· 1 nvest financial holdings limited | integrated annual report 2020 group awards 2019...

NVest Financial Holdings Limited | INTEGRATED ANNUAL REPORT 20201

GroupAwards

2019 Morningstar Award- Best Fund House (Smaller Fund Range)- Best Moderate Allocation Fund (NFB Ci Managed Fund)

Old Mutual 2018/19- VIP Platinum Broker Award Eastern Cape

2019 Raging Bull Award- Best South African Multi-Asset Low Equity Fund (NFB Ci Stable Fund)

2019 Intellidex Top Private Banks & Wealth Managers Awards - Top Wealth Manager- Top Wealth Manager - People’s Choice- Top Wealth Manager Lump-sum Investors

SANTAM 2018/19 - Top Performing Broker in the East Coast Region


Group contacts

NVest SecuritiesEast London

T: 043 – 735 1270E: [email protected]: www.nvestsecurities.co.zaNFB House, 42 Beach Road, Nahoon, East London, 5241

NVest SecuritiesGauteng

T: 011 – 895 8000E: [email protected]: www.nvestsecurities.co.zaUnit 1101 Illovo Point, 68 Melville Road, Illovo, Sandton 2196

NVest PropertiesEast London

T: 043 – 735 2000E: [email protected] House, 42 Beach Road, Nahoon, East London, 5241

NFB Private Wealth Management East London

T: 043 – 735 2000E: [email protected]: www.nfb.co.zaNFB House, 42 Beach Road, Nahoon, East London, 5241

NFB Private Wealth Management Gauteng

T: 011 – 895 8000E: [email protected]: www.nfb.co.zaUnit 1101 Illovo Point, 68 Melville Road, Illovo, Sandton 2196

NFB Private Wealth Management Port Elizabeth

T: 041 – 582 3990E: [email protected]: www.nfb.co.za106 Park Drive, Building 2, 2nd Floor, Park Drive, Port Elizabeth, 6000

NFB Private Wealth Management Cape Town

T: 021 – 202 0001E: [email protected]: www.nfb.co.za15th Floor, Metropolitan Building, 7 Walter Sisulu Avenue, Cape Town, 8001

NFB Asset ManagementGauteng

T: 011 – 895 8000E: [email protected]: www.nfb.co.zaUnit 1101 Illovo Point, 68 Melville Road, Illovo, Sandton 2196

NFB InsuranceEast London

T: 043 – 735 2460E: [email protected]: www.nfb.co.za51 Beach Road, Nahoon, East London, 5241

Independent Executor and Trust East London

T: 043 – 735 4633E: [email protected]: www.iet.co.za49 Beach Road, Nahoon, East London, 52411

SECURITIES

PROPERTIES

NVest Financial Holdings Limited | INTEGRATED ANNUAL REPORT 2020 3

Contents06 Chairman’s Report

08 Chief Executive Officer’s Report

14 NVest Highlights

16 Our Directors

20 Executive Management

22 Meet our Private Wealth Advisors, Portfolio Managers and Insurance Brokers

26 The NVest Way

01About NVest

28 Our journey thus far

30 Group Structure

31 Business Summary

32 Employment Equity Report

33 NFB Brand Evolution

34 35 Years in the making

35 NFB PWM - the power of one

36 Paying it forward - ASISA Internship

37 NFB PWM triumphs at Intellidex Awards

38 Taking CSR to the next level

72 Group Consolidated Annual Financial Statements

75 Directors’ Report

78 Statement of Financial Position

79 Statement of Profit or Loss & Other Comprehensive Income

80 Statement of Changes in Equity

82 Statement of Cash Flows

84 Accounting Policies

94 Notes to the Consolidated Annual Financial Statements

126 Analysis of Shareholders

127 General Information

129 Notice of AGM and Proxy

CorporateGovernance

03

GroupAffairs

02

04 Annual FinancialStatements

43 Corporate Governance and Sustainability Report

56 Social and Ethics Committee Report

58 Audit and Risk Committee Report

61 Remuneration and Nominations Committee Report

65 Directors Responsibilities and Approval

66 Group Company Secretary’s Certification

67 Independent Auditor’s Report


Scope of thisIntegratedAnnual ReportThe Report provides a balanced view on both the financial and non-financial performance of the Group over the twelve months ended 29 February 2020 in respect of the Group’s majority and wholly owned subsidiary business operations across South Africa.

The content of this Report is specifically aimed at providing NVest’s key stakeholders with a holistic view and understanding of the economic, environmental, social and governance initiatives that are material to the long-term success and sustainability of the Group.

The Integrated Annual Report and summary financial statements have been compiled in accordance with the integrated reporting principles contained in the Code of Corporate Practices and Conduct set out in the King Report on Corporate Governance for South Africa (“the King Code”). The annual financial statements have been prepared by Sean Weldon (independent preparer) under the supervision of the Group Financial Director and have been approved by the Group Board of Directors.

The Report contains references to forward-looking statements in places. These statements are subject to risks and uncertainties which may result in the actual outcome or performance being materially different from what has been expressed or implied by such statements. Stakeholders are thus advised not to place undue reliance on any forward-looking statements. NVest will not update or revise any forward-looking statements, even if new information becomes available, other than as required in terms of the Listing Requirements of the JSE.

An electronic version of this Report is available for viewing on the Group website: www.nvestholdings.co.za.

As a valued stakeholder, we welcome your feedback on this Integrated Annual Report, which may be used to shape and guide the content and format of future Reports. Please direct any feedback to [email protected].

We trust that you will find this Report to be both informative and insightful in terms of our performance during the past financial year as well as our ambitions for further growth going forward.

If you require any further information regarding NVest please make contact with us via the contact details provided at the back of the Report.

We trust that you will enjoy reading through this Report as much as we have enjoyed putting it together.

NVest Financial Holdings Limited

(hereinafter referred to as “NVest”, “the Company” or “the

Group”) is pleased to present this Integrated

Annual Report (“the Report”) for the 2020

financial year.

NaThaN CarrGroup Legal and Corporate Strategy


ABOUTNVEST

HOLDINGS

01


We release the report in the most turbulent times. The Report sets out the latest annual chapter of NVest’s continued growth as a broad-based financial services provider and includes various facts and figures of the past financial year. The Report also documents the steady and controlled progress made across the Group in terms of delivering on our ambitions, including various operational, tactical and strategic priorities.

Importantly, the Report also includes an insight into the values of NVest, as an organisation that is deeply connected to and engaged with the communities in which our staff and colleagues live and work. The past year has been one where, through the Group’s bold and co-ordinated CSR agenda, NVest has made a profoundly positive impact on those most vulnerable and in need within our communities.

Whilst falling just outside of the year under review, the NFB Private Wealth Management business celebrated its 35th anniversary on the 1st of April 2020 – a truly remarkable achievement. The NFB brand has been built throughout those years on a foundation of trust, exceptional service and tangible results in protecting and growing the wealth of our valued clients.

Dear Stakeholders,

Welcome to the Integrated Annual Report for NVest for the financial year ended 29 February 2020.

It is with great pleasure that the Board presents this, itsfifth Integrated Annual Report, since listing on the Alternative Exchange of the Johannesburg Stock Exchangein May 2015.

Chairman’sReport



As a consequence of all of these things, I am extremely humbled and proud to be associated with the NVest Group, its people and clients.

The resounding themes that emerge from the pages that follow include progress in terms of executing operational alignment and capacity building across our underlying businesses, consistency in delivering results and resilience in adapting to fast changing and unprecedented times.

The operating environment presented a challenging backdrop throughout the year and the South African economy had a gloomy 2019, characterised by declining growth and delayed reforms. The local economy is in its longest downward cycle since 1945, having not expanded by more than 2% per annum since 2013.

Whilst South Africa’s downward trajectory in terms of fiscal position is not new, concerns are now rising on the back of the rapid deterioration over the past two years specifically. The slowdown in economic growth and revenue receipts, wasteful public-sector spending, administrative and efficiency challenges at the South African Revenue Service and a growing public sector wage bill are the greatest contributors to alarming debt levels in South Africa.

The global story of 2019 was broadly more positive, especially towards the end of the year. Global markets rallied at the end of December 2019 to give the MSCI World Index its best year of the decade (+27.7%). The continued tension between China and the US seemed to subside on the back of “phase 1” of a trade deal just in time to avoid the US going ahead with a scheduled implementation of 15% tariffs on $160bn of Chinese imports, and the world breathed a collective sigh of relief.

December 2019 also ushered in some much-needed clarity as to the UK’s plans for exiting the European Union (EU) as UK voters delivered a strong mandate to Prime Minister Boris Johnson to proceed with his proposal of exiting by the end of January 2020. Johnson’s Labour government saw its representation in Parliament lifted from 46% to 56% as a result of the December election, giving them the comfortable majority needed to execute Brexit. The much needed Brexit clarity helped the British pound continue a rally which saw it rise over 10% since its August lows when the UK faced a real possibility of leaving the EU without a deal.

So 2020 arrived with some renewed hope, on the back of a clearer Brexit road map, improving US-China trade relations and generally stronger investor sentiment. And then COVID-19 became real ...

Much has changed since South Africa’s lockdown was first announced by President Cyril Ramaphosa in March 2020. Whilst the extended lockdown has been credited with buying our country critical time in order to prepare for the expected rise in COVID infections, the cost to the economy has been substantial.

As we enter a new phase in the Government’s response and start to see an easing of restrictions and the re-opening of the economy, despite a significant climb in the spread of the virus, the challenge is to adapt to the “new normal” and to find ways to engage and remain relevant to our clients in a vastly different environment.

NVest has weathered the disruption of lockdown remarkably well and has delivered respectable results given the unprecedented context. These results were underpinned by growth in revenue (up 1.26% to R310.2 million), earnings per share (up 2.71% to 21.62 cents per share) and net asset value (up 7.06% to 159.60 cents per share). Total assets under management and administration decreased marginally from R30.3 billion as at February 2019 to R30.1 billion as at 29 February 2020. The Board is encouraged by these solid results in the most testing of conditions and would like to thank Anthony and his leadership team for their hard work and commitment to task.

Prospects for 2020 and 2021 have deteriorated considerably due to the COVID-19 pandemic, but thanks to prudent cost management, strong leadership and considerable cash reserves NVest is well positioned to confront these challenges head on and to leverage the opportunities that will no doubt emerge in a post COVID environment.

Thanks to the expertise, hard work, discipline and dedication of everyone who works at NVest we enter the new financial year well placed to serve our clients and to reward our shareholders over time for their trust in our collective ability to continue to exceed expectations.

In closing I would like to convey my profound gratitude to my fellow Directors. Your continued support has been unwavering and I greatly appreciate your expertise and contributions throughout the year.

Enjoy the read, and stay safe.

_______________________Jonathan GoldbergGroup Chairman25 May 2020

“...I am extremely humbled and proud to be associated with the NVest Group, its people and clients. ”



Dear Stakeholders,

I am delighted to report on the performance and affairs of the NVest Group for the past financial year ended 29 February 2020.

Chief ExecutiveOfficer’sReport

COMMENTARY:

The 2020 financial year will go down as a particularly challenging chapter in our history, but one which we successfully navigated through as a Group of businesses to achieve some noteworthy achievements.

The financial results scorecard for 2020 reflects respectable numbers despite continued headwinds of local and international market turbulence, increasing regulation and intensifying competition. And those operating conditions were challenging before the arrival of COVID-19 at the start of 2020, which has proceeded to wreak devastation across many communities and economies worldwide. The impact of COVID-19 is still being felt in many countries, including South Africa, on a variety of levels and it is clear that there will be a “new normal” to emerge post the peak of the virus.

There are several yardsticks that can be applied to measure our performance for the year that was. Two of those would include a comparison of, firstly, this year’s financial results versus



those of the previous year and, secondly, how NVest has fared compared with our listed wealth management competitors.

In summary, NVest did not manage to repeat the same levels of year on year growth in revenue and profit that has been achieved in previous years. However, most financial headlines that will be unpacked in more detail within the Report are either slightly up or relatively flat compared with the previous financial year ended February 2019.

In terms of the second lens of competitor comparison, NVest’s results compare and contrast very favourably on a peer review basis within the South African financial services industry, with many local competitors’ struggles manifesting in negative trajectories. On both counts it is fair to say that, all things considered and given the unprecedented environment we have had to operate in, those are noteworthy outcomes.

This integrated Report goes beyond the financial numbers, however, and I am pleased to record that the Group has had another productive year in terms of progressing our strategic agenda of building capacity and capability and ensuring that our businesses are positioned for growth. These efforts have centred predominantly on the consolidation and amalgamation of our Private Wealth Management businesses into one legal structure to leverage scale and operational efficiencies.

The operational and legal components of the restructuring have gone smoothly and we are confident that this new model will bear fruit for many years to come. I would like to congratulate the new leadership of the amalgamated NFB Private Wealth Management business of Andrew Duvenage as Managing Director and Mike Estment as Executive Chairman as well as their revamped executive team and Board and to wish them well as they embrace the opportunity of taking this important business to the next level.

Our Private Wealth Management business also added to the highlights package of the year by walking away with three awards at the annual Intellidex Awards evening in June

2019. In addition to being named the Top Wealth Manager in South Africa, NFB also won the Top Wealth Manager for Lump-Sum Investors and the People’s Choice Top Wealth Manager awards as voted for by South African clients. These are remarkable accolades that we can all be very proud of.

The year was also characterised by a notable change in gear with regard to our branding and marketing efforts. This has been a strategic objective of the business and, as a result of the right level of investment, focus and effort, is now starting to translate into a growing profile across our chosen markets.

The Group’s vision is to become the pre-eminent independent Wealth Management business, with a national distribution footprint that provides a holistic, integrated client product and service proposition. The achievements of the past year have taken us several steps towards realising that goal.

We are extremely proud of the progress NVest has made over the years, the results achieved during the 2020 financial year, as well as the broader contribution that the business continues to make to the local economy and the communities in which we operate.

RESULTS:

The Group has demonstrated its resilience during the year under review, delivering consistent results in the context of particularly challenging operating conditions. Market volatility locally and abroad on the back of heightened political and economic uncertainty and weak investor confidence have contributed to a difficult business environment. Despite these prevailing headwinds, NVest has maintained its performance in key areas including top line revenue and headline earnings. This bears testimony to the resilience and sustainability of NVest’s operating model and its continued relevance to the market.

The following headlines summarise the financial performance of the Group for the year under review:


Revenue increased by

1.26% to(2019: R306.3 million)

Net Asset Value increased

by 7.06% to (2019: 149.07 cents

per share)

Net Cash from operating activities

increased by 3.60% to (2019: from R68.6 million)

Total Group Assets under Management

and Administration remained relatively

flat at

R66.5 million

Headline Earnings decreased by

2.20% to(2019: R65.95 million)

R64.51 million

R71.1 million

R310.2 million

21.62cents

Net Profit After Tax increased

by 2.56% (2019: R64.8 million)

as at 29 February 2020 (2019: R30.3 billion).

Earnings Per Share increased

by 2.71% to(2019: 21.05 cents per share)

Declaration of a final dividend

The total dividend for the 2020 financial year amounts to 11.75 cents per share which is the same

as was declared for the 2019 financial year.

6.50 centsper share

159.60 cents

R30.1 billion


The overall position in terms of revenue growth and the increased cost of sales translated into a profit before tax of R 90.41 million (2019: R 89.45 million).

Prudent cost management remains a priority for the business and this discipline was another feature for the year under review. Cost of Sales increased by 1.12% (R1.3 million) which was broadly in line with expectation and is proportionate to the overall growth of the business. As in prior years, the increase in costs is a product of variable costs growing in line with revenue, costs associated with operating in the listed environment such as Legal, Regulatory and Compliance costs, as well as increased investment in Marketing which was identified as a strategic priority.

The Company remains highly cash generative. Net cash from operating activities increased by 3.6% from R68.6 million in 2019 to R71.1 million for the year under review. NVest continues to hold substantial cash reserves of R196.2 million (which includes R159 471 432 in cash and cash equivalents and R36 689 681 held in liquid investments at fair value). The strategic intention is to apply these reserves predominantly in acquisitions going forward to ensure a more attractive yield than what these funds currently earn on call.

Headline Earnings decreased to R64.51 million (2019: R65.95 million) and Headline Earnings Per Share decreased slightly to 21.30 cents per share (2019: 21.78 cents per share), largely due to the tough market and operating environment.

Non-current liabilities reduced substantially by R49 million due to the maturity of a number of commercial notes during the next financial period, resulting in these commercial notes being disclosed as current liabilities. There were no other material changes to assets or liabilities from the prior period.

It is worth noting that the adoption of IFRS16 during the 2020 financial year has necessitated the recognition of both Right-of-use assets (Non-Current Assets) and Lease Liabilities (both Non-Current Liabilities and Current Liabilities) with depreciation and finance charges recognised through the Statement of Profit and Loss and Other Comprehensive Income. The adoption of this IFRS Standard did not have a material impact on the Annual Financial Statements for the 2020 Financial Year.

OPERATIONAL REVIEW:

During the year under review the NVest Group consisted of ten wholly or majority owned subsidiaries located in Gauteng, East London, Port Elizabeth and Cape Town. The core business operations are NFB Private Wealth Management, NFB Asset Management and NVest Securities Stockbroking.

The core proposition is strengthened by complementary business subsidiaries aimed at providing a holistic financial service offering, which includes a short-term insurance brokerage, a property investment business and a wills and estates business. This collection of businesses provides a unique offering to clients as well as a diverse set of income streams that adds to the sustainability of our business model.

The controlled downscaling of our Property Services business as well as the Western Cape Private Wealth Management

subsidiary has gone according to plan. The strategic intention, however, remains to re-establish a meaningful presence in the Western Cape to grow our Private Wealth Management distribution in that geography over time.

The Group subsidiaries during the year under review were as follows:

• NFB Private Wealth Management (Pty) Limited (previously NFB Finance Brokers Eastern Cape (Pty) Limited)Private Wealth Management (NVest holds 100%)

• NFB Finance Brokers Gauteng (Pty) LimitedPrivate Wealth Management (NVest holds 100%)

• NFB Finance Brokers Port Elizabeth (Pty) Limited Private Wealth Management (NVest holds 100%)

• NFB Finance Brokers Western Cape (Pty) Limited Private Wealth Management (NVest holds 100%)

• NFB Asset Management (Pty) Limited Asset Management (NVest holds 100%)

• NFB Insurance Brokers (Border) (Pty) Limited Short Term Insurance (NVest holds 82%)

• NVest Securities (Pty) Limited Stockbroking (NVest holds 100%)

• NVest Properties Limited Commercial Property (NVest holds 100%)

• NVest Property Services (Pty) Limited Property Brokerage and Services (NVest holds 100%)

• Independent Executor and Trust (Pty) Limited Fiduciary, Wills and Estate Planning/Trust Administration (NVest holds 70%)

The three separate and wholly owned NFB Private Wealth Management subsidiaries, NFB Private Wealth Management (Pty) Limited, NFB Finance Brokers Port Elizabeth (Pty) Limited and NFB Finance Brokers Gauteng (Pty) Limited executed steps over the past year to amalgamate into one consolidated Private Wealth Management business – NFB Private Wealth Management (Pty) Limited.

The first phase of amalgamation, being the operational consolidation and streamlining of the separate subsidiary boards and executive teams into one centrally led Private Wealth Management business under the NFB brand, took place during the course of 2019. The next phase being the legal amalgamation became effective as of 1 June 2020. The strategic rationale for the amalgamation is to create the appropriate legal structure to leverage economies of scale and to facilitate growth on a national as opposed to a regional level.

All of the subsidiary businesses listed above are separate legal entities with their own Boards and dedicated Management teams. Overall strategic direction across the Group of companies emanates directly from the Group Executive Management Committee (“Group Exco”) at NVest Financial Holdings Limited Level which includes a good representation of business Managing Directors. I would like to pay tribute to the members of the Group Exco team and thank them for their efforts during the past year as we continue to grow and strengthen the business in all respects.


Subsidiary Feb 2020revenue

Feb 2019revenue

Feb 2020 Net Profit after Tax

Feb 2019 Net Profit after Tax

NFB Private Wealth Management (Pty) Limited 79 409 318 76 078 118 16 296 260 14 248 132

NFB Finance Brokers Gauteng (Pty) Limited 69 374 209 65 843 111 7 834 147 11 542 499

NFB Finance Brokers Port Elizabeth (Pty) Limited 6 779 468 7 750 915 555 295 1 002 034

NFB Finance Brokers Western Cape (Pty) Limited 475 511 569 622 286 435 -23 939

NFB Asset Management (Pty) Limited 10 605 613 9 262 941 3 347 415 786 944

NFB Insurance Brokers (Border) (Pty) Limited 23 741 145 21 643 291 3 180 899 2 945 355

NVest Securities (Pty) Limited 74 471 494 74 686 453 21 859 639 22 836 142

NVest Properties Limited 53 387 258 52 184 620 3 654 310 4 051 858

NVest Property Services (Pty) Limited 198 698 2 457 957 92 585 64 156

Independent Executor and Trust (Pty) Limited 5 274 809 4 139 630 1 403 108 1 016 420

NVest Financial Holdings Limited 75 917 603 62 291 848 60 411 868 50 277 911

Total 399 634 405 376 908 506 118 921 961 108 747 512

Note: The above figures exclude inter-company eliminations which were performed on consolidation.

A brief synopsis of the year under review per business:

NFB Private Wealth Management (Pty) Limited, had another strong year growing both revenue and profit in difficult conditions. On behalf of the Board and Executive team I would like to congratulate the lead Executive Director of the business, Gavin Ramsay, for another outstanding contribution made not only in the context of this subsidiary but also the collective Private Wealth Management cluster and across the Group, particularly with regard to our Asset Management business. I would also like to acknowledge the entire Advisory team who have all made a valuable contribution to the collective success of this business. They have been well supported by a proficient and cohesive support team throughout the year.

NFB Finance Brokers Gauteng (Pty) Limited, performed to expectations and grew revenue and assets under management positively. The Managing Director, Andrew Duvenage, ably supported by his Operations Director, William Higgs, continue to play leading roles in the consolidation of the respective Wealth Management businesses. Their work in this regard has been exemplary. Andrew has now assumed the position as Managing Director of the amalgamated NFB Private Wealth Management (Pty) Limited business –we wish him and his Board and executive team every success in taking NFB Private Wealth Management forward. I would also like to thank Mike Estment for the valuable role that he continues to play in the capacity as Chairman of NFB Private Wealth Management, ensuring that the long standing history and experience of the business remains of value in shaping our future.

NFB Finance Brokers Port Elizabeth (Pty) Limited had a disappointing year as a result of not meeting expectations in terms of client and asset acquisition. The ambition of the business is being rebooted through key appointments and we are optimistic that Port Elizabeth and environs will be an area of growth going forward.

The Cape Town NFB Private Wealth Management office performed to expectation given that the business is in a process of rationalisation. Cape Town and the wider Western Cape remains a target geography for future growth.

NVest Securities (Pty) Limited, came through a challenging year ending circa 4% down from last year based on Net Profit After Tax. Given the environment and market conditions, this was a respectable outcome in light of the material drawdown on key underlying assets (equally weighted top 40 -13% and Listed Property -26% on a capital basis over the period). Chris Lemmon, Managing Director of NVest Securities and an Executive Director on our Group Board, has been central to the repositioning of our stockbroking business and there has been continued improvements made in the investment process as well as the implementation of the business’s new website.

NFB Asset Management (Pty) Limited, had another fantastic year with gross revenue climbing 15% from the prior year. Operating profit is recorded as being largely unchanged, however, this does not account for the significant dividend income achieved via the business’s investment in NFB International in Mauritius. This dividend income equates to circa 25% of gross revenue, but on an after-tax basis. NFB Asset Management was again nominated for another Raging Bull Award in the Best Multi Asset Low Equity Fund category at January’s awards ceremony. NFB Asset Management, with 5 PlexCrowns for the NFB Ci Stable and Managed Funds and the business itself, has also successfully retained its maximum possible rating. The Funds are also 5- and 4-star rated by Morningstar and have a 5 rating from Lipper. My congratulations to Managing Director Paul Marais, his team and the Investment Committee on another strong year.

NFB Insurance Brokers (Border) (Pty) Limited delivered another solid year of incremental growth in revenue and profit despite industry headwinds which include the hardening reinsurance market resulting in reduced capacity in the placement of large risks and insurers applying stringent


risk management principles and increasing rates making the placement of certain risks extremely challenging. The integration of De Ridder Brokers, a short-term insurance business which was acquired in the prior financial year, has been executed smoothly and has increased the overall client base meaningfully and added capacity to the team. I would like to thank and congratulate the Managing Director, Michelle Wolmarans, for another strong year.

Both NVest Properties Limited and NVest Property Services (Pty) Limited performed to expectations during the year. NVest Properties Limited is a co-shareholder, developer and end purchaser in the Illovo Point Development (‘the development”) in Johannesburg through which two units have been acquired (one of which is the new home for NFB Private Wealth Management and NFB Asset Management). The development has been fraught with a variety of challenges, including internal disputes amongst shareholders and delayed building progress, which has absorbed a significant amount of additional management time. It is hoped that the final stages of work required to finally complete the building will be put to bed in the short term.

The NVest Properties commercial property portfolio performed to expectations in difficult market conditions which, as a result of COVID-19, have worsened significantly since January. Increasing vacancies and a tenant base that has been adversely impacted by lockdown regulations has added to a turbulent environment for commercial property owners. The portfolio is being carefully managed to mitigate these headwinds as best as possible. The Property Services business is in the final stages of being wound down as previously reported and the numbers tabled above reflect that.

Independent Executor and Trust (Pty) Limited had an exceptional year, delivering record breaking results which included exceeding the R5 million milestone on revenue for the first time ever. This business provides a value adding service to many of our clients across the Group and I would like to convey my appreciation to Debi Godwin and her capable team for their continued contribution to the overall Group proposition and success.

STRATEGY AND ACQUISITIONS:

NVest’s ambition is to become a leading Wealth Management Group of national significance. The strategy to achieve that ambition is one of controlled organic and inorganic growth, executed efficiently, that will elevate earnings, unlock operational efficiencies and ensure sustainability.

The Group has and continues to actively evaluate a variety of acquisitive opportunities aligned to our targeted growth markets.

Whilst there were no acquisitions or disposals during the year under review, various acquisitive opportunities were actively considered and this remains a priority focus within the Group’s long-term strategy. The Group is well placed to grow through strategic acquisitions and has over R190 million in cash reserves (including cash equivalents and liquid investments) available for investment.

During the 2020 Financial Year, there was an issue of 500 000 shares, in respect of share options that were exercised by a

Board Member, Mr CG Lemmon. The options were exercised at their subscription price of R1.82 on 2 December 2019 (vesting date).

As at 29 February 2020, the Company had 303 241 722 shares in issue (2019: 302 741 722). No shares were repurchased for the year ended 29 February 2020.

PROSPECTS:

The Group has demonstrated its resilience during the year under review, delivering consistent results in the context of particularly challenging operating conditions. Market volatility locally and abroad on the back of heightened political and economic uncertainty and weak investor confidence have contributed to a difficult business environment. Despite these prevailing headwinds NVest has maintained its performance in key areas including top line revenue and headline earnings. This bears testimony to the resilience and sustainability of NVest’s operating model and its continued relevance to the market.

The Board and Management team are positive about the future prospects for the Group. The business is well placed in terms of capital reserves which provides a meaningful source of funding for acquisitions. The leadership team is experienced and settled and is supported by a Board and governance structures that are maturing year on year. The Board and Management are therefore very positive about the Group’s future prospects and believe that the business is well placed in terms of capital reserves, human resources, infrastructure and operations to continue to grow the business at a favourable rate of return. An upswing in the economic climate and investor conditions would only serve to expedite and aide translating that opportunity into tangible results.

CHANGES TO THE BOARD OF DIRECTORS:

The following changes to the Board occurred during the year under review and up to the date of this report:

• Mr Glenn Wayne Orsmond resigned from the Board as an Executive Director with effect from 1 May 2019.

• Mr Charl Herselman was appointed as Group Financial Director with effect from 1 November 2019.

• Mr Brendan Connellan, who was previously appointed to the Board in the capacity as a Non-Executive Director, was re-appointed as an Executive Director in light of him resuming the role of Chief Operating Officer, with effect from 1 March 2020.

SUBSEQUENT EVENTS:

Since 31 December 2019, the spread of COVID-19 has severely impacted many economies around the globe. In many countries, businesses are being forced to cease or limit operations for long or indefinite periods of time. Measures taken to contain the spread of the virus, including travel bans, quarantines, social distancing, and closures of non-essential services have triggered significant disruptions to businesses


worldwide, resulting in an economic slowdown. Global stock markets have also experienced great volatility and a significant weakening. Governments and central banks have responded with monetary and fiscal interventions to stabilise economic conditions.

South Africa has not been spared of the devastating impact of the virus. Since the implementation of the National Lockdown in South Africa on 26 March 2020, the Company has, for the most part, operated remotely with staff having been set up to work from their homes. The Company has managed to operate effectively and with minimal disruption during the national lockdown period. NVest is implementing a phased return to work of employees post the move to level 3 lockdown as of 1 June 2020.

NVest’s financial position has, to date, not been adversely affected and – whilst the position remains fluid - Management are of the opinion that it is unlikely to be materially affected in coming months.

The Group has determined that COVID-19 is a non-adjusting subsequent event and, accordingly, the financial position and results of operations as of and for the year ended 29 February 2020 have not been adjusted to reflect any impact.

The duration and impact of the COVID-19 pandemic, as well as the effectiveness of government and central bank responses, remains unclear at this time. It is not possible to reliably estimate the duration and severity of these consequences, as well as their impact on the financial position and results of the Company for future periods. Our Board and Group Exco team are proactively managing the continued impact that the COVID-19 environment has on our business and will continue to do so for as long as may be necessary.

APPRECIATION

I would like to express my sincere appreciation to the Board for their extensive contributions made throughout the year, to our Chairman Jonathan Goldberg for his ongoing guidance and sage advice, to our Corporate Advisors at Arbor Capital - and to Michelle Krastanov in particular - for their considered counsel, to our shareholders for their continued belief in our philosophy and approach, to the Group Exco and management team - and all staff across the Group - for their unwavering dedication and commitment to NVest.

And finally, thank you to all our clients and customers whose expectations we continually strive to exceed.

_______________________anthony Godwin Group Chief Executive Officer 25 May 2020

13

“...NVest has maintained its performance in key areas including top line revenue and headline earnings. This bears testimony to the resilience and sustainability of NVest’s operating model and its continued relevance to the market.”


NVest:Highlights

r171.8 millCASH RESERVES

2 %HEPS DOWN

21.78CENTS

1%r310 million

(2019: R306 mill)

rEVENUE increased by

OFFICELOCaTIONS4

NET aSSET VaLUE PER SHARE159.60CENTS7% =

DIVIDENDS PER SHARE

11.75 CENTS

EASTERN CAPE

WESTERN CAPE

GAUTENG

r30.1aSSETS UNDER MANAGEMENT

billion

GAUTENGCAPE TOWN

EAST LONDONPORT ELIZABETH

GrOWTh PrOFIT BEFOrE TaX(NET OF FAIR VALUE ADJUSTMENT)10.3%

TENSUBSIDIarIES


hEaDLINE EarNINGSPER SHARE (CENTS)

2017

2018

2019

2020 18.45

19.66

21.78

21.30

DIVIDENDSPER SHARE (CENTS)

10.30

2017 2018 2019 2020

12.00

11.50

11.00

10.50

10.00

9.50

9.00

8.50

8.00

11.00

11.75 11.75

aFrICaN, COLOUrED& INDIaN EMPLOYEES 33%

rEVENUE - FEB 2020

INSURANCEBROKING

PROPERTY

ADMIN OF ESTATES &

TRUSTS

WEALTHMANAGEMENT

6%19%

14%

1%60%

NPaT - FEB 2020

INSURANCEBROKING

INVESTMENTS*

* Investments reflect those of NVest Financial Holdings Limited, which holds interests in and across the various Group Entities and from which it earns investment income.

PROPERTY

ADMIN OF ESTATES &

TRUSTS

WEALTHMANAGEMENT

3%51%

3%1% 42%

rEVENUE (R)

2014 2015 2016 2017 2018 2019 2020

80

70

60

50

40

30

20

10

0

r32,

668,

686

r35,

366,

786

r59,

487,

499

r62,

068,

099

r60,

130,

906

r64,

799,

612

r66,

457,

836

NPaT (R)

2014 2015 2016 2017 2018 2019 2020

r97,

211,

558

r114

,642

,325

r97,

211,

558

r114

,642

,325

r216

,443

,442

r282

,066

,249

r290

,942

,740

r306

,336

,355

r310

,185

,831

350

300

250

200

150

100

50

0

INVESTMENTS*


Our Directors

FRONT ROW: From left to rightLusanda Mangxamba / Jonathan Goldberg / Anthony Godwin / Michael Estment / Dr. Lana Weldon

BACK ROW: From left to rightDylan Schemel / Brendan Connellan / Charl Herselman / Chris Lemmon



aNThONY DENIS GODWIN (60) ChIEF EXECUTIVE OFFICEr & EXECUTIVE DIrECTOr

Position Group Chief Executive OfficerAppointment date 3 July 2008

Qualifications:- International Capital Markets Qualification (Registered

Persons Examination), 2001- National Certificate in Wealth Management, 2005

Anthony has over 30 years’ experience within the Financial Services industry and originally served as Managing Director and a leading financial advisor of NFB Private Wealth Management, the core and original company within the NVest group of companies. Anthony was appointed as Managing Director of NFB Finance Brokers Eastern Cape (Pty) Limited (trading as NFB Private Wealth Management) in 2004 and of the NVest Group in 2008 upon its formation. Anthony is now the Group Chief Executive Officer of NVest Financial Holdings Limited, giving overall strategic direction and leadership to the Group of companies. Anthony also sits on the Boards of a number of subsidiary companies within the Group. Anthony is a member of the Financial Planning Institute and the Institute of Financial Markets. Anthony is also an active member of Rotary and is a past president of the East London Golf Club.

CharL hErSELMaN (36) GrOUP FINaNCIaL DIrECTOr aND EXECUTIVE DIrECTOr

Position Group Financial DirectorAppointment date 1 November 2019

Qualifications:- B Compt (UNISA) 2006- B Compt (Honours) (UNISA) 2007- CA(SA) - 2010

Charl was appointed to the Board with effect from 1 November 2019 following his appointment as Group Financial Director on the same date.

After matriculating, Charl was employed by Charteris & Barnes, a predominantly Eastern Cape based accounting and auditing firm, where he served his articles and during which time, he studied part-time and qualified as a Chartered Accountant in 2010. During his tenure at Charteris & Barnes, Charl served as an Office Manager and an Associate.

Charl joined the NVest Group in September 2012 and was involved in the financial aspects of the Group’s listing in 2015. Prior to being appointed as Group Financial Director, Charl has fulfilled the roles of Group Accountant, Group Financial Manager and most recently, Head: Group Finance.

Charl is also the Treasurer and serves on the Board of an Eastern Cape based NGO that specialises in Early Childhood Development.

MIChaEL ESTMENT (62) EXECUTIVE DIrECTOr

Position Executive Chairman of the consolidated NFB Private Wealth Management business and Chairman of NFB Asset Management (Pty) Limited.

Appointment date 1 September 2015

Qualifications:- BA Education (NMMU)- Post Graduate Diploma in Financial Planning (UFS)- CFP designation 2009

After graduating from the University of Port Elizabeth (now NMMU) with a B.A. degree in 1981, Mike started his career at Barclays Bank where he developed credit facilities for the bank’s key Eastern Cape clients before moving on to running the Treasury Division of a national broking group in 1983.

The NFB Group was incorporated in 1985 with Mike as a founding partner. His responsibilities included setting up the Treasury and Asset Management Divisions of the Group. Shortly after NFB opened its Johannesburg offices in 1988, Mike moved from Port Elizabeth to Johannesburg to run this key division. He was subsequently promoted to the role of Chief Executive Officer of NFB Private Wealth Management in Gauteng in 1994. Post the listing of NVest Financial Holdings Limited on the JSE Altx, and the acquisition of NFB Finance Brokers Gauteng (Pty) Limited, Mike was appointed as an Executive Director on the Group Board and currently Chairs the Boards of NFB Private Wealth Management and NFB Asset Management.

Mike is a member of the IoD.



ChrIS GraNT LEMMON (41) EXECUTIVE DIrECTOr

Position Executive Director (Managing Director of NVest Securities (Pty) Limited)

Appointment date 1 March 2018

Qualifications:- B.Com (University of Natal), 2000- MBA (University of Natal), 2006- RPE Equities- South African Institute of Stockbrokers Board Member- Authorised Settlement Officer- Authorised Compliance Officer

Chris re-joined the NVest Group on 1 November 2016 as Managing Director of NVest Securities (Pty) Limited based in Gauteng, having previously fulfilled the roles of Director – Sasfin Securities and Head of Private Clients and Asset Management. Chris has been instrumental in establishing the new NVest Securities office in Johannesburg and in instilling best practice, rigour and process to securities portfolio construction. Chris has 12 years of experience in managing private client equity portfolios. Chris was appointed to the Board with effect from 1 March 2018.

BrENDaN JOSEPh CONNELLaN (45) EXECUTIVE DIrECTOr

Position Non-Executive Director (Group Chief Operations and Compliance Officer)

Appointment date 20 August 2018

Qualifications:- Bachelor of Commerce (Rhodes University, 1997)- Postgraduate Diploma in Financial Planning (UFS, 2000)- Advanced Postgraduate Diploma in Financial

Planning (UFS, 2002)- International Capital Markets Qualification (SAIFM -

Registered Persons Examination, 2001)- Certificate in Compliance Management (UCT, 2006)- JSE Compliance Officers Exam (SAIFM, 2008)

Brendan started his career with NFB Private Wealth Management, now a subsidiary of the NVest Financial Holdings Group, and has over 20 years of experience in the Financial Services industry. During Brendan’s career he has served the Group in various key roles including as Group Chief Operating Officer, the Head of Compliance and Group Company Secretary. Brendan is also the Group’s designated Anti-Money Laundering Officer and Head of the Employment Equity Committee and sits on the Boards of several subsidiary companies within the Group. Brendan is also the Chairperson of an Eastern Cape based NGO that specialises in Early Childhood Development.

Brendan was appointed to the Board with effect from 20 August 2018. Brendan continues to perform various services to the Group, but on an outsourced basis.

JONaThaN GOLDBErG (58) INDEPENDENT NON- EXECUTIVE ChaIrMaN

Position Independent Non-Executive ChairmanAppointment date 1 April 2015 Occupation Chief Executive Officer

- Global Business Solutions

Qualifications:- B.Comm (NMMU), 1983- LLB (NMMU), 1986- Honours in Business Administration cum laude

(University of Stellenbosch), 1988- MBA cum laude (University of Stellenbosch), 1989- Institute of Directors of South Africa – Chartered Director- Numerous managerial & self-study courses - 1989 – 2014- Board Director for several companies.

Jonathan is the CEO of Global Business Solutions, a leading national Labour Law, B-BBEE and EE consultancy. He is a former accredited commissioner of the Commission for Conciliation, Mediation and Arbitration (CCMA), an IMSEC Arbitration and Mediation panellist, a BUSA representative at NEDLAC and a member of the Tokiso dispute settlement panel. Jonathan, and his associate companies, have numerous investments in diverse businesses and he serves on the board of numerous companies.

Jonathan is a leader and developer of the Wits Business School’s executive development programme in B-BBEE. Over his career, Jonathan has edited four books, has compiled many publications, delivered several presentations and seminars and advises business and government on a range of different business related subject matters.

Jonathan holds several key positions as an Employment Conditions Commissioner, Chief Operating Officer of the Confederation of Associations in the Private Employment Sector (CAPES), member of the Employment Services Board, and as a BUSA representative at NEDLAC focussing on labour law amendments, including a-typical employment.

Jonathan continues to be actively involved in businesses as a strategic advisor in numerous fields.Jonathan is the chairperson of two large South African organisations, one of which is listed on the Johannesburg Stock Exchange. He is a Certified Chartered Director of the Institute of Directors and is a sought-after advisor, speaker and lecturer.


Dr LaNa JOY WELDON (46) INDEPENDENT NON-EXECUTIVE DIrECTOr

Position Independent Non-Executive Director and Chairperson of the Group Audit and Risk Committee

Appointment date September 2016Occupation Senior lecturer – Faculty of Business at

Sheridan Institute of Higher Learning

Qualifications:- Bachelor of Commerce (Accounting), (Rhodes

University), 1995- B Compt Honours (UNISA) 1996- Chartered Accountant (Member of the South African

Institute of Chartered Accountants), 1997- Registered Auditor (Independent Regulatory Board

for Auditors), 1997- 21 years lecturing experience at tertiary level- MBA (Edinburgh Business School, Heriot Watt

University), 2004- PhD Commerce (Nelson Mandela University)- Chartered Director (South Africa)- GAICD (Australian Institute of Chartered Directors)

Lana is a senior lecturer in Accounting and Finance, serves on a number of boards ranging from charitable institutions to listed entities in an independent non-executive capacity and runs a small consultancy to keep abreast of practical developments within her profession.

Lana has had extensive involvement in the accounting profession as a training officer and audit partner, and in the education field as a post graduate lecturer and corporate facilitator and presenter. She has widespread experience in audit quality assurance reviews and is the Past President of the South African Association for Accounting Academics. She is also a past Council member of the International Association for Accounting Education and Research and chairs the NVest Financial Holdings Limited Audit and Risk Committee.

LUSaNDa MaNGXaMBa (45) INDEPENDENT NON-EXECUTIVE DIrECTOr

Position Independent Non-Executive Director and member of the Audit and Risk and Remuneration and Nominations Committees

Appointment date 28 February 2019 Occupation Founder and director of a business

Advisory Consultancy Company

Qualifications:- Bachelor of Commerce, (Rhodes University), 1997- Honours in Economics, (Rhodes University), 1998- Masters in Business Administration, (University of Cape

Town), 2007- Certificate in Social Entrepreneurship, (Oxford

University), 2015

Lusanda has a wealth of business experience having worked in South Africa and London and across various industries during her 21 year career to date. Over the past approximately 12 years, she was an internal consultant at Investec Bank, dealing with high net worth individuals. She then pursued a career as a management consultant and attained specialist skills in the development of SME’s and enterprise and supplier development programmes of large corporates. She also spent 3 years consulting to the mining industry, with a key focus on strategy, stakeholder management and business analysis. Lusanda is the founder and director of a business Advisory Consultancy Company specialising in SME’s and BEE and is currently contracted to the Waste Bureau.

DYLaN SChEMEL (37) NON-EXECUTIVE DIrECTOr

Position Non-Executive Director Appointment date 1 June 2015Occupation Financial Director (Spargs Group)

Qualifications:- Bachelor of Accounting (Rhodes University) 2005- Chartered Accountant (member of the South African

Institute of Chartered Accountants)

Dylan is the Financial Director of the Spargs Group of companies specialising in the retail and property sector in the Eastern Cape. He started his career with First National Bank in December 2000 during his studies. In 2006 Dylan joined OHS Chartered Accountants where he trained and qualified as a Chartered Accountant before joining the Spargs Group in 2011.


ExecutiveManagement in addition to the

Executive Directors

From left to right:Andrew Duvenage / Siviwe Relebohile Kwatsha / Nathan Carr

Gavin Ramsay / William Higgs / Paul Marais

GaVIN raMSaY (47)Director NFB Private Wealth Management (Pty) Limited

Qualifications:- B.Com (Rhodes University)

Gavin started his career at NFB in East London in October 1993 and has accumulated over 25 years Private Wealth Management industry experience. Gavin is currently a Director of NFB Private Wealth Management (Pty) Limited, a key member of the NFB Asset Management Investment Committee and is responsible for dealing strategy and income production across the Private Wealth management businesses. Gavin also sits on various Group subsidiary boards.

aNDrEW DUVENaGE (38)Managing Director NFB Private Wealth Management (Pty) Limited

Qualifications:- B.Com (Hons) Investment management (cum laude

University of Johannesburg, 2003- Post Graduate Diploma in Financial Planning, UFS, 2007- Advanced PGDFP (cum laude) UFS, 2009- MBA (cum laude), GIBS, 2011

Andrew joined NFB Private Wealth Management in 2004 and has 15 years’ experience in the financial services industry. After NVest Financial Holdings Limited acquired the NFB Gauteng business in 2015, Andrew was elevated to the position of Managing Director of NFB Finance Brokers Gauteng (Pty) Limited and plays a leading role in growing the Private Wealth Management franchise across those subsidiaries. Andrew is now the Managing Director of NFB Private Wealth Management (Pty) Limited, which is an amalgamation of the original Private Wealth Management subsidiaries.



SIVIWE rELEBOhILE KWaTSha (41)Group Chief Information OfficerNVest Financial Holdings

Qualifications:- Bachelor of Science (Computer Science) cum laude

(Rhodes), 1998- Bachelor of Science with Honours (Computer Science)

cum laude (Rhodes), 1999- Certificate in Corporate Governance cum laude (UJ), 2014

Siviwe joined the Executive Team of NVest as Chief Information Officer with effect from 1 February 2019, having previously served as an Independent Non-Executive Director on the Group Board. Siviwe is a senior management consultant with extensive experience and a proven ability to provide real world solutions to high level technical and business problems. Siviwe specializes in Information, Communication and Technology (ICT) security, governance, network and solutions architecture. Siviwe has been the chairman of the Social and Ethics Committee since the Group’s listing. He also chairs the Group Risk and Control Committee.

PaUL MaraIS (41)Managing Director NFB Asset Management (Pty) Limited

Qualifications:- B.Com, University of the Witwatersrand, 1999- B.Com (Hons), University of Johannesburg, 2003

Paul joined NFB during his undergraduate degree studies and has occupied various roles across the business during his tenure. He is currently the Managing Director of NFB Asset Management (Pty) Limited and the Head of its Investment Committee where he is responsible for the management, distribution, development and administration of the NFB Asset Management investment portfolios.

NaThaN Carr (45)Group head of Legal and Corporate StrategyNVest Financial Holdings

Qualifications:- BA (Rhodes University, 1995)- LLB (Rhodes University, 1997)- MBA (Rhodes Investec Business School, 2012)- Advanced Diploma in Labour Law (University of

Johannesburg, 1999)- Change Management (University of Cape Town, 2018)- Commercial Law and Contracts (University of Cape Town, 2018)- Admitted attorney – 1999, South Africa- Admitted Solicitor – 2001, England and Wales- Institute of Directors South Africa – Member. - Prince II accredited Project Manager Practitioner

Nathan joined NVest Financial Holdings Limited in 2016 as Group Head of Legal and Corporate Strategy after 18 years of working in mainstream banking and legal practice, during which time he occupied various senior Legal, Operational and Strategic roles across the Barclays Group based in London, Johannesburg, Dubai and Mauritius. Nathan has been involved in a number of high-level corporate transactions and business integrations, including the acquisition of Absa by Barclays Bank Plc in 2005, the acquisition of Nile Bank in Uganda (by Barclays Bank of Uganda) in 2007 and the local incorporation of Barclays Bank Mauritius Limited in 2014.

Nathan has led the formulation and introduction of a Group-wide Risk and Control Framework at NVest and is instrumental in the acquisitive growth strategy of the Group. He also established and chaired the Group Risk and Control Committee.

WILLIaM hIGGS (33)Operations Director NFB Private Wealth Management (Pty) Limited

Qualifications:- B.Com (Hons) Financial Accounting (University of Pretoria 2009)- B.Com Financial Accounting (University of Pretoria 2008)- CA (SA)

William joined NFB Private Wealth Management in 2015 as Chief Operating Officer of the Gauteng PWM business. He brought with him financial control and organisational optimisation experience in financial services across the African continent. He became Financial Director of the Gauteng PWM business in July 2017 as the business looked to grow and consolidate key roles. With the strategic intent to amalgamate the three PWM businesses into a national single financial services provider and legal company, William was appointed Operations Director of the national NFB Private Wealth Management business in April 2019.


Meet our Private Wealth Advisors,Portfolio Managers andInsurance Brokers

Name:Anthony Godwin

Location: NFB PWM EL

Industry Experience: CEO of NVFH & Executive Director

Contact: [email protected]

Name:Bryan Lones


Industry Experience: Private Wealth Manager


Name:Gavin Ramsay


Industry Experience: Executive Director (EL Regional Head) / Private Wealth Manager


Name:Glen Wattrus




Name:Jaco de Beer




Name:Juanita Niemand


Industry Experience: Consultant - Healthcare Advisory Services


Name:Julie McDonald


Industry Experience: Financial Advisor(Risk Assurance Specialist)


Name:Leona Trollip

Location: NFB PWM EL and NFB PWM PE

Industry Experience: Divisional Manager - Employee Benefits


Name:Leonie Schoeman


Industry Experience: Divisional Manager - Healthcare Advisory Services


Name:Nonnie Canham




Name:Philip Bartlett


Industry Experience: Senior Executive / Private Wealth Manager


Name:Janine Nass


Industry Experience: Consultant – Healthcare Advisory Services



Name:Rob Masters




Name:Travis McClure




Name:Walter Lowrie




Name:Andrew Duvenage

Location: NFB PWM JHB

Industry Experience: Managing Director


Name:Evelyn Doubell




Name:Grant Magid




Name:Jaco Van Zyl




Name:Laurie Wiid




Name:Lydia Byrnes


Industry Experience: Representative under supervision


Name:Mike Estment


Industry Experience: Executive Chairman


Name:Philip Shapiro




Name:Stephen Katzenellenbogen




Name:Thulisile Nkomo




Name:Jeremy Diviani





Name:William Higgs


Industry Experience: Operations Director


Name:Marco Van Zyl

Location: NFB PWM PE



Name:Nicky Sass


Industry Experience: Healthcare Consultant


Name:Xolisa Funani




Name:Paul Marais

Location: NFB Asset Management

Industry Experience: Managing Director and Portfolio Manager


Name:Moosa Manqindi


Industry Experience: Research Analyst


Name:Michelle Wolmarans

Location: NFB Insurance Brokers

Industry Experience: Managing Director


Name:Franscois de Ridder


Industry Experience: Executive Director/Commercial and Corporate Broker


Name:Steven Pope


Industry Experience: Executive Director


Name:Richard Clarke


Industry Experience: Executive Director


Name:Jennifer Grobbelaar


Industry Experience: Personal & Commercial Lines Marketer


Name:Heidi Frohbus


Industry Experience: Claims Manager


Name:Amy Degenhardt


Industry Experience: Investment Research Analyst


Name:Trevor Crouse





Name:Chris Lemmon

Location: NVest Securities JHB

Industry Experience: Managing Director/Stockbroker


Name:Melany Annandale




Name:Mandy Waterson

Location: NVest Securities EL

Industry Experience: Stockbroker/Portfolio Manager


Name:Greg Farland


Industry Experience: Stockbroker/Portfolio Manager


Name:Tony Hadley


Industry Experience: Portfolio Manager


Name:Tracy Bouwer




Name:Andy Russell




Name:Robert Hume




Name:Liam Graham


Industry Experience: Director/Stockbroker


Name:Debbie Bieske





WHO WE ARE: “OUR PEOPLE AND THEIR EXPERTISE ARE OUR CROWN JEWELS”

At the heart of NVest is a cohesive team of Wealth, Investment, Risk and Property specialists with a 35-year (and counting) track record of leveraging their collective expertise, experience, knowledge and market insights to achieve exceptional results for our clients.

WHAT WE DO: “WHERE PASSION MEETS INTELLECTUAL CAPITAL”

NVest’s passion lies in exceeding client expectations by providing market leading, Investment, Risk and Wealth enhancing products, services and solutions. Outcomes matter. We place value in, and hold ourselves accountable against, results. Private Wealth Management, Stockbroking and Asset Management are our core pillars – which are seamlessly complemented by tailored offerings in Short Term Insurance, Risk, Employee Benefits, Commercial Property Investment and Services and an established Wills and Estates practice.

NVest’s select range of propositions enables us to provide a holistic service to clients, customised to their individual needs and objectives.

HOW WE DO IT: “THE NVEST WAY”

NVest prides itself on a personal, partnering approach with clients which allows for a deep and accurate understanding of each client’s individual circumstances and needs, coupled with an enviable depth of knowledge, resources and specialist expertise to provide best of breed solutions.

On product and service, NVest benefits from access to a suite of stand-out in-house solutions whilst also being able to deploy the very best that the open market has to offer through strategic institutional relationships with blue chip players. We are proudly independent.

The NVest and NFB brands are widely respected and admired in the market, which is testimony to the trust that has been earned from a broad range of clients over three decades of results driven performance.

Say what you like - size matters and is a key differentiator for NVest. The Group consistently punches above its weight, being large enough to capitalise on significant scale, whilst remaining sufficiently agile to readily adapt to and embrace changing market trends.

OUR AMBITIONS FOR GROWTH: “PRE-EMINENCE”

NVest successfully listed on the Johannesburg Stock Exchange (Altx) in 2015 and, with that, sent a clear message to market – NVest is intent on becoming a player of national significance on the Wealth, Asset Management and Investment stage.

Since listing, NVest has acquired a notable Private Wealth Management presence in Johannesburg, which has been bolstered by the launch of a new stockbroking branch (NVest Securities) in the commercial capital of South Africa. Group assets under management and administration continue to grow and now sit just shy of R30.1 billion. Our Asset Management business has beaten off all competition to three consecutive Raging Bull Awards (2016/2017 and 2018) and topped this with back to back Morningstar Awards for Best Cautious Allocation Fund (NFB Ci Cautious Fund of Funds) and for Best Moderate Allocation Fund (NFB Ci Balanced Fund of Funds) in 2018 and 2019. But we are just getting started….

NVest’s ambition is to become the pre-eminent Wealth Management Group in South Africa, renowned for growing the prosperity of all our stakeholders by providing an integrated suite of market leading investment services and solutions through a co-ordinated national distribution footprint.

HOW WE WILL ACHIEVE OUR AMBITION: “BECOMING THE PRE-EMINENT WEALTH MANAGEMENT GROUP IN SOUTH AFRICA”

NVest’s ambitions are being realised by focusing steadfastly on what we do best, supplemented by a blend of organic and acquisitive growth in a controlled and co-ordinated manner.

Organic growth centres on a relentless pursuit to drive efficiencies in how we deliver niche propositions as seamlessly as possible. Central to the organic growth agenda is the harnessing of NVest’s operating model to optimise the vertical integration of products and services to the benefit of clients, colleagues and shareholders. The primary focus here is on the intersecting propositions of Private Wealth Management, Stockbroking and Asset Management.

Acquisitive growth is a key and complementary pillar to our organic growth journey. The priority lies in growing earnings by expanding our distribution network and diversifying our equity investments in targeted markets and geographies through the pursuit of selected business partners that fit our cultural DNA, who share our national ambition and who will materially enhance the collective power and reach of our existing business model. We - unapologetically - apply a discerning, rifle approach on acquisitive growth opportunities.

This, coupled with an ingrained entrepreneurial flair that is open to diversification opportunities to grow earnings, is our path to pre-eminence…

The NVest way- AND OUR PATH TO PRE-EMINENCE


GROUPAFFAIRS

02


2017

2001

2018

2002

2019

2006

2007

2020

1985

2008

1986

2009

1987We have lift off! NFB Financial Services Group was founded in Port Elizabeth, fundamentally as money market and gilt brokers.

NFB launched its first two registered unit trusts, the NFB Conservative Fund of Funds and the NFB Balanced Fund of Funds in May 2007.

NFB Asset Management assets under management passed the R1 billion mark.

In June 2002, NFB launched a range of risk-profiled funds, actively managed by NFB’s Asset Management Division.

This achievement was repeated in January 2018 and the Asset Management business went one step further by winning the Morningstar South Africa Fund Award for the Best Cautious Allocation Fund (NFB Ci Cautious Fund of Funds) and for Best Moderate Allocation Fund (NFB Ci Balanced Fund of Funds). Total Group Assets under Management and administration reach R29.7 Billion.

The NFB Private Wealth Management businesses were legally amalgamated with effect from 1 June 2020 to optimise the corporate structure for future growth on a national scale.

Execute the operational consolidation of NFB Private Wealth Management and continue to optimise integration of assets appropriately, whilst pursuing acquisitive opportunities to grow earnings and scale.

The 1st of March 2009 saw the acquisition of 70% of Independent Executor and Trust (a small but well-established East London based fiduciary services business) into the NVest Group of companies.

Diversification comes to the fore…. NFB business operations were extended into equity and unit trust investments due to low interest rates. And the NFB flag is planted in Johannesburg with the opening of a new office.

The NVest Group is born. In July 2008, the group restructured to become the NVest Group of Companies, of which NFB was made a subsidiary.

Spreading the footprint…. an NFB office was opened in East London, which would become the Group’s head office over time.

June 2001, Fedsure sold its interest in NFB. By December 2001 the Group had accumulated approximately R3 billion assets under management.

NVest Securities (Pty) Limited (the Group’s stockbroking business) opened its doors in Johannesburg for the first time. NFB Finance Brokers Port Elizabeth (Pty) Limited acquired Three Oaks Capital RF (Pty) Limited, a growing financial advisory brokerage in Port Elizabeth. NFB Asset Management (Pty) Limited achieved ground-breaking national recognition in consecutive years (2017 and 2018) by receiving a Raging Bull Certificate for the best Low Equity Fund and the prestigious Raging Bull Award itself for the top Multi Asset Equity Fund.

Our journey thus far...



2014

1997

2015

1998

2016

2000

2011

1990

2012

1994

2013

1995Beyond our borders. NFB operations were extended to Frankfurt to take advantage of Eskom bond trading through the Financial Rand.

As one door closes, another one opens….NFB’s Port Elizabeth division was sold during this year (to be reopened in 2008). The year also saw the launch of NFB’s Employee Benefits and Healthcare Divisions in East London.

NFB Group launched its own wrap fund under the NFB brand. NFB Portfolio Management Services (PMS), NFB’s exclusive share portfolio management division, opened its doors in East London.

JSE ALTX Listing here we come! The Group reacquired 100% of NFB Finance Brokers Western Cape Proprietary Limited in January. In May, the Group holding company successfully listed on the Alternate Exchange of the JSE. In September NVest acquired 100% of the share capital of NFB Finance Brokers (Gauteng) Pty Limited, giving the Group a scalable presence in the business capital of South Africa, Johannesburg.

With the underlying financial performance of the Group remaining strong, this was a year of consolidation and repositioning for future scalable and sustainable growth post the listing.

NFB’s founding M.D. along with the international business, formally separated.

March 2012 saw NFB Insurance Brokers (Border) purchase another brokerage: Kearney Financial Brokers. In early 2012 NVest Properties was converted to a public company in anticipation of its first public offer of securities.

NVest Securities discretionary assets under management exceeded R3bn for the first time. The NFB Global Balanced Fund was launched on the Sanlam Asset Management Ireland platform and distribution agreements were concluded with Old Mutual International and Glacier International.

Fedsure acquired 49% of NFB’s domestic and international business operations.

In March 2011 NFB Insurance Brokers (Border) purchased Elite Insurance Consultants, making it the largest short-term insurance brokerage in East London. NVest Properties was formally established and October 2011 saw the Group’s first (private) issue of Commercial Paper by NVest Properties

NFB Insurance Brokers is born with the opening of a Short-Term Insurance division in East London.

NFB Private Wealth Management’s total discretionary assets under management reached R6.5bn. Total NVest Group assets under management reached R14bn (including NFB Eastern Cape, NFB Port Elizabeth, NVest Securities and NFB Asset Management). NVest Securities gained its third fully fledged stock broker.

NVest is a broad range Financial Services Provider listed on the Alternative Exchange of the

Johannesburg Stock Exchange. The Group has evolved, diversified and grown

over a 35-year journey.



Our Group Structure

PrIVaTE WEaLTh MaNaGEMENT PrOPErTY INSUraNCE WILLS & ESTaTES SECUrITIES aSSET

MaNaGEMENT

NVest Financial holdings LimitedEast London

registration No. 2008/015990/06

NFB Finance Brokers Port Elizabeth (Pty) LtdPercentage Ownership: 100%

Reg: 2005/025001/07 | FSP: 26362

NVest Securities (Pty) LtdPercentage Ownership: 100%

Reg: 2008/015192/07 | Member of the JSE LtdFSP: 44699

NFB Private Wealth Management (Pty) LimitedPercentage Ownership: 100%

Reg: 2003/030583/07 | FSP: 16300

NFB Finance Brokers Gauteng (Pty) LtdPercentage Ownership: 100%

Reg: 1998/024730/07 | FSP: 16216

NFB Finance Brokers Western Cape (Pty) LtdPercentage Ownership: 100%

Reg: 2003/030583/07 | FSP: 16300

NFB asset Management (Pty) LtdPercentage Ownership: 100%

Reg: 2005/042953/07 | FSP: 25962

NFB Insurance Brokers (Border) (Pty) LtdPercentage Ownership: 80.95%Reg: 1996/010593/07 | FSP: 8932

Independent Executor and Trust (Pty) LtdPercentage Ownership: 70%

Reg: 2008/018611/07

NVest Properties LimitedPercentage Ownership: 100%

Reg: 2010/008681/06

NFB aM InternationalPercentage Ownership: 30%

Mauritius

horwath Financial Services (Pty) Ltd

PercentageOwnership: 33.33%

Reg: 2002/008600/07 FSP: 10889

Nations NFB (Pty) LtdPercentage

Ownership: 49%Reg: 2015/043665/07

Listed onJSE (altx)

in May2015

New (2018) minority equity

investment offshore.

51%Black

Owned – JV withNations Capital

The NFB Private Wealth Management businesses (formerly the Eastern Cape subsidiary, along with the Gauteng and Port Elizabeth businesses) were legally amalgamated into one business - NFB Private Wealth Management (Pty) Limited - with effect from 1 June 2020.


Our Business Summary

Brand Core Products/Services Entities/Location NVFh ownership People

NFB Private Wealth Management is the founding business within the NVest Group. Originating in Port Elizabeth in 1985, NFB Private Wealth Management has grown into one of the country’s leading broad-spectrum financial services groups with offices in Gauteng, Cape Town, Port Elizabeth and East London. NFB provides independent financial advice, products and services for both local and offshore investment. NFB Private Wealth Management is registered as a discretionary Financial Services Provider with the Financial Sector Conduct Authority (Gauteng and Eastern Cape).

NFB PWM/Advisory also includes:• Employee Benefits: group pension and

provident schemes as well as group risk planning;

• Healthcare Advisory Services: personal and group healthcare (medical aid) planning.

www.nfb.co.za

*As at 1st June 2020 NFB EC, Gauteng & PE consolidated to form NFB Private Wealth Management (Pty) Limited

NFB Finance Brokers Eastern Cape (Pty)

Limited[East London]*

100%

Total: 39Client Facing/Sales: 14Back office/support: 25

NFB Finance Brokers Gauteng (Pty) Limited

[Gauteng]*100%


NFB Finance Brokers Port Elizabeth (Pty)

Limited [Port Elizabeth](includes Three Oaks

Capital)*

100%


NFB Finance Brokers Western Cape (Pty)

Limited [Cape Town] [Operating as a branch

of NFB]*

100%


Established in 2001. Specialises in the provision of investment solutions to independent financial advisory businesses in the form of CIS and model portfolios. Authorised as a Category II discretionary Financial Services Provider with the Financial Sector Conduct Authority. www.nfbam.co.za

NFB asset Management (Pty) Limited[Gauteng] 100%


Established in 1997. Full range of personal and commercial insurance products. Several binder agreements in place with credible insurers, which allows for operational efficiency and personalised service. www.nfbec.co.za

NFB Insurance Brokers (Border) (Pty) Limited

[East London] 82%


Established in 2008. NVest Securities offers investments in all JSE listed securities – direct equity/shares and listed property stocks. Portfolios are tailor-made to suit your needs and required level of involvement. Authorised to provide money broking services and a registered Financial Services Provider.www.nvestsecurities.co.za

NVest Securities (Pty) Limited

[East London and Gauteng]

100%


Incorporated in 2010. Specifically established for the purpose of acquiring, holding and managing a portfolio of commercial properties, issuing of Commercial Paper, predominantly to clients of the NVest Financial Holdings Group.

NVest Properties Limited[East London] 100%


Purchased by NVest Financial Holdings in March 2009, this well-established business specialises in the preparation of Wills, managed accounts and the administration of deceased estates and testamentary trusts. IE&T is a member of the Fiduciary Institute of South Africa.

Independent Executor and Trust (Pty) Limited

[East London] 70%


SECURITIES

PROPERTIES

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EmploymentEquity ReportTotal number of employees as at 29th February 2020. (including employees with disabilities) in each of the following occupational levels. Note: A=Africans, C=Coloureds, I=Indians and W=Whites.

Occupational LevelsMale Female Foreign Nationals

Totala C I W a C I W Male Female

Top management 1 0 0 22 0 0 0 2 0 0 25

Senior management 0 0 0 3 1 1 0 6 0 0 11

Professionally qualified and experienced specialists and mid-management 1 0 0 6 6 1 0 16 1 1 32

Skilled technical and academically qualified workers, junior management, supervisors, foremen, and superintendents

1 0 0 3 3 4 4 26 0 1 42

Semi-skilled and discretionary decision making 1 0 0 3 4 6 2 19 0 0 35

Unskilled and defined decision making 1 0 0 0 5 0 0 0 0 0 6

TOTaL PErMaNENT 5 0 0 37 19 12 6 69 1 2 151

Temporary employees 2 0 0 0 5 0 0 1 0 0 8

GraND TOTaL 7 0 0 37 24 12 6 70 1 2 159

Total number of employees for people with disabilities ONLY in each of the following occupational levels. Note: A=Africans, C=Coloureds, I=Indians and W=Whites

Occupational LevelsMale Female Foreign Nationals

Totala C I W a C I W Male Female

Top management 0 0 0 0 0 0 0 0 0 0 0

Senior management 0 0 0 0 0 0 0 0 0 0 0

Professionally qualified and experienced specialists and mid-management 0 0 0 1 1 0 0 1 0 0 3

Skilled technical and academically qualified workers, junior management, supervisors, foremen, and superintendents

0 0 0 0 1 0 0 1 0 0 2

Semi-skilled and discretionary decision making 0 0 0 1 0 0 0 0 0 0 1

Unskilled and defined decision making 0 0 0 0 0 0 0 0 0 0 0

TOTaL PErMaNENT 0 0 0 2 2 0 0 2 0 0 6

Temporary employees 0 0 0 0 0 0 0 0 0 0 0

GraND TOTaL 0 0 0 2 2 0 0 2 0 0 6

NFVh - 23 NFB EC - 40 NFB G - 37 NVS - 12 NVP - 0NFB IB - 28 NFB PE - 9 NFB aM - 4 IET - 6

FEMALEEMPLOYEES72%

STAFF COMPLEMENT AS AT FEBRUARY 2020159

GEOGRAPHIC OFFICE LOCATIONS4

TOTAL SPENT ON STAFF TRAINING AND DEVELOPMENT

r 530,115 23

40

37

12

28

9

640

Breakdown of staff

per office


The evolution of the NFB Brand

NaTIONaL FINaNCE BrOKErS1985: The company has had its fair share of excitement, shake-ups and change in its history since inception in April 1985 in Port Elizabeth. The Company was originally named National Finance Brokers and used burgundy and black as its corporate colours. An existing national player in the investment market inspired the logo’s original design.

NFB FINaNCIaL SErVICES GrOUPThe Company’s name changed again to NFB Finance Brokers (Pty) Ltd in June 1994, when the Fedsure Group acquired a 49% stake in NFB. This was later refined to “NFB Financial Services Group”. The logo was again adapted slightly, still keeping elements of the old logo like the slanted lines in the lettering (but with a more modern look) and the burgundy and black colours.

NFB FINaNCIaL SErVICES GrOUP JOhaNNESBUrGNFB Financial Services Group celebrated its 30th anniversary and the Johannesburg based company embarked on an entirely new journey with their identity. The logo was completely recreated with a clean and modern design representing timeless sophistication and elegance.

NFB INVESTMENT & INSUraNCE BrOKErS1990: The black changed to white and the company name changed to NFB Investment & Insurance Brokers in 1990, with a subtle adaptation of the logo. The reason for the change was to clear the mis-perception that the business of the company was to provide finance.

NFB FINaNCIaL SErVICES GrOUPAfter 16 years the opportunity was ripe for a corporatere-brand and the introduction of a new corporate face to market. On 1 April 2001, coinciding with NFB’s 16th anniversary, we launched a new Corporate Identity, complete with a new logo and new colours, being deep blue and grey/silver.

NFB PrIVaTE WEaLTh MaNaGEMENT2016 witnessed the reunion of the independent NFB Divisions under the listed NVest Financial Holdings Limited Company.The NFB Private Wealth Management Divisions, as well as Asset Management and Short-Term Insurance, under went a group-wide rebrand which is both fresh and distinctive.

1985

1990

2001

2017

1994

2015

investment &insurance brokers


NFB celebrated its 35th anniversary on the 1st April 2020. This is a special moment and a tribute to the leaders, staff, clients and institutions we are fortunate to serve. The story began in 1985 with a staff complement of seven people spread between Port Elizabeth and Cape Town. From this humble beginning, we have managed to grow the business to a point where today, we manage many billions both locally and abroad for hundreds of principally South African families.

Today, NFB forms an integral part of the NVest Group, which is listed on the Alternative Exchange of the JSE. The NVest Group consists of several businesses, including NFB Asset Management, a remarkably successful and award-winning business and NVest Securities, a fully licensed stockbroking member of the JSE.

NFB developed its early roots in Port Elizabeth and Cape Town, before spreading our wings to East London where NVest now has its Head Office.

Independence and service have been cornerstones of the business and the success we have had in the retention of both key

staff and clients bears testimony to this. One of the most rewarding facets of the business has been the retention of key people, ranging from advisors, directors, and our very experienced administrative teams, to the operations team and many more.

It amazes me how often we are treated, as the leadership of NFB, to compliments addressed to many members of our broader team. From assistants, to receptionists, drivers and the ever-important tea ladies, we continue to receive accolades. Many of our clients and institutions have developed friendships with our staff. I trust that this will be a lasting characteristic of NFB.

Mike Estment Executive Chairman

NFB has turned Knowledge into Wealth for more than three decades.

35 Yearsin the Making


NFB Private Wealth Management has a proud history spanning over 35 years. During that time NFB has grown significantly with regional offices in Johannesburg, East London, Port Elizabeth and a satellite office in Cape Town. Up until 2020 they have operated and been licensed as separate legal companies.

Given NVest Financial Holdings as the common parent company, the same trading name of NFB Private Wealth Management and the same business modus operandi across all of the separate NFB Advisory businesses, the strategic decision was taken in late 2018 to amalgamate the NFB businesses into one company and one Financial Services Provider (FSP).

In April 2019 we went through the first stage of the amalgamation which involved the internal alignment of governance and operational aspects across all the regions including alignment of the board of directors of the NFB Private Wealth Management companies. In 2020 we then progressed to phase two of the amalgamation, being the legal amalgamation of the separate companies.

According to Andrew Duvenage, Managing Director of NFB Private Wealth Management: “This amalgamation has several significant advantages over the old operating structure: the main one being the streamlining of current internal processes to be more responsive to client needs. It will also enable us to hold product providers to account from one central point so that we can be sure we’re providing the best possible investment and risk products, as well as pricing, for our clients. We also believe that the new structure positions the business well to expand through future acquisitions, and we

would look to use this opportunity to strengthen our advisory team with further appointments going forward. There are no planned changes to the advisory teams supporting clients, and we look forward to continuing to provide the high level of service to which clients have become accustomed over the last 35 years.”

The newly amalgamated company is officially registered as NFB Private Wealth Management Pty Limited, trading as NFB Private Wealth Management and the amalgamation became legally effective as of 1 June 2020.

NFB Private Wealth Management - the power of ONE

“We also believe that the new

structure positions the business

well to expand through future acquisitions...”


NFB Private Wealth Management participated for a third consecutive year in the Asisa Future IFA Internship programme. The programme is a year-long initiative providing high potential, early career black individuals with the opportunity to participate in a structured learning environment while gaining hands on work experience in a financial advisory business. This helps bridge the gap between theoretical university-based knowledge and participation in the real economy. In the 2019/2020 financial year, NFB hosted a total of five interns across our East London and Johannesburg offices. In East London we welcomed Janet Oloya, Khanya Dladla and Siphamandla Oliphant into the business whilst Tumelo Magasha and Mabatho Maphalala joined our Johannesburg office.

Over the last three financial years of supporting the programme we have now seen eight interns progress through the NFB hosting programme excluding the current intake.

William Higgs, Operations Director of NFB Private Wealth Management is very supportive of the programme, saying:

“Our hosting programme has been hugely successful. This year’s interns have fully immersed themselves in the business and have fast-tracked their learning and performance. We are pleased to report that at the end of the internship, we retained three of the interns in a fulltime capacity and the other two interns are still with NFB in a part time capacity.”

NFB is the largest supporter of the Asisa Future IFA Internship programme and as a result of this support, Asisa has been able to expand the programme such that internships will also be offered in Port Elizabeth and Durban along with Cape Town, Johannesburg and East London.

Higgs further commented: “Given our national footprint with focused business opportunities in the Eastern Cape, NFB has contributed to the Asisa programme by requesting an intern in the Port Elizabeth office for 2021. This has really brought NFB’s national presence to the programme. Our very first intern, Dineo Botsi, has also progressed in the business to a level where she now forms part of the interviewing panel to assess and select intern candidates. This further cements what we are trying to achieve in equipping the interns with the ability to help drive the business forward and for previous years of interns to become the role models for future generations. We look forward to their growth and success during the year ahead.”

Asisa Future IFA programme 2020

Paying itforward

“We are pleased to report that at the end

of the internship, we retained three of the

interns in a fulltime capacity and the

other two interns are still with NFB in a part

time capacity.”

Left to right: Janet Oloya, Khanya Dladla and Siphamandla Oliphant

From Left to right: Reba Makhudu, Mabatho Maphalala, Dineo Botsi, Nndise Makhuvha, Tumelo Magasha


NFB Private Wealth Management - triumphs at Intellidex Awards

NFB Private Wealth Management walked away with three awards at the prestigious Intellidex Top Private Banks & Wealth Managers Awards held in Johannesburg in June 2019.

In addition to being named the Top Wealth Manager NFB also won the Top Wealth Manager for Lump-Sum Investors and the People’s Choice Top Wealth Manager awards as voted for by South African clients.

“These awards are testament to the uniquely personal relationships our advisors have with their clients. We focus on simplifying the complexity of wealth and portfolio management for our clients while delivering exceptional value. This recognition and exceptional achievement would not be possible without the extraordinary team at NFB,” says Mike Estment, Chairman and Private Wealth Manager at NFB.

2019 was the second year in a row that NFB won the Top Wealth Manager for Boutique firms’ category which gives further credibility to NFB as the pre-eminent wealth management franchise.

For its part, the People’s Choice award is determined by a wide-ranging online survey of 5820 clients, designed to assess the different strengths and weaknesses of South Africa’s private banks and wealth managers. The main areas of focus are on satisfaction levels with products and services, and whether clients believe they are getting value for money for fees charged.

“NFB has built an enviable reputation in the industry, one in which we and our customers take great pride in. Intellidex is an influential barometer of the wealth management market in South Africa. Being able to win three awards, including the main category award, illustrates our effectiveness and understanding of how best to provide holistic financial services” (Mike Estment, Executive Chairman of NFB Private Wealth Management).

Launched in 2012, Intellidex conducts this annual survey to determine the top players in

various categories of the wealth management and private banking sectors. Participating firms complete a

questionnaire and a major survey of their clients also informs the rankings. NFB is the top boutique wealth manager of the

year and also wins in the passive lump-sum investor archetype. The firm is also the People’s Choice winner as top wealth manager,

which is voted for by clients.

From left to right: Thulisile Nkomo, Mike Estment & Natalie Schonken


There are so many not-for-profit organisations and charities doing really impactful work in the Eastern Cape that it’s not easy to choose which to support because they are all deserving. For the 2019/2020 financial year though we focused our CSR spend on education, targeting the early childhood development (ECD) phase, primary, secondary and tertiary levels (where possible with a financial literacy bias).

Through a robust selection process we identified three educational organisations and a student-led Foundation that we have formally partnered with as Group CSR beneficiaries going forward.

All three education facilities offer the following:

• Transportation: Children are collected and dropped off at specific areas to ensure their safety.

• Nutrition: All children receive either one or two healthy meals a day and nutritious snacks.

• Education: Classes are restricted to a maximum of 20 children and taught by qualified teachers and support staff.

• Love: All facilities provide emotional care for every child throughout the school day and in activities beyond the classroom.

Further below we detail what each organisation or foundation does and how we would like to support each one (although we are not limited to doing only what is proposed). There are also numerous Group fund-raising events being held over the year, the proceeds of which can also be split between the various beneficiaries.

The 2019/2020 CSR budget amounted to R420,000 and we are committed to at least 75% of this spend qualifying as BBBEE Corporate Social Development.

Group CSR Beneficiaries

After a rigorous selection process which involved site visits and interviews we were delighted to announce the following Group CSR beneficiaries:

At NVest, we take an active role in uplifting the communities in which we operate and 2019 proved to be a watershed year in the roll out of our CSR agenda.

Taking CSRto the next level

Loaves and Fishes Network (LaFN) - ECD education phase

The mission of LAFN is to engage in community development by providing holistic childcare training and development, and appropriate facilities, whilst mobilising and supporting parent and community participation in the caring, nurturing and well-being of their children.

hope Schools - Senior education phase

Hope Schools aim to achieve the brightest possible future for children who are infected, affected, or orphaned by HIV/AIDS by providing excellent education and holistic care throughout their schooling years.

African Angels - Primary education phase

African Angels Independent School provides quality primary school education (6 -13 years) for

economically and socially disadvantaged children from local townships and surrounding farms. With a

youth unemployment rate of 39%, a quality education is essential to create future opportunities.

The Kepe Foundation

Kepe Foundation lends a helping hand to those in need, via outreach programmes and mentoring.


Deep poverty has a detrimental effect on children’s future outcomes, with early childhood deprivation negatively impacting children’s health, cognitive development, social, emotional and behavioural development all of which are linked to educational outcomes. In order to overcome these multi-faceted challenges children need the care and support of adults including their parents and caregivers, Early Childhood Development (ECD) practitioners and the broader community who can, on behalf of the child, access essential services such as primary health care, adequate nutrition, safe water, basic sanitation, protection from abuse and violence, psycho-social support and early childhood care and education.

The LAFN team delivers impact-driven programmes supporting children within socio-economically disadvantaged communities. They capacitate and support ECD centres, ECD practitioners and parents in a holistic yet practical and accessible manner that ensures the well-being of children.

Our role is to provide LAFN with financial assistance to ensure their learning centre care givers and parents are well educated in the above areas.

We have chosen African Angels as the beneficiary of our primary education phase support efforts. African Angels is an English medium primary located in Chintsa East, a seaside village, just outside East London, in the Eastern Cape.

Its scholars are all from socially and economically disadvantaged backgrounds, and classes are limited in size to no more than 20 children in each class, ensuring each child can get individual attention and assistance. Their aim is to provide high-quality primary school education that provide a good foundation upon which students become productive, employed and sound citizens. Our support of this school will comprise both financial assistance and mentoring. NVest is going to sponsor the grade 4 class for 2020 and beyond. This special group of children will be linked with NVest team members as mentors/partners over the course of the year. A number of children in this grade have absent fathers, are insecure and lack resilience and confidence, and all live in compromised living situations.

There will be a number of opportunities over the year to support the Grade 4 cohort; whether its helping repainting their classroom, helping cover books at the beginning of term, cheering them on at sports day, donating second hand clothes, or one on one help with school work. Relationships can be formed through visits to the school, and possibly visits (post the coronavirus crisis) to the NVest offices.

We will also be providing financial support which can be used as the school sees fit; it may be allocated to the grade 4 teacher’s salary but it can also be used for other needs.

Over the long-term, our goal is to donate towards the development of a boys’ hostel. Currently the school has very limited resources for accommodation and only a girls’ hostel.

NVest is going to Sponsor thegrade 4 class for 2020 and beyond.

Loaves & Fishes Network

African Angels


Based in East London, Hope Schools educate children from Grade 00 to Grade 11. Their goal is to expand to incorporate a grade 12 class by 2021.

We have chosen to support Hope Schools’ College students (Grades 8 – 11). These scholars undertake a very diverse programme consisting of technical skills, work readiness and life skills. We would like to revamp the current computer lab and replace the 12 old and out-of-date computers with 25 new PCs; operating systems would be ‘serviced’ by NVest on an ongoing basis. This would give the children an opportunity to research and improve their computer literacy.

The Kepe Foundation was launched by student Siyasibulela “Siya” Kepe, who comes from Cala in the Transkei, at the age of 24. He plays an active role in his community; he mentors young men, inspiring them to become role models, helping them realise their worth and potential. Siya is a phenomenal young man and we think the other beneficiaries will gain from having him engaging with the children at their schools.

There are also numerous Group fund-raising events being held over the year, the proceeds of which can also be split between the various beneficiaries.

The Kepe Foundation

Hope Schools


CORPORATEGOVERNANCE

03


INTRODUCTION

The Directors are pleased to present the Group’s Corporate Governance and Sustainability Report to stakeholders, to endorse the King Code and recognise their responsibility to conduct the affairs of NVest with integrity and accountability in accordance with generally accepted corporate practices. This includes timely, relevant, and meaningful reporting to shareholders and other stakeholders and providing a proper and objective perspective of the Group’s affairs. It is the Board’s aim to achieve true transparency and to build a trusting relationship with all stakeholders.

The Directors have, accordingly, established procedures and policies appropriate to the NVest business in keeping with its commitment to best practices in corporate governance. These procedures and policies have been and will continue to be reviewed by the Directors periodically to keep abreast with changes in the legislative and regulatory landscape as well as industry best practice.

SUSTAINABLE DEVELOPMENT STRATEGY

Corporate Group strategy is approved and overseen by the Board and executed by Executive Management. Group subsidiaries are responsible for setting their own strategic plans which are required to be approved by their boards and Group Executive Management as well as tracked on a regular basis.

CORPORATE GOVERNANCE

The Group subscribes to the values of good corporate governance at all levels and is committed to conducting its business with discipline, integrity and social responsibility.

Pursuant to the Listings Requirements of the JSE Limited (“the JSE”), NVest endorses the governance outcomes, principles and recommended practices contained in the King Report on Corporate Governance 2016 (“King IV” or “the King Code”), which came into effect for companies listed on the JSE on 1 October 2017.

The Board of Directors, which constitutes the governing body of the Company, has satisfied itself that NVest has substantially applied the applicable principles set out in King IV, together with the mandatory corporate governance requirements set out in paragraph 3.84 as read with Section 21 of the Listings Requirements of the JSE, for the year ended 29 February 2020 (see 1.13 further below).

The Directors adopted the principles set out in Part 5 of the King Code. Levels of application in terms of the principles of the King Code are documented fully in this Report and are further accessible via the Group’s website at www.nvestholdings.co.za.

The Directors of NVest have adopted the fundamental outcomes of King IV being the creation of an ethical culture, good performance, effective control and legitimacy.

The formal steps taken by the Directors during the period under review are as follows:

Corporate Governance& Sustainability Report

for the financial year ended 29 February 2020.

It is the Board’s aim to achieve true transparency and to build a trusting relationship with all stakeholders.


1.1. Directors

The Board

The Board of Directors meets regularly and discloses the number of meetings held each year in the Company’s Integrated Annual Report, together with the attendance at such meetings. A formal record is kept of all conclusions reached by the Board on matters referred to it for discussion. Should the Board require independent professional advice, such advice is sought by the Board at the Company’s expense.

All Directors have access to the advice and services of Brendan Connellan, who fulfils the role of Group Company Secretary. The Board is of the opinion that the Company Secretary has the requisite attributes, experience and qualifications to fulfil his commitments effectively. This assessment is based on the experience, qualifications and competency of the Company Secretary. The appointment or dismissal of the Company Secretary is a matter for the Board as a whole and not one individual Director.

Directors are expected to maintain their independence when deciding on matters relating to strategy, performance, resources and standards of conduct. On first appointment, all Directors will be expected to undergo appropriate training as to the Company’s business, strategic plans and objectives, and other relevant laws and regulations. This will be performed on an on-going basis to ensure that Directors remain abreast of changes in regulations and the prevailing commercial environment.

The Board is responsible for relations with stakeholders, as well as being accountable to them for the performance of the Company and reporting thereon in a timely and transparent manner.

In accordance with AltX Listings Requirements, the Directors are required to attend a 4-day Directors Induction Programme (“DIP”). All Directors in office for the year under review ended 29 February 2020 have attended the programme and obtained their certification with the exception of Charl Herselman (appointed with effect from 1 November 2019). Arrangements have been made for him to attend DIP in October 2020.

Chairman and Chief Executive Officer

The offices of Chairman and Chief Executive Officer are separated. Anthony Godwin is the appointed Chief Executive Officer and Jonathan Goldberg is the Independent Non-Executive Chairman.

Board balance

The Board includes both Executive and Non-Executive Directors in order to maintain a balance of power and ensure independent, unbiased decisions and that no one individual has unfettered powers of decision-making. In line with governance best practise, the Company had a majority of Non-Executive Directors for most of the year under review. For the year commencing 1 March 2020, it has a slight majority of Executive Directors.

The Board of Directors of NVest consisted of the following Directors during the period under review:

Executive Directors

• Anthony Godwin (Chief Executive Officer) • Charl Herselman (Financial Director)• Chris Lemmon • Glenn Orsmond (resigned as Financial Director with effect

from 1 May 2019)• Michael Estment

Independent Non-Executive Directors

• Jonathan Goldberg (Independent Non-Executive Chairman)

• Dr Lana Weldon (Lead Independent Non-Executive Director)

• Lusanda Mangxamba

Non-Executive Directors• Brendan Connellan (appointed as Non-Executive

Director for the year under review, with effect from 1 March 2019, reappointed as an Executive Director on 1 March 2020)

• Dylan Schemel

Supply of information

The Board meets on a regular basis where possible, but every three months as a minimum. The Directors are briefed properly in respect of special business prior to Board meetings and information is provided timeously to enable them to fully consider all relevant issues.

Furthermore, management supplies the Board with the pertinent information needed to fulfil its duties. Directors make further enquiries where necessary, and have unrestricted access to all Group information, records, documents and property. Not only does the Board look at the quantitative performance of the Group, but also at issues such as customer satisfaction, market share, environmental performance and other appropriate issues. The Chairman ensures that all Directors are briefed adequately prior to Board meetings.

Delegation of duties

Directors have the authority to delegate certain of their duties, either externally or internally, to perform their duties fully. The Chief Executive Officer reviews these delegations and reports on this to the Board.

appointments to the Board

Any member of the Board can nominate a new appointment to the Board, which will be considered at a Board meeting, subject to prior approval of the Remuneration and Nominations Committee. Any nominated Director’s expertise and experience are considered by the entire Board in a formal and transparent manner, as well as any prevailing


needs of the Board in considering such appointment, including consideration of the Group’s Diversity Policy.

A General Meeting of the Directors has the power to appoint someone as a Director from time to time, either to fill a vacancy, or as an additional Director. The Company’s Memorandum of Incorporation (“MOI”) does not provide for a maximum number of Directors, but does provide for shareholders, by way of ordinary resolution, to determine a maximum number of Directors from time to time as they deem appropriate. Any interim appointments are subject to approval at the Company’s next General or Annual General Meeting.

Board meetings

The Board retains overall accountability for the day-to-day management and strategic direction of the Group, as well as for attending to relevant legislative, regulatory, and prevailing best practice requirements.

Accountability to shareholders remains paramount in Board decisions, and this is balanced against the demands of the regulatory environment in which the Group operates and the concerns of its other stakeholders.

Four Board meetings were held during the 2020 financial year under review. The Dates of those meetings and the Directors that attended each meeting are tabled below:

Name of member 20 May 2019 19 august 2019 18 Nov 2019 17 Feb 2020

Jonathan Goldberg Present Present Present Present

Anthony Godwin Present Present Present Present

Dr Lana Weldon Present Present Present Present

Brendan Connellan* Present Present Present Present

Michael Estment Present Present Present Present

Dylan Schemel Present Present Present Present

Chris Lemmon Present Present Present Present

Charl Herselman N/A N/A Present Present

Lusanda Mangxamba Present Present Present Present

(*in capacity as Company Secretary)A representative of the Company’s Designated Advisor, Arbor Capital Sponsors, was also present at all of the above meetings, in accordance with the JSE Listings Requirements.

1.2. Directors’ remuneration

remuneration Policy

The Remuneration Policy in place makes provision to remunerate Executive Directors on either an incentive basis or a non-incentive basis, details of which are set out in the Report of the Remuneration and Nominations Committee. Both incentive and non-incentive-based remuneration is market-related. The Remuneration and Nominations Committee ensures that Group remuneration and recruitment is aligned with overall business strategy, with the aim of enabling NVest to attract and retain personnel who will create long-term value for all stakeholders. The full Remuneration Report is set out on page 61 of the Integrated Annual Report.

The Remuneration and Nominations Committee consisted of the following Independent Non-Executive Directors during the year under review:

• Jonathan Goldberg (Chairman)• Dr Lana Weldon• Lusanda Mangxamba

1.3. accountability and audit

Incorporation

The Company is duly incorporated in South Africa and operates in conformity with its MOI and all applicable laws of South Africa.

Financial reporting

The Board is responsible for the Group’s systems of internal financial and operational control, as well as for maintaining an appropriate relationship with the Company’s auditors. The Board is responsible for presenting a balanced and understandable assessment of the Company’s financial position with respect to all financial and price sensitive reports on the Company.

Internal control

The Directors conduct an annual review of the Company’s internal controls and report their findings to shareholders. This review covers financial, operational and compliance controls, as well as a review of the risk management policies and procedures of the Company.


audit and risk Committee

A combined Audit and Risk Committee (“the Committee”) has been established, whose primary objective is to provide the Board with additional assurance regarding the efficacy and reliability of the financial information used by the Directors, to assist them in discharging their duties. The Committee is required to provide comfort to the Board that adequate and appropriate financial and operating controls are in place, that significant business, financial and other risks have been identified and are being suitably managed, that the Financial Director has the appropriate expertise and experience and that satisfactory standards of governance, reporting and compliance are in operation. The Committee sets the principles for recommending the use of the external auditors for non-audit services.

The combined Audit and Risk Committee consisted of the following Non-Executive Directors for the year under review:

• Dr Lana Weldon (Chairman)• Dylan Schemel • Lusanda Mangxamba

A detailed report of the Audit and Risk Committee is set out on page 58 of this Integrated Annual Report and a description of material risks that are specific to the Group as required by paragraph 7.F.7 of the JSE Listings Requirements are set out later in this Corporate Governance and Sustainability Report.

External auditors

The external auditors of the Group are BDO South Africa Incorporated and they have performed an independent and objective audit of the Group’s financial statements. The statements are prepared in terms of the International Financial Reporting Standards (“IFRS”). Interim reports are not audited.

1.4. Company Secretary

Brendan Connellan was the appointed Group Company Secretary for the year under review. The Board has considered and satisfied itself on the competence, qualifications and experience of the Company Secretary to fulfil his commitments effectively. The Directors assess the on-going competency of the Company Secretary on an annual basis and in compliance with section 3.84(h) of the JSE Listing Requirements.

Moreover, the Board confirms that there is an arm’s length relationship between itself and the Company Secretary and this position is assessed on an annual basis. Brendan Connellan acted as the group Company Secretary on an outsourced basis during the year ended 29 February 2020, which further enhanced the arm’s length relationship. All Directors have access to the advice and services of the Company Secretary, who has performed this role for the Group for several years.

Subsequent to the year end, he rejoined the Company as an executive director but retains the role of Company Secretary. Despite his executive appointment, the Board sill considers that he is independent in both mind and actions and conducts his duties on an arm’s length basis.

Brendan Connellan has headed up the Company’s compliance management function since its inception as well as that of subsidiary companies and is exceptionally well-versed in the Group’s compliance needs with different regulatory bodies. Over the years, he has successfully advised the Board and staff on requisite compliance matters and ensured that the Company is fully compliant in this regard.

1.5. Financial Director

Mr Glenn Orsmond resigned as Financial Director of the Group with effect from 01 May 2019 in order to take up a position in the aviation industry. Charl Herselman CA(SA) was subsequently appointed to serve on the Board as Financial Director with effect from 1 November 2019. Charl had already fulfilled the duties and responsibilities of the Financial Director since the departure of Glenn Orsmond as well as having served as Head: Group Finance until his appointment onto the Board. The Group is currently assessing the appropriate course of action to take in respect of the appointment of a permanent Financial Director.

The Financial Director position is a full-time executive role. The Audit and Risk Committee has confirmed the experience and expertise of Charl Herselman at an Audit and Risk Committee meeting and has issued confirmation thereof to the JSE. Charl assumed the formal responsibilities required of him in terms of the JSE Listings Requirements and the Companies Act relating to his appointment as Interim Financial Director.

In support of the Financial Director, the Group also has a very strong finance team and employed the services of an expert in International Financial Reporting Standards (IFRS) to draft its consolidated annual financial statements.

1.6. Code of ethics

NVest subscribes to the highest ethical standards and behavior in the conduct of its business and related activities. All employees of the Group are required to maintain the highest standards in ensuring that business practices are conducted in a manner, which, in all reasonable circumstances, are above reproach. The values have been embodied in an Ethics Policy which commits Directors and employees to the highest standards of ethical behavior.

Social and Ethics Committee:

In compliance with the Act, the following persons served in the Social and Ethics Committee during the year under review:

• Siviwe Kwatsha (Chairman)*• Jonathan Goldberg (Independent Non-Executive

Director)• Dr Lana Weldon (Independent Non-Executive Director)• Brendan Connellan (Non-Executive Director)**• Travis McClure (Prescribed Officer)

(*Siviwe Kwatsha also serves as Chief Information Officer for the Group **Brendan Connellan has been reappointed as an Executive Director of the Company with effect from 1 March 2020, having also been reappointed as Chief Operations Officer for the Group).


A detailed report of the Social and Ethics Committee for the period under review is set out on page 56 of this Integrated Annual Report.

1.7 relations with shareholders

Meetings with shareholders take place on a regular basis. Meetings with investment analysts, to provide presentations on the Company and its performance, will be considered going forward.

The Board shall ensure that shareholders are supplied with all the necessary information in order that they may make considered use of their votes and assess the corporate governance of the Company.

1.8 Dealing in securities

NVest has a policy in place governing the dealing in the Company’s securities by Directors, Executives and Senior Management of the Company in line with the JSE Listings Requirements and the Financial Markets Act.

The Board has established procedures regarding the legislation which regulates insider trading, whereby there is a closed period from the date of the financial year end to the earliest publication of the Preliminary Report, the Abridged Report or the Provisional Report in the case of results for a full period and from the date of the interim period end to the date of the publication of the first and second interim results as the case may be, which periods are known as closed periods.

In accordance with the JSE Listings Requirements, no Director nor the Company Secretary shall deal in the securities of the Company during a closed or prohibited period as well as whilst the Company is trading under a cautionary.

All Directors, Prescribed Officers and the Company Secretary shall obtain clearance to deal from the Chairman of the Company or other designated Directors in line with Company policy prior to dealing, and the Company Secretary keeps a register of such clearances in terms of the JSE Listings Requirements. The Company Secretary or such person as may be nominated by him from time to time keeps a record of all dealings by Directors in the securities of the Company.

There have been no dealings in NVest securities by Directors from the date of the financial year end (29 February 2020) until the date of this Report.

1.9 Governance of IT

The Board is responsible for IT governance as an integral part of the Group’s governance framework. The IT function is not expected to significantly change in the short term.

Various new and reviewed IT policies have been approved by the Board and implemented since the issuance of the last Integrated Annual Report to ensure effective governance of IT related matters and the Board continues to ensure implementation of policy in that regard.

1.10 Employment equity

NVest upholds and supports the objectives of the Employment Equity Act 1998 (Act 53 of 1998). NVest’s employment policies are designed to provide equal opportunities, without discrimination, to all employees and potential employees.

1.11 Promotion of diversity

In terms of paragraph 3.84 of the JSE Listings Requirements, the Board is required to have a policy on the promotion of gender and race diversity at Board level. The Company recognises that gender and race diversity that reflects the country’s population demographics at Board level is an important facet of diversity and is a catalyst for social cohesion, transformation and competitiveness within the financial services industry. In addition, the Board is also mindful of diversity when considering disabled persons. As such, the Board approved its Diversity Policy on 23 November 2017. However, before adoption of this Policy, the Board had already formalised its stance in terms of supporting disabled persons and gender diversity and this is reflected in the appointment of Dr Lana Weldon to the Board with effect from 6 October 2016 and more recently, Lusanda Mangxamba with effect from 28 February 2019.

1.12 additional JSE Disclosures

Paragraph 3.63

Paragraph 3.63 of the JSE Listings Requirements requires that an issuer announce the details of transactions in “securities” of the issuer by certain parties, including the issuer’s directors, prescribed officers and the company secretary or their “associates”. The term “transaction” is defined in paragraph 3.64 of the JSE Listings Requirements to include inter alia, purchases and sales of the issuer’s securities, as well as derivatives referencing the issuer’s securities and any other transaction providing direct or indirect exposure to the issuer’s share price.

With effect from 2 December 2019, the announcement requirements were expanded significantly.

The definition of “transaction” was expanded to include the use of the issuer’s securities as “security, guarantee, collateral or otherwise granting a charge, lien or other encumbrance over the securities” (paragraph 3.64(h)). As amended, paragraph 3.64(h) states that a transaction (for which an announcement is required) occurs at the time a security agreement is entered into, at the time when a right of the secured party is exercised, and at the time that an existing security agreement is amended or terminated.

The following directors of the Company have shares of the Company pledged as security against loans taken out as follows:


Director Number of shares pledged

Class of Securities pledged

Nature and term of financial obligation

amount of Financial Obligation

Brendan Connellan 10,705,475 Ordinary Shares12-month

interest only loan R5,057,000

Christopher Lemmon 500,000 Ordinary Shares 5-year interest only loan R910,000

Paragraph 7.F.7

Paragraph 7.F.7 of the JSE Listings Requirements requires that an issuer discloses a description of material risks which are specific to the issuer, its industry and/or its securities. The Group has a detailed risk register in place detailing all risks that have been identified by the issuer and its subsidiaries. The risks are rated according to the probability of each risk materialising and the likely potential impact to the Group and/or each subsidiary (as may be applicable) should any risk materialise. Each risk has a risk mitigation strategy attached to it. Risk registers are assessed by the relevant boards of directors at each board meeting. Directors are required to sign an attestation confirming that risks are adequately and appropriately disclosed and mitigated and their understanding of their responsibility relating to the management of risks of the Group company that they are directors of.

Below is a summary of the main risks that are specific to the Group, the industry in which we are in and/or our securities. Please note that these risks and the assesment of their probability and impact are fluid and are likely to evolve over time.

risk Description

Probability of risk Materialising Impact (if risk was to materialise).Insert X where appropriate. Mitigation

Probable (51% or >)

reasonably Possible

(30% - 50%)

remote (30% or <)

Financial Loss/Cost

reputational Damage

regulatory Censure

Operational inefficiency

and/or competitive

disadvantage

risk adequately Mitigated in opinion of

Board?

Capacity Constraints: Being a small to medium sized Group, there is inherent capacity constraint and “double hatting” of key individuals. This has the potential to adversely impact the pace of future growth of the Group. Focus must be applied on capacitating key roles and succession planning.

X X Yes

risk of Loss of Key role Players: The performance and sustainability of the Group is vulnerable to departures of key role players. There is potential for the sustainability and profitability of the Group to be negatively impacted if certain key individuals were to exit.

X X Yes

risk of Uncompetitive remuneration Models: There is an ongoing risk that Group remuneration models, specifically of income producing employees, becomes uncompetitive or inconsistent with the market. It is essential that remuneration models remain competitive and aligned to Group strategic objectives and growing shareholder value.

X X Yes

B-BBEE Credentials: The Group's lack of BBBEE credentials may constrain future growth and performance and place certain existing institutional client mandates and/or licences at risk.

X X In Progress

Legal and regulatory environment: continues to remain fluid and evolve over time, with a potentially material impact on the business and modus operandi of the Group. Key areas that need proactive monitoring and attention are the Retail Distribution Review (RDR) as well as the Protection of Personal Information Act (POPI).

X X X X X Yes


Legal Compliance: The inherent risk that the Group breaches primary legislation applicable to. Primary legislation/regulation includes: the Companies Act, JSE Listings Requirements and Regulations, King Code on Corporate Governance, Employment Equity, Broad-Based Black Economic Empowerment, Protection of Personal Information Act, Financial Intelligence Centre Act, Financial Advisory and Intermediary Services Act and the Income Tax Act (amongst other).

X X X X Yes

Business Continuity: Potential inability of the business to implement business continuity in a crisis situation whereby system access, communication and/or resourcing is materially impacted (e..g owing to fire, flood, disease or other crisis). This risk has been tested under the prevailing COVID-19 lockdown conditions. To date, the Busines has responded well and has been able to formulate robust Business Continuity Plans and execute those to minimise disruption and reduction in productivity.

X X X X X Yes

Cyber Crime: The risk that internal controls and measures are not suitably robust to prevent company confidential or private client data being accessed by an unauthorised party and the Group or parts of the Group being victims of Cyber-crime. There is an increased risk of Cyber-Crime during the COVID-19 lockdown measures as hackers take the opportunity and unusual circumstances to gain unauthorised access to data and systems.

X X X X X Yes

Earnings Growth: The risk that earnings growth and broader financial performance returns of the Group do not meet shareholder/market expectations precipitating a drop in share value. The COVID-19 pandemic has caused substantial volatility in markets across the world which have precipitated material losses. There is an increased risk of client litigation for such losses. To date, the Group and client investment portfolios have fared better than the markets.

X X Yes

1.13 Transfer office

Computershare Investor Services (Pty) Limited acts as Transfer Secretary to the Group.

1.14. application of King IV Principles for the year ended 29 February 2020

King IV advocates an outcomes-based approach towards the achievement of four key governance outcomes being;

(i) an ethical culture, (ii) good performance, (iii) effective control, and, (iv) legitimacy.

A summary of the King IV principles implemented by the Company in meeting and/or supporting those outcomes is set out below. While recommended practices were applied where and to the extent applicable to the business, further enhancements will be made over time in line with the Company’s aspirations to continuously adapt and improve its corporate governance practices.


In terms of the Listings Requirements of the JSE, companies listed on the Alternative Exchange Board (“AltX”) are only required to report on the extent of their application of the principles set out in Part 5.3 (Governing Structures and Delegation) of the King Code. However, the Company has elected to continue with full disclosure in accordance with King IV and its summary in that regard is available via the Group website (http://nvestholdings.co.za).

ParT 5.1: Leadership, ethics and corporate citizenship

Governance outcome: Ethical culture

Principle 1 Leadership

The Board should lead ethically and effectively

The Board is committed to the highest standards of corporate governance. The responsibilities of the Board include providing effective leadership based on an ethical foundation. To this end, the Board has adopted an Ethics Policy which is designed to ensure the effective management of ethics and is applicable to all directors and employees across the Group. The Board and its respective committees monitor compliance with the Ethics Policy on an on-going basis.

Directors have a legal obligation to prevent conflicts of interest with the Company and are obliged to disclose any potential conflicts prior to any consideration or discussion by the Board of such items and are required to recuse themselves from any meetings while such discussions are in progress. Disclosures of other directorships are tabled at the start of each Board meeting and this is a standard agenda item.

Practices implemented with regards to the appointment of new directors are included under Principle 7 below.

A “performance and effectiveness assessment” is performed annually in respect of the Board and the Audit and Risk, the Remuneration and Nominations and the Social and Ethics Committees. The results of those assessments are communicated to the Board and its committees.

Principle 2 Organisational ethics

The Board should govern the ethics of the organisation in a way that supports the establishment of an ethical culture

In accordance with the Board Charter (which is reviewed annually in August), the Board is the guardian of the values and ethics of the Group and sets the tone for an ethical organisational culture across the Group. The Board has a fiduciary duty to act in good faith, with due care and diligence and in the best interests of the Group and its stakeholders and is therefore the primary body responsible for the corporate governance values of the Group. While control is delegated to management in the day-to-day management of the Group, the Board retains full and effective control over the Group.

The Ethics Policy adopted by the Board commits the Group and its employees to the highest ethical standards of conduct and amongst others regulates aspects of confidentiality, non-discrimination, the acceptance of gifts, bribery and political contributions.

Procedures exist in terms of which unethical business practices can be brought to the attention of the Board. The Board has adopted a zero-tolerance approach to fraud and the appropriate remedial action is taken should any substance be found to the matter reported.

Principle 3 responsible corporate citizenship

The Board should ensure that the organisation is and is seen to be a responsible corporate citizen

The Social and Ethics Committee, which reports to the Board and shareholders, reflects and effects the Company’s commitment to responsible corporate citizenship. NVest subscribes to the provisions of the Promotion of Equality and Prevention of Unfair Discrimination Act.

The Group’s good corporate citizenship is further evidenced by its promotion of the reduction of corruption, as well as its contribution to the development of the communities in which its activities are predominantly conducted or within which its products or services are predominantly marketed. The Board has adopted a Group Corporate Social Responsibility (“CSR”) Policy which commits the Company to making a meaningful contribution to the communities in which it operates. Pursuant to the CSR Policy the Company maintains a record of sponsorship, donations and charitable giving.

A Diversity Policy has also been adopted, notwithstanding that the Group had identified the need for inclusivity and diversity in earlier years.

During the period under review there were no material fines or penalties incurred which needed to be brought to the attention of stakeholders.


ParT 5.2: Strategy, performance and reporting

Governance outcome: Good performance and value creation

Principle 4 Strategy and performance

The Board should appreciate that the organisation’s core purpose, its risks and opportunities, strategy, business model, performance and sustainable development are all inseparable elements of the value creation process

The Board, as a whole and through its Committees, approves and monitors the implementation of the strategy and business plans of the Group, sets objectives, reviews key risks and opportunities that could threaten or enhance the Group’s ability to provide sustainable long-term growth to stakeholders, and evaluates performance against the background of economic, environmental and social issues relevant to the Company and global economic conditions.

The sustainability of the Group’s businesses is a key consideration in the development and implementation of the Group’s business model, supported by formal policies governing environmental, corporate social investment, ethical and remuneration matters, all of which form key components of the value-creation process and are effective in ensuring the long-term sustainability of the Group.

The Audit and Risk Committee actively monitors the Group’s key risks and risk events as part of its standard agenda.

Principle 5 reporting

The Board should ensure that reports issued by the organisation enable stakeholders to make informed assessments of the organisation’s performance and its short, medium, and long-term prospects

The Board is responsible for the integrity and transparency of the Company’s reporting and, assisted by the Audit and Risk Committee and the external auditors, oversees the issue of the Company’s annual financial statements and integrated reports.

The Social and Ethics and Audit and Risk Committees oversee the sustainability reporting process, although this is not independently assured by a sustainability assurer. Independent assurance will be considered in the future should the Company size warrant such an initiative. The Company also ensures that these reports and other information are published on its website.

The Board is committed to a communication policy to ensure that timely, relevant, accurate and honest information is provided to all stakeholders to enable them to make informed assessments of the Company’s performance and its short, medium, and long-term prospects.

The Company has adopted policies governing the dissemination of price-sensitive information and insider trading. The publication of external reports and press releases, including releases on the JSE’s electronic news service (SENS), requires the prior approval of the Company’s Chief Executive Officer or the Company Secretary.

ParT 5.3: Governing structures and delegation

Governance outcome: adequate and Effective control

Principle 6 Primary role and responsibilities of the Board

The Board should serve as the focal point and custodian of corporate governance in the organisation

The Board ensures that the Company applies the governance principles contained in King IV and continues to further entrench and strengthen recommended practices through the Group’s governance structures, systems, processes and procedures. The Board’s governance role and responsibilities are set out in the Board Charter and includes the focal role of setting the strategic direction of the Group.

The Board meets once every quarter; however, should important matters arise between scheduled meetings, additional meetings may be convened. The Board may obtain independent, external professional advice at the Company’s expense concerning matters within the scope of their duties and the directors may request documentation from and set up meetings with management as and when required.

An appropriate governance framework and the necessary policies and processes are in place to ensure entities in the Group adhere to Group requirements and minimum governance standards.

While it may delegate to its committees and management where appropriate, the Board remains ultimately accountable for corporate governance in the Group and for the appropriate and transparent reporting of corporate governance.


Principle 7 Composition of the Board

The Board should comprise the appropriate balance of knowledge, skills, experience, diversity and independence for it to discharge its governance role and responsibilities objectively and effectively

At the date of this Annual Report, the Board is comprised of five executive directors, three Independent Non-Executive Directors and one Non-Executive Director. All members of the Board have the requisite skills and knowledge from diverse industry backgrounds. The abridged curricula vitae of the Directors are included in the Integrated Annual Report.

The Board is chaired by an Independent Non-Executive Director (“Chairman”) and the roles of the Chairman and the Chief Executive Officer are separate and clearly defined to ensure a balance of power and effective discharge of duties. The Board has also appointed a Lead Independent Director to provide leadership to the Board to provide for instances when the Chairman is conflicted.

The independence of the Non-Executive Directors is reviewed on an annual basis by the Board against the criteria stipulated by the Listings Requirements of the JSE and King IV. The arrangements for the periodic, staggered rotation of Board members are included in the Company’s Memorandum of Incorporation and are duly applied.

To ensure a formal and transparent appointment process, any new appointment of a Director is considered firstly by the Remuneration and Nominations Committee and secondly by the Board as a whole. The selection process involves considering the existing balance of knowledge, skills and experience on the Board and a continual process of assessing the needs of the Company and the Board’s effectiveness and ability for it to discharge its governance role and responsibilities objectively and effectively. Directors are appointed in terms of the Company’s Memorandum of Incorporation. New Directors appointed to the Board are provided with an induction pack, including background material on the Company’s business and Board matters and guidance on Directors’ duties and responsibilities. New Directors are required and encouraged to meet with various senior executives within the Group in order to fully acquaint themselves with key functions, business units and people.

Directors receive regular briefings on legal and other developments, including changes in the business and the business environment. As the Company is listed on AltX, all directors are required to complete an AltX Directors Induction Programme presented by the Institute of Directors of Southern Africa.

The Board has adopted a policy on the promotion of diversity and inclusion at Board level, which policy includes disability, gender and race diversity, and reports in the Integrated Report on how it has made progress towards the targets established in the policy.

The Board has carried out a formal self-evaluation and is satisfied that the composition of the Board reflects the appropriate mix of knowledge, skills, experience, diversity and independence.

Principle 8 Committees of the Board

The Board should ensure that its arrangements for delegation within its own structures promote independent judgement, and assist with balance of power and the effective discharge of its duties

Details regarding the Board’s delegation of authority framework are included under Principle 10 below.

The Board has delegated certain functions, without abdicating its own responsibilities, to the following committees (“the Committees”), all of which has been established pursuant to written Terms of Reference:

• Audit and Risk Committee • Social and Ethics Committee• Remuneration and Nominations Committee • Group Risk and Control Committee• Executive Committee

The Committees are appropriately constituted and members are appointed by the Board, with the exception of the Audit and Risk Committee whose members are nominated by the Board and elected by shareholders of the Company. Minutes of the meetings of the Committees are formally recorded.

The Committees assist the Board to effectively discharge its duties. The composition and mandates of the Committees, as detailed in the Corporate Governance Report, ensure that there is an appropriate balance of power and that an independent perspective is brought to Board deliberations and that no single director has unfettered powers.


Principle 9 Evaluations of the performance of the Board

The Board should ensure that the evaluation of its own performance and that of its committees, its chair, and its individual members, support continued improvement in its performance and effectiveness

The performance and effectiveness of the Board as a whole, as well as the Board Committees, is evaluated annually. The Chairman of the Board, assisted by the Company Secretary, leads the Board’s evaluation processes. Items identified for improvement are discussed and followed up to ensure the implementation of recommended actions and the continued improvement in performance and effectiveness.

An assessment of the suitability and effectiveness of the Group Financial Director is conducted annually by the Audit and Risk Committee and is confirmed in the Audit and Risk Committee’s report in the annual financial statements. Actions are taken where needs are identified.

The appointment of the Chairman is reviewed by the Board every 3 years at the time of the retirement and reappointment of the Non-Executive Chairman.

Principle 10 appointment and delegation to management

The Board should ensure that the appointment of, and delegation to, management contribute to role clarity and the effective exercise of authority and responsibilities

While retaining overall accountability and subject to matters reserved to itself, the Board has delegated authority to the Chief Executive Officer, other executive directors and senior executives to run the day-to-day affairs of the Company, subject to a limits of authority framework which contributes to the effective exercise of responsibilities. The Board approves and regularly reviews the limits of authority framework. In instances where delegation of authority has taken place to management or committees, pre-approved materiality levels and terms of references apply, respectively.

The Chief Executive Officer is accountable to the Board for the successful implementation of its strategy and the overall management and performance of the Group. The role and responsibilities of the Chief Executive Officer, who was appointed by the Board, are set out in the Board Charter.

The Board has satisfied itself that key management functions are fulfilled by competent and appropriately authorised individuals and are adequately resourced.

To provide continuity of executive leadership, a succession plan in respect of the Chief Executive Officer, executive management and other key positions is in place and is reviewed by the Board on a regular basis.

The Company has appointed Brendan Connellan as Company Secretary, who reports to the Board on all statutory, regulatory and governance matters concerning the Group. The performance and independence of the Company Secretary is evaluated by the Board annually and the Board has satisfied itself as to the appropriateness of this appointment and as to the arms-length nature of this appointment.

ParT 5.4: Governance functional areas

Principle 11 risk governance

The Board should govern risk in a way that supports the organisation in setting and achieving its strategic objectives

In terms of the Board Charter, the Board is responsible for the governance of risk and the Audit and Risk Committee assists the Board with this responsibility. The Audit and Risk Committee sets the approach for risk governance in a manner that ensures adequate evaluation of opportunity and risk and supports the Company in setting and achieving its strategic objectives.

The Board has delegated to Management the responsibility to design, implement and monitor a Group-wide Risk and Control Framework.

A Group Risk and Control Committee comprising senior management of the Group representing has been established in terms of the Risk and Control Framework. This committee’s role is to ensure effective implementation of the Risk and Control Framework and to provide assurance to the Audit and Risk Committee and the Board that the Risk and Control Framework is integrated into the daily activities of the Group and that risks are being managed effectively in accordance with the terms of the Framework. The Committee reports, through its Chairperson, into the Audit and Risk Committee.

The Audit and Risk Committee review Group and individual subsidiary risk registers at every meeting. The risk registers, which are updated on a regular basis with the subsidiary risk registers also considered at each subsidiary board meeting, categorise the estimated impact and likelihood of identified risks and detail the controls established and remedial action taken at various levels to mitigate the risks identified.


Principle 12 Technology and information governance

The Board should govern technology and information in a way that supports the organisation setting and achieving its strategic objectives

The Board recognises the importance of technology and information in relation to the Group’s strategy and as such, an IT Governance Framework has been adopted by the Board. The Group’s IT Governance Framework delegates implementation to management and includes the information technology strategy, structure, policies, and procedures to ensure alignment with the performance and sustainability of the Company. In terms of the Board Charter and the Audit and Risk Committee Terms of Reference, the Board, together with the Audit and Risk Committee, oversee the governance of information technology. The Company has identified the importance of this principle and appointed a Chief Information Officer to head IT Governance from an executive perspective.

Principle 13 Compliance governance

The Board should govern compliance with applicable laws and adopted, non-binding rules, codes and standards in a way that supports the organisation being ethical and a good corporate citizen

The Board delegates its responsibility for the implementation and execution of effective compliance management to management; however, the Board retains overall accountability for compliance with applicable laws, adopted non-binding rules, codes and standards.

The Audit and Risk Committee, together with the Social and Ethics Committee, the Company Secretary and the Company’s Designated Advisor, review the adequacy and effectiveness of the Group’s procedures to ensure compliance with legal and regulatory responsibilities. Any material incidences of non-compliance and/or significant fines or penalties incurred are reported to the Board and/or the Audit and Risk Committee to ensure that appropriate remedial action is taken.

The Board is apprised of relevant new legislation or regulations introduced from time to time to ensure that compliance requirements are kept up to date. Details of any material regulatory penalties, sanctions or fines for non-compliance with the Group’s statutory obligations incurred will be disclosed in the Integrated Report. During the year under review, there were no material findings of non-compliance with applicable legislation or regulations.

Principle 14 remuneration governance

The Board should ensure that the organisation remunerates fairly, responsibly and transparently so as to promote the achievement of strategic objectives and positive outcomes in the short, medium and long term

The Board oversees the governance of remuneration and sets the direction for remuneration across the Group, considering market conditions, expert advice from remuneration specialists and the Company’s remuneration policy. The Company’s remuneration policy, as approved by the Board, is tabled for a non-binding advisory vote at each Annual General Meeting of shareholders. Non-executive directors’ fees are submitted annually to shareholders for approval at the Annual General Meeting. The remuneration policy ensures that the Company remunerates fairly, responsibly and transparently in the context of overall remuneration in the Group to enable the Company to achieve its strategic objectives and to secure positive outcomes in the short, medium and long term. The provisions of the remuneration policy are included in the Integrated Report.

Principle 15 assurance

The Board should ensure that assurance services and functions enable an effective control environment, and that these support the integrity of information for internal decision-making and of the organisation’s external reports

The Company is committed to appointing service providers to provide independent assurance on both the financial and non-financial aspects of the business based upon their specific expertise and experience. The Board sets the direction for assurance services and functions but the responsibility for overseeing such arrangements is delegated to the Audit and Risk Committee, which is charged with supporting the integrity of information for internal decision-making use and for external reports.

A combined assurance model has been developed and formally implemented across the Group to effectively cover the Group’s significant risks and material matters. The model includes, but is not limited to;


• the Group’s risk management and compliance functions as well as outsourced Compliance Officers,

• the external auditors and regulatory inspectors, • together with such other external assurance providers as may be appropriate or

deemed necessary from time to time, including the Company Secretary, which provides assurance on aspects of corporate governance and a JSE Designated Advisor which advises on the Listings Requirements of the JSE.

The Audit and Risk Committee has satisfied itself as to the independence of the external auditor. Furthermore, the Audit and Risk Committee has reviewed the appointment of the auditors and the audit partner in accordance with the requirements of the JSE Listings Requirements. With regards to an internal audit function, the nature and size of the Company does not warrant such a function at this stage. However, the Audit and Risk Committee will continue to consider the requirement for same, and this remains as a standing agenda item for consideration at each meeting.

ParT 5.5: Stakeholder relationships

Governance outcome: Legitimacy

Principle 16 Stakeholders

In the execution of its governance role and responsibilities, the Board should adopt a stakeholder-inclusive approach that balances the needs, interests and expectations of material stakeholders in the best interests of the organisation over time

The Board acts as a steward of the Company and each director acts with independence of mind in the best interests of the Company and its stakeholders. In its deliberations, decisions and actions, the Board is sensitive to the legitimate interests and expectations of the Company’s stakeholders. Directors are mindful of their fiduciary duties and their duty to act in accordance with applicable legislation. Records of directors’ financial interests are kept and updated on an on-going basis.

The Company engages its stakeholders on multiple levels and this allows the Company to manage issues effectively and timeously. The appropriate balance between the Company’s various stakeholder groupings and the best interests of the Company is assessed on a continuous basis. The Company acts in accordance with the requirements of the Companies Act and the JSE Listings Requirements regarding the equitable treatment of shareholders.

Stakeholders are kept apprised of the Company’s performance by publication of the Integrated Report, the interim and year-end results announcements and, where required, trading updates.

Management is responsible for maintaining stakeholder relationships.

Principle 17 responsibilities of institutional investors

The Board of an institutional investor organisation should ensure that responsible investment is practices by the Company to promote the good governance and the creation of value by the companies which it serves

Not applicable as the Company is not an institutional investor organisation.


Social & EthicsCommittee Report

for the year ended 29 February 2020. NVest is a broad range Financial Services and Property Group with over R30.1 billion in assets under management and administration as at 28 February 2019 and is now in its fifth year of operation as a listed entity on the Alternative Exchange of the JSE.

The Social and Ethics Committee (“the Committee”) was established by the NVest Board in 2015 to consider and monitor the moral and ethical conscience of the Group. The Committee is constituted and operates according to the Companies Act, 2008 (No. 71 of 2008) as amended (“the Companies Act”), Section 43(5) of the Companies Regulations and the King IV report on corporate governance (“King IV”).

The Committee comprised five members during the year under review being;

• Mr Siviwe Kwatsha (Chief Information Officer) as Chairman of the Committee • Mr Brendan Connellan (Company Secretary) • Mr Jonathan Goldberg (Independent Non-Executive Director)• Dr Lana Weldon (Independent Non-Executive Director) • Mr Travis McClure (Subsidiary Director)

Anthony Godwin (Group Chief Executive Officer), Taryn van der Poel (Group HR Manager), Phumla Chitwa (Head: Group Compliance), Colette Sutherland (Assistant Company Secretary), Nathan Carr (Head: Group Legal) as well as other members of the Board, Executive Management and the Designated Advisor attend meetings by invitation.

The Committee met four times during the period under review and received feedback from management on matters under the Committee’s oversight. The Committee reports on any significant matters to the Board in terms of its mandate. The meetings held, and the member’s attendance, during the period are set out below:

The responsibilities and functions of the Committee, which are aligned with the Committee’s statutory functions as set out in the Companies Act, formed the basis of the Work Plan for 2019/20. These activities are as follows:

(a) To monitor the Group’s activities, having regard to any relevant legislation, other legal requirements or prevailing codes of best practice, with regard to matters relating to:

(i) Social and economic development, including the Group’s standing in terms of the goals and purposes of:

(aa) the 10 principles set out in the United Nations Global Compact Principles (UNGCP);

Name of member 21 May 2018 20 aug 2018 19 Nov 2018 18 Feb 2019

Siviwe Kwatsha Present Present Present Present


Brendan Connellan Present Present Present Present

Travis McClure Present Present Present Present


SIVIWE KWaTShaChairman - Social & Ethics Committee


(bb) the Organisation for Economic Co-operation and Development (“OECD” recommendations regarding corruption;(cc) the Employment Equity Act; and (dd) the Broad-Based Black Economic Empowerment Act.

(ii) Good corporate citizenship, including the Group’s:

aa) promotion of equality, prevention of unfair discrimination, and reduction of corruption;

(bb) contribution to development of the communities in which its activities are

predominantly conducted or within which its products or services are predominantly marketed; and

(cc) record of sponsorship, donations and charitable giving

(iii) The environment, health and public safety, including the impact of the Group’s activities and of its products or services.

(iv) Consumer relationships, including the Group’s advertising, public relations and compliance with consumer protection laws; and

(v) Labour and employment, including:

(aa) the Group’s standing in terms of the International Labour Organization Protocol on decent work and working conditions;

(bb) the Group’s employment relationships and its contribution toward the educational development of its employees;

(cc) to draw matters within its mandate to the attention of the Board as occasion requires; and

(dd) to report, through one of its members, to shareholders at the company’s annual general

meeting on the matters within its mandate.

During the year under review the Committee attended to matters relating to the Work Plan above and reported to the Board accordingly. The monitoring of and conformance to the above is on-going within the Group structure.

The Company has elected include this Social and Ethics Committee report in the Annual Report in addition to the requirement of paragraph a)(v)(dd) above.

NVest conformed with the formal policies previously implemented to address the following:

1. Social and Economic Development. NVest adheres to the principles set out in the UNGCP and the OECD recommendations on corruption. NVest is committed to complying with the labour law requirements of the Employment Equity Act (No. 55 of 1998). No incidents have been reported.

2. Good Corporate Citizenship. NVest subscribes to the provisions of the Promotion of Equality and Prevention of Unfair Discrimination Act (No. 4 of 2000). No incidents have been reported.

3. The Environment, health and Public Safety. NVest subscribes to and is compliant with the Occupational Health and Safety Act (No. 85 of 1993). No incidents have been reported.

4. Consumer relations. NVest subscribes to and is compliant with the Consumer Protection Act (No. 68 of 2008). No incidents have been reported.

5. Labour and Employment. NVest supports and adheres to the terms of the International Labour Organisation Protocol. NVest is materially compliant with the following Acts: the Basic Conditions of Employment Act (No. 75 of 1997), the Labour Relations Act (No. 66 of 1995), the Skills Development Levies Act (No. 97 of 1998) and the Unemployment Insurance Act (No. 63 of 2001) as amended.

In addition to the above, particular progress was made during the year under review in respect of the following:

• To assist the Committee in carrying out its responsibilities, the Social and Ethics Dashboard (“the Dashboard”) remains aligned with the core responsibility areas of the Committee’s oversight role and serves as a consolidated monitoring tool in respect of the Group’s Social and Ethics activities. The Dashboard is reviewed as a standing agenda item at Committee meetings. The Dashboard has shown a steady improvement across the spectrum, with significant progress in areas that posed a higher risk to the Group.

• The Dashboard, alongside the Risk Register and Risk Event Log, is reviewed at the Group Risk and Control Committee meetings as well as at the respective subsidiary Board meetings to ensure that the most up to date and accurate information is collated to inform the monitoring tool and process.

• Under the Group-wide Risk and Control Framework, policies on Corporate Social Responsibility, Ethics, Procurement, Recruitment and Diversity have been reviewed.

• The Committee played an instrumental role in guiding, shaping and reviewing policies which clearly articulate the Group’s stance and commitment on matters within the Committee’s terms of reference.

• Furthermore, the Committee oversees the monitoring of a whistle blowing channel and protocol for internal and external parties to raise their concerns on the operations of the business and/or the conduct of our staff.

During the year under review, the Committee has revised its terms of reference and recommended a number of policies relating to its work to the Board. Accordingly, the Committee is satisfied that it has fulfilled its responsibilities in terms of its terms of reference, the JSE Listings Requirements, its Memorandum of Incorporation and the Companies Act for the reporting period and is operating in conformity and compliance therewith. The Committee, in fulfilling its mandate as prescribed by the Companies Regulations to the Companies Act, as found no instances of non-compliance with the regulations. Finally, there have been no incidents reported on the anonymous whistle-blower service.

The progress made by the Committee against its mandate was only possible through the constructive engagement and contributions of its members, invitees and the support of the Board.

_____________________________Siviwe KwatshaChairman25 May 2020


Name of member 20 May 2019 19 august 2019 18 Nov 2019 17 Feb 2020



Dylan Schemel Present Present Present Present

Audit & RiskCommittee Report

for the year ended 29 February 2020.

We are pleased to present our Report for the financial year ended 29 February 2020.

The Audit and Risk Committee (“the Committee”) is an independent statutory committee nominated by the Group Board of Directors (“the Board”) and appointed by the shareholders of NVest. Further duties are delegated to the Committee by the Board. This Report includes both these sets of duties and responsibilities.

Committee Terms of reference:

The Committee has adopted formal terms of reference that have been approved by the Board. The Committee has conducted its affairs in compliance with its terms of reference and has discharged its responsibilities contained therein. The terms of reference are available on the Company’s website, at www.nvestholdings.co.za and are also available on request.

Committee members, meeting attendance and assessment:

The Committee consists of two Independent Non-Executive Directors (Lana Weldon and Lusanda Mangxamba) and one Non-Executive Director (Dylan Schemel). It meets at least twice per year as per its terms of reference. The Chairman, Chief Executive Officer, Group Financial Director, external auditors, a representative of the Designated Advisor and other assurance providers (Legal, Compliance, Risk, IT, Health and Safety) attend meetings by invitation only. The Committee is chaired by Independent Non-Executive Director Dr Lana Weldon. During the year under review four meetings were held as set out below:

The effectiveness of the Committee and its individual members is assessed on an annual basis.

role and responsibilities

The Committee is guided by its terms of reference dealing with membership, structure and levels of authority and has the following responsibilities:

• ensuring compliance with applicable legislation and the requirements of regulatory authorities;

• nominating for appointment a registered auditor who, in the opinion of the Audit and Risk Committee, is independent of the company;

• matters relating to financial accounting, accounting policies, reporting and disclosure;

Dr LaNa WELDONChairman - Audit and Risk Committee


• internal audit policy including considering the need for an internal audit function and in due course, reviewing the activities, scope, adequacy, and effectiveness of the internal audit function and audit plans;

• review/approval of external audit plans, findings, reports, fees and determination and approval of any non-audit services that the auditor may provide to the company;

• review/consideration of expertise and experience of the Financial Director and the finance team;

• compliance with the Code of Corporate Practices and Conduct; and

• compliance with the Company’s code of ethics.

Statutory duties:

The Committee’s role and responsibilities include statutory duties pursuant to the Companies Act, 71 of 2008 (“the Companies Act”), and further responsibilities assigned to it by the Board. The Committee also executed its duties in terms of the requirements of King IV and the JSE Listings Requirements.

External auditor appointment and independence:

The Committee has satisfied itself that the Group’s external auditor, BDO, is independent of the Group as set out in section 94(8) of the Companies Act, which includes consideration of previous appointments of the Group’s auditor, the extent of other work undertaken by the auditor for the Group and compliance with criteria relating to independence or conflicts of interest as prescribed by the Independent Regulatory Board for Auditors.

Requisite assurance was sought and provided by BDO that internal governance processes within BDO support and demonstrate its claim to independence.

The Committee ensured that the appointment of BDO complied with the Companies Act, JSE Listings Requirements and any other legislation relating to the appointment of auditors.

The Committee, in consultation with Executive Management, agreed to the engagement letter, terms, audit plan and proposed audit fees for the 2020 financial year. There is a formal procedure that governs the process whereby the Company’s auditor is considered for non-audit services.

The Committee approved the terms for the provision of non-audit services by the external auditor and approved the nature and extent of non-audit services that the external auditor may provide in terms of the agreed pre-approval policy.

The Committee has satisfied itself that BDO are accredited on the JSE Limited list of auditors and their advisors respectively. In addition, the Committee considered the appointment of BDO and the audit partner in accordance with the requirements set out in paragraph 3.84(g)(iii) of the JSE Listings Requirements and, pursuant to the review of the relevant documentation, have assessed the suitability of BDO as the auditor and Mr Craig Kilian as designated auditor to the Group.

Financial statements and accounting practices:

The Committee has reviewed the accounting policies and the financial statements of the Company and is satisfied that they are appropriate and comply with International Financial Reporting Standards. The Committee has an established process to receive and deal appropriately with any concerns and complaints relating to the reporting practices of the Company. No matters of significance have been raised in the past financial year.

During the year under review, the Committee considered the 2020 JSE Report on proactive monitoring process and has taken appropriate action to apply the contents and findings to the Company’s annual financial statements.

Internal financial controls:

The Committee considered the internal financial controls in conjunction with a review of the management report from the auditor, as well as the financial reporting systems.

The Committee is of the opinion that NVest’s system of internal financial controls and financial reporting procedures continue to operate effectively and form a basis for the preparation of reliable financial statements. Furthermore, the Group Accounting and Financial Policy approved by the Committee on 18 February 2019 is fully implemented.

Whistle blowing:

The Committee receives and deals with any concerns or complaints, whether from within or outside the Company, relating to the accounting practices of the Company, the content or auditing of the Group’s financial statements, the internal financial controls of the Group and related matters. Furthermore, the Group has implemented a whistle blowing channel through which complaints and/or concerns can be submitted anonymously both from within the organisation and externally via the Company website.

Duties assigned by the Board:

In addition to the statutory duties of the Committee, as reported above, and in accordance with the provisions of the Companies Act, the Board has determined further functions for the Committee to perform, as set out in the Audit and Risk Committee’s terms of reference. These functions include the following:

• Integrated reporting and combined assurance

The Committee fulfils an oversight role regarding the Group’s Integrated Report and the reporting process. The Committee considered the Group’s sustainability information as disclosed in the Integrated Report and has assessed its consistency with operational and other information known to Committee members, and for consistency with the annual financial statements. The Committee is satisfied that the sustainability information is reliable and consistent with the financial results.


The Committee is satisfied that the Group has optimised the assurance coverage obtained from management and external assurance providers, in accordance with an appropriate combined assurance model.

The Committee has, at its meeting held on 25 May 2020, recommended the Integrated Report for approval by the Board, subject to certain stylistic and formatting changes requested at that meeting.

• Going concern

The Committee has reviewed a documented assessment including key assumptions, prepared by management, of the going concern status of the Company and has made recommendation to the Board in accordance therewith. The Board’s statement on the going concern status of the Company, as supported by the Committee, is elsewhere in the Integrated Report.

• Governance of risk

The Committee is further assigned oversight of the Group’s risk management function. The Committee fulfils this oversight role with particular regard to financial reporting risks, internal financial controls, fraud risk as it relates to financial reporting, and information technology risk.

• Internal audit

During the year under review, the Group did not have an internal audit function. The Committee is satisfied that the current nature of the business warrants a Group Compliance function as opposed to an internal audit function. The Committee has satisfied itself that no factors have arisen which have caused the Committee to amend its recommendation that no internal audit function is required for the Group at this time. In addition, the Committee continually assesses the need to establish an internal audit department as the Group’s operations increase and this is a standing agenda item for consideration at each meeting. The Board has taken responsibility to ensure that an effective governance, risk management and internal control environment has been maintained.

During the year under review, the Committee had the opportunity to meet with the external auditors without management being present.

The Committee is satisfied that it has complied with its legal, regulatory and other responsibilities.

Evaluation of the expertise and experience of the Financial Director and the Finance Function

Mr Glenn Orsmond resigned as Financial Director of the Group with effect from 01 May 2019 in order to take up a position in the aviation industry. Charl Herselman CA(SA) was subsequently appointed to serve on the Board as Interim Financial Director with effect from 1 November 2019. Charl had already fulfilled the duties and responsibilities of the Financial Director since the departure of Glenn Orsmond as well as having served as Head: Group Finance

until his appointment onto the Board. The Group is currently assessing the appropriate course of action to take in respect of the appointment of a permanent Financial Director.

Where necessary, additional skills and expertise have been contracted to strengthen the overall timing and delivery of outputs, particularly in relation to IFRS and the preparation of the Annual Financial Statements. The Committee satisfied itself that the Interim Financial Director has the appropriate expertise and experience to discharge the responsibilities of that role.

The Committee has considered and has satisfied itself of the appropriateness of the expertise and adequacy of resources of the Finance Function and the experience of the senior members of management responsible for the Finance Function, in conjunction with the insourced expertise and skills.

_____________________________Dr Lana WeldonChairman25 May 2020


JONaThaN GOLDBErG

Chairman - Remuneration and Nominations Committee and Group Board of Directors

Remuneration andNominations

Committee Report NVest’s Remuneration and Nominations Committee have been assigned responsibilities relating both to Group remuneration as well as responsibilities ordinarily allocated to a Nominations Committee.

The Committee is empowered by the Board of Directors of NVest (“the Board”) to set medium and long-term remuneration for Executive Directors and to further assist the Board in ensuring that Group remuneration and recruitment is aligned with the overall business strategy, with the aim of enabling NVest to attract and retain personnel who will create long-term value for all stakeholders.

BACKGROUND STATEMENT

The Board has considered the impact of the King IV Code on Corporate Governance (“King IV”) on the Remuneration Policy as well as the amended JSE Listing Requirements and presents this Report in two parts. The Chairman’s and CEO’s Reports provide context to the decisions and considerations taken during the reporting year which influenced the remuneration outcomes and will influence remuneration going forward.

The Board has the task to ensure that the Company and the major subsidiary Companies comply with the necessary principles as set out in the King Report on Governance for South Africa (King IV) and relevant sections of the Companies Act, 2008 (No. 71 of 2008) (“the Act”) when determining the remuneration of senior Executives and Non-Executive Directors.

Since the presentation of the summary of the last Remuneration Policy (“the Policy”) to shareholders, no material changes were made to the Remuneration Policy and structure of the Group.

The Company has once again offered no awards in terms of its Share Incentive Scheme and has made the decision not to offer any further performance-based awards until it is comfortable that it has found a mechanism to ensure that any awards offered are value-adding to the Group. The Company continues to assess various alternatives available to it in terms of implementing a performance-based Share Incentive Scheme.

Given the diversified nature of the Group, the intention of the Remuneration Report is to provide an overview and understanding of NVest’s remuneration philosophy and focuses on Executive and Non-Executive Director remuneration.

Terms of reference:

The Committee’s framework is guided by the Committee’s terms of reference which have been approved by the Board. The terms of reference are reviewed every twelve to fifteen months to ensure that they are updated in line with relevant new legislation and are always aligned with the Group’s prevailing strategy.

Committee members, meeting attendance and assessment:

The Committee is independent and consists of three Independent Non-Executive Directors. It meets at least twice per year as per the terms of reference. Executive


Directors and other members of Executive Management attend meetings by invitation only. Siviwe Kwatsha resigned from the Committee with effect from 31 January 2019 as a result of him taking up the Executive position of Chief Information Officer at NVest. I would like to go on record to thank Siviwe for his substantial contribution to the Committee since its formation.

During the year under review, and up to the date of this Report, four meetings were held as set out below:

The effectiveness of the Committee and its individual members is assessed on an annual basis.

In accordance with its terms of reference, the Committee is also responsible for the oversight of all aspects of remuneration and determining the Group’s strategy in this regard. The Committee’s terms of reference were reviewed and re-approved during the year under review.

PART 1

remuneration Policy:

Policy principles

The Board evaluates and monitors the Group’s remuneration philosophy and practices to ensure consistency with governance principles and corporate strategy. The Board implements the approved Remuneration Policy to ensure:

• salary structures and policies motivate superior performance and are linked to realistic performance objectives that support sustainable long-term business growth,

• stakeholders are able to make an informed assessment of reward practices and governance processes, and,• compliance with all applicable laws and regulatory codes.

The Company is currently listed on the Alternative Exchange of the JSE and is required to have an Audit and Risk Committee and a Social and Ethics Committee. The Company has also established the Remuneration and Nominations Committee pursuant to the terms of Part 5.3 of King IV.

Governance - Board responsibility

The Board carries the ultimate responsibility for the Remuneration Policy. The Board will, when required, refer matters for shareholder approval, for example:

• new share-based incentive schemes and their design,• Non-Executive Director and Board Committee fees.

The Remuneration Report, Part 1 and Part 2, will be put to non-binding shareholders’ votes at the 2020 Annual General Meeting (“AGM”) of shareholders.

role of benchmarking

To ensure that the Group remains competitive in the markets in which it operates, all elements of remuneration are subject to regular reviews against relevant market and peer data.

The Remuneration Policy aims at positioning the Group as a leader in Wealth and Asset Management in particular. To retain flexibility and ensure fairness when directing human capital to those areas of the Group requiring focused attention, subjective performance assessments may be required at different levels when evaluating employee contributions.

The Group believes that its Remuneration Policy plays a vital role in realising business strategy and therefore should be competitive in the markets in which it operates.

The Remuneration Policy in place remunerates Executive Directors both by way of fees or guaranteed salary and / or on

Name of member 20 May 2019 190 aug 2019 18 Nov 2019 17 Feb 2020





an incentive basis (mainly through commission structures, but also by way of bonuses and profit share arrangements), with a strong focus on performance requirements needing to be met. Commission and profit share arrangements are not on a pool basis but rather on an individual performance basis and are self-funding, aligning the interests of the Executive Directors with the interests of the shareholders.

Where agreed upon fees or guaranteed monthly remuneration is paid, this is market related. All increases in respect of Executives as well as any other payments to Directors of any form, after being recommended by the CEO and the executive team, have to be approved by the Committee.

NVest (in the form of the original company, NFB, with other subsidiaries being added over the years) has been in business for 35 years and is very well established in the Eastern Cape and Gauteng, where the bulk of the business operates from and earns its income. This requires a remuneration strategy that attracts and retains individuals with the required skills to make the Group a success. The Remuneration Policy defines general guidelines for the Company’s incentive pay to the Board of Directors through the Committee and Executive Management.

Executive Directors’ remuneration currently comprises of one or more of the following elements:

• Basic salary• Additional fees• Benefits• Bonuses/Commission• Other benefits

Basic salary is subject to annual reviews by the Board, such reviews being conducted considering the performance of the Company.

Benefits comprise of fringe benefits, allowances, risk benefits and retirement benefits.

Bonuses are discretionary payments and are paid quarterly or annually each year based on performance and incentive arrangements in place from time to time.

Executive Directors that receive the majority of their remuneration by way of commission do so as a result of the fact that they are in sales-related roles and their commissions are directly related to their sales performance. These are in line with their agreed remuneration and are calculated according to set formulas.

A Share Incentive Scheme (“the Scheme”) is formally in place with its objective being to attract, motivate, reward and retain participants who are able to materially influence the performance of the Group on a basis which aligns their interest with those of the Company.

Thus, awards offered in terms of the Scheme will, to a large degree, be based on expected or sustained exceptional performance and where deemed appropriate on past exceptional performance, making a material contribution to the benefit of the Group significantly above and beyond expectations and/or market conditions. However, as stated above, the Company has made the decision to pend

any awards until such time as the Company has found a mechanism to ensure that any awards offered are affordable and add long term value to the Group.

Other benefits are granted at the discretion of the Board. These will include fringe benefits payable to Directors.

Non-Executive Directors’ remuneration is payable in the form of a retainer for attendance at various Board and Committee meetings and work associated therewith. Additional fees will be payable for additional time spent on the behalf of the Company at market related rates. Non-Executive Director remuneration is approved by shareholders in general meeting.

The Committee will ensure that Executive Management and the Board reviews the current Remuneration Policy during the next reporting period to ensure that the policy is compliant with the recommendations of King IV.

Service contracts

NVest has entered into normal service contracts with all of its Executive Directors. All Non-Executive Directors are subject to retirement by rotation and re-election by NVest shareholders at least once every three years in accordance with the MOI.

Senior management salaries

The Company ensures that senior management receive competitive, market-related packages. Regular salary benchmarking exercises are undertaken to help sustain this position. The structure and basis for performance-based incentives is recommended by the Committee and approved by the Board and is aligned with company strategy and current shareholder and management objectives.

Annual salary increases, after being recommended by the CEO, must be approved by the Committee. Once an average overall increase is agreed to by the Committee, the Executive Committee determines individual application of increases, with variances being due to higher or lower performance ratings based on performance appraisal reviews.

Non-Executive Director remuneration

In terms of Section 66 (9) of the Companies Act, 71 of 2008, shareholders are required to approve the remuneration of Non-Executive Directors.

A special resolution was passed - whereby shareholders approved the remuneration of Non-Executive Directors for the period commencing 19 August 2019 until 17 August 2020. These fees were disclosed in special resolution number 3 of the Annual General Meeting notice of the 2019 Integrated Annual Report.

Shareholder engagement

The Group’s Remuneration Policy and the implementation thereof are placed before shareholders for consideration and approval under the terms of an advisory non-binding vote at the August 2020 AGM as recommended by King IV.


In the event that 25% or more of the votes cast are recorded against either the Remuneration Policy resolution or the implementation resolution, then:

• Executive management will engage shareholders to ascertain the reasons for the dissenting vote. Where considered appropriate, Non-Executive Board members may participate in these engagements with selected shareholders; and

• Executive management will make specific recommendations to the Board as to how the legitimate and reasonable objections of shareholders might be addressed, either in the Group’s Remuneration Policy or through changes on how the Remuneration Policy is implemented.

PART 2 – IMPLEMENTATION OF REMUNERATION POLICY

Executive Director remuneration

Guaranteed pay – base pay and benefits

In determining the Cost to Company (CTC) increases for Executive Directors, the Board considered the average increases to general staff and also used relevant market data.

Benchmarks were selected based on several factors, including, but not limited to, company size and complexity of comparable listed companies by reference to market capitalisation, turnover, profitability, number of employees and sector.

Executives that are remunerated on a commission-only-basis because of sales and/or portfolio management responsibilities that they also carry generally do not receive any guaranteed remuneration and thus were not subject to annual increases. Salary-based executives or executives that do have a portion of total remuneration that is guaranteed, received the standard annual increase received by employees of the Group. Most salaried executives also receive quarterly incentive bonuses that are directly linked to individual performance measures.

The Group is currently in the process of implementing new Key Performance Areas and Indicators for Executives in the Group. At this time, the remuneration structures of Executives are not directly linked to Group performance measures and/or targets.

Summary of Executive Directors guaranteed pay and short-term incentivesThe remuneration paid to Executive Directors while in office of the Company during the year ended 29 February 2020, is set out in note 32 of the Annual Financial Statements.

Short-term incentives 2021The 2020/2021 criteria for performance measures and targets as well as weightings are being established by developing Key Performance Areas and Key Performance Indicators for each executive, with a view to linking these to remuneration. Most salaried Executives receive quarterly incentives that are directly linked to individual performance. The remuneration of commission-earning executives is directly linked to their individual performance.

Long-term incentivesAs detailed above, the Company has formalised a Group Share Incentive Scheme, but implementation of performance-based long-term incentives has been paused at this stage.

Non-Executive Director remunerationThe remuneration paid to Non-Executive Directors while in office of the Company during the year ended 29 February 2020 is set out in note 32 of the Annual Financial Statements.

Proposed Non-Executive Directors’ fees for the period 17 August 2020 (date of Annual General Meeting) to 16 August 2021 (date of 2021 Annual General Meeting) will be as follows

Member Fee (r)

Board Chairperson 121 551

Board Director 69 168

Audit and Risk Committee Chairperson 49 604

Audit and Risk Committee Member 33 571

Remuneration and Nominations Committee Chairperson

45 842

Remuneration and Nominations Committee Member

25 815

Social and Ethics Committee Chairperson

43 064

Social and Ethics Committee Member 22 661

The fees will be paid net of VAT which may become payable over and above these fees, depending on the status of the individual director’s tax position.

Refer to special resolution number 3 of the notice of AGM on page 132 of this report for approval of the fees by shareholders in terms of section 66 of the Companies Act.

Non-binding advisory vote

Shareholders are requested to cast an advisory vote on the Remuneration Implementation Report as contained in Part 2 of this report.

approval

This Remuneration Report was approved by the Board of Directors of NVest.

___________________________Jonathan GoldbergChairman25 May 2020


Directors Responsibilitiesand Approval

It is their responsibility to ensure that the annual financial statements fairly present the state of affairs of the group as at the end of the financial year and the results of its operations and cash flows for the period then ended, in conformity with International Financial Reporting Standards. The external auditors are engaged to express an independent opinion on the annual financial statements.

The annual financial statements are prepared in accordance with International Financial Reporting Standards and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates.

The directors acknowledge that they are ultimately responsible for the system of internal financial control established by the group and place considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the directors sets standards for internal control aimed at reducing the risk of error or loss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the group and all employees are required to maintain the highest ethical standards in ensuring the group’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the group is on identifying, assessing, managing and monitoring all known forms of

risk across the group. While operating risk cannot be fully eliminated, the group endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.

The directors are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss.

The directors have reviewed the group’s cash flow forecast for the year to 28 February 2021 and, in light of this review and the current financial position, they are satisfied that the group has or had access to adequate resources to continue in operational existence for the foreseeable future.

The external auditors are responsible for independently auditing and reporting on the group’s financial statements. The financial statements have been examined by the group’s external auditors and their report is presented on pages 67 to 71.

The annual financial statements set out on pages 72 to 125, which have been prepared on the going concern basis, were approved by the directors on 29 May 2020 and were signed on their behalf by:

________________________________Jonathan Goldberg Chairman25 May 2020

________________________________anthony GodwinChief Executive Officer25 May 2020

The directors are required in terms of the Companies Act 71 of 2008 to maintain adequate accounting records and are responsible for the content and integrity of the annual financial statements and related financial information included in this report.


Group CompanySecretary’s

CertificationIn my capacity as Group Company Secretary, I hereby confirm in terms of Section 88(2)(e) of the Companies Act, No. 71 of 2008 (“the Companies Act”), that for the financial year ended 29 February 2020, the Group has lodged with the Companies and Intellectual Property Commission all such returns as required of a public company in terms of the Companies Act and that all such returns are true, correct and up to date.

_____________________________Brendan Connellan COMPANY SECRETARY25 May 2020

BrENDaN CONNELLaN Company Secretary


IndependentAuditor’s Report

Independent auditor’s reportTo the Shareholders ofNVest Financial holdings Limited

report on the audit of the Consolidated and Separate Financial Statements

Opinion We have audited the consolidated and separate financial statements of NVest Financial Holdings Limited (the group and company) set out on pages 72 to 125, which comprise the consolidated and separate statements of financial position as at 29 February 2020, and the consolidated and separate statements of profit or loss and other comprehensive income, consolidated and separate statements of changes in equity and the consolidated and separate statements of cash flows for the year then ended, and notes to the consolidated and separate financial statements, including a summary of significant accounting policies.

In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of NVest Financial Holdings Limited as at 29 February 2020, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa.

Basis for OpinionWe conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements section of our report. We are independent of the group and company in accordance with the sections 290 and 291 of the Independent Regulatory Board for Auditors’ Code of Professional Conduct for Registered Auditors (Revised January 2018), parts 1 and 3 of the Independent Regulatory Board for Auditors’ Code of Professional Conduct for Registered Auditors (Revised November 2018) (together the IRBA Codes) and other independence requirements applicable to performing audits of financial statements in South Africa. We have fulfilled our other ethical responsibilities, as applicable, in accordance with the IRBA Codes and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Codes are consistent with the corresponding sections of the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) respectively. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit MattersKey audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated and separate financial statements of the current period. These matters were addressed in the context of our audit of the consolidated and separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined that there are no key audit matters in respect of the separate financial statements. The following key audit matters relates to the consolidated financial statements.

Key audit matter how our audit addressed the key audit matter

Valuation of land and buildings and investment property (consolidated financial statements) – note 4 and 6

The audit procedures we performed included, amongst others, the following:

The carrying value of investment property amounted to R274,255,654 and the carrying value of land and buildings amounted to R65 136 185.

• We considered management’s assessment of COVID-19 being a non-adjusting event after the reporting period, by considering the timing of the announcement of COVID-19 as a global pandemic by the World Health Organisation, as well as the timing of the first reported case in South Africa.

BDO South Africa Incorporated Registration number: 1995/002310/21 Practice number: 905526VAT number: 4910148685

National Executive: PR Badrick • HN Bhaga-Muljee • DF Botha • E Singh • BJ de Wet • HCS Lopes (Johannesburg Office Managing Partner) SM Somaroo • ME Stewart (Chief Executive) • IM Scott • MS Willimott

The company’s principal place of business is at 52 Corlett Drive, Illovo, Johannesburg, where a list of directors’ names is available for inspection. BDO South Africa Incorporated, a South African personal liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.



VThe Group uses independent valuers to determine the fair values of the properties on a rotational basis over a three-year period. Investment properties not falling into roster for independent valuation in a particular year are valued by the director’s valuations.

The inputs with the most significant impact on these valuations are disclosed in note 6 to the financial statements, and include contractual rentals and market related income capitalisation rates.

The significance of the balance as well as the judgement applied by the director and independent valuers as well as the estimation uncertainty relating to in determining the fair value of investment property, as a result we have identified the valuation of investment property as a key audit matter.

• We assessed the design and implementation of key controls in the valuation process of the properties.

• We assessed the competence and capabilities of the independent valuers and the director performing the valuations;

• In addition, we discussed the scope of the independent valuers work with management and reviewed their terms of engagement to determine that there were no matters that affected their independence and objectivity or imposed scope limitations upon them;

• We assessed that the measurement basis used in the valuation models were in accordance with International Financial Reporting Standards and our knowledge of the industry and client;

• We critically evaluated the forecasts and capitalisation rates used by the director and the independent valuers in the valuation calculation, ensuring these are in line with industry norms and our understanding of the properties.

• We also used our internal valuations specialist to assist us in evaluating the reasonability and appropriateness of the critical assumptions used and methodologies applied by the Group in determining the fair value of properties.

• We tested the mathematical accuracy of the valuation calculations

• We evaluated the adequacy and appropriateness of the presentation and disclosure of investment property and the respective key valuation assumption in the consolidated financial statement in accordance with International Financial Reporting Standards.



Goodwill assessment (Consolidated financial statements) – note 7

The carrying value of goodwill amounted to R87,008,312, arising from acquisitions by the Group.

Goodwill is tested for impairment annually. The value in use is assessed using discounted cash flow models. As disclosed in note 7 to the financial statements, there are a number of key sensitive judgements and estimates made in determining the inputs into these models which include growth rates and discount rates. As a result we have identified impairment testing of goodwill as a key audit matter. There was no impairment of goodwill in the current year.

The audit procedures we performed included, amongst others, the following:

• We assessed the design and implementation of key controls in the goodwill impairment process performed by management.

• We evaluated the determination of CGU’s based on our understanding of how management monitors the Group’s operations and makes decisions about groups of assets that generate independent cash flows.

• We assessed the mathematical accuracy of the calculations within the impairment models.

• We reviewed the impairment models for compliance with ISA 36 Impairments Assets.

• We used our internal valuation experts to assist us in evaluating the reasonability of assumptions and methodologies used in the forecast models. We have challenged management, primarily on their key assumptions to which the impairment test is most sensitive.

• We furthermore challenged the reasonability of the forecasts applied by management by comparing the accuracy of their prior year projects to the current year actual and obtaining and corroborating explanations for significant variations between the current year and forecasts.

• We evaluated the adequacy and appropriateness of the presentation and disclosures relating to the impairment assessments of goodwill including the respective key valuation assumption used in the consolidated financial statement in accordance with International Financial Reporting Standards.


Other InformationThe directors are responsible for the other information. The other information comprises the information included in the document titled “NVest Financial Holdings Limited Annual Financial Statements for the year ended 29 February 2020”, which includes the Directors’ Report, the Audit Committee’s Report and the Company Secretary’s Certificate as required by the Companies Act of South Africa, which we obtained prior to the date of this report, and the Annual Report, which is expected to be made available to us after that date. The other information does not include the consolidated and separate financial statements and our auditor’s report thereon.

Our opinion on the consolidated and separate financial statements does not cover the other information and we do not and will not express an audit opinion or any form of assurance conclusion thereon.

In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

responsibilities of the Directors for the Consolidated and Separate Financial StatementsThe directors are responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated and separate financial statements, the directors are responsible for assessing the group’s and the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group and / or the company or to cease operations, or have no realistic alternative but to do so.

auditor’s responsibilities for the audit of the Consolidated and Separate Financial StatementsOur objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether

due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group’s and the company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group’s and the company’s ability to continue as a going concern. If we conclude that a


material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated and separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group and /or the company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether the consolidated and separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the consolidated and separate financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

report on Other Legal and regulatory requirementsIn terms of the IRBA Rule published in Government Gazette Number 39475 dated 4 December 2015, we report that BDO South Africa Incorporated has been the auditor of NVest Financial Holdings Limited for 6 years.

BDO South africa IncorporatedRegistered Auditors

hilton Craig KilianDirectorRegistered Auditor

29 May 2020

106 Park DrivePort Elizabeth CentralPort Elizabeth, 6001


CONSOLIDATEDANNUAL

FINANCIALSTATEMENTS

04


General Information

NVest Financial Holdings Limited and its subsidiaries | (Registration number 2008/015990/06) Annual Financial Statements for the year ended 28 February 2019

Country of incorporation and domicile South Africa

Nature of business and principal activities Financial and intermediary services, stockbroking activitires, rental of commercial property, administration of deceased estates and trusts.

Directors J. Goldberg A.D. Godwin L.J. Weldon D.L. Schemel C.G. Lemmon M. Estment C. Herselman B.J. Connellan L. Mangxamba

Registered office NFB House 42 Beach Road Nahoon East London 5241

Business address NFB House 42 Beach Road Nahoon East London 5241

Postal address P.O. Box 8132 Nahoon East London 5210

Bankers Nedbank Limited Standard Bank of South Africa Limited Investec Bank Limited

auditors BDO South Africa Incorporated Chartered Accountants (SA) Registered Auditors BDO South Africa is a member firm of BDO Incorporated Limited

Secretary B.J. Connellan

Company registration number 2008/015990/06

Level of assurance These annual financial statements have been audited in compliance with Section 30(2)(a) of the Companies Act 71 of 2008.

Preparer The annual financial statements were compiled by: Sean Weldon Chartered Accountant (SA)

Issued 25 May 2020


IndexNVest Financial Holdings Limited and its subsidiaries | (Registration number 2008/015990/06) Annual Financial Statements for the year ended 29 February 2020

The reports and statements set out below comprise the annual financial statements presented to the shareholders

Directors’ Report 75 - 77

Statement of Financial Position 78

Statement of Profit or Loss and Other Comprehensive Income 79

Statement of Changes in Equity 80 - 81

Statement of Cash Flows 82 - 83

Accounting Policies 84 - 93

Notes to the Consolidated Annual Financial Statements 94 - 125


The directors have pleasure in submitting their report on the annual financial statements of NVest Financial Holdings Limited and its subsidiaries and the group for the year ended 29 February 2020.

1. Review of financial results and activities

The consolidated annual financial statements have been prepared in accordance with International Financial Reporting Standards and the requirements of the Companies Act 71 of 2008. The accounting policies have been applied consistently compared to the prior year.

Full details of the financial position, results of operations and cash flows of the group are set out in these consolidated annual financial statements.

2. Share capital

2020 2019

authorised Number of shares

Ordinary shares 1,000,000,000 1,000,000,000

2020 2019 2020 2019Issued r r Number of sharesOrdinary shares 326,154,200 324,779,200 303,241,722 302,741,722

There have been no changes to the authorised or issued share capital during the year under review.

3. Dividends

The company’s dividend policy is to consider an interim and a final dividend in respect of each financial year. At its discretion, the directors may consider a special dividend, where appropriate. Depending on the perceived need to retain funds for expansion or operating purposes, the directors may pass on the payment of dividends.

A final dividend (number 9) of 6.25 cents per share (R18,921,358) was declared on 20 May 2019 and paid on 18 June 2019. This in respect of the year ended 28 February 2019.

An interim dividend (number 10) of 5.25 cents per share (R15 920 190) was declared on 18 November 2019 and paid on 9 December 2019 in respect of the year ended 29 February 2020.

4. Share incentive scheme

Refer to note 37 of the consolidated annual financial statements for details of the group share incentive scheme.

Directors’ Report



5. Directorate

The directors in office during the year and at the date of this report are as follows:

Directors Office Designation Nationality Changes

J. GoldbergChairman and Remuneration and Nomination Committee Chair

Non-executive Independent South African

L.J. WeldonAudit and Risk Committee Chair and Lead Independent Director

Non-executive Independent South African

L. Mangxamba Director Non-executive Independent South African

B.J. Connellan Company Secretary Executive South African

D.L. Schemel Director Non-executive South African

A.D. Godwin Chief Executive Officer Executive South African

M. Estment Director Executive South African

C.G. Lemmon Director Executive South African

G.W. Orsmond Chief Financial Officer Executive South African Resigned 01 May 2019

C. Herselman Interim Financial Director Executive South AfricanAppointed 01 November 2019

Mr C. Herselman was appointed as Interim Financial Director on 01 November 2019 to replace Mr G.W. Orsmond who resigned on 1 May 2019. Mr B.J. Connellan was appointed as a non-executive director on 1 March 2019 however was reappointed as an executive director on 1 March 2020.

6. Directors’ interests in shares

As at 29 February 2020, the directors of the company held direct and indirect beneficial interests in 34.0% (2019: 33.9%) of its issued ordinary shares, as set out below.

Interests in shares

Directors 2020Direct

2019Direct

2020Indirect

2019Indirect

J. Goldberg 856,788 856,788 50,000 50,000

A.D. Godwin - - 76,000,000 76,000,000

L.J. Weldon - - 110,000 110,000

D.L. Schemel 196,793 196,793 - -

C.G. Lemmon 550,000 50,000 - -

M. Estment 349,999 349,999 14,280,801 14,280,801

C. Herselman - 107,000 60,000 59,250

B.J. Connellan 10,705,475 10,705,475 - -

12,659,055 12,266,055 90,500,801 90,500,051

The register of interests of directors and others in shares of the company is available to the shareholders on request.

There have been no changes in beneficial interests that occurred between the end of the reporting period and the date of this report.

7. Directors’ interests in contracts

During the financial year, no contracts were entered into which directors or officers of the group had an interest and which significantly affected the business of the group.



8. Interests in subsidiaries and associates

Details of material interests in subsidiary companies and associates are presented in the consolidated annual financial statements in notes 8 and 9.

There were no significant acquisitions or divestitures during the year ended 29 February 2020.

9. Events after the reporting period

Since 31 December 2019, the spread of COVID-19 has severely impacted many local economies around the globe. In many countries, businesses are being forced to cease or limit operations for long or indefinite periods of time. Measures taken to contain the spread of the virus, including travel bans, quarantines, social distancing, and closures of non-essential services have triggered significant disruptions to businesses worldwide, resulting in an economic slowdown. Global stock markets have also experienced great volatility and a significant weakening. Governments and central banks have responded with monetary and fiscal interventions to stabilise economic conditions.

Since the implementation of the National Lockdown in South Africa on 27 March 2020, the Company has operated remotely with staff having been set up to work from their homes. The Company has managed to continue operating during this period and Management are confident that it will be able to continue to do so until such time as this is no longer required.

The Company’s financial position has, to date, not been adversely affected and Management are of the opinion that it is unlikely to be significantly affected in coming months, due to the fact that the Groups primary income is from the Private Wealth Management companies. The Property holding company in the Group contributed 5% of the Groups Net Profit After Tax and it appears to be the only company to date that may be affected by the impact of the pandemic, with a temporary decrease in revenue, due to tenants requesting payment holidays on their rental payments. Private Wealth Management clients have continued to contribute to their policies, savings and investments and consequently, it is highly unlikely that the pandemic will have a material impact on Group earnings.

The Company has determined that this is a non-adjusting subsequent event. Accordingly, the financial position and results of operations as of and for the year ended 29 February 2020 have not been adjusted to reflect its impact. The duration and impact of the COVID-19 pandemic, as well as the effectiveness of government and central bank responses, remains unclear at this time. It is not possible to reliably estimate the duration and severity of these consequences, as well as their impact on the financial position and results of the Company for future periods.

Furthermore, in addition to the above, subsequent to 29 February 2020, there will be an internal restructuring of the Group’s existing Private Wealth Management entities, namely NFB Finance Brokers Eastern Cape Proprietary Limited, NFB Finance Brokers Gauteng Proprietary Limited

and NFB Finance Brokers Port Elizabeth Proprietary Limited. It is envisaged that NFB Finance Brokers Eastern Cape Proprietary Limited will be the resultant company, renamed “NFB Private Wealth Management Proprietary Limited, with the other two entities being the amalgamating entities, which collapse into the resultant company. The Amalgamation will be done pursuant to Section 44 of the Income Tax Act No. 58 of 1962. The date set for the legal amalgamation to take place is 1 June 2020.

The Group has determined that this is a non-adjusting subsequent event. Accordingly, the financial position and results of the operations as of and for the year ended 29 February 2020 have not been adjusted to reflect this impact.

10. Going concern

The directors believe that the group has adequate financial resources to continue in operation for the foreseeable future and accordingly the consolidated annual financial statements have been prepared on a going concern basis. The directors have satisfied themselves that the group is in a sound financial position and that it has access to sufficient borrowing facilities to meet its foreseeable cash requirements. The directors are not aware of any new material changes that may adversely impact the group. The directors are also not aware of any material non-compliance with statutory or regulatory requirements or of any pending changes to legislation which may affect the group.

11. auditors

BDO Cape Incorporated continued in office as auditors for the company for 2020.

BDO Cape Incorporated amalgamated into BDO South Africa Incorporated on 01 August 2019.

At the AGM, the shareholders will be requested to reappoint BDO South Africa Incorporated as the independent external auditors of the company and to confirm Mr H.C. Kilian as the designated lead audit partner for the 2021 financial year.

12. Secretary

The company secretary is Mr B.J. Connellan.

Business address: 42 Beach Road Nahoon East London 5241



Statement of Financial Positionas at 29 February 2020

assetsNon-Current assetsProperty, plant and equipment 4 73,382,198 47,487,774 615,982 727,758Right-of-use assets 5 1,088,818 - 14,843,297 -Investment property 6 274,255,654 306,121,663 - -Operating lease asset 6 2,391,485 6,906,762 - -Goodwill 7 87,008,312 87,008,312 - -Investments in subsidiaries 8 - - 121,475,497 121,010,497Investments in associates 9 459,554 625,910 - -Loans to group companies 10 - - 6,550,000 6,550,000Loans to directors, managers and employees 11 910,000 - - -Deferred tax 12 2,646,100 2,280,922 2,064,153 218,862

442,142,121 450,431,343 145,548,929 128,507,117Current assetsLoans to group companies 10 - - 176,168,526 125,771,663Loans to shareholders - 28,547 - -Loan to associate 13 47,391 84,772 - -Trade and other receivables 14 20,947,667 22,550,322 364,597 479,796Investments at fair value 15 36,689,681 36,865,109 25,138,979 25,138,979Operating lease asset 6 3,274,435 1,627,262 - -Current tax receivable 1,229,610 967,177 745,750 198,081Cash and cash equivalents 16 159,471,432 135,024,089 36,995,170 61,050,035

221,660,216 197,147,278 239,413,022 212,638,554Total assets 663,802,337 647,578,621 384,961,951 341,145,671

Equity and LiabilitiesEquityEquity attributable to Equity holders of ParentShare capital 17 326,154,200 324,779,200 326,154,200 324,779,200Reserves 7,056,544 6,181,035 629,259 629,259Retained income 150,768,811 120,348,317 35,844,916 14,084,458

483,979,555 451,308,552 362,628,375 339,492,917Non-controlling interest 2,437,299 2,283,980 - -

486,416,854 453,592,532 362,628,375 339,492,917

Group CompanyFigures in rand Notes 2020 2019 2020 2019

LiabilitiesNon-Current LiabilitiesBorrowings 18 64,204,376 109,591,596 - -Lease liabilities 5 1,339,550 - 20,803,530 -

Deferred tax 12 11,109,433 16,108,502 37,716 37,668

76,653,359 125,700,098 20,841,246 37,668Current LiabilitiesTrade and other payables 19 37,258,865 35,366,945 789,042 1,615,018Loans from group companies - - - 68Borrowings 18 61,496,917 32,593,609 - -Lease liabilities 5 126,560 - 703,288 -Current tax payable 1,849,782 325,437 - -

100,732,124 68,285,991 1,492,330 1,615,086Total Liabilities 177,385,483 193,986,089 22,333,576 1,652,754Total Equity and Liabilities 663,802,337 647,578,621 384,961,951 341,145,671



Statement ofProfit or Loss and Other Comprehensive Income


Revenue 20 310,185,831 306,336,355 75,917,603 62,291,848

Cost of sales 21 (118,097,465) (116,785,774) - -Gross profit 192,088,366 189,550,581 75,917,603 62,291,848Other income 22 613,133 5,021,901 2,497,362 2,745,391Other operating gains (losses) 23 805,990 (2,450,210) - -Movement in credit loss allowances 24 (102,656) (192,282) - -Operating expenses (103,985,416) (99,632,153) (18,258,550) (16,988,117)Operating profit 24 89,419,417 92,297,837 60,156,415 48,049,122Investment revenue 25 10,977,791 9,631,577 4,522,695 5,018,217Finance costs 26 (12,981,025) (13,798,383) (2,198,930) -Income from equity accounted investments 2,989,596 1,317,832 - -Profit before taxation 90,405,779 89,448,863 62,480,180 53,067,339Taxation 27 (23,947,943) (24,649,251) (2,068,312) (2,789,428)Profit for the year 66,457,836 64,799,612 60,411,868 50,277,911

Other comprehensive income:Items that will not be reclassified to profit or loss:Gains on property revaluation 623,771 1,814,660 - -Income tax relating to items that will not be reclassified (139,725) (508,105) - -Total items that will not be reclassified to profit or loss 484,046 1,306,555 - -Items that may be reclassified to profit or loss: Share of comprehensive income of equity accounted investments

9 391,462 - - -

Other comprehensive income for the year net of taxation 875,508 1,306,555 - -Total comprehensive income for the year 67,333,344 66,106,167 60,411,868 50,277,911

Profit attributable to:Equity holders of the parent 65,480,917 63,726,376 60,411,868 50,277,911

Non-controlling interest 976,919 1,073,236 - -66,457,836 64,799,612 60,411,868 50,277,911

Total comprehensive income attributable to:Equity holders of the parent 66,356,425 65,032,931 60,411,868 50,277,911Non-controlling interest 976,919 1,073,236 - -

67,333,344 66,106,167 60,411,868 50,277,911

Per share informationaverage number of sharesWeighted average number of shares 302,863,640 302,741,722 - -

Earnings per share 36Earnings per share (c) 21.62 21.05 - -Diluted earnings per share (c) 21.62 21.05 - -

Net asset value per shareNet asset value per share (c) 159.60 149.07 - -Net tangible asset value per share (c) 130.91 120.33 - -

Dividends per share (c) 11.49 11.50 - -



Statement ofChanges in Equity

Figures in randShare

capital

Foreigncurrency

translationreserve

revaluationreserve

Share based

payment reserve

Other NDr

Total reserves

retainedincome

Total attributable

to equity holders of

the group / company

Non-

controlling interest Total equity

Group

Balance at 01 March 2018 324,779,200 - 4,464,136 410,345 - 4,874,481 91,437,239 421,090,920 2,053,817 423,144,737

Profit for the year - - - - - - 63,726,376 63,726,376 1,073,236 64,799,612

Other comprehensive income - - 1,306,554 - - 1,306,554 - 1,306,554 - 1,306,554

Total comprehensive income for the year - - 1,306,554 - - 1,306,554 63,726,376 65,032,930 1,073,236 66,106,166

Acquisition from non-controlling interest - - - - - - - - (130,873) (130,873)

Dividends - - - - - - (34,815,298) (34,815,298) (712,200) (35,527,498)

Total contributions by and distributions to owners of company recognised directly in equity - - - - - - (34,815,298) (34,815,298) (843,073) (35,658,371)

Opening balance as previously reported 324,779,200 - 5,770,690 410,345 - 6,181,035 120,348,317 451,308,552 2,283,980 453,592,532

Adjustments

Change in accounting policy - - - - - - (218,877) (218,877) - (218,877)

Balance at 01 March 2019 as restated 324,779,200 - 5,770,690 410,345 - 6,181,035 120,129,442 451,089,677 2,283,980 453,373,657

Profit for the year - - - - - - 65,480,917 65,480,917 976,919 66,457,836

Other comprehensive income - 391,462 484,047 - - 875,509 - 875,509 - 875,509

Total comprehensive income for the year - 391,462 484,047 - - 875,509 65,480,917 66,356,426 976,919 67,333,345

Issue of shares 1,375,000 - - - - - - 1,375,000 - 1,375,000

Dividends - - - - - - (34,841,548) (34,841,548) (823,600) (35,665,148)

Total contributions by and distributions to owners of company recognised directly in equity 1,375,000 - - - - - (34,841,548) (33,466,548) (823,600) (34,290,148)

Balance at 29 February 2020 326,154,200 391,462 6,254,737 410,345 - 7,056,544 150,768,811 483,979,555 2,437,299 486,416,854

Note 17



Figures in randShare

capital

Foreigncurrency

translationreserve

revaluationreserve

Share based

payment reserve

Other NDr

Total reserves

retainedincome

Total attributable

to equity holders of

the group / company

Non-

controlling interest Total equity

Company

Balance at 01 March 2018 324,779,200 - - 410,345 - 410,345 (1,378,155) 323,811,390 - 323,811,390

Profit for the year - - - - - - 50,277,911 50,277,911 - 50,277,911

Total comprehensive income for the year - - - - - - 50,277,911 50,277,911 - 50,277,911

Dividends - - - - - - (34,815,298) (34,815,298) - (34,815,298)

Changes in ownership interest - control not lost - - - - 218,914 218,914 - 218,914 - 218,914

Total contributions by and distributions to owners of company recognised directly in equity - - - - 218,914 218,914 (34,815,298) (34,596,384) - (34,596,384)

Opening balance as previously reported 324,779,200 - - 410,345 218,914 629,259 14,084,458 339,492,917 - 339,492,917

Adjustments

Change in accounting policy - - - - - - (3,809,862) (3,809,862) - (3,809,862)

Balance at 01 March 2019 as restated 324,779,200 - - 410,345 218,914 629,259 10,274,596 335,683,055 - 335,683,055

Profit for the year - - - - - - 60,411,868 60,411,868 - 60,411,868

Total comprehensive income for the year - - - - - - 60,411,868 60,411,868 - 60,411,868

Issue of shares 1,375,000 - - - - - - 1,375,000 - 1,375,000

Dividends - - - - - - (34,841,548) (34,841,548) - (34,841,548)

Total contributions by and distributions to owners of company recognised directly in equity 1,375,000 - - - - - (34,841,548) (33,466,548) - (33,466,548)

Balance at 29 February 2020 326,154,200 - - 410,345 218,914 629,259 35,844,916 362,628,375 - 362,628,375

Note 17

Statement of Changes in Equity [continued]



Statement ofCash Flows


Cash flows from operating activitiesProfit before taxation 90,405,779 89,448,863 62,480,180 53,067,339

adjustments for:Depreciation and amortisation 2,294,468 1,816,046 1,860,065 197,224(Gains) losses on disposals, scrappings and settlements of assets and liabilities (843,665) 224,653 - -Income from equity accounted investments (2,989,596) (1,317,832) - -

Dividends received (1,789,580) (1,165,628) (55,093,347) (558,906)

Interest received (9,188,211) (8,465,949) (16,718,267) (4,459,311)Finance costs 12,981,025 13,798,383 2,198,930 -Fair value losses 37,675 2,225,557 - -Impairment losses and reversals 102,656 623,025 - -Movements in operating lease assets and accruals 2,868,104 273,854 - -Movements in provisions - (500,000) - -Share option expense 465,000 - - -

Changes in working capital:Trade and other receivables 1,499,999 8,064,723 115,199 645,529Trade and other payables 1,891,920 (8,120,936) (825,973) (166,614)Cash generated from (used in) operations 97,735,574 96,904,759 (5,983,213) 48,725,261Interest income 9,188,211 8,465,949 3,353,572 4,459,311Dividends received (trading) 5,339,789 1,893,910 46,093,347 558,906Finance costs (12,981,025) (13,798,383) (2,198,930) -Tax paid 28 (28,107,676) (24,856,864) (2,979,610) (3,019,010)Repayment of lease liabilities (98,623) - (277,213) -Net cash from operating activities 71,076,250 68,609,371 38,007,953 50,724,468

Cash flows from investing activitiesPurchase of property, plant and equipment 4 (27,421,312) (6,793,886) (99,034) (231,017)Disposal of property, plant and equipment 4 33,203 237,840 - -Purchase of investment property 6 (10,333,094) - - -Disposal of investment property 6 43,000,000 - - -Additions in investments (incl subsidiaries and associates) - (412,370) - (68)Loans to related parties repaid - - - 947,325Loans advanced to related parties - - (27,122,168) (10,533,679)Purchase of investments at fair value - (36,873,932) - (25,138,979)Disposal of investments at fair value 175,428 - - -Advances of loan to associate - (84,772) - -Receipts from loan to associate 37,381 - - -Sale of financial assets - 31,643,465 - 25,000,000Loans to shareholders repaid 28,547 91,834 - -Net cash from investing activities 5,520,153 (12,191,821) (27,221,202) (9,956,418)



Statement of Cash Flows [continued]


Cash flows from financing activitiesRepayment of loans from related parties - - (68) (3,347)

Repayment of borrowings 29 (16,483,912) (11,868,314) - -

Dividends paid (35,665,148) (35,527,498) (34,841,548) (34,815,298)

Proceeds on disposal of shares in subsidiary to non-controlling interest where control is not lost - 183,642 - -

Net cash from financing activities (52,149,060) (47,212,170) (34,841,616) (34,818,645)

Total cash movement for the year 24,447,343 9,205,380 (24,054,865) 5,949,405Cash at the beginning of the year 135,024,089 125,818,709 61,050,035 55,100,630

Total cash at end of the year 16 159,471,432 135,024,089 36,995,170 61,050,035



1. Significant accounting policies

The principal accounting policies applied in the preparation of these consolidated and separate annual financial statements are set out below.

1.1 Basis of preparation

The consolidated and separate annual financial statements have been prepared on the going concern basis in accordance with, and in compliance with, International Financial Reporting Standards and International Financial Reporting Interpretations Committee (“IFRIC”) interpretations issued and effective at the time of preparing these annual financial statements and the Companies Act 71 of 2008 of South Africa, as amended.

These annual financial statements comply with the requirements of the JSE Listing Requirements, SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and the Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council.

These accounting policies are consistent with the previous period, except for the changes set out in note 2.

1.2 Consolidation

Basis of consolidation

The consolidated annual financial statements incorporate the annual financial statements of the company and all subsidiaries. Subsidiaries are entities (including structured entities) which are controlled by the group.

The group has control of an entity when it is exposed to or has rights to variable returns from involvement with the entity and it has the ability to affect those returns through use of its power over the entity.

The results of subsidiaries are included in the consolidated annual financial statements from the effective date of acquisition to the effective date of disposal.

All inter-company transactions, balances, and unrealised gains on transactions between group companies are eliminated in full on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Non-controlling interests in the net assets of consolidated subsidiaries are identified and recognised separately from the group’s interest therein, and are recognised within equity.

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions and are recognised directly in the Statement of Changes in Equity.

The difference between the fair value of consideration paid or received and the movement in non-controlling interest for such transactions is recognised in equity attributable to the owners of the company.

Investments in subsidiaries in the separate financial statements

In the company’s separate financial statements, investments in subsidiaries are carried at cost less any accumulated impairment losses.

1.3 Investments in associates

An associate is an entity over which the group has significant influence and which is neither a subsidiary nor a joint arrangement. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. It generally accompanies a shareholding of between 20% and 50% of the voting rights.

Under the equity method, investments in associates are carried in the Statement of Financial Position at cost adjusted for postacquisition changes in the group’s share of net assets of the associate, less any impairment losses.

The group’s share of post-acquisition profit or loss is recognised in profit or loss, and its share of movements in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment.

Any goodwill on acquisition of an associate is included in the carrying amount of the investment, however, a gain on acquisition is recognised immediately in profit or loss.

Profits or losses on transactions between the group and an associate are eliminated to the extent of the group’s interest therein.

1.4 Significant judgements and sources of estimation uncertainty

The preparation of annual financial statements in conformity with IFRS requires management, from time to time, to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. These estimates and associated assumptions are based on experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Accounting PoliciesNVest Financial Holdings Limited and its subsidiaries | (Registration number 2008/015990/06) Annual Financial Statements for the year ended 29 February 2020


Critical judgements in applying accounting policies

The critical judgements made by management in applying accounting policies, apart from those involving estimations, that have the most significant effect on the amounts recognised in the financial statements, are outlined as follows:

Lease classification

The group is party to leasing arrangements, both as a lessee and as a lessor. The treatment of leasing transactions (where the Group acts as a lessor) in the annual financial statements is mainly determined by whether the lease is considered to be an operating lease or a finance lease. In making this assessment, management considers the substance of the lease, as well as the legal form, and makes a judgement about whether substantially all of the risks and rewards of ownership are transferred. Based on the assessment performed by management, it was determined that the substance of the leasing arrangements were operating in nature.

The finance lease criteria were not satisfied per management’s assessment as risks and rewards of ownership were not deemed to have been transferred.

Expected manner of realisation for deferred tax

Management have reviewed the investment property portfolio of the group in order to determine the appropriate rate at which to measure deferred tax. Investment property is measured at fair value. The manner of recovery of the carrying amount, i.e. through use or sale, affects the determination of the deferred tax assets or liabilities. IFRS assumes that the carrying amount of investment property is recovered through sale rather than through continued use. Management considered the business model of the portfolio and concluded that the assumption is not rebutted and that the deferred taxation should be measured on the sale basis. Key sources of estimation uncertainty

Impairment of financial assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The group uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the group’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period. For details of the key assumptions and inputs used, refer to the individual notes addressing financial assets.

Fair value estimation

Land and buildings and investment property, are revalued on an annual basis, to fair value using observable market data as inputs to the extent that it is available. It is the policy of the group to obtain a independent valuation of all the

investment property within a three year rolling period. More than one independent valuer may be used to provide the valuation.

Impairment testing

The group reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. When such indicators exist, management determines the recoverable amount by performing value in use and fair value calculations. These calculations require the use of estimates and assumptions. When it is not possible to determine the recoverable amount for an individual asset, management assesses the recoverable amount for the cash generating unit to which the asset belongs.

Irrespective of whether there is any indication of impairment, the group also tests intangible assets with an indefinite useful life for impairment annually by comparing its carrying amount with its recoverable amount. This impairment test is performed during the annual period and at the same time every period. The group tests goodwill acquired in a business combination for impairment annually.

Useful lives of property, plant and equipment

Management assess the appropriateness of the useful lives and residual values of property, plant and equipment at the end of each reporting period. The useful lives of motor vehicles, furniture and computer equipment are determined based on group replacement policies for the various assets. Individual assets within these classes, which have a significant carrying amount are assessed separately to consider whether replacement will be necessary outside of normal replacement parameters.

When the estimated useful life of an asset differs from previous estimates, the change is applied prospectively in the determination of the depreciation charge.

1.5 Investment property

Investment property is recognised as an asset when, and only when, it is probable that the future economic benefits that are associated with the investment property will flow to the enterprise, and the cost of the investment property can be measured reliably.

Investment property is initially recognised at cost. Transaction costs are included in the initial measurement.

Fair value

Subsequent to initial measurement investment property is measured at fair value.

A gain or loss arising from a change in fair value is included in net profit or loss for the period in which it arises.

Accounting Policies [continued]

1.4 Significant judgements and sources of estimation uncertainty [continued]



1.6 Property, plant and equipment

Property, plant and equipment are tangible assets which the group holds for its own use or for rental to others and which are expected to be used for more than one year.

An item of property, plant and equipment is recognised as an asset when it is probable that future economic benefits associated with the item will flow to the group, and the cost of the item can be measured reliably.

Property, plant and equipment is initially measured at cost.

Expenditure incurred subsequently for additions to or replacements of parts of property, plant and equipment are capitalised if it is probable that future economic benefits associated with the expenditure will flow to the group and the cost can be measured reliably. Day to day servicing costs are included in profit or loss in the year in which they are incurred.

Subsequent to initial recognition, property, plant and equipment is measured at cost less accumulated depreciation and any accumulated impairment losses, except for land and buildings which are stated at revalued amounts. The revalued amount is the fair value at the date of revaluation.

Revaluations are made with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting year.

When an item of property, plant and equipment is revalued, any accumulated depreciation at the date of the revaluation is eliminated against the gross carrying amount of the asset.

Any increase in an asset’s carrying amount, as a result of a revaluation, is recognised in other comprehensive income and accumulated in the revaluation reserve in equity.

Any decrease in an asset’s carrying amount, as a result of a revaluation, is recognised in profit or loss in the current year. The decrease is recognised in other comprehensive income to the extent of any credit balance existing in the revaluation reserve in respect of that asset. The decrease recognised in other comprehensive income reduces the amount accumulated in the revaluation reserve in equity.

The revaluation reserve related to a specific item of property, plant and equipment is transferred directly to retained income when the asset is derecognised.

Depreciation of an asset commences when the asset is available for use as intended by management. Depreciation is charged to write off the asset’s carrying amount over its estimated useful life to its estimated residual value, using a method that best reflects the pattern in which the asset’s economic benefits are consumed by the group. Leased assets are depreciated in a consistent manner over the shorter of their expected useful lives and the lease term. Depreciation is not charged to an asset if its estimated

residual value exceeds or is equal to its carrying amount. Depreciation of an asset ceases at the earlier of the date that the asset is classified as held for sale or derecognised.

The useful lives of items of property, plant and equipment have been assessed as follows:

ItemDepreciation

methodaverage useful life

Land and buildings Straight line 50 years

Airconditioners Straight line 6 years

Furniture and fixtures Straight line 6 to 10 years

Motor vehicles Straight line 8 years

Office equipment Straight line 5 years

IT equipment Straight line 3 to 4 years

Computer software Straight line 3 years

Leasehold improvements Straight line Lease term

Capital WIP Straight line 3 to 6 years

The residual value, useful life and depreciation method of each asset are reviewed at the end of each reporting year. If the expectations differ from previous estimates, the change is accounted for prospectively as a change in accounting estimate.

Impairment tests are performed on property, plant and equipment when there is an indicator that they may be impaired. When the carrying amount of an item of property, plant and equipment is assessed to be higher than the estimated recoverable amount, an impairment loss is recognised immediately in profit or loss to bring the carrying amount in line with the recoverable amount.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its continued use or disposal. Any gain or loss arising from the derecognition of an item of property, plant and equipment, determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item, is included in profit or loss when the item is derecognised.

1.7 Financial instruments

Financial instruments held by the group are classified in accordance with the provisions of IFRS 9 Financial Instruments. Broadly, the classification possibilities, which are adopted by the group ,as applicable, are as follows:

Financial assets which are equity instruments are classified as mandatorily at fair value through profit or loss.

Financial assets which are debt instruments are classified as amortised cost. (This category applies only when the contractual terms of the instrument give rise, on specified dates, to cash flows that are solely payments of principal and interest on principal, and where the instrument is held under a business model whose objective is met by holding the instrument to collect contractual cash flows); or Financial liabilities are carried at amortised cost




Note 33 Financial instruments and risk management presents the financial instruments held by the group based on their specific classifications.

The specific accounting policies for the classification, recognition and measurement of each type of financial instrument held by the group are presented below:

Loans receivable at amortised cost

Classification

Loans to related parties (note 10) and loans to shareholders are classified as financial assets subsequently measured at amortised cost.

They have been classified in this manner because the contractual terms of these loans give rise, on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding, and the group’s business model is to collect the contractual cash flows on these loans.

recognition and measurement

Loans receivable are recognised when the group becomes a party to the contractual provisions of the loan. The loans are measured, at initial recognition, at fair value.

They are subsequently measured at amortised cost.

The amortised cost is the amount recognised on the loan initially, minus principal repayments. Impairment

The group recognises a loss allowance for expected credit losses on all loans receivable measured at amortised cost. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective loans.

The group measures the loss allowance for loans receivable at an amount equal to lifetime expected credit losses (lifetime ECL), which represents the expected credit losses that will result from all possible default events over the expected life of the receivable.

Significant increase in credit risk

In assessing whether the credit risk on a loan has increased significantly since initial recognition, the group compares the risk of a default occurring on the loan as at the reporting date with the risk of a default occurring as at the date of initial recognition.

The group considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort. Forward-looking

information considered includes the future prospects of the industries in which the counterparties operate, obtained from economic expert reports, financial analysts, governmental bodies, relevant think-tanks and other similar organisations, as well as consideration of various external sources of actual and forecast economic information.

By contrast, if a loan is assessed to have a low credit risk at the reporting date, then it is assumed that the credit risk on the loan has not increased significantly since initial recognition.

The group regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increases in credit risk before the amount becomes past due.

Measurement and recognition of expected credit losses The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a default) and the exposure at default.

The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information as described above. The exposure at default is the gross carrying amount of the loan at the reporting date.

Lifetime ECL is measured on a collective basis in cases where evidence of significant increases in credit risk are not yet available at the individual instrument level. Loans are then grouped in such a manner that they share similar credit risk characteristics, such as nature of the loan, external credit ratings (if available), industry of counterparty etc.

The grouping is regularly reviewed by management to ensure the constituents of each group continue to share similar credit risk characteristics.

If the group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous reporting period, but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the group measures the loss allowance at an amount equal to 12 month ECL at the current reporting date, and visa versa.

An impairment gain or loss is recognised for all loans in profit or loss with a corresponding adjustment to their carrying amount through a loss allowance account. The impairment loss is included in operating expenses in profit or loss as a movement in credit loss allowance (note 24).

Credit risk

Details of credit risk related to loans receivable are included in the specific notes and the financial instruments and risk management (note 33).

1.7 Financial instruments [continued]




Derecognition

Refer to the “derecognition” section of the accounting policy for the policies and processes related to derecognition.

Any gains or losses arising on the derecognition of a loan receivable is included in profit or loss in derecognition gains (losses) on financial assets at amortised cost.

Trade and other receivables

Classification

Trade and other receivables, excluding, when applicable, VAT and prepayments, are classified as financial assets subsequently measured at amortised cost (note 14).

They have been classified in this manner because their contractual terms give rise, on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding, and the group’s business model is to collect the contractual cash flows on trade and other receivables.


Trade and other receivables are recognised when the group becomes a party to the contractual provisions of the receivables. They are measured, at initial recognition, at fair value plus transaction costs, if any.

They are subsequently measured at amortised cost. The amortised cost is the amount recognised on the receivable initially, minus principal repayments, plus cumulative amortisation (interest) using the effective interest method of any difference between the initial amount and the maturity amount, adjusted for any loss allowance.

Impairment

The group recognises a loss allowance for expected credit losses on trade and other receivables, excluding VAT and prepayments. The amount of expected credit losses is updated at each reporting date.

The group measures the loss allowance for trade and other receivables at an amount equal to lifetime expected credit losses (lifetime ECL), which represents the expected credit losses that will result from all possible default events over the expected life of the receivable.

Measurement and recognition of expected credit losses

The group makes use of a provision matrix as a practical expedient to the determination of expected credit losses on trade and other receivables. The provision matrix is based on historic credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current and forecast direction of conditions at the reporting date, including the time value of money, where appropriate.

An impairment gain or loss is recognised in profit or loss with a corresponding adjustment to the carrying amount of trade and other receivables, through use of a loss allowance account. The impairment loss is included in operating expenses in profit or loss as a movement in credit loss allowance (note 24).

Write off policy

The group writes off a receivable when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the counterparty has been placed under liquidation or has entered into bankruptcy proceedings. Receivables written off may still be subject to enforcement activities under the group recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognised in profit or loss.

Credit risk

Details of credit risk are included in the trade and other receivables note (note 14) and the financial instruments and risk management note (note 33).

Derecognition

Refer to the derecognition section of the accounting policy for the policies and processes related to derecognition.

Any gains or losses arising on the derecognition of trade and other receivables is included in profit or loss in the derecognition gains (losses) on financial assets at amortised cost line item.

Investments in equity instruments

Classification

Investments in equity instruments are presented in note 15. They are classified as mandatorily at fair value through profit or loss.


Investments in equity instruments are recognised when the group becomes a party to the contractual provisions of the instrument. The investments are measured, at initial recognition, at fair value. All transaction costs are recognised in profit or loss.

Investments in equity instruments are subsequently measured at fair value with changes in fair value recognised in profit or loss.

Fair value gains or losses recognised on investments at fair value through profit or loss are included in other operating gains (losses) (note 23).

Dividends received on equity investments are recognised in profit or loss when the group’s right to received the dividends is established, unless the dividends clearly represent a





recovery of part of the cost of the investment. Dividends are included in investment income (note 25).

Borrowings, loans from related parties and trade and other payables

Classification

Loans from related parties (note 10) and borrowings (note 18) are classified as financial liabilities subsequently measured at amortised cost.

Trade and other payables (note 19), excluding VAT and amounts received in advance, are classified as financial liabilities subsequently measured at amortised cost.


Borrowings, loans from related parties and trade and other payables are recognised when the group becomes a party to the contractual provisions, and are measured, at initial recognition, at fair value plus transaction costs, if any.

They are subsequently measured at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability.

If trade and other payables contain a significant financing component, and the effective interest method results in the recognition of interest expense, then it is included in profit or loss in finance costs (note 26).

Trade and other payables expose the group to liquidity risk and possibly to interest rate risk. Refer to note 33 for details of risk exposure and management thereof.

Interest expense, calculated on the effective interest method, is included in profit or loss in finance costs (note 26.)

Borrowings expose the group to liquidity risk and interest rate risk. Refer to note 33 for details of risk exposure and management thereof.

Derecognition

Refer to the “derecognition” section of the accounting policy for the policies and processes related to derecognition.

Cash and cash equivalents

Cash and cash equivalents are initially measured at fair value, and are subsequently measured at amortised cost.

Derecognition

Financial assets

The group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the group retains substantially all the risks and rewards of ownership of a transferred financial asset, the group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

Financial liabilities

The group derecognises financial liabilities when, and only when, the group obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

1.8 Tax

Current tax assets and liabilities

Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities

A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax asset is not recognised when it arises from the initial recognition of an asset or liability in a transaction at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

A deferred tax asset is recognised for the carry forward of unused tax losses to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilised.





Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Tax expenses

Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from:

• a transaction or event which is recognised, in the same or a different period, to other comprehensive income, or

• a business combination.

Current tax and deferred taxes are charged or credited to other comprehensive income if the tax relates to items that are credited or charged, in the same or a different period, to other comprehensive income.

Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly in equity.

1.9 Leases

A contract is, or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

In order to assess whether a contract is, or contains a lease, management determine whether the asset under consideration is “identified”, which means that the asset is either explicitly or implicitly specified in the contract and that the supplier does not have a substantial right of substitution throughout the period of use. Once management has concluded that the contract deals with an identified asset, the right to control the use thereof is considered. To this end, control over the use of an identified asset only exists when the group has the right to substantially all of the economic benefits from the use of the asset as well as the right to direct the use of the asset.

In circumstances where the determination of whether the contract is or contains a lease requires significant judgement, the relevant disclosures are provided in the significant judgments and sources of estimation uncertainty section of these accounting policies.

Group as lessee

A lease liability and corresponding right-of-use asset are recognised at the lease commencement date, for all lease agreements for which the group is a lessee. For these leases, the group recognises the lease payments as an operating expense (note 24) on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

The various lease and non-lease components of contracts containing leases are accounted for separately, with consideration being allocated to each lease component on the basis of the relative stand-alone prices of the lease components and the aggregate stand-alone price of the non-lease components (where non-lease components exist).

However as an exception to the preceding paragraph, the group has elected not to separate the non-lease components for leases of land and buildings.

Details of leasing arrangements where the group is a lessee are presented in note 5 Leases (group as lessee).

Lease liability

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the group uses its incremental borrowing rate.

Lease payments included in the measurement of the lease liability comprise the following:

• fixed lease payments, including in-substance fixed payments, less any lease incentives;

• variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;

• the amount expected to be payable by the group under residual value guarantees;

• the exercise price of purchase options, if the group is reasonably certain to exercise the option;

• lease payments in an optional renewal period if the group is reasonably certain to exercise an extension option; and

• penalties for early termination of a lease, if the lease term reflects the exercise of an option to terminate the lease.

Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability (or right-of-use asset). The related payments are recognised as an expense in the period incurred and are included in operating expenses (note 5).

The lease liability is presented as a separate line item on the Statement of Financial Position.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect lease payments made. Interest charged on the lease liability is included in finance costs (note 26).

The group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) when:

• there has been a change to the lease term, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate;

1.8 Tax [continued]




1.9 Leases [continued]

• there has been a change in the assessment of whether the group will exercise a purchase, termination or extension option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate;

• there has been a change to the lease payments due to a change in an index or a rate, in which case the lease liability is remeasured by discounting the revised lease payments using the initial discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used);

• there has been a change in expected payment under a residual value guarantee, in which case the lease liability is remeasured by discounting the revised lease payments using the initial discount rate;

• a lease contract has been modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised payments using a revised discount rate.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recognised in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

right-of-use assets

Lease payments included in the measurement of the lease liability comprise the following:

• the initial amount of the corresponding lease liability;• any lease payments made at or before the

commencement date;• any initial direct costs incurred;• any estimated costs to dismantle and remove the

underlying asset or to restore the underlying asset or the site on which it is located, when the group incurs an obligation to do so, unless these costs are incurred to produce inventories; and

• less any lease incentives received.

Right-of-use assets are subsequently measured at cost less accumulated depreciation.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. However, if a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. Depreciation starts at the commencement date of a lease.

For right-of-use assets which are depreciated over their lease terms, the lease terms are presented in the following table:

ItemDepreciation

methodaverage useful life

Buildings Straight line 13 years

The depreciation charge for each year is recognised in profit or loss unless it is included in the carrying amount of another asset.

Group as lessor

Leases for which the group is a lessor are classified as finance or operating leases. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases. Lease classification is made at inception and is only reassessed if there is a lease modification.

When the group is an intermediate lessor, it accounts for the head lease and the sublease as two separate contracts. The sublease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease. If the head lease is a short-term lease to which the group applies the exemption described previously, then it classifies the sub-lease as an operating lease.

The various lease and non-lease components of contracts containing leases are accounted for separately, with consideration being allocated by applying IFRS 15.

Operating leases

Lease payments from operating leases are recognised on a straight-line basis over the term of the relevant lease, or on another systematic basis if that basis is more representative of the pattern in which the benefits form the use of the underlying asset are diminished. Operating lease income is included in revenue (note 20).

Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and are expensed over the lease term on the same basis as the lease income.

Modifications made to operating leases are accounted for as a new lease from the effective date of the modification. Any prepaid or accrued lease payments relating to the original lease are treated as part of the lease payments of the new lease.

1.10 Impairment of assets

The group assesses at each end of the reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the group estimates the recoverable amount of the asset.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined.




The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use.

If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss.

An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in profit or loss. Any impairment loss of a revalued asset is treated as a revaluation decrease.

Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units or groups of units.

An entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amounts of those assets are estimated.

The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods.

1.11 Share capital and equity

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

1.12 Share based payments

Services received or acquired in a share-based payment transaction are recognised when the services are received. A corresponding increase in equity is recognised if the services were received in an equity-settled share-based payment transaction.

If the fair value of the services received cannot be estimated reliably, or if the services received are employee services, their value and the corresponding increase in equity, are measured, indirectly, by reference to the fair value of the equity instruments granted.

Vesting conditions which are not market related (i.e. service conditions) are not taken into consideration when determining the fair value of the equity instruments granted. Instead, vesting conditions which are not market related are taken into account by adjusting the number of equity instruments included in the measurement of the transaction

amount so that, ultimately, the amount recognised for services received as consideration for the equity instruments granted are based on the number of equity instruments that eventually vest.

1.13 Employee benefits

Short-term employee benefits

The cost of short-term employee benefits are recognised in the period in which the service is rendered and are not discounted.

The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs.

The expected cost of profit sharing and bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments as a result of past performance.

1.14 revenue from contracts with customers

IFRS 15 establishes a comprehensive framework for determining whether, how much and when the revenue should be recognised. Revenue comprises of fees earned in respect of administration, brokerage, commission, consultancy and management services.

In terms of IFRS 15, the group is required to recognise revenue when or as the entity satisfies a performance obligation by transferring a promised service or good to a customer. The group has therefore assessed the impact of IFRS 15 based on the IFRS 15 five step process as per below:

• The mandate is the contract signed between the customer and the entity and is the legally enforceable contract identifying the rights of each party.

• The performance obligation in the mandate is the promise by the entity to manage the clients portfolios. The mandate specifies the transaction price as being the expected administration fee, brokerage fee, commission fee, consultancy fee and management fee to be charged. The service performed by the entity to the client as per the signed mandate results in the fees being earned.

• These fees are separately identifiable to each obligation, and therefore no estimation will be required in allocation of the fees to the performance obligation.

• The group only recognises the revenue when it has satisfied the promised obligation of providing the service, and the obligation has been monetised.

The group’s revenue is measured based on the consideration received in the contract with the customer excluding Value Added Taxation.

1.10 Impairment of assets [continued]




1.14 revenue from contracts with customers [continued]

Revenue is earned and recognised as follows: Brokerage income - this income is earned when stockbroking services are provided for shares bought and sold on behalf of a client and recognised at the time of the transaction.

Commission income - initial/take on commission comprises commissions earned on advice on investment and insurance products and the group recognises revenue when the transaction that gives rise to the revenue is concluded with the client. The group is entitled to this revenue irrespective of the decisions the client makes in the future. Ongoing monthly/annuity commission is earned and this is based on the value of the respective underlying investment portfolio, and recognised as it is earned on a monthly basis as this is when the service is performed.

Administration fees - are fees earned for administration and maintenance of share and investment portfolios (charged and settled on a quarterly basis), and for the administration of deceased estates.

Management fees - are fees received for the monthly management of investment portfolios (based on the value of assets under management), property portfolios and trusts. Revenue is recognised each month as the services are performed.

Practical Expedient

The group has taken advantage of the practical exemption not to account for significant financing components where the time difference between receiving consideration and transferring control of services to its customer is one year or less.

1.15 Cost of sales

The related cost of providing services recognised as revenue in the current period is included in cost of sales.

1.16 Borrowing costs

Borrowing costs are recognised as an expense in the period in which they are incurred. There are no qualifying assets in the group.

1.17 Earnings per share

Earnings per share is calculated by taking the profit after taxation attributable to the equity holders of the parent and dividing this by the weighted average number of shares in issue. Diluted earnings per share adjusts the figures calculated in the basic earnings per share by the effects of instruments which dilute the basic earnings per share figure. Headline earnings per share is calculated in terms of the requirements set out in Circular 01/2019 issued by the JSE.

1.18 Segmental reporting

IFRS 8 requires operating segments to be identified on the basis of internal reports that are regularly reviewed by the chief operating decision maker (considered to be the executive members of the board).

Management currently identifies five operating segments, being operations in the Republic of South Africa divided into insurance broking, wealth management, administration of estates and trusts, property services and investments. Each operating segment is monitored separately and strategic decisions are made on the basis of segment operating results.

1.19 Net asset value and net tangible asset value per share

It is company policy to disclose net asset value and net tangible asset value per share.

In determining net asset value and net tangible asset per share, the total number of shares in issue at year end was used as denominator. For net tangible asset value per share, the goodwill was excluded from the numerator.

2. Changes in accounting policy

The annual financial statements have been prepared in accordance with International Financial Reporting Standards on a basis consistent with the prior year except for the adoption of the following new or revised standards.

application of IFrS 16 Leases

In the current year, the group has adopted IFRS 16 Leases (as issued by the IASB in January 2016) with the date of initial application being 01 March 2019. IFRS 16 replaces IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a lease, SIC-15 Operating Leases - Incentives and SIC 27 - Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

IFRS 16 introduces new or amended requirements with respect to lease accounting. It introduces significant changes to the lessee accounting by removing the distinction between operating and finance leases and requiring the recognition of a right-of-use asset and a lease liability at the lease commencement for all leases, except for short-term leases and leases of low value assets. In contrast to lessee accounting, the requirements for lessor accounting have remained largely unchanged. Details of these new requirements are described in the accounting policy for leases. The impact of the adoption of IFRS 16 on the company’s annual financial statements is described below.




The group has applied the practical expedient available in IFRS 16 which provides that for contracts which exist at the initial application date, an entity is not required to reassess whether they contain a lease. This means that the practical expedient allows an entity to apply IFRS 16 to contracts identified by IAS 17 and IFRIC 4 as containing leases; and to not apply IFRS 16 to contracts that were not previously identified by IAS 17 and IFRIC 4 as containing leases.

IFRS 16 has been adopted by applying the modified retrospective approach, whereby the comparative figures are not restated. Instead, cumulative adjustments to retained earnings have been recognised in retained earnings as at 01 March 2019.

Leases where company is lessee

Leases previously classified as operating leases

The group undertook the following at the date of initial application for leases which were previously recognised as operating leases:

• recognised a lease liability, measured at the present value of the remaining lease payments, discounted at the group’s incremental borrowing rate at the date of initial application

• recognised right-of-use assets measured on a lease by lease basis, at either the carrying amount (as if IFRS 16 applied from commencement date but discounted at the incremental borrowing rate at the date of initial application) or at an amount equal to the lease liability adjusted for accruals or prepayments relating to that lease prior to the date of initial application.

The group applied IAS 36 to consider if these right-of-use assets are impaired as at the date of initial application.

The group applied the following practical expedients when applying IFRS 16 to leases previously classified as operating leases in terms of IAS 17. Where necessary, they have been applied on a lease by lease basis: • leases which were expiring within 12 months of 01 March 2019 were treated as short term leases, with remaining lease

payments recognised as an expense on a straight-line basis or another systematic basis which is more representative of the pattern of benefits consumed;

• initial direct costs were excluded from the measurement of right-of-use assets at the date of initial application. • hindsight was applied where appropriate. This was specifically the case for determining the lease term for leases which

contained extension or termination options.

Impact on financial statements

On transition to IFRS 16, the group recognised an additional R1 260 737 of right-of-use assets and R1 564 734 of lease liabilities, while the company recognised an additional R16 492 552 of right-of-use assets and R21 784 032 of lease liabilities. The difference for both group and company was recognised in retained earnings and deferred taxation.

When measuring lease liabilities, company discounted lease payments using its incremental borrowing rate at 01 March 2019. The weighted average rate applied is 10.25% per annum.

Group01 March 2019

Company01 March 2019

Operating lease commitment at 28 February 2019 as previously disclosed 2,277,247 36,762,038Discounted using the incremental borrowing rate at 1 March 2019 (712,513) (14,978,006)Lease liabilities recognised at 01 March 2019 1,564,734 21,784,032

3. New Standards and Interpretations

3.1 Standards and interpretations effective and adopted in the current year

In the current year, the group has adopted the following standards and interpretations that are effective for the current financial year and that are relevant to its operations:

Notes to the Consolidated Financial Statements



Standard/ Interpretation: Effective date: Years beginning on or after Expected impact:

• Long-term Interests in Joint Ventures and Associates - Amendments to IAS 28 01 January 2019 The impact of the amendments is

not material.

• Prepayment Features with Negative Compensation - Amendment to IFRS 9 01 January 2019 The impact of the amendments is

not material.

• Amendments to IFRS 3 Business Combinations: Annual Improvements to IFRS 2015 - 2017 cycle 01 January 2019 The impact of the amendments is

not material.

• Amendments to IAS 12 Income Taxes: Annual Improvements to IFRS 2015 - 2017 cycle 01 January 2019 The impact of the amendments is

not material.

• Amendments to IAS 23 Borrowing Costs: Annual Improvements to IFRS 2015 - 2017 cycle 01 January 2019 The impact of the amendments is

not material.

• Uncertainty over Income Tax Treatments 01 January 2019 The impact of the amendments is not material.

• IFRS 16 Leases 01 January 2019 The impact of the standard is set out in note 2 Changes in accounting policy

3.2 Standards and interpretations not yet effective

The Group has chosen not to early adopt the following standards and interpretations, which have been published and are mandatory for the group’s accounting periods beginning on or after 01 March 2020 or later periods:

Standard/ Interpretation: Effective date: Years beginning on or after Expected impact:

• Definition of material - IAS 1 Presentation of financial statements 01 January 2020 Unlikely there will be a material impact

• Classification of liabilities as current or non-current - IAS 1 Presentation of financial statements 01 January 2022 Unlikely there will be a material impact

• Definition of material - IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors 01 January 2020 Unlikely there will be a material impact

Notes to the Annual Financial Statements [continued]


4. Property, plant and equipment

Group 2020 2019Cost or

revaluationaccumulated depreciation

Carrying Value

Cost or revaluation

accumulated depreciation

Carrying Value

Land and buildings 65,136,185 - 65,136,185 39,548,866 - 39,548,866Furniture and fixtures 6,935,489 (2,328,936) 4,606,553 6,898,838 (2,555,123) 4,343,715Motor vehicles 187,925 (159,268) 28,657 187,925 (152,039) 35,886Office equipment 4,633,319 (2,404,819) 2,228,500 1,634,629 (909,219) 725,410IT equipment 5,065,332 (3,790,417) 1,274,915 4,156,961 (3,068,564) 1,088,397Computer software 740,266 (634,014) 106,252 712,388 (555,513) 156,875Leasehold improvements 34,935 (33,811) 1,124 34,935 (30,536) 4,399Capital - Work in progress* 80,542 (80,530) 12 1,664,756 (80,530) 1,584,226Total 82,813,993 (9,431,795) 73,382,198 54,839,298 (7,351,524) 47,487,774

* Capital - Work in progress relates to office equipment and furniture and fittings with the construction of a new building.

Company 2020 2019Cost or

revaluationaccumulated depreciation

Carrying Value

Cost or revaluation

accumulated depreciation

Carrying Value

Furniture and fixtures 517,815 (148,215) 369,600 517,815 (101,611) 416,204Office equipment 296,945 (216,540) 80,405 273,110 (187,671) 85,439IT equipment 978,065 (828,129) 149,936 917,401 (708,552) 208,849Computer software 162,089 (146,048) 16,041 147,553 (130,287) 17,266Total 1,954,914 (1,338,932) 615,982 1,855,879 (1,128,121) 727,758

3.1 Standards and interpretations effective and adopted in the current year [continued]


reconciliation of property, plant and equipment - Group - 2020

Openingbalance additions Disposals Transfers revaluations Depreciation

Closingbalance

Land and buildings 39,548,866 24,963,548 - - 623,771 - 65,136,185Furniture and fixtures 4,343,715 939,060 (24,015) 371,432 - (1,023,639) 4,606,553Motor vehicles 35,886 - - - - (7,229) 28,657Office equipment 725,410 561,566 (4,095) 1,212,782 - (267,163) 2,228,500IT equipment 1,088,397 930,987 - - - (744,469) 1,274,915Computer software 156,875 26,151 - - - (76,774) 106,252Leasehold improvements

4,399 - - - - (3,275) 1,124

Capital - Work in progress

1,584,226 - - (1,584,214) - - 12

47,487,774 27,421,312 (28,110) - 623,771 (2,122,549) 73,382,198

reconciliation of property, plant and equipment - Group - 2019

Openingbalance additions Disposals Transfers revaluations Depreciation

Closingbalance

Land and buildings 33,999,164 3,735,042 - - 1,814,660 - 39,548,866Furniture and fixtures 3,401,429 309,297 (233,807) 1,686,342 - (819,546) 4,343,715Motor vehicles 56,273 - (796) - - (19,591) 35,886Office equipment 2,169,241 348,668 (101,378) (1,456,435) - (234,686) 725,410IT equipment 1,146,255 654,580 (67,832) - - (644,606) 1,088,397Computer software 46,754 160,530 - - - (50,409) 156,875Leasehold improvements

248,267 1,555 - (229,907) - (15,516) 4,399

Capital - Work in progress

31,704 1,584,214 - - - (31,692) 1,584,226

41,099,087 6,793,886 (403,813) - 1,814,660 (1,816,046) 47,487,774

reconciliation of property, plant and equipment - Company - 2020

Openingbalance additions Depreciation

Closingbalance

Furniture and fixtures 416,204 - (46,604) 369,600Office equipment 85,439 23,836 (28,870) 80,405IT equipment 208,849 60,663 (119,576) 149,936Computer software 17,266 14,535 (15,760) 16,041

727,758 99,034 (210,810) 615,982

reconciliation of property, plant and equipment - Company - 2019

Openingbalance additions Depreciation

Closingbalance

Furniture and fixtures 406,892 52,284 (42,972) 416,204Office equipment 107,843 7,910 (30,314) 85,439IT equipment 159,721 152,757 (103,629) 208,849Computer software 19,509 18,066 (20,309) 17,266

693,965 231,017 (197,224) 727,758



4. Property, plant and equipment [continued]





4. Property, plant and equipment [continued]

Property, plant and equipment encumbered as security

The following assets have been encumbered as security for the secured long-term borrowings (note 18):

Land and buildings 20,904,547 27,371,617 - -

Erf 11104 East London (NFB House) is provided as security for the loan to purchase the property.

revaluations

The group’s land and buildings are stated at revalued amounts, being the fair value at the date of revaluation. Revaluations are performed on an annual basis at the end of the year.

Refer to note 6 for specific details regarding the valuation of the land and buildings. Refer to note 34 Fair Value Information regarding the fair value hierarchy of Property, plant and equipment.

The carrying value of the revalued assets under the cost model would have been:

Land and buildings 53,212,495 25,418,284 - -

Details of properties

Erf 11104 East London (NFB house)- Purchase price 14,040,671 14,040,671 - -

- Revaluation since purchase 6,085,488 6,552,559 - -

- Capitalised expenditure 778,387 778,387 - -

20,904,546 21,371,617 - -

Erf 76307 East London (Sherpa house)- Purchase price 13,000,000 13,000,000 - -

- Revalution since purchase 1,842,397 1,403,204 - -

- Capitalised expenditure 39,003 39,003 - -

14,881,400 14,442,207 - -

Erf 3 Illovo Point Unit 17- Revaluation since purchase 651,649 - - -

- Capitalised expenditure 28,698,590 3,735,041 - -

29,350,239 3,735,041 - -

5. Leases (group as lessee)

The group and company leases units in an office complex for administration purposes.

Net carrying amounts of right-of-use assets

The carrying amounts of right-of-use assets are as follows:

Buildings 1,088,818 - 14,843,297 -



additions to right-of-use assets

Buildings 1,260,737 - 16,492,552 -

Depreciation recognised on right-of-use assets

Depreciation recognised on right-of-use assets is presented below. It includes depreciation which has been expensed in the total depreciation charge in profit or loss (note 24).

Buildings 171,919 - 1,649,255 -

Lease liabilities

The maturity analysis of lease liabilities is as follows:

Within one year 268,896 - 2,850,954 -

Two to five years 1,262,101 - 13,585,134 -

More than five years 493,765 - 17,849,807 -

2,024,762 - 34,285,895 -

Less finance charges component (558,652) - (12,779,077) -

1,466,110 - 21,506,818 -

Non-current liabilities 1,339,550 - 20,803,530 -

Current liabilities 126,560 - 703,288 -

1,466,110 - 21,506,818 -

Exposure to liquidity risk

Refer to note 33 Financial instruments and risk management for the details of liquidity risk exposure and management.

6. Investment property

Group

Investment property 274,255,654 306,121,663 - -

reconciliation of investment property - Group - 2020

Openingbalance additions Disposals

Fair valueadjustments Total

Investment property 306,121,663 10,333,094 (42,161,428) (37,675) 274,255,654

reconciliation of investment property - Group - 2019

Openingbalance

Fair valueadjustments Total

Investment property 308,338,397 (2,216,734) 306,121,663

5. Leases (group as lessee) [continued]





Encumbered propertiesCarrying value of assets pledged as security:

Erf 387, 389 & 394 Butterworth 17,053,034 17,094,616 - -

Erf 11032, 11008, 11031 & 11010 Cape Town 25,555,403 24,844,970 - -

Erf 169827 Cape Town 22,666,612 21,110,554 - -

Erf 28971 Cape Town 20,668,634 19,335,743 - -

Erf 5991 East London 19,763,421 25,812,342 - -

Erf 5992 East London 13,029,389 22,251,097 - -

Erf 10015 East London 57,900,145 52,051,183 - -

Erf 65432 East London 14,636,828 13,705,857 - -

Erf 90 Mthatha 14,501,058 12,981,156 - -

Erf 3197 & 3198 Port Elizabeth 15,694,792 13,894,183 - -

Erf 2785 & 2786 Pretoria 12,192,441 11,016,094 - -

Erf 8245 Queenstown - 42,161,428 - -

Erf 61228 East London 26,579,132 25,093,249 - -

260,240,889 301,352,472 - -

The fair value of the investment property is as follows:

Erf 387, 389 & 394 Butterworth 17,773,483 18,106,773 - -

Erf 11032, 11008, 11031 & 11010 Cape Town 26,033,024 25,360,953 - -

Erf 169827 Cape Town 22,802,970 21,261,879 - -

Erf 28971 Cape Town 21,240,119 19,443,454 - -

Erf 5991 East London 19,777,189 25,971,041 - -

Erf 5992 East London 13,076,516 22,363,760 - -

Erf 10015 East London 60,210,763 54,984,473 - -

Erf 65432 East London 14,869,796 13,724,567 - -

Erf 90 Mthatha 15,377,790 14,103,743 - -

Erf 3197 & 3198 Port Elizabeth 15,740,114 13,937,756 - -

Erf 2785 & 2786 Pretoria 12,203,241 11,031,214 - -

Erf 8245 Queenstown - 44,034,632 - -

Erf 61228 East London 26,601,441 25,366,968 - -

Erf 33342 East London 4,917,693 4,964,473 - -

Erf 3 Illovo Point - Unit 16 9,297,435 - - -

279,921,574 314,655,686 - -

Details of valuation

It is the policy of the group to obtain an independent valuation of all the investment property within a three year rolling period. More than one independent valuer may be used to provide the valuation.

The effective date of the revaluations was 29 February 2020. Revaluations were performed by Catherine Ossher from Broll Property Group (Erf 3197 & Erf 3198 Ascot Office), Grant Schroder from API Properties (Erf 2785 & Erf 2786 Montana), Tony Bales from Epping Property (Erf 169827 Cape Town) and Kevin Roux from Kevin Roux Properties (Erf 387, 388, 389 and 394 Butterworth). The total independent value of all buildings revalued amounts to R68 519 808 in the current year. None of these independent companies are connected to the company and all four have recent experience in the location and category of the investment properties being valued.

The valuations were based on the use of properties by market participants that would maximise the value of the assets or the group of assets within which the assets will be used.

6. Investment property [continued]





The significant inputs and assumptions in respect of the valuation process are developed in close consultation with management. The valuation process and fair value changes are reviewed by the group audit committee and the board of directors at each reporting date. The directors confirm that there have been no material changes to the assumptions applied by the registered valuers.

For property (including owner occupied), totalling R276 537 950 (2019: R163 904 035), where external valuations were not obtained, the valuation was based on income capitalisation based on current rentals for a 12 month period, discounted at market related capitalisation rates. The following assumptions were used:

Capitalisation rates of between 9.25 % and 11% were used depending on the type of building and the location thereof. The average capitalisation rate came to 9.68%.

For revaluations not performed by external valuers, the directors have used capitalisation rates, comparable with the capitalisation rates used by South African Property Owners Association (SAPOA). As one of South Africa’s largest valuation firms, SAPOA annually values property portfolios which include shopping centres, agricultural property, residential, commercial and industrial property. SAPOA also undertakes municipal property valuations, as well as specialised valuations such as hotels, hospitals, bare dominiums, airports etc. The capitalisation rates take into account the location and type of property. Changes in capitalisation rates attributable to changes in market conditions can have a significant impact on property valuations. A 25 basis point increase in the average capitalisation rate to 9.93%, will decrease the value of investment property by R15.1 million. A 25 basis point decrease in the capitalisation rate to 9.43%, will increase the value of investment property by R2.4 million.

The valuations were determined using income capitalisation based on current rentals for a 12 month period, based on contractual increases ranging between 7% - 10%, and significant unobservable inputs. These inputs include:

Vacancy rates: Based on current and expected future market conditions.

Maintenance costs: Including necessary investments to maintain functionality of the property for its expected useful life.

Capitalisation rates: Based on location size and quality of the properties and taking into account market data at the valuation date.

Owner occupied property of R65 136 185 was disclosed as Property, plant and equipment - please refer to note 4.

The fair value measurement qualifies as a level 3 input in terms of IFRS 13 Fair Value Adjustment. Refer to note 34 Fair Value Information regarding the fair value hierarchy for Investment Property.

Amounts recognised in profit and loss for the year Rental income from investment property 43,382,284 51,437,629 - -

Direct operating expenses from rental generating property (16,635,190) (20,841,901) - -

26,747,094 30,595,728 - -

The below operating lease asset was calculated in compliance with IFRS 16 on a straight line basis.

Investment property 274,255,654 306,121,662 - -

Operating lease asset

- current 2,391,485 1,627,262 - -

- non current 3,274,435 6,906,762 - -

Fair value obtained 279,921,574 314,655,686 - -

6. Investment property [continued]





7. Goodwill

Group 2020 2019

Costaccumulated

impairmentCarrying

value Costaccumulated

impairmentCarrying

value

Goodwill 87,439,055 (430,743) 87,008,312 87,439,055 (430,743) 87,008,312

reconciliation of goodwill - Group - 2020Openingbalance Changes

Closing balance

Independent Executor and Trust Proprietary Limited 1,029,071 - 1,029,071

NFB Private Wealth Management Proprietary Limited 18,249,826 - 18,249,826

NFB Finance Brokers Gauteng Proprietary Limited 54,036,408 - 54,036,408

NFB Finance Brokers Western Cape Proprietary Limited 32,811 - 32,811

NFB Insurance Brokers (Border) Proprietary Limited 3,029,540 - 3,029,540

NVest Properties Limited 2,393,697 - 2,393,697

NFB Finance Brokers Port Elizabeth Proprietary Limited 4,834,766 - 4,834,766

NVest Securities Proprietary Limited 3,402,194 - 3,402,194

87,008,313 - 87,008,313

reconciliation of goodwill - Group - 2019Openingbalance

Impairmentloss Total

Independent Executor and Trust Proprietary Limited 1,029,071 - 1,029,071

NFB Private Wealth Management Proprietary Limited 18,249,826 - 18,249,826

NFB Finance Brokers Gauteng Proprietary Limited 54,036,408 - 54,036,408

NFB Finance Brokers Western Cape Proprietary Limited 32,811 - 32,811

NFB Insurance Brokers (Border) Proprietary Limited 3,029,540 - 3,029,540

NVest Properties Limited 2,393,697 - 2,393,697

NVest Property Services Proprietary Limited 430,623 (430,623) -

NFB Finance Brokers Port Elizabeth Proprietary Limited 4,834,766 - 4,834,766

NVest Securities Proprietary Limited 3,402,194 - 3,402,194

87,438,936 (430,623) 87,008,313

The goodwill arose on acquisitions of the companies and is tested for impairment on an annual basis. The recoverable amount of the cash generating unit (CGU) has been based on a value-in-use calculation taking into account cost to sell. To calculate this, cashflow projections are based on financial budgets approved by management covering a five year period. A terminal value was calculated by applying a growth factor of 6% as this better reflects the nature of the revenue generating capacity of the CGU.

The discount rate uses the pre-tax weighted average cost of capital (WACC) which reflects the risks specific to the CGU’s concerned. The key assumptions used in the value-in-use calculations are as follows:

Discount rate (WACC): 19.52% - 22.52% Long term growth factor: 6.00% Fair value hierarchy: Level 3 input

The calculations indicate that no impairment is necessary to the carrying value of goodwill. If the above rates were changed by +/- 1%, there would still be no impairment.

The carrying amounts of the goodwill presented above do not exceed the recoverable amount.





8. Interests in subsidiaries

The following table lists the entities which are controlled directly by the group.

Company

Name of company %holding

2020

%holding

2019

Carryingamount

2020

Carryingamount

2019

NFB Private Wealth Management Proprietary Limited 100.00 % 100.00 % 17,263,691 17,263,691

NFB Insurance Brokers (Border) Proprietary Limited 80.95 % 80.95 % 3,332,678 3,332,678

NVest Property Services Proprietary Limited 100.00 % 100.00 % 301,334 301,334

NFB Finance Brokers Port Elizabeth Proprietary Limited 100.00 % 100.00 % 1,259,812 1,259,812

NVest Securities Proprietary Limited (refer note 37) 100.00 % 100.00 % 3,073,436 2,608,436

Independent Executor and Trust Proprietary Limited 70.00 % 70.00 % 84 84

NFB Finance Brokers Western Cape Proprietary Limited 100.00 % 100.00 % 20,074 20,074

NFB Asset Management Proprietary Limited 100.00 % 100.00 % 120 120

NVest Properties Limited 100.00 % 100.00 % 33,524,268 33,524,268

NFB Finance Brokers Gauteng Proprietary Limited 100.00 % 100.00 % 62,700,000 62,700,000

121,475,497 121,010,497

9. Investments in associates

The following table lists the associates in the group which are not considered to be material.

Group

Name of company held by% ownership interest 2020

% ownership interest 2019

Carrying amount 2020

Carryingamount 2019

Crowe Financial Services SA Proprietary Limited

NFB Finance Brokers Gauteng Proprietary Limited

33.33% 33.33% 290,289 23,033

NFB AM International (incorporated Mauritius)

NFB Asset Management Proprietary Limited

30.00% 30.00% 169,216 602,828

Nations NFB Proprietary Limited

NFB Finance Brokers Gauteng Proprietary Limited

49.00% 49.00% 49 49

459,554 625,910

aggregated individually immaterial associates accounted for using the equity method

Carrying value of investments 412,470 412,470

Share of (loss) profit from continuing operations (344,378) 213,440

Share of other comprehensive income* 391,462 -

* Share of other comprehensive income from an associate relates to the translation of the foreign associate at closing rates, between presentation and functional currency.








10. Loans to related parties

Subsidiaries

NVest Securities Proprietary LimitedThe loan is unsecured, bears interest at the SARS official rate and will be repaid within the next three years. This loan has been subordinated in favour of and for the benefit of other creditors of the company.

- - 2,000,000 2,000,000

NFB Finance Brokers Port Elizabeth Proprietary LimitedThe loan is unsecured, bears no interest and will be repaid within the next three years. This loan has been subordinated in favour of and for the benefit of other creditors of the company.

- - 3,500,000 3,500,000

Independent Executor and Trust Proprietary LimitedThe loan is unsecured, bears no interest and will be repaid within the next three years.

- - 1,050,000 1,050,000

NVest Securities Proprietary LimitedThe loan is secured by the shares purchased in the holding company, and bears interest at call account interest rates, which is payable annually. The loan will be repaid in full on 1 December 2024.

- - 910,000 -

NVest Properties LimitedThe loan is unsecured, bears interest at variable rates ranging between 7.75% and 9.5%. The loan is repayable on demand.

- - 175,258,526 125,771,663

- - 182,718,526 132,321,663

Split between non-current and current portionsNon-current assets - - 6,550,000 6,550,000

Current assets - - 176,168,526 125,771,663

- - 182,718,526 132,321,663

Exposure to credit risk

Loans receivable inherently expose the group to credit risk, being the risk that the group will incur financial loss if counterparties fail to make payments as they fall due.

The maximum exposure to credit risk is the gross carrying amount of the loans as presented below. The group does not hold collateral or other credit enhancements against group loans receivable.

Management has considered the estimate of expected credit losses for loans and receivables at company level. The credit risk impact was assessed on these in the following way:

• Assessed the stage of life assessment, incorporating the duration of the loans and the repayment history. • Assessed the credit risk of the subsidiaries, incorporating the future financial standing, the future ability to service interest and

capital and any future recoverability of security against the loans. • The net asset value position of the subsidiary companies.

Management is of the opinion that the companies have ample resources to settle the loans as and when required and there is therefore little or no risk of expected credit losses.


12. Deferred tax

Deferred tax liability

Fair value adjustments on investment property and property, plant and equipment

(8,878,447) (13,300,634) (37,716) (37,668)

Straight-lining of operating leases as lessor (2,111,089) (2,798,221) - -

Other deferred tax liability (119,897) (9,647) - -

Total deferred tax liability (11,109,433) (16,108,502) (37,716) (37,668)

Deferred tax asset

Deferred income 636,162 467,137 - -

Payroll accruals 857,158 907,267 198,367 218,862

Leases 105,642 - 1,865,786 -

Income received in advance 898,601 647,028 - -

Deferred tax balance from temporary differences other than unused tax losses

2,497,563 2,021,432 2,064,153 218,862

Tax losses available for set off against future taxable income

148,537 259,490 - -

2,646,100 2,280,922 2,064,153 218,862

Total deferred tax asset 2,646,100 2,280,922 2,064,153 218,862

Deferred tax liability (11,109,433) (16,108,502) (37,716) (37,668)

Deferred tax asset 2,646,100 2,280,922 2,064,153 218,862

Total net deferred tax (liability) asset (8,463,333) (13,827,580) 2,026,437 181,194




11. Loans to directors, managers and employees

Schedule of loans to directors, managers and employees C.G. LemmonThe loan is secured by the shares purchased in the holding company, interest is payable monthly and is charged at call account interest rates. The capital amount will be repaid in full on 1 December 2024.

910,000 - - -

Loans to directors, managers and employeesAdvances 910,000 - - -

Split between non-current and current portionsNon-current assets 910,000 - - -

Exposure to credit riskManagement is of the opinion that the security held for the loan to director mitigates the risk of expected credit losses.


12. Deferred tax [continued]

reconciliation of deferred tax (liability) / assetAt beginning of year (13,827,580) (13,818,549) 181,194 201,909

(Originating) reversing temporary difference relating to

Property, plant and equipment (72,241) (546,180) (47) (5,770)

Revaluation of investment property 4,517,781 496,549 - -

Prepaid expenses (92,318) 17,297 - 24,494

Operating lease asset 687,132 (18,751) - -

Revaluation of investments - 8,951 - -

Income received in advance 251,573 (566,420) - -

Provision of payroll accruals (100,565) 73,523 (20,496) (39,439)

Deductible temporary difference movement on leases 105,642 - 1,865,786 -

Assessed loss (110,953) 18,484 - -

Deferred income 169,025 467,137 - -

Doubtful debts 9,171 40,379 - -

(8,463,333) (13,827,580) 2,026,437 181,194

13. Loan to associate

Nations NFB Proprietary Limited 47,391 84,772 - -

The loan is unsecured, interest free and has no definite date of repayment.




14. Trade and other receivables

Financial instruments: Trade receivables 14,535,389 8,745,924 - -

Expected credit loss allowance (294,938) (192,282) - -

Trade receivables at amortised cost 14,240,451 8,553,642 - -

Deposits 550,850 563,234 - -

Sundry debtors 380,773 11,780,045 14,017 11,333

Non-financial instruments:Value Added Tax 3,911,108 - - -

Loans advanced to employees 257,420 441,618 138,845 229,775

Prepaid expenses 1,327,808 980,754 72,679 102,950

Accrued income 279,257 231,029 139,056 135,738

Total trade and other receivables 20,947,667 22,550,322 364,597 479,796


14. Trade and other receivables [continued]Split between non-current and current portions

Current assets 20,947,667 22,550,322 364,597 479,796

Categorisation of trade and other receivables

Trade and other receivables are categorised as follows in accordance with IFRS 9: Financial Instruments:

At amortised cost 15,172,074 20,885,588 14,017 11,333

Non-financial instruments 5,775,593 1,664,735 350,580 479,797

20,947,667 22,550,323 364,597 491,130

Exposure to credit risk

In order to mitigate the risk of financial loss from defaults (defined as 90 days past due), the group only deals with reputable customers with consistent payment histories. Each customer is analysed individually for creditworthiness before terms and conditions are offered. The exposure to credit risk and the creditworthiness of customers, is continuously monitored.

There have been no significant changes in the credit risk management policies and processes since the prior reporting period. A loss allowance is recognised for all trade receivables, in accordance with IFRS 9 Financial Instruments, and is monitored at the end of each reporting period. In addition to the loss allowance, trade receivables are written off when there is no reasonable expectation of recovery, for example, when a debtor has been placed under liquidation. Trade receivables which have been written off are not subject to enforcement activities.

The group measures the loss allowance for trade receivables by applying the simplified approach which is prescribed by IFRS 9. In accordance with this approach, the loss allowance on trade receivables is determined as the lifetime expected credit losses on trade receivables. These lifetime expected credit losses are estimated using a provision matrix, which is presented below. The provision matrix has been developed by making use of past default experience of debtors but also incorporates forward looking information on macroeconomic factors affecting the Group’s customers and general economic conditions of the industry as at the reporting date. The Group has identified the gross domestic product (GDP), unemployment rate and inflation rate as the key macroeconomic factors.

Trade receivables were previously impaired only when there was objective evidence that the asset was impaired. The impairment was calculated as the difference between the carrying amount and the present value of the expected future cash flows.

The group has historically only experienced credit losses with regard to NVest Properties Limited and only had one default customer in the past 24 months. The group considers liquidity risk to be immaterial. The group applied the expected credit loss model when calculating impairment losses and have provided the loss allowance as listed below:

Group 2020 2020 2019 2019

Expected credit loss rate:

Estimated gross carrying

amount at default

Loss allowance (Lifetime

expected credit loss)

Estimated gross carrying

amount at default

Loss allowance (Lifetime

expected credit loss)

Not past due: 0% 659,565 - 155,795 -

Less than 30 days past due: 0% 423,078 - 130,480 -

31 - 60 days past due: 25% 328,030 54,813 161,733 23,187

61 - 90 days past due: 50% 265,263 82,947 67,013 28,913

91 - 120 days past due: 75% 596,992 157,178 201,377 140,182

Total 2,272,928 294,938 716,398 192,282





14. Trade and other receivables [continued]

16. Cash and cash equivalents

Cash and cash equivalents consist of:

Cash on hand 12,318 12,475 - -

Bank balances 123,402,532 135,011,614 36,995,170 61,050,035

Short-term deposits 36,056,582 - - -

159,471,432 135,024,089 36,995,170 61,050,035

Credit quality of cash at bank and short term deposits, excluding cash on hand

All cash at bank and short term deposits, excluding cash on hand, are held by major, reputable institutions:

Credit ratingInvestec Bank PLC - BBB - 45,057,210 65,821,008 32,977,437 56,724,257

Nedbank Limited - BBB - 109,802,130 63,552,057 4,017,733 4,325,778

The Standard Bank of South Africa Limited - BBB - 4,599,774 5,638,549 - -

159,459,114 135,011,614 36,995,170 61,050,035




reconciliation of loss allowances

The following table shows the movement in the loss allowance (lifetime expected credit losses) for trade and other receivables:

Opening balance 192,282 - - -

Provision raised on new trade receivables 102,656 192,282 - -

Closing balance 294,938 192,282 - -

15. Investments at fair value

Investments held by the group which are measured at fair value, are as follows:

Designated at fair value through profit or loss: Ci Holdings Proprietary LimitedThis financial instrument represents 16.67% ownership in this company however this does not represent significant influence. The shares are held by NFB Asset Management Proprietary Limited.

150,000 150,000 - -

Mandatorily at fair value through profit or loss:Listed shares 4,751,669 3,462,174 - -

Unit trusts 31,788,012 33,252,935 25,138,979 25,138,979

36,689,681 36,865,109 25,138,979 25,138,979

Fair value informationRefer to note 34 Fair value information for the fair value hierarchy of Investments at Fair Value.


17. Share capital

authorised1 000 000 000 ordinary shares of no par value 1,000,000,000 1,000,000,000 1,000,000,000 1,000,000,000

reconciliation of number of shares issued:Reported as at 01 March 2019 324,779,200 324,779,200 324,779,200 324,779,200

Issue of shares - share based payment 1,375,000 - 1,375,000 -

326,154,200 324,779,200 326,154,200 324,779,200

Issued303 241 722 (2019 - 302 741 722) ordinary shares 326,154,200 324,779,200 326,154,200 324,779,200

There are no special rights, preference nor restrictions, on the distribution and capital repayments of shares, save as provided for in the NVest Financial Holdings Limited Share Incentive Scheme.

20 500 000 of the unissued ordinary shares are specifically reserved for the NVest Financial Holdings Limited Share Incentive Scheme. During the current financial year no share options were granted.

18. Borrowings

held at amortised costSecuredErf 61228 East LondonThe loan bears interest at 0.50% below the prime lending rate and is subject to monthly instalments of R129 430. The fixed property is encumbered as security over the bond.

7,329,551 8,143,923 - -

Erf 387, 389 & 394 ButterworthThe loan bears interest at 0.60% below the prime lending rate and is subject to monthly instalments of R57 218. The fixed property is encumbered as security over the bond.

1,202,873 1,749,209 - -

Erf 11032, 11009, 11031 & 11010 Cape TownThe loan bears interest at 0.70% below the prime lending rate and is subject to monthly instalments of R127 475. The fixed property is encumbered as security over the bond.

4,939,172 5,962,009 - -

Erf 28971 Cape TownThe loan bears interest at 0.20% below the prime lending rate and is subject to monthly instalments of R114 745. The fixed property is encumbered as security over the bond.

4,445,930 5,366,500 - -

Erf 5992 East LondonThe loan bears interest at 0.60% below the prime lending rate and is subject to monthly instalments of R89 526. The fixed property is encumbered as security over the bond.

3,076,454 3,824,168 - -

Erf 10015 Mdantsane, East LondonThe loan bears interest at 0.60% below the prime lending rate and is subject to monthly instalments of R190 883. The fixed property is encumbered as security over the bond.

4,796,193 6,549,420 - -

Erf 90 MthathaThe loan bears interest at 0.60% below the prime lending rate and is subject to monthly instalments of R43 223. The fixed property is encumbered as security over the bond.

945,114 1,354,231 - -

Erf 3197 & 3198 Port ElizabethThe loan bears interest at 0.70% below the prime lending rate and is subject to monthly instalments of R108 246. The fixed property is encumbered as security over the bond.

3,885,256 4,782,022 - -





18. Borrowings [continued]

Erf 2785 & 2786 PretoriaThe loan bears interest at 0.60% below the prime lending rate and is subject to monthly instalments of R82 818. The fixed property is encumbered as security over the bond.

2,343,748 3,081,246 - -

Erf 8245 QueenstownThe loan bears interest at 0.60% below the prime lending rate and is subject to monthly instalments of R127 189. The fixed property is encumbered as security over the bond.

- 3,687,929 - -

Erf 169827 Cape TownThe loan bears interest at 0.70% below the prime lending rate and is subject to monthly instalments of R130 847. The fixed property is encumbered as security over the bond.

5,433,337 6,451,496 - -


3,672,551 4,282,490 - -


8,439,187 9,785,974 - -


7,911,927 8,884,588 - -

Commercial Notes Series 1These commercial notes are unsecured and issued at a nominal value of R1 000 000 each and have a maturity date of October 2022. Interest is raised at 8.5% per annum, payable monthly and escalating annually by 5%. The effective interest rate is 8.91%.

10,000,000 10,300,000 - -

Commercial Notes Series 2These commercial notes are unsecured and issued at a nominal value of R1 000 000 each and have a maturity date of January 2023. Interest is raised at 8.5% per annum, payable monthly and escalating annually by 5%. The effective interest rate is 8.91%.

4,400,000 5,630,000 - -

Commercial Notes Series 3These commercial notes are unsecured and issued at a nominal value of R1 000 000 each and have a maturity date of June 2020. Interest is raised at 9% per annum, payable monthly and escalating annually by 5%. The effective interest rate is 9,43%.

9,000,000 9,000,000 - -

Commercial Notes Series 4These commercial notes are unsecured and issued at a nominal value of R1 000 000 each and have a maturity date of July 2020. Interest is raised at 9% per annum, payable monthly and escalating annually by 5%. The effective interest rate is 9,43%.

4,300,000 4,300,000 - -

Commercial Notes Series 5These commercial notes are unsecured and issued at a nominal value of R1 000 000 each and have a maturity date of July 2022. Interest is raised at 8.5% per annum, payable monthly and escalating annually by 5%. The effective interest rate is between 8,88%.

5,000,000 5,000,000 - -

Public offerIssued with a minimum nominal value of R100 000 each on 1 January 2013 with a redemption date of 5 years and 1 day from issue date. This was extended by 3 years to 1 January 2021. The commercial notes bear interest at 8,75% per annum, escalating annually by 0.5%. The effective interest rate is 9,17%.

34,580,000 34,050,000 - -

125,701,293 142,185,205 - -





18. Borrowings [continued]

Split between non-current and current portionsNon-current liabilities - Commercial notes 19,400,000 47,350,000 - -

Non-current liabilities - Other 44,804,377 62,241,596 - -

Current liabilities - Commercial notes 47,880,000 20,930,000 - -

Current liabilities - Other 13,616,916 11,663,609 - -

125,701,293 142,185,205 - -

Exposure to liquidity riskRefer to note 33 Financial instruments and financial risk management for details of liquidity risk exposure and management.

Exposure to interest rate riskRefer to note 33 for details of interest rate risk management for investments in borrowings The fair value of borrowings approximates their carrying amounts.

19. Trade and other payables

Financial instruments:Trade payables and accrued expenses 13,812,205 20,101,737 26,857 774,896

Accrued bonus 749,383 1,205,620 86,347 142,668

Tenant deposits 1,445,832 1,782,220 - -

Brokers, clearing houses, client accounts and settlement control account

2,537,558 1,454,657 - -

Non-financial instruments:Amounts received in advance 5,481,298 4,958,139 - -

Accrued leave pay 2,457,310 2,325,386 622,106 638,983

Dividend Withholding Tax 805,414 955,897 - -

Payroll accruals 6,677,998 - - -

Value Added Tax 3,291,867 2,583,289 53,732 58,471

37,258,865 35,366,945 789,042 1,615,018

Exposure to interest rate riskRefer to note 33 Financial instruments and financial risk management for details of interest rate risk management for trade and other payables.

Fair value of trade and other payablesThe fair value of trade and other payables approximates their carrying amounts.

20. revenue

revenue from contracts with customersRendering of services 263,987,588 255,727,550 8,628,684 6,919,531

revenue other than from contracts with customersRental Income 46,198,243 47,685,388 - -

Interest received - 2,923,417 13,515,106 12,826,125

Dividends received - - 53,773,813 42,546,192

46,198,243 50,608,805 67,288,919 55,372,317310,185,831 306,336,355 75,917,603 62,291,848





20. revenue [continued]

Disaggregation of revenue from contracts with customers

The group disaggregates revenue from customers as follows:

rendering of servicesCommissions received 203,842,694 191,502,206 - -

Management fees received 54,062,963 54,784,446 - -

Administration fees received 2,891,523 3,164,187 8,628,684 6,919,531

Fees earned 615,125 493,158 - -

Brokerage 2,575,283 5,783,553 - -

263,987,588 255,727,550 8,628,684 6,919,531

Timing of revenue recognition

at a point in timeRendering of services 263,987,588 255,727,550 8,628,684 6,919,531

21. Cost of sales

Rendering of services 118,097,465 116,785,774 - -

rendering of servicesAdministration and management fees paid 31,272,554 18,440,499 - -

Fees earned - 1,991,271 - -

Commissions paid 86,824,911 96,354,004 - -

118,097,465 116,785,774 - -

22. Other income

Other recoveries - 24,750 2,475,572 2,719,229

Call dealing profit - 317,419 - -

Other income* 613,133 4,679,732 21,790 26,162

613,133 5,021,901 2,497,362 2,745,391

* Other income for 2019 financial year includes a restraint of trade receipt of R4 125 000.





23. Other operating gains (losses)

Gains (losses) on disposals, scrappings and settlementsInvestment property 6 838,572 - - -

Property, plant and equipment 4 5,093 (224,653) - -

843,665 (224,653) - -

Fair value lossesInvestment property 6 (37,675) (2,216,734) - -

Financial assets designated as at fair value through profit or loss

- (8,823) - -

(37,675) (2,225,557) - -Total other operating losses 805,990 (2,450,210) - -

24. Operating profit

Operating profit for the year is stated after charging the following, amongst others:

auditor’s remuneration - externalAudit fees 1,289,053 1,045,686 288,567 192,250

remuneration, other than to employeesAdministrative and managerial services 916,085 829,616 62,360 -

Consulting and professional services 3,329,513 1,720,220 1,653,965 664,357

4,245,598 2,549,836 1,716,325 664,357

Employee costsSalaries, wages, bonuses and other benefits 51,796,874 50,591,324 12,313,925 11,664,467

Share based compensation expense 465,000 - - -

Total employee costs 52,261,874 50,591,324 12,313,925 11,664,467

Leases

Operating lease chargesPremises 1,006,480 2,001,475 255,012 2,305,349

Equipment 231,366 229,518 - -

1,237,846 2,230,993 255,012 2,305,349

Depreciation and amortisationDepreciation of property, plant and equipment 2,122,549 1,816,046 210,810 197,224

Depreciation of right-of-use assets 171,919 - 1,649,255 -

Total depreciation and amortisation 2,294,468 1,816,046 1,860,065 197,224

Movement in credit loss allowancesTrade and other receivables 102,656 192,282 - -





25. Investment income

Dividend incomeEquity instruments at fair value through profit or loss:Listed investments - Local 1,789,580 1,165,628 1,319,534 558,906

Interest incomeLoans to:Directors, managers and employees 15,187 6,233 14,599 67

Investments in financial assets:Bank 8,884,995 8,335,524 3,020,917 4,347,346

Equity instruments at fair value through profit or loss 167,645 111,898 167,645 111,898

Trade and other receivables 120,384 6,055 - -

SARS interest - 6,239 - -

Total interest income 9,188,211 8,465,949 3,203,161 4,459,311Total investment income 10,977,791 9,631,577 4,522,695 5,018,217

26. Finance costs

Commercial notes 6,265,826 6,209,455 - -

Non-current borrowings 6,561,081 7,587,967 - -

Lease liability 153,862 - 2,198,930 -

Other interest paid 256 961 - -

Total finance costs 12,981,025 13,798,383 2,198,930 -

27. Taxation

Major components of the tax expense

CurrentLocal income tax - current period 29,369,588 25,145,534 2,431,941 2,768,714

Deferred(Reversing)/originating temporary differences (5,421,645) (496,283) (363,629) 20,714

23,947,943 24,649,251 2,068,312 2,789,428

reconciliation of the tax expenseReconciliation between applicable tax rate and average effective tax rate.

Applicable tax rate 28.00 % 28.00 % 28.00 % 28.00 %

Dividends received -% -% (24.69)% (22.74)%

Share of income from associate (1.76)% (0.18)% -% -%

Capital gains tax 0.05 % 0.03 % -% -%

Goodwill impairment -% (0.22)% -% -%

Deferred tax asset previously not recognised 0.04 % -% -% -%

26.33 % 27.63 % 3.31 % 5.26 %





28. Tax paid

Balance at beginning of the year 641,740 930,410 198,081 (52,215)

Current tax for the year recognised in profit or loss (29,369,588) (25,145,534) (2,431,941) (2,768,714)

Balance at end of the year 620,172 (641,740) (745,750) (198,081)

(28,107,676) (24,856,864) (2,979,610) (3,019,010)

29. Long-term borrowings

Opening balance - Commercial notes (68,280,000) (68,280,000) - -

Opening balance - Other (73,905,205) (85,773,519) - -

Closing balance - Commercial notes 67,280,000 68,280,000 - -

Closing balance - Other 58,421,293 73,905,205 - -

(16,483,912) (11,868,314) - -

30. Capital commitment and guarantees

The entity has no capital commitment at the end of the current financial year.

Operating leases - as lessee (expense)

Minimum lease payments due- within one year - 404,823 - 2,476,143

- in second to fifth year inclusive - 487,136 - 12,768,270

- later than five years - - - 21,517,525

- 891,959 - 36,761,938

In light of the adoption of IFRS 16 there are no commitments. Operating lease payments represent rentals payable by the group for certain of its office properties. Leases are negotiated for an average term of five years and rentals are fixed for an average of three years. No contingent rent is payable.

Operating leases - as lessor (income)

Minimum lease payments due- within one year 23,640,859 30,508,076 - -

- in second to fifth year inclusive 33,402,763 49,368,615 - -

- later than five years 5,699,176 1,544,306 - -

62,742,798 81,420,997 - -

Lease income is earned from rental of investment property. Leases are negotiated for an average term of five years and rentals are fixed for an average of three years. No contingent rent is payable.





31. related parties

relationshipsSubsidiaries Refer to note 8

Associates Refer to note 9

Entity under common management Sherpa House 61 Proprietary Limited

Compensation to directors and other key management Refer note 32

Shareholders Godwin TrustThe Gavin Ramsay Family TrustB.J. ConnellanThe Andrew and Heather Kent TrustR.M. McIntyreThe Rayner Sparg Trust

related party balances

Loan accounts - Owing by related partiesIndependent Executor and Trust Proprietary Limited - - 1,050,000 1,050,000

National Finance Brokers Port Elizabeth Proprietary Limited - - 3,500,000 3,500,000

NVest Properties Limited - - 175,258,526 125,771,663

NVest Securities Proprietary Limited - - 910,000 -

NVest Securities Proprietary Limited - - 2,000,000 2,000,000

C.G. Lemmon 910,000 - - -

Nations NFB Proprietary Limited 47,391 84,772 - -

related party transactions

Interest received from related partiesNVest Securities Proprietary Limited - - (150,411) (150,933)

NVest Properties Limited - - (13,364,695) (10,736,355)

Commission received from related partiesNFB Insurance Brokers (Border) Proprietary Limited - - (49,923) (53,069)

rent paid to (received from) related partiesNFB Private Wealth Management Proprietary Limited - - (1,458,770) (1,768,602)

NVest Securities Proprietary Limited - - (878,802) (753,661)

NVest Properties Limited - - 2,917,541 2,719,466

NVest Property Services Proprietary Limited - - - (164,537)

NVest Properties Limited - - (138,000) (32,430)

NFB Finance Brokers Gauteng Proprietary Limited - - 157,178 -

NFB Private Wealth Management Proprietary Limited - - 88,383 -





31. related parties [continued]

administration fees paid to/(received from) related partiesIndependent Executor and Trust Proprietary Limited - - (261,876) (241,205)

NFB Private Wealth Management Proprietary Limited - - (2,927,028) (4,036,441)

NFB Finance Brokers Port Elizabeth Proprietary Limited - - (415,008) (240,000)

NFB Insurance Brokers (Border) Proprietary Limited - - (747,408) (797,740)

NVest Properties Limited - - (891,756) (159,792)

NVest Property Services Proprietary Limited - - - (279,915)

NVest Properties Limited - - (1,096,848) (1,164,438)

NFB Finance Brokers Gauteng Proprietary Limited - - (1,829,952) -

NFB Finance Brokers Gauteng Proprietary Limited - - 62,360 -

NFB Asset Management Proprietary Limited - - (458,808) -

Dividends received from related partiesNFB Asset Management Proprietary Limited - - (3,347,413) (784,392)

NFB Private Wealth Management Proprietary Limited - - (14,000,000) (13,400,000)

NFB Finance Brokers Gauteng Proprietary Limited - - (8,000,000) (8,900,000)

NVest Securities Proprietary Limited - - (15,500,000) (16,800,000)

NVest Property Services Proprietary Limited - - (1,000,000) -

NVest Properties Limited - - (9,000,000) -

NFB Insurance Brokers (Border) Proprietary Limited - - (2,226,400) (1,700,000)

Independent Executor and Trust Proprietary Limited - - (700,000) (961,800)

32. Directors’ emoluments

Executive

2020

Emoluments Otherbenefits*

Commission earned and

other benefits as directors’

of subsidiaries

Total

A.D. Godwin 646,945 - 4,604,742 5,251,687

C.G. Lemmon - 90,000 3,913,110 4,003,110

M. Estment - - 8,283,534 8,283,534

C. Herselman (appointed 01 November 2019) 442,039 94,302 - 536,341

G.W. Orsmond (resigned 01 May 2019) 189,900 68,766 - 258,666

1,278,884 253,068 16,801,386 18,333,338

2019

Emoluments Otherbenefits*

Commission earned and

other benefits as directors’

of subsidiaries

Total

A.D. Godwin 613,210 - 4,954,319 5,567,529

C.G. Lemmon - - 3,769,274 3,769,274

F.T. Knox (resigned 01 September 2018) 586,490 144,694 - 731,184

M. Estment - - 8,826,076 8,826,076

G.W. Orsmond (appointed 01 September 2018) 630,000 105,826 - 735,826

B.J. Connellan (appointed 20 August 2018) 918,352 184,645 - 1,102,997

2,748,052 435,165 17,549,669 20,732,886





32. Directors’ emoluments [continued]

Non-executive

2020 Directors’ fees Other fees TotalJ. Goldberg 163,700 - 163,700

L.J. Weldon 142,700 - 142,700

D.L. Schemel 88,200 - 88,200

B.J. Connellan* 87,875 299,568 387,443

L. Mangxamba 182,630 - 182,630

665,105 299,568 964,673

2019 Directors' fees TotalJ. Goldberg 163,800 163,800

L.J. Weldon 129,615 129,615

D.L. Schemel 80,830 80,830

S.R. Kwatsha (resigned 31 January 2019) 67,395 67,395

441,640 441,640

* Mr B.J. Connellan was appointed as a non-executive director on 1 March 2019 however was reappointed as an executive director on 1 March 2020.

33. Financial instruments and risk management

Categories of financial instruments

Categories of financial assets

Group - 2020

Note(s)

Fair valuethrough

profit or loss - Mandatory

Fair valuethrough

profit or loss - Designated

amortisedcost Total

Loans to directors, managers and employees 11 - - 910,000 910,000

Loans receivable 13 - - 47,391 47,391

Investments at fair value 15 36,539,681 150,000 - 36,689,681

Trade and other receivables 14 - - 15,172,074 15,172,074

Cash and cash equivalents 16 - - 159,471,432 159,471,432

36,539,681 150,000 175,600,897 212,290,578





33. Financial instruments and risk management [continued]

Group - 2019 Note(s)

Fair valuethrough


Fair valuethrough

profit or loss - Designated

amortisedcost Total

Loans to shareholders - - 28,547 28,547

Loans receivable 13 - - 84,772 84,772

Investments at fair value 15 36,715,109 150,000 - 36,865,109

Trade and other receivables 14 - - 20,885,588 20,885,588

Cash and cash equivalents 16 - - 135,024,089 135,024,089

36,715,109 150,000 156,022,996 192,888,105

Company - 2020 Note(s)

Fair valuethrough


amortisedcost Total

Loans to group companies 10 - 182,718,526 182,718,526

Investments at fair value 15 25,138,979 - 25,138,979

Trade and other receivables 14 - 14,017 14,017

Cash and cash equivalents 16 - 36,995,170 36,995,170

25,138,979 219,727,713 244,866,692

Company - 2019 Note(s)

Fair valuethrough


amortisedcost Total

Loans to group companies 10 - 132,321,663 132,321,663

Investments at fair value 15 25,138,979 - 25,138,979

Trade and other receivables 14 - 11,333 11,333

Cash and cash equivalents 16 - 61,050,035 61,050,035

25,138,979 193,383,031 218,522,010

Categories of financial liabilities

Group - 2020 Note(s)amortised

cost Leases TotalTrade and other payables 19 18,544,978 - 18,544,978

Borrowings 18 125,701,293 - 125,701,293

Lease liailities 5 - 1,466,110 1,466,110

144,246,271 1,466,110 145,712,381

Group - 2019 Note(s)amortised

cost TotalTrade and other payables 19 23,338,614 23,338,614

Borrowings 18 142,185,205 142,185,205

165,523,819 165,523,819






Capital risk management

The group’s objective when managing capital (which includes share capital, borrowings, working capital and cash and cash equivalents) is to maintain a flexible capital structure that reduces the cost of capital to an acceptable level of risk and to safeguard the group’s ability to continue as a going concern while taking advantage of strategic opportunities in order to maximise stakeholder returns sustainably.

The group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The capital structure of the group consists of debt, which includes the borrowings disclosed in notes 8, 12 & 15 cash and cash equivalents disclosed in note 13, and equity as disclosed in the statement of financial position.

In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The directors review the management accounts of the group on a monthly basis and discuss the progress with local management. There were no changes in the group’s approach to capital management during the year. There are no externally imposed capital requirements.

There have been no changes to what the entity manages as capital, the strategy for capital maintenance or externally imposed capital requirements from the previous year.

The capital structure and gearing ratio of the group at the reporting date was as follows:

Company - 2020 Note(s)amortised

cost Leases TotalTrade and other payables 19 113,204 - 113,204

Lease liabilities 5 - 21,506,818 21,506,818

113,204 21,506,818 21,620,022

Company - 2019 Note(s)amortised

cost TotalTrade and other payables 19 774,897 774,897

Loans from group companies 68 68

774,965 774,965

Loans from group companies - - - 68

Borrowings 18 125,701,293 142,185,205 - -

Lease liabilities 5 1,466,110 - 21,506,818 -

Trade and other payables 19 37,258,862 35,366,949 789,043 1,615,016

Total borrowings 164,426,265 177,552,154 22,295,861 1,615,084

Cash and cash equivalents 16 (159,471,432) (135,024,089) (36,995,170) (61,050,035)

Net borrowings 4,954,833 42,528,065 (14,699,309) (59,434,951)

Equity 486,416,860 453,592,534 362,628,376 339,492,918

Gearing ratio 1% 9% (4)% (18)%






The maximum exposure to credit risk is presented in the table below:

2020 2019

Group Note(s)

Gross carrying amount

Credit loss allowance

amortised cost / fair

value




valueLoans to shareholders - - - 28,547 - 28,547

Loans to directors, managers and employees

11 910,000 - 910,000 - - -

Loans receivable 13 47,391 - 47,391 84,772 - 84,772

Investments at fair value through profit or loss

15 150,000 - 150,000 150,000 - 150,000

Operating lease asset 6 5,665,920 - 5,665,920 8,534,024 - 8,534,024

Trade and other receivables

14 15,467,011 (294,938) 15,172,073 21,308,899 (192,282) 21,116,617


16 159,471,432 - 159,471,432 135,024,089 - 135,024,089

181,711,754 (294,938) 181,416,816 165,130,331 (192,282) 164,938,049

2020 2019

Company Note(s)




value




valueLoans to related parties 10 182,718,526 - 182,718,526 132,321,663 - 132,321,663


16 36,995,170 - 36,995,170 61,050,035 - 61,050,035

219,713,696 - 219,713,696 193,371,698 - 193,371,698

Financial risk management

Overview

The group is exposed to the following risks from its use of financial instruments:• Credit risk;• Liquidity risk; and• Market risk (currency risk, interest rate risk and price risk).

Credit risk

Credit risk is the risk of financial loss to the group if a customer or counterparty to a financial instrument fails to meet its contractual obligations.





33. Financial instruments and risk management [continued]Liquidity risk

The maturity profile of contractual cash flows of non-derivative financial liabilities, and financial assets held to mitigate the risk, are presented in the following table. The cash flows are undiscounted contractual amounts.

Group - 2020 Note(s)Less than 1

year1 to 2 years

2 to 5 years

Over 5 years Total

Carrying amount

Trade and other payables 19 18,544,979 - - - 18,544,979 18,544,979

Borrowings 18 70,907,728 19,477,526 52,573,061 1,847,330 144,805,645 125,701,293

Lease liabilities 268,896 285,030 1,376,840 93,996 2,024,762 1,466,110

89,721,603 19,762,556 53,949,901 1,941,326 165,375,386 145,712,382

Group - 2019 Note(s)Less than 1

year1 to 2 years

2 to 5 years

Over 5 years Total

Carrying amount

Trade and other payables 24,544,189 - - - 24,544,189 24,544,189

Borrowings 18 40,458,445 66,878,445 45,613,828 9,308,365 162,259,083 142,185,205

65,002,634 66,878,445 45,613,828 9,308,365 186,803,272 166,729,394

Company - 2020 Note(s)Less than 1

year1 to 2 years

2 to 5 years

Over 5 years Total

Carrying amount

Trade and other payables 113,204 - - - 113,204 113,204

Lease liabilities 703,288 3,066,630 14,479,748 13,888,563 32,138,229 21,506,818

816,492 3,066,630 14,479,748 13,888,563 32,251,433 42,423,552

Company - 2019 Note(s)Less than

1 year TotalCarrying amount

Trade and other payables 19 1,556,545 1,556,545 1,556,545

Loans from group companies

68 68 68

1,556,613 1,556,613 1,556,613

Interest rate risk

Interest rate sensitivity analysis

The following sensitivity analysis has been prepared using a sensitivity rate which is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates. All other variables remain constant. The sensitivity analysis includes only financial instruments exposed to interest rate risk which were recognised at the reporting date. No changes were made to the methods and assumptions used in the preparation of the sensitivity analysis compared to the previous reporting period.

Group

At 29 February 2020, if the interest rate had been 1.00% per annum (2019: 1.00%) higher or lower during the period, with all other variables held constant, profit or loss for the year would have been R 101,683 (2019: R 196,293) lower or higher.

Company

At 29 February 2020, if the interest rate had been 1.00% per annum (2019: 1.00%) higher or lower during the period, with all other variables held constant, profit or loss for the year would have been R 260,708 (2019: R 427,956) lower or higher.

Price risk

The group is exposed to price risk because of its investments in equity instruments which are measured at fair value. The exposure to price risk on equity investments is managed through a diversified portfolio. The group is not exposed to commodity price risk.

There have been no significant changes in the price risk management policies and processes since the prior reporting period.





34. Fair value information

Fair value hierarchy

The table below analyses assets and liabilities carried at fair value. The different levels are defined as follows:

Level 1: Quoted unadjusted prices in active markets for identical assets or liabilities that the group can access at measurement date.

Level 2: Inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability.

Levels of fair value measurements

Level 1

recurring fair value measurements

assets Notes(s)

Financial assets mandatorily at fair value through profit or loss

15

Listed shares 4,751,669 3,462,174 - -

Total 4,751,669 3,462,174 - -

Level 2


assets Notes(s)

Financial assets mandatorily at fair value through profit or loss

15

Unit trusts 31,788,012 33,252,935 25,138,979 25,138,979

Total 31,788,012 33,252,935 25,138,979 25,138,979

Level 3


assets Notes(s)

Investment property 6

Investment property (refer note 6 for detailed valuation technique)

279,921,574 314,655,686 - -

Property, plant and equipment 4

Buildings(refer note 6 for detailed valuation technique)

65,136,185 39,548,866 - -

Total 345,057,759 354,204,552 - -

Valuation techniques used to derive level 2 fair values

Unit trusts

These are valued with reference to the statements received from the relevant financial institution. These values are determined with reference to the value of the investments in these funds. No changes have been made to the valuation technique.





35. Segmental reporting

2020 revenueProfit

before tax assets LiabilitiesInterest

revenueTax

expenseSegments:

Insurance broking 23,741,145 4,423,063 16,740,025 7,628,301 557,454 (1,242,164)

Wealth management 241,115,613 68,174,063 154,621,030 79,378,760 4,452,452 (18,102,625)

Administration of estates and trusts 5,274,088 1,944,679 6,952,936 4,611,556 155,058 (541,571)

Property services 53,585,956 5,125,419 396,489,192 314,368,311 1,009,892 (1,378,524)

Investments 75,917,603 62,480,180 384,961,951 22,333,576 3,203,161 (2,068,312)

Inter-company eliminations (89,448,574) (51,741,625) (295,962,797) (250,935,021) (189,806) (614,747)

310,185,831 90,405,779 663,802,337 177,385,483 9,188,211 (23,947,943)

2019 revenueProfit

before tax assets LiabilitiesInterest

revenueTax

expenseSegments:

Insurance broking 21,643,291 4,090,771 11,544,006 2,605,878 640,947 (1,145,416)

Wealth management 234,201,137 69,466,451 106,136,011 40,471,641 2,888,938 (18,874,155)

Administration of estates and trusts 4,139,628 1,411,693 3,295,346 1,357,075 148,526 (395,275)

Property services 54,642,576 5,891,130 374,817,245 286,443,262 499,998 (1,775,117)

Investments 62,291,848 53,067,339 341,145,672 1,652,755 4,459,311 (2,789,428)

Inter-company eliminations (70,582,125) (44,478,521) (189,359,659) (138,544,522) (171,771) 330,140

306,336,355 89,448,863 647,578,621 193,986,089 8,465,949 (24,649,251)

Operating segments have been aggregated based on the nature of the activities undertaken by the various underlying companies.

The judgements applied relate to the splitting of the various services offered by the Group, by the nature of the service provided, into the five main operating segments below:

• Insurance Broking - relates to short term insurance broking service • Wealth Management - relates to private wealth management services, which includes stockbroking services • administration of estates and trusts - relates to services around the administration of deceased estates and administration

of testamentary Trusts • Property services - relates to the supply of commercial properties for rental by third parties (and in prior years, the

management of client commercial property portfolios)• Investments - relates to the placement of surplus funds to generate investment returns





36. Earnings per share

2020 2019Gross Net Gross Net

Earnings per share (cents) 21.62 21.05

Diluted earnings per share (cents) 21.62 - 21.05

Headline earnings per share (cents) 21.30 - 21.78

Earnings attributable to equity holders of the parent - 65,480,917 - 63,726,376

Fair value loss adjustment of investment property 37,675 27,126 2,216,734 1,720,186

Loss on disposal of fixed assets (843,825) (607,554) 99,256 71,464

Impairment loss on goodwill - - - 430,624

Re-measurements included in equity-accounted earnings of associate

- (391,462) - -

headline earnings 64,509,027 65,948,650

Earnings per share as presented on the Statement of Profit or Loss and Other Comprehensive Income is based on the weighted average number of 302 863 640 ordinary shares in issue (2019 - 302 741 722).

There are no dilutive instruments as the share options which are outstanding at year end are out of the money and therefore the basic earnings per share and diluted earnings per share are the same.

37. Share options

NVest Financial Holdings Limited operate the NVest Financial Holdings Limited Share Incentive Scheme (“the Scheme”). The purpose of the Scheme is to attract, motivate, reward and retain participants who are able to influence the performance of the group, on a basis which aligns their interests with those of the Company’s shareholders. This share incentive scheme is equity settled.

The NVest Financial Holdings Limited Board is responsible for the operation and administration of the Scheme, and, subject to applicable Laws, has discretion to decide whether and on what basis the Scheme shall be operated, which may include but not be limited to the delegation of the administration of the Scheme to a Compliance Officer or any third party appointed by the Board, but excluding any executive director of the Company.

Subject to the provisions of the Scheme, any Applicable Laws and the approval of the Board, the Board shall be entitled to make and establish such rules and regulations, and to amend the same from time to time, as they may deem necessary or expedient for the proper implementation and administration of the Scheme.

The Scheme confers the right to participants to acquire share options to a combined maximum of 20 500 000 ordinary shares, with no single participant exceeding a holding of 5 000 000 shares within the scheme.

The Board, in its sole discretion, shall determine the number of share options to be granted to eligible employees, the option price per share, the option and vesting dates and any conditions attaching to the option. There were no options outstanding at year end. Analysis of share options granted to employees of the group is detailed as follows:

reconciliation of share options

Director Optiongrant date

Subscriptionprice (rand)

Outstandingas at 1 March

2019

Lapsed/cancelledduring the

period

Exercised Outstandingas at

29 February2020

A. Duvenhage 15 July 2016 1.98 200,000 (200,000) - -

M. Wolmarans 15 July 2016 1.98 50,000 (50,000) - -

F.T. Knox 15 July 2016 1.98 25,000 (25,000) - -

C.G. Lemmon 1 December 2016 1.82 500,000 - (500,000) -

775,000 (275,000) (500,000) -





37. Share options [continued]

The share options exercised by C.G. Lemmon were accounted for in the company as an investment in a subsidiary, as they were part of the share option scheme described above. The result was an increase in the investment in NVest Securities Proprietary Limited of R465 000.

38. Events after the reporting period

Since 31 December 2019, the spread of COVID-19 has severely impacted many local economies around the globe. In many countries, businesses are being forced to cease or limit operations for long or indefinite periods of time. Measures taken to contain the spread of the virus, including travel bans, quarantines, social distancing, and closures of non-essential services have triggered significant disruptions to businesses worldwide, resulting in an economic slowdown. Global stock markets have also experienced great volatility and a significant weakening. Governments and central banks have responded with monetary and fiscal interventions to stabilise economic conditions.

Since the implementation of the National Lockdown in South Africa on 26 March 2020, the Company has operated remotely with staff having been set up to work from their homes. The Company has managed to continue operating during this period and Management are confident that it will be able to continue to do so until such time as this is no longer required.

The Company’s financial position has, to date, not been adversely affected and Management are of the opinion that it is unlikely to be significantly affected in coming months, due to the fact that the Groups primary income is from the Private Wealth Management companies. The Property holding company in the Group contributed 5% of the Groups Net Profit After Tax and it appears to be the only company to date that may be affected by the ipact of the pandemic, with a temporary decrease in revenue, due to tenants requesting payment holidays on their rental payments. Private Wealth Management clients have continued to contribute to their policies, savings and investments and consequently, it is highly unlikely that the pandemic will have a material impact on Group earnings.

The Company has determined that COVID-19 is a non-adjusting subsequent event. Accordingly, the financial position and results of operations as of and for the year ended 29 February 2020 have not been adjusted to reflect its impact. The duration and impact of the COVID-19 pandemic, as well as the effectiveness of government and central bank responses, remains unclear at this time. It is not possible to reliably estimate the duration and severity of these consequences, as well as their impact on the financial position and results of the Company for future periods.

Furthermore, in addition to the above, subsequent to 29 February 2020, there will be an internal restructuring of the Group’s existing Private Wealth Management entities, namely NFB Finance Brokers Eastern Cape Proprietary Limited, NFB Finance Brokers Gauteng Proprietary Limited and NFB Finance Brokers Port Elizabeth Proprietary Limited. It is envisaged that NFB Finance Brokers Eastern Cape Proprietary Limited will be the resultant company, renamed “NFB Private Wealth Management Proprietary Limited, with the other two entities being the amalgamating entities, which collapse into the resultant company. The Amalgamation will be done pursuant to Section 44 of the Income Tax Act No. 58 of 1962. The date set for the legal amalgamation to take place is 1 June 2020.

The Group has determined that this is a non-adjusting subsequent event. Accordingly, the financial position and results of the operations as of and for the year ended 29 February 2020 have not been adjusted to reflect this impact.





Analysis ofShareholders NVest shareholder spread as at 29 February 2020 is set out below:

Type of shareholdersNumber of

ShareholdersNumber of

SharesPercentage

holding %Close Corporations 2 378 000,00 0,12%

Estate Late 10 125 000,00 0,04%

Other 3 343 270,00 0,11%

Private Companies 13 179 438,00 0,06%

Public Companies 1 55 000,00 0,02%

Retail Shareholders (Individuals) 695 48 290 082,00 15,92%

Retirement Benefit Funds 90 1 512 532,00 0,50%

Trusts 149 252 358 400,00 83,22%

Totals 963 303 241 722,00 100,000%

Size of Shareholding Number of

Shareholders Number of

Shares Percentage

holding%1 – 10 000 710,00 5 898 585,00 1,95%

10 001 – 25 000 120,00 2 293 047,00 0,76%

25 001 – 100 000 86,00 4 010 583,00 1,32%

100 001 – 500 000 24,00 5 620 303,00 1,85%

500 001 and over 23,00 285 419 204,00 94,12%

Totals 963 303 241 722 100,00%

Types of Non-Public Shareholders Number of

shareholders Number of

Shares Percentage

holding% Associates of Directors (incl major subsidiaries) 6 14 605 802 4,82%

Associates of Directors with 10%+ interest 1 76 000 000 25,06%

Directors 5 12 659 055 4,17%

Directors of Major Subsidiary 1 335 000 0,11%

Persons with interests >10% 2 118 300 221 39,01%

Restricted Employees / Prescribed Officers 6 5 624 222 1,85%

Total Non-Public 21 227 524 300 75,03%Total Public 942 75 717 422 24,97%Total* 963 303 241 722 100%

Beneficial Shareholders holding more than 3% Number of

shareholders Number of

Shares Percentage

holding% Mr Brendan Joseph Connellan 1 10 705 475 3,53%

The Andrew and Heather Kent Trust 1 14 200 000 4,68%

Michael Estment Family Trust 1 14 275 801 4,71%

Mr Robert More Mc Intyre 1 16 559 440 5,46%

The Gavin Ramsay Family Trust 1 42 000 000 13,85%

Godwin Trust 1 76 000 000 25,06%

The Rayner Sparg Trust No2 1 76 300 221 25,16%

Totals 7 250 040 937 82,46%


GeneralInformation Company Name NVest Financial

holdings Limited

Date and placeof incorporation

3 July 2008– Republic of South Africa

Companyregistration Number 2008/015990/06

Nature of business and principal activities Financial Services

Directors Jonathan GoldbergChairman – Independent Non-Executive Director

Dr Lana WeldonLead Independent Non-Executive Director

Lusanda MangxambaIndependent Non-Executive Director

Dylan SchemelNon-Executive Director

anthony GodwinGroup CEO – Executive Director

Charl herselmanGroup Finance Director – Executive Director

Michael EstmentExecutive Director

Chris LemmonExecutive Director

Brendan ConnellanExecutive Director

Registered office NFB House, 42 Beach Road,Nahoon,East London, 5241

Postal address PO Box 8132Nahoon East London, 5210

Stockbroker NVest Securities (Pty) Limited(Registration Number 2008/015192/07)(Member of the JSE Limited)Financial Services Board Licence No: 44699NFB House42 Beach RoadNahoon, 5241

auditors BDO South africa IncorporatedChartered Accountants SA(Registration Number 2010/016204/21)6th Floor, 119 Hertzhog Boulevard Foreshore, Cape Town, 8001(PO Box 2275, Cape Town, 8001)

attorney Cooper Conroy Bell and richards Inc(Registration Number 1983/013472/21)26 Pearce Street Berea East London Eastern Cape

Company Secretary Brendan Joseph ConnellanNFB House, 42 Beach Road,Nahoon,East London, 5241

Designated advisor arbor Capital Sponsors (Registration number 2006/033725/07)20 Stirrup LaneWoodmead Office ParkCnr Woodmead Drive and Van Reenens AvenueWoodmeadSandton, 2191

Transfer Secretaries Computershare Investor Services (Pty) Limited Registration Number: 2004/003647/07Rosebank Towers15 Biermann AveRosebankJohannesburg, 2196(PO Box 61051 Marshalltown, 2107)


Notice of AnnualGeneral Meeting & Proxy

Notice is hereby given that the annual general meeting of shareholders of the Company will be held at 11:00 on Monday, 17 August 2020 at 42 Beach Road, East London (or amended date as allowed by the Companies Act) to consider, and if deemed fit, to pass, with or without modifications, the resolutions set out below.

Electronic Participation in the annual General Meeting

Please note that the Company intends to make provisions for shareholders of the Company, or their proxies, to participate in the annual general meeting by way of electronic communication. In the event of any restrictions placed on public gatherings pursuant to regulations issued in terms of the Disaster Management Act, No. 57 of 2002 (as amended), the Shareholders’ meeting may, instead of being held in person, be held on a virtual meeting platform and shareholders may vote at such a virtual meeting by way of electronic voting technology. Should you wish to participate in the annual general meeting by way of electronic communication, you will need to contact the Company Secretary at [email protected] by not later than 11:00 on Friday, 14 August 2020, so that the Company can provide for a teleconference or videoconference dial-in facility. Please ensure that if you are participating in the meeting via teleconference or videoconference that the voting proxies be sent through to the transfer secretaries, namely Computershare Investor Services Proprietary Limited at Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196 (PO Box 61051, Marshalltown, 2107) by no later than 11:00 on Thursday, 13 August 2020. No changes to voting instructions after this time and date can be accepted unless the Chairman of the meeting is satisfied as to the identification of the electronic participant.

Certificated shareholders or own-name dematerialised shareholders may attend and vote at the annual general meeting, or alternatively appoint a proxy to attend, speak and, in respect of the applicable resolutions, vote in their stead by completing the attached form of

proxy and returning it to the transfer secretaries, namely Computershare Investor Services Proprietary Limited at Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196 (PO Box 61051, Marshalltown, 2107), to be received by no later than 11:00 on Thursday, 13 August 2020 for administrative purposes or thereafter to the Company by hand before the commencement of the meeting.

The board of directors of the Company has determined that the record date for the purpose of determining which shareholders of the Company are entitled to receive notice of this annual general meeting is Friday, 19 June 2020 and the record date for purposes of determining which shareholders of the Company are entitled to participate in and vote at the annual general meeting is Friday, 7 August 2020. Accordingly, only shareholders who are registered in the register of members of the Company on Friday, 7 August 2020 will be entitled to participate in and vote at the annual general meeting. The last date to trade in order to be entitled to participate in and vote at the annual general meeting is Tuesday, 4 August 2020.

1. Ordinary resolution number 1 – annual Financial Statements

“rESOLVED ThaT the Annual Financial Statements of the Company and its subsidiaries for the year ended 29 February 2020, together with the reports of the directors, auditor, Audit and Risk Committee, Remuneration Committee and the Social and Ethics Committee, be received, considered and adopted.”

Explanatory note:The Annual Financial Statements are required to be approved in terms of the Companies Act, 2008 (No 71 of 2008) (“the Act”). The minimum percentage of voting rights that is required for ordinary resolution 1 to be adopted is 50% (fifty percent) of the voting rights plus 1 (one) vote to be cast on this resolution.

NVEST FINaNCIaL hOLDINGS LIMITED(Incorporated in the Republic of South Africa)

(Registration number 2008/015990/06)(“NVest” or “the Company”)

DIrECTOrSAnthony Godwin (CEO)* Jonathan Goldberg (Chairman)**

Charl Herselman (CFO)* Lana Weldon**

Michael Estment* Lusanda Mangxamba**

Christopher Lemmon* Dylan Schemel***

Brendan Connellan*

Executive* Independent Non-Executive** Non-Executive***


2. Ordinary resolution number 2 – appointment of director – Charl herselman

“rESOLVED ThaT the appointment of Charl Herselman as a Director of the Company be and is hereby approved.”

Charl Herselman’s abridged curriculum vitae is set out on page 17 of this integrated annual report to which this notice is attached.

Explanatory note:In accordance with the Memorandum of Incorporation (“MOI”) of the Company, all directors appointed to fill a casual vacancy or an interim appointment shall be elected by an ordinary resolution of the shareholders at the next general or annual general meeting of the company.

The minimum percentage of voting rights that is required for ordinary resolution 2 to be adopted is 50% (fifty percent) of the voting rights plus 1 (one) vote to be cast on this resolution.

3. Ordinary resolution number 3 – Director retirement and re-election – Lusanda Mangxamba

“rESOLVED ThaT Lusanda Mangxamba, which director retires in terms of the Company’s Memorandum of Incorporation (“MOI”) and, being eligible, offers herself for re-election as a director of the Company be and is hereby approved.”

Lusanda Mangxamba’s abridged curriculum vitae is set out on page 19 of this integrated annual report to which this notice is attached.

4. Ordinary resolution number 4 – Director retirement and re-election – Dylan Schemel

“rESOLVED ThaT Dylan Schemel, which director retires in terms of the Company’s Memorandum of Incorporation (“MOI”) and, being eligible, offers himself for re-election as a director of the Company be and is hereby approved.”

Dylan Schemel’s abridged curriculum vitae is set out on page 19 of this integrated annual report to which this notice is attached.

Explanatory note for ordinary resolutions 3 and 4:In accordance with the MOI of the Company, one-third of the non-executive directors or any interim appointed non-executive directors are required to retire at each annual general meeting and may offer themselves for re-election. In terms of the MOI the executive directors, during the period of their service contract, are not taken into account when determining which directors are to retire by rotation.

The minimum percentage of voting rights that is required for each of ordinary resolutions 4 and 5 to be adopted is 50% (fifty percent) of the voting rights plus 1 (one) vote to be cast on each resolution.

5. Ordinary resolution number 5 – appointment and remuneration of auditors

“rESOLVED ThaT the appointment of BDO South Africa Incorporated as nominated by the Group’s Audit and Risk Committee, as the independent external auditor of the Group be and is hereby approved and that the Audit and Risk Committee be and are hereby authorised to determine the remuneration of the auditors. It is noted that Craig Kilian is the individual registered auditor who will undertake the audit for the financial year ending 28 February 2021, being the designated auditor.

Explanatory note:BDO South Africa Incorporated indicated their willingness to be appointed as the Company’s auditor until the next Annual General Meeting. The Audit and Risk Committee has satisfied itself as to the independence of BDO South Africa Incorporated and Craig Kilian, and has also considered the requirements for the appointment of the audit firm and audit partner in accordance with the JSE Listings Requirements. Further details are set out in the Audit and Risk Committee Report on page 58 of this integrated report.

The Audit and Risk Committee has the power in terms of the Companies Act to approve the remuneration of the external auditors. The remuneration paid to the auditors during the year ended 29 February 2020 is set out in note 24 of the Annual Financial Statements.

The minimum percentage of voting rights that is required for this resolution to be adopted is 50% (fifty percent) of the voting rights plus 1 (one) vote to be cast in favour of this resolution.

6. Ordinary resolution number 6 – re-appointment of audit and risk Committee member – Dylan Schemel

“rESOLVED ThaT Dylan Schemel be and is hereby re-appointed as member of the Audit and Risk Committee.”

Dylan Schemel’s curriculum vitae is set out on page 19 of this integrated annual report to which this notice is attached.

7. Ordinary resolution number 7 – re-appointment of audit and risk Committee member - Lusanda Sinegugu Mangxamba

“rESOLVED ThaT Lusanda Sinegugu Mangxamba be and is hereby re-appointed as member of the Audit and Risk Committee.”

Lusanda Mangxamba’s curriculum vitae is set out on page 19 of this integrated annual report to which this notice is attached.

8. Ordinary resolution number 8 – re-appointment of audit and risk Committee member – Dr Lana Joy Weldon

“rESOLVED ThaT Dr Lana Joy Weldon be and is hereby approved to be appointed as a member and Chairperson of the Audit and Risk Committee.”


Explanatory note for ordinary resolutions 6 to 8:In accordance with Section 94 of the Act, the Company must elect an audit committee at each annual general meeting, comprising at least three members, which members must be approved by shareholders at such a meeting.

The minimum percentage of voting rights that is required for each of ordinary resolutions 7 to 9 to be adopted is 50% (fifty percent) of the voting rights plus 1 (one) vote to be cast on each resolution.

9. Ordinary resolution number 9 - Endorsement of NVest’s remuneration policy

“rESOLVED ThaT, the company’s remuneration policy as set out in Part I of the Remuneration Report, be and is hereby approved.”

Explanatory note:In terms of King IV dealing with boards and directors, companies are required to table their remuneration policy every year to shareholders for a non-binding advisory vote at the AGM. This vote enables shareholders to express their views on the remuneration policies adopted and on their implementation.

Part I of the company’s Remuneration Report is contained on pages 62 to 64 of this integrated annual report.

Ordinary resolution 9 is of an advisory nature only and failure to pass this resolution will therefore not have any legal consequences relating to existing arrangements. However, the board will take the outcome of the vote into consideration when considering the company’s remuneration policy.

10. Ordinary resolution number 10 - Endorsement of the implementation of NVest’s remuneration policy

“rESOLVED ThaT, the implementation of the company’s remuneration policy as set out in Part II of the company’s Remuneration Report, be and is hereby approved.”

Explanatory Note:In terms of King IV dealing with boards and directors, companies are required to table their remuneration policy every year to shareholders for a non-binding advisory vote at the AGM. This vote enables shareholders to express their views on the remuneration policies adopted and on their implementation.

Part II of the company’s Remuneration Report is contained on page 64 of this integrated annual report.

Ordinary resolution 10 is of an advisory nature only and failure to pass this resolution will therefore not have any legal consequences relating to existing arrangements. However, the board will take the outcome of the vote into consideration when considering the company’s remuneration policy.

Should more than 25% of the total votes cast be against either ordinary resolutions 9 or 10, the company will issue an announcement on the Stock Exchange News Services (“SENS”) inviting shareholders who voted against the resolutions to meet with members of the Remuneration and

Nomination Committee. The process to be followed will be set out in a SENS announcement.

The minimum percentage of voting rights that is required for each of ordinary resolutions 9 and 10 to be adopted is 50% (fifty percent) of the voting rights plus 1 (one) vote to be cast on each resolution.

11. Special resolution number 1 – General authority to allot and issue shares for cash

“rESOLVED ThaT, subject to the provisions of the Companies Act, the Listings Requirements of the JSE and the company’s memorandum of incorporation, as a general authority valid until the next Annual General Meeting of the company and provided that it shall not extend past 15 months from the date of this Annual General Meeting, the authorised but unissued ordinary shares of the company be and are hereby placed under the control of the directors who are hereby authorised to allot, issue, grant options over or otherwise deal with or dispose of these shares to such persons at such times and on such terms and conditions and for such consideration whether payable in cash or otherwise, as the directors may think fit, provided that:

- the shares which are the subject of the issue for cash must be of a class already in issue, or where this is not the case, must be limited to such equity securities or rights that are convertible into a class already in issue;

- this authority shall not endure beyond the next Annual General Meeting of the company nor shall it endure beyond 15 months from the date of this meeting;

- the shares must be issued only to public shareholders (as defined in the Listings Requirements of the JSE) and not to related parties (as defined in the Listings Requirements of the JSE);

- Upon any issue of shares for cash which represent, on a cumulative basis within a financial year, 5% (five percent) of the number of shares in issue prior to that issue, the company shall publish an announcement containing full details of the issue, (including the number of shares issued, the average discount to the weighted average traded price of the shares over the 30 days prior to the date that the price of the issue is agreed in writing between the company and the party/(ies) subscribing for the shares and the effects of the issue on the Statement of Financial Position, net asset value per share, net tangible asset value per share, the Statement of Comprehensive Income, earnings per share, headline earnings per share, and if applicable diluted earnings per share and diluted headline earnings per share), or an explanation, including supporting information (if any), of the intended use of the funds, or any other announcements that may be required in such regard in terms of the Listings Requirements which may be applicable from time to time;

- the number of ordinary shares issued for cash shall not, in the current financial year, in aggregate, exceed 50% or 151 620 861 of the Company’s issued ordinary shares (including securities which are compulsorily convertible into shares of that class and excluding treasury shares) provided that;

a) any equity securities issued under the authority during the period contemplated above must be deducted from the 151 620 861 ordinary shares as stated above; and


b) in the event of a sub-division or consolidation of issued equity securities during the period contemplated above, the existing authority must be adjusted accordingly to represent the same allocation ratio.

- the maximum discount at which shares may be issued is 10% of the weighted average traded price of the company’s shares over the 30 business days prior to the date that the price of the issue is determined or agreed by the directors of the Company.”

Explanatory note:An ordinary resolution is required in terms of the Listings Requirements of the JSE in order for shareholders to place the authority to issue shares for cash under the control of the directors. A special resolution is required in terms of the Companies Act to issue more than 30% new shares. Accordingly, this resolution is proposed as a special resolution.

In order for this resolution to be adopted, it must be approved by 75% (seventy five percent) of the voting rights exercised on special resolution 1 by shareholders present or represented by proxy at the Annual General Meeting and entitled to exercise voting rights on the resolution is required.

12. Special resolution number 2 – authority to issue shares, securities convertible into shares or rights that may exceed 30% of the voting power of the current issued share capital

“rESOLVED ThaT: the authorised but unissued shares of the Company be and are hereby placed under the control of the directors (to the extent that this is necessary in terms of the MOI) and the Directors be and are hereby authorised, to the extent required in terms of section 41(3) of the Companies Act, to allot and issue such number of shares in the authorised but unissued share capital of the Company as may be required for purposes of issuing shares, securities convertible into shares, or rights exercisable for shares in a transaction or series of integrated transactions notwithstanding the fact that such number of ordinary shares may have voting power equal to or in excess of 30% of the voting rights of all ordinary shares in issue immediately prior to such issue. This authority specifically includes the authority to allot and issue any ordinary shares in the authorised but unissued share capital of the Company to any underwriter(s) of a rights or claw-back offer (whether or not such underwriter is a related party to Visual (as defined for purposes of the Listings Requirements) and/or person falling within the ambit of section 41(1) of the Companies Act, being a director, future director, prescribed officer or future prescribed officer of the Company or a person related or inter-related to the Company or related or inter-related to a Director or prescribed officer of the Company or a nominee of any of the foregoing persons.”

Explanatory note:The reason for special resolution number 2 is to:

a. obtain approval from the shareholders of the Company, in terms of the provisions of sections 41(1) and (3) of the Companies Act (to the extent required), to issue additional ordinary shares in the authorised but unissued share capital of the Company to enable the Company to issue shares, securities convertible into shares, or rights exercisable for shares in a transaction or series of integrated transactions notwithstanding the fact that such number of ordinary shares may

have voting power equal to or in excess of 30% of the voting rights of all ordinary shares in issue immediately prior to such issue; and

b. to provide for the possibility of such shares being issued to persons and parties considered to be related and/or inter-related parties as defined in section 2 of the Companies Act, 2008 and the Listings Requirements of the Johannesburg Stock Exchange (“JSE”), which issue will be subject to the JSE Listings Requirements.

In order for this resolution to be adopted, the support of at least 75% of the voting rights exercised on special resolution 2 by shareholders present or represented by proxy at the Annual General Meeting and entitled to exercise voting rights on the resolution is required.

13. Special resolution number 3 – Non-Executive Directors’ remuneration

“rESOLVED ThaT the approval of the remuneration payable to the non-executive directors:

For the period 17 August 2020 (date of Annual General Meeting) to 16 August 2021 (date of 2021 Annual General Meeting) will be as follows:

Member Fee (r)Board Chairperson 121 551

Board Director 69 168

Audit and Risk Committee Chairperson 49 604

Audit and Risk Committee Member 33 571

Remuneration and Nominations Committee Chairperson

45 842

Remuneration and Nominations Committee Member

25 815

Social and Ethics Committee Chairperson 43 064

Social and Ethics Committee Member 22 661

The above being subject to individual non-executive directors remaining as directors for the entire period, failing which they will only be entitled to a pro rata portion of the amounts stipulated above.

The fees will be paid net of VAT which may become payable over and above these fees, depending on the status of the individual director’s tax position.

Explanatory note:In terms of Section 66(9) of the Act, shareholders are required to approve the remuneration of directors.


14. Special resolution number 4 – General authority to enter into funding agreements, provide loans or other financial assistance

“rESOLVED ThaT to the extent required in terms of sections 44 and 45 of the Companies Act, the board (or any


person/s authorised by the board), as it thinks fit, but subject to compliance with the requirements of the MOI, the Companies Act and the Listings Requirements applicable to the Company, be granted authority to provide:

(i) direct or indirect financial assistance as contemplated in section 44 of the Companies Act to any person approved by the Board (or any person/s to whom the Board has delegated the power to approve recipients of the financial assistance);

(ii) direct or indirect financial assistance as contemplated in section 45 of the Companies Act to: a. a related or inter-related company or corporation as

contemplated in the Companies Act; and/or b. to a member of such a related or inter-related

company or corporation; and/orc. to a director or prescribed officer of a related or

inter-related company; and/ord. to a person related to any such company,

corporation, member, director or prescribed officer, for any purpose in the normal course of business of the NVest Group, and any black economic empowerment transaction, at any time during a period of 2 (two) years commencing on the date that this special resolution is passed.

The board will, before making any such financial assistance available satisfy itself that immediately after providing the financial assistance, the company will satisfy the solvency and liquidity test as contemplated in the Companies Act and that the terms under which the financial assistance is proposed to be given are fair and reasonable to the company.”

Explanatory note:The purpose of this resolution is to enable the Company to enter into funding arrangements with its subsidiaries and to allow intergroup loans between subsidiaries and where appropriate, directors’ loans.


15. Special resolution number 5: General authority to acquire (repurchase) shares

“rESOLVED ThaT, subject to the approval of 75% of the shareholders present in person and by proxy, and entitled to vote at the annual general meeting, the Company and/or any subsidiary of the Company is hereby authorised, by way of a general authority, from time to time, to acquire ordinary shares in the share capital of the Company from any person in accordance with the requirements of the MOI, the Act and the JSE Listings Requirements, provided that:

- any such acquisition of ordinary shares shall be effected through the order book operated by the JSE trading system and done without any prior understanding or arrangement with the counterparty;

- this general authority shall be valid until the earlier of the Company’s next Annual General Meeting or the variation or revocation of such general authority by special resolution at any subsequent general meeting of the Company, provided that it shall not extend beyond 15

months from the date of passing of this special resolution number 5;

- an announcement will be published as soon as the Company or any of its subsidiaries have acquired ordinary shares constituting, on a cumulative basis, 3% of the number of ordinary shares in issue and for each 3% in aggregate of the initial number acquired thereafter, in compliance with paragraph 11.27 of the JSE Listings Requirements;

- acquisitions of shares in aggregate in any one financial year may not exceed 20% (twenty percent) of the Company’s ordinary issued share capital, as the case may be, as at the date of passing of this special resolution number 5;

- ordinary shares may not be acquired at a price greater than 10% above the weighted average of the market value at which such ordinary shares are traded on the JSE as determined over the five business days immediately preceding the date of acquisition of such ordinary shares;

- the Company has been given authority by its memorandum of incorporation;

- the board of directors authorises the acquisition and that the Company passed the solvency and liquidity test, as set out in Section 4 of the Companies Act, and that since the solvency and liquidity test was performed there have been no material changes to the financial position of the Company;

- in terms of section 48 (2)(b) of the Companies Act, the board of a subsidiary Company may determine that it will acquire shares of its holding company, but (i) not more than 10%, in aggregate, of the number of issued shares of any class of shares of a Company may be held by, or for the benefit of, all of the subsidiaries of that Company, taken together; and (ii) no voting rights attached to those shares may be exercised while the shares are held by the subsidiary, and it remains a subsidiary of the Company whose shares it holds;

- in terms of section 48 (8)(b) of the Companies Act, the repurchase of any shares is subject to the requirements of sections 114 and 115 if, considered alone, or together with other transactions in an integrated series of transactions, it involves the acquisition by the Company of more than 5% of the issued shares of any particular class of the Company’s shares;

- at any point in time, the Company and/or its subsidiaries may only appoint one agent to effect any such acquisition;

- the Company and/or its subsidiaries undertake that they will not enter the market to so acquire the Company’s shares until the Company’s designated advisor has provided written confirmation to the JSE regarding the adequacy of the Company’s working capital in accordance with Schedule 25 of the Listings Requirements of the JSE; and

- the Company and/or its subsidiaries may not acquire any shares during a prohibited period, as defined in the Listings Requirements of the JSE unless a repurchase program is in place, where dates and quantities of shares to be traded during the prohibited period are fixed and full details of the program have been disclosed in an announcement over the SENS prior to the commencement of the prohibited period.

Explanatory Note:The reason for and effect of this special resolution is to grant the Company and its subsidiaries a general authority to facilitate the acquisition by the Company and/or its subsidiaries of the Company’s own shares, which general authority shall be valid until the earlier of the next annual general meeting of


the Company or the variation or revocation of such general authority by special resolution at any subsequent general meeting of the Company, provided that this general authority shall not extend beyond 15 months from the date of the passing of this special resolution number 5.

Any decision by the directors, after considering the effect of an acquisition of up to 20% of the Company’s issued ordinary, as the case may be, to use the general authority to acquire shares of the Company will be taken with regard to the prevailing market conditions and other factors and provided that, after such acquisition, the directors are of the opinion that:

- the Company and its subsidiaries will be able to pay their debts in the ordinary course of business;

- recognised and measured in accordance with the accounting policies used in the latest audited annual group financial statements, the assets of the Company and its subsidiaries will exceed the liabilities of the Company and its subsidiaries;

- the share capital and reserves of the Company and its subsidiaries will be adequate for the purposes of the business of the Company and its subsidiaries; and

- the working capital of the Company and its subsidiaries will be adequate for the purposes of the business of the Company and its subsidiaries, for the period of 12 months after the date of the notice of the annual general meeting. The Company will ensure that its designated advisor will provide the necessary letter on the adequacy of the working capital in terms of the Listings Requirements of the JSE, prior to the commencement of any purchase of the Company’s shares on the open market.

The JSE Listings Requirements require, in terms of section 11.26, the following disclosures, which appear in this annual report:

- Major shareholders – refer to page 126 of this integrated annual report.

- Share capital of the Company – refer to page 75 of this integrated annual report.

Litigation statementIn terms of paragraph 11.26 of the JSE Listings Requirements, the directors, whose names appear on page 16 of this integrated annual report, are not aware of any legal or arbitration proceedings that are pending or threatened, that may have or had in the recent past, being at least the previous 12 months, a material effect on NVest’s financial position.

Directors’ responsibility statementThe directors, whose names appear on page 16 of this integrated annual report, collectively and individually accept full responsibility for the accuracy of the information pertaining to this special resolution and certify that, to the best of their knowledge and belief, there are no facts that have been omitted which would make any statements false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that this special resolution contains all information required by law and the JSE Listings Requirements.

Material changesOther than the facts and developments reported on in this integrated annual report, there have been no material changes in the financial or trading position of the Company

and its subsidiaries since the date of signature of the audit report and up to the date of the notice of annual general meeting. The directors have no specific intention, at present, for the Company or its subsidiaries to acquire any of the Company’s shares but consider that such a general authority should be put in place should an opportunity present itself to do so during the year, which is in the best interests of the Company and its shareholders.

The directors are of the opinion that it would be in the best interests of the Company to extend such general authority and thereby allow the Company or any of its subsidiaries to be in a position to acquire the shares issued by the Company through the order book of the JSE, should the market conditions, tax dispensation and price justify such an action.


16. Special resolution number 6: Company acquiring the Company’s shares from a director or prescribed officer

“rESOLVED ThaT, when any general repurchase by the Company of its shares takes place in accordance with special resolution number 6, the board is authorised, as required by section 48(8)(a) of the Companies Act, to approve the purchase by the Company of its issued shares from a director and/or a prescribed officer of the company, and/or person related to a director or prescribed officer of the company, subject to the provisions of the MOI, the Companies Act, and the Listings Requirements.”

Explanatory Note:This resolution is proposed in order to enable the board, from the date of passing of this special resolution until the date of the next annual general meeting of the Company, (such resolution not to be valid for a period greater than 15 (fifteen) months from the date of the passing of this special resolution), to approve the acquisition by the Company of its shares from a director and/or a prescribed officer of the Company, and/or a person related to any of them when a general repurchase by the company of the Company’s shares takes place in accordance with special resolution number 6.

Section 48(8)(a) of the Companies Act provides, among others, that a decision by the board to acquire shares of the company from a director or prescribed officer of the company, or a person related to a director or prescribed officer of the company, must be approved by a special resolution of the shareholders of the company. When a general repurchase by the company of the Company’s shares takes place in accordance with special resolution number 6, the Company may inadvertently acquire shares from a director and/or a prescribed officer of the Company, and/or a person related to a director or prescribed officer of the Company and such repurchase must, in terms of the Companies Act, be approved by a special resolution of the shareholders.



Voting and Proxies

Certificated shareholders and dematerialised shareholders with “own name” registration

If you are unable to attend the annual general meeting to be held at 11:00 on Monday 17 August 2020 at 42 Beach Road, East London and wish to be represented thereat, you should complete and return the attached form of proxy in accordance with the instructions contained therein and lodge it with, or post it to, the transfer secretaries, namely Computershare Investor Services Proprietary Limited, Rosebank Towers 15 Biermann Avenue Rosebank (PO Box 61051 Marshalltown, 2107), to be received by no later than 11:00 on Thursday,13 August 2020 for administrative purposes or thereafter to the Company by hand before the commencement of the meeting.

Dematerialised shareholders, other than those with “own name” registration

If you hold dematerialised shares in NVest through a Central Securities Depository Participant (“CSDP”) or broker and do not have an “own name” registration, you must timeously advise your CSDP or broker of your intention to attend and vote at the annual general meeting or be represented by proxy thereat in order for your CSDP or broker to provide you with the necessary authorisation to do so, or should you not wish to attend the annual general meeting in person, you must timeously provide your CSDP or broker with your voting instruction in order for the CSDP or broker to vote in accordance with your instruction at the annual general meeting.

Each shareholder, whether present in person or represented by proxy, is entitled to attend and vote at the annual general meeting. On a show of hands every shareholder who is present in person or by proxy shall have one vote, and, on a poll, every shareholder present in person or by proxy shall have one vote for each share held by him/her.

A form of proxy which sets out the relevant instructions for use is attached for those members who wish to be represented at the annual general meeting of members. Duly completed forms of proxy must be lodged with the transfer secretaries of the Company to be received by no later than 11:00 on Thursday, 13 August 2020 for administrative purposes or thereafter to the Company by hand before the commencement of the meeting.

By order of the Board

________________________________Brendan ConnellanCompany Secretary

25 May 2020


NVEST FINaNCIaL hOLDINGS LIMITED (Incorporated in the Republic of South Africa)

(Registration number 2008/015990/06)(“NVest” or “the Company”)

FORM OF PROXY (for use by certificated and own name dematerialised shareholders only)

For use by certificated and “own name” registered dematerialised shareholders of the Company (“shareholders”) at the annual general meeting of NVest to be held at 11:00 on Monday, 17 August 2020 at 42 Beach Road, East London.

I/We (please print) ______________________________________________________________________________________________________

of (address) ____________________________________________________________________________________________________________

being the holder/s of _______________________________________ ordinary shares of no par value in NVest, appoint (see note 1):

1. _________________________________________________________ or failing him,

2. _________________________________________________________ or failing him,

3. the chairperson of the annual general meeting,

as my/our proxy to act for me/us and on my/our behalf at the annual general meeting which will be held for the purpose of considering, and if deemed fit, passing, with or without modification, the resolutions to be proposed thereat and at any adjournment thereof; and to vote for and/or against the resolutions and/or abstain from voting in respect of the ordinary shares registered in my/our name/s, in accordance with the following instructions (see note 2):

Number of votes

For against abstain

Ordinary resolution Number 1 –Adoption of Annual Financial Statements

Ordinary resolution Number 2 – Appointment of director – Charl Herselman

Ordinary resolution Number 3 – Director retirement and re-election – Lusanda Mangxamba

Ordinary resolution Number 4 –Director retirement and re-election – Dylan Schemel

Ordinary resolution Number 5 – Appointment and remuneration of auditors

Ordinary resolution Number 6 –Re-appointment of Audit and Risk Committee member – Dylan Schemel

Ordinary resolution Number 7 – Re-appointment of Audit and Risk Committee member– Lusanda Mangxamba

Ordinary resolution number 8 –Re-appointment of Audit and Risk Committee member and Chairperson – Dr Lana Joy Weldon

Ordinary resolution Number 9 – Endorsement of NVest’s remuneration policy

Ordinary resolution Number 10 – Endorsement of the implementation of NVest’s remuneration policy


Special resolution Number 1 – General authority to allot and issue shares for cash

Special resolution Number 2 – Authority to issue shares, securities convertible into shares or rights that may exceed 30% of the voting power of the current issued share capital

Special resolution Number 3 – Non-Executive Directors’ remuneration

Special resolution number 4 – General authority to enter into funding agreements, provide loans or other financial assistance

Special resolution Number 5 – General authority to acquire (repurchase) shares

Special resolution Number 6 – Company acquiring the Company’s shares from a director or prescribed officer

Signed at ____________________________________ on _____________________________________ 2020

Signature ____________________________________

Assisted by me (where applicable) __________________________________________________________

Name ________________________________________ Capacity ___________________________________

Signature ____________________________________

1. Certificated shareholders and dematerialised shareholders with “own name” registration

If you are a certificated shareholder or have dematerialised your shares with “own name” registration and you are unable to attend the annual general meeting of NVest shareholders to be held at 11:00 on Monday, 17 August 2020 at 42 Beach Road, East London and wish to be represented thereat, you must complete and return this form of proxy in accordance with the instructions contained herein and lodge it with, or post it to, the transfer secretaries, namely Computershare Investor Services Proprietary Limited, Rosebank Towers 15 Biermann Avenue Rosebank (PO Box 61051 Marshalltown, 2107), no later than 11:00 on Thursday, 13 August 2020 for administrative purposes or thereafter to the Company by hand before the commencement of the meeting.

2. Dematerialised shareholders other than those with “own name” registration

If you hold dematerialised shares in NVest through a CSDP or broker other than with an “own name” registration, you must timeously advise your CSDP or broker of your intention to attend and vote at the annual general meeting or be represented by proxy thereat, in order for your CSDP or broker to provide you with the necessary authorisation to do so, or should you not wish to attend the annual general meeting in person, you must timeously provide your CSDP or broker with your voting instruction in order for the CSDP or broker to vote in accordance with your instruction at the annual general meeting.

NOTES

1. This form is for use by certificated shareholders and dematerialised shareholders with “own-name” registration whose shares are registered in their own names on the record date and who wish to appoint another person to represent them at the meeting. If duly authorised, companies and other corporate bodies who are shareholders having shares registered in their own names may appoint a proxy using this form or may appoint a representative in accordance with the last paragraph below.

Other shareholders should not use this form. All beneficial holders who have dematerialised their shares through a Central Securities Depository Participant (“CSDP”) or broker, and do not have their shares registered in their own name, must provide the CSDP or broker with their voting instructions. Alternatively, if they wish to attend the meeting in person, they should request the CSDP or broker to provide them with a letter of representation in terms of the custody agreement entered into between the beneficial owner and the CSDP or broker.

2. This proxy form will not be effective at the meeting unless received at the registered office of the Company at 42 Beach Road, East London, Republic of South Africa, not later than 11:00 on Thursday, 13 August 2020 for administrative purposes or thereafter to the Company by hand before the commencement of the meeting.


3. This proxy shall apply to all the ordinary shares registered in the name of shareholders at the record date unless a lesser number of shares are inserted.

4. A shareholder may appoint one person as his proxy by inserting the name of such proxy in the space provided. Any such proxy need not be a shareholder of the Company. If the name of the proxy is not inserted, the chairman of the meeting will be appointed as proxy. If more than one name is inserted, then the person whose name appears first on the form of proxy and who is present at the meeting will be entitled to act as proxy to the exclusion of any persons whose names follow. The proxy appointed in this proxy form may delegate the authority given to him in this proxy by delivering to the Company, in the manner required by these instructions, a further proxy form which has been completed in a manner consistent with the authority given to the proxy of this proxy form.

5. Unless revoked, the appointment of proxy in terms of this proxy form remains valid until the end of the meeting even if the meeting or a part thereof is postponed or adjourned.

6. If6.1 a shareholder does not indicate on this instrument

that the proxy is to vote in favour of or against or to abstain from voting on any resolution; or

6.2 the shareholder gives contrary instructions in relation to any matter; or

6.3 any additional resolution/s which are properly put before the meeting; or

6.4 any resolution listed in the proxy form is modified or amended,

the proxy shall be entitled to vote or abstain from voting, as he thinks fit, in relation to that resolution or matter. If, however, the shareholder has provided further written instructions which accompany this form and which indicate how the proxy should vote or abstain from voting in any of the circumstances referred to in 6.1 to 6.4, then the proxy shall comply with those instructions.

7. If this proxy is signed by a person (signatory) on behalf of the shareholder, whether in terms of a power of attorney or otherwise, then this proxy form will not be effective unless:7.1 it is accompanied by a certified copy of the authority

given by the shareholder to the signatory; or7.2 the Company has already received a certified copy

of that authority

8. The chairman of the meeting may, at his discretion, accept or reject any proxy form or other written appointment of a proxy which is received by the chairman prior to the time when the meeting deals with a resolution or matter to which the appointment of the proxy relates, even if that appointment of a proxy has not been completed and/or received in accordance with these instructions. However, the chairman shall not accept any such appointment of a proxy unless the chairman is satisfied that it reflects the intention of the shareholder appointing the proxy.

9. Any alterations made in this form of proxy must be initialled by the authorised signatory/ies.

10. This proxy form is revoked if the shareholder who granted the proxy:10.1 delivers a copy of the revocation instrument to the

Company and to the proxy or proxies concerned, so that it is received by the Company by not later than 11:00 on Thursday, 13 August 2020 for administrative purposes or thereafter to the Company by hand before the commencement of the meeting; or

10.2 appoints a later, inconsistent appointment of proxy for the meeting; or

10.3 attends the meeting in person.

11. If duly authorised, companies and other corporate bodies who are shareholders of the Company having shares registered in their own name may, instead of completing this proxy form, appoint a representative to represent them and exercise all of their rights at the meeting by giving written notice of the appointment of that representative. This notice will not be effective at the meeting unless it is accompanied by a duly certified copy of the resolution/s or other authorities in terms of which that representative is appointed and is received at the Company’s registered office at 42 Beach Road, East London, not later than 11:00 on Thursday, 13 August 2020 for administrative purposes or thereafter to the Company by hand before the commencement of the meeting.

Summary of rights established by section 58 of the Companies act, 71 of 2008 (“Companies act”), as required in terms of subsection 58(8)(b)(i)

1. A shareholder may at any time appoint any individual, including a non-shareholder of the Company, as a proxy to participate in, speak and vote at a shareholders’ meeting on his or her behalf (section 58(1)(a)), or to give or withhold consent on behalf of the shareholder to a decision in terms of section 60 (shareholders acting other than at a meeting) (section 58(1)(b)).

2. A proxy appointment must be in writing, dated and signed by the shareholder, and remains valid for one year after the date on which it was signed or any longer or shorter period expressly set out in the appointment, unless it is revoked in terms of paragraph 6.3 or expires earlier in terms of paragraph 10.4 below (section 58(2)).

3. A shareholder may appoint two or more persons concurrently as proxies and may appoint more than one proxy to exercise voting rights attached to different securities held by the shareholder (section 58(3)(a)).

4. A proxy may delegate his or her authority to act on behalf of the shareholder to another person, subject to any restriction set out in the instrument appointing the proxy (“proxy instrument”) (section 58(3)(b)).

5. A copy of the proxy instrument must be delivered to the Company, or to any other person acting on behalf of the Company, before the proxy exercises any rights of the shareholder at a shareholders’ meeting (section 58(3)


(c)) and in terms of the memorandum of incorporation (“MOI”) of the Company at least 48 hours before the meeting commences.

6. Irrespective of the form of instrument used to appoint a proxy:6.1 the appointment is suspended at any time and

to the extent that the shareholder chooses to act directly and in person in the exercise of any rights as a shareholder (section 58(4)(a));

6.2 the appointment is revocable unless the proxy appointment expressly states otherwise (section 58(4)(b)); and

6.3 if the appointment is revocable, a shareholder may revoke the proxy appointment by cancelling it in writing or by making a later, inconsistent appointment of a proxy, and delivering a copy of the revocation instrument to the proxy and to the Company (section 58(4)(c)).

7. The revocation of a proxy appointment constitutes a complete and final cancellation of the proxy’s authority to act on behalf of the shareholder as of the later of the date stated in the revocation instrument, if any, or the date on which the revocation instrument was delivered as contemplated in paragraph 6.3 above (section 58(5)).

8. If the proxy instrument has been delivered to a Company, as long as that appointment remains in effect, any notice required by the Companies Act or the Company’s MOI to be delivered by the Company to the shareholder must be delivered by the Company to the shareholder (section 58(6)(a)), or the proxy or proxies, if the shareholder has directed the Company to do so in writing and paid any reasonable fee charged by the Company for doing so (section 58(6)(b)).

9. A proxy is entitled to exercise, or abstain from exercising, any voting right of the shareholder without direction, except to the extent that the MOI or proxy instrument

provides otherwise (section 58(7)).10. If a Company issues an invitation to shareholders to

appoint one or more persons named by the Company as a proxy, or supplies a form of proxy instrument:

10.1 the invitation must be sent to every shareholder entitled to notice of the meeting at which the proxy is intended to be exercised (section 58(8)(a));

10.2 the invitation or form of proxy instrument supplied by the Company must:

10.1.1 bear a reasonably prominent summary of the rights established in section 58 of the Companies Act (section 58(8)(b)(i));

10.1.2 contain adequate blank space, immediately preceding the name(s) of any person(s) named in it, to enable a shareholder to write the name, and if desired, an alternative name of a proxy chosen by the shareholder (section 58(8)(b)(ii)); and

10.1.3 provide adequate space for the shareholder to indicate whether the appointed proxy is to vote in favour of or against any resolution(s) to be put at the meeting, or is to abstain from voting (section 58(8)(b)(iii));

10.3 the Company must not require that the proxy appointment be made irrevocable (section 58(8)(c)); and

10.4 the proxy appointment remains valid only until the end of the meeting at which it was intended to be used, subject to paragraph 7 above (section 58(8)(d)).

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