A dividend is money that the board of directors of a company decides to pay to its shareholders. It’s how a company shares available profits with its shareholders. Dividends are typically paid once or twice a year but are not guaranteed. The Company’s board of directors determines the amount of the dividends based on the Company's performance and the availability of excess cash (i.e., cash not required by the Company to pay preference share dividends, taxes and expenses).

The Old Mutual Bula Tsela Retail Scheme (RF) Ltd (“RetailCo”) may make a dividend distribution in respect of its ordinary shares provided  (ii) the distribution is in line with section 46 of the Companies Act, 71 of 2008 (the Companies Act) and (ii) the RetailCo Board approves the distribution by resolution. In doing so, RetailCo has to ensure that it complies with its undertakings to OML (as holder of preference shares in RetailCo) under the preference share terms. Under the preference share terms, 15% of the dividend received from OML (net of amounts required to pay or provide for (i) tax liabilities and (ii) a reasonable estimate of operational expenses) can be distributed in respect of its ordinary shares.

The RetailCo Board therefore takes into account the preference share repayment due to OML, any tax liabilities payable and the operational expenses that needs to be accounted for in the next 12 months in determining whether or not the Board can declare an ordinary dividend and the amount of the ordinary dividend that can be declared.

It is 72 cents per share. Dividend withholding tax will be withheld where the beneficial owner is an individual, resulting in you receiving 57.6 cents per share.

Payment is to be made on or about 30 September 2024.

The number of Bula Tsela Ordinary Shares in issue does not have a 1:1 relationship to the number of Old Mutual shares held by Bula Tsela.

It will be paid into the bank account details of which have been provided by you.

In terms of the memorandum of incorporation of the Company, the Company must first use monies it receives to pay any taxes due and to provide for any expenses it incurs. The monies remaining thereafter are to be distributed as to 85% thereof to the preference shareholder (noting that the preference shareholder provided 85% of the funding required to acquire the Old Mutual shares), and the other 15% is distributed to the beneficial owners of ordinary shares.

The law prescribes that dividends declared by South African companies is subject to dividends withholding tax at a rate of 20%. Dividends withholding tax is accordingly required to be withheld (i.e., kept back) by the Company from the dividend declared, and is paid to SARS.

This year (2024) the dividend withholding tax is payable at a rate of 20% which equals 14.4 cents.

Old Mutual significantly assisted Bula Tsela to pay the price of the Old Mutual shares. Old Mutual provided 85% of the total funding required to acquire the Old Mutual shares. The funding raised by Bula Tsela from members of the public contributed only 15% (fifteen percent) of the total funding required. By providing funding, Old Mutual enabled Bula Tsela to acquire a number of the Old Mutual shares well in excess of that which it would have been able to acquire with just the money raised by it in cash from members of the public. The potential net benefits of these Old Mutual shares, including the dividends that may be received on the Old Mutual shares, and any increases in the value thereof that may occur, will benefit you as a beneficial owner of shares in Bula Tsela.

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