
Registration number 1999/000238/06
Share codes: APA ISIN codes: ZAE000083598
APB ZAE000083606
AXC ZAE000083580
("ApexHi")
CALCULATION OF THE BASE COST OF THE C UNITS FOR CAPITAL GAINS TAX PURPOSES
INTRODUCTION
ApexHi has received a number of queries in relation to the calculation of the
base cost of the newly created C units.
As indicated in the circular to shareholders dated Friday, 25 August 2006, the
South African Revenue Services has indicated that:
* the conversion of the ApexHi A and B units into A, B and C units (the
"conversion") did not constitute the disposal of the A and B units by the
unit holders for capital gains tax purposes;
* the base cost of the C units for capital gains tax purposes would be
calculated in accordance with the following formula:
{(X-Y) divided by X} xZ
Where:
X = R13.60 per A unit or R15.20 per B unit, being the price at which the A
and B units traded before they were delisted;
Y = R12.70 per A unit or R14.10 per B unit, being the price at which the A
and B units were relisted (after the creation and listing of the C units);
and
Z = the base cost for a unit holder of their A or B units, usually being
the market value of that A or B unit at 1 October 2001 or that unit"s
actual cost to the unitholder if acquired after 1 October 2001.
CALCULATION OF BASE COST OF THE C UNITS
The effect of the formula set out above is that:
* 6.618% of the base cost of any A units held before the conversion is
attributed to the C units received from the holding of A units,with the
balance of the base cost remaining attributable to the A units;
* 7.237% of the base cost of any B units held before the conversion is
attributed to the C units received from the holding of B units, with the
balance of the base cost remaining attributable to the B units.
This is illustrated by the example set out below which is premised on the
assumption that a unit holder owns 1 A and/or B units and that the base cost of
those units is R10.00per unit:
A unit B unit
Number of units held 1 1
Number of C units received (before the
disposal in terms of the scheme) 0.45 0.55
Base cost per A or B unit (Z) R10.00 R10.00
Price before delisting (X) R13.60 R15.20
Price on relisting (Y) R12.70 R14.10
Base cost of:
that portion of the A unit exchanged for 0.6618
0.45 C units received ((13.60-
12.70)/13.60) x 10.00
that portion of the B unit exchanged for 0.7237
0.55 C units received ((15.20-
14.10)/15.20) x 10.00
the balance of the A unit retained by 9.3382
the A unit holder
the balance of the B unit retained by B 9.2763
unit holder
Total base cost R10.00 R10.00
Effects of the scheme:
Scheme consideration 2.00 2.00
Base cost of 1 C unit
for the A unit holder is R0.6618(being 1.47
the base cost of 0.45 of a C unit
calculated above)/0.45
for the B unit holder is R0.7237(being 1.32
the base cost of 0.55 of a C unit
calculated above)/0.55
Capital gain per 1 C unit sold 0.53 0.68
The above is illustrative only and based on the assumptions set out above. In
particular the market value of the A and B units as at 1 October was not R10.00
per unit and this amount has been used for illustrative purposes only. Unit
holders should seek independent tax advice in relation to their specific
circumstances.
Rosebank
15 November 2006
Corporate advisor, legal advisor and sponsor to ApexHi
Java Capital (Proprietary) Limited
Date: 15/11/2006 11:19:07 AM Produced by the JSE SENS Department
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