PSG FINANCIAL SERVICES LIMITED - Change in Accounting Policy And Trading Statement Measure

Change in Accounting Policy And Trading Statement Measure

PSG FINANCIAL SERVICES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1919/000478/06)
JSE Limited share code: PGFP
ISIN code: ZAE000096079
LEI code: 378900E99AFDC02B0F23
(“PSG Financial Services” or “the Company”)

CHANGE IN ACCOUNTING POLICY AND TRADING STATEMENT MEASURE


INTRODUCTION

Holders of PSG Financial Services cumulative, non-redeemable, non-participating
preference shares (“preference share(s)” or “preference shareholders”) are advised that the
Company’s unaudited financial results for the six months ended 31 August 2020 will be
published on SENS before 08h00 on Thursday, 15 October 2020.

The Company is a wholly-owned subsidiary and the only directly-held asset of PSG Group
Limited (“PSG Group”). While it does not have a direct impact on preference shareholders
(and specifically the payment of preference share dividends), such preference shareholders
are, for the sake of transparency, referred to the PSG Group trading statement which was
released on SENS earlier today, 13 October 2020. The trading statement also includes
details of the PSG Group results presentation which will be made at 09h00 on Thursday, 15
October 2020.

The Company previously announced the declaration of its preference share dividend in
respect of the six months ended 31 August 2020, which was paid on Monday, 21 September
2020.

CHANGE IN ACCOUNTING POLICY

International Financial Reporting Standards (“IFRS”) require that an entity reassess whether
it is an Investment Entity if facts or circumstances indicate changes to one or more of the
elements making up the definition of an Investment Entity or the typical characteristics of an
Investment Entity.

For the reasons detailed in PSG Group’s abovementioned SENS announcement dated, 13
October 2020, PSG Financial Services also reassessed its Investment Entity status in terms
of IFRS and determined that it became an Investment Entity with effect from 1 March 2020.
The performance of its investment portfolio is accordingly measured with reference to the fair
value of each investment (i.e. sum-of-the-parts (“SOTP”) value) rather than the consolidated
profitability of PSG Financial Services (i.e. recurring earnings) with effect from 1 March 2020.
This is in line with PSG Financial Services’ objective of value creation through capital
appreciation, investment income or both.

Where an entity’s status changes to that of an Investment Entity, it no longer consolidates its
subsidiaries, but rather measures them at fair value through profit or loss. Such change in
accounting policy is applied prospectively, with no adjustment to prior year comparatives.
However, an Investment Entity continues to consolidate subsidiaries that provide services
related to the Investment Entity’s investment activities (i.e. those wholly-owned subsidiaries
comprising PSG Financial Services’ head office operations).
Pursuant to the aforementioned change in IFRS Investment Entity status, PSG Financial
Services’ interim financial statements for the six months ended 31 August 2020, prepared in
accordance with IFRS, will not be comparable to prior periods.

CHANGE IN TRADING STATEMENT MEASURE

Pursuant to the aforementioned change in Investment Entity status, PSG Financial Services
has determined the adoption of net asset value per share as trading statement measure to
be more relevant and will accordingly report thereon in future.

Stellenbosch
13 October 2020

Sponsor
PSG Capital

Joint independent sponsor
UBS South Africa

Date: 13-10-2020 07:15:00
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