PROSPECTUS. The offer has been partly underwritten as disclosed in paragraph 1.6 of this Prospectus.

Transcription

1 ADVANCED HEALTH LIMITED (formerly AC Motor Group Limited) (Incorporated in the Republic of South Africa) (Registration number 2013/059246/06) ( the Company or Advanced Health ) ISIN Code: ZAE JSE Code: AVL PROSPECTUS Prepared and issued in terms of the Listings Requirements ( the Listings Requirements ) of the JSE Limited ( the JSE ) and the Companies Act, 2008 (No. 71 of 2008), as amended ( the Act ), relating to an offer for subscription of Advanced Health ordinary Shares by way of: an offer by the Company by way of a private placement and preferential offer for subscription of ordinary no par value Shares in the issued share capital of the Company at an issue price of 100 cents per ordinary share; and the subsequent listing of the ordinary Shares of Advanced Health on the Alternative Exchange (AltX) of the JSE. Opening date of the offer at 09h00 on Monday, 31 March 2014 Closing date of the offer at 12h00 on* Thursday, 17 April 2014 Anticipated listing date on AltX at commencement of trade on Friday, 25 April 2014 *Shareholders wishing to subscribe for ordinary Shares in dematerialised form must advise their Central Securities Depository Participant ( CSDP ) or broker of their acceptance of the offer to subscribe for Shares in the manner and within the cut-off time stipulated by their CSDP or broker. In the event of an over-subscription in terms of the offer, the directors will adjust the allocation of applicants on an equitable basis in accordance with paragraph 5.18 of the JSE Listings Requirements. The Shares offered in terms of this prospectus will rank pari passu with the existing ordinary Shares in Advanced Health and rank equally as to voting, share in profits, dividends and distributions. At the date of closing of the offer and assuming that the offer is fully subscribed, Advanced Health s share capital will comprise authorised ordinary Shares of no par value and issued ordinary Shares of no par value with stated capital of R There will be no convertible or redeemable Shares issued. The offer is subject to a minimum subscription of R , which needs to be raised by the issue of Shares in terms of this prospectus in order to meet the condition for listing to raise R (of which R has already been raised) as set by the AltX Advisory Committee of the JSE as well as to achieve the spread requirements that at least 10% of the Shares are held by the public and there are at least 100 public shareholders as stipulated in the AltX Listings Requirements. The offer has been partly underwritten as disclosed in paragraph 1.6 of this Prospectus. The Company does not have any treasury Shares in issue. Subject to achieving the required spread of public shareholders in terms of the JSE Listings Requirements, being obtained pursuant to the offer, the JSE has granted Advanced a listing in respect of up to ordinary Shares on the AltX under the abbreviated name Advanced, share code AVL and ISIN ZAE It is anticipated that the listing of the Shares on AltX will become effective from the commencement of business on Friday, 25 April

2 Applications for ordinary Shares in Advanced Health must be for a minimum of ordinary Shares at 100 cents per share, amounting to R5 000, and in multiples of 100 ordinary Shares thereafter. Fractions of Shares in Advanced Health will not be issued. The Shares in Advanced Health will only be tradable on the JSE in dematerialised form and, as such, all investors who elect to receive their ordinary Shares in Advanced Health in certificated form, will have to dematerialise their certificated Shares should they wish to trade therein. The directors, whose names are given in paragraph 1.2 of this document collectively and individually accept full responsibility for the accuracy of the information given and certify that to the best of their knowledge and belief there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that the prospectus contains all information required by law and the JSE Listings Requirements. The Designated Advisor, Auditors and Reporting Accountants, Attorneys, Commercial Banker and Transfer Secretaries, whose names are set out in this prospectus, have given and have not, prior to registration, withdrawn their written consents to the inclusion of their names in the capacities stated. An English copy of this prospectus, accompanied by the documents referred to under Registration of Prospectus in paragraph 4.2 of this prospectus, was registered by the Commissioner on 28 March 2014 in terms of Regulation 52(5) of the Companies Act, 2008 (No. 71 of 2008), as amended. Designated Advisor Arcay Moela Sponsors Attorney Phatshoane Henney Inc. Underwriter Eenhede Konsultante (Edms) Bpk Auditor, Reporting Accountants Mazars (Gauteng) Incorporated Transfer Secretary Trifecta Capital Services Date of issue: Monday, 31 March

3 CORPORATE INFORMATION AND ADVISORS Company secretary [Regulation 58(2)(b(iii)] M Janse Van Rensburg Professional Accountant (SA) Lifestyle Garden Centre, Corner Beyers Naude & Ysterhout Avenue Randpark Ridge, 2194 (PO Box 1849, Northwold, 2155) Designated Advisor Arcay Moela Sponsors Proprietary Limited (Registration number 2006/033725/07) Ground Floor, One Health Building Woodmead North Office Park 54 Maxwell Drive Woodmead, 2157 (PO Box 62397, Marshalltown, 2107) Group Bankers [Regulation 58(2)(b(ii)] ABSA Bank Limited 3rd Floor, ABSA Forum Building Nelson Mandela Drive Bloemfontein, 9301 (PO Box 323, Bloemfontein, 9300); and Grindrod Bank Limited (Registration number 1994/007994/06) 5 th Floor Protea Place 40 Dreyer Street Claremont Western Cape (Postnet Suite 64, Private Bag X1005, Claremont, 7735) Attorneys [Regulation 58(2)(b(ii)] Phatshoane Henney Inc. 35 Markgraaff Street Bloemfontein South Africa, 9301 (PO Box 153 or 260, Bloemfontein, 9300) Registered office One Health, Ground Floor Woodmead North Office Park 54 Maxwell Drive Woodmead, 2157 (PO Box 1476, Silverton, Pretoria, 0127) Reporting accountants and auditors [Regulation 58(2)(b(i)] Mazars (Gauteng) Incorporated (Registration number 2000/026635/21) Erasmus Forum A, 434 Rigel Avenue South Erasmusrand, Pretoria, 0181 (Private Bag x4 Hatfield 0028) Transfer Secretaries Trifecta Capital Services Proprietary Limited (Registration number 2009/018890/07) Business Partners Tower Hive 5 th Floor, 3 Caxton Road, Industria, 2093 (PO Box 61272, Marshalltown, 2107) Place and date of incorporation Pretoria on 10 April

4 IMPORTANT INFORMATION The definitions and interpretations commencing on page 9 of this Prospectus apply to this section on important Information. FORWARD-LOOKING STATEMENTS This Prospectus contains statements about the Company 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 Group; growth prospects and outlook for operations, individually or in the aggregate; and liquidity and capital resources and expenditure. These forward-looking statements are not based on historical facts, but rather reflect current expectations 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", budget "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, estimates of capital expenditures, acquisition strategy, future capital expenditure levels, 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. The Company cautions 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 the Company operates may differ materially from those made in, or suggested by, the forward-looking statements contained in this Prospectus. All these forward-looking statements are based on estimates and assumptions made by the Company, all of which estimates and assumptions, although the Company believes them to be reasonable, are inherently uncertain. Such estimates, assumptions or statements may not eventuate. Many factors (including factors not yet known to the Company, or not currently considered material) could cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied in those estimates, statements or assumptions. Offerees should keep in mind that any forward-looking statement made in this Prospectus or elsewhere is applicable only at the date on which such forward-looking statement is made. New factors that could cause the business of the Company 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. The Company has no duty to, and does not intend to, update or revise the forward-looking statements contained in this Prospectus after the date of this Prospectus, except as may be required by law. FOREIGN PERSONS This Prospectus has been prepared for the purposes of complying with the Companies Act and the regulations published in terms thereof and the information disclosed may not be the same as that which would have been disclosed if this Prospectus had been prepared in accordance with the laws and regulations of any jurisdiction outside of South Africa. The release, publication or distribution of this Prospectus 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. Any failure to comply with the applicable requirements may constitute a violation of the securities laws of any such jurisdiction. 4

5 This Prospectus and any accompanying documentation 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 in any jurisdiction in which it is illegal to make such an offer, invitation or solicitation, or such offer, invitation or solicitation would require the Company to comply with filing and/or other regulatory obligations. In those circumstances this Prospectus and any accompanying documentation are sent for information purposes only and should not be copied or redistributed. Persons who are not resident in South Africa must satisfy themselves as to the full observance of the laws of any applicable jurisdiction concerning their participation in the offer, including any requisite governmental or other consents, observing any other requisite formalities and paying any transfer or other taxes due in such other jurisdictions. The Company accepts no responsibility for the failure by any person to inform himself/herself about, and/or to observe any applicable legal requirements in any relevant jurisdiction. The distribution of this Prospectus in jurisdictions outside South Africa and Australia may be restricted by law and persons who come into possession of it who are not in South Africa or Australia should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. Neither the Shares nor the Prospectus have, nor will they be, registered under the US Securities Act, 1933 or with the regulatory authority of any state or jurisdiction of the United States of America or under the applicable laws of the United Kingdom, Canada, or Japan and may not be offered, sold, pledged or otherwise transferred in the United States of America or to any national, resident or subject of the United Kingdom, Canada, or Japan. Neither this document nor any copy of it may be sent to or taken into the United State of America, Canada, or Japan. 5

6 TABLE OF CONTENTS Page Corporate information and advisors 3 Important information 4 Definitions and interpretations 8 Prospectus Section 1 - Information about the Company whose securities are being offered Name, address and incorporation Directors, other office holders, or material third parties History, state of affairs and prospects of Company Share capital of the Company Options or preferential rights in respect of Shares Commissions paid or payable in respect of underwriting Material contracts Interests of directors and promoters Loans Shares issued or to be issued otherwise than for cash Property acquired or to be acquired Amounts paid or payable to promoters Preliminary expenses and issue expenses 40 Section 2 - Information about the offered securities Purpose of the offer Time and date of the opening and closing of the offer Particulars of the offer Minimum subscription The Company s shareholding 45 Section 3 Statements and Reports relating to the offer Statement as to adequacy of capital Report by directors as to material changes Statement as to listing on a stock exchange Report by auditor where business undertaking is to be acquired Report by auditor where the Company will acquire a subsidiary Report by the auditor of the Company 48 Section 4 Additional material information Litigation statement Experts consents Directors responsibility statement Vendors and controlling shareholders 49 Section 5 Inapplicable or immaterial matters 50 6

7 Page Annexures 1 Independent reporting accountant s report on the historical financial information of 51 Advanced Health 2 On incorporation balance sheet of Advanced Health 53 3 Independent reporting accountant s report on the historical financial information of 73 Presmed Australia 4 Consolidated historical financial information of Presmed Australia 75 5 Independent reporting accountant s report on the pro forma financial information of 101 Advanced Health 6 Pro forma financial information of Advanced Health Independent reporting accountant s report on the profit forecasts of Advanced 112 Health 8 Profit forecast on Advanced Health Alterations to share capital and premium on Shares Material borrowings, material loans receivable and inter-company loans Other directorships held by directors of Advanced Health Subsidiary companies Details of immovable property leased from third parties Curricula vitae of the directors and key management of Advanced Health Extracts from the Advanced Health MOI King Code on Corporate Governance Details of the underwriter Analysis of risks facing shareholders 148 Share application form Attached 7

8 DEFINITIONS In this prospectus and the annexures hereto, unless the context indicates otherwise, references to the singular include the plural and vice versa, words denoting one gender include the others, expressions denoting natural persons include juristic persons and associations of persons and vice versa, and the words in the first column hereunder have the meanings stated opposite them in the second column, as follows: acquisitions Advanced Health or the Company the acquisition of controlling interests in Presmed Australia, emalahleni Day Hospital, Medgate Day Clinic directly from the Vendors by Advanced Health and indirectly through Advanced Health SA, which companies previously operated within the same group of companies controlled by Eenhede Konsultante under the same management going forward as the Advanced Health Group; Advanced Health Limited (Registration number 2013/059246/06) (formerly AC Motor Group Limited), a public company duly incorporated with the laws South Africa on 10 April 2013 having its registered address at One Building, Ground Floor, Woodmead North Office Park, 54 Maxwell Drive, Woodmead, 2157, which directly holds 100% in Advanced Health SA and 94.64% in Presmed Australia; Advanced SA Health Advanced Health SA Proprietary Limited (Registration number 2013/053514/07) (formerly Vatonet (Pty) Limited), a private company duly incorporated with the laws of South Africa on 2 nd April 2013 having its registered address at One Building, Ground Floor, Woodmead North Office Park, 54 Maxwell Drive, Woodmead, 2157 and a wholly owned subsidiary of Advanced Health, which will hold a controlling interest in the South African subsidiary operations through its shareholding in emalahleni Day Hospital and Medgate Day Clinic; American option Arcay Moela Sponsors auditors or independent reporting accountants BBBEE Act BEE or BBBEE board of directors or the board broker or stockbroker an option that can be exercised at any time during the period of the option; Arcay Moela Sponsors Proprietary Limited, (Registration number 2006/033725/07), a private company duly incorporated in accordance with the laws of South Africa and designated advisor to Advanced Health; Mazars (Gauteng) Incorporated, Practice No A, with registered address at Erasmus Forum A, 434 Rigel Avenue South, Erasmusrand, Pretoria, 0181, the auditor and independent reporting accountant to Advanced Health; Broad-Based Black Economic Empowerment Act 2003 (Act 53 of 2003) (as amended); the economic empowerment of all black people, including women, workers, youth, people with disabilities and people living in rural areas, through diverse but integrated socio-economic strategies as defined in the BBBEE Act; the present board of directors of Advanced Health, further details of whom appear in paragraph 1.2 of this prospectus; any person registered as a broking member (equities) in terms of the Rules of the JSE made in accordance with the provisions of the FMA; 8

9 business day Carl Grillenberger Carl Grillenberger Family Trust Central Coast Surgery Centre certificated shareholders certificated Shares CIPC common monetary area Companies Act or the Act Company Secretary controlling shareholder Cor Van Zyl CSDP "dematerialise" any day other than a Saturday, Sunday or gazetted national public holiday in South Africa; Carl Alfred Grillenberger, the Chief Executive Officer of the company under identity number ; the Carl Grillenberger Family Trust (Registration number 10103/07), is a discretionary family trust of which the beneficiaries are CA Grillenberger, JL Grillenberger, Sandra Comfort, CQ Grillenberger, Estate Late CA Hanson, B Elliott, DP Viljoen, J Elliott, Sage Comfort, PA Grillenberger, JT Hanson, Luke Viljoen, B Viljoen and Liam Viljoen, with trustees being Carl Grillenberger, Cor van Zyl and Frans van Hoogstraten of 181 Kloof Road, Clifton, 8005, which trust is incorporated under the laws of South Africa, having its registered address at 302 Westerbloem, 39 van Heerden Street, Wilgehof, Bloemfontein 9301 and one of the Medgate Day Clinic Vendors; Central Coast Surgery Centre Proprietary Limited (Registration number ABN ), a private company duly incorporated with the laws of Australia on 7 December 2009 having its registered address at UHY Haines Norton, Level 11, 1 York Street, Sydney, NSW, 2000 and a 55.56% subsidiary of Presmed Australia, with the balance of the shares held equally between six minority shareholders unrelated to Advanced Health, holding 7.41% each; holders of certificated Shares; issued ordinary Shares which have not been dematerialised, title to which is represented by share certificates or other physical documents of title; Companies and Intellectual Property Commission (formerly CIPRO); South Africa, the Republic of Namibia and the Kingdoms of Swaziland and Lesotho; the Companies Act, 2008 (No. 71 of 2008), as amended; M Janse Van Rensburg, Professional Accountant (SA) having an address at Lifestyle Garden Centre, Corner Beyers Naude & Ysterhout Avenue, Randpark Ridge, 2194; the controlling shareholder of Advanced Health before and after the offer, being Eenhede Konsultante; Cornelis Johannes Petrus Gerhardus Van Zyl Financial Director of the company under identity number ; a Central Securities Depository Participant, accepted as a participant in terms of the FMA, as amended, appointed by an individual shareholder for purposes of, and in regard to the dematerialisation of documents of title for purposes of incorporation into Strate; the process whereby certificated shares are converted into electronic format for purposes of Strate and are no longer evidenced by documents of title, and "dematerialised shares" will have a corresponding meaning; 9

10 directors documents of title EBITDA Eenhede Konsultante emalahleni Day Hospital emalahleni Vendors emigrant Epping Surgery Centre Exchange Control Regulations Frans Van Hoogstraten Gerrit van den Berg Grand Palace Trading 58 the Group or the Advanced Health Group the directors of the Company whose details are set out in paragraph 1.2 and Annexure 14 to this prospectus; share certificates, certified transfer deeds, balance receipts or any other documents of title acceptable to Advanced Health in respect of Shares; earnings before interest, taxation, depreciation and amortisation; Eenhede Konsultante Eiendoms Beperk, (Registration number 1969/006230/07), a private company duly incorporated in accordance with the laws of South Africa having its registered address at 302 Westerbloem, 39 Van Heerden Street, Wilgehof, Bloemfontein, 9301, the directors of which are Carl Grillenberger, Cor van Zyl and Frans van Hoogstraten, which company is held by the VOCA Family Trust (50%) and VC Family Trust (50%) and the controlling shareholder of Advanced Health; emalahleni Day Hospital Proprietary Limited (Registration number 2007/018535/07), a private company duly incorporated in accordance with the laws South Africa on 5 July 2007 having its registered address at PFS Building, 11 Neven Street, Witbank, 1035 and a 100% subsidiary of Advanced Health SA; Premedical Witbank (68.08%); Grand Palace Trading 58 (14.7%), Kodi Godfrey Moloto (14.7%), Martha Gelderblom (1.3%) and Joan Marlene Glanzmann (1.3%); an emigrant from South Africa whose address is outside the common monetary area; Epping Surgery Centre Proprietary Limited (Registration number ABN ), a private company duly incorporated with the laws of Australia on 21 October 2003 having its registered address at UHY Haines Norton, Level 11, 1 York Street, Sydney, NSW, 2000 and a 56.50% subsidiary of Presmed Australia with the balance of the shares held equally between five minority shareholders unrelated to Advanced Health, holding between 7.75% and 1.30% each; the Exchange Control Regulations, promulgated in terms of Section 9 of the Currency and Exchanges Act, 1933 (Act 9 of 1933), as amended; Frans Andre Van Hoogstraten independent non-executive director of the company under identity number ; Gerrit van den Berg (ID number ), one of the Medgate Vendors; Grand Palace Trading 58 Proprietary Limited (Registration number 2003/000603/07), a private company duly incorporated in accordance with the laws South Africa having its registered address at PFS Building, 11 Neven Street, Witbank, 1035 held by Mr Thabo Monareng (100%), the director of which is Mr Thabo Monareng and one of the emalahleni Vendors; Advanced Health and its Subsidiaries from time to time; 10

11 IFRS Ingham Analytics Joan Marlene Glanzmann JSE JSE Limited Kinser Investments International Financial Reporting Standards, which comprise standards and interpretations approved by the International Accounting Standards Board, International Financial Reporting Interpretations Committee and International Accounting Standards, and Standing Interpretations Committee interpretations approved by the International Accounting Standards Committee; Ingham Analytics Proprietary Limited (Registration number ), a private company duly incorporated in accordance with the laws of South Africa and independent valuer of the acquisitions to Advanced Health; Joan Marlene Glanzmann (ID number ), one of the emalahleni Vendors; Johannesburg Stock Exchange; a company duly registered and incorporated with limited liability under the company laws of the Republic of South Africa under registration number 2005/022939/06, licensed as an exchange under the FMA; Kinser Investments Pty Limited (Registration number ACN ), a private company duly incorporated in accordance with the laws of Australia on 7 August 1998 having its registered address at Tower 2, Level 14, 101 Grafton Street, Bondi Junction, New South Wales, which company is controlled by Marc Resnik (50%), a director of Advanced Health, and which holds a 5.36% minority interest in Presmed Australia; Kodi Moloto last date Godfrey practicable Kodi Godfrey Moloto (ID number ), one of the emalahleni Vendors; the last practicable date prior to the finalisation of this prospectus, being Friday, 14 March 2014 ; Maluti Aktien Gesellschaft Marc Resnik Marti Gelderblom Maluti Aktien Gesellschaft (Registration number FL ) a company duly incorporated with the company laws of Liechtenstein with registered office at C/O Fiduciana Verwaltungsanstalt, Egerta 53, 9496 Balzers, Principality of Liechtenstein, a company owned by unrelated parties to Advanced Health and one of the Presmed Australia Vendors; Marc Colin Resnik, Managing Director, Presmed Australia, under passport number N and a director of Advanced Health; Marti Gelderblom, key management and chairman of the Social and Ethics Committee under identity number and one of the emalahleni Vendors; Mazars Reporting Accountants Medgate Clinic or Day Mazars (Gauteng) Incorporated Chartered Accountants South Africa (Registration number 2000/026635/21) and the auditors and Reporting Accountants to Advanced Health; Medgate Day Clinic Proprietary Limited (Registration number 2000/011092/07), a private company duly incorporated in accordance with the laws South Africa on 7 June 2000 having its registered address at PFS Building, 11 Neven Street, Witbank, 1035 and a wholly owned subsidiary of Advanced Health SA; 11

12 Medgate Vendors MOI non-resident offer for subscription or the Offer ordinary Shares or Shares own-name registration Phatshoane Henney Inc. or attorneys Phil Jaffe Preferential Placing Eenhede Konsultante (47.8%), VC Family Trust (13.5%), Carl Grillenberger Family Trust (38.3%) and Gerrit van den Berg (0.4%);, Memorandum of Incorporation of the Company as amended from time to time; a person whose registered address is outside the common monetary area and who is not an emigrant; an offer in terms of which the Company is offering for subscription, via a public placing, of ordinary Shares of no par value at an issue price of 100 cents per ordinary share; ordinary Shares in the share capital of the Company, having no par value; registration in own name of shareholders who hold/will hold ordinary Shares which have been dematerialised and are recorded by a CSDP on the subregister kept by that CSDP in the name of such shareholder; Phatshoane Henney Incorporated, is a specialist law firm based in Bloemfontein, South Africa and the attorney of Advanced Health; Philip Jack Jaffe, independent non-executive director of the company under passport number N ; the placing of Shares in terms of the Offer by Advanced to directors, employees, pensioners and direct business associates, including customers, suppliers and other parties with whom there exists a direct and enduring contractual relationship, as well as doctors known to Advanced, which preferential placing will be by means of a non-transferable application form bearing the name of the specific party and stating a maximum number of securities that may be subscribed for in that application; Presmed Australia Presmed Australia Proprietary Limited (Registration number ABN ), a private company duly incorporated in accordance with the laws of Australia on 3 January 1997 having its registered address at UHY Haines Norton, Level 11, 1 York Street, Sydney, NSW, 2000 and a 94.64% subsidiary of Advanced Health, holding the Australian subsidiary operations through 72.58% in Sydney Surgery Centre, 56.50% in Epping Surgery Centre and 55.56% in Central Coast Surgery Centre and in which Kinser Investments, a company associated with Marc Resnik, a director of Advanced Health, retains a 5.36% minority interest; Presmed Australia Vendors Presmedical Witbank Private Placing Eenhede Konsultante (83.75%) and Maluti Aktien Gesellschaft (10.9%); Presmedical Witbank Proprietary Limited (Registration number 1968/012308/07), a private company duly incorporated in accordance with the laws South Africa having its registered address at PFS Building, 11 Neven Street, Witbank, 1035 held by VOCA Trust (100%), the director of which is Carl Grillenberger and one of the emalahleni Vendors; the private placing of Shares by way of a Prospectus to individuals, institutions, companies, stockbrokers and other entities, and including a Preferential Placing; 12

13 this Prospectus Rand or R or cents register SARB SENS shareholders South Africa or the Republic Strate Subsidiaries Sydney Surgery Centre transfer secretaries UHY Haines Norton underwriter VAT VC Family Trust the bound document dated 24 February 2014, including all annexures and enclosures thereto; South African Rand, the official currency of South Africa; the register of Advanced Health shareholders; the South African Reserve Bank; the Stock Exchange News Service of the JSE; the holders of issued ordinary Shares; the Republic of South Africa; the settlement and clearing system used by the JSE, managed by Strate Limited, (Registration number 1998/022242/06), a public company duly incorporated under the laws of South Africa; the subsidiaries of Advanced Health, being one directly wholly-owned subsidiaries namely; Advanced Health South Africa Proprietary Limited, holding 100% in emalahleni Day Hospital and Medgate Day Clinic and one 94.64% held subsidiary being Presmed Australia and three indirectly owned subsidiaries held through Presmed Australia, namely Sydney Surgery Centre Proprietary Limited (72.58%), Epping Surgery Centre Proprietary Limited (56.5%) and % in Central Coast Surgery Centre Proprietary Limited; Sydney Surgery Centre Proprietary Limited (Registration number ABN ), a private company duly incorporated with the laws of Australia on 22 July 1997 having its registered address at UHY Haines Norton, Level 11, 1 York Street, Sydney, NSW, 2000 and a 72.58% subsidiary of Presmed Australia, with the balance of the shares held equally between a number minority shareholders unrelated to Advanced Health, holding between 4.31% and 0.25% each; Trifecta Capital Services Proprietary Limited (Registration number 2009/018890/07), a private company incorporated in accordance with the laws of South Africa; UHY Haines Norton Chartered Accountants an Australian company (Registration number ABN ) and the auditors to Presmed Australia and its subsidiaries; Eenhede Konsultante; Value-Added Taxation; the VC Family Trust (Registration number 468/1993), is a discretionary family trust of which the beneficiaries are Sandra Comfort, CQ Grillenberger, Estate Late CA Hanson, B Elliott, DP Viljoen and J Elliott, with trustees being Carl Grillenberger, Cor van Zyl and Frans van Hoogstraten of 181 Kloof Road, Clifton 8005, which trust is incorporated under the laws of South Africa, having its registered address at 302 Westerbloem, 39 van Heerden Street, Wigehof, Bloemfontein, 9301 and a 50% shareholder in Eenhede Konsultante; 13

14 Vendors VOCA Trust Wilfred T Mthembu Presmed Australia Vendors, the emalahleni Vendors, the Medgate Vendors and the Advanced Health SA Vendors; the VOCA Family Trust (Registration number 9060/2001), is a discretionary family trust of which the beneficiaries are Sandra Comfort, CQ Grillenberger, Sage Comfort, PA Grillenberger, Estate Late CA Hanson and JT Hanson, with trustees being Carl Grillenberger, Cor van Zyl and Frans van Hoogstraten of 181 Kloof Road, Clifton 8005, which trust is incorporated under the laws of South Africa, having its registered address at 302 Westerbloem, 39 van Heerden Street, Wigehof, Bloemfontein, 9301 and a 50% shareholder in Eenhede Konsultante; Dr Wilfred Tommy Mthembu Independent non-executive director of the company under identity number ; and Ysbrand Visser Jacobus Ysbrand Jacobus Visser (alternate director to Phil Jaffe) under identity number

15 ADVANCED HEALTH LIMITED (formerly AC Motor Group Limited) (Incorporated in the Republic of South Africa) (Registration number 2013/059246/06) ( the Company or Advanced Health ) ISIN Code: ZAE JSE Code: AVL PROSPECTUS DOCUMENTS AND CONSENTS AVAILABLE FOR INSPECTION In terms of Regulation 53 of the Companies Regulations, and section 7G of the Listings Requirements, certified copies of the following documents will be available for inspection at the registered office of the Company from the date of this Prospectus until the 10th Business Day following the closing date of the offer on Monday, 31 March 2014: the MOI and the MOI of the subsidiaries; the Prospectus, including the subscription form; the independent reporting accountants reports on the Company s historical financial information as set out in Annexure 1 of this Prospectus; the independent reporting accountants reports on Presmed Australia s historical financial information as set out in Annexure 3 of this Prospectus; the independent reporting accountants report on the reviewed pro forma financial information of the Company as set out in Annexure 5 of this Prospectus; the Independent reporting accountant s report on the profit forecast of Advanced Health for the two years ending 30 June 2014 and 30 June 2015 respectively, as set out in Annexure 7 of this Prospectus; the material contracts as detailed in Section 1, paragraph 1.7; the employment agreements with directors, managers and secretaries; the written consent of each of the persons referred to in Section 1, paragraph of this Prospectus; the written power of attorney executed by each director of the Company not signing the Prospectus. 15

16 SECTION 1 INFORMATION ABOUT THE COMPANY WHOSE SECURITIES ARE BEING OFFERED 1.1 Name, address and incorporation Company Name Advanced Health Limited [Regulation 57(1)(a)] Registration Number 2013/059246/06 [Regulation 57(1)(a)] Business Address One Health Ground Floor, Woodmead North Office Park, 54 Maxwell Drive, Woodmead, 2157 (PO Box 1476, Silverton, Pretoria, 0127) [Regulation 57(1)(b)(i)] Registered Address One Health, Ground Floor, Woodmead North Office Park, 54 Maxwell Drive Woodmead, 2157 (PO Box 1476, Silverton, Pretoria, 0127) [Regulation 57(1)(b)] Address of Transfer Secretary Business Partners Tower Hive, 5 th Floor, 3 Caxton Road Industria, 2094 (PO Box 61272, Marshalltown, 2107); [Regulation 57(1)(b)] Date and place of Incorporation 10 April 2013 in Pretoria [Regulation 57(1)(c)] Details of the holding company of Advanced Health [Regulation 57(3) (a)] Company Name Eenhede Konsultante (Edms) Bpk (holding 77.15% before the Offer) Registration Number 1969/006230/07 Registered Address 302 Westerbloem, 39 van Heerden Str, Wilgehof, Bloemfontein, 9301 Date of Incorporation 23 April

17 1.1.2 Details of the subsidiary companies of Advanced Health [Regulations 57(3) (b)] Company Name Advanced Health South Africa Proprietary Limited Registration Number 2013/053514/07 Registration Address One Building, Ground Floor, Woodmead North Office Park, 54 Maxwell Drive, Woodmead, 2157 Date of incorporation 2 April 2013 Company Name emalahleni Day Hospital Proprietary Limited Registration Number 2007/018535/07 Registered Address PFS Building, 11 Neven Street, Witbank, 1035 (Postnet Suit 114, Private Bag X7260) Date of Incorporation 05 July 2007 Company Name Medgate Day Clinic Proprietary Limited Registration Number 2000/011092/07 Registered Address PFS Building, 11 Neven Street, Witbank, 1035 (Postnet Suit 114, Private Bag X7260) Date of Incorporation 07 June 2000 Company Name Presmed Australia Proprietary Limited Registration Number ABN Registered Address UHY Haines Norton, Level 11, 1 York Street, Sydney, NSW 2000, Australia. (Postal Address: 810 Pacific Highway, Gordon, NSW 2072, Australia) Date of Incorporation 31 January 1997 Company Name Sydney Surgery Centre Registration Number ABN Registered Address UHY Haines Norton, Level 11, 1 York Street, Sydney, NSW, 2000 Date of Incorporation 22 July 1997 Company Name Epping Surgery Centre Registration Number ABN Registered Address UHY Haines Norton, Level 11, 1 York Street, Sydney, NSW, 2000 Date of Incorporation 21 October

18 Company Name Central Coast Surgery Centre Registration Number ABN Registered Address UHY Haines Norton, Level 11, 1 York Street, Sydney, NSW, 2000 Date of Incorporation 1 December Directors, other office holders, or material third parties [Regulation 58] Directors of the Company [Regulation 58(2)(a),(3)(a)] Carl Grillenberger (70) Nationality Business address Appointment date 14 June 2013 Qualifications Occupation Position in Company Term of office Cor Van Zyl (66) South African One Health, Ground Floor, Woodmead North Office Park, 54 Maxwell Drive Woodmead B.Comm; CA (SA); MBA Businessman Chief Executive Officer No fixed term but subject to the provisions of the MOI and the Act Nationality South African Business address One Health, Ground Floor, Woodmead North Office Park, 54 Maxwell Drive Woodmead Appointment date 06 January 2014 Qualifications B.Comm (Hons) Acc, CTA, CA(SA), RA(SA) Occupation Member of Boards Position in Company Financial Director Term of office No fixed term but subject to the provisions of the MOI and the Act Frans Van Hoogstraten (65) Nationality South African Business address One Health, Ground Floor, Woodmead North Office Park, 54 Maxwell Drive Woodmead Appointment date 06 January 2014 Qualifications Dip. Law (UCT) Occupation Attorney Position in Company Independent non-executive Chairman Term of office No fixed term but subject to the provisions of the MOI and the Act 18

19 Philip Jack Jaffe (73) Nationality Australian Business address 810 Pacific Highway, Gordon, NSW 2072, Australia Appointment date 06 January 2014 Qualifications B.Comm, CA(SA), HDip Tax, CA (Australia) Occupation Chartered Accountant Position in Company Independent Non-executive Director Term of office No fixed term but subject to the provisions of the MOI and the Act Marc Resnik (56) Nationality Australian Business address 810 Pacific Highway, Gordon, NSW 2072, Australia Appointment date 06 January 2014 Qualifications Dip Pharm (SA) Occupation Pharmacist and businessman Position in Company Managing Director of Presmed Australia Term of office No fixed term but subject to the provisions of the MOI and the Act Wilfred T Mthembu (51) Nationality South African Business Address 206 Jeppe Street, Marble Towers, Johannesburg Appointment date 06 January 2014 Qualification Occupation Position in company Term of office Alternate Director Ysbrand Jacobus Visser (47) MBBCH, FCOPHTH Ophthalmologist Independent non-executive director No fixed term but subject to the provisions of the MOI and the Act Nationality South African Business address 2nd Floor, Bremer Building, 23 Donald Murray Avenue, Parkwes, Bloemfontein. Appointment date 6 February 2014 Qualifications BLC; LLB (University of Pretoria) Occupation Managing director of Cuny Group (Pty) Ltd Position in Company Alternate director to Phillip Jaffe Term of office No fixed term but subject to the provisions of the MOI and the Act Abridged CVs of the Company s directors are set out in Annexure 14 of this Prospectus Name and business address of the Company Secretary [Regulation 58(b)(iii)] M Janse Van Rensburg Professional Accountant (SA) Lifestyle Garden Centre, Corner Beyers Naude & Ysterhout Avenue Randpark Ridge, 2194 (PO Box 1849, Northwold, 2155) 19

20 1.2.3 Name and business addresses of the auditors, attorneys, banker and stockbroker Auditors: Mazars (Gauteng) Incorporated (Registration number 2000/026635/21) Erasmus Forum A, 434 Rigel Avenue South, Erasmusrand, Pretoria, 0181 (Private Bag x4 Hatfield 0028) A copy of the letter from Mazars (Gauteng) Incorporated consenting to be named as the Company s auditors in the Prospectus is available for inspection as set out in the introduction Attorneys: [Regulation 58(2)(b)(ii)] Phatshoane Henney Inc. 35 Markgraaff Street, Bloemfontein, South Africa, 9301 (PO Box 153 or 260, Bloemfontein, South Africa, 9300) A copy of the letter from Phatshoane Henney Inc. consenting to be named as the Company s attorneys in the Prospectus is available for inspection as set out in the introduction Bankers: ABSA Bank Limited 3rd Floor, ABSA Forum Building, Nelson Mandela Drive, Bloemfontein, 9301 (PO Box 323, Bloemfontein, 9300); and Grindrod Bank Limited 5 th Floor Protea Place, 40 Dreyer Street, Claremont Western Cape, 7735 (Postnet Suite 64, Private Bag X1005, Claremont, 7735) A copy of the letters from ABSA Bank Limited and Grindrod Bank Limited consenting to be named as the Company s banker in the Prospectus is available for inspection as set out in the introduction Underwriter: Eenhede Konsultante 302 Westerbloem, 39 Van Heerden Street, Wilgehof, Bloemfontein, 9301 (PO Box 16371, Vlaeberg, 8018 A copy of the letter from Eenhede Konsultante consenting to be named as the Company s underwriter in the Prospectus is available for inspection as set out in the introduction Qualification, borrowing powers, appointment, voting powers and remuneration of directors of Advanced Health [Regulation 58(3)] Directors and prescribed officer remuneration No prescribed officers have been identified in addition to the directors of Advanced Health. The remuneration and anticipated fees to be paid to the directors of Advanced Health for the year ending 30 June 2014 are set out below, assuming a conversion rate of R9.096 to AU$1: 20

21 Salary R Fees R 21 Retirement Benefits R Bonus R Total R Option s 2014 Executive: Carl Grillenberger Note 1 Cor Van Zyl Note 2 Marc Resnik (Note 3) Note 3 Sub-total Non-executive: Frans Van Hoogstraten (Note 4) Phil Jaffe (Note 5) Note 6 Wilfred T Mthembu (Note 7) Ysbrand Jacobus Visser Sub-total Totals Note 1 - Carl Grillenberger In lieu of remuneration, for a period of 3 (three) years from the date of publication of the results for the end of each financial year of the Company, Carl Grillenberger is granted an American option ( the Option ) to purchase a maximum of (two million) ordinary shares per year, totalling shares over a three year period commencing from 30 June 2014 (the Option Shares ), which Option must be exercised after three years from the Option being granted, within a further three year period. The exercise price payable per share for the Option Shares shall equal the amount of the weighted average price per share per annum of the Company s shares as traded on the JSE during the financial year ended June each year for which the Option is granted. The purchase consideration will be payable on exercise of the Option or any part thereof. The first option is to be exercised three years from the date of granting (30 th June 2014), on or before the 30 th June The second option which applies to the year ended 30 June 2015 must be exercised on or before 30 th June The third option which applies to the year ended 30 th June 2016 must be exercised on or before 30 th June If the Option, or any part thereof, is not exercised within a period of three years from the date on which the Option is granted, the Option shall lapse. No option premium has been paid, or is payable, for the Option. Note 2 - Cor van Zyl In lieu of remuneration, for a period of 3 (three) years from the date of publication of the results for the end of each financial year of the Company, Cor van Zyl is granted an American option ( the Option ) to purchase a maximum of (one million five hundred thousand) ordinary shares per year, totalling shares over a three year period commencing from 30 June 2014 (the Option Shares ), which Option must be exercised after three years from the Option being granted, within a further three year period. The exercise price payable per share for the Option Shares shall equal the amount of the weighted average price per share per annum of the Company s shares as traded on the JSE during the financial year ended June each year for which the Option is granted. The purchase consideration will be payable on exercise of the Option or any part thereof.

22 The first option is to be exercised three years from the date of granting (30 th June 2014), on or before the 30 th June The second option which applies to the year ended 30 June 2015 must be exercised on or before 30 th June The third option which applies to the year ended 30 th June 2016 must be exercised on or before 30 th June Note 3 Marc Resnik In addition to his salary and benefits, Marc is entitled to 7.5% of the pre-tax profit earned by Presmed Australia calculated in terms of a predetermined formula. This has been estimated at AU$151,825 based on the profit forecast for Presmed Australia for the year ending 30 June 2014 and has been converted at an assumed exchange rate of R9.81 to AU$1. Furthermore, in 2012 Marc, through his investment company Kinser Investments, was granted an option to subscribe for shares (equating to 10%) in Presmed Australia at a subscription price of AU$8.00 per Presmed share, exercisable for a period of 10 years commencing 26 June Note 4 - Frans van Hoogstraten Frans is entitled to an additional remuneration at a rate of R per meeting attended in addition to the monthly retainer of R per month. Note 5 Phil Jaffe The fees payable to Phil Jaffe are in respect of 22 subsidiary company board meetings per year. In addition to this Phil is entitled to a remuneration of AU$2,285 per additional meeting attended. Note 6 Phil Jaffe For a period of 3 (three) years from the end of each financial year of the Company, Phil Jaffe is granted an option to purchase a maximum of 100, 000 (one hundred thousand) ordinary shares per year (the Option Shares ). If the Option or any part thereof is not exercised after a period of 3 (three) years from the date on which the option is granted, within a further three year period, the Option shall lapse. The total purchase consideration payable for the Option Shares shall equal the amount of the weighted average price per share per annum of the company s shares as traded on the JSE during the financial year ended June each year on the date on which the option is granted, payable on exercising of the Option or any part thereof. The first option is to be exercised three years from the date of granting (30 th June 2014), on or before the 30 th June The second option which applies to the year ended 30 June 2015 must be exercised on or before 30 th June The third option which applies to the year ended 30 th June 2016 must be exercised on or before 30 th June Note 7 Wilfred T Mthembu In addition to the annual retainer of R , Wilfred T Mthembu is entitled to an additional remuneration at a rate of R per meeting attended. Note 8: Ysbrand Jacobus Visser In addition to the annual retainer of R Jacobus is entitled to an additional remuneration at a rate of R per meeting attended. The fees for non-executive directors were approved by shareholders on 27 January

23 Of the above directors the following directors are paid by Presmed Australia: 2014 Executive: Salary R Fees R Benefit R Bonus R Total R Marc Resnik Sub-total Options Note 3 above Analyses of benefits that are to be received by directors from the Company are set out below. The company has not granted fringe benefits to any director other than to Marc Resnik who receives vehicle fringe benefit. Analysis of benefits Fringe benefits housing R Fringe benefits vehicles R Overseas travel allowance R Expense allowance Total R R Carl Grillenberger Cor Van Zyl Frans Van Hoogstraten Phil Jaffe Marc Resnik Wilfred T Mthembu - - Ysbrand Jacobus Visser Totals Marc Resnik is remunerated in Australian Dollars and a conversion rate of R9.096 to AU$1 has been used for the above table. There will be no variation of the remuneration of directors pursuant to the listing of Advanced Health. The above remuneration will be paid by Advanced Health and Presmed Australia Directors service contracts [Regulation 58(3)(a)] Fees of non-executive directors must be approved by shareholders in general meeting as detailed in Annexure 13. The directors have the power to vote remuneration to themselves or any members of the board, other than fees for nonexecutive directors. No payments were made by Advanced Health Limited or accrued as payable, or were proposed to be paid within the three years preceding the date of this Prospectus, either directly or indirectly, in cash or securities or otherwise to: the directors in respect of management, consulting, technical, secretarial fees or restraint payments; a third party in lieu of directors fees; and the directors as an inducement to qualify them as directors. None of the directors have any commission, gain or profit-sharing arrangements other than the profit sharing arrangement which applies to Marc Resnik as reflected in note 6 on paragraph of this Prospectus. 23

24 The Company does not have a provident or pension plan in place as at the last practicable date, other than the Australian Superannuation payments, which apply to Carl Grillenberger and Marc Resnik as reflected under benefits column which forms part of paragraph above. No director or promoter has any material beneficial interest, direct or indirect, in the promotion of Advanced Health and in any property to be acquired or proposed to be acquired by Advanced Health out of the proceeds of the issue or during the three years preceding the date of this Prospectus. The Company has formal employment agreements with all the executive directors which provide for a one month notice period after completion of the first year s employment. The employment agreement entitles the director to participate in the Company s Incentive Bonus Scheme and a discretionary 13 th cheque. The employment agreements do not provide for restraint provisions, restraint payments or payments on termination of employment. One third of non-executive directors are subject to rotation each year as stipulated in the MOI. The Chief Executive Officer may be appointed by contract for a maximum period of three years and is subject to rotation except during the period of any such contract. The employment agreements are available for inspection as detailed in page 15 of this Prospectus. The MOI does not provide for an age limit for the retirement of directors but has provisions for the disqualification of directors as detailed in Annexure 15 to this Prospectus. M Janse Van Rensburg Professional Accountant (SA) has been appointed as the Company Secretary to Advanced Health from January 2014 in anticipation of the listing of the Company. There are no other existing or proposed contracts with Advanced Health, written or oral, relating to the directors and managerial remuneration and other fees. The Company does not have any Share Option Schemes. The only options granted are to the directors and subsidiary directors as detailed in paragraph 1.5 below Borrowing powers of the Company and the Subsidiaries exercisable by the directors [Regulation 58(3) (c)] The relevant provisions of the MOI of Advanced Health relating to the borrowing powers exercisable by the directors are set out in Annexure 15 to this Prospectus. Neither Advanced Health, nor its Subsidiaries, has exceeded its borrowing powers during the past three years. There are no exchange controls or other restrictions on the borrowing powers of Advanced Health and its Subsidiaries Appointment, qualification and remuneration of directors The relevant provisions of the MOI of Advanced Health relating to qualification, appointment, remuneration, voting powers, rotation/retirement, and interests in transactions of the directors are set out in Annexure 15 to this Prospectus. Remuneration in relation to directors is set out in above. 24

25 Directors declarations The directors do not have any interests in contracts with Advanced Health as at the last practicable date other than in the acquisitions to form the Advanced Health group ahead of the listing as detailed in paragraph and paragraph 1.8 of this Prospectus Other matters In terms of the declarations lodged by the directors in accordance with Schedule 21 of the Listings Requirements, none of the directors or senior management of Advanced Health or its Subsidiaries: has been declared bankrupt or insolvent, or has entered into an individual voluntary compromise arrangement to surrender his or her estate; is or was a director with an executive function of any company at the time of (or within 12 months preceding), any business rescue, or any company that has adopted a resolution proposing business rescue or made application to be put under business rescue or any notices in terms of section 129(7) of the Companies Act, or any receivership, compulsory liquidation, creditors' voluntary liquidation, administration, company voluntary arrangement or any compromise or arrangement with its creditors generally or with any class of its creditors; is or has been a partner in a partnership at the time of, or within 12 months preceding, any compulsory liquidation, administration or voluntary arrangements of such partnership; is or has been a partner in a partnership at the time of, or within 12 months preceding, a receivership of any assets of such partnership; has had any of his or her assets subject to receivership; is or has been publicly criticised by any statutory or regulatory authorities, including recognised professional bodies or been disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of any company; is or has been convicted of any offence involving dishonesty; has been declared delinquent or placed under probation in terms of section 162 of the Companies Act and/or section 47 of the Close Corporations Act, 1984, as amended or has been disqualified by a Court to act as a director in terms of section 69 of the Act; has been removed from an office of trust on the grounds of misconduct involving dishonesty; and/or subject to any court order declaring such person delinquent or placing him under probation; Company subsidiaries The Company has two directly owned subsidiaries namely; Advanced Health SA and Presmed Australia. Advanced Health SA in turn holds 100% in emalahleni Day Hospital and 100% in Medgate Day Clinic. In addition, Presmed Australia in turns holds 72.58% in Sydney Surgery Centre Proprietary Limited 56.50%, Epping Surgery Centre Proprietary Limited and 55.56% in Central Coast Surgery Centre Proprietary Limited. 25

26 1.3. HISTORY, STATE OF AFFAIRS AND PROSPECTS OF THE COMPANY [Regulation 59] History of the Company [Regulation 59(3)(a)(i); 59(3)(a)(ii)] Advanced Health was incorporated as a public company on 10 April 2013 as AC Motor Group Limited and remained dormant until it was decided to utilise the company as a holding company for Advanced Health. Eenhede Konsultante acquired control of AC Motor Group on 26 June 2013 in anticipation of injecting its controlling interests in Presmed Australia as well as emalahleni Day Hospital and Medgate Day Clinic for purposes of listing on the JSE. With effect from 27 January 2014, Advanced Health acquired the controlling interests in Presmed Australia as well as emalahleni Day Hospital, Medgate Day Clinic and Advanced Health SA, essentially from the former controlling shareholder Eenhede Konsultante, which company remains as the controlling shareholder of the Advanced Health Group. Presmed Australia was founded by PresMed Limited (now known as Life Healthcare Limited), together with key members of the PresMed Limited Management team a number of years ago and Eenhede Konsultante acquired Presmed Australia when control of Presmed Limited was sold to Afrox Healthcare in Presmed Australia accounts for more than 90% of the Advanced Health group at the Last Practicable Date. Thus the asset base and the management of the Group remains the same and Advanced Health has merely been interposed as the holding company for purposes of the listing on the JSE. Carl Grillenberger was mainly involved in the property industry since the 1970 s. During the early 1980 s the South African property industry had to fend for its survival in an environment where the industry was plagued by interest rates well in excess of 20% per annum. At the time Grillenberger decided to visit the USA, where the property industry had to deal with similar interest rates. The main aim of Grillenberger s trip was to form an idea as to how he should re-position his property involvement given the high interest rates which the industry had to live with. In Houston Texas, Grillenberger met a property developer who focussed on the development of medical centres and ambulatory surgery centres. This developer informed him that the advantage of an investment in healthcare properties is that people need healthcare whether the economy is depressed or flourishing. In Houston he learned that an investment in a well-planned medical facility can offer good returns over the long-term, irrespective of the state of the economy. Back in South Africa he formed President Medical Investments Limited ( Presmed ) in 1983 and bought his first interest in the Witbank Day Clinic which is today known as the emalahleni Day Hospital. In Witbank he learned all the important features associated with the management and growth of day clinics. By 1986 Grillenberger had invested most of his capital in three day clinics. Based on the advice obtained from Philip Jaffe, a practising chartered accountant from Johannesburg, he decided to list these clinics on the Development Capital Market of the JSE in Presmed Limited was the company used for this listing. In addition to day clinics Presmed also focussed on the development of private hospitals. Grillenberger s main passion however remained the development of day clinics. 26

27 During the early 1990 s the main private hospital operators functioning in South Africa demonstrated concern about the competition coming from day clinics. As a result they implemented strategies in terms of which the medical scheme movement changed the tariff structure for hospitals and clinics in such a way that these were detrimental to day clinics. Following this industry change, Grillenberger decided to take a two year sabbatical from his South African business involvements and moved to Sydney, Australia with the aim to develop clinics in Australia. Once the first Australian clinic was up and running Marc Resnik, who was at that time a director at Presmed, joined him and took over the management of the Australian business. The group now manages and owns three day clinics in Australia. Back in South Africa, Grillenberger merged Presmed Limited with Afrox Health Proprietary Limited. The merged entity is now known as Life Healthcare Limited. During the years which followed, Grillenberger was restrained from the healthcare industry in South Africa as a result of a restraint of trade undertaking given by him to Afrox Health. During these years the South African Day Clinic Association, which was once chaired by Grillenberger, became defunct and the number of day clinics in operation dwindled. During 2005 Life Healthcare terminated the lease agreement, which applied to the Medgate Day Clinic. Grillenberger saw this as an opportunity to get back into the South African Day clinic industry. A similar event happened in respect of the Witbank Day Clinic which was closed down by Life Health. Here it must be noted that the fee structure implemented by the South African medical scheme movement was such that it enhanced the admission of patients to hospitals and that day clinics were not rewarded on a fair and reasonable basis. Nothing was done to stimulate the development of day clinics. During 2009 Grillenberger refurbished and reopened the original Witbank Day Clinic under the name of emalahleni Day Hospital. During the middle of 2013 Discovery Health decided to implement a new compensation strategy in terms of which specialists, who treat a Discovery Medical Scheme member in a day clinic, will be paid a higher fee compared to the fee payable if the said patient is treated in a hospital. This was good news to Grillenberger who by now learned that more than 6,000 ambulatory surgery centres have been developed in the USA to attend to the short stay surgical requirements of United States citizens. Shortly after the Discovery announcement, the management of the various clinics took a decision to merge the Australian clinics with those in South Africa and to form Advanced Health Limited. In addition to this the management of Advanced Health actively lobbied with other clinics in South Africa to get the defunct Day Clinic Association going again. This move has been received with overwhelming support from owners of clinics and should help the industry as a whole, to get a better foothold in the South Africa healthcare industry. The existing management and directors of Advanced Health took a decision to have Advanced Health listed on the AltX division of the JSE. The board of directors of Advanced Health is confident that by listing the group sufficient equity funds can be generated to fund the future growth objectives of the Advanced Health group. There are no government protection or investment encouragement laws that impact on the company or the Group. 27

28 The group structure of Advanced Health is set out below: About the Company and the Offer Advanced Health was founded by Carl Grillenberger ( Carl ), who has since the early 1980s been a firm believer in the benefits of day surgery facilities. Having gained international exposure to organisations involved with the development and management of ambulatory surgery centres, he formed President Medical Investments Limited ( Presmed ) in Presmed s objectives were to acquire and develop same day surgical facilities and hospitals in South Africa. The company, which was listed on the JSE, grew from strength to strength under Carl s leadership. During the 1990 s Cor van Zyl and Marc Resnik joined Carl and served with him as directors of Presmed. In 1999, Presmed, then a group consisting of 12 day clinics and 19 hospitals, became the vehicle for the reverse listing of the healthcare interests of African Oxygen Limited. Presmed was renamed Afrox Healthcare Limited, and is today known as Life Healthcare Limited. During the late 1990s Carl spent two years in Australia where he established Presmed Australia Proprietary Limited ( PMA ), a company currently holding interests in three ophthalmic day clinics. In Australia, Carl was assisted by Marc Resnik, a former managing director of the then South African Lifecare Clinics and, subsequently, a Presmed director. Marc is managing director of the Australian arm of the business, having first stabilised and then expanded the asset base there. In 2006, Carl, by then no longer under a restraint of trade as a result of the Afrox Healthcare transaction, acquired the Medgate Day Clinic ( MDC ) in Roodepoort, Gauteng and in 2009 he opened the emalahleni Day Hospital in emalahleni (Witbank), Mpumalanga. The main challenge which Carl had with the day clinic industry in South Africa was that this segment of the healthcare industry was never really supported by the funders of healthcare. A substantial part of the overseas growth came as a result of the support which the industry enjoyed from the funders of healthcare services. This type of support was lacking in South Africa to such an extent that the industry declined here while growing elsewhere in the world. Over the past few years the South African funders of health care services complained about the ever increasing costs associated with the hospitalisation of members in private hospitals. Little if anything was done to give serious consideration to other alternatives such as ambulatory surgery centres. From the middle of 2013 the Discovery Health Medical Scheme ( Discovery ) started to look seriously at alternatives in terms of which their exposure to the private hospital industry can be curtailed. 28