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celebrating 20 years Notice of annual general meeting Aspen Pharmacare Holdings Limited

Incorporated in the Republic of South Africa
Registration number 1985/002935/06
(“Company”)
JSE share code: APN ISIN code: ZAE 000066692

A. NOTICE OF MEETING

Notice is hereby given that the 20th annual general meeting (“meeting”) of the shareholders of the Company will be held at Aspen Place, 9 Rydall Vale Park, Douglas Saunders Drive, La Lucia Ridge, Durban, South Africa, on Thursday, 6 December 2018 at 10:00.

B. ATTENDANCE AND PARTICIPATION AT THE MEETING

General

The date on which a person must be registered as a shareholder in the register of the Company for purposes of being entitled to attend and participate in, and speak and vote at, the meeting is Friday, 30 November 2018 (“Record Date”). Accordingly, the last day to trade in order to be registered in the register of members of the Company and therefore be eligible to participate in and vote at the annual general meeting is Tuesday, 27 November 2018.

Certificated shareholders and dematerialised shareholders with "own-name registration"

If you hold certificated shares or hold dematerialised shares with "own-name registration" (i.e. you specifically instructed your Central Securities Depository Participant (“CSDP”) to hold your shares in your own name on the Company’s sub-register):

  • you may attend the meeting in person; or
  • you may appoint a proxy to participate in, and speak and vote at, the meeting on your behalf by completing the attached form of proxy and delivering it to the Company’s transfer secretaries. Shareholders are requested, but are not obliged, to submit their completed forms of proxy to the Company’s transfer secretaries before 10:00 on Monday, 3 December 2018. The purpose of this request is to provide certainty to the Chairman of the meeting regarding the number of participants. Accordingly, shareholders will not be prejudiced in any manner if they do not deliver their completed forms of proxy to the Company’s transfer secretaries by the aforementioned time and date, and will still be able to deliver their completed forms of proxy to the Chairman of the meeting C/o the Company Secretary & Group Governance Officer at Aspen Place, 9 Rydall Vale Park, Douglas Saunders Drive, La Lucia Ridge, Durban, South Africa, at any time prior to the commencement of the meeting (although this could delay the commencement of the meeting).

A proxy need not be a shareholder of the Company.

Dematerialised shareholders other than those with "own-name registration"

If you hold dematerialised shares other than with "own-name registration", you may:

  • instruct your CSDP or broker to vote at the meeting on your behalf by providing your CSDP or broker with your voting instructions in terms of the custody agreement entered into between you and your CSDP or broker. You must not complete the attached form of proxy; or
  • attend the meeting in person by instructing your CSDP or broker to issue you with the necessary letter of representation to attend the meeting in terms of the custody agreement entered into between you and your CSDP or broker.

Identification

Section 63(1) of the Act provides that all meeting participants must provide reasonably satisfactory identification to the Chairman of the meeting, who must be satisfied that the right of that person to participate in, and speak and vote at, the meeting as a shareholder, as a proxy for a shareholder or as a representative of a shareholder, has been verified.

Electronic participation

Shareholders or their proxies or representatives may participate in (but not vote at) the meeting by way of telephone conference call, and if they wish to do so:

  • must contact the Company Secretary & Group Governance Officer (by email at the address rverster@aspenpharma.com) by no later than 10:00 on Friday, 30 November 2018 in order to obtain a pin number and dial-in details for the conference call;
  • will be required to provide reasonably satisfactory identification; and
  • will be billed separately by their own telephone service providers for their telephone call to participate in the meeting.

Shareholders and their proxies or their representatives will not be able to vote telephonically at the meeting and will still need to appoint a proxy or representative to vote on their behalf at the meeting.

Voting

Voting on each resolution at the meeting will be conducted by way of polling. This means that any person who is present at the meeting, whether as a shareholder or as a proxy for a shareholder, has the number of votes determined in accordance with the voting rights associated with the shares held by that shareholder.

C. PURPOSE OF THE MEETING

The purpose of the meeting is to:

  • present the audited Annual Financial Statements of the Company and the Group for the year ended 30 June 2018 (including the Directors’ report and the Audit & Risk Committee report);
  • present and note the report of the Social & Ethics Committee, which is available from the Company’s website www.aspenpharma.com;
  • note the retirement of, and vote on the re-election of certain directors of the Company;
  • vote on the approval of the appointment of an independent external auditor for the year ending 30 June 2019;
  • vote on the appointment of the members of the Audit & Risk Committee;
  • place unissued shares under the control of the directors;
  • vote on the approval of a general but restricted authority to issue shares for cash;
  • endorse, by way of a non-binding advisory vote, the remuneration policy;
  • endorse, by way of a non-binding advisory vote, the remuneration implementation report;
  • authorisation of an executive director to sign necessary documents;
  • vote on the approval of non-executive director remuneration;
  • vote on financial assistance to a related or inter-related company;
  • vote on the approval of a general authority to repurchase shares; and
  • consider and, if deemed fit, pass, with or without modification, the ordinary and special resolutions set out hereunder in the manner required by the Act.

D. INTERPRETATION

In this notice of meeting (including the form of proxy attached hereto), the term:

  • “Act” – means the Companies Act, No 71 of 2008 (as amended from time to time);
  • “Annual Financial Statements” – means the Audited Annual Financial Statements of the Company and the Group for the year ended 30 June 2018;
  • “Group” – means the Company and any and all subsidiaries of the Company and, if appropriate, references to “the Group” will include each member of the Group;
  • “Integrated Report” – means the Integrated Report of the Company for the year ended 30 June 2018, which was posted to shareholders during November 2018 along with this notice of meeting;
  • “King IV” – means the King Code of Governance Principles and the King Report on Governance™ for South Africa, 2016;
  • “Listings Requirements” – means the Listings Requirements of the JSE Limited (“JSE”), as amended from time to time;
  • “Regulations” – means the regulations promulgated under section 223 of the Act;
  • “SENS” – means the Stock Exchange News Service operated by the JSE Limited; and
  • “subsidiary/ies” – will bear the meaning assigned to this term in section 3 of the Act.

ORDINARY BUSINESS

ORDINARY RESOLUTION NUMBER 1 – presentation and adoption of Annual Financial Statements

Resolution

To receive and adopt the Annual Financial Statements, including the Directors’ report and the Audit & Risk Committee report (included by reference), of the Company and the Group for the year ended 30 June 2018.

Additional information and threshold for approval

In order for this ordinary resolution to be adopted, the support of a majority of the votes cast by the shareholders present or represented by proxy at the meeting and entitled to vote on this ordinary resolution is required.

A hard copy of the Annual Financial Statements may be obtained from the registered office of the Company or from the Company Secretary & Group Governance Officer (by email at the address rverster@aspenpharma.com). An electronic copy of these statements may be obtained from the Company’s website: www.aspenpharma.com.

ORDINARY RESOLUTION NUMBER 2 – presentation and noting of the Social & Ethics Committee report

Resolution

To receive and note the Social & Ethics Committee report of the Company and the Group for the year ended 30 June 2018.

Additional information and threshold for approval

In order for this ordinary resolution to be adopted, the support of a majority of the votes cast by the shareholders present or represented by proxy at the meeting and entitled to vote on this ordinary resolution is required.

A hard copy of the Social & Ethics Committee report may be obtained from the registered office of the Company or from the Company Secretary & Group Governance Officer (by email at the address rverster@aspenpharma.com). An electronic copy of this report may be obtained from the Company’s website www.aspenpharma.com.

ORDINARY RESOLUTION NUMBER 3 – re-election of directors

Resolution

To elect or re-elect the following directors, who are either retiring by rotation in terms of the Memorandum of Incorporation of the Company or who have been appointed by the Board since the Company’s previous annual general meeting, all of whom are eligible and offer themselves for re-election:

3.1 Roy Andersen;

3.2 Linda de Beer;

3.3 Chris Mortimer;

3.4 David Redfern; and

3.5 Sindi Zilwa.

Additional information and threshold for approval

Abbreviated biographical details of the directors are set out in the Board of Directors section in the Integrated Report and on the Company’s website www.aspenpharma.com.

Each of the ordinary resolutions above will be considered by way of a separate vote and, in order for each ordinary resolution to be adopted, the support of a majority of the votes cast by the shareholders present or represented by proxy at the meeting and entitled to vote on each such ordinary resolution is required.

ORDINARY RESOLUTION NUMBER 4 – reappointment of independent external auditors

Resolution

To reappoint the auditors, PricewaterhouseCoopers Inc., as the independent registered auditors of the Company and the Group, upon the recommendation of the Audit & Risk Committee, and to note that Craig West will be the individual registered auditor who will undertake the audit for the financial year ending 30 June 2019.

Threshold for approval

In order for this ordinary resolution to be adopted, the support of a majority of the votes cast by the shareholders present or represented by proxy at the meeting and entitled to vote on this ordinary resolution is required.

ORDINARY RESOLUTION NUMBER 5 – election of Audit & Risk Committee members

Resolution

To elect the following independent non-executive directors as members of the Audit & Risk Committee of the Company for the financial year ending 30 June 2019:

5.1 Roy Andersen;

5.2 Linda de Beer;

5.3 Babalwa Ngonyama; and

5.4 Sindi Zilwa.

Additional information and threshold for approval

Abbreviated biographical details of the directors are set out in the Board of Directors section in the Integrated Report and on the Company’s website www.aspenpharma.com.

Each of the ordinary resolutions above will be considered by way of a separate vote and, in order for each ordinary resolution to be adopted, the support of a majority of the votes cast by the shareholders present or represented by proxy at the meeting and entitled to vote on each such ordinary resolution is required.

ORDINARY RESOLUTION NUMBER 6 – place unissued shares under the control of directors

Resolution

To place the ordinary shares in the authorised but unissued share capital of the Company at the disposal and under the control of the directors, subject to a maximum amount of 22 822 577 ordinary shares, which represents the equivalent of approximately 5% of the ordinary shares in issue as at 30 June 2018, being 456451541 ordinary shares, excluding treasury shares, until the next annual general meeting of the Company, who are hereby authorised and empowered, subject to the provisions of the Act and the Listings Requirements, to allot, issue and otherwise dispose of such shares to such person/s on such terms and conditions and at such time/s as the directors may from time to time in their discretion deem fit; provided that this resolution shall not authorise the directors to effect an issue of shares for cash as contemplated in the Listings Requirements.

Threshold for approval

In order for this ordinary resolution to be adopted, the support of a majority of the votes cast by the shareholders present or represented by proxy at the meeting and entitled to vote on this ordinary resolution is required.

ORDINARY RESOLUTION NUMBER 7 – general but restricted authority to issue shares for cash

Resolution

To authorise the directors, by way of a general authority and subject to the provisions of the Act and the Listings Requirements, to issue ordinary shares for cash as and when suitable situations arise, subject to the following limitations:

  • the authority contained in this ordinary resolution is valid until the Company’s next annual general meeting or for a period of 15 months from the date of passing of this ordinary resolution, whichever period is shorter;
  • the directors may only issue ordinary shares pursuant to this ordinary resolution to public shareholders, as defined in paragraphs 4.25 to 4.27 of the Listings Requirements, and not to related parties;
  • the number of ordinary shares that are the subject of any general issues for cash cannot exceed, in the aggregate in any one financial year of the Company, 5% of the ordinary issued share capital as at 30 June 2018, being 456 451 541 ordinary shares, excluding treasury shares. Based on this limitation, the directors cannot issue more than 22 822 577 ordinary shares pursuant to the authority granted in this ordinary resolution;
  • the maximum discount at which any ordinary shares may be issued pursuant to the authority in this ordinary resolution is 10% of the weighted average traded price of the ordinary shares measured over the 30 business days prior to the date that the price of the issue is agreed between the Company and the person subscribing for the ordinary shares; and
  • an announcement must be published, at the time of an issue representing, on a cumulative basis within one year, 5% or more of the number of ordinary shares in issue prior to such issue, giving full details of the issue, including (i) the number of ordinary shares issued; (ii) the average discount to the weighted average traded price of the ordinary shares over the 30 business days prior to the date that the price of the issue is agreed between the Company and the person subscribing for the ordinary shares; and (iii) the intended use of the funds arising from the subscription.

Threshold for approval

In order for this ordinary resolution to be adopted, the support of at least 75% of the votes cast by the shareholders present or represented by proxy at the meeting and entitled to vote on this ordinary resolution is required.

ORDINARY RESOLUTION NUMBER 8 – authorisation for an executive director to sign necessary documents

Resolution

To authorise any of the executive directors of the Company to sign all such documents and instruments and to do all such things as may be necessary for or incidental to the implementation of the resolutions adopted at the meeting.

Threshold for approval

In order for this ordinary resolution to be adopted, the support of a majority of the votes cast by the shareholders present or represented by proxy at the meeting and entitled to vote on this ordinary resolution is required.

NON-BINDING ADVISORY RESOLUTION

NON-BINDING ADVISORY RESOLUTION NUMBER 1 – remuneration policy

Resolution

To endorse, by way of a non-binding advisory vote, the remuneration policy of the Company and the Group, as set out in the Remuneration & Nomination Committee report of the Integrated Report.

Threshold for approval

In order for this non-binding ordinary resolution to be adopted, the support of a majority of votes cast by the shareholders present or represented by proxy at the meeting and entitled to vote on this resolution is required. Ordinary resolution number 8 is of an advisory nature only and failure to pass this resolution will therefore not have any legal consequences relating to existing arrangements. Policy provisions have been adopted to ensure that, in instances where the remuneration policy is voted against by 25% or more of voting rights exercised, appropriate measures be taken to constructively engage dissenting shareholders in order to address legitimate and reasonable objections and concerns raised or to clarify and adjust remuneration governance or processes. The nature and outcomes of these engagements will be reported on in our Integrated Report of the following financial year.

NON-BINDING ADVISORY RESOLUTION NUMBER 2 – remuneration implementation report

Resolution

To endorse, by way of a non-binding advisory vote, the remuneration implementation report of the Company and the Group, as set out in the Remuneration & Nomination Committee report of the Integrated Report.

Threshold for approval

In order for this non-binding ordinary resolution to be adopted, the support of a majority of votes cast by the shareholders present or represented by proxy at the meeting and entitled to vote on this resolution is required. Ordinary resolution number 9 is of an advisory nature only and failure to pass this resolution will therefore not have any legal consequences relating to existing arrangements. Policy provisions have been adopted to ensure that, in instances where the implementation report is voted against by 25% or more of voting rights exercised, appropriate measures be taken to constructively engage dissenting shareholders in order to address legitimate and reasonable objections and concerns raised or to clarify and adjust remuneration governance or processes. The nature and outcomes of these engagements will be reported on in our Integrated Report of the following financial year.

SPECIAL BUSINESS

SPECIAL RESOLUTION NUMBER 1 – remuneration of non-executive directors

Resolution

To approve the remuneration of non-executive directors with effect from 1 July 2018, on the basis set out below:

    Year to 30 June 2019 Year to 30 June 2018  
    Proposed
base fee
R
Proposed fee  
per meeting#
R  
Current
base fee
R
Current fee
per meeting
R
Base fee
percentage
increase
1.1 Board          
  (a) Chairman* 1 164 397 n/a  1 098 488 n/a 6%
  (b) Board member 168 175 31 641  158 656 29 850 6%
1.2 Audit & Risk Committee          
  (a) Chairman 211 003 38 945  199 060 36 741 6%
  (b) Committee member 107 317 19 170  101 243 18 085 6%
1.3 Remuneration & Nomination Committee          
  (a) Chairman 80 189 19 200  75 650 18 113 6%
  (b) Committee member 40 659 9 411  38 357 8 879 6%
1.4 Social & Ethics Committee          
  (a) Chairman 86 509 28 001  81 613 26 416 6%
  (b) Committee member 43 183 14 858  40 739 14 017 6%

* The Chairman of the Board does not receive any additional fees for his role as Chairman or for his attendance of committee meetings.
# Unscheduled meetings are remunerated at an hourly rate.
The fees detailed above are excluding VAT.

Additional information and threshold for approval

This special resolution will be considered by way of a separate vote on the remuneration of each category of non-executive directors (as specified in each line item of the table above) and, in order for each special resolution to be adopted, the support of at least 75% of the votes cast by the shareholders present or represented by proxy at the meeting and entitled to vote on this special resolution is required. Five scheduled Board meetings, five scheduled Audit & Risk Committee meetings, three scheduled Remuneration & Nomination Committee meetings and four scheduled Social & Ethics Committee meetings are to be held in the 2019 financial year. Unscheduled meetings of the Board and its committees may be held as required from time to time.

SPECIAL RESOLUTION NUMBER 2 – financial assistance to related or inter-related company

Resolution

To authorise the Company or any of its subsidiaries, in terms of and subject to the requirements of section 45 of the Act, at any time and from time to time during the period of two years commencing on the date of adoption of this special resolution, to provide direct or indirect financial assistance by way of loan, guarantee, the provision of security or otherwise to any companies or corporations that are related or inter-related to the Company (as contemplated in the Act).

Additional information and threshold for approval

In order for this special resolution to be adopted, the support of at least 75% of the votes cast by the shareholders present or represented by proxy at the meeting and entitled to vote on this special resolution is required.

As it is difficult to foresee the exact details of financial assistance that the Company and/or its subsidiaries may be required to provide over the next two years. It is essential, however, that the Company is able to organise effectively its internal financial administration and funding arrangements. For these reasons, and because it would be impractical and difficult to obtain shareholder approval each time the Company and/or its subsidiaries wish/es to provide financial assistance as contemplated above, it is necessary to obtain the approval of shareholders, as set out in this special resolution. This special resolution does not authorise the provision of financial assistance to a director or a prescribed officer of the Company, or to a director, prescribed officer or member of a related or inter-related company or any company or person related to any such director, prescribed officer, member, or company, as the Company does not provide such financial assistance and is solely intended to facilitate funding arrangements throughout the Group.

The Board shall, before authorising the provision of any financial assistance contemplated in this special resolution, comply with the requirements set out in section 45 of the Act relating to, inter alia, solvency and liquidity.

SPECIAL RESOLUTION NUMBER 3 – general authority to repurchase shares

Resolution

To authorise the directors, by way of a general authority, to facilitate an acquisition by the Company or any of its subsidiaries, from time to time, of the Company’s ordinary issued share capital in terms of the Act and the Listings Requirements, provided that (i) the Company shall not, in the aggregate in any one financial year acquire more than 20% of its ordinary issued share capital, and (ii) a subsidiary may not hold more than 10% of the Company’s issued share capital. Such general approval shall be valid until the earlier of the date of the next annual general meeting of the Company or the date that is 15 months from the date of the adoption of this special resolution.

Additional information and threshold for approval

It is recorded that the Listings Requirements currently require, inter alia, that the Company may make a general repurchase of its securities only if:

  • the repurchase of shares is effected through the order book operated by the JSE’s trading system and done without any prior understanding or arrangement between the Company and the counterparty (reported trades are prohibited);
  • acquisitions in the aggregate, in any one financial year, may not exceed 20% of the Company’s issued share capital as at the date of adoption of this special resolution;
  • repurchases are not made at a price more than 10% above the weighted average of the market value for the securities for the five business days immediately preceding the date of the repurchase;
  • an announcement containing full details of each share repurchase is published in accordance with the Listings Requirements as soon as the Company or Group has acquired shares constituting, on a cumulative basis, 3% of the number of the ordinary shares in issue at the time the authority is granted and for each subsequent 3% repurchase thereafter;
  • at any point in time, the Company may only appoint one agent to effect any repurchases on the Company’s behalf;
  • there is a resolution by the Board of Directors that resolved that it authorised the repurchase, that the Company passed the solvency and liquidity test, and that since the test was done there have been no material changes to the financial position of the Group; and
  • the Company and/or its subsidiaries do not repurchase any shares during a prohibited period (as defined by the Listings Requirements), unless a repurchase programme is in place that has been submitted to the JSE in writing prior to the commencement of the prohibited period. The Company must instruct an independent, uninfluenced third party, which makes its investment decisions in relation to the Company’s shares to execute the repurchase programme submitted to the JSE prior to the commencement of the prohibited period.

The directors have no specific intention, at present, for the Company or Group to repurchase any of the Company’s shares, but should the authority be granted at the meeting, it will provide the Board of Directors with the flexibility to repurchase such shares as and when the best interests of the Company require it to do so.

Additional information required to be disclosed in connection with this special resolution in terms of the Listings Requirements is contained under section E of this notice of meeting.

In order for this special resolution to be adopted, the support of at least 75% of the votes cast by the shareholders present or represented by proxy at the meeting and entitled to vote on this special resolution is required.

E. ADDITIONAL DISCLOSURE REQUIRED IN TERMS OF THE LISTINGS REQUIREMENTS RELATING TO SPECIAL RESOLUTION NUMBER 3

Solvency and liquidity statement

The directors of the Company, after considering the effect of the repurchase of the maximum number of the Company’s shares in terms of the general authority to be provided in terms of special resolution number 3, are satisfied that for a period of 12 months after the date of this notice of meeting:

  • the Company and the Group will be able in the ordinary course of business to pay their debts;
  • the assets of the Company and the Group, recognised and measured in accordance with the accounting policies used in the latest audited Group Annual Financial Statements, will be in excess of the liabilities of the Company and the Group, recognised and measured in the same way as the assets;
  • the share capital and reserves of the Company and the Group will be adequate for ordinary business purposes; and
  • the working capital of the Company and the Group will be adequate for ordinary business purposes.

The Company undertakes to advise its sponsor before embarking on a general repurchase or capital distribution.

Additional information

The following additional information is provided in terms of the Listings Requirements for purposes of the general authority to repurchase the Company’s shares, as applicable:

  • information relating to the major shareholders of the Company can be found on pages 146 and 147 of the Integrated Report; and
  • information relating to the share capital of the Company can be found in note 11 of the Group Annual Financial Statements.

Directors’ responsibility statement

The directors, whose names appear on pages 100 to 103 of the Integrated Report, collectively and individually accept full responsibility for the accuracy of the information pertaining to special resolution number 3 and certify that, to the best of their knowledge and belief, there are no facts that have been omitted that would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that special resolution number 3 contains all information required by the Listings Requirements.

Material changes

Other than the facts and developments reported on in the Integrated Report and Annual Financial Statements, there have been no material changes in the affairs or financial position of the Company and the other members of the Group since the date of signature of the audit report and up to the date of this notice of meeting.

By order of the Board

Riaan Verster
Company Secretary & Group Governance Officer
Johannesburg

26 October 2018