circular to cipla medpro shareholders information and advisers cipla medpro company secretary and...
TRANSCRIPT
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTIONThe defi nitions and interpretations commencing on page 12 of this Circular apply throughout this Circular; including these cover pages (unless the context indicates a contrary intention).
Action required1. This entire Circular is important and should be read with particular attention to the section entitled “Action required by Cipla Medpro Shareholders”, which commences on page 6.2. If you are in any doubt as to what action to take, you should consult your Broker, CSDP, banker, accountant, attorney or other professional adviser immediately.3. If you have disposed of all your Cipla Medpro Shares, please forward this Circular to the purchaser of such Cipla Medpro Shares or to the Broker, CSDP, banker or other agent
through whom the disposal was effected.
Cipla Medpro and Cipla India do not accept responsibility, and will not be held liable, for any action of, or omission by, any CSDP or Broker including, without limitation, any failure on the part of the CSDP or Broker of any Benefi cial Owner of Cipla Medpro Shares to notify such Benefi cial Owner of the transactions set out in this Circular.
Cipla Medpro South Africa Limited Cipla Limited (Incorporated in the Republic of South Africa) (Incorporated in India) (Registration number 2002/018027/06) (Registration number 11-2380) Share code: CMP Share codes: BSE Limited – 500087 ISIN: ZAE000128179 National Stock Exchange of India Limited – CIPLA EQ (“Cipla Medpro” or “the Company”) ISIN: INE059A01026 (“Cipla India”)
CIRCULAR TO CIPLA MEDPRO SHAREHOLDERSrelating to, inter alia: • a Scheme of Arrangement in terms of section 114 of the Companies Act proposed by the Cipla Medpro Board between
Cipla Medpro and the Cipla Medpro Shareholders, in terms of which, if implemented: – Cipla India (or its nominated subsidiary) will acquire from each Cipla Medpro Shareholder, all (100%) of their Cipla
Medpro Shares held on the Scheme Consideration Record Date (save for those Cipla Medpro Shares held by Dissenting Shareholders), for a cash consideration of R10.00 per Cipla Medpro Share (subject to any Adjustment); and
– Cipla Medpro will become a wholly owned Subsidiary of Cipla India;• the manner in which Option Holders will be dealt with, namely:
– Option Holders will, pursuant to the existing terms of the Cipla Medpro Share Incentive Schemes, automatically have their Share Options accelerated so as to allow them to exercise such Share Options and participate in the Offer and Scheme; or
– at Cipla India’s election (to be exercised by Cipla India on or before the fifth Business Day after the General Meeting), the Option Holders may be offered the Option Holder Offers; and
• the delisting of Cipla Medpro from the JSE in the event the Scheme becomes operative;and incorporating:• a report prepared by the Independent Expert in terms of section 114(3) of the Companies Act; • a statement of Appraisal Rights in terms of section 164(2) of the Companies Act;• extracts of section 115 of the Companies Act dealing with approval required for fundamental transactions and section 164
of the Companies Act, dealing with Appraisal Rights;• historical financial information in respect of Cipla Medpro; • a Notice of the General Meeting; • a form of proxy in respect of the General Meeting (green) (for use by Certificated Shareholders and Own-Name Dematerialised
Shareholders only); and
• a Form of Surrender and Transfer in respect of the Scheme (blue) (for use by Certificated Shareholders only).
Financial Adviser and Transaction Legal Adviser to Cipla Medpro Financial Adviser to Cipla India Sponsor to Cipla Medpro
Independent Expert to Cipla Medpro Legal Adviser to Cipla India
Sponsor to Cipla Medpro Merchant Bank to Cipla India
Date of issue: 15 April 2013 This document is available in English only. Copies may be obtained from the registered offi ce of Cipla Medpro and the Financial Advisers to Cipla Medpro, whose addresses are set out in the “Corporate information and advisers” section of this Circular, from 15 April 2013 until 15 May 2013.
CORPORATE INFORMATION AND ADVISERS
CIPLA MEDPRO
Company Secretary and Registered OfficeCipla Medpro South Africa LimitedR Manilall CA(SA)1474 South Coast RoadMobeniDurban 4052(PO Box 32003, Mobeni, 4060)
Financial Adviser and Transaction Sponsor to Cipla MedproAbsa Bank Limited (acting through its Corporate and Investment Banking division) (Registration number 1986/004794/06)15 Alice LaneSandton2196(Private Bag X10056, Sandton, 2146)
Legal Adviser to Cipla MedproNorton Rose South Africa (incorporated as Deneys Reitz Inc) (Registration number 1984/003385/21)3 Pencarrow CrescentPencarrow ParkLa Lucia RidgeDurban4051(PO Box 5003, Pencarrow Park, 4019)
Sponsor to Cipla MedproNedbank Capital (a division of Nedbank Limited) (Registration number 1951/000009/06)135 Rivonia RoadSandownSandton2196( PO Box 1144, Johannesburg, 2000)
Independent Expert to Cipla MedproBridge Capital Advisors Proprietary Limited (Registration number 1998/016302/07)27 Fricker RoadIllovoSouth Africa2196(PO Box 651010, Benmore, 2010)
Transfer secretaries to Cipla MedproComputershare Investor Services Proprietary Limited (Registration number 2004/003647/07)Ground Floor70 Marshall StreetJohannesburg2001(PO Box 61051, Marshalltown, 2107)
CIPLA INDIA
Registered OfficeCipla LimitedMumbai CentralMumbaiIndia400 008
Legal Adviser to Cipla IndiaWebber Wentzel 10 Fricker RoadIllovo BoulevardIllovoSouth Africa2196(PO Box 61771, Marshalltown, 2107)
Financial Adviser to Cipla IndiaMorgan Stanley South Africa Proprietary Limited(Registration number 1994/000261/07)2 Merchant PlaceCorner Fredman Drive and Rivonia RoadSandtonSouth Africa2196
Merchant Bank to Cipla IndiaRand Merchant Bank(A division of FirstRand Bank Limited)(Registration number 1929/001255/06)1 Merchant PlaceCorner Fredman Drive and Rivonia RoadSandtonJohannesburg, 2196(PO Box 786273, Sandton 2146)
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IMPORTANT LEGAL NOTES
The definitions and interpretations commencing on page 12 of this Circular apply to this section on Important Legal Notes.
FORWARD-LOOKING STATEMENTS This Circular contains statements about Cipla Medpro that are or may be forward-looking statements. All statements, other than statements of historical fact are, or may be deemed to be, forward-looking statements, including, without limitation, those concerning strategy; the economic outlook for the industry; production; cash costs and other operating results; growth prospects and outlook for operations, individually or in the aggregate; liquidity and capital resources and expenditure and the outcome and consequences of any pending litigation proceedings. These forward-looking statements are not based on historical facts, but rather reflect current views concerning future results and events and generally may be identified by the use of forward-looking words or phrases such as “believe”, “aim”, “expect”, “anticipate”, “intend”, “foresee”, “forecast”, “likely”, “should”, “planned”, “may”, “estimated”, “potential” or similar words and phrases.
Examples of forward-looking statements include statements regarding a future financial position or future profits, cash flows, corporate strategy, anticipated levels of growth (including in the pharmaceutical market), estimates of capital expenditures, acquisition strategy, future expansion prospects or future capital expenditure levels and the expected Rand to US$ and/or INR rate of exchange, sales forecasts and parameters and other economic factors, such as, inter alia, interest rates.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Cipla Medpro and Cipla India caution that forward-looking statements are not guarantees of future performance. Actual results, financial and operating conditions, liquidity and the developments within the industry in which Cipla Medpro operates may differ materially from those made in, or suggested by, the forward-looking statements contained in this Circular.
All these forward-looking statements are based on estimates and assumptions as regards Cipla Medpro, as communicated by Cipla Medpro in publicly available documents, all of which estimates and assumptions, are inherently uncertain although Cipla Medpro believes them to be reasonable. Such estimates, assumptions or statements may not eventuate. Factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied in those statements or assumptions include other matters not yet known to Cipla Medpro and/or Cipla India or not currently considered material by Cipla Medpro and/or Cipla India. Important factors that could cause actual events to differ materially from Cipla Medpro and/or Cipla India’s expectations include the following: changes in political, economic, legal and social conditions in South Africa and elsewhere; fluctuations in currencies; future legislation, including regulations and rules as well as changes in enforcement policies; and other factors beyond Cipla Medpro and/or Cipla India’s control.
Cipla Medpro Shareholders should keep in mind that any forward-looking statement made in this Circular or elsewhere is applicable only at the date on which such forward-looking statement is made. New factors that could cause the business of Cipla Medpro not to develop as expected may emerge from time to time and it is not possible to predict all of them. Further, the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statement are not known. Cipla Medpro and Cipla India have no duty to, and do not intend to, update or revise the forward-looking statements contained in this Circular after the date of this Circular, except as may be required by law.
FOREIGN SHAREHOLDERS AND APPLICABLE LAWS
This Circular has been prepared for the purposes of complying with the Companies Act, the Takeover Regulations published in terms thereof and the JSE Listings Requirements, and the information disclosed may not be the same as that which would have been disclosed if this Circular had been prepared in accordance with the laws and regulations of any jurisdiction outside of South Africa or the listings requirements of any other stock exchange. The release, publication or distribution of this Circular in jurisdictions other than South Africa may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than South Africa should inform themselves about, and observe, any applicable requirements or restrictions. Any failure to comply with the applicable requirements or restrictions may constitute a violation
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of the securities laws of any such jurisdiction. This Circular is not intended to, and does not constitute, or form part of, an offer to sell or an invitation to purchase or subscribe for any securities or a solicitation of any vote or approval, including in any jurisdiction where such offer, invitation or solicitation would be unlawful. This Circular does not constitute a prospectus or a prospectus equivalent document. Cipla Medpro Shareholders are advised to read this Circular, which contains the terms and conditions of the Scheme, with care. Any decision to approve the Scheme or other response to the proposals should be made only on the basis of the information in this Circular.
The Scheme may be affected by the laws of the relevant jurisdictions of Cipla Medpro Shareholders not resident in South Africa. Such non-resident Cipla Medpro Shareholders should inform themselves about and observe any applicable legal requirements of such jurisdictions. It is the responsibility of any non-resident Cipla Medpro Shareholder to satisfy himself or herself or itself as to the full observance of the laws and regulatory requirements of the relevant jurisdiction in connection with the Scheme including the obtaining of any governmental, exchange control or other consents or the making of any filings which may be required, the compliance with other necessary formalities, the payment of any issue, transfer or other taxes or other requisite payments due to such jurisdiction.
The Scheme is governed by the laws of South Africa and is subject to any applicable South African laws and regulations, including the Companies Act and the Takeover Regulations.
Any Cipla Medpro Shareholder who is in doubt as to his, her or its position, including, without limitation, tax status and effects, should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.
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TABLE OF CONTENTS
Page
CORPORATE INFORMATION AND ADVISORS Inside front cover
IMPORTANT LEGAL NOTES 1
FORWARD-LOOKING STATEMENTS 1
SALIENT FEATURES 5
ACTION REQUIRED BY CIPLA MEDPRO SHAREHOLDERS 6
SALIENT DATES AND TIMES RELATING TO THE SCHEME 10
DEFINITIONS AND INTERPRETATIONS 12
COMBINED CIRCULAR TO CIPLA MEDPRO SHAREHOLDERS
1. INTRODUCTION 20
2. PURPOSE OF THIS CIRCULAR 21
3. BACKGROUND INFORMATION ON CIPLA INDIA 21
4. RATIONALE FOR THE SCHEME 21
5. BENEFITS OF THE SCHEME TO CIPLA MEDPRO SHAREHOLDERS 22
6. TERMS AND CONDITIONS OF THE SCHEME, SCHEME CONSIDERATION AND CIPLA MEDPRO SHAREHOLDERS’ RIGHTS 22
7. CIPLA MEDPRO SHARE INCENTIVE SCHEMES 31
8. SUSPENSION AND TERMINATION OF LISTING 3 3
9. THIRD PARTY APPROACHES 33
10. BREAK FEE 34
11. IMPLEMENTATION THROUGH A SUBSIDIARY 3 5
12. CIPLA MEDPRO BOARD 35
13. INTERESTS OF CIPLA INDIA AND CIPLA INDIA DIRECTORS’ INTERESTS INCIPLA MEDPRO SHARES 35
14. INTERESTS OF CIPLA MEDPRO AND CIPLA MEDPRO DIRECTORS IN CIPLA INDIA SECURITIES 35
15. INTERESTS OF CIPLA MEDPRO DIRECTORS IN CIPLA MEDPRO SHARES 35
16. IRREVOCABLE UNDERTAKINGS 35
17. INTERESTS AND DEALINGS IN CIPLA MEDPRO SHARES AND CIPLA INDIA SHARES BY PROVIDERS OF IRREVOCABLE UNDERTAKINGS 35
18. REMUNERATION OF CIPLA MEDPRO DIRECTORS 3 6
19. AGREEMENTS IN RELATION TO THE SCHEME 36
20. FINANCIAL INFORMATION OF CIPLA MEDPRO 36
21. INDEPENDENT BOARD 36
22. THE VIEWS OF THE INDEPENDENT BOARD AND THE CIPLA MEDPRO BOARD ON THE SCHEME 36
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Page
23. FUNDING AND CASH CONFIRMATION 36
24. CIPLA MEDPRO SHARE CAPITAL 37
25. CIPLA MEDPRO DIRECTORS’ SERVICE CONTRACTS 37
26. OTHER SERVICE CONTRACTS 38
27. REPORT OF THE INDEPENDENT EXPERT 38
28. STATEMENT WITH RESPECT TO AGREEMENTS BETWEEN CIPLA MEDPRO AND CIPLA INDIA AND OTHERS 38
29. INTENDED ACTION OF CIPLA MEDPRO DIRECTORS 39
30. FOREIGN SHAREHOLDERS AND EXCHANGE CONTROL REGULATIONS 39
31. TAX IMPLICATIONS FOR CIPLA MEDPRO SHAREHOLDERS 39
32. LITIGATION STATEMENT 39
33. INDEPENDENT BOARD RESPONSIBILITY STATEMENT 39
34. CIPLA INDIA RESPONSIBILITY STATEMENT 39
35. CIPLA MEDPRO RESPONSIBILITY STATEMENT 40
36. CONSENTS 40
37. DOCUMENTS AVAILABLE FOR INSPECTION 40
ANNEXURE 1: INDEPENDENT EXPERT’S REPORT 41
ANNEXURE 2: HISTORICAL FINANCIAL INFORMATION OF CIPLA MEDPRO 46
ANNEXURE 3: FOREIGN SHAREHOLDERS AND EXCHANGE CONTROL REGULATIONS 50
ANNEXURE 4: COPY OF SECTION 115 OF THE COMPANIES ACT 51
ANNEXURE 5: COPY OF SECTION 164 OF THE COMPANIES ACT 53
NOTICE CONVENING GENERAL MEETING 56
ANNEXURE GM1: SUMMARY OF APPLICABLE RIGHTS ESTABLISHED IN SECTION 58OF THE COMPANIES ACT 59
ANNEXURE GM2: COPY OF SECTION 164 OF THE COMPANIES ACT 60
FORM OF PROXY Attached
FORM OF SURRENDER AND TRANSFER IN RESPECT OF SCHEME Attached
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SALIENT FEATURES
The definitions and interpretations commencing on page 12 of this Circular apply to this Salient Features section.• A recommended cash offer has been made by Cipla India to acquire from each Cipla Medpro Shareholder,
subject to fulfilment of the Conditions Precedent, all (100%) of their Cipla Medpro Shares held on the Scheme Consideration Record Date (save for those Cipla Medpro Shares held by Dissenting Shareholders), for a cash consideration of R10.00 per Cipla Medpro Share (subject to any Adjustment), pursuant to the Scheme of Arrangement.
• If the Scheme of Arrangement is approved, Share Options held under the Cipla Medpro Share Incentive Schemes will, in terms thereof, be accelerated so that the holders thereof will be allowed to exercise such Share Options and to participate in the Scheme. Share Options which are not exercised will lapse.
• Alternatively, at Cipla India’s election (to be exercised by Cipla India on or before the fifth Business Day after the General Meeting), the Option Holders may be offered the Option Holder Offers.
• Immediately following implementation of the Proposed Transaction, Cipla Medpro will become a wholly owned Subsidiary of Cipla India (excluding only the Cipla Medpro Shares held by Dissenting Shareholders, if any) and will be delisted from the JSE.
• The Scheme Consideration of R10.00 per Cipla Medpro Share represents the following premiums:
Before the Offer(R/share)
The Offer(R/share)
Premium(%)
Closing price on 26 February 2013 (a) 9.67 10.00 3.430-Day VWAP prior to 26 February 2013 (b) 9.13 10.00 9.6Closing price on 8 May 2012 (c) 7.34 10.00 36.230-Day VWAP to 8 May 2012 (d) 6.82 10.00 46.7Closing price on 20 November 2012 (e) 7.69 10.00 30.030-Day VWAP to 20 November 2012 (f) 7.37 10.00 35.8
Notes:(a) The “Before” column reflects the closing JSE market value per Cipla Medpro Share on 26 February 2013, being the trading day
immediately preceding the finalisation of the Firm Intention Announcement.(b) The “Before” column reflects the 30-day volume weighted average JSE market value per Cipla Medpro Share calculated for
the trading days during the 30-day period up to and including the trading day immediately preceding the finalisation of the Firm Intention Announcement.
(c) The “Before” column reflects the closing JSE market value per Cipla Medpro Share on 8 May 2012, being the trading day immediately preceding the publication of the cautionary announcement regarding a potential offer by Cipla India.
(d) The “Before” column reflects the 30-day volume weighted average JSE market value per Cipla Medpro Share calculated for the trading days during the 30-day period up to and including 8 May 2012.
(e) The “Before” column reflects the closing JSE market value per Cipla Medpro Share on 20 November 2012, being the trading day immediately preceding the publication of the second cautionary announcement regarding a potential offer by Cipla India.
(f) The “Before” column reflects the 30-day volume weighted average JSE market value per Cipla Medpro Share calculated for the trading days during the 30-day period up to and including 20 November 2012.
• The Independent Board has appointed Bridge Capital as its independent expert in terms of the Takeover Regulations to consider the terms of the Proposed Transaction and to give an opinion on whether or not the Proposed Transaction is fair and reasonable to the holders of Cipla Medpro Shares and the Option Holders.
• Bridge Capital has indicated that in its view the terms and conditions of the Proposed Transaction are fair and reasonable to the holders of Cipla Medpro Shares and the Option Holders.
• The Independent Board is of the unanimous opinion that the terms and conditions of the Proposed Transaction are fair and reasonable to Cipla Medpro Shareholders and the Option Holders respectively, and has unanimously resolved to approve the Proposed Transaction and to recommend without qualification, to the Cipla Medpro Board and the Cipla Medpro Shareholders that they support the Proposed Transaction and vote in favour of the requisite resolutions to be passed to give effect to it.
• The Cipla Medpro Board has also unanimously resolved to support and facilitate the Proposed Transaction and is therefore recommending to Cipla Medpro Shareholders that they vote in favour of all resolutions required to implement the Proposed Transaction.
• Cipla India has received irrevocable undertakings from Majestic Silver Trading (the beneficial owner of 8 000 000 Cipla Medpro Shares), Mokone (the holder of 10 Cipla Medpro Shares) and Luthuli (the holder of 789 024 Cipla Medpro Shares) to vote in favour of the Scheme, such Cipla Medpro Shares representing approximately 2% of the existing issued ordinary share capital of Cipla Medpro.
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ACTION REQUIRED BY CIPLA MEDPRO SHAREHOLDERS
The definitions and interpretations commencing on page 12 of this Circular apply to this section on the Action Required by Cipla Medpro Shareholders.
This Circular is important and requires your immediate attention. The action you need to take is set out below. If you are in any doubt as to what action to take, you should consult your Broker, CSDP, banker, accountant, attorney or other professional adviser. If you have disposed of your Cipla Medpro Shares, this Circular should immediately be handed to the purchaser of such Cipla Medpro Shares or the Broker, CSDP or other agent who disposed of your Cipla Medpro Shares for you.
Please take careful note of the following provisions regarding the action to be taken by Cipla Medpro Shareholders:
A General Meeting of Cipla Medpro Shareholders will be held at the Cipla Medpro Offices, Board Room number 1, Belvedere Office Park, Block F, Bella Rosa Street, Bellville, Cape Town, at 10 h00 on Wednesday, 15 May 2013 to consider and, if deemed fit, to pass the special resolution required to:• approve a Scheme of Arrangement under the Companies Act which will (if the Scheme of
Arrangement becomes operative) enable Cipla India to acquire all (100%) of the Cipla Medpro Shares (save for those Cipla Medpro Shares held by Dissenting Shareholders, as more fully described in paragraph 6.13 of this Circular).
A notice convening such General Meeting is attached to, and forms part of this Circular.
1. IF YOU HAVE DEMATERIALISED YOUR CIPLA MEDPRO SHARES AND DO NOT HAVE “OWN-NAME” REGISTRATION:
1.1 Voting at the General Meeting
1.1.1 If you have not been contacted by your CSDP or Broker, it is advisable for you to contact your CSDP or Broker immediately and furnish your CSDP or Broker with your voting instructions in the manner and by the cut-off time and date stipulated by your CSDP or Broker in terms of the Custody Agreement between you and your CSDP or Broker.
1.1.2 If your CSDP or Broker does not obtain voting instructions from you, your CSDP or Broker will be obliged to act in accordance with the instructions contained in the Custody Agreement between you and your CSDP or Broker.
1.1.3 You must not complete the attached form of proxy (green). Your CSDP or Broker will issue the proxy if required by you. See paragraph 1.2.2 below.
1.2 Attendance, representation and voting at the General Meeting
1.2.1 In accordance with the Custody Agreement between you and your CSDP or Broker, you must advise your CSDP or Broker if you wish to:1.2.1.1 attend, speak at and/or vote at the General Meeting; or1.2.1.2 send a proxy to represent you at the General Meeting.
1.2.2 Your CSDP or Broker should then issue the necessary letter of representation and/or proxy form to you for you or your proxy to attend, speak and vote at the General Meeting.
1.3 Surrender of Documents of Title
You must not complete the attached Form of Surrender and Transfer (blue). Dematerialised Shareholders do not have to surrender any Documents of Title. This will be done by your CSDP or Broker.
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1.4 Settlement of Scheme Consideration
If the Scheme becomes operative and you are a Scheme Participant on the Scheme Consideration Record Date, you will, in terms of the Custody Agreement between you and your CSDP or Broker, have your account held at your CSDP or Broker credited with the Scheme Consideration and debited with the Cipla Medpro Shares transferred to Cipla India pursuant to the Scheme on the Operative Date. If you are a Dissenting Shareholder who subsequently becomes a Scheme Participant after the Scheme Consideration Record Date pursuant to paragraph 6.13.6.2 of this Circular, you will, in terms of the Custody Agreement between you and your CSDP or Broker, have your account held at your CSDP or Broker credited with the Scheme Consideration and debited with the Cipla Medpro Shares transferred to Cipla India pursuant to the Scheme on the date set out in paragraph 6.13.6.2 of this Circular.
2. IF YOU HAVE NOT DEMATERIALISED YOUR CIPLA MEDPRO SHARES OR IF YOU HAVE DEMATERIALISED YOUR CIPLA MEDPRO SHARES WITH “OWN-NAME” REGISTRATION:
2.1 Attendance, representation and voting at the General Meeting
You may attend, speak at and vote at the General Meeting in person (or if you are a company or other body corporate be represented by a duly authorised natural person). Alternatively, you may appoint a proxy to represent you at the General Meeting by completing the attached form of proxy (green) in accordance with its instructions and (i) returning it to the Transfer Secretaries, Computershare Investor Services Proprietary Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001 or PO Box 61051, Marshalltown, 2107, to be received by them by 10h00 on Monday, 13 May 2013 (or not less than 48 hours before any adjournment or postponement of the General Meeting) or (ii) returning it to Cipla Medpro at Belvedere Office Park, Block F, Bella Rosa Street, Bellville, Cape Town (marked for the attention of the Company Secretary), to be received after the last time specified in (i) above but before the commencement of the General Meeting (or any adjournment or postponement of the General Meeting) or (iii) by handing it to the chairman of the General Meeting before the appointed proxy exercises any of your shareholder rights at the General Meeting (or any adjournment or postponement of the General Meeting), provided that, should you return such form of proxy (green) in terms of (ii) above, you will also be required to furnish a copy of such form of proxy (green) to the chairman of the General Meeting before the appointed proxy exercises any of your shareholder rights at the General Meeting (or any adjournment or postponement of the General Meeting). You may also use any other valid form of proxy, should you so wish.
2.2 Surrender of Documents of Title (this applies only to Certificated Shareholders and not to “own-name” Dematerialised Shareholders)
2.2.1 In order to have the Scheme Consideration paid to you, you are required to complete the attached Form of Surrender and Transfer (blue) in accordance with its instructions and return it, together with the Documents of Title representing all your Certificated Cipla Medpro Shares, to the Transfer Secretaries, Computershare Investor Services Proprietary Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001 or PO Box 61763, Marshalltown, 2107.
2.2.2 Documents of Title held by Certificated Shareholders in respect of their Cipla Medpro Shares will cease to be of any value, and shall not be good for delivery, from the Operative Date, other than for surrender in terms of the Scheme and/or the Appraisal Rights.
2.3 Settlement of Scheme Consideration
2.3.1 Certificated Shareholders
2.3.1.1 If (i) the Scheme becomes operative, (ii) you are a Scheme Participant on the Scheme Consideration Record Date, (iii) you are a Certificated Shareholder and (iv) you have surrendered your Documents of Title in accordance with paragraph 2.2 above, on or before 12 h00 on the Scheme Consideration Record Date, the Scheme Consideration will be posted to you, at your risk, within five Business Days of the Operative Date unless you elect in the Form of Surrender and Transfer (blue) to receive the Scheme Consideration by way of an EFT to a valid South African Rand denominated bank account, in which case the Scheme Consideration will be paid to such bank account on the Operative Date.
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2.3.1.2 If (i) the Scheme becomes operative, (ii) you are a Scheme Participant on the Scheme Consideration Record Date, (iii) you are a Certificated Shareholder and (iv) you surrender your Documents of Title after 12 h00 on the Scheme Consideration Record Date, the relevant Transfer Secretaries will only post the Scheme Consideration to you, at your risk, or pay it to you by way of an EFT to a valid South African Rand denominated bank account (if you selected that option on the Form of Surrender and Transfer (blue)), within five Business Days of receipt of your Documents of Title and Form of Surrender and Transfer (blue), provided that should you:2.3.1.2.1 fail to surrender your Documents of Title and completed Form of
Surrender and Transfer (blue) to the relevant Transfer Secretaries then, unless otherwise agreed in writing between Cipla India, Cipla Medpro and you, the relevant Scheme Consideration will be held in trust by Cipla Medpro (or any third party nominated by it for this purpose from time to time) for your benefit and at your risk for a maximum period of three years, after which period such funds shall be made over to the Guardians Fund. For the avoidance of doubt, no interest will accrue in favour of, or be payable to, any Scheme Participant on any such funds held by Cipla Medpro and/or in trust; and
2.3.1.2.2 be a Dissenting Shareholder who subsequently becomes a Scheme Participant after the Scheme Consideration Record Date pursuant to paragraph 6.13.6.2 of this Circular, you will still need to surrender your Documents of Title, together with a completed Form of Surrender and Transfer (blue), to the relevant Transfer Secretaries and payment of the Scheme Consideration will only be posted to you or paid to you by way of EFT to a valid South African Rand denominated bank account (if you select that option on the Form of Surrender and Transfer (blue)) on the date set out in paragraph 6.13.6.2 of this Circular.
2.3.1.3 If you wish to surrender your Documents of Title in anticipation of the Scheme becoming operative:2.3.1.3.1 you should complete the Form of Surrender and Transfer (blue)
in accordance with its instructions and return it, together with your Documents of Title, to the Transfer Secretaries, Computershare Investor Services Proprietary Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001 or PO Box 61763, Marshalltown, 2107; and
2.3.1. 3.2 it should be noted that you will not be able to Dematerialise or deal in your Cipla Medpro Shares between the date of surrender of your Documents of Title and the Operative Date or, if the Scheme does not become operative, the date on which your Documents of Title are returned to you pursuant to paragraph 2.3.1.5 below.
2.3.1.4 Documents of Title surrendered prior to 12 h00 on the Scheme Consideration Record Date in anticipation of the Scheme becoming operative will be held in trust by the relevant Transfer Secretaries, at the risk of the Certificated Shareholder, pending the Scheme becoming operative.
2.3.1.5 Should the Scheme not become operative any Documents of Title surrendered to and held by the relevant Transfer Secretaries will be returned to you by the relevant Transfer Secretaries, at your own risk, by registered post within five Business Days from the date of receipt of the Documents of Title or the date on which Cipla Medpro notifies the Transfer Secretaries that the Scheme will not become operative, whichever is the later.
2.3.2 Own-Name Dematerialised Shareholders
2.3.2.1 If the Scheme becomes operative and you are a Scheme Participant on the Scheme Consideration Record Date, you will, in terms of the Custody Agreement between you and your CSDP or Broker, have your account held at your CSDP or Broker credited with the Scheme Consideration and debited with the Cipla Medpro Shares
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transferred to Cipla India pursuant to the Scheme on the Operative Date. If you are a Dissenting Shareholder who subsequently becomes a Scheme Participant after the Scheme Consideration Record Date pursuant to paragraph 6.13.6.2 of this Circular, you will, in terms of the Custody Agreement between you and your CSDP or Broker, have your account held at your CSDP or Broker credited with the Scheme Consideration and debited with the Cipla Medpro Shares transferred to Cipla India pursuant to the Scheme on the date set out in paragraph 6.13.6.2 of this Circular.
2.3.2.2 You must not complete the attached Form of Surrender and Transfer (blue).
3. GENERAL
3.1 Dematerialisation
If you wish to Dematerialise your Cipla Medpro Shares, please contact your CSDP or Broker. No Dematerialisation or rematerialisation of Cipla Medpro Shares may take place from the commencement of the Scheme LDT. You do not need to Dematerialise your Cipla Medpro Shares to receive the Scheme Consideration.
3.2 Documents of Title lost or destroyed
If Documents of Title relating to any Scheme Shares to be surrendered are lost or destroyed, Certificated Scheme Participants should nevertheless return the Form of Surrender and Transfer (blue), duly signed and completed, together with an indemnity form obtainable from the Transfer Secretaries.
Cipla Medpro may, in its discretion and with the consent of Cipla India, dispense with the surrender of such Documents of Title upon production of evidence satisfactory to Cipla Medpro that the Documents of Title to the Scheme Shares in question have been lost or destroyed and upon provision of a suitable indemnity on terms satisfactory to it. Indemnity forms are obtainable from the Transfer Secretaries.
3.3 Electronic participation
3.3.1 Cipla Medpro Shareholders are advised in terms of section 63(3) of the Companies Act and in accordance with clause 5.6 of Cipla Medpro’s Memorandum of Incorporation, that:3.3.1.1 while the General Meeting will be held in person, it is open to Scheme Members
and/or their proxies to participate in the General Meeting by electronic communication, as contemplated in section 63(2) of the Companies Act; and
3.3 .1.2 Scheme Members and/or their proxies will be able, at their own expense, to access the meeting by means of a teleconference facility, arrangements for which can be made through the office of the Company Secretary.
3.3.2 Cipla Medpro Shareholders who will (or whose proxies will) participate in the General Meeting by electronic communication should confirm, by no later than 10 h00 on Monday, 13 May 2013 to the Company Secretary whether they wish to vote at the General Meeting by electronic communication.
4. DISSENTING SHAREHOLDERS’ APPRAISAL RIGHTS
Cipla Medpro Shareholders are advised and informed of their rights in terms of section 164 of the Companies Act as set out in Annexure 5 of this Circular. Cipla Medpro Shareholders who wish to exercise their rights in terms of the aforementioned section are required, before the resolution to approve the Scheme is voted on at the General Meeting, to give notice to Cipla Medpro in writing objecting to the resolution, and then to vote against the resolution at the General Meeting, and thereafter to comply with the procedural requirements of section 164 of the Companies Act.
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SALIENT DATES AND TIMES RELATING TO THE SCHEME
The definitions and interpretations commencing on page 12 of this Circular shall apply to this section on Salient Dates and Times relating to the Scheme.
2013
Circular posted to Cipla Medpro Shareholders and notice convening the General Meeting published on SENS on Monday, 15 April
Notice convening the General Meeting published in the South African press on Tuesday, 16 April
Last day to trade Cipla Medpro Shares on the JSE in order to be recorded in the Register on the Voting Record Date in order to be eligible to vote at the General Meeting (see note 1 below) on Friday, 3 May
Voting record date on which Cipla Medpro Shareholders must be recorded in the Register in order to vote at the General Meeting by close of trading (see note 2 below) on Friday, 10 May
Last date and time to lodge forms of proxy for the General Meeting with the Transfer Secretaries by 10 h00 on Monday, 13 May
Last date and time for Cipla Medpro Shareholders to give notice in terms of section 164 of the Companies Act objecting to the special resolution approving the Scheme by 10 h00 on Wednesday, 15 May
General Meeting to be held at 10 h00 on Wednesday, 15 May
Results of the General Meeting released on SENS on Wednesday, 15 May
Results of the General Meeting published in the South African press on Thursday, 16 May
If the Scheme is approved by Cipla Medpro Shareholders at the General Meeting:
Last date on which Cipla Medpro Shareholders can apply to the Court in terms of section 115(3) of the Companies Act Wednesday, 29 May
Last date for Cipla Medpro to send notices of the adoption of the special resolution approving the Scheme to objecting Cipla Medpro Shareholders, in terms of section 164 of the Companies Act Wednesday, 29 May
If no Cipla Medpro Shareholders exercise their rights in terms of section 115 of the Companies Act:
Finalisation Date estimated to be on or about Friday, 28 June
Finalisation Date announcement estimated to be published on SENS on Friday, 28 June
Finalisation Date announcement estimated to be published in the South African press on Monday, 1 July
Last day to trade to participate in the Scheme Consideration estimated to be on Friday, 5 July
Suspension of listing of Cipla Medpro Shares on the JSE estimated to be at commencement of trading on Monday, 8 July
Scheme Consideration Record Date to be recorded in the Register in order to receive the Scheme Consideration estimated to be by close of trading on or about Friday, 12 July
Operative Date of the Scheme estimated to be on Monday, 15 July
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2013
Subject to the delayed implementation provisions regulating Dissenting Shareholders set out in paragraph 6.13.6.2 of this Circular, payment of the Scheme Consideration estimated to be transferred electronically or posted to Certificated Scheme Participants (if the Form of Surrender and Transfer (blue) and Documents of Title are received by the relevant Transfer Secretaries on or before 12 h00 on the Scheme Consideration Record Date) on or about Monday, 15 July
Subject to the delayed implementation provisions regulating Dissenting Shareholders set out in paragraph 6.13.6.2 of this Circular, Dematerialised Scheme Participants estimated to have their accounts held at their CSDP or Broker credited with the Scheme Consideration on or about Monday, 15 July
Delisting of Cipla Medpro from the JSE estimated to be on Tuesday, 16 July
Notes:
1. The above dates and times are subject to such changes as may be agreed to by Cipla Medpro and Cipla India and/or may be subject to obtaining certain regulatory approvals. If the Conditions Precedent are not met by Friday, 28 June 2013, an updated timetable will be published on SENS and published in the South African press.
2. Cipla Medpro Shareholders should note that, as trade in Cipla Medpro Shares on the JSE is settled in the electronic settlement system used by Strate, settlement of trades takes place five Business Days after the date of such trades. Therefore, Cipla Medpro Shareholders who acquire Cipla Medpro Shares on the JSE after the last day to trade in Cipla Medpro Shares so as to be recorded in the Register on the Voting Record Date will not be entitled to vote at the General Meeting.
3. Cipla Medpro Shareholders who wish to exercise their Appraisal Rights are referred to Annexure 5 of this Circular for purposes of determining the relevant timing for the exercise of their Appraisal Rights.
4. Cipla Medpro Shareholders who wish to exercise their right in terms of section 115(3) of the Companies Act, to require the approval of a court for the Scheme, should refer to Annexure 4 of this Circular which includes an extract of section 115 of the Companies Act. Should Cipla Medpro Shareholders exercise their rights in terms of section 115(3) of the Companies Act, the dates and times set out above will not be relevant. Cipla Medpro Shareholders will be notified separately of the applicable dates and times under this process.
5. Dematerialised Shareholders, other than those with “own-name” registration, must provide their CSDP or Broker with their instructions for voting at the General Meeting by the cut-off time and date stipulated by their CSDP or Broker in terms of their respective Custody Agreements between them and their CSDP or Broker.
6. No Dematerialisation or rematerialisation of Cipla Medpro Shares may take place from the commencement of the Scheme LDT.
7. If the General Meeting is adjourned or postponed, forms of proxy (green) submitted for the initial General Meeting will remain valid in respect of any adjournment or postponement of the General Meeting.
8. Although the salient dates and times are stated to be subject to change, such statement may not be regarded as consent or dispensation for any change to time periods which may be required in terms of the Takeover Regulations, where applicable, and any such consents or dispensations must be specifically applied for and granted.
9. All times referred to in this Circular are references to South African Standard Time.
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DEFINITIONS AND INTERPRETATIONS
In this Circular and the annexures and forms attached hereto, unless otherwise stated or clearly indicated by the context, the words in the first column have the meanings stated opposite them in the second column, words in the singular include the plural and vice versa, words importing one gender include the other genders, and pronouns relating to a natural person include references to a juristic person and vice versa:
“ ABSA CIBW” or “Financial Adviser to Cipla Medpro” or “Transaction Sponsor”
Absa Corporate and Investment Bank, a division of ABSA Bank Limited (Registration number 1986/004794/06), a public company duly registered and incorporated in accordance with the laws of South Africa, all the issued shares of which are listed on the JSE;
“Accelerated Option Shares” Cipla Medpro Shares to be allotted and issued by Cipla Medpro in terms of each of the Cipla Medpro Share Incentive Schemes as a result of (i) the acceleration, on the Finalisation Date, of all Share Options so as to vest and be exercisable in full; and (ii) the exercise of those accelerated Share Options by the relevant Option Holders;
“Adjustment” an adjustment, if any, to the Scheme Consideration as contemplated in paragraph 6.10 of this Circular;
“Affiliate” in respect of any person, any other person or entity that directly or indirectly Controls, is Controlled by, or is under common Control with, such person;
“Appraisal Rights” the rights afforded to Cipla Medpro Shareholders in terms of section 164 of the Companies Act, an extract of which is set out in Annexure 5 to this Circular;
“Appraisal Rights Offer” an offer made by Cipla Medpro to a Cipla Medpro Shareholder to acquire such person’s Cipla Medpro Shares in terms of section 164(11) of the Companies Act;
“Assumed Share Capital” means the sum of 446 490 684 Cipla Medpro Shares (representing the number of Cipla Medpro Shares in issue as at the date of this Circular, being 15 April 2013, plus 5 327 615 Cipla Medpro Shares (representing the total number of additional Cipla Medpro Shares which may be issued pursuant to the Share Option arrangements referred to in paragraph 7 of this Circular);
“Banks Act” the South African Banks Act, No 94 of 1990, as amended from time to time;
“BEE” black economic empowerment;
“Beneficial Owner” a person on whose behalf any Dematerialised Cipla Medpro Share (not held in “own-name”) is held by a CSDP or Broker or a nominee of a CSDP or Broker in accordance with a Custody Agreement;
“Bridge Capital” Bridge Capital Advisors Proprietary Limited (Registration number 1998/016302/07), a private company registered and incorporated in South Africa;
“Broker” a “stockbroker”, as defined in the Securities Services Act, or its nominee;
“BSE Limited” Bombay Stock Exchange Limited;
“Business Day” a day other than a Saturday, Sunday or official public holiday in South Africa;
“Cents” South African cents in the official currency of South Africa;
“CEO” Chief Executive Officer;
“Certificated Cipla Medpro Shares” Cipla Medpro Shares which have not yet been Dematerialised, title to which is represented by a paper Share Certificate or other physical Document of Title;
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“Certificated Scheme Members” Scheme Members who hold Certificated Cipla Medpro Shares;
“Certificated Scheme Participants” Scheme Participants who hold Certificated Cipla Medpro Shares;
“Certificated Scheme Shares” Scheme Shares which are Certificated Cipla Medpro Shares;
“Certificated Shareholders” holders of Certificated Cipla Medpro Shares;
“CFO” Chief Financial Officer;
“Circular” this Circular to Cipla Medpro Shareholders, including the Notice and Annexures;
“Cipla India” Cipla Limited (Registration number 11-2380) a publicly held company incorporated in accordance with the laws of India, the subscribed and paid up shares of which are listed on the BSE Limited and the National Stock Exchange of India Limited (NSE), and Global Depository Receipts of which are listed on the Luxembourg Stock Exchange (Societe De La Bourse De Luxembourg), holding no shares or securities in Cipla Medpro at the date of this Circular;
“Cipla India Board” the board of directors of Cipla India, as constituted from time to time;
“Cipla Medpro” or “the Company” Cipla Medpro South Africa Limited (Registration number 2002/018027/06), a public company incorporated in accordance with the laws of South Africa, all the issued ordinary shares of which are listed on the JSE with share code CMP;
“ Cipla Medpro Board” or “Board of Directors”
the board of directors of Cipla Medpro, as constituted from time to time;
“Cipla Medpro Group” Cipla Medpro and its Subsidiaries and Affiliates;
“Cipla Medpro Shareholders” Certificated Shareholders and Dematerialised Shareholders;
“ Cipla Medpro Share Incentive Schemes”
collectively, ESOP 1 and ESOP 2;
“Cipla Medpro Shares” ordinary shares with a par value of R0.001 each in the issued share capital of Cipla Medpro;
“Common Monetary Area” South Africa, the Republic of Namibia and the Kingdoms of Swaziland and Lesotho;
“Companies Act” the South African Companies Act, No 71 of 2008, as amended from time to time;
“Competition Act” the South African Competition Act, No 89 of 1998, as amended from time to time;
“Competition Authorities” the Competition Authorities (Botswana), the Competition Authorities (Namibia), the Competition Authorities (Other) and/or the Competition Authorities (SA), as applicable;
“Competition Authorities (Botswana)” the Botswana Competition Authority and/or Competition Commission as contemplated in the Botswana Competition Act, No 17 of 2009, as applicable;
“Competition Authorities (Namibia)” the Namibian Competition Commission established under the Namibia Competition Act, No 2 of 2003 and/or the High Court of Namibia, as applicable;
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“Competition Authorities (Other)” the COMESA Competition Commission, Board of Commissioners and/or the COMESA Court of Justice established in terms of the COMESA Treaty of 1982, as applicable and, to the extent determined by Cipla India pursuant to paragraph 6.7.3, (i) the Mauritius Competition Commission established under the Mauritius Competition Act, No 25 of 2007 and/or the Supreme Court of Mauritius, as applicable; and/or (ii) the Swaziland Competition Commission established under the Swaziland Competition Act, No 125 of 2007 and/or the High Court of Swaziland, as applicable; and/or (iii) the Competition and Consumer Protection Commission as established under the Zambian Competition and Fair Trading Act, No 18 of 1994 and/or the Competition Tribunal as established under the Zambia Competition and Consumer Protection Act, No 24 of 2010, as applicable;
“Competition Authorities (SA)” the Competition Commission, Competition Tribunal and/or the Competition Appeal Court established under the Competition Act, as applicable;
“Conditions Precedent” the conditions precedent to which the Scheme is subject, as set out in paragraph 6.2 of this Circular;
“Control” is as defined in section 2(2)(a) of the Companies Act;
“Court” any applicable High Court of South Africa or appeal body having relevant jurisdiction;
“CSDP” a “participant”, as defined in the Securities Services Act, appointed by a Dematerialised Shareholder for the purpose of and in regard to dematerialisation in terms of the Securities Services Act;
“Custody Agreement” a custody mandate or other similar agreement between a Dematerialised Shareholder and a CSDP or Broker, regulating their relationship in respect of Dematerialised Shares held on a Sub-register of Cipla Medpro Shareholders administered by a CSDP or Broker on behalf of that person;
“Dematerialisation” the process in accordance with the requirements of Strate by which Cipla Medpro Shares held by Certificated Shareholders are converted or held in electronic form as Dematerialised Cipla Medpro Shares and recorded in the Sub-register maintained by a CSDP and a reference to “Dematerialised” shall be read accordingly;
“Dematerialised Cipla Medpro Shares” Cipla Medpro Shares which have been Dematerialised through a CSDP or Broker and are held on the Sub-register administered by CSDPs in electronic form;
“Dematerialised Scheme Members” Scheme Members who hold Dematerialised Cipla Medpro Shares;
“Dematerialised Scheme Participants” Scheme Participants who hold Dematerialised Cipla Medpro Shares;
“Dematerialised Scheme Shares” Scheme Shares which are Dematerialised Cipla Medpro Shares;
“Dematerialised Shareholders” holders of Dematerialised Cipla Medpro Shares;
“Detailed Cautionary Announcement” the cautionary announcement published by Cipla Medpro on SENS on Wednesday, 21 November 2012;
“Dissenting Shareholder” at any relevant time, a Cipla Medpro Shareholder who has validly exercised his, her or its Appraisal Rights and demanded, in terms of sections 164(5) to 164(8) of the Companies Act, that Cipla Medpro pay him, her or it the fair value of all his, her or its Cipla Medpro Shares, for so long as none of the circumstances contemplated in section 164(9) of the Companies Act have occurred in relation to such Cipla Medpro Shareholder;
“Documents of Title” valid Share Certificates, certificated transfer deeds, balance receipts or any other tangible proof of ownership acceptable to Cipla India and Cipla Medpro in respect of Cipla Medpro Shares;
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“EFT” electronic funds transfer;
“Emigrant” an emigrant from the Common Monetary Area whose address is outside the Common Monetary Area;
“ESOP 1” the Cipla Medpro South Africa Share Option Scheme, adopted on or about 20 May 2005;
“ESOP 2” the Cipla Medpro South Africa Employee Share Option Scheme, adopted on or about 20 January 2011;
“Exchange Control Regulations” the Exchange Control Regulations, 1961, as amended from time to time, issued in terms of section 9 of the South African Currency and Exchanges Act, No 9 of 1933, as amended from time to time;
“Finalisation Date” the date on which the last of the Conditions Precedent has been fulfilled or, if applicable, waived;
“Firm Intention Announcement” the firm intention announcement released by Cipla Medpro on SENS on Thursday, 28 February 2013;
“First Cautionary Announcement” the cautionary announcement published by Cipla Medpro on SENS on Wednesday, 9 May 2012;
“Foreign Shareholder” a Cipla Medpro Shareholder who is a non-resident of South Africa as contemplated in the Exchange Control Regulations;
“Form of Surrender and Transfer” form of surrender and transfer (blue) for use by Certificated Shareholders, to be completed and to accompany surrendered Documents of Title;
“General Meeting” the general meeting of Cipla Medpro Shareholders to be held at Cipla Medpro Offices, Board Room number 1, Belvedere Office Park, Block F, Bella Rosa Street, Bellville, Cape Town at 10 h00 on 15 May 2013 (and any adjournment or postponement thereof) to consider and, if deemed fit, approve the Scheme and the special and ordinary resolutions recorded in the Notice;
“Governmental Authority” any applicable supra-national, national, state, municipal or local government (including any subdivision, court, administrative, trade or regulatory agency or commission or other authority thereof) in each case in any jurisdiction which is responsible for applying national security, foreign investment, exchange control, pharmaceutical/medicines, merger control or other competition or antitrust legislation or regulation in such jurisdiction, including but not limited to: the Competition Authorities and the South African Reserve Bank, along with the authorities before which appeals against the decisions made by any of the foregoing may be brought;
“Income Tax Act” the South African Income Tax Act, No 58 of 1962, as amended from time to time;
“Independent Board” the independent committee of directors of Cipla Medpro contemplated in Regulation 81(j), consisting of Mokone, M Mosweu and S Zungu, none of whom hold any material shareholdings in Cipla Medpro, constituted for the purpose of the Proposed Transaction as contemplated in Regulation 110;
“Independent Expert” Bridge Capital, appointed as independent expert to provide external advice to the Cipla Medpro Board and the Independent Board in relation to the Proposed Transaction and Scheme in terms of section 114 of the Companies Act and Regulation 110(1);
“Independent Expert’s Report” the report prepared by the Independent Expert, as envisaged in terms of section 114 of the Companies Act, applicable to the Scheme and contained in this Circular;
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“Implementation Agreement” the written implementation agreement entered into between Cipla India and Cipla Medpro in relation to the Scheme and the transactions described in this Circular, dated 27 February 2013 as amended from time to time;
“ISIN” International Securities Identification Number;
“JSE” JSE Limited (Registration number 2005/022939/06), a public company registered and incorporated in South Africa, licensed as an exchange under the Securities Services Act;
“JSE Listings Requirements” the Listings Requirements of the JSE, as applicable from time to time;
“Last Day to Trade for the Scheme” or “Scheme LDT”
the last day to trade in Cipla Medpro Shares on the JSE in order to be recorded in the Register by the Scheme Consideration Record Date in order to be eligible to participate in the Scheme as a Scheme Participant;
“ Last Day to Trade for Voting at the General Meeting”
the last day to trade in Cipla Medpro Shares, which is estimated to be Friday, 3 May 2013, in order to be recorded in the Register on the Voting Record Date in order to be eligible to vote at the General Meeting;
“Last Practicable Date” Friday, 12 April 2013 being the last practicable date prior to the finalisation of this Circular;
“Luthuli” Penuell Cornwell Sibusiso Luthuli, a director of Cipla Medpro and the Chairman of the Cipla Medpro Board;
“Majestic Silver Trading” Majestic Silver Trading 223 Proprietary Limited (Registration number 2005/038532/07), a private company duly registered and incorporated in accordance with the laws of South Africa, the entire issued share capital of which is held by current and former employees of the Cipla Medpro Group, holding 8 million Cipla Medpro Shares at the date of this Circular, which comprises approximately 1.79% of the issued Cipla Medpro Shares;
“Mokone” Nthabiseng Dinah Mokone, a director of Cipla Medpro;
“ Morgan Stanley” or “Financial Adviser to Cipla India”
Morgan Stanley South Africa Proprietary Limited (Registration number 1994/000261/07), a private company duly registered and incorporated in accordance with the laws of South Africa;
“NDA” the Non-Disclosure and Exclusivity Agreement between Cipla India and Cipla Medpro dated 8 May 2012, as amended by a letter from Cipla India to Cipla Medpro dated 23 October 2012;
“Nominated Subsidiary” any Subsidiary of Cipla India which Cipla India wishes to substitute itself with and in respect of which Cipla India has delivered to Cipla Medpro at any time prior to the Scheme Consideration Record Date, a Nominated Subsidiary’s Deed of Adherence in the form set out in Annex G of the Implementation Agreement, duly signed by such Subsidiary;
“Notice” the notice of the General Meeting incorporated in this Circular;
“Nedbank Capital” or “Sponsor” Nedbank Capital a division of Nedbank Limited (Registration number 1951/000009/06), a public company duly registered and incorporated in accordance with the laws of South Africa; all the issued shares of which are listed on the JSE;
“ Norton Rose” or “Legal Adviser to Cipla Medpro”
Norton Rose South Africa (Incorporated as Deneys Reitz Inc) (Registration number 1984/003385/21), a company duly registered and incorporated in accordance with the laws of South Africa;
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“Offer” the conditional offer by Cipla India to acquire all of the Cipla Medpro Shares held by Cipla Medpro Shareholders on the Scheme Consideration Record Date, for the Scheme Consideration, by way of the Scheme (including the Accelerated Option Shares), and, as applicable, to terminate the Share Option Rights pursuant to the Option Holder Offers;
“Offer Period” is as defined in section 117(1)(g) of the Companies Act;
“Operative Date” the date on which the Scheme becomes operative (if approved), being the first Business Day following the Scheme Consideration Record Date, or such other date as agreed between Cipla India and Cipla Medpro and announced on SENS and published in the South African press;
“Option Holders” holders of Share Options;
“Option Holder Offers” the offers, which may be made by Cipla India to the Option Holders, at Cipla India’s election (to be exercised by Cipla India on or before the fifth Business Day after the General Meeting) to terminate the Share Option Rights of Option Holders, in exchange for payment of the Option Share Offer Settlement Amount;
“ Option Share Offer Settlement Amount”
an amount equal to the “in the money” value of each Share Option held by an Option Holder, being an amount equal to the difference between the Scheme Consideration and the strike price payable per Cipla Medpro Share on the exercise of the relevant Share Option;
“ Own-Name Dematerialised Shareholders”
those Dematerialised Shareholders that hold Own-Name Dematerialised Cipla Medpro Shares;
“ Own-Name Dematerialised Cipla Medpro Shares”
Dematerialised Cipla Medpro Shares with Own-Name Registration;
“Own-Name Registration” the registration of Dematerialised Cipla Medpro Shares in the name of the beneficial owner thereof (as opposed to in the name of a nominee for the beneficial owner) in a Sub-register;
“ Own-Name Dematerialised Scheme Members”
Scheme Members who hold Own-Name Dematerialised Cipla Medpro Shares;
“ Own-Name Dematerialised Scheme Participants”
Scheme Participants who hold Own-Name Dematerialised Cipla Medpro Shares;
“Proposed Transaction” the transaction proposed by Cipla India to acquire (subject to fulfilment of the Conditions Precedent) the Scheme Shares for the Scheme Consideration by way of the Scheme and if Cipla India so elects (such election to be exercised by Cipla India on or before the fifth Business Day after the General Meeting), to terminate the Share Option Rights pursuant to Option Holder Offers;
“Rand” or “R” or “ZAR” South African Rand, the official currency of South Africa;
“Register” Cipla Medpro’s securities register, including all Sub-registers;
“Regulations” the Companies Regulations, 2011, published in terms of the Companies Act, as applicable from time to time;
“Requisite Majority” in connection with the General Meeting, a majority representing not less than 75% of the voting rights exercised by Scheme Members present in person or by proxy and voting at the General Meeting and at which sufficient persons are present to exercise, in aggregate, at least 25% of all of the voting rights that are entitled to be exercised on that matter;
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“ Scheme” or “Scheme of Arrangement”
the Scheme of Arrangement in terms of section 114, and in particular section 114(1)(c), of the Companies Act proposed by the Cipla Medpro Board between Cipla Medpro and Cipla Medpro Shareholders in terms of which Cipla India will, if the Scheme becomes operative, acquire the Scheme Shares for the Scheme Consideration, as more fully set out on pages 20 to 40 of this Circular, subject to any modification or amendment made thereto with the approval of the TRP;
“Scheme Consideration” the consideration payable by Cipla India to each Scheme Participant in terms of the Scheme, being R10.00 in cash per Cipla Medpro Share held on the Scheme Consideration Record Date that is acquired by Cipla India, subject to any Adjustment;
“Scheme Consideration Guarantees” the bank guarantees provided by FirstRand Bank Limited (acting through its Rand Merchant Bank division) and The Hongkong and Shanghai Banking Corporation Limited, Johannesburg Branch, to the TRP, in compliance with Regulation 111(4) and (5) of the Takeover Regulations, in security for payment of the Scheme Consideration;
“Scheme Consideration Record Date” 17 h00 on the fifth Business Day after the Scheme LDT, being the latest time and date for Cipla Medpro Shareholders to be registered as such in the Register in order to participate in the Scheme and receive the Scheme Consideration;
“ Scheme Consideration Record Date Share Capital”
means the sum of (i) the Cipla Medpro Shares in issue as at the Scheme Consideration Record Date plus (ii) Cipla Medpro Shares, if any, which are still to be issued pursuant to the provisions of paragraphs 7.2.2 and 7.3.3;
“Scheme LDT” the last day to trade Cipla Medpro Shares on the JSE in order to be registered in the Register on the Scheme Consideration Record Date;
“Scheme Members” Cipla Medpro Shareholders recorded as such in the Register on the Voting Record Date, which are lawfully entitled to attend, speak at and vote at the General Meeting;
“Scheme Participants” (a) holders of Scheme Shares who are entitled to receive the Scheme Consideration, being those Cipla Medpro Shareholders who are registered as such in the Register on the Scheme Consideration Record Date, excluding any Dissenting Shareholders and (b) Dissenting Shareholders who are subsequently deemed to be Scheme Participants pursuant to paragraph 6.13.6 of this Circular;
“Scheme Shares” all (100%) Cipla Medpro Shares registered to or held by Scheme Participants on the Scheme Consideration Record Date;
“Securities Services Act” the South African Securities Services Act, No 36 of 2004, as amended from time to time;
“SENS” the Stock Exchange News Service of the JSE;
“Share Certificate” the paper share certificate or other Document of Title, representing the shares which are held and which have not been Dematerialised;
“Share Options” unexercised (as at the Finalisation Date) options (vested and unvested), if any, to subscribe for or acquire Cipla Medpro Shares issued to Option Holders in terms of the Cipla Medpro Share Incentive Schemes, whether such options are yet capable of exercise or not;
“Share Option Rights” the rights of an Option Holder in respect of his or her Share Options;
“South Africa” the Republic of South Africa;
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“Strate” Strate Limited (Registration number 1998/022242/06), a public company registered and incorporated in South Africa, which is a registered Central Securities Depository (as defined in the Securities Services Act) and which is responsible for the electronic clearing and settlement system used by the JSE to settle trades;
“Subsidiary” or “Subsidiaries” shall have the meaning ascribed thereto in the Companies Act, provided that such references shall be deemed to include any company or other body corporate, which if it had been incorporated under the Companies Act, would be a “subsidiary” as defined therein;
“Sub-register” each of Cipla Medpro’s sub-registers of members administered and maintained by CSDP’s in electronic form;
“Takeover Regulations” the provisions set out in chapter 5 of the Regulations, 2011;
“TRP” or “Panel” the Takeover Regulation Panel, established in terms of section 196 of the Companies Act;
“Transaction Documents” the Implementation Agreement, the Firm Intention Announcement, this Circular, the Scheme Document (being the document setting out the detailed terms and conditions of the Scheme, which for the avoidance of doubt is incorporated into, and forms part of, this Circular) and any other documents relating to the Proposed Transaction;
“Transfer Secretaries” Computershare Investor Services Proprietary Limited (Registration number 2004/003647/07) a private company registered and incorporated in South Africa and the transfer secretaries of Cipla Medpro;
“VAT” value added tax, levied in terms of the provisions of the South African Value Added Tax Act, No 89 of 1991, as amended from time to time;
“Voting Record Date” the last time and date to be recorded in the Register in order to be eligible to attend, speak at and vote at the General Meeting (or adjournment or postponement thereof), which date is expected to be on Friday, 10 May 2013, or such other date and time agreed between Cipla India and Cipla Medpro and announced on SENS and published in the South African press;
“VWAP” volume weighted average price; and
“ Webber Wentzel “ or “Legal adviser to Cipla India”
Webber Wentzel.
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Cipla Medpro South Africa Limited Cipla Limited (Incorporated in the Republic of South Africa) (Incorporated in India) (Registration number 2002/018027/06) (Registration number 11-2380) Share code: CMP Share codes: BSE Limited – 500087 ISIN: ZAE000128179 National Stock Exchange of India Limited – CIPLA EQ (“Cipla Medpro” or “the Company”) ISIN: INE059A01026 (“Cipla India”)
COMBINED CIRCULAR TO CIPLA MEDPRO SHAREHOLDERS
The definitions and interpretations commencing on page 12 of this Circular apply throughout.
1. INTRODUCTION
In the Firm Intention Announcement published on SENS on 28 February 2013 and in the South African press on 1 March 2013 Cipla Medpro Shareholders were advised of Cipla India’s firm intention to make a cash offer, which offer may be implemented directly by Cipla India or through a Subsidiary of Cipla India, to acquire all (100%) of the Cipla Medpro Shares, and that Option Holders will, pursuant to the existing terms of the Cipla Medpro Share Incentive Schemes, automatically have their Share Options accelerated so as to allow them to exercise such Share Options and participate in the Offer and Scheme. In the alternative, Option Holders may at Cipla India’s election (to be exercised by Cipla India on or before the fifth Business Day after the General Meeting) be offered to terminate their Share Options under the Option Holder Offers.
Cipla Medpro and Cipla India have entered into the Implementation Agreement in relation to the Proposed Transaction and the transactions described in this Circular. The Implementation Agreement contains provisions relating to the implementation of the Scheme and certain undertakings by Cipla India and Cipla Medpro (including, inter alia, undertakings by Cipla Medpro in respect of the conduct of business of Cipla Medpro during the period between the date of publication of the Firm Intention Announcement and the earlier of the Operative Date and termination of the Implementation Agreement, and certain obligations of Cipla Medpro with regard to third party approaches).
The Cipla Medpro Board proposes that the acquisition of all of the Cipla Medpro Shares be implemented by way of the Scheme and that the current Share Options shall either be accelerated and exercised before the Scheme Consideration Record Date (in which event Cipla Medpro Shares will be issued in respect of the Share Options and will be dealt with under the Scheme as Scheme Shares), alternatively, at Cipla India’s election (to be exercised by Cipla India on or before the fifth Business Day after the General Meeting), it will be entitled to offer Option Holders the Option Holder Offers.
If the Scheme is implemented, Scheme Participants will receive the Scheme Consideration in respect of all of the Cipla Medpro Shares held by them. Subject to the Scheme being approved and all of the Conditions Precedent being fulfilled such that the Scheme becomes unconditional, Cipla Medpro will delist from the JSE. The finalisation announcement is estimated to be released on SENS on Friday, 28 June 2013 and published in the South African press on Monday, 1 July 2013.
Following the implementation of the Scheme, Cipla India will become the registered and Beneficial Owner of all of the Cipla Medpro Shares (save for those Cipla Medpro Shares that may be transferred by Dissenting Shareholders to Cipla Medpro pursuant to section 164(13) or section 164(15)(c)(v) of the Companies Act pursuant to any exercise of Appraisal Rights). The listing on the JSE of the Cipla Medpro Shares should be terminated on the Operative Date.
The implementation of the Scheme is subject to the fulfilment or waiver of the Conditions Precedent.
For a full understanding of the detailed legal terms and conditions attaching to the Scheme, this Circular should be read in its entirety.
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2. PURPOSE OF THIS CIRCULAR
The purpose of this Circular is to:• provide Cipla Medpro Shareholders with information regarding the Scheme;• provide Cipla Medpro Shareholders with the Independent Expert’s Report in respect of the Scheme
prepared in terms of section 114(3) of the Companies Act;• advise Cipla Medpro Shareholders of the Independent Board and Cipla Medpro Board’s recommendation
in respect of the Scheme (as supported by the Independent Expert’s Report); • convene the General Meeting to consider and, if deemed fit, approve the resolutions as set out in the
Notice; and• inform Cipla Medpro Shareholders of their Appraisal Rights and the manner in which they should
exercise these rights should they wish to do so.
3. BACKGROUND INFORMATION ON CIPLA INDIA
Cipla India laid the foundation for the Indian pharmaceutical industry in 1935, with the vision to make India self-reliant in healthcare. Over the years, Cipla India has emerged as one of the most respected names in the manufacture of generic medicines not just in India but worldwide. Its state-of-the-art research and development centre has given India and the world many firsts. This includes a revolutionary AIDS cocktail for less than a dollar a day. Cipla India has over 34 manufacturing facilities across India, and manufactures 2 000+ products in 65 therapeutic categories.
With an annual turnover of over US$1.4 billion, Cipla India serves doctors and patients in over 170 countries. It has earned a name for maintaining one global standard across all its products and services. Cipla India continues to support, improve and save millions of lives with its high-quality drugs and innovative devices.
4. RATIONALE FOR THE SCHEME
Supplies from Cipla India currently account for approximately 85% of Cipla Medpro’s business. Cipla India believes that closer integration across the value chain will benefit both Cipla India and Cipla Medpro going forward. It is a key objective of Cipla India and Cipla Medpro that any transaction will, amongst others, with the support of Cipla India, further strengthen Cipla Medpro’s position in the South African pharmaceutical market, support the optimisation of Cipla Medpro’s manufacturing capability and support Cipla Medpro’s expansion into collaboratively identified African markets.
The Proposed Transaction is in line with Cipla India’s strategy to grow its international business by increasing its exposure to emerging markets with high growth potential. Cipla India’s core proposition is to save people money so they can live better, and this proposition has a strong appeal to consumers in emerging markets. Therefore, South Africa presents a compelling growth opportunity for Cipla India.
Cipla India has been a core business partner of the Cipla Medpro Group since the founding of the business in 1993. Cipla India has been and remains the principal supplier of pharmaceutical products to Cipla Medpro.
Within the South African market, Cipla India sees Cipla Medpro as an ideal entry point into the region and a strategic fit with Cipla India’s global organisation. Cipla India is attracted to Cipla Medpro’s talented management team, cultural fit with Cipla India, and operational expertise.
Cipla India recognises the important contributions of Cipla Medpro’s black economic empowerment shareholders to the business and will work closely with the Cipla Medpro Board and management team to ensure that Cipla Medpro continues to meaningfully promote black economic empowerment in the future.
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5. BENEFITS OF THE SCHEME TO CIPLA MEDPRO SHAREHOLDERS
The Scheme Consideration (excluding any Adjustment) represents the following premiums:
Before the Offer(R/share)
The Offer(R/share)
Premium(%)
Closing price on 26 February 2013 (a) 9.67 10.00 3.430-Day VWAP prior to 26 February 2013 (b) 9.13 10.00 9.6Closing price on 8 May 2012 (c) 7.34 10.00 36.230-Day VWAP to 8 May 2012 (d) 6.82 10.00 46.7Closing price on 20 November 2012 (e) 7.69 10.00 30.030-Day VWAP to 20 November 2012 (f) 7.37 10.00 35.8
Notes:
(a) The “Before” column reflects the closing JSE market value per Cipla Medpro Share on 26 February 2013, being the trading day immediately preceding the finalisation of the Firm Intention Announcement.
(b) The “Before” column reflects the 30-day volume weighted average JSE market value per Cipla Medpro Share calculated for the trading days during the 30-day period up to and including the trading day immediately preceding the finalisation of the Firm Intention Announcement.
(c) The “Before” column reflects the closing JSE market value per Cipla Medpro Share on 8 May 2012, being the trading day immediately preceding the publication of the cautionary announcement regarding a potential offer by Cipla India.
(d) The “Before” column reflects the 30-day volume weighted average JSE market value per Cipla Medpro Share calculated for the trading days during the 30-day period up to and including 8 May 2012.
(e) The “Before” column reflects the closing JSE market value per Cipla Medpro Share on 20 November 2012, being the trading day immediately preceding the publication of the second cautionary announcement regarding a potential offer by Cipla India.
(f) The “Before” column reflects the 30-day volume weighted average JSE market value per Cipla Medpro Share calculated for the trading days during the 30-day period up to and including 20 November 2012.
After implementation of the Scheme, Cipla India intends to restructure the Cipla Medpro board of directors, consistent with Cipla Medpro being a wholly owned Subsidiary of Cipla India.
6. TERMS AND CONDITIONS OF THE SCHEME, SCHEME CONSIDERATION AND CIPLA MEDPRO SHAREHOLDERS’ RIGHTS
In terms of section 114, and in particular section 114(1)(c) of the Companies Act, the Cipla Medpro Board proposes the Scheme as set out in this paragraph 6 between Cipla Medpro and the Cipla Medpro Shareholders.
6.1 The Scheme
6.1.1 In terms of the Scheme, Cipla India will acquire the Scheme Shares from the Scheme Participants for the Scheme Consideration.
6.1.2 If the Scheme takes effect and becomes operative:6.1.2.1 without any further act or instrument being required, the Scheme Participants
(whether they have voted in favour of the Scheme or not, or abstained or refrained from voting) shall have their Scheme Shares expropriated and transferred to Cipla India and shall be deemed to have disposed of their Scheme Shares, free of encumbrances, to Cipla India on the Operative Date in exchange for the Scheme Consideration and Cipla India shall be deemed to have acquired registered and Beneficial Ownership of all the Scheme Shares on the Operative Date;
6.1.2.2 each Scheme Participant shall be deemed to have ceded and transferred to Cipla India, on the Operative Date, all of the Scheme Shares held by each such Scheme Participant;
6.1.2.3 in consideration for the Scheme Shares, Scheme Participants shall be entitled to receive the Scheme Consideration against transfer of the Scheme Shares, subject to the remaining provisions of this paragraph 6; and
6.1.2.4 save as provided in paragraph 6.13, the Scheme will become operative on the Operative Date.
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6.1.3 Save as contemplated in paragraph 6.13, the disposal and transfer by each Scheme Participant of the Scheme Shares held by the Scheme Participant to Cipla India, and the acquisition of ownership of those Scheme Shares by Cipla India, pursuant to the provisions of paragraphs 6.1.2.1 and 6.1.2.2 of this Circular, shall be effected on the Operative Date in accordance with the following provisions:6.1.3.1 in the case of Certificated Cipla Medpro Shares, each Certificated Scheme
Participant shall be deemed to have transferred to Cipla India on the Operative Date all of their Certificated Scheme Shares, without any further act or instrument being required; and
6.1.3.2 in the case of Dematerialised Cipla Medpro Shares, each Dematerialised Scheme Participant will have all of their Dematerialised Scheme Shares transferred to Cipla India on the Operative Date in accordance with the requirements of section 53 of the Companies Act and the rules of Strate.
6.1.4 Subject to the provisions of paragraph 6.13 in respect of Dissenting Shareholders, on the Operative Date, Cipla Medpro shall instruct that the Transfer Secretaries and relevant CSDPs to record the transfer of the Scheme Shares to Cipla India in the Register (including all Sub-registers in respect of Dematerialised Scheme Shares). Without limitation to the transfer of the Scheme Shares to Cipla India by operation of law in accordance with the Scheme, each Scheme Participant irrevocably (in rem suam) appoints Cipla Medpro (acting through any authorised representative including the Transfer Secretaries) as its attorney and agent to act in its stead and authorises Cipla Medpro, as principal, with power of substitution, to cause the Scheme Shares disposed of by the Scheme Participants in terms of the Scheme to be ceded and transferred to, and registered in the name of Cipla India on or at any time after the Operative Date, and to do all such things and take all such steps (including the signing of any instrument of transfer and instructing of any CSDP or its nominee) as Cipla Medpro in its discretion considers necessary in order to record or effect that cession and transfer of ownership and registration.
6.1.5 By no later than 17 h00 on the Business Day prior to the Operative Date, Cipla India shall pay the aggregate Scheme Consideration (excluding, for the avoidance of doubt, any amounts which may in future become payable to Dissenting Shareholders) to Cipla Medpro as principal or the Transfer Secretaries as agent for and on behalf of Cipla Medpro, in accordance with the provisions of paragraph 6.11.3 of this Circular, in final discharge of Cipla India’s obligations to make payment of the Scheme Consideration under the Scheme (excluding, for the avoidance of doubt, any amounts which may in future become payable to Dissenting Shareholders).
6.1.6 Against transfer of the Scheme Shares to Cipla India, Cipla Medpro shall procure that the Scheme Consideration is paid to the Scheme Participants in full, in accordance with the terms of the Scheme and without regard to any lien, right of set-off, counterclaim or other analogous right to which Cipla Medpro or Cipla India may otherwise be, or claim to be, entitled against any Scheme Participant but subject always to any legal obligations imposed on Cipla Medpro under any law applicable to the relevant Scheme Participant.
6.1.7 The Scheme Consideration shall not bear interest.
6.1.8 Cipla Medpro, as principal, shall use its best endeavours to procure that Cipla India complies with its obligations under the Scheme, and Cipla Medpro alone shall have the right to enforce all those obligations (if necessary) against Cipla India. Cipla Medpro undertakes in favour of the Scheme Participants that it will, as principal, enforce all rights which it may have against Cipla India to so procure that Cipla India complies with its obligations under the Scheme.
6.1.9 The rights of the Scheme Participants to receive the Scheme Consideration will be rights enforceable by Scheme Participants against Cipla Medpro only and then only to the extent of requiring Cipla Medpro to enforce its rights in terms of the Scheme against Cipla India.
6.1.10 After close of trading on the JSE on the Scheme LDT, Cipla Medpro Scheme Shares may no longer be traded on the JSE or ceded, transferred or disposed of to any person, other than to Cipla India pursuant to the Scheme or Cipla Medpro pursuant to the valid exercise of Appraisal Rights. The effect of the Scheme, inter alia, will be that Cipla India will, on the Operative Date, become the registered and Beneficial Owner of all the Scheme Shares.
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Any person who acquires Cipla Medpro Shares after the Scheme LDT shall have such Cipla Medpro Shares expropriated to Cipla India under the Scheme, and shall not be entitled to the Scheme Consideration, or to any rights or claim against Cipla India and/or Cipla Medpro in respect thereof or otherwise under or in respect of the Scheme and/or the acquisition by Cipla India of Cipla Medpro Shares thereunder.
6.1.11 Cipla India and Cipla Medpro have agreed that, upon the Scheme becoming operative, they will give effect to the terms and conditions of the Scheme and will take all actions and sign all necessary documents to give effect to the Scheme.
6.2 Conditions Precedent to the Scheme
The Scheme is subject to certain Conditions Precedent, namely:
6.2.1 the passing of a resolution, as contemplated in section 115(2) of the Companies Act, in terms of which Cipla Medpro Shareholders approve the Scheme, by the requisite majority of Cipla Medpro Shareholders, as contemplated in section 115(2) of the Companies Act and, to the extent required pursuant to section 115(3) of the Companies Act, the approval of the implementation of such resolution by the Court;
6.2.2 Cipla Medpro Shareholders not having exercised Appraisal Rights by giving valid demands to this effect to Cipla Medpro, in terms of section 164(7) of the Companies Act, in respect of 15% or more of the issued share capital of Cipla Medpro within 30 Business Days following the General Meeting, provided that, in the event that any Cipla Medpro Shareholders give notice objecting to the Scheme, as contemplated in section 164(3) of the Companies Act, and all or some of those Cipla Medpro Shareholders vote against the resolution proposed at the General Meeting to approve the Scheme, but do so in respect of less than 15% of the issued share capital of Cipla Medpro, this condition shall be deemed to have been fulfilled at the time of the General Meeting;
6.2.3 the receipt of the following unconditional approvals, consents or waivers (“Consents”) from Governmental Authorities necessary for the implementation of the Proposed Transaction (or if such Consent is conditional, such conditions being satisfactory to the one of Cipla Medpro or Cipla India on whom such condition is imposed and for which purpose a condition imposed on Cipla Medpro shall be deemed to be imposed on both Cipla Medpro and Cipla India):6.2.3.1 the TRP (in terms of a compliance certificate to be issued in terms of the Companies
Act);6.2.3.2 the Competition Authorities (SA) and the Competition Authorities (Namibia);6.2.3.3 the Competition Authorities (Other);6.2.3.4 the Competition Authorities (Botswana), to the extent required;6.2.3.5 the Financial Surveillance Department of the South African Reserve Bank, or its
duly authorised agent; and6.2.3.6 the Reserve Bank of India, to the extent required;
6.2.4 receipt from each of Nedbank Limited and ABSA Bank Limited of a written waiver of, and confirmation that it will accordingly not exercise, any rights which it may have against any Cipla Medpro Group company as a result of the implementation of the Proposed Transaction, which will be addressed to and accordingly be enforceable by each of Cipla India and its Nominated Subsidiary and the relevant Cipla Medpro Group company;
6.2.5 by the date on which the last of the Scheme conditions in paragraphs 6.2.1 to 6.2.4 is fulfilled or waived (as the case may be) (“MAE Reference Date”) none of the following events or circumstances (“MAE Events”) exists or has occurred or has arisen and in respect of which events or circumstances Cipla India has given written notice thereof to Cipla Medpro within not less than five Business Days of the MAE Reference Date: an adverse effect, fact, circumstance or any potential adverse effect, fact or circumstance which exists, or has arisen or occurred, or is reasonably likely to arise or occur (including without limitation any tax liability or liabilities, or potential tax liability or liabilities of Cipla Medpro or any Cipla Medpro Group company, including any interest and/or penalties which are or may be levied, and which arise from any non-compliance by such companies with any tax legislation at any time
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prior to 27 February 2013 and/or the MAE Reference Date (“Non-Compliance Liabilities”)) which is not an “Expected Event” and which is or is reasonably likely (alone or together with any other such actual or potential adverse effect, fact or circumstance) to be, or is deemed, to be, (a) material with regard to the operations, continued existence, business, condition, assets and liabilities of the Cipla Medpro Group taken as a whole (whether as a consequence of the Proposed Transaction or not), or (b) material to the implementation of the Proposed Transaction. For the purposes of this paragraph 6.2.5, to be material, the adverse effect, fact or circumstance must have (or be reasonably likely to have) any one of (i) an adverse impact on the fair value of Cipla Medpro in excess of R200 million or (ii) an adverse impact upon Cipla Medpro’s annual profit before tax (“PBT”) in any one year (current (financial year ended 31 December 2012) or future) in excess of R40 million, or (iii) render the implementation of the Proposed Transaction more expensive to Cipla India by an amount exceeding 10% of the Scheme Consideration, or (iv) cause Cipla India to acquire less than 100% of the issued share capital of Cipla Medpro as at the Operative Date pursuant to the Proposed Transaction, or (v) in respect of any Non-Compliance Liability/ies, an aggregate liability to the Cipla Medpro Group in excess of R40 million. For purposes of this paragraph 6.2.5, an “Expected Event” is an effect, fact or circumstance which, as at 27 February 2013, is independently known by Cipla India or which was fully and fairly disclosed by Cipla Medpro to Cipla India and (A) which is so known by or disclosed to Cipla India as being reasonably likely to arise and (B) the effect, scope and quantum of which arises within the reasonably anticipated (by Cipla India) effect, scope and quantum. For the avoidance of doubt, if the effect, scope or quantum of the relevant event is more adverse to Cipla India (including in its capacity as prospective shareholder of Cipla Medpro) than that reasonably anticipated by it, the event will not be an “Expected Event” to the extent of any such additionally adverse effect, scope or quantum. Without derogating from Cipla India’s rights to assert the existence of an MAE Event, Cipla India shall be entitled to assess the value of any Non-Compliance Liability as (X) the amount of any actual tax liability which has been conclusively determined between the relevant Cipla Medpro Group company and the relevant revenue authority prior to the MAE Reference Date or (Y) in respect of any Non-Compliance Liability which has not been conclusively determined prior to the MAE Reference Date, the amount thereof which, at the request of Cipla India, is considered by Deloitte (or, if Deloitte will not act, Ernst & Young, or failing it any other reputable accounting firm with appropriate tax expertise nominated by the chairperson of the South African Institute of Chartered Accountants) to be the amount, conservatively assessed, which is reasonably likely to be payable by the relevant Cipla Medpro Group company (provided that where such accounting firm is for any reason unable to express such a view, Cipla India may request it to assess a lesser amount, with a higher likelihood of occurrence, and include such lesser assessment in the determination of the aggregate tax exposure); and
6.2.6 by the date on which the last of the Scheme conditions in paragraphs 6.2.1 to 6.2.5 is fulfilled or waived, the Implementation Agreement has not been terminated pursuant to clause 22 thereof.
6.3 The Conditions Precedent in paragraphs 6.2.2, 6.2.3.3, 6.2.3.4, 6.2.4, 6.2.5 and 6.2.6 are for the benefit of Cipla India and may be waived by Cipla India (in whole or in part in its sole discretion) by notice in writing to Cipla Medpro.
6.4 The Conditions Precedent in paragraphs 6.2.1 and 6.2.3 (other than 6.2.3.3 and 6.2.3.4) are for the benefit of both Cipla India and Cipla Medpro and may only be waived by them (in whole or in part in their respective sole discretions) by written agreement between them; provided that no such waiver shall be permissible where the effect thereof would be to waive a statutory prerequisite for the lawful implementation of the Scheme in circumstances where that prerequisite has not been satisfied.
6.5 Notwithstanding anything to the contrary in the Implementation Agreement or this Scheme, and without prejudice to any other rights which Cipla Medpro and Cipla India may have thereunder or in law, the Conditions Precedent shall be deemed pro non scripto upon the due implementation of the Scheme on the Operative Date.
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6.6 A certificate signed by a duly authorised signatory of Cipla India (duly authorised by the Cipla India Board) and a duly authorised director of Cipla Medpro stating that all the Conditions Precedent have been fulfilled or waived and that the Scheme has become operative shall be binding on Cipla Medpro and the Scheme Participants.
6.7 Competition consents
6.7.1 South Africa
A filing to the Competition Authorities (SA) will be made by Cipla Medpro and Cipla India on the basis that the Scheme, once operative, will be an intermediate merger in terms of the Competition Act. The South African Competition Commission has an initial review period of 20 Business Days from filing, which may be extended by a further 40 Business Days.
6.7.2 Namibia
A filing to the Competition Authorities (Namibia) will be made by Cipla Medpro and Cipla India on the basis that the Scheme, once operative, will be a notifiable merger. The process could take between 30 and 120 days (or longer) from the date of filing, but is not expected to take longer than 60 days.
6.7.3 COMESA/Swaziland/Mauritius/Zambia
A filing to COMESA will be made by Cipla Medpro and Cipla India on the basis that the Scheme, once operative, will be a notifiable merger for purposes of the COMESA Treaty. The process could take 120 days (or longer) from the date of filing. If required by Cipla India, any required notifications to, or merger filings required by, competition authorities in Mauritius, Swaziland and Zambia will be made.
6.7.4 Botswana
If required by Cipla India, a filing to the Competition Authorities (Botswana) will be made by Cipla Medpro and Cipla India.
6.8 General Meeting
6.8.1 The resolutions as set out in the Notice will be put to a vote at the General Meeting to be held at 10 h00 at Cipla Medpro Offices, Board Room number 1, Belvedere Office Park, Block F, Bella Rosa Street, Bellville, Cape Town on 15 May 2013 or on any other date to which it may be adjourned or postponed.
6.8.2 Each Certificated Scheme Member and Own-Name Dematerialised Scheme Member who is registered in the Register on the Voting Record Date for the Scheme, may attend, speak at and vote at the General Meeting in person or be represented thereat by proxy. Forms of proxy (green) must be completed in accordance with its instructions and (i) returned to the Transfer Secretaries, Computershare Investor Services Proprietary Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001 or PO Box 61051, Marshalltown, 2107, to be received by them by 10h00 on Monday, 13 May 2013 (or not less than 48 hours before any adjournment or postponement of the General Meeting) or (ii) returning it to Cipla Medpro at Belvedere Office Park, Block F, Bella Rosa Street, Bellville, Cape Town, (marked for the attention of the Company Secretary), to be received after the l ast time specified in (i) above but before the commencement of the General Meeting (or any adjournment or postponement of the General Meeting) or (iii) by handing it to the chairman of the General Meeting before the appointed proxy exercises any of your shareholder rights at the General Meeting (or any adjournment or postponement of the General Meeting), provided that, should you return such form of proxy (green) in terms of (ii) above, you will also be required to furnish a copy of such form of proxy (green) to the chairman of the General Meeting before the appointed proxy exercises any of your shareholder rights at the General Meeting (or any adjournment or postponement of the General Meeting). Certificated Scheme Members and Own-Name Dematerialised Scheme Members may also use any other valid form of proxy, should they so wish.
6.8.3 Dematerialised Scheme Members, other than Own-Name Dematerialised Scheme Members, must give their instructions to their CSDP or Broker by the time and in the
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manner prescribed in the Custody Agreement between the relevant Scheme Member and their CSDP or Broker. If a Dematerialised Scheme Member wishes to attend, speak at and/or vote at the General Meeting in person or be represented thereat by proxy, he/she/it must arrange with his CSDP or Broker to give him or her or it the necessary letter of representation and/or proxy form to do so. Dematerialised Cipla Medpro Shareholders, other than Own-Name Dematerialised Shareholders, must not complete the form of proxy (green).
6.8.4 If you are a Scheme Member and you wish to oppose the Scheme, then you may:6.8.4.1 vote against the Scheme either in person or by proxy at the General Meeting;
and/or6.8.4.2 voice your opinion at the General Meeting.
6.8.5 In terms of section 63(3) of the Companies Act and in accordance with clause 5.6 of Cipla Medpro’s Memorandum of Incorporation:6.8.5.1 while the General Meeting will be held in person, it is open to Scheme Members
and/or their proxies to participate in the General Meeting by electronic communication, as contemplated in section 63(2) of the Companies Act; and
6.8.5.2 Scheme Members and/or their proxies will be able, at their own expense, to access the meeting by means of a teleconference facility, arrangements for which can be made through the office of the Company Secretary.
6.8.6 Cipla Medpro Shareholders who will (or whose proxies will) participate in the General Meeting by electronic communication should confirm, by no later than 10 h00 on Monday, 13 May 2013 to the Company Secretary whether they wish to vote at the General Meeting by electronic communication.
6.9 Surrender of Documents of Title
6.9.1 Dematerialised Scheme Participants need not take any action regarding the surrender of Documents of Title. This will be done automatically by the relevant CSDP or Broker.
6.9.2 Certificated Scheme Participants shall, notwithstanding the transfer of ownership of their Scheme Shares and subject to the Scheme becoming operative, only be entitled to receive the Scheme Consideration once they have surrendered their Document(s) of Title, unless such requirement is dispensed with by Cipla Medpro as contemplated in paragraph 6.9.7.
6.9.3 A Certificated Scheme Participant who wishes to expedite receipt of the Scheme Consideration and surrender his/her/its Document(s) of Title in anticipation of the Scheme becoming operative may complete the attached Form of Surrender and Transfer (blue) in accordance with its instructions and return it as soon as possible, together with the Document(s) of Title relating to his/her/its Certificated Scheme Shares, to be received by the Transfer Secretaries by no later than 12 h00 on the Scheme Consideration Record Date. Alternatively, Certificated Scheme Participants may wait until the Scheme becomes operative, which is estimated to be on Monday, 15 July 2013, and surrender their Document(s) of Title under cover of the duly completed Form of Surrender and Transfer (blue) at that time.
6.9.4 No receipt will be issued for Document(s) of Title surrendered unless specifically requested. Persons requiring receipts must prepare a receipt and forward it, together with their Document(s) of Title.
6.9.5 Document(s) of Title surrendered by Certificated Scheme Participants prior to the Scheme Consideration Record Date in anticipation of the Scheme becoming operative will be held in escrow on behalf of such Certificated Scheme Participants by the Transfer Secretaries. If the Scheme does not become operative for any reason whatsoever, the Transfer Secretaries will, within five Business Days from the date of receipt of the Documents of Title or the date on which Cipla Medpro notifies the Transfer Secretaries that the Scheme will not become operative, whichever is the later, return the Document(s) of Title to the Scheme Participant concerned, by registered post, at the risk of such Scheme Participant, to the return address specified on the Form of Surrender and Transfer (blue), or if no return address is specified on the Form of Surrender and Transfer (blue), to the address recorded in the Register.
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6.9.6 If Document(s) of Title relating to any Scheme Shares to be surrendered are lost or destroyed, Certificated Scheme Participants should nevertheless return the Form of Surrender and Transfer (blue), duly signed and completed, together with an indemnity form, which is obtainable from the Transfer Secretaries.
6.9.7 Cipla Medpro may, in its discretion and with the consent of Cipa India, dispense with the surrender of such Document(s) of Title upon production of evidence satisfactory to Cipla Medpro that the Document(s) of Title to the Scheme Shares in question have been lost or destroyed and upon provision of a suitable indemnity on terms satisfactory to it. Indemnity forms are obtainable from the Transfer Secretaries.
6.9.8 The attention of Certificated Cipla Medpro Shareholders is drawn to the fact that they will be unable to Dematerialise and/or trade in their Scheme Shares on the JSE from the date of surrender. However, Certificated Cipla Medpro Shareholders’ right to attend, speak and vote at the General Meeting will not be affected by surrendering their Documents of Title.
6.10 Determination of the Scheme Consideration
6.10.1 If the Scheme becomes operative, each Scheme Participant will receive R10.00 from Cipla India, for every Scheme Share held by such Scheme Participant, subject to adjustment as provided for in paragraphs 6.10.2 to 6.10.4.
6.10.2 In the event that the Scheme Consideration Record Date Share Capital exceeds the Assumed Share Capital, the Scheme Consideration will be reduced by the ratio of the number of Cipla Medpro Shares comprising the Assumed Share Capital to the number of Cipla Medpro Shares comprising the Scheme Consideration Record Date Share Capital, with such revised Scheme Consideration being reflected to the fourth decimal fraction of a cent, with the fifth decimal fraction being rounded in accordance with the standard convention (decimals under five being rounded down and those of five or over five being rounded up); provided that where the Scheme Consideration Record Date Share Capital exceeds the Assumed Share Capital by less than 1% due to the issue and/or exercise of Share Options as envisaged in paragraph 7, no adjustment shall be made to the Scheme Consideration.
6.10.3 Without derogating from the undertakings given by Cipla Medpro in this regard in the Implementation Agreement, in the event that Cipla Medpro makes or declares any dividend or other distribution to Cipla Medpro Shareholders between and including 27 February 2013 and the Operative Date, the Scheme Consideration will be reduced by an amount equal to the fair value of such dividend or other distribution, divided by the number of Cipla Medpro Shares comprising the Scheme Consideration Record Date Share Capital, with such revised Scheme Consideration being reflected to the fourth decimal fraction of a cent, with the fifth decimal fraction being rounded in accordance with the standard convention (decimals under five being rounded down and those of five or over five being rounded up).
6.10.4 The Scheme Consideration payable to any Scheme Participant in respect of all of such person’s Scheme Shares will be aggregated. Where the aggregate Scheme Consideration payable to such Scheme Participant includes a fraction of a cent, such fraction will be rounded upwards.
6.10.5 The provisions of paragraphs 6.10.1 to 6.10.4 shall apply mutatis mutandis to the Option Share Offer Settlement Amount.
6.11 Settlement of the Scheme Consideration
6.11.1 Subject to the remaining provisions of this paragraph 6.11, if the Scheme becomes operative, Scheme Participants will be entitled to receive the Scheme Consideration.
6.11.2 Settlement of the Scheme Consideration is subject to the Exchange Control Regulations, the salient provisions of which are set out in Annexure 3 to this Circular.
6.11.3 By no later than 17 h00 on the Business Day prior to the Operative Date, Cipla India shall pay the aggregate Scheme Consideration (excluding, for the avoidance of doubt, any sums which may become payable in future under paragraph 6.13.6.2) into a valid South African Rand denominated interest bearing account nominated by Cipla Medpro (for the benefit of the Scheme Participants), in full and final discharge of Cipla India’s obligations to pay
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the Scheme Consideration under the Scheme, save for amounts (if any) payable under paragraph 6.13.6.2 which shall be paid by Cipla India to Cipla Medpro if, and as and when, such amounts become due and payable to the relevant former Dissenting Shareholder.
6.11.4 Against transfer of the Scheme Shares to Cipla India, Cipla Medpro or its agents will administer and effect payment of the Scheme Consideration to Scheme Participants in accordance with the provisions of paragraph 6.11.5 of this Circular and without regard to any lien, right of set-off, counterclaim or other analogous right to which Cipla Medpro or Cipla India may otherwise be, or claim to be, entitled against any Scheme Participant. No interest will be payable on the Scheme Consideration to Scheme Participants.
6.11.5 If the Scheme becomes operative:
6.11.5.1 Dematerialised Scheme Participants will, in terms of the Custody Agreement between the relevant Scheme Participants and the CSDP or Broker, have their accounts held at their CSDPs or Brokers credited with the Scheme Consideration and debited with the Cipla Medpro Shares transferred to Cipla India pursuant to the Scheme on the Operative Date or, in the case of Dissenting Shareholders who subsequently become Scheme Participants after the Scheme Consideration Record Date pursuant to paragraph 6.13.6.2 below, on the date contemplated in paragraph 6.13.6.2; and
6.11.5.2 Certificated Scheme Participants:6.11.5.2.1 who have surrendered their Documents of Title in accordance with
paragraph 6.9 to the relevant Transfer Secretaries on or before 12 h00 on the Scheme Consideration Record Date, will have the Scheme Consideration posted to them, at their risk, within five Business Days of the Operative Date, unless they have elected to receive the Scheme Consideration by way of an EFT to a valid South African Rand denominated bank account by completing the relevant sections of the Form of Surrender and Transfer (blue), in which case the Scheme Consideration will be paid to the bank account nominated by them on the Form of Surrender and Transfer (blue) on the Operative Date; or
6.11.5.2.2 who surrender their Documents of Title in accordance with paragraph 6.9 to the relevant Transfer Secretaries after 12 h00 on the Scheme Consideration Record Date, will have the Scheme Consideration posted to them, at their risk, or paid to them by way of an EFT to a valid South African Rand denominated bank account (if this option was selected on the Form of Surrender and Transfer (blue)), within five Business Days of the Transfer Secretaries receiving their Documents of Title and completed Form of Surrender and Transfer (blue),
unless such Scheme Participants are Dissenting Shareholders who have subsequently become Scheme Participants after the Scheme Consideration Record Date pursuant to paragraph 6.13.6.2 below, in which case such Scheme Participants will still need to surrender their Documents of Title, together with completed Forms of Surrender and Transfer (blue), to the relevant Transfer Secretaries and payment of the Scheme Consideration will only be posted to such Scheme Participants, at their risk, or paid to them by way of an EFT to a valid South African Rand denominated bank account (if this option was selected on the Form of Surrender and Transfer (blue)) on the date set out in paragraph 6.13.6.2 below.
6.11.5.3 In the event that any Scheme Participant who holds Certificated Shares fails to surrender his or her or its Documents of Title and completed forms of Surrender and Transfer (blue) to the relevant Transfer Secretaries then, unless otherwise agreed between Cipla India, Cipla Medpro and the Scheme Participants concerned, the relevant Scheme Consideration will be held in trust by Cipla Medpro (or any third party nominated by it for this purpose from time to time) for the benefit of the Scheme Participants concerned at the Scheme Participant’s risk for a maximum
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period of three years, after which period such funds shall be made over to the Guardians Fund. For the avoidance of doubt, no interest will accrue in favour of, or be payable to, any Scheme Participant on the funds held by Cipla Medpro (or third party) in accordance with this paragraph 6.11.5.3.
6.12 Effects of the Scheme
6.12.1 If all of the Conditions Precedent are fulfilled or waived, as the case may be, and the Scheme becomes operative, Scheme Participants (whether they voted in favour of the Scheme or not, or abstained or refrained from voting) shall, with effect from the Operative Date, have their Scheme Shares expropriated and transferred to Cipla India and be deemed to have:6.12.1.1 disposed of (and shall be deemed to have undertaken to transfer) their Scheme
Shares free from encumbrances, to Cipla India, which will be deemed to have acquired registered and Beneficial Ownership of the Scheme Shares in exchange for payment of the Scheme Consideration, and Scheme Participants shall no longer be Cipla Medpro Shareholders in respect of the Scheme Shares;
6.12.1.2 ceded and transferred to Cipla India, on the Operative Date, all of the Scheme Shares held;
6.12.1.3 without derogating from the expropriation of the Scheme Shares by operation of law in accordance with the Scheme, irrevocably (in rem suam) authorised and instructed Cipla Medpro, as principal, with the power of substitution, to cause the Scheme Shares to be ceded and transferred to, and registered in the name of Cipla India on or at any time after the Operative Date and to do all such things and take all such steps (including the signing of any instrument of transfer and the instructing of any CSDP or its nominee) as Cipla Medpro in its discretion considers necessary to record or effect that cession and transfer of ownership and registration; and
6.12.1.4 instructed Cipla Medpro as principal, but with the power to appoint agents, to procure that the Scheme Consideration is paid to the Scheme Participants in accordance with the provisions of the Scheme.
6.12.2 The effect of the Scheme will be that Cipla India will, with effect from the Operative Date, become the registered and Beneficial Owner of all the Scheme Shares.
6.13 Dissenting Shareholders’ Appraisal Rights
6.13.1 Cipla Medpro Shareholders are hereby advised of their Appraisal Rights in terms of section 164 of the Companies Act.
6.13.2 Cipla Medpro Shareholders who wish to exercise their rights in terms of the aforementioned section of the Companies Act are required, before the special resolution to approve the Scheme is voted on at the General Meeting, to give notice to Cipla Medpro in writing objecting to the resolution in terms of section 164(3) of the Companies Act and to vote against the Scheme at the General Meeting.
6.13.3 If the resolution approving the Scheme is adopted by Cipla Medpro, Cipla Medpro is required in terms of section 164(4) of the Companies Act, within ten Business Days after Cipla Medpro adopts the resolution, to send a notice to Cipla Medpro Shareholders who gave written notice to Cipla Medpro objecting to the special resolution and did not withdraw such written notice or vote in support of the resolution, notifying them that the resolution has been adopted.
6.13.4 Cipla Medpro Shareholders who gave written notice to Cipla Medpro in terms of section 164(3) of the Companies Act (and have not withdrawn that notice), who voted against the resolution approving the Scheme and who have complied with all the procedural requirements set out in section 164 may, in terms of sections 164(5) to 164(8) of the Companies Act, within 20 Business Days of receiving notice from Cipla Medpro in terms of section 164(4) of the Companies Act, send a written demand to Cipla Medpro, requiring that Cipla Medpro pay them fair value for all of the Cipla Medpro Shares held by them and in respect of which they have given the aforesaid written notice.
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6.13.5 Cipla Medpro Shareholders who wish to obtain further information as to their Appraisal Rights are referred to Annexure 5 of this Circular which contains a full extract of section 164 of the Companies Act.
6.13.6 In the event that any of the circumstances contemplated in section 164(9) of the Companies Act occur:
6.13.6.1 on or prior to the Scheme Consideration Record Date, then a Cipla Medpro Shareholder who was, up until that time, a Dissenting Shareholder will be a Scheme Participant and be subject to all the provisions of the Scheme; and
6.13.6.2 after the Scheme Consideration Record Date, then a Cipla Medpro Shareholder who was, up until that time, a Dissenting Shareholder will be deemed to have been a Scheme Participant as at the Operative Date of the Scheme and be deemed to have transferred its Scheme Shares to Cipla India as at the Operative Date in terms of the Scheme, provided that settlement of the Scheme Consideration shall take place on the later of: (i) the Operative Date; (ii) the date which is five Business Days after that Dissenting Shareholder’s rights in respect of its Cipla Medpro Shares are reinstated in terms of section 164(10) of the Companies Act or pursuant to a final Court order; and (iii) if that Dissenting Shareholder is a Certificated Cipla Medpro Shareholder, the date which is five Business Days after that Dissenting Shareholder surrenders its Documents of Title and completed Form of Surrender and Transfer (blue) to the relevant Transfer Secretaries.
6.13.7 For the sake of clarity, except where expressly provided otherwise, all provisions applicable to other Scheme Participants shall apply equally to any Dissenting Shareholder who becomes a Scheme Participant as a result of his rights to Cipla Medpro Shares being reinstated in terms of section 164(10) of the Companies Act or pursuant to a final Court order.
6.14 Consideration Guarantee
6.14.1 Rand Merchant Bank a division of FirstRand Bank Limited, a registered South African Bank (Registration number 1929/001225/08), has provided an irrevocable and unconditional bank guarantee in an amount of R2 670 000 000.00 and The Hongkong and Shanghai Banking Corporation Limited – Johannesburg Branch, a registered South African Bank (Registration number 2006/0033197/10), has provided an irrevocable and unconditional bank guarantee in an amount of R1 850 182 990.00 in favour of Cipla Medpro Shareholders and Cipla Medpro to the TRP for the sole purpose of fully satisfying the Scheme Consideration. The respective guarantees expire on 10 September 2013.
6.15 Restricted jurisdictions
6.15.1 To the extent that the distribution of this Circular in certain jurisdictions outside of South Africa may be restricted or prohibited by the laws of such foreign jurisdiction then this Circular is deemed to have been provided for information purposes only and none of Cipla Medpro nor Cipla India, nor their respective boards of directors, accept any responsibility for any failure by Scheme Participants to inform themselves about, and to observe, any applicable legal requirements in any relevant foreign jurisdiction.
6.15.2 Scheme Participants who are in doubt as to their position should consult their professional advisers.
7. CIPLA MEDPRO SHARE INCENTIVE SCHEMES
7.1 Cipla Medpro has two current share incentive schemes, namely ESOP 1 and ESOP 2. Both Cipla Medpro Share Incentive Schemes provide for the grant of options (to acquire shares in Cipla Medpro) which may be exercised after certain periods have lapsed following the grant thereof. The last operative options granted under ESOP 1 were granted in November 2009, and a decision was taken by the Cipla Medpro Board when ESOP 2 was created, that no further options would be issued under ESOP 1. Options were granted under ESOP 2 during 2011 and 2012.
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7.2 ESOP 17.2.1 At the date of signature of the Implementation Agreement and the Firm Intention
Announcement there was one remaining Option Holder under ESOP 1, and the rights of such Option Holder to exercise his rights under ESOP 1 had already vested.
7.2.2 Between the date of signature of the Implementation Agreement and the Firm Intention Announcement, and the date of this Circular, the one remaining Option Holder under ESOP 1 exercised all of his Share Options. Accordingly, at the date of this Circular, there are no remaining Option Holders or Share Options under ESOP 1.
7.3 ESOP 2
7.3.1 There are currently two categories of Option Holders under ESOP 2, namely those with unvested Share Options and those with vested Share Options. Further, some Share Options will vest on 25 May 2013, so depending on the Operative Date, there may be more Option Holders with vested Share Options at the Operative Date.
7.3.2 In terms of the ESOP 2, if an offer is made to members of Cipla Medpro in terms of the Takeover Regulations or under a scheme of arrangement, the Cipla Medpro Board shall stipulate that all outstanding and unexercised options shall be exercisable on or before a date determined by the Cipla Medpro Board, so as to enable the holders of such options to exercise their options and to participate in the offer to members, provided however that the Cipla Medpro Board may stipulate, notwithstanding anything to the contrary in the scheme established under ESOP 2, that any options not exercised on or before the date so stipulated by the Cipla Medpro Board shall lapse on that date.
7.3.3 Accordingly, the Cipla Medpro Board shall stipulate a date prior to the Scheme Consideration Record Date as the date by which each Option Holder must exercise his/her Share Options, failing which the Share Options shall lapse. The Cipla Medpro Board has stipulated this date as 17 h00 on the second Business Day after the Finalisation Date. If he/she exercises his/her Share Options he shall be dealt with as a Scheme Participant in respect of the Cipla Medpro Shares issued pursuant to such exercise, while if he does not exercise his Share Options, they will lapse.
7.4 As at the Last Practicable Date, there were 5 327 615 Share Options, resulting in a potential aggregate payment to Option Holders for Accelerated Option Shares described above of up to R53 276 150.00.
7.5 As an alternative mechanism to what is set out above, in respect of the Share Options and future Share Options referenced in paragraph 7.4, Cipla India may, if it so elects (such election to be exercised by Cipla India on or before the fifth Business Day after the General Meeting), direct separate Option Holder Offers to each Option Holder to pay (or, alternatively, for Cipla Medpro to pay, provided that Cipla India has put it in funds to do so) such Option Holder the Option Share Offer Settlement Amount as consideration for the termination by such Option Holder of his or her Share Options. Such payment will, subject to the Scheme becoming unconditional, be made on the Operative Date.
7.6 The offers contained in the respective Option Holder Offers will be subject to the suspensive condition that the Scheme becomes unconditional in accordance with its terms. Shareholders are referred to paragraph 27 and the Independent Expert’s Report where it opined that based on and subject to the terms of the Independent Expert report as at the date thereof, the terms of the acceleration of the Share Options set out herein and the alternate offers contained in the respective Option Holder Offers are fair and reasonable to Option Holders.
7.7 Cipla Medpro undertook, prior to 27 February 2013, as part of their terms of employment, to Mark Sardi, Skhumbuzo Ngozwana and Mark Daly to offer them respectively share options in respect of 2 206 740, 550 000 and 350 000 Cipla Medpro Shares when they are lawfully able to do so. Cipla Medpro has confirmed to Cipla India that, subject only to the Proposed Transaction becoming operative, each such employee has terminated his rights to be granted options and thus to be issued shares in Cipla Medpro, and has agreed with Cipla Medpro to be paid the fair value of his surrendered rights (consistent with that of a comparable offer under the Takeover Regulations).
7.8 Save for the issue before the Scheme Consideration Record Date of 300 000 Share Options which Cipla Medpro had previously committed to certain members of Cipla Medpro management, Cipla Medpro has agreed not to issue, or promise to issue, any further Cipla Medpro Shares or rights to or options in respect of Cipla Medpro Shares share options from 27 February 2013 until the Operative Date.
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8. SUSPENSION AND TERMINATION OF LISTING
Subject to the Scheme becoming unconditional in accordance with its terms, the JSE has granted approvals for the suspension of the listing of Cipla Medpro Shares with effect from the commencement of trading on the JSE on the Business Day after the estimated Scheme LDT (being estimated as Monday, 8 July 2013) and the termination of the listing of Cipla Medpro Shares from the commencement of trading on the day after the Operative Date (being estimated as Tuesday, 16 July 2013).
9. THIRD PARTY APPROACHES
In terms of the Implementation Agreement:
9.1 During the period from 27 February 2013 and continuing until the earlier of the Operative Date or the termination of the Implementation Agreement, Cipla Medpro has agreed that it will not, and (subject to the proviso s hereunder) shall procure that no other member of the Cipla Medpro Group nor any director, officer, employee, adviser, agent or representative of it or any of them shall, directly or indirectly: 9.1.1 solicit, initiate, encourage or otherwise seek to procure discussions, negotiations, agreement
or arrangement in connection with any expression of interest, inquiry, proposal or offer (or possible expression of interest, inquiry, proposal or offer) (i) howsoever structured or effected; (ii) as revised, varied, extended or renewed from time to time; (iii) whether or not subject to any precondition/s and (iv) whether or not legally binding, regarding any merger, amalgamation, share exchange, business combination, take-over bid, sale or other disposition of all or substantially all of its assets, recapitalisation, reorganisation, liquidation, material sale or issue of treasury securities or rights or interests therein or thereto or rights or options to acquire any material number of treasury securities or any type of similar transaction, or series of transactions, which would or could constitute a change of control (as defined in the Takeover Regulations) or reasonably be considered to be likely to preclude or be inconsistent with the Proposed Transaction or its implementation, other than the Proposed Transaction itself (each an “Alternative Proposal”);
9.1.2 participate in any discussions, negotiations, communication or correspondence regarding or which would or might reasonably be expected to lead to any Alternative Proposal (unless it constitutes or might reasonably be expected to lead to constituting a Superior Proposal (as defined below));
9.1.3 agree to, approve or recommend an Alternative Proposal (unless it constitutes a Superior Proposal); and/or
9.1.4 enter into any agreement related to an Alternative Proposal (unless it constitutes a Superior Proposal),
provided, however, that nothing shall prevent Cipla Medpro from furnishing non-public information to, or entering into a confidentiality agreement and/or discussions with, any person in response to a bona fide Alternative Proposal that is submitted by such person after the date hereof which is not withdrawn and which is reasonably capable of being a Superior Proposal, provided: (i) the Cipla Medpro Board concludes, acting in good faith, that such action is required in order for them to comply with their fiduciary obligations under applicable law or their obligations under the Companies Act and (ii) Cipla Medpro first gives Cipla India advance written notice of its intention to furnish such non-public information or discussions, along with the name of such person and copies of all other due diligence materials exchanged between such person and Cipla Medpro to the extent not already provided to Cipla India; and provided further that Cipla Medpro will not be responsible for (and accordingly there will be no breach by Cipla Medpro of the provisions of this paragraph 9 in respect of) any action which, but for this proviso, would result in a breach of Cipla Medpro’s obligations under this paragraph 9 by an employee, adviser, agent or representative who acts without a mandate to do so by Cipla Medpro or relevant member of the Cipla Medpro Group and where Cipla Medpro has, should such unmandated action occur, subsequently taken reasonable steps to terminate such unmandated action as expeditiously as possible after becoming aware thereof. A “Superior Proposal” is a bona fide Alternative Proposal received by Cipla Medpro which the Cipla Medpro Board, acting in the exercise of its fiduciary duties, determines in good faith after consultation with its advisers would, if implemented in accordance with its terms, result in a transaction more favourable to the Cipla Medpro Shareholders than the Proposed Transaction, taking into account, inter alia, the nature of the consideration, the likelihood of such a transaction being completed within a reasonable period of time and the financing risks relating thereto.
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9.2 Cipla Medpro has further agreed to promptly (and in any event within two days) notify Cipla India in writing of (i) any approach that is made to Cipla Medpro or any other member of the Cipla Medpro Group (or any of the directors, officers, employees, advisers, agents or representatives of Cipla Medpro or any other member of the Cipla Medpro Group) in relation to any Alternative Proposal, in which case the notification shall include a copy of and other relevant details of the Alternative Proposal and the terms proposed (including but not limited to the identity of the person making or proposing to make the Alternative Proposal, price, timetable and conditionality) ( and Cipla Medpro will keep Cipla India informed of any material changes thereto) and (ii) any request for information received by Cipla Medpro under the Takeover Code, in which case the notification shall include details of the identity of the person requesting the information and of the nature of the information being requested.
9.3 Cipla Medpro may receive, negotiate and furnish information to any person who makes a Superior Proposal, and may recommend a Superior Proposal to Cipla Medpro Shareholders, provided that (inter alia) it gives Cipla India 10 Business Days notice of its intention to recommend such Superior Proposal and Cipla India does not, within eight Business Days thereafter, revise the terms of its Offer to provide for financial and/or other terms equivalent to, or more favourable than, those in the Superior Proposal.
10. BREAK FEE
In terms of the Implementation Agreement:
10.1 Subject to the relevant exchange control approvals, where applicable, Cipla Medpro undertakes to pay Cipla India a break fee of R33.75 million, plus value-added tax (if any) (“Break Fee”) if at any time after 27 February 2013:
10.1.1 Cipla Medpro breaches its obligations in relation to third party approaches/non-solicitation;
10.1.2 Cipla Medpro treats the Scheme resolution as a nullity as contemplated in section 115(5)(b) of the Companies Act or fails to convene the General Meeting;
10.1.3 within six months of the Firm Intention Announcement being issued, an Alternative Proposal (whether or not it constitutes a Superior Proposal) is proposed and becomes unconditional in accordance with its terms;
10.1.4 Cipla Medpro materially breaches any of the provisions of the Implementation Agreement which breach materially prejudices or would be reasonably likely to materially prejudice the implementation of the Proposed Transaction on the terms envisaged by Cipla India and Cipla Medpro (“Medpro Material Breach”) and the Medpro Material Breach, if capable of being remedied is not cured by Cipla Medpro, to the reasonable satisfaction of Cipla India, within 30 days (“Medpro Cure Period”) of written notice of such Medpro Material Breach by Cipla India to Cipla Medpro, provided that the Scheme subsequently does not become effective for reasons other than any act or omission of Cipla India in breach of the Implementation Agreement;
10.1.5 the Firm Intention Announcement having been issued, the Cipla Medpro Board and/or the Independent Board, having initially resolved to support the Scheme thereafter (i) fail to propose the Scheme; or (ii) fail to recommend to Cipla Medpro Shareholders, without qualification, to vote in favour of the Scheme, or subsequently withdraw or adversely qualify any such recommendation, other than in changed circumstances which by law require the Cipla Medpro Board to express a different view, provided that in the event that Cipla India unilaterally withdraws the Offer to acquire the Scheme Shares other than in accordance with the provisions of the Implementation Agreement, no Break Fee will be payable by Cipla Medpro in terms of this paragraph 10.1.5.
10.2 Subject to the relevant exchange control approvals, where applicable, Cipla India undertakes to pay Cipla Medpro a break fee of R33.75 million, plus value-added tax (if any) (“Cipla Break Fee”) if, at any time after 27 February 2013, the Scheme fails as a result of any breach by Cipla India of its obligations under the Implementation Agreement and/or the Scheme.
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11. IMPLEMENTATION THROUGH A SUBSIDIARY
In terms of the Implementation Agreement, Cipla India may, subject to regulations applicable to it, elect to implement the Offer though a Nominated Subsidiary. In such event, the relevant rights and obligations of Cipla India under the Scheme and Implementation Agreement will vest in the Nominated Subsidiary. Under the Implementation Agreement, Cipla India guarantees the due and punctual performance by the Nominated Subsidiary of its obligations under the Scheme and the Implementation Agreement.
12. CIPLA MEDPRO BOARD
After implementation of the Scheme, Cipla India intends to restructure the Cipla Medpro board of directors, consistent with Cipla Medpro being a wholly owned Subsidiary of Cipla India.
13. INTERESTS OF CIPLA INDIA AND CIPLA INDIA DIRECTORS’ INTERESTS IN CIPLA MEDPRO SHARES
As at the Last Practicable Date, neither Cipla India nor any of its directors held any direct or indirect beneficial interests in Cipla Medpro, nor did they have any dealings in Cipla Medpro Shares during the period beginning six months before the Offer Period and ending on the Last Practicable Date.
14. INTERESTS OF CIPLA MEDPRO AND CIPLA MEDPRO DIRECTORS IN CIPLA INDIA SECURITIES
As at the Last Practicable Date, neither Cipla Medpro nor any of its directors held any direct or indirect beneficial interests in Cipla India, nor did they have any dealings in Cipla India shares during the period beginning six months before the Offer Period and ending on the Last Practicable Date.
15. INTERESTS OF CIPLA MEDPRO DIRECTORS IN CIPLA MEDPRO SHARES
15.1 Directors
As at the Last Practicable Date, the directors of Cipla Medpro held the following direct and indirect interests in Cipla Medpro Shares:
DirectorDirect
beneficialIndirect
beneficial Total
Percentage of issued share
capital (%)
MB Caga – 180 000 180 000 0.04PCS Luthuli 789 024 1 998 000 2 787 024 0.62MW Daly – 200 000 200 000 0.04ND Mokone 10 – 10 0.00
Total 789 034 2 378 000 3 167 034 0.71
15.2 Directors
As at the Last Practicable Date, none of the directors of Cipla Medpro held any Share Options in Cipla Medpro, other than MW Daly who holds 150 000 Share Options.
16. IRREVOCABLE UNDERTAKINGS
As at the Last Practicable Date, Cipla India has received irrevocable undertakings from the following persons to support the Proposed Transaction:16.1 Majestic Silver Trading, the beneficial owner of 8 000 000 Cipla Medpro Shares, being approximately
1.79% of the issued share capital;16.2 Mokone, the registered and beneficial owner of 10 Cipla Medpro Shares; and16.3 Luthuli, the registered and beneficial owner of 789 024 Cipla Medpro Shares.
17. INTERESTS AND DEALINGS IN CIPLA MEDPRO SHARES AND CIPLA INDIA SHARES BY PROVIDERS OF IRREVOCABLE UNDERTAKINGS
None of the persons who have provided irrevocable undertakings to Cipla India have had any dealings in Cipla Medpro or Cipla India shares during the period beginning six months before the Offer Period and ending on the Last Practicable Date.
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18. REMUNERATION OF CIPLA MEDPRO DIRECTORS
The Cipla Medpro directors’ emoluments will not be affected as a result of the Scheme.
19. AGREEMENTS IN RELATION TO THE SCHEME
Other than the Implementation Agreement and the NDA, no other agreements have been entered into between Cipla India, Cipla India directors and any of Cipla Medpro, the Cipla Medpro directors, Cipla Medpro Shareholders or the trustees of the Cipla Medpro Share Incentive Schemes, in relation to the Scheme.
20. FINANCIAL INFORMATION OF CIPLA MEDPRO
Historical financial information of Cipla Medpro for the three financial years ended 31 December 2010, 31 December 2011 and 31 December 2012 is provided in Annexure 2 to this Circular. The financial information in respect of the financial years ended 31 December 2010 and 31 December 2011 is extracted from the restated annual financial statements and in respect of the financial year ended 31 December 2012 is extracted from the reviewed, condensed, provisional, consolidated annual results for 2012, which have not yet been audited.
21. INDEPENDENT BOARD
The Independent Board comprises Mokone, MT Mosweu and SMD Zungu, being directors of Cipla Medpro whom the Cipla Medpro Board has indicated are independent directors in terms of Regulation 81(j) of the Regulations.
22. THE VIEWS OF THE INDEPENDENT BOARD AND THE CIPLA MEDPRO BOARD ON THE SCHEME
22.1 After due consideration of the Independent Expert’s Report, the Independent Board has determined that it will place reliance on the valuation performed by the Independent Expert for the purposes of reaching its own opinion regarding the Scheme and the Scheme Consideration as contemplated in Regulation 110(3)(b) of the Regulations. The Independent Board has formed a view of the range of the fair value of the Cipla Medpro Shares, which accords with the valuation range contained in the Independent Expert’s report, in considering its opinion and recommendation. The Independent Board has considered the following factors which are difficult to quantify or are unquantifiable (as contemplated in Regulation 110(6) of the Regulations) in forming its opinion:22.1.1 the factors identified in the Independent Expert’s report;22.1.2 the ability of Cipla Medpro to enforce the terms of the Scheme against Cipla India and the
enforceability of the Consideration Guarantee; and22.1.3 the likelihood of the Conditions Precedent being timeously fulfilled and the Scheme
becoming operative.
22.2 Taking into account the Independent Expert’s Report, the Independent Board has considered the terms and conditions of the Scheme, and the members of the Independent Board are unanimously of the opinion that the terms and conditions thereof are fair and reasonable to Cipla Medpro Shareholders and, accordingly, recommend that Cipla Medpro Shareholders vote in favour of the Scheme at the General Meeting.
22.3 Each of the remaining members of the Cipla Medpro Board recommends that Cipla Medpro Shareholders vote in favour of the Scheme at the General Meeting and accordingly, the Cipla Medpro Board unanimously recommends that Cipla Medpro Shareholders vote in favour of the Scheme at the General Meeting.
23. FUNDING AND CASH CONFIRMATION
23.1 The aggregate Scheme Consideration will be funded through Cipla India’s existing cash resources and, where necessary, facilities.
23.2 FirstRand Bank Limited (acting through its Rand Merchant Bank division) and The Hongkong and Shanghai Banking Corporation Limited, Johannesburg Branch, have furnished guarantees to the TRP, in compliance with Regulation 111(4) and (5) of the Takeover Regulations, in security for payment by Cipla India of the Scheme Consideration (see paragraph 6.14).
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24. CIPLA MEDPRO SHARE CAPITAL
At the date of this Circular:24.1 the issued share capital of Cipla Medpro is 446 490 684 Cipla Medpro Shares; and24.2 there are 5 327 615 Share Options that have not yet been exercised and in respect of which no Cipla
Medpro Shares have yet been issued.
25. CIPLA MEDPRO DIRECTORS’ SERVICE CONTRACTS
25.1 Executive directors
JS Smith resigned as CEO on 5 October 2012 and C Aucamp resigned as CFO on 26 November 2012.
Material particulars of service contracts with executive Cipla Medpro directors are as follows:
Executivedirectors Position
Gross guaranteed
remuneration 2013
(R’000)
Noticeperiod Leave
Retirement age
JvD du Preez Acting CEO 1 2801 N/A 25 days N/AMW Daly CFO 2 5112 4 months 25 days N/A
Notes:
1. This is for the period 1 January 2013 to 30 April 2013. It does not include any short-term incentive amounts, which are subject to Board approval.
2. This excludes a retention bonus payable on 25 April 2013, and excludes the share options referred to in paragraph 7.7 of this Circular.
Director remuneration
Executive Directors
Directors’fees
(R’000)
Basicsalary (R’000)
Annualbonus(R’000)
Otherbenefits
(R’000)
Life cover and medical
benefits(R’000)
Totalremun-eration
2012(R’000)
2013(R’000)
JvD du Preez1 N/A 1 457 – – – 1 457 1 280MW Daly N/A 207 – 22 5 234 2 5114
C Aucamp2 N/A 3 505 683 281 108 4 577 N/AJS Smith3 N/A 9 666 – 1 273 148 11 087 N/A
Notes:
1. For the period 16 August 2012 to 31 December 2012 JvD du Preez has been acting CEO – see below for fees as a non-executive director. The 2013 amount does not include any short term incentive amounts, which may be approved by the Cipla Medpro Board.
2. Resigned from Cipla Medpro Group on 26 November 2012.
3. Resigned from Cipla Medpro Group on 5 October 2012.
4. This excludes a retention bonus payable on 25 April 2013, and excludes the share options referred to in paragraph 7.7 of this Circular.
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25.2 Non-executive directors
Material particulars of service contracts with non-executive Cipla Medpro directors are as follows:
Non-executive directors
Annual fees2012
(R’000)
PCS Luthuli 788MB Caga 511JvD du Preez1 348ND Mokone 752MT Mosweu 559SMD Zungu 249
Note:
1. For the period 1 January 2012 to 15 August 2012.
25.3 Term of office
25.3.1 JS Smith resigned as CEO on 5 October 2012 and C Aucamp resigned as CFO on 26 November 2012;
25.3.2 JvD du Preez was appointed as acting CEO with effect from 16 August 2012, and he has committed to Cipla Medpro to continue to so act until at least the General Meeting; and
25.3.3 MW Daly was appointed as CFO with effect from 26 November 2012. Termination of his employment requires four months’ notice by either party.
26. OTHER SERVICE CONTRACTS
No service contracts have been entered into or amended within six months before the Offer Period other than in the ordinary course of business and on arm’s length terms.
27. REPORT OF THE INDEPENDENT EXPERT
The Independent Expert’s Report prepared in accordance with section 114(3) of the Companies Act and regulation 90 of the Regulations is provided in Annexure 1 to this Circular. Copies of section 115 and section 164 of the Companies Act are provided in Annexures 4 and 5 to this Circular, respectively. Having considered the terms and conditions of the Scheme and based on the conditions set out in its report, the Independent Expert has concluded that the terms and conditions of the Scheme are fair and reasonable to Cipla Medpro Shareholders and to the Option Holders.
28. STATEMENT WITH RESPECT TO AGREEMENTS BETWEEN CIPLA MEDPRO AND CIPLA INDIA AND OTHERS
Cipla Medpro and Cipla India have entered into the NDA. In order to regulate the implementation of the Scheme, the Option Holder Offers and treatment of the Option Holders, Cipla India and Cipla Medpro entered into an Implementation Agreement on 27 February 2013 (which was amended by a First Addendum to the Implementation Agreement entered into on 9 April 2013) which regulates, inter alia:
28.1 the conditions precedent to the Scheme and certain support and implementation undertakings given by Cipla Medpro and Cipla India in relation to implementing the Proposed Transaction;
28.2 customary undertakings given by Cipla Medpro to Cipla India in relation to its activities and preservation of its business, up until the Operative Date;
28.3 representations and warranties by Cipla Medpro and Cipla India to each other; and
28.4 termination of the Implementation Agreement.
Cipla Medpro has not entered into any other agreements with Cipla India or its concert parties with regard to the Proposed Transaction, and nor do any such agreements exist.
39
Cipla Medpro has not entered into any agreements, and nor do any exist, with any directors or equivalent of Cipla India, or persons who were directors or equivalent of Cipla India within the preceding 12 months, or with holders of Cipla India securities or a beneficial interest in Cipla India, or persons who were holders thereof or interested therein within the preceding 12 months.
29. INTENDED ACTION OF CIPLA MEDPRO DIRECTORS
All of the Cipla Medpro directors who own Cipla Medpro Shares in their personal capacity intend to vote in favour of the Scheme. Mokone, one of the Independent Board members, and who holds 10 Cipla Medpro Shares, has provided an irrevocable undertaking to Cipla India to vote in favour of the Scheme. Luthuli, one of the Cipla Medpro Board members, and who holds 789 024 Cipla Medpro Shares, has provided an irrevocable undertaking to Cipla India to vote in favour of the Scheme.
30. FOREIGN SHAREHOLDERS AND EXCHANGE CONTROL REGULATIONS
Information regarding Foreign Shareholders and Exchange Control Regulations is set out in Annexure 3 to this Circular.
31. TAX IMPLICATIONS FOR CIPLA MEDPRO SHAREHOLDERS
The tax treatment of Scheme Participants is dependent on their individual circumstances and on the tax jurisdiction applicable to such Scheme Participants. It is recommended that Scheme Participants seek appropriate advice in this regard.
32. LITIGATION STATEMENT
32.1 Save for the matters mentioned in paragraphs 32.2 and 32.3 below, there are no material legal or arbitration proceedings, including any such proceedings that are pending or threatened of which Cipla Medpro is aware, that may have, or have had during the previous 12 months before the date of this Circular, a material effect on the financial position of the Cipla Medpro Group.
32.2 Arbitration proceedings between Cipla Medpro and Reckitt Benkiser South Africa Proprietary Limited (“RBSA”), in terms of which RBSA had made certain claims against Cipla Medpro and Cipla Medpro had made certain counter claims, all relating to alleged breaches of a manufacturing and supply agreement between Cipla Medpro and RBSA, were settled in June 2012 on the basis that Cipla Medpro would pay RBSA an amount of R80 million in full and final settlement, such payment being made in three tranches, of R30 million, R30 million and R20 million respectively, payable on 31 July 2012, 31 July 2013 and 31 January 2014 respectively. The amount due on 31 July 2012 was paid.
32.3 Jerome Smith, the previous CEO of Cipla Medpro has instituted claims against Cipla Medpro and another company within the Cipla Medpro Group in the Labour Court of South Africa, Cape Town, for an amount of R18 483 750 in respect of the alleged repudiation of a fixed term employment contract and R11 638 249 in respect of unpaid bonus payments. The claims have been defended and the Cipla Medpro Board does not believe that they have any merit.
33. INDEPENDENT BOARD RESPONSIBILITY STATEMENT
The Independent Board accepts responsibility for the information contained in this Circular which relates to Cipla Medpro and confirms that, to the best of its knowledge and belief, such information which relates to Cipla Medpro is true and the Circular does not omit anything likely to affect the importance of such information.
34. CIPLA INDIA RESPONSIBILITY STATEMENT
Cipla India accepts responsibility for the information contained in this Circular which relates to Cipla India and confirms that, to the best of its knowledge and belief, such information which relates to Cipla India is true and the Circular does not omit anything likely to affect the importance of such information.
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35. CIPLA MEDPRO RESPONSIBILITY STATEMENT
The Cipla Medpro Board accepts responsibility for the information contained in this Circular which relates to Cipla Medpro and confirms that, to the best of its knowledge and belief, such information which relates to Cipla Medpro is true and the Circular does not omit anything likely to affect the importance of such information.
36. CONSENTS
Each of the Cipla Medpro and Cipla India’s advisers and the Transfer Secretaries have consented in writing to act in the capacities stated and to their names appearing in this Circular and have not withdrawn their consent prior to the publication of this Circular.
37. DOCUMENTS AVAILABLE FOR INSPECTION
The following documents will be available for inspection at Cipla Medpro’s registered office and at the offices of ABSA CIBW, at 15 Alice Lane, Sandton from the date of posting of this Circular until the end of the Offer Period:• the consolidated restated annual financial statements of the Cipla Medpro Group for the two financial
years ended 31 December 2010 and 31 December 2011 and the reviewed, condensed, provisional, consolidated annual results for 31 December 2012;
• the constitutional documents (including the memoranda of incorporation) of Cipla Medpro and the Cipla Medpro Subsidiaries;
• a signed copy of the Implementation Agreement and the First Addendum to the Implementation Agreement;
• a signed copy of this Circular;• the signed Independent Expert’s Report;• copies of the irrevocable undertakings referred to in paragraph 16 above; and• a copy of the Cipla Medpro Share Incentive Schemes trust deeds and rules and the addenda thereto.
SIGNED ON BEHALF OF THE INDEPENDENT BOARD
SIGNED ON BEHALF OF CIPLA INDIA
SIGNED ON BEHALF OF CIPLA MEDPRO BOARD
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Annexure 1
INDEPENDENT EXPERT’S REPORT
2nd Floor, 27 Fricker Road,Illovo 2196
PO Box 651010, Benmore, 2010
Tel: 27 11 268 6231Fax: 27 11 268 6538
www.bridgecapital.co.za
Bridge Capital Advisors (Pty) Limited
1998/016302/07
Directors: PJ Venter, PR Veldtman,J Clark, ER Middelmiss
27 February 2013
The Independent BoardCipla Medpro South Africa LimitedPO Box 1096Durbanville7551
ATTENTION: THE INDEPENDENT BOARD OF CIPLA MEDPRO SOUTH AFRICA LIMITED
FAIR AND REASONABLE OPINION IN RESPECT OF THE OFFER BY CIPLA LIMITED (“CIPLA INDIA”) TO ACQUIRE 100% OF THE ISSUED ORDINARY SHARE CAPITAL OF CIPLA MEDPRO SOUTH AFRICA LIMITED (“ CIPLA MEDPRO” OR “THE COMPANY”) AND SETTLE THE OUTSTANDING MEDPRO SHARE OPTIONS
INTRODUCTION
The Board of Directors of Cipla Medpro (“the Board”) received an offer from Cipla India to acquire the entire issued share capital of Cipla Medpro for a price of R10.00 per Cipla Medpro share (“the Offer Price”). Furthermore, the option holders of the Cipla Medpro South Africa Limited Share Option Trust and the Cipla Medpro South Africa Employee Share Option Scheme (“Cipla Medpro Option Holders”) will be settled through the automatic acceleration of their share options under the scheme, or alternatively may be offered a cash consideration equivalent to the “in the money” value of the Cipla Medpro options on a net cash cancellation basis, being an amount equal to the difference between the Offer Price and the strike price of the Medpro options, upon the Scheme becoming operative (collectively “the Transaction” or “the Offer”). The transaction will be implemented by way of a scheme of arrangement to be proposed by the Cipla Medpro Board of Directors, in terms of section 114 of the Companies Act, No 71 of 2008, as amended from time to time (the “Companies Act”) (the “Scheme”). This fair and reasonable opinion is required in terms of section 114(3) of the Companies Act and the Companies Regulations, 2011 (“the Regulations”).
The Transaction is defined as an affected transaction in terms of the Companies Act, and is subject to the provisions of the Takeover Regulations as set out in Chapter 5 of the Regulations. If the Transaction is implemented, it will result in an effective change in control of Cipla Medpro and hence its Independent Board
42
(as defined in the Regulations) is required, in terms of the Regulations, to obtain appropriate external advice on the Offer in the form of a fair and reasonable opinion from an Independent Expert. This includes approval by the Takeover Regulation Panel (“TRP”), by way of the issuance of the requisite compliance certificate by the TRP.
As a consequence of the above, Bridge Capital Advisors (Pty) Limited (“Bridge Capital”) has been appointed by the Independent Board of Cipla Medpro (“the Independent Board”) in relation to the Offer to advise on whether, in our opinion, the Offer by Cipla India to acquire 100% of the Cipla Medpro shares in issue from the Cipla Medpro shareholders pursuant to the Offer, and settlement of the relevant share options as set out in the circular, is fair and reasonable.
DEFINITION OF THE TERMS “FAIR” AND “REASONABLE”
For the purposes of our opinion, fairness is primarily based on a quantitative assessment. Therefore the consideration payable to the stakeholders of Cipla Medpro would be considered to be fair if the consideration payable is equal to or greater than an arm’s length market related price for the securities, as determined in accordance with an accepted valuation approach, or unfair if the opposite would hold true.
The assessment of reasonableness of the Offer focuses on the Offer Price in relation to the prevailing trading price per Cipla Medpro share. If the consideration offered per Cipla Medpro share exceeds either the estimated fair value per Cipla Medpro share or the current traded price Cipla Medpro share, but not both, a split opinion clearly detailing the Independent Board’s view is required, e.g. fair but not reasonable or reasonable but not fair.
SOURCES OF INFORMATION
In the course of our analysis, we relied upon financial and other information obtained from Cipla Medpro’s management and from various public, financial and industry sources. Our conclusion is dependent on such information being accurate in all material respects.
The principal sources of information used in formulating our opinion regarding the Offer include:• information and assumptions made available by and from discussions held with the directors of the
Independent Board and management of Cipla Medpro; • audited Annual Reports of Cipla Medpro for the financial years ended 31 December 2009, 31 December 2010
and 31 December 2011;• draft financial reports of Cipla Medpro for the financial year ended 31 December 2012;• interim financial statements of Cipla Medpro for the periods ended 30 June 2010, 30 June 2011 and
30 June 2012;• Cipla Medpro management accounts for the periods ending 31 December 2009, 31 December 2010,
31 December 2011 and 31 December 2012;• reviewed the audited and unaudited financial information related to Cipla Medpro, as detailed above;• Cipla Medpro budgets for the year ending 31 December 2013 per operating division;• Cipla Medpro management forecasts per operating division for the five years ending 31 December 2013
to 31 December 2017;• held discussions with Cipla Medpro directors and management and considered such other matters as
the Independent Expert considered necessary, including the prevailing economic and market conditions and trends;
• reviewed Cipla Medpro’s forecast income statements and the basis of the assumptions therein including the prospects of the businesses. This review included an assessment of the recent historical performance to date as well as the reasonableness of the outlook assumed based on discussions with management;
• divisional management sales representative’s forecasts for each of Cipla Medpro’s respective operational division’s segments and products;
• terms and conditions of agreements with material suppliers including the manufacturing and supply agreement between Cipla Medpro (Pty) Limited, Cipla Life Sciences (Pty) Limited, Medpro Pharmaceutica (Pty) Limited and Cipla India;
• terms and conditions of agreements with material customers including, but not limited to, the awarded HP13-2013 Antiretroviral Tender on 29 November 2012;
• publicly available information relating to Cipla Medpro and other companies in their respective sectors that we deemed to be relevant, including company announcements, analysts’ reports and media articles;
43
• details of the terms of the Cipla Medpro South Africa Limited Share Option Trust adopted on or about 20 May 2005 and the Cipla Medpro South Africa Employee Share Option Scheme adopted on or about 20 January 2011;
• details of the options issued to the Cipla Medpro Option Holders in terms of the Cipla Medpro South Africa Limited Share Option Trust and the Cipla Medpro South Africa Employee Share Option Scheme; and
• the terms and conditions of the Offer.
Where practical, we have corroborated the reasonability of the information provided to us for the purpose of our opinion, including publicly available information, whether in writing or obtained in discussions with management and the Independent Board. The consolidated audited financial statements of Cipla Medpro for the year ended 31 December 2012 were not finalised at the time of this opinion.
PROCEDURES
In arriving at our opinion, we have, inter alia: • reviewed the Offer, including its terms and conditions;• considered information made available by Cipla Medpro and from discussions held with the Independent
Board and management of Cipla Medpro;• discussed the terms of the Offer with the Independent Board;• discussed the future prospects of Cipla Medpro with management and considered the qualitative benefits
of the Offer identified by management of each company; • assessed the long-term potential of Cipla Medpro;• evaluated the relative risks associated with Cipla Medpro and the industry in which it operates;• reviewed the methodologies available for performing valuations of businesses operating in this industry
sector;• capital structure and current financial position relative to the market value and Offer Price;• reviewed the historic prices and volumes at which the shares in Cipla Medpro have traded and analysed the
share price performance over the relevant periods for comparison; • reviewed general economic, market and related conditions in which Cipla Medpro operates;• undertook a detailed analysis of the share price performance of Cipla Medpro from 9 May 2012, being
the date of the first cautionary. This included relative price performance against comparable companies and the various relevant indices as well as consideration of the volume weighted average prices (“VWAPs”) at which the Cipla Medpro share has been trading on a 30, 60, 90 day basis, prior to the announcement of the Transaction on 28 February 2013;
• considered impacts of foreign exchange rates on the budgets provided, management forecasts and the long-term performance of Cipla Medpro;
• reviewed certain publicly available information relating to Cipla Medpro that the Independent Expert deemed to be relevant, including company announcements and media articles;
• where relevant, representations made by management and/or directors were corroborated to source documents or independent analytical procedures were performed by the Independent Expert, to examine and understand the industry in which Cipla Medpro operates, and to analyse external factors that could influence the business of Cipla Medpro.
• compiled a detailed financial model valuing the Cipla Medpro ordinary shares using the forecast financial information prepared by the management of Cipla Medpro and applied the Independent Expert’s assumptions of cost of equity capital and assumptions relating to yields on assets and liabilities, other revenues, cost increase and growth in assets;
• performed an additional valuation of the Cipla Medpro ordinary shares using a market comparable method using local and international peers of Cipla Medpro;
• complied a valuation for the Cipla Medpro Option Holders using the Black Scholes valuation methodology using information relating to the options including their respective quantities, normalised volatility, strike prices, vesting periods and years to maturity; and
• we compared our indicative valuations with the offer consideration payable in terms of the Offer.
Our procedures and enquiries did not constitute an audit in terms of International Standards on Auditing. Accordingly we cannot express an opinion on the financial data or other information used in arriving at our opinion. Furthermore, we do not express an opinion on the legality nor the enforceability of any agreements reviewed in arriving at our opinion.
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VALUATION
Fair value of Cipla Medpro ordinary shares
We have performed a valuation of Cipla Medpro to determine whether the Offer Price represents fair value to Cipla shareholders. The Discounted Cash Flow (“DCF”) using Capital Asset Pricing Methodology (“CAPM”) was employed as the primary method and a valuation of Cipla Medpro using a market comparable method using local and international peers of Cipla Medpro was employed as an additional method.
Sensitivity analyses were performed considering key assumptions in arriving at the valuation range set out below. The above valuation involved a stress test and sensitivity analysis on the key value drivers.
The outcome of the valuation of the Cipla Medpro Shares resulted in a valuation range between R9.16 and R9.70 per Cipla Medpro Share, with a core value of R9.50 per Cipla Medpro Share. The current offer of R10.00 per Cipla Medpro Share is therefore fair to the Cipla Medpro Shareholders. The Offer is solely a cash payment for the shares with no further benefit accruing to the Cipla Medpro Shareholders.
Fair value of vested options in Cipla Medpro’s Share Option Scheme
Each vested option was valued using the Black-Scholes formula for European call options. With the vested options being European, i.e. exercisable only at the expiry dates, it is never optimal to exercise the options prior to their expiry dates and hence the theoretical maximum value of a vested option in Cipla Medpro’s Share Option Scheme is the value of its equivalent European call option.
The fair values of the options were calculated on a weighted basis using each option’s time to expiry, strike price, the expected dividend yield on Cipla Medpro ordinary shares over the time to expiry and the normalised historical volatility of Cipla Medpro’s ordinary shares. The share price at 20 November 2012, being the trading day immediately preceding the publication of the second cautionary announcement related to such a potential transaction, was used as the spot price in the calculation of the fair values.
The Black Scholes option pricing model was employed to determine a fair value of the Cipla Medpro options held by the Cipla Medpro Option Holders, which resulted in a value on a weighted average basis, if the options were automatically vested, of R9.57 per Cipla Medpro Share. Alternatively, on a net cash cancellation basis, being an amount equal to the difference between the Offer Price and the strike price of the Cipla Medpro options, on a weighted average basis, resulted in a “in the money” value of R2.84 per Medro option. Therefore, in both circumstances, Cipla Medpro Option Holders will receive an amount greater than the fair value of the option calculated utilising the Black-Scholes option pricing model.
REASONABILITY
The Offer represents a premium to the VWAP’s per Cipla Medpro ordinary share for the days up to and including 20 November 2012, being the trading day immediately preceding the publication of the second cautionary announcement related to such a potential transaction, as follows:• 35.8% to the 30-day VWAP of Cipla Medpro shares of R7.37 per share in respect of the Offer Price; • 42.1% to the 60-day VWAP of Cipla Medpro shares of R7.04 per share in respect of the Offer Price; and• 35.2% to the 90-day VWAP of Cipla Medpro shares of R7.39 per share in respect of the Offer Price.
The Offer is substantiated as a premium over the historical VWAP’s per Cipla Medpro ordinary share for the days up to and including 2 7 February 2013, being the trading day immediately preceding the publication of the firm intention announcement, as follows:• 9.5% to the 30-day VWAP of Cipla Medpro shares of R9.13 per share in respect of the Offer Price; • 11.0% to the 60-day VWAP of Cipla Medpro shares of R9.01 per share in respect of the Offer Price; and• 13.0% to the 90-day VWAP of Cipla Medpro shares of R8.85 per share in respect of the Offer Price.
In terms of the above, the Offer is considered to be reasonable.
OPINION
The Independent Expert’s opinion is necessarily based upon the information available to it up to 27 February 2013, including the financial information as well as other conditions and circumstances existing and disclosed to it. The Independent Expert has assumed that all conditions precedent, including any material regulatory and other approvals or consents required in connection with the Transaction have been fulfilled or obtained.
45
Accordingly, it should be understood that subsequent developments may impact the Independent Expert’s opinion, but it is under no obligation to update, revise or re-affirm its opinion as a result thereof.
Offer to ordinary shareholders
We have considered the terms and conditions of the Offer, and based upon, and subject to the aforegoing, we are of the opinion that the Offer of R10.00 is fair and reasonable to the Cipla Medpro shareholders.
Offer to option holders
We have considered the terms and conditions of the Offer, and based upon, and subject to the aforegoing, we are of the opinion that the Offer as presented to Cipla Medpro Option Holders is both fair and reasonable.
Our opinion is based upon the market, regulatory and trading conditions as they currently exist and can only be evaluated at the date of this letter. It should be understood that subsequent developments may affect our opinion, which we are under no obligation to update, revise or re-affirm.
LIMITING CONDITIONS AND RELATED PARTY RELATIONSHIPS
We have relied upon the accuracy of information provided to us or otherwise reviewed by us, for the purposes of this opinion, whether in writing or obtained in discussion with the management of Cipla Medpro. We express no opinion on this information.
There were no limiting conditions, or any restrictions of scope imposed by Cipla Medpro whilst this opinion was being prepared.
This letter and opinion is provided solely for the benefit of the Independent Board of Cipla Medpro for the sole purpose of assisting the Independent Board in forming and expressing an opinion for the benefit of the Cipla Medpro shareholders and Cipla Medpro Option Holders.
There is no relationship between Bridge Capital and any other parties involved in the Transaction. Bridge Capital has no shares in Cipla Medpro or any other party involved in the Transaction. Bridge Capital’s fees in respect of this fair and reasonable opinion is R1 750 000 plus VAT is not payable in shares and is not contingent or related to the outcome of the Offer.
Bridge Capital has no conflict of interest in relation to the Offer and is able to make impartial decisions in relation to that Offer without fear or favour. Bridge Capital has all the necessary competencies for this appointment. An internal review and quality control process exists at Bridge Capital that ensured that someone other than the senior person responsible for the assignment reviewed the final opinion.
Each shareholder’s individual decision may be influenced by such shareholder’s particular circumstances. Our opinion does not purport to cater for each shareholder’s circumstances, but rather the general body of shareholders taken as a whole. Should a shareholder be in any doubt as to what action to take, he or she should consult an independent adviser.
Bridge Capital is satisfied that all other information as required under section 114(3) of the Act not contained in this report is contained in the Circular.
CONSENT
We hereby consent to the inclusion of this letter and references thereto, in the form and context in which they appear in the circular to Cipla Medpro shareholders and the firm intention announcement.
Yours faithfully
Jonathan FisherDirector
Bridge Capital Advisors (Pty) Limited27 Fricker RoadIllovo
PO Box 651010Benmore2010
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Annexure 2
HISTORICAL FINANCIAL INFORMATION OF CIPLA MEDPRO
The historical financial information of the Cipla Medpro Group for the three financial years ended 31 December 2012, 31 December 2011 and 31 December 2010, as extracted from the reviewed/restated annual financial statements of the relevant years, is set out below:Statements of financial position as at 31 December
Cipla MedproGroup
Reviewed2012
(R’000)
Cipla MedproGroup
Restated2011
(R’000)
Cipla MedproGroup
Restated2010
(R’000)
ASSETSNon-current assetsProperty, plant and equipment 427 811 444 457 420 125 Intangible assets 1 397 749 1 390 057 1 371 197 Other investments 12 8 6 Loans receivable 1 596 3 191 – Deferred tax assets 93 601 88 074 42 114
Total non-current assets 1 920 769 1 925 787 1 833 442
Current assetsInventory 433 869 389 253 289 661 Income tax receivable 38 273 1 312 742 Trade and other receivables, including derivatives 518 254 439 811 323 440 Loans receivable 4 424 3 881 7 709 Cash and cash equivalents 97 337 16 493 46 448
Total current assets 1 092 157 850 750 668 000
Total assets 3 012 926 2 776 537 2 501 442
EQUITYCapital and reserves 1 948 369 1 830 937 1 702 319 Non-controlling interest 17 789 12 544 7 472
Total equity 1 966 158 1 843 481 1 709 791
LIABILITIESNon-current liabilitiesLoans and borrowings 268 003 282 722 314 428 Provisions 16 765 42 622 – Deferred tax liabilities 17 274 – –
Total non-current liabilities 302 042 325 344 314 428
Current liabilitiesTrade and other payables, including derivatives 615 611 431 683 381 521 Loans and borrowings 18 692 21 976 17 354 Provisions 44 282 30 000 – Income tax payable 195 17 090 7 052 Bank overdrafts 65 946 106 963 71 296
Total current liabilities 744 726 607 712 477 223
Total liabilities 1 046 768 933 056 791 651
Total equity and liabilities 3 012 926 2 776 537 2 501 442
Net asset value per share (cents)# 440.4 412.9 376.6 Net tangible asset value per share (cents)# 127.3 101.6 74.6# This was not disclosed in the restated annual financial statements of the Cipla Medpro Group. Both calculations are based on the
number of shares in issue at year-end.
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Statements of comprehensive income for the years ended 31 December
Cipla MedproGroup
Reviewed2012
(R’000)
Cipla MedproGroup
Restated2011
(R’000)
Cipla MedproGroup
Restated2010
(R’000)
Revenue 2 297 224 1 767 561 1 446 979 Cost of sales (1 154 288) (737 699) (548 892)
Gross profit 1 142 936 1 029 862 898 087 Other income 15 422 121 264 6 614 Other operating expenses (831 814) (766 818) (581 108)
Profit before finance costs and income tax 326 544 384 308 323 593 Net finance costs and finance income (74 434) (42 626) (57 755)
Finance costs (78 814) (58 212) (60 585) Finance income 4 380 15 586 2 830
Profit before income tax 252 110 341 682 265 838 Income tax expense (83 746) (102 768) (83 750)
Profit for the year 168 364 238 914 182 088
Profit attributable to:
Equity holders of the parent 161 369 233 888 178 188 Non-controlling interest 6 995 5 026 3 900
Profit for the year 168 364 238 914 182 088
Other comprehensive income for the year (net of income tax) – – – Total comprehensive income for the year 168 364 238 914 182 088
Total comprehensive income attributable to:
Equity holders of the parent 161 369 233 888 178 188 Non-controlling interest 6 995 5 026 3 900
Total comprehensive income for the year 168 364 238 914 182 088
Earnings per share
Basic earnings per share (cents) 36.6 52.3 40.3 Diluted earnings per share (cents) 36.4 52.1 39.8
Headline earnings per share
Basic headline earnings per share (cents) 37.6 55.3 40.3 Diluted headline earnings per share (cents) 37.5 55.0 39.8
Dividend per share
Interim (cents) 8.5 6.5 5.0 Final (cents) – 7.5 6.0
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Statements of changes in equity for the years ended 31 December
Cipla MedproGroup
Reviewed2012
(R’000)
Cipla MedproGroup
Restated2011
(R’000)
Cipla MedproGroup
Restated2010
(R’000)
Total equity at beginning of year 1 843 481 1 709 791 1 522 505Total comprehensive income for the year 168 364 238 914 182 088Issue of share capital – – 22 205Share issue expenses – – (27)Shares issued from the CMSA Share Option Trust 24 769 – 17 490Shares acquired by the CMSA Share Option Trust – – (22 205)Share buy-back – (49 983) –IFRS 2: Share-based Payments 2 729 1 455 10 478Changes in ownership interest – 1 407 –Dividends paid (73 185) (58 103) (22 743)
Total equity at end of the year 1 966 158 1 843 481 1 709 791
Comprising:
Capital and reserves 1 948 369 1 830 937 1 702 319 Non-controlling interest 17 789 12 544 7 472
Total equity 1 966 158 1 843 481 1 709 791
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Statements of cash flow for the years ended 31 December
Cipla MedproGroup
Reviewed2012
(R’000)
Cipla MedproGroup
Restated2011
(R’000)
Cipla MedproGroup
Restated2010
(R’000)
Cash flows from operating activities
Cash generated by operations 390 922 342 686 314 457 Finance costs paid (33 130) (37 678) (44 607)Finance income received 4 358 4 080 2 389 Dividends paid (73 185) (58 103) (22 743)Income tax paid (125 155) (132 967) (94 514)STC paid (700) (6 010) (4 042)
Net cash flows from operating activities 163 110 112 008 150 940
Cash flows from investing activities
Acquisitions of property, plant and equipment (13 134) (48 444) (49 286)Acquisitions of intangible assets (35 593) (55 526) (47 400)Proceeds on disposals of property, plant and equipment 2 95 10 Decrease/(Increase) in loans receivable 1 052 (3 146) (1 550)
Net cash flows from investing activities (47 673) (107 021) (98 226)
Cash flows from financing activities
Share issue expenses – – (27)Proceeds from the exercise of share options 24 769 – 16 493 Acquisitions of subsidiaries – (2 000) – Share buy-back – (49 983) – Redemption of preference shares – (34 500) (159 770)(Decrease)/Increase in loans payable (18 345) 15 874 125 885
Net cash flows from financing activities 6 424 (70 609) (17 419)
Net increase/(decrease) in cash and cash equivalents 121 861 (65 622) 35 295 Cash and cash equivalents at beginning of the year (90 470) (24 848) (60 143)
Cash and cash equivalents at end of the year 31 391 (90 470) (24 848)
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Annexure 3
FOREIGN SHAREHOLDERS AND EXCHANGE CONTROL REGULATIONS
The following is a summary of the Exchange Control Regulations as they apply to Scheme Participants. Scheme Participants who are not resident in, or who have a registered address outside, South Africa must satisfy themselves as to the full observance of the laws of the relevant jurisdiction concerning the receipt of the Scheme Consideration, including obtaining any requisite governmental or other consents, observing any other requisite formalities and paying any transfer or other taxes due in such territory. If in doubt, Scheme Participants should consult their professional advisers without delay.
1. Residents of the Common Monetary Area
In the case of:
1.1 Certifi cated Scheme Participants whose registered addresses in the Register are within the Common Monetary Area and whose Documents of Title are not restrictively endorsed in terms of the Exchange Control Regulations, the Scheme Consideration will be posted or transferred by way of EFT to such Scheme Participants, in accordance with paragraphs 6.11.5.2.1 and 6.11.5.2.2.
1.2 Dematerialised Scheme Participants whose registered addresses in the Register are within the Common Monetary Area and have not been restrictively designated in terms of the Exchange Control Regulations, the Scheme Consideration will be credited directly to the accounts nominated for the relevant Scheme Participants by their duly appointed CSDP or Broker in terms of the Custody Agreement with their CSDP or Broker.
2. Emigrants from the Common Monetary Area
In the case of Scheme Participants who are Emigrants from the Common Monetary Area and whose Scheme Shares form part of their blocked assets, the Scheme Consideration will:
2.1 in the case of Certifi cated Scheme Participants whose Documents of Title are restrictively endorsed in terms of the Exchange Control Regulations, be forwarded to the authorised dealer in foreign exchange in South Africa controlling such Scheme Participants’ blocked assets in terms of the Exchange Control Regulations. The attached Form of Surrender and Transfer (blue) makes provision for details of the authorised dealer concerned to be given; or
2.2 in the case of Dematerialised Scheme Participants, the Scheme Consideration will be paid to their CSDP or Broker, which shall arrange for the same to be credited directly to the blocked Rand bank account of the Scheme Participants concerned with their authorised dealer in foreign exchange in South Africa.
3. All other non-residents of the Common Monetary Area
The Scheme Consideration accruing to non-resident Scheme Participants whose registered addresses are outside the Common Monetary Area and who are not Emigrants from the Common Monetary Area will:
3.1 in the case of Certifi cated Scheme Participants, whose Documents of Title have been restrictively endorsed in terms of the Exchange Control Regulations, be posted to their registered address, unless written instructions to the contrary are received and an alternative address is provided. The attached Form of Surrender and Transfer (blue) makes provision for a substitute address or bank details; or
3.2 in the case of Dematerialised Scheme Participants, be paid to their duly appointed CSDP or Broker and credited to such Scheme Participants in terms of the provisions of the Custody Agreement with their CSDP or Broker.
4. Information not provided
If the information regarding authorised dealers is not given or written instructions to the contrary are provided but no address is given, as required in terms of paragraphs 1.1 and 2.1, the Scheme Consideration will be held in trust by Cipla Medpro or the Transfer Secretaries on behalf of Cipla Medpro for the Scheme Participants concerned, pending receipt of the necessary information or instructions. No interest will be paid on the Scheme Consideration so held.
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Annexure 4
COPY OF SECTION 115 OF THE COMPANIES ACT
“Section 115: Required approval for transactions contemplated in Part A
(1) Despite section 65, and any provision of a company’s Memorandum of Incorporation, or any resolution adopted by its board or holders of its securities, to the contrary, a company may not dispose of, or give effect to an agreement or series of agreements to dispose of, all or the greater part of its assets or undertaking, implement an amalgamation or a merger, or implement a scheme of arrangement, unless:
(a) the disposal, amalgamation or merger, or scheme of arrangement:
(i) has been approved in terms of this section; or
(ii) is pursuant to or contemplated in an approved business rescue plan for that company, in terms of Chapter 6; and
(b) to the extent that Parts B and C of this Chapter and the Takeover Regulations apply to a company that proposes to:
(i) dispose of all or the greater part of its assets or undertaking;
(ii) amalgamate or merge with another company; or
(iii) implement a scheme of arrangement, the Panel has issued a compliance certifi cate in respect of the transaction, in terms of section 119(4)(b), or exempted the transaction in terms of section 119(6).
(2) A proposed transaction contemplated in subsection (1) must be approved:
(a) by a special resolution adopted by persons entitled to exercise voting rights on such a matter, at a meeting called for that purpose and at which sufficient persons are present to exercise, in aggregate, at least 25% of all of the voting rights that are entitled to be exercised on that matter, or any higher percentage as may be required by the company’s Memorandum of Incorporation, as contemplated in section 64(2); and
(b) by a special resolution, also adopted in the manner required by paragraph (a), by the shareholders of the company’s holding company if any, if:
(i) the holding company is a company or an external company;
(ii) the proposed transaction concerns a disposal of all or the greater part of the assets or undertaking of the subsidiary; and
(iii) having regard to the consolidated financial statements of the holding company, the disposal by the subsidiary constitutes a disposal of all or the greater part of the assets or undertaking of the holding company; and
(c) by the court, to the extent required in the circumstances and manner contemplated in subsections (3) to (6).
(3) Despite a resolution having been adopted as contemplated in subsections (2)(a) and (b), a company may not proceed to implement that resolution without the approval of a court if:
(a) the resolution was opposed by at least 15% of the voting rights that were exercised on that resolution and, within five business days after the vote, any person who voted against the resolution requires the company to seek court approval; or
(b) the court, on an application within 10 business days after the vote by any person who voted against the resolution, grants that person leave, in terms of subsection (6), to apply to a court for a review of the transaction in accordance with subsection (7).
(4) For the purposes of subsections (2) and (3), any voting rights controlled by an acquiring party, a person related to an acquiring party, or a person acting in concert with either of them, must not be included in calculating the percentage of voting rights:
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(a) required to be present, or actually present, in determining whether the applicable quorum requirements are satisfied; or
(b) required to be voted in support of a resolution, or actually voted in support of the resolution.
(4A) In subsection (4), ‘act in concert’ has the meaning set out in section 117(1)(b).
(5) If a resolution requires approval by a court as contemplated in terms of subsection (3)(a), the company must either:
(a) within 10 business days after the vote, apply to the court for approval, and bear the costs of that application; or
(b) treat the resolution as a nullity.
(6) On an application contemplated in subsection (3)(b), the court may grant leave only if it is satisfied that the applicant:
(a) is acting in good faith;
(b) appears prepared and able to sustain the proceedings; and
(c) has alleged facts which, if proved, would support an order in terms of subsection (7).
(7) On reviewing a resolution that is the subject of an application in terms of subsection (5)(a), or after granting leave in terms of subsection (6), the court may set aside the resolution only if:
(a) the resolution is manifestly unfair to any class of holders of the company’s securities; or
(b) the vote was materially tainted by conflict of interest, inadequate disclosure, failure to comply with the Act, the Memorandum of Incorporation or any applicable rules of the company, or other significant and material procedural irregularity.
(8) The holder of any voting rights in a company is entitled to seek relief in terms of section 164 if that person:
(a) notified the company in advance of the intention to oppose a special resolution contemplated in this section; and
(b) was present at the meeting and voted against that special resolution.
(9) If a transaction contemplated in this Part has been approved, any person to whom assets are, or an undertaking is, to be transferred, may apply to a court for an order to effect:
(a) the transfer of the whole or any part of the undertaking, assets and liabilities of a company contemplated in that transaction;
(b) the allotment and appropriation of any shares or similar interests to be allotted or appropriated as a consequence of the transaction;
(c) the transfer of shares from one person to another;
(d) the dissolution, without winding-up, of a company, as contemplated in the transaction;
(e) incidental, consequential and supplemental matters that are necessary for the effectiveness and completion of the transaction; or
(f) any other relief that may be necessary or appropriate to give effect to, and properly implement, the amalgamation or merger.”
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Annexure 5
COPY OF SECTION 164 OF THE COMPANIES ACT
“Section 164: Dissenting shareholders appraisal rights
(1) This section does not apply in any circumstances relating to a transaction, agreement or offer pursuant to a business rescue plan that was approved by shareholders of a company, in terms of section 152.
(2) If a company has given notice to shareholders of a meeting to consider adopting a resolution to:
(a) amend its Memorandum of Incorporation by altering the preferences, rights, limitations or other terms of any class of its shares in any manner materially adverse to the rights or interests of holders of that class of shares, as contemplated in section 37(8); or
(b) enter into a transaction contemplated in section 112, 113 or 114, that notice must include a statement informing shareholders of their rights under this section.
(3) At any time before a resolution referred to in subsection (2) is to be voted on, a dissenting shareholder may give the company a written notice objecting to the resolution.
(4) Within 10 business days after a company has adopted a resolution contemplated in this section, the company must send a notice that the resolution has been adopted to each shareholder who:
(a) gave the company a written notice of objection in terms of subsection (3); and
(b) has neither:
(i) withdrawn that notice; or
(ii) voted in support of the resolution.
(5) A shareholder may demand that the company pay the shareholder the fair value for all of the shares of the company held by that person if:
(a) the shareholder:
(i) sent the company a notice of objection, subject to subsection (6); and
(ii) in the case of an amendment to the company’s Memorandum of Incorporation, holds shares of a class that is materially and adversely affected by the amendment;
(b) the company has adopted the resolution contemplated in subsection (2); and
(c) the shareholder:
(i) voted against that resolution; and
(ii) has complied with all of the procedural requirements of this section.
(6) The requirement of subsection (5)(a)(i) does not apply if the company failed to give notice of the meeting, or failed to include in that notice a statement of the shareholders rights under this section.
(7) A shareholder who satisfies the requirements of subsection (5) may make a demand contemplated in that subsection by delivering a written notice to the company within:
(a) 20 business days after receiving a notice under subsection (4); or
(b) if the shareholder does not receive a notice under subsection (4), within 20 business days after learning that the resolution has been adopted.
(8) A demand delivered in terms of subsections (5) to (7) must also be delivered to the Panel, and must state:
(a) the shareholder’s name and address;
(b) the number and class of shares in respect of which the shareholder seeks payment; and
(c) a demand for payment of the fair value of those shares.
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(9) A shareholder who has sent a demand in terms of subsections (5) to (8) has no further rights in respect of those shares, other than to be paid their fair value, unless:
(a) the shareholder withdraws that demand before the company makes an offer under subsection (11), or allows an offer made by the company to lapse, as contemplated in subsection (12)(b);
(b) the company fails to make an offer in accordance with subsection (11) and the shareholder withdraws the demand; or
(c) the company, by a subsequent special resolution, revokes the adopted resolution that gave rise to the shareholder’s rights under this section.
(10) If any of the events contemplated in subsection (9) occur, all of the shareholder’s rights in respect of the shares are reinstated without interruption.
(11) Within five business days after the later of:
(a) the day on which the action approved by the resolution is effective;
(b) the last day for the receipt of demands in terms of subsection (7)(a); or
(c) the day the company received a demand as contemplated in subsection (7)(b), if applicable, the company must send to each shareholder who has sent such a demand a written offer to pay an amount considered by the company’s directors to be the fair value of the relevant shares, subject to subsection (16), accompanied by a statement showing how that value was determined.
(12) Every offer made under subsection (11):
(a) in respect of shares of the same class or series must be on the same terms; and
(b) lapses if it has not been accepted within 30 business days after it was made.
(13) If a shareholder accepts an offer made under subsection (12):
(a) the shareholder must either in the case of:
(i) shares evidenced by certificates, tender the relevant share certificates to the company or the company’s transfer agent; or
(ii) uncertificated shares, take the steps required in terms of section 53 to direct the transfer of those shares to the company or the company’s transfer agent; and
(b) the company must pay that shareholder the agreed amount within 10 business days after the shareholder accepted the offer and:
(i) tendered the share certificates; or
(ii) directed the transfer to the company of uncertificated shares.
(14) A shareholder who has made a demand in terms of subsections (5) to (8) may apply to a court to determine a fair value in respect of the shares that were the subject of that demand, and an order requiring the company to pay the shareholder the fair value so determined, if the company has:
(a) failed to make an offer under subsection (11); or
(b) made an offer that the shareholder considers to be inadequate, and that offer has not lapsed.
(15) On an application to the court under subsection (14):
(a) all dissenting shareholders who have not accepted an offer from the company as at the date of the application must be joined as parties and are bound by the decision of the court;
(b) the company must notify each affected dissenting shareholder of the date, place and consequences of the application and of their right to participate in the court proceedings; and
(c) the court:
(i) may determine whether any other person is a dissenting shareholder who should be joined as a party;
(ii) must determine a fair value in respect of the shares of all dissenting shareholders, subject to subsection (16);
(iii) in its discretion may:
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(aa) appoint one or more appraisers to assist it in determining the fair value in respect of the shares; or
(bb) allow a reasonable rate of interest on the amount payable to each dissenting shareholder from the date the action approved by the resolution is effective, until the date of payment;
(iv) may make an appropriate order of costs, having regard to any offer made by the company, and the final determination of the fair value by the court; and
(v) must make an order requiring:
(aa) the dissenting shareholders to either withdraw their respective demands or to comply with subsection (13)(a); and
(bb) the company to pay the fair value in respect of their shares to each dissenting shareholder who complies with subsection (13)(a), subject to any conditions the court considers necessary to ensure that the company fulfils its obligations under this section.
(15A) At any time until the court has made an order contemplated in subsection (15)(c)(v), a dissenting shareholder may accept the offer made by the company in terms of subsection (11), in which case:
(a) that shareholder must comply with the requirements of subsection 13(a); and
(b) the company must comply with the requirements of subsection 13(b).
(16) The fair value in respect of any shares must be determined as at the date on which, and time immediately before, the company adopted the resolution that gave rise to a shareholder’s rights under this section.
(17) If there are reasonable grounds to believe that compliance by a company with subsection (13)(b), or with a court order in terms of subsection (15)(c)(v)(bb), would result in the company being unable to pays its debts as they fall due and payable for the ensuing 12 months:
(a) the company may apply to a court for an order varying the company’s obligations in terms of the relevant subsection; and
(b) the court may make an order that:
(i) is just and equitable, having regard to the financial circumstances of the company; and
(ii) ensures that the person to whom the company owes money in terms of this section is paid at the earliest possible date compatible with the company satisfying its other financial obligations as they fall due and payable.
(18) If the resolution that gave rise to a shareholder’s rights under this section authorised the company to amalgamate or merge with one or more other companies, such that the company whose shares are the subject of a demand in terms of this section has ceased to exist, the obligations of that company under this section are obligations of the successor to that company resulting from the amalgamation or merger.
(19) For greater certainty, the making of a demand, tendering of shares and payment by a company to a shareholder in terms of this section do not constitute a distribution by the company, or an acquisition of its shares by the company within the meaning of section 48, and therefore are not subject to:
(a) the provisions of that section; or
(b) the application by the company of the solvency and liquidity test set out in section 4.
(20) Except to the extent:
(a) expressly provided in this section; or
(b) that the Panel rules otherwise in a particular case, a payment by a company to a shareholder in terms of this section does not obligate any person to make a comparable offer under section 125 to any other person.”
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NOTICE CONVENING GENERAL MEETING
If you are in any doubt as to what action you should take in respect of the following resolutions, please consult your Central Securities Depository Participant (“CSDP”), Broker, banker, attorney, accountant or other professional adviser immediately.
All terms used in this notice of General Meeting shall, unless the context otherwise requires or they are otherwise defined herein, have the meaning attributed to them in the Circular to which this notice of General Meeting is attached.
A. NOTICE
Notice is hereby given to Cipla Medpro Shareholders as at the record date of Friday, 12 April 2013, that a general meeting (“General Meeting”) of shareholders of the Company (“Cipla Medpro Shareholders” or “Shareholders”), will be held at 10 h00 on Wednesday, 15 May 2013 at the offices of Cipla Medpro, Board Room number 1, Belvedere Office Park, Block F, Bella Rosa Street, Bellville, Cape Town, for the purpose of considering, and, if deemed fit, passing, with or without modification, the special and ordinary resolutions set out hereafter.
B. WHO MAY ATTEND AND VOTE?
Record Date
The Cipla Medpro Board determined that, in terms of section 62(3)(a), read with section 59 of the Companies Act, the Voting Record Date, being the date on which Cipla Medpro Shareholders who are entitled to attend, speak at and vote at the General Meeting will be determined, will be Friday, 10 May 2013. Accordingly, the last day to trade Cipla Medpro Shares in order to be recorded in the Register to vote at the General Meeting will be Friday, 3 May 2013.
Attending in person or by proxy
If you hold Own-Name Dematerialised Cipla Medpro Shares or if you are the registered holder of Certificated Cipla Medpro Shares:
– you may attend the General Meeting in person; or
– alternatively, you may appoint a proxy to represent you at the General Meeting by completing the attached form of proxy (green) in accordance with the instructions contained therein and returning it to the Company at its registered address or to the Transfer Secretaries to be received at any time before the commencement of the General Meeting (or any adjournment or postponement thereof) or by handing it to the chairman of the General Meeting before the appointed proxy exercises any of your shareholder rights at the General Meeting (or any adjournment or postponement of the General Meeting), provided that, should you return such form of proxy (green) to the relevant Transfer Secretaries less than 48 hours before the General Meeting, you will also be required to furnish a copy of such form of proxy (green) to the chairman of the General Meeting before the appointed proxy exercises any of your shareholder rights at the General Meeting (or any adjournment or postponement of the General Meeting). A proxy need not be a shareholder of the Company but must be a natural person.
The attached form of proxy (green) is only to be completed by those Cipla Medpro Shareholders who:
– hold Certificated Cipla Medpro Shares; or
– are recorded on the Register as Own-Name Dematerialised Shareholders.
The attached form of proxy (green) is provided to Cipla Medpro Shareholders for their convenience. Cipla Medpro Shareholders are not obliged to use the attached form, and may appoint a proxy in writing under section 58 of the Companies Act. A summary of the provisions of this section is included in Annexure GM 1 to this notice.
If you hold Dematerialised Cipla Medpro Shares which are not Own-Name Dematerialised Cipla Medpro Shares:
– and wish to attend, speak at and/or vote in person at the General Meeting, you must obtain the necessary letter of representation and/or proxy form from your CSDP or Broker to attend, speak at and/or vote at the General Meeting in person or by proxy;
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– and do not wish to attend the General Meeting but would like your vote to be recorded at the meeting, you should contact your CSDP or Broker and furnish them with your voting instructions in terms of the relevant Custody Agreement entered into between you and your CSDP or Broker; and
– you must not complete the attached form of proxy (green).
Electronic participation
Cipla Medpro Shareholders or their proxies may participate in the General Meeting by way of teleconference call and, if they wish to do so:
– must contact the Company Secretary by email at [email protected] no later than 12 h00 on Friday, 10 May 2013 in order to obtain a pin number and dial-in details for that conference call;
– will be required to provide reasonably satisfactory identification;
– will be billed separately by their own telephone service providers for their telephone call to participate in the General Meeting; and
– should, if they wish to vote at the General Meeting by electronic communication, confirm, by no later than 10 h00 on Monday, 13 May 2013 to the Company Secretary that they wish to do so.
Identification
In terms of section 63(1) of the Companies Act, any person attending or participating in a meeting of shareholders must present reasonably satisfactory identification and the person presiding at the meeting must be reasonably satisfied that the right of any person to participate in and vote (whether as shareholder or as proxy for a shareholder) has been reasonably verified. Accordingly, all General Meeting participants will be required to provide reasonably satisfactory identification to the chairperson of the General Meeting in order to participate in and vote at the General Meeting.
Voting
On a show of hands, every Cipla Medpro Shareholder who is present in person, by proxy or represented at the General Meeting shall have one vote (irrespective of the number of ordinary shares held) and on a poll, every Cipla Medpro Shareholder shall have that proportion of the total votes in the Company which the aggregate amount of the nominal value of the ordinary shares held by that Shareholder bears to the aggregate of the nominal value of all the Cipla Medpro Shares issued by the Company.
C. PURPOSE OF THE GENERAL MEETING
The purpose of the General Meeting is to consider and if deemed fit, pass with or without modification all resolutions set out below.
SPECIAL RESOLUTION NUMBER 1:
APPROVAL OF THE SCHEME IN TERMS OF SECTIONS 114 AND 115 OF THE COMPANIES ACT
“Resolved that, subject to the fulfilment or waiver of the conditions precedent (or such conditions precedent being deemed to be pro non scripto) set out in paragraph 6.2 of the Circular to Cipla Medpro Shareholders dated 15 April 2013 to which this notice convening the General Meeting is attached, the scheme of arrangement in terms of section 114 of the Companies Act proposed by the board of directors of Cipla Medpro South Africa Limited (“Cipla Medpro”) between Cipla Medpro and its shareholders (as more fully described in the Circular to Cipla Medpro Shareholders dated 15 April 2013 to which this notice convening the General Meeting is attached), in terms of which, if implemented, Cipla Limited (“Cipla India”) (or its nominated subsidiary) will acquire all (100%) of the Cipla Medpro Shares held by Scheme Participants on the Scheme Consideration Record Date, excluding the Cipla Medpro Shares held by Cipla Medpro Shareholders who validly exercise their Appraisal Rights by demanding, in terms of sections164(5) to 164(8) of the Companies Act, that Cipla Medpro pay them the fair value of all their Cipla Medpro Shares for R10.00 in cash for every Cipla Medpro Share (subject to any Adjustment) (“Cash Consideration”), be and is hereby approved as a special resolution in terms of section 115(2)(a) of the Companies Act. This approval incudes approval, by way of special resolution to the extent necessary, for all obligations of, and actions and steps by, Cipla Medpro under or in connection with the Scheme and the Proposed Transaction set out in the Circular, including the Implementation Agreement.”
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The quorum requirement for Special Resolution Number 1 to be adopted is sufficient persons being present in person or by proxy to exercise, in aggregate, at least 25% of all voting rights that are entitled to be exercised on such special resolution.
In terms of section 62(3)(c) of the Companies Act, the percentage of voting rights required for Special Resolution Number 1 to be adopted is at least 75% of the voting rights exercised on such special resolution.
ORDINARY RESOLUTION NUMBER 1:
AUTHORITY GRANTED TO DIRECTORS
“Resolved that each director of Cipla Medpro be and is hereby individually authorised to sign all such documents and do all such other things as may be necessary or desirable for or incidental to the implementation of Special Resolution Number 1.”
In terms of section 62(3)(c) of the Companies Act, the percentage of voting rights required for Ordinary Resolution Number 1 to be adopted is more than 50% of the voting rights exercised on such ordinary resolution.
D. APPRAISAL RIGHTS FOR DISSENTING SHAREHOLDERS
In terms of section 164 of the Companies Act, at any time before Special Resolution Number 1 as set out in this notice convening the General Meeting is voted on, a Cipla Medpro Shareholder may give the Company a written notice objecting to Special Resolution Number 1.
Within 10 Business Days after the Company has adopted Special Resolution Number 1, the Company must send a notice to Cipla Medpro Shareholders that Special Resolution Number 1 has been adopted to each Shareholder who:
– gave the Company a written notice of objection as contemplated above; and
– has neither withdrawn that notice nor voted in support of Special Resolution Number 1.
A Cipla Medpro Shareholder may demand that the Company pay the Shareholder the fair value for all of the Cipla Medpro Shares of the Company held by that person if:
– the Cipla Medpro Shareholder has sent the Company a written notice of objection;
– the Company has adopted the Special Resolution Number 1; and
– Cipla Medpro Shareholder voted against the Special Resolution Number 1 and has complied with all of the procedural requirements of section 164 of the Companies Act.
A copy of section 164 of the Companies Act is set out in Annexure 5 to the Circular to which this notice convening the General Meeting is attached, and also in Annexure GM 2 to this notice. Further detail regarding the process and consequences of a Cipla Medpro Shareholder exercising its Appraisal Rights are set out in paragraph 6.13 of the Circular.
By order of the Cipla Medpro Board
Rochelle ManilallCompany Secretary
15 April 2013
Registered office Transfer Secretaries to Cipla Medpro1474 South Coast Road Computershare Investor Services Proprietary LimitedMobeni Ground Floor, 70 Marshall StreetDurban Johannesburg 4052 2001(PO Box 32003, Mobeni, 4060) (PO Box 61051, Marshalltown, 2107)
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Annexure GM 1
SUMMARY OF APPLICABLE RIGHTS ESTABLISHED IN SECTION 58 OF THE COMPANIES ACT
For purposes of this summary, the term “shareholder” shall have the meaning ascribed thereto in section 57(1) of the Companies Act.
1. At any time, a shareholder of a company is entitled to appoint any individual, including an individual who is not a shareholder of that company, as a proxy to participate in, speak and vote at, a shareholders meeting on behalf of the shareholder.
2. A proxy appointment must be in writing, dated and signed by the relevant shareholder.
3. Except to the extent that the memorandum of incorporation of a company provides otherwise:
3.1 a shareholder of the relevant company may appoint two or more persons concurrently as proxies, and may appoint more than one proxy to exercise voting rights attached to different securities held by such shareholder; and
3.2 a copy of the instrument appointing a proxy must be delivered to the relevant company, or to any other person on behalf of the relevant company, before the proxy exercises any rights of the shareholder at a shareholders meeting.
4. Irrespective of the form of instrument used to appoint a proxy:
4.1 the appointment of the proxy is suspended at any time and to the extent that the shareholder who appointed that proxy chooses to act directly and in person in the exercise of any rights as a shareholder of the relevant company; and
4.2 should the instrument used to appoint a proxy be revocable, a shareholder may revoke the proxy appointment by cancelling it in writing, or making a later inconsistent appointment of a proxy, and delivering a copy of the revocation instrument to the proxy and the relevant company.
5. The revocation of a proxy appointment constitutes a complete and final cancellation of the proxy’s authority to act on behalf of the relevant shareholder as of the later of the date:
5.1 stated in the revocation instrument, if any; or
5.2 upon which the revocation instrument is delivered to the proxy and the relevant company.
6. Should the instrument appointing a proxy or proxies have been delivered to the relevant company, as long as that appointment remains in effect, any notice that is required by the Companies Act or the relevant company’s memorandum of incorporation to be delivered by such company to the shareholder must be delivered by such company to:
6.1 the shareholder, or
6.2 the proxy or proxies if the shareholder has in writing directed the relevant company to do so and has paid any reasonable fee charged by the company for doing so.
7. A proxy is entitled to exercise, or abstain from exercising, any voting right of the relevant shareholder without direction, except to the extent that the memorandum of incorporation of the relevant company or the instrument appointing the proxy provides otherwise.
8. If a company issues an invitation to shareholders to appoint one or more persons named by such company as a proxy, or supplies a form of instrument for appointing a proxy:
8.1 such invitation must be sent to every shareholder who is entitled to receive notice of the meeting at which the proxy is intended to be exercised and must bear a reasonably prominent summary of the rights established by section 58 of the Companies Act;
8.2 the company must not require that the proxy appointment be made irrevocable; and
8.3 the proxy appointment remains valid only until the end of the relevant meeting at which it was intended to be used, unless revoked as contemplated in section 58(5) of the Companies Act (see paragraph 5 above).
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Annexure GM 2
COPY OF SECTION 164 OF THE COMPANIES ACT
“Section 164: Dissenting shareholders appraisal rights
(1) This section does not apply in any circumstances relating to a transaction, agreement or offer pursuant to a business rescue plan that was approved by shareholders of a company, in terms of section 152.
(2) If a company has given notice to shareholders of a meeting to consider adopting a resolution to:
(a) amend its Memorandum of Incorporation by altering the preferences, rights, limitations or other terms of any class of its shares in any manner materially adverse to the rights or interests of holders of that class of shares, as contemplated in section 37(8); or
(b) enter into a transaction contemplated in section 112, 113 or 114, that notice must include a statement informing shareholders of their rights under this section.
(3) At any time before a resolution referred to in subsection (2) is to be voted on, a dissenting shareholder may give the company a written notice objecting to the resolution.
(4) Within 10 business days after a company has adopted a resolution contemplated in this section, the company must send a notice that the resolution has been adopted to each shareholder who:
(a) gave the company a written notice of objection in terms of subsection (3); and
(b) has neither:
(i) withdrawn that notice; or
(ii) voted in support of the resolution.
(5) A shareholder may demand that the company pay the shareholder the fair value for all of the shares of the company held by that person if:
(a) the shareholder:
(i) sent the company a notice of objection, subject to subsection (6); and
(ii) in the case of an amendment to the company’s Memorandum of Incorporation, holds shares of a class that is materially and adversely affected by the amendment;
(b) the company has adopted the resolution contemplated in subsection (2); and
(c) the shareholder:
(i) voted against that resolution; and
(ii) has complied with all of the procedural requirements of this section.
(6) The requirement of subsection (5)(a)(i) does not apply if the company failed to give notice of the meeting, or failed to include in that notice a statement of the shareholders rights under this section.
(7) A shareholder who satisfies the requirements of subsection (5) may make a demand contemplated in that subsection by delivering a written notice to the company within:
(a) 20 business days after receiving a notice under subsection (4); or
(b) if the shareholder does not receive a notice under subsection (4), within 20 business days after learning that the resolution has been adopted.
(8) A demand delivered in terms of subsections (5) to (7) must also be delivered to the Panel, and must state:
(a) the shareholder’s name and address;
(b) the number and class of shares in respect of which the shareholder seeks payment; and
(c) a demand for payment of the fair value of those shares.
61
(9) A shareholder who has sent a demand in terms of subsections (5) to (8) has no further rights in respect of those shares, other than to be paid their fair value, unless:
(a) the shareholder withdraws that demand before the company makes an offer under subsection (11), or allows an offer made by the company to lapse, as contemplated in subsection (12)(b);
(b) the company fails to make an offer in accordance with subsection (11) and the shareholder withdraws the demand; or
(c) the company, by a subsequent special resolution, revokes the adopted resolution that gave rise to the shareholder’s rights under this section.
(10) If any of the events contemplated in subsection (9) occur, all of the shareholder’s rights in respect of the shares are reinstated without interruption.
(11) Within five business days after the later of:
(a) the day on which the action approved by the resolution is effective;
(b) the last day for the receipt of demands in terms of subsection (7)(a); or
(c) the day the company received a demand as contemplated in subsection (7)(b), if applicable, the company must send to each shareholder who has sent such a demand a written offer to pay an amount considered by the company’s directors to be the fair value of the relevant shares, subject to subsection (16), accompanied by a statement showing how that value was determined.
(12) Every offer made under subsection (11):
(a) in respect of shares of the same class or series must be on the same terms; and
(b) lapses if it has not been accepted within 30 business days after it was made.
(13) If a shareholder accepts an offer made under subsection (12):
(a) the shareholder must either in the case of:
(i) shares evidenced by certificates, tender the relevant share certificates to the company or the company’s transfer agent; or
(ii) uncertificated shares, take the steps required in terms of section 53 to direct the transfer of those shares to the company or the company’s transfer agent; and
(b) the company must pay that shareholder the agreed amount within 10 business days after the shareholder accepted the offer and:
(i) tendered the share certificates; or
(ii) directed the transfer to the company of uncertificated shares.
(14) A shareholder who has made a demand in terms of subsections (5) to (8) may apply to a court to determine a fair value in respect of the shares that were the subject of that demand, and an order requiring the company to pay the shareholder the fair value so determined, if the company has:
(a) failed to make an offer under subsection (11); or
(b) made an offer that the shareholder considers to be inadequate, and that offer has not lapsed.
(15) On an application to the court under subsection (14):
(a) all dissenting shareholders who have not accepted an offer from the company as at the date of the application must be joined as parties and are bound by the decision of the court;
(b) the company must notify each affected dissenting shareholder of the date, place and consequences of the application and of their right to participate in the court proceedings; and
(c) the court:
(i) may determine whether any other person is a dissenting shareholder who should be joined as a party;
(ii) must determine a fair value in respect of the shares of all dissenting shareholders, subject to subsection (16);
62
(iii) in its discretion may:
(aa) appoint one or more appraisers to assist it in determining the fair value in respect of the shares; or
(bb) allow a reasonable rate of interest on the amount payable to each dissenting shareholder from the date the action approved by the resolution is effective, until the date of payment;
(iv) may make an appropriate order of costs, having regard to any offer made by the company, and the final determination of the fair value by the court; and
(v) must make an order requiring:
(aa) the dissenting shareholders to either withdraw their respective demands or to comply with subsection (13)(a); and
(bb) the company to pay the fair value in respect of their shares to each dissenting shareholder who complies with subsection (13)(a), subject to any conditions the court considers necessary to ensure that the company fulfils its obligations under this section.
(15A) At any time until the court has made an order contemplated in subsection (15)(c)(v), a dissenting shareholder may accept the offer made by the company in terms of subsection (11), in which case:
(a) that shareholder must comply with the requirements of subsection 13(a); and
(b) the company must comply with the requirements of subsection 13(b).
(16) The fair value in respect of any shares must be determined as at the date on which, and time immediately before, the company adopted the resolution that gave rise to a shareholder’s rights under this section.
(17) If there are reasonable grounds to believe that compliance by a company with subsection (13)(b), or with a court order in terms of subsection (15)(c)(v)(bb), would result in the company being unable to pays its debts as they fall due and payable for the ensuing 12 months:
(a) the company may apply to a court for an order varying the company’s obligations in terms of the relevant subsection; and
(b) the court may make an order that:
(i) is just and equitable, having regard to the financial circumstances of the company; and
(ii) ensures that the person to whom the company owes money in terms of this section is paid at the earliest possible date compatible with the company satisfying its other financial obligations as they fall due and payable.
(18) If the resolution that gave rise to a shareholder’s rights under this section authorised the company to amalgamate or merge with one or more other companies, such that the company whose shares are the subject of a demand in terms of this section has ceased to exist, the obligations of that company under this section are obligations of the successor to that company resulting from the amalgamation or merger.
(19) For greater certainty, the making of a demand, tendering of shares and payment by a company to a shareholder in terms of this section do not constitute a distribution by the company, or an acquisition of its shares by the company within the meaning of section 48, and therefore are not subject to:
(a) the provisions of that section; or
(b) the application by the company of the solvency and liquidity test set out in section 4.
(20) Except to the extent:
(a) expressly provided in this section; or
(b) that the Panel rules otherwise in a particular case, a payment by a company to a shareholder in terms of this section does not obligate any person to make a comparable offer under section 125 to any other person.”
PRINTED BY INCE (PTY) LTD REF. W2CF15944
Cipla Medpro South Africa Limited(Incorporated in the Republic of South Africa)
(Registration number 2002/018027/06)Share code: CMP
ISIN: ZAE000128179(“Cipla Medpro” or “the Company”)
FORM OF PROXY
For use only by shareholders that hold shares in certificated form (certificated shareholders) or shareholders who have dematerialised their shares (dematerialised shareholders) and are registered with “own-name” registration, at the General Meeting of Cipla Medpro to be held at the Cipla Medpro Offices, Board Room number 1, Belvedere Office Park, Block F, Bella Rosa Street, Bellville, Cape Town at 10 h00 on Wednesday, 15 May 2013.
Dematerialised shareholders holding shares other than with “own-name” registration, must inform their CSDP or broker of their intention to attend the General Meeting and request their CSDP or broker to issue them with the necessary letter of representation and/or proxy form to attend the General Meeting in person and vote or provide their CSDP or broker with their voting instructions should they not wish to attend the General Meeting in person. Letters of representation must be lodged with Cipla Medpro’s registrars by the commencement of the General Meeting (or any adjournment or postponement thereof). These shareholders must not use this form of proxy.
I/We
(full name/s in block letters)
of
(address)
being the holders of shares in the capital of Cipla Medpro, and entitled to vote, do hereby appoint (see note):
1. or failing him/her,
2. or failing him/her,
3. the chairman of the General Meeting,
as my/our proxy to represent and act for me/us at the General Meeting for purposes of considering and, if deemed fit, passing, with or without modification, the resolutions to be proposed thereat and at each adjournment or postponement thereof; and to vote for and/or against the resolutions and/or abstain from voting in respect of the shares in the issued share capital of Cipla Medpro registered in my/our name in accordance with the following instructions:
Number of shares
For Against Abstain
Special Resolution Number 1 – Approval of the Scheme and related transactions in terms of sections 114 and 115 of the Companies Act
Ordinary Resolution Number 1 – Authority granted to directors
Please indicate in the appropriate spaces provided above how you wish your vote to be cast. If no indication is given, the proxy will be entitled to vote or abstain as he/she deems fit.
For the purpose of resolutions now proposed in terms of the JSE Listings Requirements wherein any votes are to be excluded from that resolution, any proxy given by a holder of securities to the holder of such an excluded vote shall also be excluded from voting for the purposes of that resolution.
Signed at on 2013
Telephone number Cellphone number
Signature
Assisted by (where applicable)
Each shareholder is entitled to appoint one or more proxies (who need not be a shareholder of Cipla Medpro but must be natural persons) to attend, speak at and vote in place of that shareholder at the meeting.
Notes to the form of proxy:
1. The form of proxy must only be used by Certificated Shareholders or Dematerialised Shareholders who hold Dematerialised Shares in their “own-name”.
2. Dematerialised shareholders who hold dematerialised shares other than in their “own-name” and who wish to attend the meeting in person may do so by requesting the registered holder, being their CSDP, Broker or nominee, to issue them with a letter of representation and/or form of proxy.
3. Dematerialised shareholders who hold Dematerialised Shares other than in their “own-name” and who do not wish to attend the meeting in person but wish to vote thereat must provide the registered holder, being the CSDP, Broker or nominee, with their voting instructions. The voting instructions must reach the registered holder in sufficient time to allow the registered holder to exercise such vote on your behalf.
4. Shareholders are reminded that the onus is on them to communicate with their CSDP or Broker.
5. A shareholder entitled to attend and vote may insert the name of a proxy or the names of two alternative proxies of the shareholder’s choice in the space/s provided, with or without deleting “the chairman of the General Meeting”, but any such deletion or insertion must be initialled by the shareholder. Any insertion or deletion not complying with the foregoing will, subject to 10, be declared not to have been validly effected. A proxy need not be a shareholder of Cipla Medpro. The person whose name stands first on the form of proxy and who is present at the meeting will be entitled to act as proxy to the exclusion of those whose names follow. In the event that no names are indicated, the proxy shall be exercised by the chairman of the meeting.
6. Please note that the person presiding at the meeting must be reasonably satisfied that the right of that person to participate and vote, either as a shareholder, or as a proxy for a shareholder, has been reasonably verified. Accordingly, meeting participants (including shareholders and proxies) must provide satisfactory identification.
7. A shareholder is entitled to one vote on a show of hands and, on a poll, one vote in respect of each share held. A shareholder’s instructions to the proxy must be indicated by inserting the relevant number of votes exercisable by the shareholder in the appropriate box(es). An “X” in the appropriate box indicates the maximum number of votes exercisable by that shareholder. Failure to comply with this will be deemed to authorise the proxy to vote or to abstain from voting at the meeting as he/she deems fit in respect of all the shareholder’s votes. A shareholder or his/her proxy is not obliged to use all the votes exercisable by the shareholder or by his/her/its proxy, but the total of the votes cast and in respect of which abstention is recorded, may not exceed the maximum number of votes exercisable by the shareholder or by his/her proxy.
8. The proxy shall (unless this sentence is struck out and countersigned) have the authority to vote, as he/she deems fit, on any other resolution which may validly be proposed at the meeting, including in respect of any proposed amendment to the above resolutions. If the aforegoing sentence is struck out, the proxy shall be deemed to be instructed to vote against any such proposed additional resolution and/or proposed amendment to an existing resolution as proposed in the notice to which this form is attached.
9. A vote given in terms of an instrument of proxy shall be valid in relation to the meeting notwithstanding the death of the person granting it, or the revocation of the proxy, or the transfer of the shares in respect of which the vote is given, unless an intimation in writing of such death, revocation or transfer is received by the transfer secretaries not less than 48 (forty eight) hours before the commencement of the meeting.
10. The chairman of the meeting may reject or accept any form of proxy which is completed and/or received other than in compliance with these notes.
11. The completion and lodging of this form of proxy will not preclude the relevant shareholder from attending the meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof, should such shareholder wish to do so.
12. Documentary evidence establishing the authority of a person signing the form of proxy in a representative or other legal capacity must be attached to this form of proxy, unless previously recorded by Cipla Medpro or unless this requirement is waived by the chairman of the meeting.
13. A minor or any other person under legal incapacity must be assisted by his/her parent or guardian, as applicable, unless the relevant documents establishing his/her capacity are produced or have been registered by Cipla Medpro.
14. Where there are joint holders of shares:
• Any one holder may sign the form of proxy.
• The vote(s) of the senior shareholders (for that purpose seniority will be determined by the order in which the names of shareholders appear in Cipla Medpro’s register of shareholders) who tenders a vote (whether in person or by proxy) will be accepted to the exclusion of the vote(s) of the other joint shareholder(s).
15. To be effective, completed forms of proxy should be (i) lodged with or mailed to Computershare Investor Services Proprietary Limited:
Hand deliveries to: Postal deliveries to:Ground Floor, 70 Marshall Street PO Box 61051Johannesburg, 2001 Marshalltown, 2107
to be received by 10h00 on Monday, 13 May 2013, (or not less than 48 hours before any adjournment or postponement of the General Meeting) or (ii) lodged with or mailed to Cipla Medpro at Belvedere Office Park, Block F, Bella Rosa Street, Bellville, Cape Town (marked for the attention of the Company secretary), to be received after the time last specified in (i) above but before the commencement of the General Meeting (or any adjournment or postponement of the General Meeting) or (iii) must be handed to the chairman of the General Meeting before the appointed proxy exercises any of the relevant shareholder’s shareholder rights at the General Meeting (or any adjournment or postponement of the General Meeting), provided that, should the relevant shareholder return such form of proxy in terms of (ii) above, the relevant shareholder will also be required to furnish a copy of such form of proxy to the chairman of the General Meeting before the appointed proxy exercises any of the relevant shareholder’s shareholder rights at the General Meeting (or any adjournment or postponement of the General Meeting).
16. Any alteration or correction made to this form of proxy, other than the deletion of alternatives, must be initialled by the signatory/ies.
17. A proxy may not delegate his/her authority to act on behalf of the shareholder, to another person.
Cipla Medpro South Africa Limited(Incorporated in the Republic of South Africa)
(Registration number 2002/018027/06)Share code: CMP
ISIN: ZAE000128179(“Cipla Medpro” or “the Company”)
FORM OF SURRENDER AND TRANSFER IN RESPECT OF SCHEME (FORM)
Important notes concerning this Form:
• This Form is only for use in respect of the scheme of arrangement in terms of section 114 of the Companies Act, 2008, proposed by Cipla Medpro between Cipla Medpro and its Shareholders.
• Full details of the Scheme are contained in the Circular to Shareholders of Cipla Medpro dated 15 April 2013 (Circular), to which this Form is attached. Accordingly, all terms used in this Form shall, unless the context otherwise requires or they are otherwise defined herein, have the meaning attributed to them in the Circular.
• This Form is attached for Certificated Scheme Participants to surrender their Documents of Title.• HOLDERS OF DEMATERIALISED CIPLA MEDPRO SHARES MUST NOT COMPLETE THIS FORM.
INSTRUCTIONS:
1. The surrender of Documents of Title is for use only by Certificated Scheme Participants.2. A separate Form is required for each Certificated Scheme Participant.3. Part A must be completed by all Certificated Scheme Participants who return this Form.4. Part B must be completed by all Certificated Scheme Participants who are emigrants from South Africa,
the Republic of Namibia and the Kingdoms of Lesotho and Swaziland (collectively, the Common Monetary Area).
5. Part C must be completed by all Certificated Scheme Participants wishing to receive payment of the Scheme Consideration by means of EFT. The option of electronic payment into a Certificated Scheme Participant’s bank account is only applicable if Documents of Title are received on or before 12 h00 on Friday, 12 July 2013.
6. Part D must be completed by Certificated Scheme Participants who are emigrants from the Common Monetary Area (emigrants) and non-residents of the Common Monetary Area (see notes 1 and 2 to Part D below).
7. If this Form is returned with the relevant Documents of Title to Cipla Medpro Shares, it will be treated as a conditional surrender which is made subject to the Scheme becoming operative. In the event of the Scheme not becoming operative for any reason whatsoever, Computershare Investor Services Proprietary Limited will, within five Business Days from the date of receipt of the Documents of Title or the date on which Cipla Medpro notifies it that the Scheme will not become operative, whichever is the later, return the Documents of Title to the Certificated Scheme Participants concerned, by registered post, at the risk of such Certificated Scheme Participants to the address specified in this Form, or if no return address is specified in this Form, to the address recorded in the Register.
8. Persons who have acquired Cipla Medpro Shares after the date of the issue of the Circular to which this Form is attached, may obtain copies of the Form and the Circular from Computershare Investor Services Proprietary Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107).
9. The Scheme Consideration will not be sent to Certificated Scheme Participants unless and until Documents of Title in respect of the relevant Scheme Shares have been surrendered to Computershare Investor Services Proprietary Limited (and the further provisions governing the Scheme Consideration are contained in the Circular).
To: Computershare Investor Services Proprietary LimitedGround Floor, 70 Marshall Street, Johannesburg, 2001(PO Box 61763, Marshalltown, 2107)
Dear Sirs
PART A: To be completed by ALL Scheme Participants who return this Form
I/We hereby surrender the Cipla Medpro Share Certificate/s and/or other Documents of Title attached hereto, representing Cipla Medpro Shares with a par value of R0.001 each, registered in the name of the person mentioned below and authorise (in addition to and without derogating in any way from any other provision of the Circular) Computershare Investor Services Proprietary Limited, conditional upon the Scheme becoming operative, to register the transfer of the Cipla Medpro Shares into the name of Cipla Limited:
Name of Shareholder Certificate number(s) Number of Cipla Medpro Shares covered by each certificate(s) enclosed
Total
Payment of the Scheme Consideration to be made as follows:
Surname or name of corporate body:
First name(s) in full
Title (Mr, Mrs, Miss, Ms, etc)
Address to which the Scheme Consideration should be sent (if different from registered address)
Postal code:
Signature of Certificated Shareholder Name and address of agent lodging this Form (if any)
Assisted by me (if applicable)
(State full name and capacity)
Date 2013
Telephone number (Home) ( )
Telephone number (Work) ( )
Cellphone number
PART B: To be completed by emigrants of the Common Monetary Area
Nominated authorised dealer in the case of a Certificated Scheme Participant who is an emigrant from the Common Monetary Area (see note 2 below).
NB: PART A must also be completed
Name of dealer Account number
Address
PART C: Bank account details of Certificated Scheme Participant
To be completed in BLOCK CAPITALS by all Certificated Scheme Participants wishing to receive payment of the Scheme Consideration by means of EFT. The option of electronic payment into a Certificated Scheme Participant’s bank account is only applicable if Documents of Title are received on or before 12 h00 on Friday, 12 July 2013.
I/We being a holder/s of Cipla Medpro Shares hereby request that the Scheme Consideration, be electronically deposited into my/our bank account, the details of which are as follows:
Name of account holder (no third party accounts):
Bank name:
Branch name:
Branch code:
Account number:
Signature of Certificated Shareholder:
Assisted by me (if applicable):
(State full name and capacity):
Date:
Telephone (Home): ( ) Telephone (Work): ( ) Cellphone:
In terms of the Financial Intelligence Centre Act, 38 of 2001, Computershare Investor Services Proprietary Limited will only be able to record the bank details if certified true copies of the Certificated Scheme Member’s ID Document and Bank Statement are submitted with this Form.
PART D: To be complete in BLOCK CAPITALS by Certificated Scheme Participants who are emigrants from the Common Monetary Area (emigrants) and non-residents of the Common Monetary Area (see notes 1 and 2 below).
The Scheme Consideration will be forwarded to the authorised dealer in foreign exchange in South Africa controlling the emigrant’s blocked assets in terms of the Exchange Control Regulations as nominated below for its control and credited to the emigrant’s blocked assets account. Accordingly, emigrants must provide the following information.
Name of authorised dealer:
Account number:
Address:
If emigrants make no nomination above, the Scheme Consideration will be held in trust by Cipla Medpro or Computershare Investor Services Proprietary Limited on behalf of Cipla Medpro for the Certificated Scheme Participants concerned, for a period of not less than three years, pending receipt of the necessary information or instructions, whereafter it shall be paid to the Guardians Fund. No interest will be paid on the Scheme Consideration so held.
Non-residents: Must complete Part D if they wish the Scheme Consideration to be paid to an authorised dealer in South Africa.
Notes and instructions:
1. Emigrants from the Common Monetary Area must complete Part B.
2. All other non-residents of the Common Monetary Area must complete Part D if they wish the Scheme Consideration to be paid to an authorised dealer in South Africa.
3. If Part B is not properly completed by emigrants, the Scheme Consideration will be held in trust by Cipla Medpro or Computershare Investor Services Proprietary Limited on behalf of Cipla Medpro for the Certificated Scheme Participants concerned, for a period of not less than three years, pending receipt of the necessary information or instructions, whereafter it shall be paid to the Guardians Fund. No interest will be paid on the amount so held in trust.
4. No receipts will be issued for documents lodged unless specifically requested, in compliance with the requirements of the JSE, lodge agents are requested to prepare special transaction receipts, if required. Signatories may be called upon for evidence of their authority or capacity to sign this Form.
5. Persons who are emigrants from the Common Monetary Area should nominate the authorised dealer in foreign exchange in South Africa which has control of their blocked assets in Part B of this Form. Failing such nomination, the Scheme Consideration due to such Certificated Scheme Participants in accordance with the provisions of the Scheme will be held in trust by Cipla Medpro or Computershare Investor Services Proprietary Limited on behalf of Cipla Medpro for the Certificated Scheme Participants concerned, for a period of not less than three years, pending receipt of the necessary information or instructions, whereafter it shall be paid to the Guardians Fund. No interest will be paid on the amount so held in trust.
6. Any alteration to this Form must be signed in full and not initialled.
7. If this Form is signed under a power of attorney, then such power of attorney, or a notarially certified copy hereof, must be sent with this Form for noting (unless it has already been noted by Cipla Medpro or Computershare Investor Services Proprietary Limited). This does not apply in the event of this Form bearing a JSE broker’s stamp.
8. Where the Certificated Scheme Participant is a company or a close corporation, unless it has already been registered with Cipla Medpro or Computershare Investor Services Proprietary Limited, a certified copy of the directors’ or members’ resolution authorising the signing of this Form must be submitted if so requested by Cipla Medpro.
9. If this Form is not signed by the Certificated Scheme Participant, the Certificated Scheme Participant will be deemed to have irrevocably appointed (in addition to and without derogating in any way from any other provision of the Circular) Computershare Investor Services Proprietary Limited to implement the Certificated Scheme Participant’s obligations under the Scheme on his or her behalf.
10. Where there are any joint holders of any Scheme Shares, only that holder whose name stands first in the Register in respect of such Scheme Shares need sign this Form.
11. A minor must be assisted by his or her parent or guardian, unless the relevant documents establishing his or her legal capacity are produced or have been registered by Computershare Investor Services Proprietary Limited.