Shareholders of both HCI and Niveus Investments are referred to the previous SENS announcements, the latest of which was released on 17 September 2012, in connection with the listing of Niveus Investments and the Pro-rata Repurchase and Distribution. Words and expressions in this announcement shall bear the same meaning as words and expressions defined in the previous SENS announcements.

The purpose of this announcement is to provide HCI shareholders, who elected to participate in the Pro-rata Repurchase and Distribution, with information regarding the base cost of their Niveus Investments Shares and with the relevant Dividends Tax information.

HCI Shareholders need to assess, based on their specific circumstances, whether they hold the HCI Shares on income or capital account.

Various provisions contained in the draft Taxation Laws Amendment Bill 2012 (“TLAB”) will, if promulgated in its current form, impact on the capital gains tax and dividends tax implications of the Pro-rata Repurchase and Distribution. In particular and in addition to the issues noted below, in terms of the TLAB, there are various dates in respect of the Pro-rata Repurchase and Distribution which should be considered for purposes of determining the base cost of the Niveus Investments Shares and the quantum of the dividend. However, on the basis that the closing price of the Niveus Investments Shares remained unchanged at R7.68 per share from 14 September 2012 to 18 September 2012, the market value per Niveus Investments Share for capital gains tax and dividends tax purposes should be R7.68 per share.

Capital gains tax:
HCI Shareholders will, in terms of the TLAB, be treated as having acquired the Niveus Investment Shares on the date of distribution (as defined) for expenditure equal to the market value of such shares on that date, which expenditure must be treated as an amount of expenditure actually incurred for capital gains tax purposes. If the TLAB is promulgated in its current form, these provisions will apply to the transaction with retrospective effect.

If these provisions are not passed, the HCI Shareholders will receive a base cost in the Niveus Investments Shares equal to the market value of their HCI Shares which have been bought back as at the date of the Pro-rata Repurchase and Distribution.

If the TLAB is passed, the base cost per Niveus Investments Share will be R7.68 per share.

If the TLAB is not passed, the base cost per Niveus Investments Share will be R7.74 per share being the closing HCI share price of R92.50 on Friday, 14 September 2012 divided by 11.95191.

Dividends tax:
The distribution in specie of Niveus Investments Shares as consideration for the specific buy-back of HCI shares does NOT constitute a reduction of contributed tax capital, but constitutes a dividend, and accordingly, in respect of the new Dividends Tax (“DT”) effective 1 April 2012, the following additional information is disclosed:

• The amount of the dividend must be deemed to be equal to the market value of the Niveus Investments Shares distributed on the date that the dividend is deemed to be paid.

• As noted above, the closing price per Niveus Investment Share remained unchanged from Friday, 14 September 2012 to Tuesday, 18 September 2012 at R7.68 per share.

•  The South African DT rate is 15%, unless reduced in terms of a double tax agreement. A dividend paid by a company is not subject to dividends tax to the extent that the dividend does not exceed the STC credit of the company and the company has, in terms of current law, by the date of payment notified the person to whom the dividend is paid of the amount by which the dividend reduces the STC credit of the company. In terms of the TLAB, the required notice must be given within 21 days after the date of payment of the dividend.

• The total Secondary Tax on Companies (“STC”) credits utilised as part of this declaration amount to R370,202,473.

• The number of HCI Shares in issue at the date of this declaration is 132 976 996.

• The total STC credits utilised per HCI share that participated in the Pro-rata Repurchase and Distribution amounts to R91.79 and the total STC credits utilised per HCI Share that received Niveus Investments Shares in terms of the Excess Applications amounts to R91.79.

• On the basis that the dividend does not exceed the STC credit of HCI and that the required notice is given timeously, the dividend subject to DT is nil.

• Hosken Consolidated Investments Limited’s income tax reference number is 9050/177/71/7.

All shareholders should declare their status to their regulated intermediary as they may qualify for a reduced DT rate or exemption in future.