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FSR / FSPP / FSRP - FirstRand - Apportionment of cost for taxation purposes in respect of the unbundling FirstRand Limited (Incorporated in the Republic of South Africa) (Registration number: 1966/010753/06) JSE Ordinary Share Code: FSR JSE ISIN: ZAE000066304 JSE "B" Preference Share Code: FSRP JSE ISIN: ZAE000060141 JSE "B1" Preference Share Code: FSPP JSE ISIN: ZAE000070900 NSX Ordinary Share Code: FST ("FirstRand") Apportionment of cost for taxation purposes in respect of the unbundling by FirstRand of its 53.4% ordinary shareholding in Discovery Holdings Limited. Introduction FirstRand ordinary shareholders ("FirstRand shareholders") are referred to the circular dated 22 October 2007 ("circular") regarding, inter alia, the unbundling by FirstRand of its 53.4% ordinary shareholding in Discovery Holdings Limited ("Discovery") to FirstRand shareholders ("unbundling"). 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"), 316,356,694 Discovery ordinary shares ("Discovery shares") to FirstRand shareholders recorded as such in the shareholders register of FirstRand on 23 November 2007 ("record date") such that each FirstRand shareholder received 0.0561343 Discovery shares for every FirstRand ordinary share ("FirstRand share") held on the record date. As detailed in annexure 5 to the circular, FirstRand shareholders will have a combined expenditure ("combined expenditure")in respect of the Discovery shares received pursuant to the unbundling ("unbundled Discovery shares") and their FirstRand shares in respect of which the unbundled Discovery shares were received ("retained FirstRand shares"). The combined expenditure will be equal to the original expenditure incurred in respect of their 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 trading account, and paragraph 20 of the Eighth Schedule to the Income Tax Act for retained FirstRand shares held on capital account. 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 Discovery shares and the retained FirstRand shares. The apportionment ratio The ratio of the respective market values of the unbundled Discovery shares and the retained FirstRand shares on the JSE as at close of trade on Tuesday, 27 November 2007 was 6.50% relating to the unbundled Discovery shares and 93.50% relating to the retained FirstRand shares ("apportionment ratio"). The apportionment ratio is to be used to apportion the combined expenditure between the unbundled Discovery 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 Discovery 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 Discovery shares and the retained FirstRand shares. Finally, in determining the base cost for the unbundled Discovery 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 Discovery shares on the dates on which the retained FirstRand shares were originally acquired. Should a FirstRand shareholder have any queries regarding the taxation consequences of the unbundling and the calculation of its cost for taxation purposes, it is advisable to consult a tax advisor in this regard. 28 November 2007 Johannesburg Merchant bank and sponsor to FirstRand RAND MERCHANT BANK (a division of FirstRand Bank Limited) Independent sponsor to FirstRand Deutsche Securities (SA) (Proprietary) Limited Legal advisor to FirstRand Webber Wentzel Bowens Date: 28/11/2007 12:38:46 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
