RDI REIT P.L.C. CIRCULAR TO RDI SHAREHOLDERS

Transcription

1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION The definitions and interpretations commencing on page 5 of this circular have been used on this cover page. If you are in any doubt as to what action to take, please consult your CSDP, CREST provider, broker, custodian, banker, accountant, legal adviser or other professional adviser. ACTION REQUIRED If you have disposed of all your shares in RDI, this circular should be handed to the purchaser of such shares or to the CSDP, CREST provider, broker, custodian, banker or other agent through whom the disposal was effected. RDI shareholders are referred to page 3 of this circular, which sets out the detailed action required of them in respect of the proposals set out in this circular. All times indicated are local times in the country to which they refer. THE ATTENTION OF SHAREHOLDERS IS DRAWN TO THE FACT THAT SHOULD THEY NOT ACTION THE CONTENTS OF THIS CIRCULAR, THEY WILL BE DEEMED TO HAVE ELECTED TO RECEIVE THE CASH DIVIDEND. SHAREHOLDERS RECORDED ON THE UK SHARE REGISTER WHO HAVE PREVIOUSLY ELECTED TO RECEIVE A SCRIP DIVIDEND WILL, UNLESS THEY TAKE STEPS TO REVOKE THEIR MANDATE, BE DEEMED TO HAVE ELECTED TO RECEIVE THE SCRIP DIVIDEND. RDI does not accept responsibility and will not be held liable for any failure on the part of the CSDP, CREST provider, broker or custodian of any holder of dematerialised or certificated shares to notify such shareholder of the proposals set out in this circular. RDI REIT P.L.C. (formerly Redefine International P.L.C.) (Incorporated and registered in the Isle of Man with registered number V) (LSE share code: RDI) (JSE share code: RPL) (ISIN: IM00B8BV8G91) (LEI: NHZUMMRYQ1745) ( RDI or the Company ) CIRCULAR TO RDI SHAREHOLDERS relating to: an election being offered to RDI shareholders to receive either a cash dividend or a scrip dividend by way of an issue of new RDI shares; and enclosing: an election form for use by certificated shareholders on the SA share register; or an election form for use by certificated shareholders on the UK share register. Corporate adviser and JSE sponsor Joint financial adviser and corporate broker Legal adviser as to English law Joint financial adviser and corporate broker Legal adviser as to Isle of Man law Date of issue: Monday, 21 May 2018 Copies of this circular may be obtained at the Company s UK transfer secretaries, Link Asset Services, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, from Monday, 21 May 2018 to Friday, 8 June It will also be available on the website of the Company ( from Monday, 21 May 2018 and at the office of the Company s JSE sponsor, Java Capital, 6A Sandown Valley Crescent, Sandton,

2 CORPORATE INFORMATION REGISTERED OFFICE Merchants House 24 North Quay Douglas Isle of Man IM1 4LE (Postal address same as physical address above) CORPORATE ADVISER Java Capital Proprietary Limited (Registration number 2012/089864/07) 6A Sandown Valley Crescent Sandton, 2196 Johannesburg, South Africa (PO Box , Saxonwold, 2132) JOINT FINANCIAL ADVISER AND CORPORATE BROKER Peel Hunt LLP (Registration number 0C357088) Moor House 120 London Wall London EC2Y 5ET (Postal address same as physical address above) LEGAL ADVISER AS TO ENGLISH LAW CMS Cameron McKenna Nabarro Olswang LLP (Registration number OC310335) 78 Cannon Street London EC4N 6AF (Postal address same as physical address above) SA TRANSFER SECRETARIES Computershare Investor Services Proprietary Limited (Registration number 2004/003647/07) Rosebank Towers 15 Biermann Avenue Rosebank 2196 (PO Box Marshalltown, 2107) COMPANY SECRETARY Lisa Hibberd Third Floor 33 Regent Street London SW1Y 4NB (Postal address same as physical address above) JSE SPONSOR Java Capital Trustees and Sponsors Proprietary Limited (Registration number 2006/005780/07) 6A Sandown Valley Crescent Sandton, 2196 Johannesburg, South Africa (PO Box , Saxonwold, 2132) JOINT FINANCIAL ADVISER AND CORPORATE BROKER J.P. Morgan Cazenove (Registration number ) 25 Bank Street Canary Wharf London E14 5JP (Postal address same as physical address above) LEGAL ADVISER AS TO ISLE OF MAN LAW Simcocks Advocates Limited (Registration number C) Ridgeway Street Douglas Isle of Man IM99 1PY (Postal address same as physical address above) UK TRANSFER SECRETARIES Link Asset Services The Registry 34 Beckenham Road Beckenham Kent BR3 4TU (Postal address same as physical address above) CORPORATE HEAD OFFICE RDI REIT P.L.C Third Floor 33 Regent Street London SW1Y 4NB (Postal address same as physical address above) PLACE AND DATE OF INCORPORATION Isle of Man, 28 June 2004 Re-registered under the Isle of Man Companies Act 2006 on 3 December 2013

3 TABLE OF CONTENTS Page Corporate information Inside front cover Salient dates and times 2 Action required by RDI shareholders 3 Definitions and interpretations 5 Circular to RDI shareholders 1. Introduction 8 2. Cash dividend 8 3. The scrip dividend 8 4. Rationale for the scrip dividend 9 5. Share capital 9 6. Tax implications 9 7. Listing of new RDI shares South African law, UK law and Isle of Man law Exchange control regulations (for shareholders on the SA share register) 16 RDI Scrip dividend election form for certificated shareholders recorded on the UK or SA share register Attached 1

4 SALIENT DATES AND TIMES For shareholders on the UK share register 2018 Posting of circular and announcement on RNS Announcement of conversion rate, scrip dividend reference price and whether the dividend will be paid as a PID, a non-pid, or a mixture of the two released on RNS on or before Last day to trade in order to be eligible for the cash dividend or alternatively the scrip dividend Shares commence trading ex the cash dividend or scrip dividend Record date for shareholders recorded on the UK share register Closing date for receipt of completed election forms by no later than 11:00 (UK time) Announcement on RNS of the amount of new RDI shares issued Dispatch of share certificates, payment of cash dividend, CREST accounts credited/updated and new RDI shares listed on the LSE Monday, 21 May Tuesday, 29 May Wednesday, 6 June Thursday, 7 June Friday, 8 June Friday, 8 June Thursday, 14 June Monday, 25 June Notes: 1. All dates and times quoted above are local dates and times in the United Kingdom. The above dates and times are subject to change. Any changes will be released on RNS. 2. RDI shareholders are referred to page 3 of this circular for information on the action required to be taken by them. 3. Shares may not be dematerialised or rematerialised between Thursday, 7 June 2018 and Friday, 8 June 2018, both days inclusive. 4. No transfer of shares between sub-registers in the United Kingdom and South Africa may take place between Tuesday, 29 May 2018 and Friday, 8 June 2018, both days inclusive. For shareholders on the SA share register 2018 Posting of circular and announcement on SENS Announcement of conversion rate, scrip dividend reference price and whether the dividend will be paid as a PID, a non-pid, or a mixture of the two released on SENS on or before Last day to trade in order to be eligible for the cash dividend or alternatively the scrip dividend Shares commence trading ex the cash dividend or scrip dividend Record date for shareholders recorded on the SA share register Closing date for receipt of completed election forms by no later than 12:00 (South African time) Announcement on SENS of the amount of new RDI shares issued Dispatch of share certificates, payment of cash dividend, CSDP/broker accounts credited/updated and new RDI shares listed on the JSE Monday, 21 May Tuesday, 29 May Tuesday, 5 June Wednesday, 6 June Friday, 8 June Friday, 8 June Thursday, 14 June Monday, 25 June Notes: 1. All dates and times quoted above are local dates and times in South Africa. The above dates and times are subject to change. Any changes will be released on SENS. 2. RDI shareholders are referred to page 3 of this circular for information on the action required to be taken by them. 3. Shareholders should note that new RDI shares should not be traded until the new RDI shares are issued or reflect in their accounts with their CSDP or broker on Monday, 25 June Shares may not be dematerialised or rematerialised between Wednesday, 6 June 2018 and Friday, 8 June 2018, both days inclusive. 5. No transfer of shares between sub-registers in the United Kingdom and South Africa may take place between Tuesday, 29 May 2018 and Friday, 8 June 2018, both days inclusive. 6. Shareholders on the SA share register will receive a cash dividend in South African Rand, based on the conversion rate. 2

5 ACTION REQUIRED BY RDI SHAREHOLDERS The definitions and interpretations commencing on page 5 of this circular apply to this section. The following information pertains to all of the Company s shareholders. On Wednesday, 25 April 2018 it was announced that the board had approved an interim dividend of 1.35 pence per share in respect of the six months ended 28 February 2018 and that the board intends offering shareholders a cash dividend or the election to receive a scrip dividend. Accordingly, you are entitled to receive either a cash dividend or a scrip dividend. Should you wish to receive the cash dividend and/or should you take no action, regardless of holding your shares in certificated or uncertificated form, you shall on Monday, 25 June 2018 receive the cash dividend. Where a shareholder recorded on the UK share register has previously elected to receive a scrip dividend and now wishes to receive the cash dividend, such shareholder must revoke their existing Mandate by notice in writing to Link Asset Services; failing which such shareholder will receive the scrip dividend. Dividend payments will be made in accordance with the payment instructions held. All times indicated below are local times in the country to which they refer. If you elect to receive the scrip dividend, the following action is required to be taken by you: SHAREHOLDERS RECORDED ON THE UK SHARE REGISTER 1. CERTIFICATED SHAREHOLDERS Shareholders holding shares in certificated form must complete the enclosed election form in accordance with the instructions contained therein and lodge it with the UK transfer secretaries, Link Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU to be received by them by no later than 11:00 (UK time) on Friday, 8 June The election forms may be submitted to the UK transfer secretaries by post or by hand (during normal business hours only). Election forms received after that time will be applied in time for the next relevant dividend. Alternatively, non-crest shareholders can elect to participate in the RDI scrip dividend through the Link Shareholder Portal on Shareholders completing a Mandate will be making an evergreen election, which will result in them receiving new shares instead of cash dividends until such Mandate is cancelled, so if you have previously elected to receive shares for future dividends for which a scrip dividend alternative is offered, you will not need to renew your Mandate. Election forms, once completed, remain in force for all future dividends until cancelled in writing. Please note that no acknowledgement of receipt of elections will be issued. Share certificates, will be dispatched to all certificated shareholders by first class post at the risk of such shareholders, on Monday, 25 June UNCERTIFICATED SHAREHOLDERS Shareholders who hold their shares in CREST can only elect to receive relevant dividends in the form of new RDI shares by use of the CREST Dividend Election Input Message. A CREST Dividend Election Input Message must be received by 11:00 (UK time) on Friday, 8 June 2018 in order to be effective. Under the Uncertificated Securities Regulations 2006, if holdings of shares are held partly in certificated and partly in uncertificated form, the Company will treat such shareholdings as if they were separate shareholdings and a separate election form/crest Dividend Election Input Message will need to be completed for each holding. To the extent that a holding is wholly or partly in uncertificated form at the record date for the relevant dividend, by submitting a CREST Dividend Election Input Message the relevant shareholder is deemed to authorise the Company to issue new RDI shares in uncertificated form in respect of that holding. Mandates other than CREST Dividend Election Input Messages, including paper election forms, will not be accepted in respect of shares held through CREST and will be ignored. The CREST Dividend Election Input Message must contain the number of shares relating to the election. If the number of elected shares is zero or left blank, the election will be rejected. If the number is greater than the shares held by the relevant shareholder through CREST at the relevant record date, the election will be scaled back to the holding at the record date. 3

6 Once an election is made using the CREST Dividend Election Input Message system it cannot be amended. Therefore, if a shareholder wishes to change their Mandate, such shareholder would need to cancel their previous election and submit a new election. Shareholders electing to receive dividends in the form of new RDI shares through the CREST Dividend Election Input Message system must submit a Dividend Election Input Message in respect of each relevant dividend otherwise the relevant shareholders will receive their dividend in cash, by cheque or to any bank account previously elected for the receipt of dividends. Uncertificated shareholders CREST accounts will be credited and updated on Monday, 25 June 2018 with the new RDI shares. SHAREHOLDERS RECORDED ON THE SA SHARE REGISTER 1. CERTIFICATED SHAREHOLDERS Certificated shareholders must complete the enclosed election form in accordance with the instructions contained therein and lodge it with the SA transfer secretaries, Computershare Investor Services Proprietary Limited, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196 (PO Box 61051, Marshalltown, 2107), to be received by them by no later than 12:00 (South African time) on Friday, 8 June Election forms received after this date and time will not be accepted. Where applicable, share certificates will be dispatched to all certificated shareholders by registered post at the risk of such shareholders, on Monday, 25 June 2018 or in accordance with the instructions given to the SA transfer secretaries. 2. DEMATERIALISED SHAREHOLDERS Dematerialised shareholders are required to notify their duly appointed CSDP, broker or custodian if they wish to receive the new RDI shares pursuant to the scrip dividend, in the manner and the time stipulated in the agreement governing the relationship between such shareholders and their CSDP, broker or custodian, failing which they will receive the cash dividend. Dematerialised shareholders CSDP/broker accounts will be credited and updated on Monday, 25 June 2018 with the new RDI shares. 4

7 DEFINITIONS AND INTERPRETATIONS In this circular and the election form attached hereto, unless the context indicates a contrary intention, the words in the first column shall have the meanings assigned to them in the second column; the singular includes the plural and vice versa; an expression which denotes one gender includes the other gender; a natural person includes a juristic person and vice versa and cognate expressions shall bear corresponding meanings. board or board of directors cash dividend certificated shareholder certificated shares CGT circular or this circular conversion rate CREST CREST Dividend Election Input Message CREST Manual CREST provider, broker or custodian CREST Regulations CSDP dematerialisation dematerialised shareholders dematerialised shares documents of title election form Euroclear Exchange Control Exchange Control Regulations FCA the board of directors of RDI; the cash dividend of 1.35 pence per share payable to shareholders out of the Company s distributable profits in accordance with their shareholding in the Company as at the record date, unless receipt of the scrip dividend has been elected; RDI shareholders holding certificated shares in the Company; a share or other security which is not in uncertificated form (that is not in CREST or Strate); Capital Gains Tax; this circular dated 21 May 2018, including the election form attached hereto; the Pound Sterling to Rand conversion rate to be applied in respect of the cash dividend; the relevant system (as defined in the CREST Regulations) for the paperless settlement of share transfers and the holdings of shares in uncertificated form in respect of which Euroclear is the operator, in accordance with which securities may be held and transferred in uncertificated form; the procedure for shareholders registered on the UK share register to elect to participate in the scrip dividend; the manual issued by Euroclear concerning the CREST system and available on the Euroclear website; a person or company that enables shareholders to hold and transfer their securities in uncertificated form or to hold and transfer their securities in uncertificated form on their behalf; the Uncertificated Securities Regulations 2006 (SD743/06), as amended, of the Isle of Man; a central securities depository participant appointed by a shareholder for purposes of, and in regard to dematerialisation and to hold and administer securities or an interest in securities on behalf of a shareholder; the process whereby certificated shares are converted to an electronic form as uncertificated shares and recorded in the sub-register of shareholders maintained by a CSDP or custodian; RDI shareholders who hold shares in dematerialised (uncertificated) form through Strate; RDI shares which have been incorporated into the Strate system, title to which is no longer represented by physical documents of title; share certificates and/or certified transfer deeds and/or balance receipts or any other documents of title in respect of RDI shares; the election form attached to this circular to be completed by certificated shareholders on the SA share register and the UK share register; Euroclear UK & Ireland Limited, a company incorporated under the laws of England and Wales and the operator of CREST; the Financial Surveillance Department of the South African Reserve Bank; the Exchange Control Regulations of South Africa issued under the Currency and Exchanges Act, 1933 (Act 9 of 1933), as amended; the Financial Conduct Authority in the United Kingdom and/or any successor or replacement body or bodies from time to time (including, for the avoidance of doubt, the Prudential Regulation Authority); FSMA Financial Services and Markets Act 2000; 5

8 GBP, Pounds Sterling or HMRC JPMC joint Financial Adviser and Corporate Broker JSE JSE Listings Requirements JSE sponsor last practicable date Link Asset Services LSE Mandate new RDI shares or scrip dividend shares Official List own-name dematerialised shareholders p or pence Peel Hunt PID or Property Income Distribution Rand RDI or the Company record date RDI group or the Group RNS SA record date SA share register Great British Pound, the legal currency of the UK; Her Majesty s Revenue and Customs; J.P. Morgan Securities trading as J.P. Morgan Cazenove (Registration number ), joint Financial Adviser and Corporate Broker, full details of which are set out in the Corporate Information section; JPMC and Peel Hunt acting as joint Financial Advisers and Corporate Brokers to RDI; the exchange operated by the JSE Limited (Registration number 2005/022939/06), a public company incorporated in accordance with the laws of South Africa, and licensed as an exchange under the Financial Markets Act of South Africa, 2012 (Act 19 of 2012), as amended; the Listings Requirements as published by the JSE, as amended from time to time; Java Capital Trustees and Sponsor Proprietary Limited (Registration number 2006/005780/07), a private company duly incorporated in accordance with the laws of South Africa, full details of which are set out in the Corporate Information section; the last practicable date prior to the finalisation of this circular; Link Asset Services is a trading name of Link Registrars Limited; the London Stock Exchange plc; the instructions of a shareholder as set out in a valid election form, online election or as submitted via a CREST Dividend Election Input Message, as the case may be; new fully paid ordinary RDI shares to be issued at the scrip dividend reference price per share pursuant to the scrip dividend; the Official List of the UK Listing Authority; dematerialised shareholders who have instructed their CSDP or custodian to hold their dematerialised shares in their own name on the sub-register (the list of shareholders maintained by the CSDP or custodian and forming part of RDI s register); Great British pence; Peel Hunt LLP (Registered number 0C357088), joint Financial Adviser and Corporate Broker, full details of which are set out in the Corporate Information section; a dividend payable which, in accordance with the UK legislation on UK-REIT s is subject to deduction of UK withholding tax unless exemptions apply; South African Rand, the lawful currency of South Africa; RDI REIT P.L.C. (Registered number V), a public company incorporated in terms of the laws of the Isle of Man which holds a primary listing on the Main Market of the LSE and a secondary listing on the JSE s Main Board, with its registered address at Merchants House, 24 North Quay, Douglas, Isle of Man IM1 4LE; the SA record date and/or the UK record date as the context may indicate; collectively, RDI, its subsidiaries, associates and joint ventures; Regulatory News Service of the LSE; the date on which a RDI shareholder on the SA share register must be recorded in the register in order to participate in the cash dividend or the scrip dividend, being the close of business on Friday, 8 June 2018; the share register maintained on behalf of the Company in South Africa by the SA transfer secretaries; 6

9 SA transfer secretaries Computershare Investor Services Proprietary Limited (Registration number 2004/003647/07), a private company duly incorporated in terms of the laws of South Africa, full details of which are set out in the Corporate Information section; scrip dividend scrip dividend reference price SENS shareholder, RDI shareholder or member shares or RDI shares South Africa or SA Strate transfer secretaries UK or United Kingdom UK Listing Rules UK record date the issue to RDI shareholders, who have elected to receive the scrip dividend, of new RDI shares in proportion to RDI shareholders shareholding in RDI as at the record date; the average closing price of RDI shares traded on the LSE over a period of five days (less the amount of the cash dividend), to be announced on or before Tuesday, 29 May For RDI shares on the SA share register, the scrip dividend reference price will be converted to Rand at the conversion rate; Stock Exchange News Service of the JSE; a registered holder of RDI shares registered on the RDI share register; ordinary shares in the share capital of RDI with a par value of 8 pence each; the Republic of South Africa; Strate Proprietary Limited (Registration number 1998/022242/07), a registered central securities depository in terms of the Financial Markets Act of South Africa, 2012 (Act 19 of 2012), as amended; collectively, the SA transfer secretaries and the UK transfer secretaries; United Kingdom of Great Britain and Northern Ireland; the UK Listing Rules made by the FCA under Part VI of FSMA; the date on which a RDI shareholder on the UK share register must be recorded in the register in order to participate in the cash dividend or the scrip dividend, being the close of business on Friday, 8 June 2018; UK-REIT a real estate investment trust under Part 12 of the UK s Corporation Tax Act 2010; UK share register UK transfer secretaries uncertificated form or in uncertificated form uncertificated shareholders the share register maintained on behalf of the Company in the Isle of Man; Link Asset Services; recorded on the register of members as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations may be transferred by means of CREST; and RDI shareholders who hold shares in uncertificated form through CREST. 7

10 RDI REIT P.L.C. (formerly Redefine International P.L.C.) (Incorporated and registered in the Isle of Man with registered number V) (LSE share code: RDI) (JSE share code: RPL) (ISIN: IM00B8BV8G91) (LEI: NHZUMMRYQ1745) ( RDI or the Company ) CIRCULAR TO RDI SHAREHOLDERS 1. INTRODUCTION On Wednesday, 25 April 2018 it was announced that the board had declared an interim dividend of 1.35 pence per share in respect of the six months ended 28 February 2018, and that the board now intends offering to shareholders a cash dividend or the election to receive a scrip dividend by way of an issue of new RDI shares (of the same class as existing shares) credited as fully paid up. Accordingly, a cash dividend will be paid to shareholders unless shareholders elect to receive a scrip dividend by way of an issue of new RDI shares credited as fully paid up. Shareholders of RDI on the record date who elect to receive the scrip dividend instead of the cash dividend, must ensure that their election forms are received by the relevant transfer secretaries at or before 11:00 (UK time)/12:00 (South African time) on Friday, 8 June CASH DIVIDEND 2.1 Shareholders on the UK share register Shareholders who hold RDI shares on the UK share register will receive the cash dividend in Pounds Sterling Shareholders not electing to receive the scrip dividend will, without any action on their part, be deemed to have elected to receive the cash dividend. Where a shareholder recorded on the UK share register has previously elected to receive a scrip dividend and now wishes to receive the cash dividend, such shareholder must revoke their existing Mandate by notice in writing to Link Asset Services; failing which such shareholder will receive the scrip dividend The cash dividend will be paid out of the Company s distributable profits. 2.2 Shareholders on the SA share register Shareholders who hold shares on the SA share register will receive the cash dividend in Rand Shareholders not electing to receive the scrip dividend will, without any action on their part, be deemed to have elected to receive the cash dividend The cash dividend will be paid out of the Company s distributable profits. 2.3 Value of dividends If no shareholders were to elect to receive the scrip dividend the value of the dividends will amount to 25.7 million. 3. THE SCRIP DIVIDEND 3.1 Terms and calculation of the scrip dividend The scrip dividend will take place in accordance with article 135 and article 141 of the Company s articles of association. Article 135 is subject to the authority of an ordinary resolution, and at the Company s Annual General Meeting held on 25 January 2018, shareholders voted in favour of ordinary resolution 19, generally and unconditionally authorising the directors to offer to the shareholders the right to elect to receive a scrip dividend in the form of the allotment of ordinary shares, credited as fully paid, instead of the whole or any part of any cash dividends (including interim dividends), which authority is valid for a period of three years Should a shareholder elect to receive the scrip dividend, such shareholder will become entitled to a number of new RDI shares, calculated by multiplying the number of shares held by that shareholder at the record date by the cash dividend per share of 1.35 pence and dividing it by the scrip dividend reference price. Where UK withholding tax has to be accounted for, the calculation will be by reference to the net amount of the dividend per share i.e pence less the current applicable withholding tax rate of 20 per cent. The new RDI shares to be issued pursuant to the scrip dividend are funded from the Company s distributable profits. 8

11 3.1.3 The election may be made by shareholders in respect of the whole of their shareholdings as of the record date only. Nominee shareholders are permitted to make elections on part of their shareholding RDI reserves the right to reduce the number of new RDI shares issued to an electing shareholder in respect of the scrip dividend if the issue of such shareholder s full allocation of new RDI shares would result in that shareholder (individually or together with any associates or shareholders deemed to be acting in concert with such shareholder) having an interest in RDI shares that would ordinarily require the shareholder (or group of shareholders) to make a mandatory cash offer for RDI pursuant to Rule 9 of the UK City Code on Takeovers and Mergers. In such circumstances, the shareholder will receive the balance of their entitlement as a cash dividend on the basis of 1.35 pence per share. 3.2 Fractions The allocation of new RDI shares will be such that shareholders who elect to receive the scrip dividend will not be allocated a fraction of a new RDI share and as such any entitlement to receive a fraction of a new RDI share which: is less than one-half of a new RDI share, will be rounded down to the nearest whole number; and is equal to or greater than one-half of a new RDI share but less than a whole new RDI share, will be rounded up to the nearest whole number. No fractions of scrip dividend shares will be issued, nor will any residual entitlements be carried forward to any future scrip dividend issue, and any amount of dividend not represented by scrip dividend shares will not be paid or payable to the relevant shareholders in respect of that dividend, but will be retained by the Company. 3.3 Maximum number of RDI shares and share capital in case all shareholders elect to receive the scrip dividend Should all eligible shareholders elect to receive the scrip dividend the maximum total number of new RDI shares to be issued by RDI will be calculated as 25.7 million divided by the scrip dividend reference price. 4. RATIONALE FOR THE SCRIP DIVIDEND The rationale for the scrip dividend is to afford shareholders the opportunity to increase their shareholding in RDI and to retain flexibility with regard to the Company s cash resources. 5. SHARE CAPITAL The share capital of the Company as at the last practicable date is as follows: m Share capital Authorised ordinary shares of 8 pence each Issued share capital ordinary shares of 8 pence each Share premium Total TAX IMPLICATIONS RDI s general guidance regarding the tax implications of the cash dividend and scrip dividend for shareholders, based on RDI s understanding of the law and practice as at the last practicable date, has been summarised below. Shareholders are nevertheless advised to consult their own independent professional tax adviser. RDI and its advisers cannot be held responsible for the tax consequences of the cash dividend or scrip dividend for any particular shareholder. Introduction RDI converted to a UK-REIT on 4 December The Company may distribute dividends to shareholders either in the form of a property income distribution ( PID ) or as an ordinary dividend ( non-pid ). One of the requirements of the UK-REIT regime is that the principal company of a group REIT (being here the Company) must, in respect of each accounting period, distribute to shareholders at least 90 per cent of the UK profits (as defined in section 530(2) of the Corporation Tax Act 2010) from the Group s property rental business in the form of PIDs. New RDI shares received in lieu of a cash dividend under the scrip dividend may be paid as a PID, a non-pid or a mixture of the two. Where a dividend is to be paid under the scrip dividend as a PID, it will be paid net of withholding tax unless one of the exceptions set out in paragraph below applies. The Company will indicate whether the dividend will be paid as a PID, non-pid or mixture of the two along with the scrip reference price as a separate announcement to this circular to be published on RNS and SENS on Tuesday, 29 May

12 6.1 UK taxation UK taxation of PIDs The statements made in this paragraph relate only to certain limited aspects of the UK taxation treatment of PIDs paid by the Company in the form of new RDI shares Amount received Shareholders who receive new RDI shares in PID form pursuant to a scrip dividend election will be regarded as having received a PID equal to the cash equivalent of the new RDI shares. Where withholding tax applies to a particular shareholder, a reduced number of new RDI shares will be issued to reflect this withholding tax and the cash equivalent will fall to be determined by grossing up the value of that reduced number of new RDI shares at the scrip dividend reference price by reference to the withholding tax rate, currently 20 per cent Individuals UK resident shareholders are taxed on PIDs as property letting income separate from any other property letting business. The gross amount of the PID is subject to tax with a credit for withholding tax deducted from the payment (see further below). HMRC tax returns contain a separate box and explanatory notes to enable individual tax payers to declare amounts received in the form of PIDs. Subject to limited exceptions, RDI is required to withhold tax at source from its PIDs at the UK basic rate of income tax, currently 20 per cent. Because of the withholding tax, a UK resident individual taxable at the basic rate will have no further tax to pay. By contrast, a UK resident individual taxable at the higher rate of 40 per cent (or the additional rate of 45 per cent) will have a further 20 per cent (25 per cent if an additional rate tax payer) to pay. An individual, who does not pay tax, perhaps because of personal allowances, may reclaim the tax withheld in their tax return. The 1,000 property income allowance (section 783BITTOIA 2005) will not apply to PIDs. A shareholder who is an individual resident (for tax purposes) in the UK and who receives new RDI shares in PID form pursuant to a scrip dividend election will be treated as having acquired those new RDI shares for an amount equal to the cash equivalent for CGT purposes Corporate shareholders (other than pension funds and charities) Subject to certain exceptions, a PID will generally be treated in the hands of shareholders who are within the charge to corporation tax as profit of a UK property business (as defined in Part 4 of the Corporation Tax Act 2009). A PID is, together with any PIDs from any other UK-REIT, treated as a separate UK property business from any other UK property business (a different UK property business ) carried on by the relevant shareholder. This means that any surplus expenses from a shareholder s different UK property business cannot be off-set against a PID as part of a single calculation of the shareholder s UK property business profits. The rate of UK corporation tax on such profits is currently 19 per cent Registered pension schemes and charities A registered pension scheme, or charity, resident (for tax purposes) in the UK should generally have no liability to UK tax in respect of a PID Withholding tax on PIDs The Company will generally be required to withhold tax at source at the basic rate (currently 20 per cent) from its PIDs. This is the case whether PIDs are paid in cash or in the form of new RDI shares pursuant to the scrip dividend Exceptions to requirement to withhold tax on PIDs Under the UK-REIT rules, certain categories of shareholder are entitled to receive PIDs without withholding tax. Shareholders qualifying for gross payment are principally: UK resident companies UK public bodies UK charities UK pension funds Managers of ISAs, PEPs and Child Trust Funds. UK shareholders who qualify for gross payment are required to complete the relevant exemption declaration form included on RDI s website. 10

13 6.1.2 UK taxation of non-pids The statements made in this paragraph relate only to certain limited aspects of the UK taxation treatment of non-pids paid by the Company in the form of new RDI shares Individuals From 6 April 2018 individuals who are resident in the UK (for tax purposes) will be given a 2,000 dividend tax allowance (the Allowance ). Dividend income received in excess of the Allowance will be taxed at 7.5 per cent for basic rate tax payers, 32.5 per cent for higher rate tax payers and 38.1 per cent for additional rate tax payers. In determining the relevant tax band for non-pid dividends, the total non-pid dividends for the tax year (including the part within the Allowance) will be treated as the highest part of the individual s total income for income tax purposes. A shareholder who is an individual resident (for tax purposes) in the UK and who receives new RDI shares in non-pid form pursuant to a scrip dividend election will be treated as having acquired those new RDI shares for an amount equal to the cash equivalent for capital gains tax purposes Corporate shareholders (other than pension funds and charities) To the extent that a company which is resident (for tax purposes) in the UK receives new RDI shares in non-pid form pursuant to the scrip dividend election, the issue of the new RDI shares should be treated as a bonus issue for which there is no acquisition cost. Consequently, the calculation of any chargeable gain or allowable loss on a future disposal of, or of part of, that company s enlarged holding should fall to be made by reference to the base cost of the original holding only. Corporate shareholders should therefore note that there will be no addition to the base cost of the increased shareholding and, in particular, no addition to the base cost representing the cash equivalent Registered pension schemes and charities Generally, a registered pension scheme, or charity, resident (for tax purposes) in the UK which receives a non-pid will not be subject to tax on receipt of the non-pid. Registered pension schemes, or charities, resident (for tax purposes) in the UK should not generally be subject to UK taxation on any chargeable gain arising on a subsequent disposal of their new RDI shares Withholding tax on non-pid Under current UK tax law, the Company will not be required to withhold tax at source from non-pids. This is the case whether the non-pid is paid in the form of new RDI shares or not Stamp duty and stamp duty reserve tax No stamp duty or stamp duty reserve tax will generally be payable on the issue of new RDI shares pursuant to the scrip dividend. 6.2 South African taxation Taxation of cash PIDs The statements made in this section relate only to certain limited aspects of the South African taxation treatment of cash PIDs paid by the Company. Furthermore, the statements made in this section apply only to cash PIDs paid in relation to shares in the Company which are listed on the JSE. A 20 per cent UK withholding tax will be deducted from cash PIDs. On application by the shareholder, assuming that the shareholder is the beneficial owner of the dividend and is a South African resident for the purposes of the SA-UK double tax agreement, a 5 per cent rebate is claimable from HMRC, resulting in an effective UK withholding tax rate of 15 per cent. 11

14 As the Company is a foreign company for South African tax purposes, the tax treatment of cash PIDs is dependent on whether the payment is a foreign dividend for South African tax purposes. A foreign dividend is broadly any cash amount payable by a foreign company where such amount is treated as a dividend payment by the Company under the income tax laws of the country where the Company has its place of effective management. The payment of cash PIDs are treated for UK tax purposes as the payment of dividends by the Company, and so they should be regarded as foreign dividends for South African tax purposes. Dividends tax The dividends tax, which was introduced with effect from 1 April 2012 by Part VIII of Chapter II of the Income Tax Act (Act 58 of 1962) (the Income Tax Act ), as amended from time to time, only applies to dividends and foreign dividends (the application to foreign dividends is limited to foreign dividends in respect of shares listed on the JSE). Dividends tax will therefore apply to cash PIDs payable by the Company, unless the dividend is exempt from dividends tax. The standard rate of South African dividends tax is 20 per cent. Assuming that the shareholder is a resident in SA and has the right, in terms of the double tax agreement between SA and the UK, to claim the five per cent rebate from HMRC in respect of UK withholding tax, dividends tax at a reduced rate of five per cent should be withheld as a result of the application of section 64N of the Income Tax Act which reduces the dividends tax by the 15 per cent UK withholding tax for which the shareholder is liable. Where the shareholder is resident in the UK and has no right, in terms of the double tax agreement between SA and the UK, to claim the five per cent rebate from HMRC in respect of the UK withholding tax, no additional dividends tax should be withheld as a result of the application of section 64N of the Income Tax Act which reduces the dividends tax by the 20 per cent UK tax for which the shareholder is liable (assuming that the shareholder is liable for UK tax on the dividend at the rate of at least 20 per cent). Cash dividends paid to South African resident companies should be exempt from the dividends tax, subject to certain administrative requirements Individuals Cash PIDs will be treated in the hands of SA shareholders who are individuals as exempt from income tax under section 10B(2) of the Income Tax Act as being a foreign dividend from a share listed on the JSE. There are no CGT consequences resulting from receiving cash PIDs Corporate shareholders Cash PIDs will be treated in the hands of SA shareholders who are corporates as exempt from income tax under section 10B(2) of the Income Tax Act as being a foreign dividend from a share listed on the JSE. There are no CGT consequences resulting from receiving cash PIDs Trusts Cash PIDs will be treated in the hands of SA shareholders who are trusts as exempt from income tax under section 10B(2) of the Income Tax Act as being a foreign dividend from a share listed on the JSE. There are no CGT consequences resulting from receiving cash PIDs Retirement funds and approved public benefit organisations Retirement funds, comprising approved pension funds, provident funds and retirement annuity funds and approved public benefit organisations are generally exempt from income tax. Thus, no South African tax will be payable by such shareholders on cash PIDs received by them. There are no CGT consequences resulting from receiving cash PIDs. 12

15 6.2.2 Taxation of cash non-pids The statements made in this section relate only to certain limited aspects of the South African taxation treatment of cash non- PIDs paid by the Company. Furthermore, the statements made in this section apply only to cash non-pids in relation to shares in the Company which are listed on the JSE. Dividends tax Dividends tax is levied at a rate of 20 per cent on any cash foreign dividend paid by a foreign company in respect of a share listed on the JSE. The payment of cash non-pids is treated for UK tax purposes as the payment of dividends by the Company, and so they should be regarded as foreign dividends for South African tax purposes. South African dividends tax will therefore apply to cash non-pids paid by the Company. Unless a shareholder is exempt from dividends tax (see below), the relevant regulated intermediary will therefore be required to deduct 20 per cent dividends tax and pay this to the South African Revenue Service ( SARS ) on the shareholders behalf. To the extent that no withholding or income tax is suffered on the cash non-pid in the UK, no rebate against the dividends tax can be claimed in terms of section 64N of the Income Tax Act Individuals Cash non-pids will be treated as exempt from income tax in the hands of individual SA shareholders under section 10B(2) of the Income Tax Act as being a foreign dividend from a share listed on the JSE. Individuals generally do not qualify for any exemption or reduction in the rate of the dividends tax. There are no CGT consequences resulting from receiving cash non-pids Corporate shareholders Cash non-pids will be treated as exempt from income tax in the hands of corporate SA shareholders under section 10B(2) of the Income Tax Act as being a foreign dividend from a share listed on the JSE. Certain shareholders (such as South African tax resident companies) are exempt from the dividends tax. It is however the responsibility of each shareholder to advise the relevant regulated intermediary of an exemption or reduced rate that applies to it. There are no CGT consequences resulting from receiving cash non-pids Trusts Cash non-pids will be treated as exempt from income tax in the hands of trust SA shareholders under section 10B(2) of the Income Tax Act as being a foreign dividend from a share listed on the JSE. Trusts generally do not qualify for any exemption or reduction in the rate of the dividends tax. There are no CGT consequences resulting from receiving cash dividends Retirement funds and approved public benefit organisations Cash non-pids will be treated as exempt from income tax in the hands of retirement fund and approved public benefit organisation SA shareholders as a result of their general exemption from income tax or under section 10B(2) of the Income Tax Act as being a foreign dividend from a share listed on the JSE. These institutions will also be exempt from the dividends tax. It is however the responsibility of each shareholder to advise the relevant regulated intermediary of an exemption or reduced rate that applies to it. There are no CGT consequences resulting from receiving cash non-pids. 13

16 6.2.3 Taxation of new RDI shares in respect of PIDs The statements made in this section relate only to certain limited aspects of the South African taxation treatment of the receipt of new RDI shares issued by the Company in respect of PIDs. Furthermore, the statements made in this section apply on to PIDs in relation to shares in the Company which are listed on the JSE. As stated above, a 20 per cent UK withholding tax will have been deducted in calculating the number of new RDI shares issued in respect of PIDs. On application by the shareholder, assuming that the shareholder is the beneficial owner of the dividend and is South African resident for purposes of the South African UK double tax agreement, a five per cent cash rebate is claimable from HMRC, resulting in an effective UK withholding tax rate of 15 per cent. Dividends tax South African dividends tax does not apply to that part of any dividend satisfied by the issue of new RDI shares Individuals It is considered that new RDI shares issued in respect of PIDs should not be treated as forming part of gross income and therefore should not give rise to income tax in the hands of SA shareholders who are individuals. If the shareholder holds the scrip shares for share dealing purposes, the proceeds upon their eventual disposal may be subject to income tax as revenue gains. The new RDI shares received by a South African tax resident shareholder from the Company will have no capital gains base cost, meaning that the value of the shares received may be subject to capital gains tax on their eventual sale Corporate shareholders It is considered that new RDI shares issued in respect of PIDs should not be treated as forming part of gross income and therefore should not give rise to income tax in the hands of SA shareholders who are corporates. If the shareholder holds the scrip shares for share dealing purposes, the proceeds upon their eventual disposal may be subject to income tax as revenue gains. The new RDI shares received by a South African tax resident shareholder from the Company will have no capital gains tax base cost, meaning that the value of the shares received may be subject to capital gains tax on their eventual sale Trusts It is considered that new RDI shares issued in respect of PIDs should not be treated as forming part of gross income and therefore should not give rise to income tax in the hands of SA shareholders who are trusts. If the shareholder holds the scrip shares for share dealing purposes, the proceeds upon their eventual disposal may be subject to income tax as revenue gains. The new RDI shares received by a South African tax resident shareholder from the Company will have no capital gains tax base cost, meaning that the value of the shares received may be subject to capital gains tax on their eventual sale Retirement funds and approved public benefit organisations Retirement funds, including approved pension funds, provident funds and retirement annuity funds and approved public benefit organisations are generally exempt from income tax and capital gains tax. Thus, the receipt of and subsequent sale of new RDI shares will be exempt from tax in the hands of retirement funds and approved public benefit organisations Taxation of new RDI shares in respect of non-pids The statements made in this section relate only to certain limited aspects of the South African taxation treatment of the receipt of new RDI shares issued by the Company in respect of non-pids. Furthermore, the statements made in this section apply only to non-pids in relation to shares in the Company which are listed on the JSE. Dividends tax South African dividends tax does not apply to that part of any dividend satisfied by the issue of new RDI shares. 14