PSG/PGFP - PSG Group Limited/ PSG Financial Services Limited - Announcement
regarding the introduction of dividends tax
PSG Group Limited
(Incorporated in the Republic of South Africa)
Registration number: 1970/008484/06
JSE share code: PSG
ISIN number: ZAE000013017
PSG Financial Services Limited
(Incorporated in the Republic of South Africa)
Registration number: 1919/000478/06
JSE share code: PGFP
ISIN number: ZAE000096079
("PSG" or "the Company")
Shareholders in PSG's cumulative, non-redeemable, non-participating preference
shares ("PSG Preference Shares") are referred to the PSG Preference Share Terms.
In terms of the aforesaid, the Company, inter alia, undertook to adjust the
Dividend Rate in the event that an amendment to the Income Tax Act resulted in
both a cost saving to the Company and the Preference Dividends being taxable in
the hands of the PSG Preference Shareholders.
It has been announced that from the date that Part VIII of Chapter II of the
Income Tax Act becomes effective ("the Dividends Tax Circumstances"), dividends
paid to shareholders will no longer be taxed in the Company's hands, but will
from such date be taxed in the hands of PSG Preference Shareholders. As set out
above and in the spirit of such undertaking, PSG has therefore resolved to pass
any such tax saving on to the PSG Preference Shareholders on the basis and
subject to the terms set out below.
The Dividend Rate as a percentage of the Prime Rate ("Prime") will therefore be
increased in accordance with the following formula:
NDR = A/(1 - B)
NDR = the new Dividend Rate applicable to the PSG Preference Shares following
the occurrence of the Dividends Tax Circumstances;
A = the Dividend Rate prevailing immediately prior to the occurrence of the
Dividends Tax Circumstances;
B = the rate of Dividends Tax, it being recorded that as at the date of this
Resolution, it is anticipated that Dividends Tax will be levied at 10% (ten
Practical example:
If the Dividends Tax Circumstances were to become effective today and the
aforesaid formula be applied, the prevailing Dividend Rate of 75% of Prime
equating to 6.75% (Prime is currently 9%) would be increased to 83.33% of Prime
equating to 7.5%.
Notwithstanding the aforesaid, should the Company in future, for whatsoever
reason, no longer enjoy the aforesaid tax saving, the Dividend Rate may be
reduced accordingly.
25 January 2012
PSG Capital
Date: 25/01/2012 16:30:01 Produced by the JSE SENS Department.
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