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Proposed Merger of Dannex Limited, Ayrton Drug Manufacturing Limited

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Proposed Merger of Dannex Limited, Ayrton Drug Manufacturing Limited Circular to Shareholders of Ayrton Drug Manufacturing Limited, Starwin Products Limited and Dannex Limited | 1 Proposed Merger of Dannex Limited, Ayrton Drug Manufacturing Limited and Starwin Products Limited Pursuant to a Scheme of Amalgamation (Under Sections 231 to 235 of the Ghana Companies Act, 1963 (Act 179), as amended) Financial Advisor Sponsoring Broker Legal Advisors Reporting Accountant Circular to Shareholders of Ayrton Drug Manufacturing Limited, Starwin Products Limited and Dannex Limited | 2 Contents ............................................................................................................................................................................ 1 IMPORTANT INFORMATION AND DISCLAIMERS ......................................................................................... 7 Introduction ....................................................................................................................................................... 7 Legal Basis for the Scheme of Amalgamation of Dannex, Ayrton and Starwin ......................................... 7 Declaration of Interest by Advisors ................................................................................................................ 8 Directors Responsibly Statement ................................................................................................................... 9 CORPORATE INFORMATION ON DANNEX LIMITED .................................................................................. 12 CORPORATE INFORMATION ON AYRTON DRUG MANUFACTURING LIMITED ..................................... 13 CORPORATE INFORMATION ON STARWIN PRODUCTS LIMITED ........................................................... 14 ADVISORS TO THE MERGER ........................................................................................................................ 15 DEFINITIONS ................................................................................................................................................... 16 SUMMARY ....................................................................................................................................................... 20 EXPECTED TIMETABLE OF PRINCIPAL EVENTS ....................................................................................... 24 Part 1: Letter from the Chairman of Ayrton and Starwin ............................................................................ 26 .......................................................................................................................................................................... 29 Part 2: Overview and Key Terms of the Merger ........................................................................................... 30 1. Introduction ................................................................................................................................................. 30 2. Legal structure of the Merger .................................................................................................................... 32 3. Key Terms and Conditions of the Merger ................................................................................................ 32 i. Consideration......................................................................................................................................................................... 32 ii. Valuation ....................................................................................................................................................................................... 33 ii. Issue of Shares ...................................................................................................................................................................... 51 iii. Conditions .............................................................................................................................................................................. 51 iv. Resolutions for Ayrton Shareholders’ Approval.................................................................................................................. 51 v. Resolutions for Starwin Shareholders’ Approval ................................................................................................................ 51 vi. Resolutions for Dannex Shareholders’ Approval ................................................................................................................ 52 vii. Share Capital .......................................................................................................................................................................... 52 viii. Other Authorisations ............................................................................................................................................................. 52 ix. Material Legal Proceedings ................................................................................................................................................... 52 x. Floatation Expenses of the Merger ....................................................................................................................................... 52 4. Boards’ Recommendation ......................................................................................................................... 53 Part 3: Overview of the Proposed Merger .................................................................................................... 53 1. Introduction ................................................................................................................................................. 53 2. Change of Name ......................................................................................................................................... 54 3. Listing on the Ghana Stock Exchange ..................................................................................................... 54 4. Benefits of the Merger ................................................................................................................................ 54 i. Growth potential .................................................................................................................................................................... 54 ii. Leading Market Position........................................................................................................................................................ 54 iii. Synergies, Increased Efficiency and Cost Savings ............................................................................................................. 54 iv. Investment appeal ................................................................................................................................................................. 54 5. Risk Factors ................................................................................................................................................ 55 i. Risks related to a failure to implement or delay in implementing the Scheme .................................................................. 55 ii. Risks related to the shares of the Merged Company........................................................................................................... 55 iii. Risks related to the operations of the Merged Company and the pharmaceutical industry ............................................. 55 iv. Price and foreign exchange risk ........................................................................................................................................... 55 v. Liquidity risk .......................................................................................................................................................................... 55 vi. Credit Risk .............................................................................................................................................................................. 55 vii. Competitor risk ...................................................................................................................................................................... 55 viii. Country Risk .......................................................................................................................................................................... 56 ix. Share Liquidity Risk .............................................................................................................................................................. 56 6. Corporate Governance of the Merged Company .................................................................................... 56 7. Date of Birth of Directors and other directorships held by them in respect of the merged entity .... 56 8. Selected Financial Information relating to Ayrton .................................................................................. 57 9. Selected Financial Information relating to Starwin ................................................................................. 58 10. Selected Financial Information relating to Dannex ........................................................................ 58 11. Shareholders ...................................................................................................................................... 59 Circular to Shareholders of Ayrton Drug Manufacturing Limited, Starwin Products Limited and Dannex Limited | 3 12. Ayrton and
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