AMSTERDAM–(BUSINESS WIRE)–Prosus N.V. (Prosus) (AEX and JSE: PRX) The annual general meeting (AGM) of Prosus N.V. was held today.

Shareholders are advised that all resolutions set out in the notice of the AGM were passed by the requisite majority of shareholders represented at the annual general meeting and adopted. We note that the issued share capital of Prosus was at record date as follows:

Class of share

Nominal value

per share

Number of votes

per share

Issued

share capital

Authorised

share capital

Ordinary Share N (N shares)

EUR0.05

1

2 003 817 745

5 000 000 000

Ordinary Share A1 (A shares)

EUR0.05

1

4 456 650

10 000 000

Ordinary Share B (B shares)

EUR0.05

1

1 128 507 756

3 000 000 000

22 088 457 ordinary shares N are currently held in treasury by the Company. Therefore, the number of ordinary shares that could have been voted at the meeting: 3 136 782 151. The total number of ordinary shares represented at the meeting was: 2 935 818 027 which is 93.59% of the total issued share capital.

Details of voting results:

NO.

AGENDA ITEM

VOTES

FOR

%

VOTES

AGAINST

%

VOTES

ABSTAIN

VOTES

TOTAL

% of ISSUED SHARE CAPITAL VOTED

2

To approve the directors’ remuneration report

2 537 178 365

86,48%

396 668 781

13,52%

1 970 628

2 935 817 774

93,59%

3

To adopt the annual accounts for the financial year ending 31 March 2022

2 933 569 821

99,97%

877 403

0,03%

1 370 550

2 935 817 774

93,59%

4

To make a distribution in relation to the financial year ending 31 March 2022

2 929 811 030

99,82%

5 258 044

0,18%

748 700

2 935 817 774

93,59%

5

To discharge executive directors from liability

2 863 523 496

97,62%

69 939 238

2,38%

2 355 040

2 935 817 774

93,59%

6

To discharge non-executive directors from liability

2 863 371 631

97,61%

70 091 184

2,39%

2 354 959

2 935 817 774

93,59%

7

To adopt the remuneration policy of the executive and non-executive directors

2 576 403 131

87,89%

354 832 457

12,11%

4 582 186

2 935 817 774

93,59%

8

To appoint S Dubey as a non-executive director

2 930 580 066

99,86%

4 211 604

0,14%

1 026 104

2 935 817 774

93,59%

9.1

To reappoint JP Bekker as a non-executive director

2 809 152 176

95,76%

124 411 355

4,24%

2 254 243

2 935 817 774

93,59%

9.2

To reappoint D Meyer as a non-executive director

2 905 479 065

99,01%

29 136 298

0,99%

1 202 411

2 935 817 774

93,59%

9.3

To reappoint SJZ Pacak as a non-executive director

2 895 136 241

98,65%

39 478 137

1,35%

1 203 396

2 935 817 774

93,59%

9.4

To reappoint JDT Stofberg as a non-executive director

2 907 221 205

99,07%

27 393 741

0,93%

1 202 828

2 935 817 774

93,59%

10

To reappoint Deloitte Accountants B.V. as the auditor for the financial year ending 31 March 2024

2 929 446 793

99,80%

5 800 813

0,20%

570 168

2 935 817 774

93,59%

11

To designate the Board of Directors as the company body to issue shares

2 791 288 253

95,12%

143 120 395

4,88%

1 409 126

2 935 817 774

93,59%

12

To authorise the board to resolve that the company acquires shares in its own capital

2 739 354 112

93,33%

195 762 360

6,67%

701 302

2 935 817 774

93,59%

13

To reduce the share capital by cancelling own shares

2 929 313 905

99,80%

5 921 474

0,20%

582 395

2 935 817 774

93,59%

Summary of statements from the annual general meeting:

A different, digital world

The group is playing an important role in delivering the benefits, safety and convenience of technological advances to some 2bn customers in an increasingly digital world. At the same time, we are focused on being a sustainable business, one that again proved its resilience in the face of global challenges and uncertainties.

Discount to net asset value

To increase net asset value per share, this year we initiated an open ended repurchase programme of Naspers and Prosus shares. This builds on earlier actions like the approved share exchange that better balanced Naspers and Prosus on their respective stock exchanges last year and repurchasing US$10bn in shares over the past two years. The current repurchase programme will be funded by an orderly, on-market sale of Tencent shares held by the group. Tencent is supportive of the withdrawal by Prosus of its voluntary restriction on the sale of its Tencent Shares.. We believe this will generate significant value for our shareholders over a sustained period. In addition, our management team has been incentivised to reduce this discount for the long-term value creation of the group.

Delivering our strategy

Essentially, our strategy is to build valuable businesses that solve everyday problems for customers. We do this globally by backing innovative local entrepreneurs, but deploying a disciplined approach to capital allocation. We typically grow our capital commitments progressively as we learn and scale, intrinsically linked to future returns.

Today, across our core segments of ecommerce, food, payments and fintech, etail and, most recently edtech, our impact is significant. Our entrepreneurs and teams improve the daily lives of billions of customers. We enable people to buy and sell safely online, easily order food delivered quickly to their homes. We enable participation in the digital economy and access to important financial services otherwise unavailable to people. We enable customers to educate themselves without visiting a classroom. And we help to satisfy a basic human need, the ability to connect and interact with others that is so important in the digital age.

A year of progress

Despite a turbulent operating environment, FY22 was a period of progress for the group. Like many technology companies, we faced significant macroeconomic and geopolitical headwinds, resulting in highly volatile capital markets. The combination of the war in Ukraine, higher inflation and rising interest rates drove up the cost of capital and increased uncertainty. Valuations of global peers in tech and internet sectors declined sharply in recent months as the level of risk appetite reduced significantly. These forces drove the first decline in the group’s net asset value in many years. To navigate these turbulent times, we are prioritising capital on supporting our existing businesses and prudent balance-sheet management to sustain adequate financial liquidity.

Group revenues grew 24% to US$37bn, driven by ecommerce which grew revenues 56%. Group trading profit was down 10% to US$5bn. Core headline earnings, our measure of after-tax operating performance, was down 40% to US$2.1bn, reflecting our sale of a 2% interest in Tencent and its lower contribution after greater losses from its associates. Our ecommerce businesses were resilient, growing revenues 53% in the second half and significantly outperforming global peers in many cases. The food-delivery segment’s performance remained strong while growth momentum continued globally in payments and fintech. In this segment, we increased our scale in India, one of the fastest-growing consumer internet markets and closing the BillDesk acquisition will create further opportunity to expand into credit and digital banking. In edtech, we made substantial progress in expanding the portfolio by acquiring market leaders in our focus areas. Our etail segment maintained revenues but recorded a small loss as it invests in growth opportunities.

We ended the year with a strong and liquid balance sheet reflecting US$9.7bn in cash and cash equivalents, 2.5 times the prior-year level. We invested US$6.3bn to increase our stakes in existing investments and new assets with substantial opportunity for future value creation, particularly in our food-delivery and edtech segments. We will continue to invest organically to build on our strong progress in specific segments: autos in classifieds, convenience in food delivery and India credit in payments and fintech.

We raised US$9.25bn in additional capital last year. We also continued to crystallise returns and pay back capital to shareholders. In total, we have allocated US$50bn in capital over the past six years: some 57% of that being invested into the business and new growth opportunities, around 25% returned to shareholders in the form of share repurchases and dividends, and the balance held in cash.

Russia’s invasion of Ukraine has deeply impacted our classifieds business in the ecommerce segment. We are appalled by the war in Ukraine and we continue to do all we can for our Ukrainian employees and the country’s people. In March 2022, we began separating the Russian classifieds business Avito from our OLX Group, and announced in May that we would exit this business and are identifying an appropriate buyer for our shares in Avito. We have also written down the full carrying value of our VK asset, the Russian online platform.

Our role in society

One of our three strategic priorities is to be a force for good for our stakeholders. Around the world, sustainability is central to our growth and strategy.

At the same time, there is growing interest from shareholders, regulators and other stakeholders in how seriously we honour our responsibilities as a global technology group.

We have a strong heritage of acting responsibly. But much of this good work has been implicit. We believe it is now essential that we do business with the stated goal of being a positive force for the world around us.

To illustrate, our Ventures arm is increasing its focus on sustainable investment themes, such as agriculture technology or agtech and healthtech. During the year, we invested in several agtech companies applying sustainable digital solutions by using soil biology analytics and artificial intelligence tools to determine the most sustainable solutions for crops, while addressing specific climate and social-inclusion challenges. These priorities are consistent with our support for circular-economy innovations to mitigate and reduce environmental footprints.

More tangibly, being a force for good translates into employment. An independent research study on iFood’s food-delivery operations in Brazil found that the company created about 730 000 jobs (formal and informal), or 0.72% of the employed population in 2020, as part of its value chain. In addition, the study noted that iFood drivers receive an hourly wage comparable to being employed in the formal sector.

Being a force for good applies equally in crisis situations. The appalling war in Ukraine is foremost a human tragedy. Ahead of the invasion, our OLX business prepared for a worsening situation, setting up accommodation for our teams and their families in the west of the country, advancing wages, and instituting regular contact with everyone. When the invasion began, we offered relocation to safer areas in the country and outside Ukraine. In addition, we are contributing US$10m to assist humanitarian aid efforts in Ukraine. Our Ukrainian and Polish employees are involved in selecting suitable registered and established charities to receive this support. At the onset of the war, we also made a US$350 000 donation to the international committee of the Red Cross.

Aligning remuneration to performance and value creation

Our group operates in highly competitive, fast-changing markets, many characterised by the shortage of key skills. Our remuneration structures therefore focus on attracting, motivating and retaining the best people to create sustainable shareholder value.

Our strategic approach to human resources and remuneration better enables us to compete for the digital talent at the heart of our businesses. Our remuneration aims are simple: promote superior performance; focus employees on achieving key business goals; and realise effective returns on employee spend. Equality and consistency are embedded in group pay practices as we build our diverse and inclusive workplaces. Our pay practices around the world are fair, competitive and above minimum-wage standards.

Importantly, we continue to engage with shareholders on remunerations topics. This feedback is constructive in continually improving the transparency of both our disclosure and reward structures.

In the review period, several factors contributed to widening the discount in our trading value relative to a sum-of-the-parts valuation to its highest level. While we still focus a material portion of executive directors’ incentives on non-Tencent portions of the group over the long run, we believe there is a critical benefit to reducing this discount.

Accordingly, for FY23, we proposed materially increasing the CEO and CFO’s short-term variable compensation exposure to narrowing the discount. At the same time, we have materially reduced the balance of annual compensation to emphasise the importance of this discount-focused incentive and align remuneration with shareholder expectations.

In addition, given our strong belief that reducing the discount is fundamental to maximising shareholder returns, the committee did not award long-term incentives for FY23.

In line with our commitment to greater transparency, we again improved disclosure on executive remuneration by detailing short-term incentive goals and achievements for FY22. We believe that revealing details of STI targets to our competitors before the end of the financial year is not in the best interests of our shareholders so, from FY23, we will disclose these targets retrospectively.

Distributions to shareholders

The distributions proposed by the company’s board of directors (“the board”) has been approved by the shareholders. On this basis, holders of ordinary shares N are entitled to a gross payment, in the form of a capital repayment, of 14 euro cents per share, holders of ordinary shares A1 will receive an amount per share equal to the outcome of the formula set forth in article 30.4 of the articles of association, being 1.118 euro cents per ordinary share A1, and holders of ordinary shares B will receive a dividend distribution of 0.000014 euro cents per share for the year ended 31 March 2022.

Holders of ordinary shares N as at Friday, 2 September 2022 (the dividend record date) who do not wish to receive a capital repayment can elect to receive a dividend instead. A choice for one option implies an opt-out of the other option. Elections to receive a dividend instead of a capital repayment will need to be made by holders of ordinary shares N by Monday, 19 September 2022. Capital repayments and dividends will be payable to shareholders recorded in the books on the dividend record date and paid on or after Tuesday, 27 September 2022.

Dividends and capital repayments are declared and paid in euros. For those holders holding their ordinary shares N in South Africa via Strate will receive a gross distribution of 236.28080 Rand cents per ordinary share N. South Africa holders of ordinary shares A1 will receive a gross dividend of 18.86871 Rand cents per ordinary share A1. Holders of ordinary shares B will receive a dividend distribution of 0.00024 Rand cents per ordinary B share. This is based on an EUR/ZAR exchange rate of 16.8772 as at 24 August 2022.

Generally, shareholders holding their ordinary shares N on the South African register positively electing to receive a dividend will receive a net distribution of at least 153.58252 Rand cents per ordinary share N. A maximum amount of 82.69828 Rand cents will be withheld (being 15% Dutch dividend withholding tax plus 20% SA dividend tax). This 15% Dutch dividend withholding tax may be reduced if shareholders provide evidence via the ABN AMRO platform that they are entitled to tax treaty benefits. The amount of additional South African dividend tax payable will be calculated by deducting from the 20% South African dividend tax otherwise due, a rebate equal to the Dutch dividend withholding tax paid in respect of the dividend (without any right of recovery). Those shareholders, unless exempt from paying dividend tax or entitled to a reduced withholding tax rate in terms of an applicable tax treaty, will thus be subject to a maximum of 20% total dividend tax which equals 47.25616 Rand cents.

Holders of Prosus American Depositary Receipts which trade on an over-the-counter basis in the United States will receive a dividend.

Salient dates:

Wednesday, 24 August 2022

Annual general meeting (including resolution to approve the dividend/capital payment)

Results of annual general meeting and currency conversion announcement (i.e. ZAR equivalent of Prosus distribution determined for JSE holders)

Wednesday, 24 August 2022

Dividend/capital payment finalisation date

Tuesday, 30 August 2022

Last date to trade on the JSE in order to appear in the shareholder register and participate in the dividend/capital repayment

Wednesday, 31 August 2022

Ex-dividend/capital repayment date for JSE. Last date to trade on the Euronext Amsterdam in order to appear in the shareholder register and participate in the dividend/capital repayment.

Thursday, 1 September 2022

Ex-dividend/capital repayment date for Euronext Amsterdam

Friday, 2 September 2022

Record date to appear in the shareholder register and participate in the dividend/capital repayment

Monday, 5 September 2022 – Monday, 19 September 2022

Dividend/capital repayment election period

Tuesday, 27 September 2022

Dividend/capital repayment date

Tuesday, 18 October 2022

Final date for intermediaries to upload Dutch DWT reclaims

Due to the differing ex-dividend dates between the JSE and Euronext Amsterdam, transfers of N ordinary shares between the JSE and the Euronext Amsterdam between Tuesday, 30 August 2022, and Friday, 2 September 2022, both dates inclusive, will not be permitted.

In addition to the Dutch dividend withholding tax at a rate of up to 15%, dividends paid in respect of ordinary N shares on the South African register will also be subject to South African dividend tax at a rate of up to 20% in relation to shareholders not entitled to an exemption from South African dividend tax. The amount of additional South African dividend tax payable may be subject to a rebate for Dutch dividend withholding tax paid in respect of such dividend without any recovery by any person so that the aggregate dividend tax would in those cases add up to a maximum of 20%.

South African corporates who own 5% or more of the shares in Prosus may qualify for a Dutch domestic exemption from Dutch dividend withholding tax.

The treaty between South Africa and the Netherlands notes that the Dutch dividend withholding tax may get reduced from 15% to 10%. This reduction applies equally to corporates holding less than 10% of the capital of Prosus, individuals and other persons who qualify as residents of South Africa for treaty purposes. If shareholders, or their tax advisors, conclude that they are entitled to benefits arising from the tax treaty, such shareholders should follow the process prescribed by the tax treaty to claim relief.

Those shareholders who qualify for relief or a reduction have until 18 October 2022 to provide evidence to ABN AMRO that their dividend qualifies for relief or a reduction from Dutch dividend withholding tax.

Please note that no Dutch dividend withholding tax will be withheld on repayments of share capital. There will also be no South African dividend tax on repayments of share capital.

Tax Implications

1. Dutch Tax Implications

1.1. General

Capital repayments will be paid from share capital. No Dutch dividend withholding tax (“DWT”) will be withheld on the amounts of capital repayments paid to shareholders.

Where a shareholder elects to receive a dividend, generally, 15% DWT will be withheld by Prosus on the cash dividend, leaving a distribution amount per share net of this 15% Dutch DWT, unless:

1.1.1. a shareholder qualifies for an exemption from or a reduction of Dutch DWT on the basis of Dutch domestic law (including implementation of EU Directives) and/or a tax treaty concluded by the Netherlands; and

1.1.2. the formal requirements to apply such exemption from or reduction of Dutch DWT are satisfied (insofar applicable).

Prosus will initially withhold 15% on ALL cash dividends distributed on Tuesday, 27 September 2022. As a subsequent step, if and to the extent Prosus has been provided before 18 October 2022 with proof that a shareholder qualifies for an exemption from or a reduction of Dutch DWT on the basis of Dutch domestic law, the difference between 15% and the Dutch DWT to be withheld will be paid out to the shareholder, after the Dutch DWT return and/or Dutch DWT notification has been filed by Prosus with the Dutch tax authorities. Prosus will remit the Dutch DWT to be withheld to the Dutch tax authorities based on the Dutch DWT return.

1.2. Domestic exemptions from Dutch DWT

1.2.1. General

Corporate shareholders may be exempt from Dutch DWT in terms of Dutch domestic law, if:

1.2.1.1. The shareholder is tax resident in the Netherlands and owns 5% or more of the share capital of Prosus, provided that the further requirements for the application of the Dutch participation exemption are met. Special rules may apply for corporate shareholders that are considered tax transparent in their country of residence, or considered tax transparent from a Dutch tax perspective; or

1.2.1.2. A shareholder is considered tax resident within the EU or EEA or is a tax resident of a country with which the Netherlands has concluded a tax treaty containing an article on taxation of dividends (such as South Africa), and, as a general rule, this corporate shareholder is the beneficial owner of the dividends distributed by Prosus and owns 5% or more of the share capital of Prosus. In addition to the shareholding requirement, the shareholder is also required to meet certain other conditions relating to the application of the Dutch participation exemption, determined as if the corporate shareholder is a Dutch tax resident.

The above exemptions are not available in cases of abuse, for which a main purposes test and artificial arrangement test applies.

If a shareholder is eligible for an exemption or reduction from Dutch DWT, in order to place reliance on such exemption or reduction, the shareholder is required to submit certain information to ABN AMRO as set-out below.

1.2.2. Dutch corporate shareholders owning 5% or more of Prosus’ share capital

In order to rely on this domestic exemption from Dutch DWT described in paragraph 1.2.1.1 above, the shareholder should provide ABN AMRO via its own intermediary bank with: (i) its name, address and place of residency, and corresponding extract from the Dutch Chamber of Commerce; (ii) the number and percentage of shares owned in Prosus; (iii) its bank account details; and (iv) a statement confirming that the Dutch participation exemption applies to the dividend at the level of the Dutch corporate shareholder. This information should be submitted before Tuesday, 18 October 2022.

As indicated above, Prosus will, as a general rule, initially withhold 15% on ALL dividends distributed on Tuesday, 27 September 2022. If, however, Prosus has been provided with proof, to its satisfaction, ultimately before 18 October 2022, that the relevant shareholder qualifies for an exemption from Dutch DWT, no amount of DWT will be withheld, and the 15% DWT that otherwise would have been withheld will be paid out by Prosus to the relevant shareholder directly, after the DWT return has been filed by Prosus with the Dutch tax authorities.

1.2.3. EU/EEA or tax treaty country resident corporate shareholders owning 5% or more

In order for a corporate shareholder to rely on the domestic exemption from Dutch DWT described in in paragraph 1.2.1.2 above, the shareholder should provide ABN AMRO via its own intermediary bank with: (i) its name, address and place of residency; (ii) the number and percentage of shares owned in Prosus; (iii) a tax residency certificate issued by its country of residence; (iv) its bank account details; and (v) a statement confirming that all relevant conditions of the DWT exemption are met.

Contacts

Enquiries

Investor Enquiries
Eoin Ryan, Head of Investor Relations

+1 347-210-4305

Media Enquiries
Shamiela Letsoalo, Media Relations Director

+ 27 78 802 6310

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