PSG KONSULT LIMITED - Tax Matter

KST 201512110081A<BR>
Tax Matter<BR>
<BR>
PSG Konsult Limited<BR>
(Incorporated in the Republic of South Africa)<BR>
Registration Number: 1993/003941/06<BR>
JSE Share Code: KST<BR>
NSX Share Code: KFS<BR>
ISIN Code: ZAE000191417<BR>
(“PSG Konsult” or “the Company”)<BR>
<BR>
PSG KONSULT – TAX MATTER<BR>
<BR>
Shareholders are referred to PSG Konsult's unaudited interim results for the six months ended 31 August<BR>
2015, as announced on 7 October 2015, which contained a voluntary disclosure note regarding a<BR>
potential tax matter.<BR>
<BR>
Tax assessments received<BR>
<BR>
On 10 December 2015, the Company's wholly-owned subsidiary, PSG Life Limited (“PSG Life”), received<BR>
revised income tax assessments from the South African Revenue Service (“SARS”) in respect of the 2009<BR>
to 2014 tax periods. The dispute with SARS relates to certain investment instruments that were last<BR>
acquired by PSG Life in 2011. SARS has decided to classify and treat these investments on a basis that<BR>
contradicts the senior counsel and independent expert tax advice obtained by PSG Life prior to making<BR>
these investments and which has subsequently again been confirmed by independent senior counsel.<BR>
<BR>
PSG Konsult's position<BR>
<BR>
PSG Life will object to, dispute and contest the above-mentioned tax assessment, which includes an<BR>
alleged normal tax payment shortfall of R113 million plus interest of R86 million and understatement<BR>
penalties of R169 million, none of which PSG Life believes to be payable.<BR>
<BR>
The PSG Konsult board is satisfied that all known facts have been taken into account in the group's<BR>
current capital plan and that all eventualities can be funded out of current resources and financial<BR>
arrangements. The board does not expect this dispute to have a negative impact on the Company's<BR>
current dividend payout policy to shareholders.<BR>
<BR>
This dispute has no relevance to any monies entrusted by clients to the firm or to any contracts that<BR>
clients have with the firm. PSG Konsult also does not expect resolution of this tax matter to have any<BR>
material bearing on the delivery of its strategic plans.<BR>
<BR>
PSG Konsult recognises that such disputes usually take time to resolve and will keep shareholders<BR>
updated once there is greater clarity on the matter.<BR>
<BR>
Tyger Valley<BR>
11 December 2015<BR>
<BR>
JSE Sponsor: PSG Capital Proprietary Limited<BR>
NSX Sponsor: PSG Wealth Management (Namibia) Proprietary Limited, member of the Namibian Stock<BR>
Exchange<BR>
<BR>
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