NVFH 2020 Integrated Annual Report

Group

Awards

2019 Morningstar Award

- Best Fund House (Smaller Fund Range)

- Best Moderate Allocation Fund (NFB Ci Managed Fund)

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

Old Mutual 2018/19

- VIP Platinum Broker Award

Eastern Cape

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NVest Financial Holdings Limited | INTEGRATED ANNUAL REPORT 2020

Group contacts

NVest Securities

East London

T: 043 – 735 1270

E: nvest@nvestsecurities.co.za

W: www.nvestsecurities.co.za

NFB House, 42 Beach Road, Nahoon, East London, 5241

SECURITIES

NVest Securities

Gauteng

T: 011 – 895 8000

E: nvest@nvestsecurities.co.za

W: www.nvestsecurities.co.za

Unit 1101 Illovo Point, 68 Melville Road, Illovo, Sandton 2196

PROPERTIES

NVest Properties

East London

T: 043 – 735 2000

E: info@nvestproperties.co.za


NFB Private Wealth

Management

East London

T: 043 – 735 2000

E: el@nfb.co.za

W: www.nfb.co.za


NFB Private Wealth

Management

Gauteng

T: 011 – 895 8000

E: jhb@nfb.co.za

W: www.nfb.co.za


NFB Private Wealth

Management

Port Elizabeth

T: 041 – 582 3990

E: pe@nfb.co.za

W: www.nfb.co.za

106 Park Drive, Building 2, 2nd Floor, Park Drive, Port Elizabeth, 6000

NFB Private Wealth

Management

Cape Town

T: 021 – 202 0001

E: ct@nfb.co.za

W: www.nfb.co.za

15th Floor, Metropolitan Building, 7 Walter Sisulu Avenue, Cape Town, 8001

NFB Asset

Management

Gauteng

T: 011 – 895 8000

E: amjhb@nfb.co.za

W: www.nfb.co.za


NFB Insurance

East London

T: 043 – 735 2460

E: nfbib@nfb.co.za

W: www.nfb.co.za

51 Beach Road, Nahoon, East London, 5241

Independent

Executor and Trust

East London

T: 043 – 735 4633

E: info@iet.co.za

W: www.iet.co.za

49 Beach Road, Nahoon, East London, 52411

2


Contents

06 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

01

About NVest

02

Group

Affairs

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

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

03

Corporate

Governance

04

Annual

Financial

Statements

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

NVest Financial Holdings Limited | INTEGRATED ANNUAL REPORT 2020 3

Scope of this

Integrated

Annual Report

Nathan Carr

Group Legal and Corporate Strategy

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.

The 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

nvestfinancialholdings@iarfeedback.co.za.

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.

4


01

ABOUT

NVEST

HOLDINGS


Chairman’s

Report

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, its

fifth Integrated Annual

Report, since listing

on the Alternative

Exchange of the

Johannesburg

Stock Exchange

in May 2015.

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.

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6 NVest NVest Financial Financial Holdings Holdings Limited Limited | INTEGRATED | INTEGRATED ANNUAL ANNUAL REPORT REPORT 2020 2020

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.

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.

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.

_______________________

Jonathan Goldberg

Group Chairman

25 May 2020

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.

“...I am extremely

humbled and

proud to be

associated with

the NVest Group,

its people and

clients. ”


Chief

Executive

Officer’s

Report

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.

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

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NVest NVest Financial Financial Holdings Holdings Limited Limited | INTEGRATED | INTEGRATED ANNUAL ANNUAL REPORT REPORT 2020 2020

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.

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.

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

Revenue

increased by

1.26% to

(2019: R306.3 million)

Net Profit After

Tax increased

by 2.56%

(2019: R64.8 million)

Total Group Assets

under Management

and Administration

remained relatively

flat at

Net Asset Value

increased

by 7.06% to

(2019: 149.07 cents

per share)

R310.2

million

R66.5

million

R30.1

billion

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

159.60

cents

The following headlines summarise the financial performance

of the Group for the year under review:

21.62

cents

Headline Earnings

decreased by R64.51

2.20% to

(2019: R65.95 million) million

6.50 cents

Earnings Per

Share increased

by 2.71% to

(2019: 21.05 cents per share)

Net Cash from

operating activities

increased by 3.60% to

(2019: from R68.6 million)

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.

R71.1

million


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) Limited


• NFB Finance Brokers Port Elizabeth (Pty) Limited


• NFB Finance Brokers Western Cape (Pty) Limited


• 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.

10


Subsidiary

Feb 2020

Revenue

Feb 2019

Revenue

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.

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.

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.

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.

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

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

12


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

“...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.”


ASSETS UNDER MANAGEMENT

R30.1

billion

NVest:

Highlights

REVENUE

increased by

1%

R310 million

(2019: R306 mill)

HEPS DOWN 2 %

21. 78

CENTS

CASH RESERVES

R171.8 mill

DIVIDENDS PER SHARE

11.75 CENTS

NET ASSET VALUE PER SHARE

159.60

7% = CENTS

GROWTH PROFIT BEFORE TAX

10.3 % (NET OF FAIR VALUE ADJUSTMENT)

4

OFFICE

LOCATIONS

GAUTENG

TEN

SUBSIDIARIES

WESTERN

cape

eastern

cape

GAUTENG

CAPE TOWN

EAST LONDON

PORT ELIZABETH

14


REVENUE - FEB 2020

REVENUE (R)

Investments*

19%

6%

Insurance

broking

350

300

250

PROPERTY

14%

ADMIN OF

ESTATES &

TRUSTS

1%

WEALTH

MANAGEMENT

60%

R97,211,558

R114,642,325

R216,443,442

R282,066,249

R290,942,740

R306,336,355

R310,185,831

200

150

100

50

2014 2015 2016 2017 2018 2019 2020

0

NPAT (R)

80

NPAT - FEB 2020

70

60

50

Investments*

51%

Insurance

broking

3%

40

R32,668,686

R35,366,786

R59,487,499

R62,068,099

R60,130,906

R64,799,612

R66,457,836

2014 2015 2016 2017 2018 2019 2020

30

20

10

0

PROPERTY

3%

1%

ADMIN OF

ESTATES &

TRUSTS

WEALTH

MANAGEMENT

42%

* 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.

HEADLINE EARNINGS

PER SHARE (CENTS)

2017

2018

2019

19.66

2020 18.45

21.30

21.78

10.30

11.00

DIVIDENDS

PER SHARE (CENTS)

11.75 11.75

2017 2018 2019 2020

12.00

11.50

11.00

10.50

10.00

9.50

9.00

8.50

8.00

AFRICAN, COLOURED

33%

& INDIAN EMPLOYEES


Our Directors

FRONT ROW: From left to right

Lusanda Mangxamba / Jonathan Goldberg / Anthony Godwin / Michael Estment / Dr. Lana Weldon

BACK ROW: From left to right

Dylan Schemel / Brendan Connellan / Charl Herselman / Chris Lemmon

16


ANTHONY DENIS GODWIN (60)

CHIEF EXECUTIVE OFFICER & EXECUTIVE DIRECTOR

Position

Group Chief Executive Officer

Appointment 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 Director

Appointment 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 Chairman

Appointment 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.

18


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 2016

Occupation 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 2015

Occupation 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.


Executive

Management

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


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.

20


Siviwe Relebohile Kwatsha (41)

Group Chief Information Officer

NVest 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 Strategy

NVest 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


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 and

Insurance Brokers

Name:

Anthony Godwin

Location:

NFB PWM EL

Industry Experience:

CEO of NVFH &

Executive Director

Contact:

AnthonyG@nvestholdings.co.za

Name:

Bryan Lones

Location:

NFB PWM EL


Private Wealth Manager

Contact:

BryanL@nfb.co.za

Name:

Gavin Ramsay

Location:

NFB PWM EL


Executive Director (EL Regional

Head) / Private Wealth Manager

Contact:

GavinR@nfb.co.za

Name:

Glen Wattrus

Location:

NFB PWM EL



Contact:

GlenW@nfb.co.za

Name:

Juanita Niemand

Location:

NFB PWM EL


Consultant - Healthcare

Advisory Services

Contact:

JuanitaN@nfb.co.za

Name:

Julie McDonald

Location:

NFB PWM EL


Financial Advisor

(Risk Assurance Specialist)

Contact:

JulieM@nfb.co.za

Name:

Leona Trollip

Location:

NFB PWM EL and NFB PWM PE


Divisional Manager

- Employee Benefits

Contact:

LeonaT@nfb.co.za

Name:

Leonie Schoeman

Location:

NFB PWM EL


Divisional Manager - Healthcare

Advisory Services

Contact:

LeonieS@nfb.co.za

Name:

Jaco de Beer

Location:

NFB PWM EL



Contact:

JacoD@nfb.co.za

Name:

Nonnie Canham

Location:

NFB PWM EL



Contact:

NonnieC@nfb.coza

Name:

Janine Nass

Location:

NFB PWM EL


Consultant – Healthcare

Advisory Services

Contact:

JanineN@nfb.co.za

Name:

Philip Bartlett

Location:

NFB PWM EL


Senior Executive / Private Wealth

Manager

Contact:

PhilipB@nfb.co.za

22


Name:

Rob Masters

Location:

NFB PWM EL



Contact:

RobM@nfb.co.za

Name:

Jeremy Diviani

Location:

NFB PWM JHB



Contact:

JeremyD@nfb.co.za

Name:

Travis McClure

Location:

NFB PWM EL



Manager

Contact:

TravisM@nfb.co.za

Name:

Laurie Wiid

Location:

NFB PWM JHB



Manager

Contact:

LaurieW@nfb.co.za

Name:

Walter Lowrie

Location:

NFB PWM EL



Contact:

WalterW@nfb.co.za

Name:

Lydia Byrnes

Location:

NFB PWM JHB


Representative under supervision

Contact:

LydiaB@nfb.co.za

Name:

Andrew Duvenage

Location:

NFB PWM JHB


Managing Director

Contact:

AndrewD@nfb.co.za

Name:

Mike Estment

Location:

NFB PWM JHB


Executive Chairman

Contact:

MikeE@nfb.co.za

Name:

Evelyn Doubell

Location:

NFB PWM JHB



Contact:

EvelynD@nfb.co.za

Name:

Grant Magid

Location:

NFB PWM JHB



Manager

Contact:

GrantM@nfb.co.za

Name:

Philip Shapiro

Location:

NFB PWM JHB



Manager

Contact:

PhilipS@nfb.co.za

Name:

Stephen Katzenellenbogen

Location:

NFB PWM JHB



Manager

Contact:

StephenK@nfb.co.za

Name:

Jaco Van Zyl

Location:

NFB PWM JHB



Contact:

JacoVZ@nfb.co.za

Name:

Thulisile Nkomo

Location:

NFB PWM JHB



Contact:

ThuliN@nfb.co.za


Name:

Trevor Crouse

Location:

NFB PWM JHB



Contact:

TrevorC@nfb.co.za

Name:

Moosa Manqindi

Location:

NFB Asset Management


Research Analyst

Contact:

MoosaM@nfb.co.za

Name:

William Higgs

Location:

NFB PWM JHB


Operations Director

Contact:

WilliamH@nfb.co.za

Name:

Michelle Wolmarans

Location:

NFB Insurance Brokers


Managing Director

Contact:

MichelleW@nfb.co.za

Name:

Marco Van Zyl

Location:

NFB PWM PE



Manager

Contact:

MarcoV@nfb.co.za

Name:

Franscois de Ridder

Location:



Executive Director/Commercial

and Corporate Broker

Contact:

FrancoisD@nfb.co.za

Name:

Nicky Sass

Location:

NFB PWM PE


Healthcare Consultant

Contact:

NickyS@nfb.co.za

Name:

Steven Pope

Location:



Executive Director

Contact:

StevenP@nfb.co.za

Name:

Xolisa Funani

Location:

NFB PWM PE



Contact:

XolisaF@nfb.co.za

Name:

Richard Clarke

Location:



Executive Director

Contact:

RichardC@nfb.co.za

Name:

Paul Marais

Location:



Managing Director and

Portfolio Manager

Contact:

PaulM@nfb.co.za

Name:

Jennifer Grobbelaar

Location:



Personal & Commercial Lines

Marketer

Contact:

JenniferG@nfb.co.za

Name:

Amy Degenhardt

Location:



Investment Research Analyst

Contact:

AmyD@nfb.co.za

Name:

Heidi Frohbus

Location:



Claims Manager

Contact:

HeidiF@nfb.co.za

24


Name:

Melany Annandale

Location:




Marketer

Contact:

MelanyA@nfb.co.za

Name:

Greg Farland

Location:

NVest Securities EL


Stockbroker/Portfolio Manager

Contact:

GregF@nvestsec.co.za

Name:

Debbie Bieske

Location:




Marketer

Contact:

DebbieB@nfb.co.za

Name:

Tony Hadley

Location:

NVest Securities EL


Portfolio Manager

Contact:

TonyH@nvestsec.co.za

Name:

Chris Lemmon

Location:

NVest Securities JHB


Managing Director/Stockbroker

Contact:

Chrisl@nvestsec.co.za

Name:

Tracy Bouwer

Location:

NVest Securities EL


Portfolio Manager

Contact:

TracyB@nvestsec.co.za

Name:

Liam Graham

Location:

NVest Securities EL


Director/Stockbroker

Contact:

LiamG@nvestsec.co.za

Name:

Andy Russell

Location:

NVest Securities EL


Portfolio Manager

Contact:

AndyR@nvestsec.co.za

Name:

Mandy Waterson

Location:

NVest Securities EL


Stockbroker/Portfolio Manager

Contact:

MandyW@nvestsec.co.za

Name:

Robert Hume

Location:

NVest Securities EL


Portfolio Manager

Contact:

RobH@nvestsec.co.za


The NVest way

- AND OUR PATH TO PRE-EMINENCE

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…

26


02

GROUP

AFFAIRS


Our journey thus far...

1985

1986

1987

We have lift off! NFB Financial Services

Group was founded in Port Elizabeth,

fundamentally as money market and gilt

brokers.

Spreading the footprint…. an NFB office

was opened in East London, which

would become the Group’s head office

over time.

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.

2006

2002

2001

NFB Asset Management assets under

management passed the R1 billion mark.

In June 2002, NFB launched a range of riskprofiled

funds, actively managed by NFB’s

Asset Management Division.

June 2001, Fedsure sold its interest in

NFB. By December 2001 the Group had

accumulated approximately R3 billion

assets under management.

2007

2008

2009

NFB launched its first two registered unit

trusts, the NFB Conservative Fund of Funds

and the NFB Balanced Fund of Funds

in May 2007.

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.

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.

2020

2019

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.

2018

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.

2017

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.

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.

28


1990

1994

1995

Beyond our borders. NFB operations were

extended to Frankfurt to take advantage

of Eskom bond trading through the

Financial Rand.

Fedsure acquired 49% of NFB’s domestic

and international business operations.

NFB’s founding M.D. along with

the international business, formally

separated.

2000

1998

1997

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.

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 Insurance Brokers is born with the

opening of a Short-Term Insurance division

in East London.

2011

2012

2013

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

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.

2016

2015

2014

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.

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.

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

NVest Financial Holdings Limited

East London

Registration No. 2008/015990/06

Listed on

JSE (Altx)

in May

2015


Percentage Ownership: 100%

Reg: 2003/030583/07 | FSP: 16300

NFB Finance Brokers Gauteng (Pty) Ltd


Reg: 1998/024730/07 | FSP: 16216

51%

Black

Owned

– JV with

Nations

Capital

Nations NFB (Pty) Ltd

Percentage

Ownership: 49%

Reg: 2015/043665/07

Horwath Financial

Services (Pty) Ltd

Percentage

Ownership: 33.33%

Reg: 2002/008600/07

FSP: 10889

NFB Finance Brokers Port Elizabeth (Pty) Ltd


Reg: 2005/025001/07 | FSP: 26362

NFB Finance Brokers Western Cape (Pty) Ltd


Reg: 2003/030583/07 | FSP: 16300

NVest Securities (Pty) Ltd


Reg: 2008/015192/07 | Member of the JSE Ltd

FSP: 44699

NFB Asset Management (Pty) Ltd


Reg: 2005/042953/07 | FSP: 25962

New (2018)

minority

equity

investment

offshore.

NFB AM International


Mauritius

NFB Insurance Brokers (Border) (Pty) Ltd

Percentage Ownership: 80.95%

Reg: 1996/010593/07 | FSP: 8932

Independent Executor and Trust (Pty) Ltd


Reg: 2008/018611/07

NVest Properties Limited


Reg: 2010/008681/06

PRIVATE WEALTH

MANAGEMENT

PROPERTY INSURANCE WILLS & ESTATES SECURITIES

ASSET

MANAGEMENT

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.

30


Our Business

Summary

Brand Core Products/Services Entities/Location

NVFH

ownership

People

Private Wealth Management

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.

NFB Finance Brokers

Eastern Cape (Pty)

Limited

[East London]*

NFB Finance Brokers

Gauteng (Pty) Limited

[Gauteng]*

NFB Finance Brokers

Port Elizabeth (Pty)

Limited [Port Elizabeth]

(includes Three Oaks

Capital)*

100%

100%

100%

Total: 39

Client

Facing/

Sales: 14

Back office/

support: 25

Total: 38

Client

Facing/

Sales: 10

Back office/

support: 28

Total: 10

Client

Facing/

Sales: 3

Back office/

support: 7

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

Western Cape (Pty)

Limited [Cape Town]

[Operating as a branch

of NFB]*

100%

Total: 1

Client

Facing/

Sales: 0

Back office/

support: 1

Asset

Management

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


(Pty) Limited

[Gauteng]

100%

Total: 4

Client

Facing/

Sales: 1

Back office/

support: 3

Short Term

Insurance

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


(Border) (Pty) Limited

[East London]

82%

Total: 26

Client

Facing/

Sales: 5

Back office/

support: 21

Stockbroking

SECURITIES

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%

Total: 15

Client

Facing/

Sales: 10

Back office/

support: 5

Property

PROPERTIES

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.


[East London] 100%

Total: 1

Client

Facing/

Sales: 0

Back office/

support: 1

Estate

Planning/Wills

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%

Total: 5

Client

Facing/

Sales: 2

Back office/

support: 3


Employment

Equity Report

Total 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 Levels

Male Female Foreign Nationals

A 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

Skilled technical and academically qualified

workers, junior management, supervisors, foremen,

and superintendents

1 0 0 6 6 1 0 16 1 1 32

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

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 Levels

Male Female Foreign Nationals

A 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

Skilled technical and academically qualified

workers, junior management, supervisors, foremen,

and superintendents

0 0 0 1 1 0 0 1 0 0 3

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

Total

R 530,115

TOTAL SPENT ON STAFF TRAINING

AND DEVELOPMENT

Female

72% employees

STAFF COMPLEMENT

159 AS AT FEBRUARY 2020

4

GEOGRAPHIC

OFFICE LOCATIONS

28

12

9

0

4

6

Breakdown

of staff

per office

37

NFVH - 23 NFB EC - 40 NFB G - 37 NVS - 12 NVP - 0

NFB IB - 28 NFB PE - 9 NFB AM - 4 IET - 6

23

40

32


The evolution

of the NFB Brand

1985

NATIONAL FINANCE BROKERS

1985: The company has had its fair share of excitement, shakeups

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 INVESTMENT & INSURANCE BROKERS

1990: 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.

1994

investment &

insurance brokers

1990

NFB FINANCIAL SERVICES GROUP

The 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

After 16 years the opportunity was ripe for a corporate

re-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.

2015

2001

NFB FINANCIAL SERVICES GROUP JOHANNESBURG

NFB 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 PRIVATE WEALTH MANAGEMENT

2016 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 groupwide

rebrand which is both fresh and distinctive.

2017


35 Years

in the Making

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

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.

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.

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

Mike Estment

Executive Chairman

34


NFB Private Wealth Management -

the power of ONE

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).

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.

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

“We also believe

that the new

structure positions

the business

well to expand

through future

acquisitions...”


Paying it

forward

Asisa Future IFA programme 2020

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.

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

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.”

From Left to right: Reba

Makhudu, Mabatho Maphalala,

Dineo Botsi, Nndise Makhuvha,

Tumelo Magasha

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.”

“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.”

36


NFB Private Wealth Management

- triumphs at Intellidex

Awards

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.

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).

From left to right: Thulisile Nkomo,

Mike Estment & Natalie Schonken


Taking CSR

to the next level

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.

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:

Loaves and Fishes Network (LAFN) - ECD education phase

African Angels - Primary 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 wellbeing

of their children.

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.

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.

The Kepe Foundation

Kepe Foundation lends a helping hand to those

in need, via outreach programmes and mentoring.

38


Loaves & Fishes Network

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.

African Angels

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 the

grade 4 class for 2020 and beyond.


Hope Schools

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

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.

40



03

CORPORATE

GOVERNANCE

42


Corporate Governance

& Sustainability Report

for the financial year ended 29 February 2020.

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).

It is the Board’s

aim to achieve

true transparency

and to build

a trusting

relationship with

all stakeholders.

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:


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.

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

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.

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

44


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-today

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 marketrelated.

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


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


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).

46


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.

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:

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.


Director

Number of

shares pledged

Class of

Securities pledged

Brendan Connellan 10,705,475 Ordinary Shares

Christopher Lemmon 500,000 Ordinary Shares

Nature and term of

financial obligation

12-month

interest only loan

5-year

interest only loan

Amount of Financial

Obligation

R5,057,000

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.

Probability of Risk Materialising

Impact (if Risk was to materialise).

Insert X where appropriate.

Mitigation

Risk Description

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.

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.

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.

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.

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 Yes

X X Yes

X X Yes

X X In Progress

X X X X X Yes

48


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).

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.

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 Cybercrime.

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.

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 X X Yes

X X X X X Yes

X X X X X Yes

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)

(ii)

(iii)

(iv)

an ethical culture,

good performance,

effective control, and,

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

The Board should lead ethically

and effectively

Leadership

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

The Board should ensure that the

organisation is and is seen to be a

responsible corporate citizen

Responsible corporate citizenship

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.

50


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

The Board should serve as the

focal point and custodian of

corporate governance in the

organisation

Primary role and responsibilities of the Board

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

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

Composition of the Board

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


its arrangements for delegation

within its own structures promote

independent judgement, and

assist with balance of power and

the effective discharge of its

duties

Committees of the Board

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.

52


Principle 9

Evaluations of the performance of the Board


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 of, and delegation

to, management contribute to

role clarity and the effective

exercise of authority and

responsibilities

Appointment and delegation to management

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, preapproved

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

The Board should govern risk in a

way that supports the organisation

in setting and achieving its

strategic objectives

Risk governance

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

The Board should govern

technology and information

in a way that supports the

organisation setting and

achieving its strategic objectives

Technology and information governance

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

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

Compliance governance

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


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

Remuneration governance

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 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

Assurance

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;

54


• 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

In the execution of its governance

role and responsibilities, the Board

should adopt a stakeholderinclusive

approach that

balances the needs, interests

and expectations of material

stakeholders in the best interests of

the organisation over time

Stakeholders

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

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

Responsibilities of institutional investors

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


Social & Ethics

Committee 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;

Siviwe Kwatsha

Chairman - Social & Ethics Committee

• 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:

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


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);

56


(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 Kwatsha

Chairman

25 May 2020


Audit & Risk

Committee 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.

Dr Lana Weldon

Chairman - Audit and Risk Committee

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:

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



Dylan Schemel Present Present Present Present

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;

58


• 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 nonaudit

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.

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.

• 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.

_____________________________

Dr Lana Weldon

Chairman

25 May 2020

• 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

60


Remuneration and

Nominations

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.

Jonathan Goldberg

Chairman - Remuneration

and Nominations Committee

and Group Board of Directors

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 performancebased

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:

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




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

62


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.

Long-term incentives

As 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 remuneration

The 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

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.

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

Remuneration and Nominations

Committee Member

Social and Ethics Committee

Chairperson

45 842

25 815

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.

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 shortterm

incentives

The 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 2021

The 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.

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 Goldberg

Chairman

25 May 2020

64


Directors Responsibilities

and Approval

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.

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

Chairman

25 May 2020

________________________________

Anthony Godwin

Chief Executive Officer

25 May 2020


Group Company

Secretary’s

Certification

In 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 Secretary

_____________________________

Brendan Connellan

COMPANY SECRETARY

25 May 2020

66


Independent

Auditor’s Report

Independent Auditor’s Report

To the Shareholders of

NVest 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 Opinion

We 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 Matters

Key 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

Valuation of land and buildings and investment property

(consolidated financial statements) – note 4 and 6

The carrying value of investment property amounted to

R274,255,654 and the carrying value of land and buildings

amounted to R65 136 185.

How our audit addressed the key audit matter

The audit procedures we performed included, amongst

others, the following:

• 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: 905526

VAT 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.


Key audit matter

VThe Group uses independent valuers to determine the fair

values of the properties on a rotational basis over a threeyear

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.

68


Key audit matter

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 Information

The 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 Statements

The 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 Statements

Our 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

70


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 Requirements

In 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.


Registered Auditors

Hilton Craig Kilian

Director

Registered Auditor

29 May 2020

106 Park Drive

Port Elizabeth Central

Port Elizabeth, 6001


04

CONSOLIDATED

ANNUAL

FINANCIAL

STATEMENTS

72


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

Nature of business and principal activities

Directors

Registered office

Business address

South Africa

Financial and intermediary services, stockbroking activitires, rental of

commercial property, administration of deceased estates and trusts.

J. Goldberg

A.D. Godwin

L.J. Weldon

D.L. Schemel

C.G. Lemmon

M. Estment

C. Herselman

B.J. Connellan

L. Mangxamba

NFB House

42 Beach Road

Nahoon

East London

5241

NFB House

42 Beach Road

Nahoon

East London

5241

Postal address P.O. Box 8132

Nahoon

East London

5210

Bankers

Auditors

Secretary

Nedbank Limited

Standard Bank of South Africa Limited

Investec Bank Limited


Chartered Accountants (SA)

Registered Auditors

BDO South Africa is a member firm of BDO Incorporated Limited

B.J. Connellan

Company registration number 2008/015990/06

Level of assurance

Preparer

These annual financial statements have been audited in compliance

with Section 30(2)(a) of the Companies Act 71 of 2008.

The annual financial statements were compiled by:

Sean Weldon

Chartered Accountant (SA)

Issued 25 May 2020




Index

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

74




Directors’

Report

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 2019

Issued R R Number of shares

Ordinary 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.




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. Goldberg

Chairman and Remuneration

and Nomination Committee

Chair

Non-executive Independent

South African

L.J. Weldon

Audit 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 African

Appointed

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

2020

Direct

2019

Direct

2020

Indirect

2019

Indirect

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.

76




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.

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

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




Statement of

Financial Position

as at 29 February 2020

Group

Company

Figures in Rand Notes 2020 2019 2020 2019

Assets

Non-Current Assets

Property, plant and equipment 4 73,382,198 47,487,774 615,982 727,758

Right-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 - - 121,475,497 121,010,497

Investments in associates 9 459,554 625,910 - -

Loans to group companies 10 - - 6,550,000 6,550,000

Loans to directors, managers and employees 11 910,000 - - -

Deferred tax 12 2,646,100 2,280,922 2,064,153 218,862

442,142,121 450,431,343 145,548,929 128,507,117

Current Assets

Loans to group companies 10 - - 176,168,526 125,771,663

Loans to shareholders - 28,547 - -

Loan to associate 13 47,391 84,772 - -

Trade and other receivables 14 20,947,667 22,550,322 364,597 479,796

Investments at fair value 15 36,689,681 36,865,109 25,138,979 25,138,979

Operating lease asset 6 3,274,435 1,627,262 - -

Current tax receivable 1,229,610 967,177 745,750 198,081

Cash and cash equivalents 16 159,471,432 135,024,089 36,995,170 61,050,035

221,660,216 197,147,278 239,413,022 212,638,554

Total Assets 663,802,337 647,578,621 384,961,951 341,145,671

Equity and Liabilities

Equity

Equity Attributable to Equity Holders of Parent

Share capital 17 326,154,200 324,779,200 326,154,200 324,779,200

Reserves 7,056,544 6,181,035 629,259 629,259

Retained income 150,768,811 120,348,317 35,844,916 14,084,458

483,979,555 451,308,552 362,628,375 339,492,917

Non-controlling interest 2,437,299 2,283,980 - -

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

Liabilities

Non-Current Liabilities

Borrowings 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 37,668

Current Liabilities

Trade and other payables 19 37,258,865 35,366,945 789,042 1,615,018

Loans from group companies - - - 68

Borrowings 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 1,615,086

Total Liabilities 177,385,483 193,986,089 22,333,576 1,652,754

Total Equity and Liabilities 663,802,337 647,578,621 384,961,951 341,145,671

78




Statement of

Profit or Loss and Other

Comprehensive Income

Group

Company


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 62,291,848

Other income 22 613,133 5,021,901 2,497,362 2,745,391

Other 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 48,049,122

Investment revenue 25 10,977,791 9,631,577 4,522,695 5,018,217

Finance 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 53,067,339

Taxation 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 50,277,911

Non-controlling interest 976,919 1,073,236 - -

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

Per share information

Average number of shares

Weighted average number of shares 302,863,640 302,741,722 - -

Earnings per share 36

Earnings per share (c) 21.62 21.05 - -

Diluted earnings per share (c) 21.62 21.05 - -

Net asset value per share

Net 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 of

Changes in Equity

Figures in Rand

Share

capital

Foreign

currency

translation

reserve

Revaluation

reserve

Share

based

payment

reserve

Other

NDR

Total

reserves

Retained

income

Total

attributable

to equity

holders of

the group /

company

Noncontrolling

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

80




Statement of Changes in Equity [continued]

Figures in Rand

Share

capital

Foreign

currency

translation

reserve

Revaluation

reserve

Share

based

payment

reserve

Other

NDR

Total

reserves

Retained

income

Total

attributable

to equity

holders of

the group /

company

Noncontrolling

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

Cash Flows

Group

Company


Cash flows from operating activities

Profit 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 8,064,723 115,199 645,529

Trade 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) 48,725,261

Interest income 9,188,211 8,465,949 3,353,572 4,459,311

Dividends received (trading) 5,339,789 1,893,910 46,093,347 558,906

Finance 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 activities

Purchase 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 - - - 947,325

Loans 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 - 25,000,000

Loans to shareholders repaid 28,547 91,834 - -

Net cash from investing activities 5,520,153 (12,191,821) (27,221,202) (9,956,418)

82




Statement of Cash Flows [continued]

Group

Company


Cash flows from financing activities

Repayment 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) 5,949,405

Cash 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




Accounting Policies

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 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.

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.

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.

84




Accounting Policies [continued]

1.4 Significant judgements and sources of estimation uncertainty [continued]

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.





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:

Item

Depreciation

method

Average

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

86





1.7 Financial instruments [continued]

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 forwardlooking

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).






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


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

88






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


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.





1.8 Tax [continued]

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;

90





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:

Depreciation Average

Item

method 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 cashgenerating

unit to which the asset belongs is determined.





1.10 Impairment of assets [continued]

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.

92





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.




Notes to the Consolidated

Financial Statements

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.

Group

01 March 2019

Company

01 March 2019

Operating lease commitment at 28 February 2019 as previously disclosed 2,277,247 36,762,038

Discounted 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:

94




Notes to the Annual Financial Statements [continued]

3.1 Standards and interpretations effective and adopted in the current year [continued]

Standard/ Interpretation:

• Long-term Interests in Joint Ventures and

Associates - Amendments to IAS 28

• Prepayment Features with Negative

Compensation - Amendment to IFRS 9

• Amendments to IFRS 3 Business Combinations:

Annual Improvements to IFRS 2015 - 2017 cycle

• Amendments to IAS 12 Income Taxes: Annual

Improvements to IFRS 2015 - 2017 cycle

• Amendments to IAS 23 Borrowing Costs: Annual

Improvements to IFRS 2015 - 2017 cycle

Effective date: Years

beginning on or after

01 January 2019

01 January 2019

01 January 2019

01 January 2019

01 January 2019

• Uncertainty over Income Tax Treatments 01 January 2019

• IFRS 16 Leases 01 January 2019

Expected impact:

The impact of the amendments is

not material.


not material.


not material.


not material.


not material.


not material.

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:

• Definition of material - IAS 1 Presentation of

financial statements

• Classification of liabilities as current or non-current

- IAS 1 Presentation of financial statements

• Definition of material - IAS 8 Accounting Policies,

Changes in Accounting Estimates and Errors

Effective date: Years

beginning on or after

Expected impact:

01 January 2020 Unlikely there will be a material impact



4. Property, plant and equipment

Group 2020 2019

Cost or

revaluation

Accumulated

depreciation

Carrying

Value

Cost or

revaluation

Accumulated

depreciation

Carrying

Value

Land and buildings 65,136,185 - 65,136,185 39,548,866 - 39,548,866

Furniture and fixtures 6,935,489 (2,328,936) 4,606,553 6,898,838 (2,555,123) 4,343,715

Motor vehicles 187,925 (159,268) 28,657 187,925 (152,039) 35,886

Office equipment 4,633,319 (2,404,819) 2,228,500 1,634,629 (909,219) 725,410

IT equipment 5,065,332 (3,790,417) 1,274,915 4,156,961 (3,068,564) 1,088,397

Computer software 740,266 (634,014) 106,252 712,388 (555,513) 156,875

Leasehold improvements 34,935 (33,811) 1,124 34,935 (30,536) 4,399

Capital - Work in progress* 80,542 (80,530) 12 1,664,756 (80,530) 1,584,226

Total 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 2019

Cost or

revaluation

Accumulated

depreciation

Carrying

Value

Cost or

revaluation

Accumulated

depreciation

Carrying

Value

Furniture and fixtures 517,815 (148,215) 369,600 517,815 (101,611) 416,204

Office equipment 296,945 (216,540) 80,405 273,110 (187,671) 85,439

IT equipment 978,065 (828,129) 149,936 917,401 (708,552) 208,849

Computer software 162,089 (146,048) 16,041 147,553 (130,287) 17,266

Total 1,954,914 (1,338,932) 615,982 1,855,879 (1,128,121) 727,758





Group

Company


4. Property, plant and equipment [continued]

Reconciliation of property, plant and equipment - Group - 2020

Opening

balance Additions Disposals Transfers Revaluations Depreciation

Closing

balance

Land and buildings 39,548,866 24,963,548 - - 623,771 - 65,136,185

Furniture and fixtures 4,343,715 939,060 (24,015) 371,432 - (1,023,639) 4,606,553

Motor vehicles 35,886 - - - - (7,229) 28,657

Office equipment 725,410 561,566 (4,095) 1,212,782 - (267,163) 2,228,500

IT equipment 1,088,397 930,987 - - - (744,469) 1,274,915

Computer software 156,875 26,151 - - - (76,774) 106,252

Leasehold

improvements

Capital - Work in

progress

Reconciliation of property, plant and equipment - Group - 2019

4,399 - - - - (3,275) 1,124

1,584,226 - - (1,584,214) - - 12

47,487,774 27,421,312 (28,110) - 623,771 (2,122,549) 73,382,198

Opening

balance Additions Disposals Transfers Revaluations Depreciation

Closing

balance

Land and buildings 33,999,164 3,735,042 - - 1,814,660 - 39,548,866

Furniture and fixtures 3,401,429 309,297 (233,807) 1,686,342 - (819,546) 4,343,715

Motor vehicles 56,273 - (796) - - (19,591) 35,886

Office equipment 2,169,241 348,668 (101,378) (1,456,435) - (234,686) 725,410

IT equipment 1,146,255 654,580 (67,832) - - (644,606) 1,088,397

Computer software 46,754 160,530 - - - (50,409) 156,875

Leasehold

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

Opening

balance Additions Depreciation

Closing

balance

Furniture and fixtures 416,204 - (46,604) 369,600

Office equipment 85,439 23,836 (28,870) 80,405

IT equipment 208,849 60,663 (119,576) 149,936

Computer 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

Opening

balance Additions Depreciation

Closing

balance

Furniture and fixtures 406,892 52,284 (42,972) 416,204

Office equipment 107,843 7,910 (30,314) 85,439

IT equipment 159,721 152,757 (103,629) 208,849

Computer software 19,509 18,066 (20,309) 17,266

693,965 231,017 (197,224) 727,758

96





Group

Company


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 -





Group

Company


5. Leases (group as lessee) [continued]

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

Opening

balance Additions Disposals

Fair value

adjustments

Total

Investment property 306,121,663 10,333,094 (42,161,428) (37,675) 274,255,654

Reconciliation of investment property - Group - 2019

Opening

balance

Fair value

adjustments

Total

Investment property 308,338,397 (2,216,734) 306,121,663

98





Group

Company


6. Investment property [continued]

Encumbered properties

Carrying 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.





Group

Company


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 - -





Group

Company


7. Goodwill

Group 2020 2019

Cost

Accumulated

impairment

Carrying

value

Cost

Accumulated

impairment

Carrying

value

Goodwill 87,439,055 (430,743) 87,008,312 87,439,055 (430,743) 87,008,312

Reconciliation of goodwill - Group - 2020

Opening

balance

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 - 2019

Opening

balance

Impairment

loss

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

Total

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.





Group

Company


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

Carrying

amount

2020

Carrying

amount

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

Crowe Financial Services

SA Proprietary Limited

NFB AM International

(incorporated Mauritius)

Nations NFB Proprietary

Limited

Held by

NFB Finance Brokers

Gauteng Proprietary

Limited


Proprietary Limited

NFB Finance Brokers

Gauteng Proprietary

Limited

% ownership

interest 2020

% ownership

interest 2019

Carrying

amount 2020

Carrying

amount 2019

33.33% 33.33% 290,289 23,033

30.00% 30.00% 169,216 602,828

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.

102





Group

Company


10. Loans to related parties

Subsidiaries

NVest Securities Proprietary Limited

The 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.

NFB Finance Brokers Port Elizabeth Proprietary Limited

The 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.

Independent Executor and Trust Proprietary Limited

The loan is unsecured, bears no interest and will be repaid within

the next three years.

NVest Securities Proprietary Limited

The 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.


The loan is unsecured, bears interest at variable rates ranging

between 7.75% and 9.5%. The loan is repayable on demand.

- - 2,000,000 2,000,000

- - 3,500,000 3,500,000

- - 1,050,000 1,050,000

- - 910,000 -

- - 175,258,526 125,771,663

- - 182,718,526 132,321,663

Split between non-current and current portions

Non-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.





Group

Company


11. Loans to directors, managers and employees

Schedule of loans to directors, managers and employees

C.G. Lemmon

The 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 employees

Advances 910,000 - - -


Non-current assets 910,000 - - -


Management is of the opinion that the security held for the loan to director mitigates the 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

104





Group

Company


12. Deferred tax [continued]

Reconciliation of deferred tax (liability) / asset

At 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





Group

Company


14. Trade and other receivables [continued]


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


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

106





Group

Company


14. Trade and other receivables [continued]

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 Limited

This 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 information

Refer to note 34 Fair value information for the fair value hierarchy of Investments at Fair Value.

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 rating

Investec 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





Group

Company


17. Share capital

Authorised

1 000 000 000 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

Issued

303 241 722 (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 cost

Secured

Erf 61228 East London

The 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.

Erf 387, 389 & 394 Butterworth




Erf 11032, 11009, 11031 & 11010 Cape Town




Erf 28971 Cape Town








Erf 10015 Mdantsane, East London




Erf 90 Mthatha




Erf 3197 & 3198 Port Elizabeth




7,329,551 8,143,923 - -

1,202,873 1,749,209 - -

4,939,172 5,962,009 - -

4,445,930 5,366,500 - -

3,076,454 3,824,168 - -

4,796,193 6,549,420 - -

945,114 1,354,231 - -

3,885,256 4,782,022 - -

108





Group

Company


18. Borrowings [continued]

Erf 2785 & 2786 Pretoria




Erf 8245 Queenstown




Erf 169827 Cape Town
















Commercial Notes Series 1

These 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%.



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%.



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%.



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%.



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%.

Public offer

Issued 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%.

2,343,748 3,081,246 - -

- 3,687,929 - -

5,433,337 6,451,496 - -

3,672,551 4,282,490 - -

8,439,187 9,785,974 - -

7,911,927 8,884,588 - -

10,000,000 10,300,000 - -

4,400,000 5,630,000 - -

9,000,000 9,000,000 - -

4,300,000 4,300,000 - -

5,000,000 5,000,000 - -

34,580,000 34,050,000 - -

125,701,293 142,185,205 - -





Group

Company


18. Borrowings [continued]


Non-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 risk

Refer to note 33 Financial instruments and financial risk management for details of liquidity risk exposure and management.

Exposure to interest rate risk

Refer 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 2,537,558 1,454,657 - -

control account

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 risk

Refer 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 payables

The fair value of trade and other payables approximates their carrying amounts.

20. Revenue

Revenue from contracts with customers

Rendering of services 263,987,588 255,727,550 8,628,684 6,919,531

Revenue other than from contracts with customers

Rental 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 55,372,317

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

110





Group

Company


20. Revenue [continued]

Disaggregation of revenue from contracts with customers

The group disaggregates revenue from customers as follows:

Rendering of services

Commissions 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 time

Rendering 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 services

Administration 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.





Group

Company


23. Other operating gains (losses)

Gains (losses) on disposals, scrappings and settlements

Investment property 6 838,572 - - -

Property, plant and equipment 4 5,093 (224,653) - -

843,665 (224,653) - -

Fair value losses

Investment property 6 (37,675) (2,216,734) - -

Financial assets designated as at fair value

- (8,823) - -

through profit or loss

(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 - external

Audit fees 1,289,053 1,045,686 288,567 192,250

Remuneration, other than to employees

Administrative 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 costs

Salaries, 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 charges

Premises 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 amortisation

Depreciation 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 allowances

Trade and other receivables 102,656 192,282 - -

112





Group

Company


25. Investment income

Dividend income

Equity instruments at fair value through profit or loss:

Listed investments - Local 1,789,580 1,165,628 1,319,534 558,906

Interest income

Loans 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 4,459,311

Total 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

Current

Local 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 expense

Reconciliation 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 %





Group

Company


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.

114





Group

Company


31. Related parties

Relationships

Subsidiaries 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 Trust

The Gavin Ramsay Family Trust

B.J. Connellan

The Andrew and Heather Kent Trust

R.M. McIntyre

The Rayner Sparg Trust

Related party balances

Loan accounts - Owing by related parties

Independent 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 parties

NVest Securities Proprietary Limited - - (150,411) (150,933)

NVest Properties Limited - - (13,364,695) (10,736,355)

Commission received from related parties

NFB Insurance Brokers (Border) Proprietary Limited - - (49,923) (53,069)

Rent paid to (received from) related parties

NFB 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 -





Group

Company


31. Related parties [continued]

Administration fees paid to/(received from) related parties

Independent Executor and Trust Proprietary Limited - - (261,876) (241,205)


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 parties

NFB Asset Management Proprietary Limited - - (3,347,413) (784,392)


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

Other

benefits*

Commission

earned and

other benefits

as directors’

of subsidiaries

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

Total

1,278,884 253,068 16,801,386 18,333,338

2019

Emoluments

Other

benefits*

Commission

earned and

other benefits

as directors’

of subsidiaries

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

Total

2,748,052 435,165 17,549,669 20,732,886

116





Group

Company


32. Directors’ emoluments [continued]

Non-executive

2020 Directors’ fees Other fees Total

J. 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 Total

J. 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 value

through

profit or loss -

Mandatory

Fair value

through

profit or loss -

Designated

Amortised

cost

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

Total

36,539,681 150,000 175,600,897 212,290,578





33. Financial instruments and risk management [continued]

Group - 2019

Note(s)

Group

Fair value

through

profit or loss -

Mandatory

Fair value

through

profit or loss -

Designated

Amortised

cost

Company


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

Total

36,715,109 150,000 156,022,996 192,888,105

Company - 2020

Note(s)

Fair value

through

profit or loss -

Mandatory

Amortised

cost

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

Total

25,138,979 219,727,713 244,866,692

Company - 2019

Note(s)

Fair value

through

profit or loss -

Mandatory

Amortised

cost

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

Total

25,138,979 193,383,031 218,522,010

Categories of financial liabilities

Group - 2020

Note(s)

Amortised

cost Leases Total

Trade 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

Trade and other payables 19 23,338,614 23,338,614

Borrowings 18 142,185,205 142,185,205

Total

165,523,819 165,523,819

118





Group

Company



Amortised

Company - 2020

Note(s)

cost Leases Total

Trade 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

Total

Trade and other payables 19 774,897 774,897

Loans from group companies 68 68

774,965 774,965

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:

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)%





Group

Company



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.

The maximum exposure to credit risk is presented in the table below:

Group

Note(s)

Gross

carrying

amount

2020 2019

Credit loss

allowance

Amortised

cost / fair

value

Gross

carrying

amount

Credit loss

allowance

Amortised

cost / fair

value

Loans to shareholders - - - 28,547 - 28,547

Loans to directors,

11 910,000 - 910,000 - - -

managers and employees

Loans receivable 13 47,391 - 47,391 84,772 - 84,772

Investments at fair value 15 150,000 - 150,000 150,000 - 150,000

through profit or loss

Operating lease asset 6 5,665,920 - 5,665,920 8,534,024 - 8,534,024

Trade and other

14 15,467,011 (294,938) 15,172,073 21,308,899 (192,282) 21,116,617

receivables

Cash and cash

16 159,471,432 - 159,471,432 135,024,089 - 135,024,089

equivalents

181,711,754 (294,938) 181,416,816 165,130,331 (192,282) 164,938,049

2020 2019

Company

Note(s)

Gross

carrying

amount

Credit loss

allowance

Amortised

cost / fair

value

Gross

carrying

amount

Credit loss

allowance

Amortised

cost / fair

value

Loans to related parties 10 182,718,526 - 182,718,526 132,321,663 - 132,321,663

Cash and cash

16 36,995,170 - 36,995,170 61,050,035 - 61,050,035

equivalents

219,713,696 - 219,713,696 193,371,698 - 193,371,698

120





Group

Company



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

year

1 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

year

1 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

year

1 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 Total

Carrying

amount

Trade and other payables 19 1,556,545 1,556,545 1,556,545

Loans from group

68 68 68

companies

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.





Group

Company


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

Financial assets mandatorily at fair value through

profit or loss

Notes(s)

15

Listed shares 4,751,669 3,462,174 - -

Total 4,751,669 3,462,174 - -

Level 2


Assets

Financial assets mandatorily at fair value through

profit or loss

Notes(s)

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

65,136,185 39,548,866 - -

(refer note 6 for detailed valuation technique)

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.

122





Group

Company


35. Segmental reporting

2020 Revenue

Profit

before tax Assets Liabilities

Interest

revenue

Tax

expense

Segments:

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 Revenue

Profit

before tax Assets Liabilities

Interest

revenue

Tax

expense

Segments:

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





Group

Company


36. Earnings per share

2020 2019

Gross 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

- (391,462) - -

earnings of associate

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

Option

grant date

Subscription

price (Rand)

Outstanding

as at 1 March

2019

Lapsed/

cancelled

during the

period

Exercised

Outstanding

as at

29 February

2020

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) -

124





Group

Company


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 of

Shareholders

NVest shareholder spread as at 29 February 2020 is set out below:

Type of shareholders

Number of

Shareholders

Number of

Shares

Percentage

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%

126


General

Information

Company Name

Date and place

of incorporation

Company

Registration Number

Nature of business and

principal activities

Directors

NVest Financial

Holdings Limited

3 July 2008

– Republic of South Africa

2008/015990/06

Financial Services

Jonathan Goldberg

Chairman – Independent


Dr Lana Weldon

Lead Independent


Auditors

Attorney


Chartered Accountants SA

(Registration Number

2010/016204/21)

6th Floor,

119 Hertzhog Boulevard

Foreshore,

Cape Town, 8001

(PO Box 2275, Cape Town, 8001)

Cooper Conroy Bell and

Richards Inc


1983/013472/21)

26 Pearce Street

Berea

East London

Eastern Cape

Lusanda Mangxamba

Independent


Dylan Schemel


Company Secretary

Brendan Joseph Connellan

NFB House,

42 Beach Road,

Nahoon,

East London, 5241

Registered office

Anthony Godwin

Group CEO

– Executive Director

Charl Herselman

Group Finance Director

– Executive Director

Michael Estment

Executive Director

Chris Lemmon

Executive Director

Brendan Connellan

Executive Director

NFB House,

42 Beach Road,

Nahoon,

East London, 5241

Designated Advisor

Transfer Secretaries

Arbor Capital Sponsors

(Registration number

2006/033725/07)

20 Stirrup Lane

Woodmead Office Park

Cnr Woodmead Drive and Van

Reenens Avenue

Woodmead

Sandton, 2191

Computershare Investor Services

(Pty) Limited

Registration Number:

2004/003647/07

Rosebank Towers

15 Biermann Ave

Rosebank

Johannesburg, 2196

(PO Box 61051 Marshalltown, 2107)

Postal address PO Box 8132

Nahoon

East London, 5210

Stockbroker

NVest Securities (Pty) Limited


2008/015192/07)

(Member of the JSE Limited)

Financial Services Board Licence

No: 44699

NFB House

42 Beach Road

Nahoon, 5241


128


Notice of Annual

General Meeting & Proxy

NVEST FINANCIAL HOLDINGS LIMITED

(Incorporated in the Republic of South Africa)

(Registration number 2008/015990/06)

(“NVest” or “the Company”)

DIRECTORS

Anthony 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***

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 brendanc@nvestholdings.co.za by not later

than 11:00 on Friday, 14 August 2020, so that the Company

can provide for a teleconference or videoconference dialin

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.


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 nonexecutive

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.


each of ordinary resolutions 4 and 5 to be adopted is 50%


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.


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 – Reappointment

of Audit and Risk Committee

member – Dylan Schemel

“RESOLVED THAT Dylan Schemel be and is hereby reappointed

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.



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.



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.”

130


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.


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.


each of ordinary resolutions 9 and 10 to be adopted is 50%


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 45 842

Chairperson

Remuneration and Nominations Committee 25 815

Member

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.



special resolution 3 by shareholders present or represented by

proxy at the Annual General Meeting and entitled to exercise


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

132


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/or

c. to a director or prescribed officer of a related or

inter-related company; and/or

d. 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.

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 4 by shareholders present or

represented by proxy at the Annual General Meeting and

entitled to exercise voting rights on the resolution is required.

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 statement

In 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 statement

The 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 changes

Other 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.



special resolution 5 by shareholders present or represented

by proxy at the Annual General Meeting and entitled to

exercise voting rights on the resolution is required.

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.

134


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 6 by shareholders present or represented by proxy at the Annual General Meeting and entitled to exercise


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 Connellan

Company 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):

Ordinary Resolution Number 1 –

Adoption of Annual Financial Statements


Appointment of director – Charl Herselman


Director retirement and re-election – Lusanda Mangxamba


Director retirement and re-election – Dylan Schemel


Appointment and remuneration of auditors


Re-appointment of Audit and Risk Committee member – Dylan Schemel


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


Endorsement of NVest’s remuneration policy


Endorsement of the implementation of NVest’s remuneration policy

Number of votes

For Against Abstain

136


Special Resolution Number 1 –

General authority to allot and issue shares for cash


Authority to issue shares, securities convertible into shares or rights that may

exceed 30% of the voting power of the current issued share capital


Non-Executive Directors’ remuneration

Special resolution number 4 –

General authority to enter into funding agreements, provide loans or other

financial assistance


General authority to acquire (repurchase) shares


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. If

6.1 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; or

7.2 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)

138


(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)).

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)).

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


140


NVFH 2020 Integrated Annual Report

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