PGFP PSG
 
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")
 
ANNOUNCEMENT REGARDING THE INTRODUCTION OF DIVIDENDS TAX
 
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)
 
Where:
 
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
 
percent).
 
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.
 
Stellenbosch
 
25 January 2012
 
Sponsor
 
PSG Capital
 
Date: 25/01/2012 16:30:01 Produced by the JSE SENS Department.
 
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