| Wed 28 Nov 2007, 12:38 | | FSR / FSPP / FSRP - FirstRand - Apportionment of c |
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FSR FSRP FSPP
FSR
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 Produced by the JSE SENS Department.
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