FSR - FirstRand Limited - Apportionment of cost for taxation and/or capital

FSR - FirstRand Limited - Apportionment of cost for taxation and/or capital     
gains tax purposes in respect of the unbundling by Firstrand of its 59.3%       
ordinary shareholding in MMI Holdings Limited                                   
FirstRand Limited                                                               
(Incorporated in the Republic of South Africa)                                  
(Registration number 1966/010753/06)                                            
Share code: FSR                                                                 
ISIN: ZAE000066304                                                              
("FirstRand")                                                                   
APPORTIONMENT OF COST FOR TAXATION AND/OR CAPITAL GAINS TAX PURPOSES IN RESPECT 
OF THE UNBUNDLING BY FIRSTRAND OF ITS 59.3% ORDINARY SHAREHOLDING IN MMI        
HOLDINGS LIMITED                                                                
1.   Introduction                                                               
FirstRand Holdings Limited ("FirstRand") ordinary shareholders ("FirstRand      
shareholders") are referred to the circular dated 6 September 2010 regarding the
unbundling by FirstRand of its 59.3% ordinary shareholding in MMI Holdings      
Limited ("MMI Holdings") to FirstRand shareholders (the "circular").            
On 13 December 2010, FirstRand unbundled and distributed, in compliance with    
section 90 of the Companies Act, 1973 and in terms of section 46 of the Income  
Tax Act, 1962 ("Income Tax Act"), 951 496 294 MMI Holdings ordinary shares ("MMI
Holdings shares") to FirstRand shareholders recorded as such in the shareholders
register of FirstRand on 10 December 2010 ("record date") such that each        
FirstRand shareholder received 16.8766 MMI Holdings shares for every 100        
FirstRand shares held on the record date (the "Unbundling").                    
As detailed in annexure 5 to the circular, FirstRand shareholders will have a   
combined expenditure ("combined expenditure") in respect of their FirstRand     
shares ("retained FirstRand shares") and the MMI Holdings shares received       
pursuant to the unbundling ("unbundled MMI Holdings shares").  For retained     
FirstRand shares held on trading account, the combined expenditure will be equal
to the original expenditure incurred in respect of such retained FirstRand      
shares, as contemplated in section 11(a), section 22(1) or section 22(2) of the 
Income Tax Act.  For retained FirstRand shares held on capital account, the     
combined expenditure will be equal to the original expenditure incurred in      
respect of such retained FirstRand shares, as contemplated in paragraph 20 of   
the Eighth Schedule to the Income Tax Act.                                      
The purpose of this announcement is to notify FirstRand shareholders of the     
apportionment ratio to be applied to the combined expenditure in determining the
portion of the combined expenditure to be allocated to the unbundled MMI        
Holdings shares and the retained FirstRand shares.                              
2.   The apportionment ratio                                                    
The ratio of the respective market values of a retained FirstRand share held    
after the Unbundling and an unbundled MMI Holdings share on the JSE as at close 
of trade on Tuesday, 14 December 2010 was 86.94708% relating to a retained      
FirstRand share held after the Unbundling and 13.05292% relating to an unbundled
MMI Holdings share ("apportionment ratio").                                     
The apportionment ratio is to be used to apportion the combined expenditure     
between the unbundled MMI Holdings shares and the retained FirstRand shares for 
the determination of profits and losses, of a capital or trading nature, to be  
derived on any future disposals of the unbundled MMI Holdings shares and/or the 
retained FirstRand shares.  Similarly, the apportionment ratio is also to be    
used to apportion the capital gains tax valuation (where applicable) of the     
retained FirstRand shares, as contemplated in paragraph 29 of the Eighth        
Schedule to the Income Tax Act, between the unbundled MMI Holdings shares and   
the retained FirstRand shares.                                                  
Finally, in determining the base cost for the unbundled MMI Holdings shares and 
the retained FirstRand shares for capital gains tax purposes, FirstRand         
shareholders are deemed to have acquired both the retained FirstRand shares and 
the unbundled MMI Holdings shares on the dates on which the retained FirstRand  
shares were originally acquired.                                                
FirstRand shareholders are advised to consult their own tax advisors should they
have any queries regarding the taxation consequences of the Unbundling and the  
calculation of their costs for taxation purposes.                               
15 December 2010                                                                
Merchant bank and sponsor to FirstRand                                          
RAND MERCHANT BANK (A division of FirstRand Bank Limited)                       
Legal advisors to FirstRand                                                     
Webber Wentzel                                                                  
Sponsor in Namibia to FirstRand                                                 
Simonis Storm Securities (Pty) Limited                                          
Date: 15/12/2010 11:08:03 Supplied by www.sharenet.co.za                     
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