GEN - Apportionment of cost for taxation and/or capital gains tax in respect of the unbundling of shares in AF Group Alexander Forbes Preference Share Investments Limited (Incorporated in the Republic of South Africa) Registration number 2006/031561/06 Share code: AFP ISIN: ZAE000188942 (“AF Pref” or “the Company”) APPORTIONMENT OF COST FOR TAXATION AND/OR CAPITAL GAINS TAX PURPOSES IN RESPECT OF THE UNBUNDLING BY AF PREF OF ITS 355,178,339 ORDINARY SHARES IN ALEXANDER FORBES GROUP HOLDINGS LIMITED 1. Introduction Holders of AF Pref preference shares ("preference shareholders") are referred to the circular dated 4 August 2014 and the finalisation announcement released on the Stock Exchange News Service (“SENS”) on 5 September 2014 regarding the unbundling by AF Pref of its 355,178,339 ordinary shares in Alexander Forbes Group Holdings Limited ("Alexander Forbes") to preference shareholders. On Monday, 22 September 2014, AF Pref unbundled and distributed, in compliance with section 112 of the Companies Act, 1973 and in terms of section 46 of the Income Tax Act, 1962 ("Income Tax Act"), 355,178,339 Alexander Forbes ordinary shares ("Alexander Forbes shares") to preference shareholders recorded as such in the shareholders register of AF Pref on Friday, 19 September 2014 ("record date") such that each preference shareholder received 1.09485 Alexander Forbes shares for every 1 (one) AF Pref preference share held on the record date (the "unbundling"). Preference shareholders will have a combined expenditure ("combined expenditure") in respect of their AF Pref preference shares (“preference shares”) and the Alexander Forbes shares received pursuant to the unbundling. For AF Pref preference shares held on trading account, the combined expenditure will be equal to the expenditure incurred in respect of such AF Pref preference shares, as contemplated in section 11(a), section 22(1) or section 22(2) of the Income Tax Act. For AF Pref preference shares held on capital account, the combined expenditure will be equal to the expenditure incurred in respect of such AF Pref preference shares, as contemplated in paragraph 20 of the Eighth Schedule to the Income Tax Act. The purpose of this announcement is to notify preference 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 Alexander Forbes shares and the AF Pref preference shares. 2. The apportionment ratio The ratio of the market value of an AF Pref preference share held after the unbundling (i.e. the redemption value of R0.07491 per AF Pref preference share) to the market value of the unbundled Alexander Forbes shares in respect of each AF Pref preference share on the JSE as at close of trade on Monday, 22 September 2014 was 0.80604% relating to an AF Pref preference share held after the unbundling and 99.19396% relating to the 1.09485 unbundled Alexander Forbes shares ("apportionment ratio"). The apportionment ratio is to be used to apportion the combined expenditure between the unbundled Alexander Forbes shares and the AF Pref preference shares for the determination of profits and losses, of a capital or trading nature, to be derived on any future disposals of the unbundled Alexander Forbes shares and the proceeds from the redemption of the AF Pref preference shares. Similarly, the apportionment ratio is also to be used to apportion the capital gains tax valuation (where applicable) of the AF Pref preference shares, as contemplated in paragraph 29 of the Eighth Schedule to the Income Tax Act, between the unbundled Alexander Forbes shares and the AF Pref preference shares. In determining the base cost for the unbundled Alexander Forbes shares and the AF Pref preference shares for capital gains tax purposes, preference shareholders are deemed to have acquired both the AF Pref preference shares and the unbundled Alexander Forbes shares on the dates on which the AF Pref preference shares were originally acquired. Preference 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. Johannesburg 23 September 2014 Financial adviser and sponsor to AF Pref Rand Merchant Bank (A division of FirstRand Bank Limited) Legal advisers to AF Pref Bowman Gilfillan Inc. Date: 23/09/2014 09:09:00 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.