FSR/FSRP/FST - FirstRand Limited - Changes to secondary tax on companies and the

FSR/FSRP/FST - FirstRand Limited - Changes to secondary tax on companies and the
introduction of dividend tax.                                                   
FirstRand Limited                                                               
(Incorporated in the Republic of South Africa)                                  
Registration number: 1966/010753/06                                             
JSE Share code:          FSR       ISIN: ZAE000066304                           
B Preference share code: FSRP      ISIN: ZAE000060141                           
NSX Share code:          FST                                                    
("FirstRand" or "the Company")                                                  
Certain entities within the FirstRand Group are authorised financial services   
and credit providers.                                                           
CHANGES TO SECONDARY TAX ON COMPANIES AND THE INTRODUCTION OF DIVIDEND TAX.     
AMENDMENTS, THAT WILL BE PROPOSED TO FIRSTRAND`S VARIABLE RATE, NON-CUMULATIVE, 
NON REDEEMABLE B PREFERENCE SHARES ("THE B PREFERENCE SHARES"), AND THE         
CUMULATIVE, REDEEMABLE PREFERENCE SHARES ISSUED BY SUBSIDIARIES OF FIRSTRAND    
("UNLISTED REDEEMABLE PREFERENCE SHARES")                                       
B Preference Shares                                                             
B Preference Shareholders are referred to the SENS announcements released by    
FirstRand on 27 February 2007 and 1 March 2007 ("the 2007 SENS Announcements")  
dealing with the proposed changes to secondary tax on companies ("STC") and the 
introduction of Dividend tax in terms of Part VIII of Chapter II of the Income  
Tax Act, 1962 ("Dividend Tax") and the manner in which these changes impact the 
B Preference Shareholders.  In the 2007 Sens announcements, FirstRand           
communicated the intention to gross-up the dividend on the B Preference Shares  
by the commensurate benefit that FirstRand would obtain as a result of such     
changes made to STC and/or Dividend Tax.                                        
The board of FirstRand has agreed to propose to shareholders that the "B"       
preference dividend for each of the "B" preference shares will be calculated in 
arrear with effect from the last Monday in August 2012 at a rate of 75,56%      
(currently 68%) of FirstRand Bank Limited`s minimum overdraft rate.             
The effect of the proposal, if approved by shareholders, is that the preference 
dividend that will be paid in August 2012, and in respect of the dividend       
periods thereafter, will be calculated at the revised rate.                     
The proposed gross-up is in terms of the preferences, rights, limitations and   
other terms associated with the "B" preference shares.                          
In order to amend the dividend rate as stated above, an amendment to the        
Company`s Memorandum of Incorporation will be proposed to shareholders at a     
general meeting planned to take place in May 2012.  The amendment will require  
the approval of the B Preference Shareholders at a separate class meeting, which
will follow the general meeting.  The amendment will also require the approval  
of the Bank Supervision Department of the SA Reserve Bank.                      
Notices of these meetings will be dispatched to shareholders in due course.     
Unlisted Redeemable Preference Shares                                           
FirstRand Bank Limited ("FirstRand Bank") and/or FirstRand Investment Holdings  
(Proprietary) Limited ("FRIHL"), both wholly owned subsidiaries of FirstRand,   
have issued Unlisted Redeemable Preference Shares.                              
As a result of the introduction of Dividend Tax, the FirstRand Bank and FRIHL   
boards have agreed to increase the dividend rate applicable to all classes of   
Unlisted Redeemable Preference Shares, by 11,11% in terms of the conditions     
attaching thereto and to achieve the objectives that we have set for the        
FirstRand "B" preference shareholders.                                          
This increase is limited to 11.11% notwithstanding that Dividend Tax has        
subsequently been introduced at a rate of 15% and does not extend to future     
amendments thereto, unless specifically provided for in the subscription        
agreements.                                                                     
Sandton                                                                         
15 March 2012                                                                   
Sponsor                                                                         
RAND MERCHANT BANK (A division of FirstRand Bank Limited)                       
Date: 15/03/2012 08:55:00 Supplied by www.sharenet.co.za                     
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