NICTUS LIMITED — Annual Report 2021

Jun 30, 2021

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NICTUS LIMITED INTEGRATED ANNUAL REPORT for the year ended 31 March 2021

Approval of the integrated annual report

ABOUT THIS REPORT

The 2021 integrated annual report builds on the disclosures contained in last year’s integrated annual report and has been prepared in line with best practice based on the principles of the King IV[TM] Report on Corporate Governance for South Africa, 2016 (King IV[TM][*] ) and the provisions of the Companies Act of South Africa, 71 of 2008 (Companies Act of South Africa) and the JSE Limited (JSE) Listings Requirements. Audited financial statements are published as part of the integrated annual report. The audited financial statements are also available to shareholders on the group website www.nictuslimited.co.za and on request from the company secretary at groupsec@nictus.com.na.

The audit and risk committee oversees the preparation of the integrated annual report. The committee recommended the report for approval to the group’s board of directors (board).

Scope and boundary of the report

This report covers the activities and performance of the Nictus Group (the group) which includes Nictus Limited (Nictus or the company), the holding company of the group, and all its subsidiaries, for the year ended 31 March 2021. The companies operate in South Africa.

There have been no changes in the scope and boundary of the report from last year. The reporting complies with International Financial Reporting Standards (IFRS), the Companies Act of South Africa and the JSE Listings Requirements. While management has also considered the reporting guidelines of the Integrated Reporting Committee of South Africa, not all of these guidelines have been incorporated in this report.

Forward-looking statements

The integrated annual report includes forward-looking statements relating to the financial position and results of the group’s operations. These statements, by their nature, involve uncertainty as they relate to events, and depend on circumstances, that may or may not occur in the future.

Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, global and national economic conditions, the cyclical nature of the retail sector, changes in interest rates, credit and the associated risk of lending, collections, inventory levels, gross and operating margins, capital management, the execution of the business model and competitive and regulatory factors. The group undertakes no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information or future events or otherwise. The forwardlooking statements have not been reviewed or reported on by the group’s auditor.

Independent assurance

Assurance of the financial statements has been provided by the external auditor, PricewaterhouseCoopers Inc.

Feedback

The group aims to establish and maintain constructive and informed relationships with all of its stakeholders.

Stakeholders are encouraged to provide feedback on the integrated annual report at groupsec@nictus.com.na which will enable the group to gauge the adequacy and standard of its integrated reporting.

• Copyright and trademarks are owned by the Institute of Directors in Southern Africa NPC and all of its rights are reserved.

CONTENTS

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Overview

ifc About this report

• 2 About Nictus

• 4 Four-year review of the group

• 6 High-level risks of the group

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• 10 Board of directors, executive management and company secretary

• 12 Chairperson’s report

• 13 Group managing director’s report

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• 16 Corporate governance report

• 24 Remuneration report

• 27 Remuneration policy

• 28 Corporate social responsibility report

Financial statements

• 29 Group annual financial statements and company annual financial statements

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Shareholder information

• 106 Notice of annual general meeting

• 113 Electronic participation

• 115 Form of proxy

• 117 Notes to the form of proxy

• 119 Definitions, ratios and terms

• ibc Contact information

• 14 Operational review

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PROFIT FOR THE YEAR
increased by
GROUP REVENUE 164,34% to
increased by R9,6 million
(2020: R3,6 million)
8,64% to
R57,9 million
(2020: R53,3 million)
DIVIDENDS DECLARED
increased by
66,67% to
GROUP TOTAL
5,00 cents per share ASSETS
(2020: 3,00 cents per share)
decreased by
INVESTMENT INCOME 10,45% to
FROM OPERATIONS R671,2 million
decreased by (2020: R749,5 million)
7,48% to
R39,7 million
(2020: R42,9 million)
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Nictus Limited / Integrated annual report 2021 1

Overview

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ABOUT NICTUS

Code of conduct

I will:

Nictus is a retailer of household furniture, electrical appliances and home electronics sold through the Nictus Meubels Proprietary Limited brand as well as a non-life insurer through the Corporate Guarantee (South Africa) (RF) Limited brand.

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Vision

Philosophy

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Nictus is an independent, diversified investment group that creates above-average value for shareholders and other stakeholders, through sustainable growth.

Nictus has been successful in change initiatives. The challenge remains to reach a top level of EXCELLENCE throughout the organisation. The philosophy and core focus will be to drive EXCELLENCE in every aspect of the organisation and, through this, establish Nictus as a leading entity wherever we are present.

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Core values

Mission

• Individual and collective ownership

With a culture of EXCELLENCE

and through visionary and dynamic leadership, we will achieve our vision through:

• Teamwork

• Respect

• Adaptability

• Protecting our independence

• Integrity

• Expanding our business base in Southern Africa

• Transparency

• Fanatical discipline

• Growing a satisfied customer base

• Optimising all resources

• Being innovative and technologydriven

• Being the preferred employer

Treat others as I want to be treated by them, the golden rule.

Always strive to do what is best for my group, my country and my planet.

Abide by the values, policies and procedures of the group, the laws of my country and the universal human principles of all that is good and just.

Be honest, reliable, fair and open in everything I say, write and do and accept responsibility for the consequences.

Protect the group’s assets, information and reputation.

Value and respect the diversity of beliefs, cultures, convictions and habits of the people of our group and the country in which we operate.

Disclose to the group any real or perceived situations where my private interests or the interests of the members of my immediate or extended family or other persons close to me may interfere with the interests of the group.

Not give or receive gifts or benefits in contravention of the policies of the group and no gift, irrespective of the value, should influence me to change my business decision to the detriment of the group.

Seek new, better and more innovative ways to do my work and perform to the utmost of my abilities.

Not remain silent in the face of dishonesty, malice, disrespect, intolerance or injustice.

“We are what we repeatedly do. Excellence then, is not an act but a habit.”

Aristotle (384 BC – 322 BC)

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Milestones

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1945
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Nictus was founded

1955 The selling of new furniture under the Nictus brand name first commenced in Namibia 1969 Primary listed on the JSE in 1969, under general retailers, JSE code: NCS 1983

The first South African furniture outlet was established in Randburg

2002

Corporate Guarantee (South Africa) (RF) Limited was founded. The company has built up a client base throughout South Africa

2012

Since the 2012 unbundling of the Namibian operation, the South African group is making steady progress towards sustainable profit and growth with effective management being established in South Africa

2019

Primary listed on the JSE for 50 years

2020 Nictus is 75 years old

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Insurance Furniture
100% 100%
segment retail segment
Corporate Guarantee Nictus Meubels Proprietary Limited
(South Africa) (RF) Limited www.nictusfurnishers.co.za
www.corporateguarantee.co.za
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The insurance segment of the The group has two furniture group is run through Corporate retail stores in South Africa. Nictus Guarantee (South Africa) (RF) Meubels Proprietary Limited places Limited, which brings a unique the customer first by continually striving towards EXCELLENCE. approach to non-life insurance Helpful personnel provide service through the alternative risk transfer with dedication and motivation, while model. The head office is currently maintaining integrity, focus and situated in Bryanston and utilises sound values. Products are of the group administration staff. HIGHEST QUALITY and provide excellent value for money. Stores The high levels of recurring sales are situated in Louis Trichardt and in both the furniture retail and Polokwane as at year end. insurance segments are evidence of service satisfaction, trust and The furniture retail segment is customer loyalty. As part of the primarily focused on the expanding commitment to service excellence, middle to higher income market in the living standards measurement the group ensures that clients are (LSM) 7 category and above. The served by staff from their own group has a recurring customer base communities. in the areas that we operate in. Total number of employees 42 REVENUE REVENUE R16,3 million R41,6 million (2020: R12,4 million) (2020: R42,3 million) ASSETS ASSETS R612,1 million R43,7 million (2020: R710,2 million) (2020: R35,3 million)

Please refer to the website for more information at www.nictuslimited.co.za.

Nictus Limited / Integrated annual report 2021 3

Overview

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FOUR-YEAR REVIEW OF THE GROUP

Figures in R’000	2021 2020 2019 2018
Statements of fnancial position Assets Non-current assets Current assets	57 244 57 870 55 605 37 916 613 912 691 610 607 260 602 390
Total assets	671 156 749 480 662 865 640 306
Equity and liabilities Total shareholders' equity Non-current liabilities Current liabilities	103 595 95 555 95 441 102 727 11 115 3 186 6 291 2 400 556 446 650 739 561 133 535 179
Total equityand liabilities	671 156 749 480 662 865 640 306
Statements of proft or loss and other comprehensive income Revenue	57 915 53 310 50 752 47 361
Operating proft Financingcosts	11 676 3 483 6 543 4 870 (212) (260) – –
Proft before taxation Taxation (expense)/credit	11 464 3 223 6 543 4 870 (1 842) 417 (985) 542
Proft after taxation	9 622 3 640 5 558 5 412
Attributable to: Owners	9 622 3 640 5 558 5 412
Proft after taxation Other comprehensive income for theperiod, net of tax	9 622 3 640 5 558 5 412 – (1 545) – –
Total comprehensive income for theyear	9 622 2 095 5 558 5 412
Attributable to: Owners	9 622 2 095 5 558 5 412
Ordinary dividends paid Number of ordinary shares issued (number of shares) Weighted average number of shares	1 603 2 004 1 988 1 988 53 443 500 53 443 500 53 443 500 66 269 940 53 443 500 53 443 500 61 736 760 66 269 940

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2021 2020 2019 2018

Key ratios Performance per ordinary share Basic earnings (cents) Headline earnings (cents) Dividends paid (cents) Net worth (cents) Proftability and asset management Net operating income* to turnover (%) Return on assets managed (%) Net asset turn (times) Return on shareholders' equity (%) Liquidity Dividend cover (times) Liability ratio Current ratio JSE performance Market price (cents) High Market price (cents) Low Market price at year end (cents) Price earnings ratio Earnings yield (%) Volume of shares traded to weighted number of issued shares (%) Market capitalisation (R'000)

18,00 6,81 9,00 8,17 18,02 6,86 8,92 8,17 3,00 3,75 3,00 3,00 193,84 178,80 178,58 155,01 20,16 6,53 12,89 10,28 10,94 3,47 6,33 4,71 0,54 0,53 0,49 0,46 9,29 3,81 5,82 5,27 6,00 1,82 2,80 2,72 5,24 6,76 5,70 5,24 1,10 1,06 1,08 1,13 100 100 70 75 36 41 35 31 70 90 69 45 3,89 13,21 7,66 5,51 25,71 7,57 13,05 18,16 1,96 1,11 1,14 1,07 37 410 48 099 36 876 29 821

* Amounts stated before taking into account finance costs.

Refer to page 119 for definitions, ratios and terms.

Nictus Limited / Integrated annual report 2021 5

Overview

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HIGH-LEVEL RISKS OF THE GROUP

Economic and political outlook risk

Uncertain economic and political conditions may impact consumer confidence

Impact Weak economic conditions resulting in decreased proftability or losses sufered by customers and clients, which could negatively afect our ability to achieve our proft targets.	Mitigation Changes in the current economic and political environments are consistently monitored at group level. In instances where changes in the economic environment are identifed that could negatively impact the group, these are discussed, assessed and, if required, countermeasures are implemented immediately to mitigate potential losses.

Brand and reputation risk

Reputational risk

Impact Should customers and stakeholders no longer trust the brands within the group, sales could deteriorate and shareholder value would be impaired.	Mitigation Managing executives and the board ensure good corporate governance, sound business practices and compliance with laws and regulations. Client and stakeholder relationships further play a vital role in mitigating the risk.

Market risk

Exposure of investments to market risk

Impact

Mitigation

Fluctuations and movements of investment balances could Senior management, together with the group’s investment negatively impact profitability. committee, evaluate and manage market risk as well as the mitigating factors with regard to these risks. Sound relationships exist with investment institutions and regular updates on market risk are received and evaluated. The size of the investment portfolio exposed to market risk is actively discussed and adjusted according to the risk appetite of the company as well as current and anticipated market conditions. Exposure limits are carefully considered to minimise the effect of sudden fluctuations in the market when investments are made. Furthermore, investments are made with the intention to obtain maximum return with minimal to no loss in the initial capital invested.

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Insurance segment Furniture retail segment

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[Group ]
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Concentration risk

The risk of losses arising from concentrated exposure to a particular group of customers (e.g. geographic location)

Impact Mitigation The occurrence of an isolated or specific event could result Customer relationships are managed on an ongoing basis to in a disproportionate, negative impact on profitability. enable the company to proactively manage identified risk areas and to avert losses.

Appropriate thresholds, actuarial modelling and risk appetite are defined and monitored at board level to address concentration risk. Our marketing strategy is aimed at increasing exposure in other geographic areas.

Operational risk

Weakness in or failure of our internal control systems

Impact Mitigation

Any weakness in or failure of internal control systems A strong focus is placed on the maintenance of internal control will negatively affect our ability to effectively manage our systems throughout the group. A strict credit granting policy is in business, control inventory and contain costs. place for all customers before credit sales are approved. Highly skilled employees with a high level of integrity are employed in This would result in losses for the group. key positions. Internal audit further provides feedback on internal controls of the group.

Inadequate control of group assets

Impact Mitigation Inadequate control of group assets could result in financial The group’s investment committee oversees investments within losses to the business. the group structure. The focus of this committee is to optimise returns within the parameters of the various laws and regulations applying to the group and its subsidiaries.

Supplier relationships

Impact Mitigation Deterioration of supplier relationships could result in a Open communication channels exist with all suppliers to ensure decrease in profits due to non-availability of inventory and that good relationships are maintained at all times. Agreed trade assistance to enhance customer service. terms are in place and these terms are respected at all times.

Nictus Limited / Integrated annual report 2021 7

Overview

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HIGH-LEVEL RISKS OF THE GROUP continued

[Group ]

Insurance segment Furniture retail segment

Operational risk continued

Client relationships

Impact

Mitigation

Deterioration of client relationships could result in failure to Clients are treated with respect at all times. Furniture customers meet sales and premium targets. can contact the various branch managers to discuss problems that may arise. Credit agreements with clients further ensure compliance with our terms and conditions of sales. Such terms and conditions are explained to the client in detail prior to the conclusion of the sale. Relationships with insurance clients, once established, are managed on an ongoing basis.

Compliance with various laws and regulations

Impact Mitigation Non-compliance with various laws and regulations could Qualified people are employed within the group to monitor result in penalties being incurred as well as reputational changes in laws and regulations as well as compliance damage. therewith. Changes in possible impacts of ever-changing laws and regulations are discussed at group and subsidiary level. Compliance to the various laws and regulations is non-negotiable.

Information technology (IT) failure and data security

Impact Business interruption, data losses and breaches of client confdentiality could result in reputational damage, fnancial losses and non-compliance with laws and regulations.	Mitigation Senior management has always adopted a proactive approach to managing the IT environment by outsourcing key functions to reputable third parties and maintaining sound business relationships with key software licensors.

Credit risk

Credit risk on counterparties

Impact Default from a counterparty being an investment house or bank could result in fnancial losses to the group.	Mitigation Senior management, together with the investment committee, evaluate the credit risk on all counterparties and monitor exposure to institutions and industries.

Bad debts

Impact Losses incurred through non-performance of debtors due to economic conditions.	Mitigation Strict controls are in place for the credit granting process and the follow-up and collection of debt is a continuous process with additional focus by branch personnel and management. Authorisation levels are in place as well as repossession procedures.

8 Nictus Limited / Integrated annual report 2021

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Leadership

• 10 Board of directors, executive management and company secretary

• 12 Chairperson’s report

• 13 Group managing director’s report

• 14 Operational review

Nictus Limited / Integrated annual report 2021 9

Leadership

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BOARD OF DIRECTORS, EXECUTIVE MANAGEMENT AND COMPANY SECRETARY

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Professor Johan Willemse (66)

Independent non-executive chairperson

Professor Barend J Willemse (Johan) obtained his MCom (Economics) from the University of the Free State (UFS) and his PhD (Agricultural Economics) from the University of Pretoria, for which he received the Protein Research Trust award for the best PhD. A Cochrane bursary to study at the Illinois University (USA) was awarded to him in 2003.

He has received various awards for his work, which included two awards as the agricultural writer of the year, the Absa/Sake economist of the year, the Animal Feed Manufacturers Association person of the year, the agriculturalist of the year by the central region of the Agricultural Writers Association and was nominated as Bloemfonteiner of the year in 2009.

His experience includes: member of the National Agricultural Marketing Council, trustee of the Oilseeds and Protein Research Trust, chief economist of Agri SA and member of the SA Maize Board’s management team as well as entrepreneur, together with his wife Marlene and two daughters, in various businesses, including agri-business consulting, feed manufacturing and tourism. He was a full professor at the Department of Agricultural Economics and chairperson for five years at the UFS. He served on the Absa Group and Absa Bank boards for more than five years as an independent non-executive director and for three years as a board member of Absa Financial Services Limited (serving on various committees).

Committees: Remuneration and nomination, audit and risk, investment (chairperson)

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Gerard Tromp (40)

Executive group managing director and executive management

Gerard R de V Tromp has a BCom Marketing degree, is a chartered accountant (South Africa and Namibia) and completed his accounting articles in 2008. After the completion of his articles, he joined the group in 2009 as the group company secretary, which role he fulfilled until 2012. During 2012, he was appointed as the managing director of the furniture retail segment. During 2014, he was appointed as deputy managing director of the group. On 18 April 2016, he was appointed as managing director of the group.

Committees: Social and ethics, investment

Eckhart Prozesky (35)

Executive group financial director and executive management

Eckhart H Prozesky is a chartered accountant (South Africa) and completed his accounting articles in 2011. After the completion of his articles, he joined the group in 2012 as the financial manager of the furniture retail segment. On 1 March 2015, he was appointed as the financial director of the group.

Committee: Investment

Nico Tromp (72)

Non-executive director

Nicolaas C Tromp (Nico) has a BCom degree. After completing his accounting articles in 1973, he joined the group and became the managing director of the group in 1979. He served as chairperson of the group from 1998 until 2003. He is also a director/chairperson of various other companies and has acted as a trustee of numerous trusts for the past 32 years. He stepped down as managing director of the group on 18 April 2016.

10 Nictus Limited / Integrated annual report 2021

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Philippus Tromp (45)

Non-executive director

Philippus J de W Tromp has a BEcon, EDP and SMP and was appointed as a non-executive director of Nictus Limited in 2012. He is currently the group managing director of Nictus Holdings Limited and has served the group for the past 17 years.

Committee: Social and ethics (chairperson)

Ronnie de Vrye (67)

Independent non-executive director

Cornelius J de Vrye (Ronnie) is a qualified chartered accountant (South Africa) and has 31 years’ experience in corporate banking and financial services, 16 of which were at executive level and 15 at non-executive board level. He has also served as an independent non-executive director in the insurance and investment industry from 2009 to date.

Committees: Remuneration and nomination, audit and risk (chairperson)

Sarita Martin (49)

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Independent non-executive director

Sarita Martin is an admitted attorney who holds various qualifications including a BProc, LLB, MBA (GIBS), Diploma in Advanced Banking and Certificate in Compliance Management. She has attended the Banking Board Leadership Programme at GIBS and has been an Institute of Directors Southern Africa (IoDSA) certified director since 2013 as well as a Fellow of the Institute of Directors. She has been a member of the core facilitator faculty of the IoDSA since 2013 and has served as a mentor on the board and as company secretary of Mentoring Circles at the IoDSA and regularly performs board appraisals in private as well as in the public sector. She also provides governance advisory, facilitation and training services for the IoDSA on a regular basis.

Having practised as an attorney, she has also held various executive positions in the fields of company secretariat for large JSE-listed companies and compliance especially within the financial services sector since 1999.

Since 2013, she has served as an independent non-executive director of a JSE-listed company where she has also served on various committees.

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She is a non-executive director and deputy chairperson on the ActionAid South Africa advisory board and is the chairperson of a company listed on the JSE Debt Market. She has also contributed to articles on corporate governance and served on panels and in the media on matters related to corporate governance. Gerard R de V Tromp has a BCom Marketing degree, is a chartered accountant (South Africa and Namibia) and completed his accounting articles in 2008. After the completion of his articles, he joined the group in 2009 as the group company secretary, which role he fulfilled until 2012. During 2012, he was appointed as the managing director of the furniture retail segment. During 2014, he was appointed as deputy managing director of the group. On 18 April 2016, he was appointed as managing director of the group.

Committees: Remuneration and nomination (chairperson) , audit and risk

Ion Gerber (34)

Executive management: Insurance segment (prescribed officer)

Stephanus J Gerber (Ion) is a qualified chartered accountant (South Africa) and a member of executive management. He completed his accounting articles in 2013, whereafter he joined the group and was appointed manager of the insurance segment in 2016 and as chief executive officer, effective 1 April 2020.

Committee: Social and ethics

Willem Boshoff (35)

Company secretary

Willem H Boshoff is a qualified chartered accountant (Namibia) and completed his accounting articles in 2012. He fulfils the role of nominee group secretary of Veritas Eksekuteurskamer Proprietary Limited.

Nictus Limited / Integrated annual report 2021 11

Leadership

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Professor Barend J Willemse
Chairperson
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CHAIRPERSON’S REPORT

The outlook for economic growth in 2021 is an increase in the order of 3,5% and a rebound in consumer expenditure in the order of 3,8%. It will take another two to three years, however, to recoup the lost wealth, given an appropriate economic policy.

In spite of an onerous and ever-developing regulatory environment in the insurance segment, we are happy to report that we received confirmation from the regulator, subsequent to an on-site visit, that we comply with the required regulations. We maintain a good working relationship with the regulator, and we are satisfied that our product offering complies with all relevant laws and regulations.

The South African economy shrank by 7% during 2020, a result of the COVID-19 pandemic and the extended lockdown period, with more than two million workers losing their jobs. Household consumption expenditure declined by 5,4% in real terms in 2020, compared to the average expenditure increase of 3,2% per year for the previous 20 years. This was one of the deepest recessions in South African economic history. The board and the management team took appropriate steps to protect the business including, among others, cost savings.

The board and management remain focused on maintaining our values and integrity and fulfilling our fiduciary duties to our shareholders. We live in a society where ethical behaviour is in short supply. We strive to do business in an ethical fashion with the support and dedication of our staff.

We are therefore exceedingly grateful for the excellent results and strong growth in profits during a very difficult time in our economic history and business environment. This was also aided by a significant rebound in the stock market, resulting in a recoupment of our losses from the previous financial year, especially for the insurance segment. Claims in this segment increased during the 2021 financial year, however, the business remains profitable. The furniture retail segment continues to collect instalment payments, while also repositioning the business with exclusive stock deals with suppliers. The provision for bad debts remains well below the industry norm, a result of good management and credit control. The segment retained customers after lockdown and with a good stock position and quality products, profits increased.

I would like to take this opportunity to thank Gerard Swart, who retired as a director after serving and greatly contributing to the company and group for more than six years. I also want to welcome Sarita Martin as a new director, who brings a wealth of corporate governance experience to the board.

A word of thanks to the board for their dedication and focus in fulfilling their roles as directors during this tough economic period and for safeguarding our shareholders’ interests. My sincere thanks to the managing director, financial director, company secretary and staff for their enthusiasm and dedication with which they implement the company’s strategy.

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The board and the management team continually evaluate the strategic positioning of the business to adapt to a changing business environment and explore new opportunities within our risk appetite. The building in Randburg is in the process of redevelopment with a partner and we are of the opinion that this will add to cash flow and profits in the future.

Professor Barend J Willemse Chairperson

22 June 2021

12 Nictus Limited / Integrated annual report 2021

GROUP MANAGING DIRECTOR’S REPORT

Segmental performance

Insurance segment

Although the past year was one of uncertainty, business interruption and claims, our insurance segment remained well positioned to weather these circumstances. We applaud the ability of our policyholders to manage their risks through this unprecedented and challenging period. Our results prove that our niche product remains resilient and exceptionally useful in facing unpredictable and difficult times. We are grateful for the levels at which investments recovered during the past year. Our strategies for investments remained prudent and paid off as our risk appetite and risk profile were strictly adhered to. Client service remains our top priority.

Furniture retail segment

We are thankful for the support experienced during the past year and would like to extend our gratitude to our customers who remained loyal to Nictus. As a result of the national lockdown, no trading took place for the months of April and May and our shops had to be closed. This was a situation that we had never experienced before and employee morale had to be boosted while the effect of the pandemic was managed on a day-to-day basis. Credit goes to our employees who remained positive and who gave their absolute best upon return from the lockdown. We applied an intense amount of focus and the pandemic forced us to remain within our basic formulas, although we were cognisant of the need to increase efficiencies. Supplier collaborations and relationships once again proved to be a contributing factor for the achieved results.

Gerard R de V Tromp Executive group managing director

The after-effect of the full lockdown took us all by surprise and while we were fortunate to have stock items available, all synergies combined and we ultimately experienced an exceptional financial year.

Corporate governance

In the economic environment in which we operate, corporate governance remains one of the major areas of focus within the group. Promoting ethical business practices with integrity remains one of the most important factors for Nictus’ success and sustainability. We remain committed to working together with all governing and regulatory bodies, stakeholders and related parties in achieving healthy relationships and promoting sound corporate governance.

Outlook

The COVID-19 pandemic is far from over and I foresee that we will experience interesting times ahead. The after-effect may call for extreme measures and disciplines, but I remain confident that we will overcome these obstacles as we are fortunate to be in a position where we have exceptional human capital and well-preserved financial capital. There will always be business cycles with good and bad times, and we strive to obtain maximum benefit in good times and wear off the challenges of bad times.

Nictus remains committed to all our esteemed stakeholders and we will continue to build on our strategy to create wealth for them all.

Appreciation

I wish to take this opportunity to thank the employees of the group for their unqualified support and dedication during the past year, but mostly for their belief that we will endure this pandemic and that teamwork generates success. I would like to thank all of our stakeholders for their specific contributions made during the past year to assist Nictus in positioning itself for future challenges that may occur. A big thank you to the chairperson and all board members for their support, guidance and belief and for putting Nictus first.

Throughout this pandemic, we remained anchored in God and believed that He will never leave us. We are and remain humbled by His grace and mercy received and His continuous presence in our lives and in Nictus and give all thanks and glory to Him.

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Gerard R de V Tromp Executive group managing director

22 June 2021

Nictus Limited / Integrated annual report 2021 13

Leadership

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OPERATIONAL REVIEW

Nictus puts the customer first by continually striving towards service excellence with dedicated, helpful, focused and motivated staff and by maintaining our integrity, discipline and a high-value system. Quality and value products are sold at the best yield possible in the South African furniture retail industry using advanced technologies.

Nictus Meubels Proprietary Limited

Nictus Meubels Proprietary Limited is a furniture retail company operating in South Africa. We set the boundaries for destination home furnishing within a selected footprint, delighting customers through quality, value, variety and service.

We have a philosophy of building strong and lasting relationships and that is why we view our customers and stakeholders as valuable partners in creating alternative insurance solutions.

Our product

Nictus has established itself as a household name for more than seven decades and is widely acknowledged for its quality, value and service. The most important benefit for our customers is the fact that they can purchase quality products at affordable prices, thereby receiving excellent value for their money. Management sees credit granting solely as a marketing tool.

Product mix, variety and exclusivity play a significant role in the success of the business. Branch managers are involved in merchandising to maintain the optimal mix within the areas in which we operate.

Products

Nictus stocks a wide variety of well-known local and international brands in the furniture trade.

Future strategy

Product innovation, exclusivity and throughput through current branches will be increased for all branches to operate at optimum levels. Nictus Emporium, our specialist bedding and lounge suite shop is selling high-quality brands which are exceptionally well presented to deliver an excellent shopping experience.

Corporate Guarantee (South Africa) (RF) Limited

Corporate Guarantee (South Africa) (RF) Limited is an insurance company which specialises in converting risk into sustainable wealth. We offer innovative risk management products as an alternative to conventional insurance products. Because we understand that the financial needs and the role of risk for each of our clients are different, we focus on structuring unique solutions to the needs of each of our clients.

Our product is based on the principle of alternative risk transfer. We enable our clients to acquire a contingency policy as a method of protection against risks. This policy enables policyholders to manage their own risks sustainably and encourages them to operate with financial independence.

The aim of the product is to build up a contingency policy to such a level that the owner becomes less dependent on costly conventional insurance in relation to risk.

Advantages of the product

• The contingency policy enables the policyholder to retain more risk for his or her own account and can be used in combination with conventional insurance as part of a total insurance programme;

• Risks that are normally excluded under conventional insurance can be covered under the policy;

• The insured is rewarded for good risk management;

• The product reduces the need for the purchase of conventional insurance to catastrophe-type cover; and

• It encourages better risk management which will directly result in a reduction of conventional insurance cost. It enhances cash flow and financial stability.

Future strategy

Increasing investment return automatically increases profit within the segment as well as the group. The investment committee assists with the management of investments within the group, especially the insurance segment. An investment mandate is in place within the segment providing management with specific guidelines for investing in financial assets. Service to our clients and focusing on relationships are cornerstones of our success.

Visit our furniture website for more information at www.nictusfurnishers.co.za as well as our social media platform on Facebook (Nictus Furnishers South Africa). Visit our insurance website for more information at www.corporateguarantee.co.za.

14 Nictus Limited / Integrated annual report 2021

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Governance

16 Corporate governance report 24 Remuneration report 27 Remuneration policy 28 Corporate social responsibility report

Nictus Limited / Integrated annual report 2021 15

Governance

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CORPORATE GOVERNANCE REPORT

The group endorses King IV[TM] and strives towards compliance therewith as further set out herein.

Approach to governance

The key applications and explanations by the group of the principles contained in King IV[TM] are explained in the table below. We account therefore in accordance with IFRS and do so in the format of integrated reporting, while compliance with the Companies Act of South Africa and the JSE Listings Requirements is enshrined in our business model.

We further acknowledge our responsibility, resulting from our fiduciary duties and duties of care, skill and diligence, to ensure that business within the group is conducted with transparency, prudence, fairness, accountability and integrity.

The company is in compliance with the provisions of the Companies Act of South Africa and the relevant laws governing its establishment, specifically relating to its incorporation. Furthermore, the company is operating in conformity with its Memorandum of Incorporation (MOI).

Governance outcome one: Ethical culture

Principle 1	Nictus application
Leadership “The governing body should lead ethically and efectively”	The board has adopted the ideal future, mission, code of conduct and core values of Nictus and sets an example by actively pursuing and acting within the ambit of the code of conduct. The ethical approach is further established with the appointment of its balanced spread of independent non-executives, pursuing the achievement of sustainable economic, social and environmental performance in a responsible manner. The board adheres to its fduciary duties and its functions are summarised in a board charter. Each member is held accountable to the rest of the board for their leadership in an evaluation process.
Principle 2	Nictus application
Organisational ethics “Govern the ethics of the organisation in a way that supports the establishment of an ethical culture”	The board, with the assistance of management and the social and ethics committee, requires all employees to sign the board-approved code of conduct, which forms the foundation for ethics within the organisation, as an undertaking to conform thereto, thereby creating awareness among employees of the group’s ethical compliance requirements. The board sets an example by undertaking to conform to the code of conduct themselves. Nictus’ code of conduct is disclosed on page 2 of this integrated annual report and is available on the group’s website. The social and ethics committee engages with stakeholders directly or through delegated functions through management to remain informed about the level of ethics that the group maintains. The board is of the opinion that a strong ethical culture is key in building strong and lasting stakeholder relationships and maintaining an internal talent pool to ensure growth and sustainability of the group with the appropriate succession.

16 Nictus Limited / Integrated annual report 2021

Governance outcome one: Ethical culture continued

Governance outcom	e one: Ethical culturecontinued
Principle 3	Nictus application
Responsible corporate citizenship “Ensure that the organisation is and is seen to be a responsible corporate citizen”	The board recognises the Constitution of South Africa as the supreme law, together with the other laws, standards and the group’s own policies and procedures, and considers how to interpret and apply them to the organisation’s activities in an efort to be and be seen as a responsible corporate citizen. With the assistance of board committees, executive management, the company secretary, a function outsourced to Veritas Eksekuteurskamer Proprietary Limited, regulators and professional service providers, the board gathers its own insights into the corporate governance of the group and utilises these insights, together with reports and information received, to efectively oversee and ultimately take responsibility for the corporate governance of the group.

Governance outcome two: Performance and value creation

Principle 4	Nictus application
Strategy and performance “The governing body 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”	Strategy, risk, opportunities, performance and sustainability, based on an ethical foundation, are all key matters dealt with in the integrated business plan of the group, which is developed by the managing director and supported by the board. These factors, including viability assessments, capital, solvency, liquidity and going concern status, are examined in detail, and monitored throughout the year to determine their individual and combined efects on the business and drive a strategy that should create exceptional value for shareholders and other stakeholders alike.
Principle 5	Nictus application
Reporting “The governing body 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, assisted by the audit and risk committee and executive management, has established controls and processes, including consultations with professional service providers to independently gather, review and report adequate information regarding the group’s fnancial and sustainable performance and the integrity of the integrated annual report. This includes oversight over information published in terms of the King IVTMdisclosure requirements. The board has assumed responsibility for the approval of interim communications and the chairperson of the board ultimately approves all SENS announcements. Nictus is committed to transparent and efective communication with all stakeholder groups. Such communication takes place through formal and informal channels, including the group’s website.

Nictus Limited / Integrated annual report 2021 17

Governance

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CORPORATE GOVERNANCE REPORT continued

Governance outcome three: Adequate and effective control

Principle 6	Nictus application
Primary roles and responsibilities of the governing body “The governing body should serve as the focal point and custodian of corporate governance in the organisation”	The board acknowledges its responsibility to steer the organisation, and to review and approve its strategic direction based on the principles of good corporate governance. The board has established committees to assist it to fulfl its duties. The committees are all constituted by charters, which are considered and approved by the board annually. The board has ensured that each committee has the necessary knowledge, skills, experience and capacity to efectively execute its delegated duties. The board charter detailing the composition of the board, its committees and attendance at meetings is summarised in the table presented on page 22 of this integrated annual report. The board believes that it has discharged its responsibilities in relation to its own charter, and that its composition, the composition of its committees and required attendance of meetings, facilitate a clear balance of power and authority at board level. Board decisions are taken with the consensus principle.
Principle 7	Nictus application
Composition of the governing body “The governing body should comprise the appropriate balance of knowledge, skills, experience, diversity and independence for it to discharge its governance role and responsibilities objectively and efectively”	The appointment of directors is a formal process, which is overseen by the remuneration and nomination committee. The group is committed to appointing suitably qualifed and experienced directors and acknowledges the responsibility for ensuring that the board attracts and appoints suitable members with an appropriate mix of skills, knowledge, experience, age and independence, with due consideration for gender, culture and race diversity, taking into account the nature, scale and complexity of the business and availability of suitable candidates. The board considered and applied these principles during the reporting period and considers the appointment of Sarita Martin appropriate when measured against same. The group supports the principles and objectives of appropriate broader diversity at board level and has adopted a policy on the promotion of broader diversity. No voluntary target has been set for any appointment of executive, non-executive and/or alternate directors to the board in terms of the diversity indicators mentioned. The board and committees are sufciently represented by independent non-executive directors and are independently chaired, with the exception of the social and ethics committee, which is chaired by a non-executive director and which has no independent non-executive director representation. The social and ethics committee is not comprised of a majority of non-executive directors. The board is satisfed that the current composition of the committee does not detract from the performance and responsibilities of it. The board comprises two executive directors, three independent non-executive directors and two non-executive directors. For the fnancial year under review, one of the independent non-executive directors had served on the board for longer than nine years. The chairperson of the board, Professor Barend J Willemse, who is categorised and confrmed as independent, has been on the board since 2010. Although serving on the board for more than nine years is relevant to the determination of a non-executive director’s independence, the board recognises that an individual’s independence cannot be determined arbitrarily on the basis of a set period of time. It is the board’s view that continued tenure brings considerable stability to the board, that has benefted greatly from the presence of individuals who have over time gained valuable insight into the group and its markets.

18 Nictus Limited / Integrated annual report 2021

Governance outcome three: Adequate and effective control continued

Governance outcom	e three: Adequate and efective controlcontinued
Principle 7continued	Nictus application
	Directors’ independence is judged from the perspective of a reasonable and informed third party, based on prevailing circumstances, the defnition of independence in terms of the Companies Act of South Africa, the King IVTMguidance in terms of the assessment of independence (substance over form basis), conficts of interest (whether perceived or actual) and other relevant considerations. Attention is given to ensure that independent non-executive directors remain independent in character and judgement, and continue to present an objective and constructive challenge to the assumptions and viewpoints presented by management and the board. Annual independence evaluations are conducted for directors whose tenure exceeds nine years.
Principle 8	Nictus application
Committees of the governing body “The governing body should ensure that its arrangements for delegation within its own structures promote independent judgement, and assist with balance of power and the efective discharge of its duties”	Well-structured board committees assist the board in fulflling its duties. Board committees are appropriately constituted and comprise members of the board, with the exception of the social and ethics committee, which has a managing executive as a member. The board committees’ authority, objectives and functions are governed by clearly defned terms of reference, mandates and charters, which are subject to annual revision. Members for each committee are selected according to their suitability in terms of their qualifcations, experience and the prescribed composition of the committees. The group has the following committees: •Audit and risk committee; •Remuneration and nomination committee; •Social and ethics committee; and •Investment committee. The governance framework detailing the composition and functions of board committees is presented on page 23 of this integrated annual report.
Principle 9	Nictus application
Evaluation of the performance of the governing body “The governing body should ensure that the evaluation of its own performance and that of its committees, its chairman and its individual members, support continued improvement in its performance and efectiveness”	Evaluations of the board, its audit and risk committee and individual directors are conducted internally through a self-assessment process annually, and consideration is given to outsourcing such evaluations, as and when the board deems necessary. The board utilises methodology developed by Ram Charan in order to identify patterns revealing areas which need to be addressed or focused on to increase the overall progressiveness of the board, with the building blocks being group dynamics, appropriate and efective information architecture and focus on substantive issues. Although areas of improvement were identifed, the board concluded during their annual assessment that they were sufciently progressive in order to provide the necessary guidance to management in executing the group’s strategy.

Nictus Limited / Integrated annual report 2021 19

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CORPORATE GOVERNANCE REPORT continued

Governance outcome three: Adequate and effective control continued

Governance outcom	e three: Adequate and efective controlcontinued
Principle 10	Nictus application
Appointment and delegation to management “The governing body should ensure that the appointment of, and delegation to, management contribute to role clarity and the efective exercise of authority and responsibilities”	The board appoints a competent and appropriately experienced managing director, who is responsible for leading the implementation and execution of approved strategy, policy and operational planning and reporting to the governing body. The board, with the assistance of the remuneration and nomination committee, continuously considers succession for the managing director. The board is satisfed that the delegation of authority framework contributes to role clarity and the efective exercise of authority and responsibility. The board has appointed Veritas Eksekuteurskamer Proprietary Limited, a competent, suitably qualifed and experienced company secretary and approves of Veritas Eksekuteurskamer Proprietary Limited’ service contract and remuneration. The ability of Veritas Eksekuteurskamer Proprietary Limited, its board and employees, to perform its company secretarial duties and its performance are assessed annually by the board taking into account a set of pre-agreed deliverables. Veritas Eksekuteurskamer Proprietary Limited boasts decades of experience and the board has considered and is satisfed with the competence, qualifcation and experience of the company secretary. The company secretary has unfettered access to the board, however, care is taken to monitor the arm’s- length relationship with the board and written agreements are in place to govern the relationship between the parties. The company secretary reports to the board, through the chairperson, all statutory duties and functions performed in relation to the board. Other duties and administrative matters are reported to executive management.
Principle 11	Nictus application
Risk governance “The governing body should govern risk in a way that supports the organisation in setting and achieving its strategic objectives”	Nictus’ risk methodology includes the consideration and implementation of appropriate risk responses to identifed risks, based on the strategic objectives of the group. The efective monitoring of risk is achieved at Nictus through a combination of daily and periodic activities undertaken by management at various levels in the organisation, culminating in the activities of executive management and the audit and risk committee, which oversee the risk management process at Nictus. The board considers and determines the levels of risk tolerance as well as risk appetite during its periodic review of the group’s risk profle. This risk profle determines the ambit within which management is allowed to take on risk-inclined projects. The audit and risk committee provides oversight of Nictus’ risk management activities and reports formally on its fndings and recommendations to the board annually. Details pertaining to the high-level risks of the group are presented on pages 6 to 8 of this integrated annual report.
Principle 12	Nictus application
Technology and information governance “The governing body should govern technology and information in a way that supports the organisation setting and achieving its strategic objectives”	Nictus promotes an ethical IT governance culture and a common IT language. IT is aligned with the performance and sustainability objectives of the group from a safeguarding, strategic and business process perspective. The board has delegated the responsibility for the implementation of an IT governance framework to management. All IT matters are referred to the group’s outsourced IT consultants, who advise on the most appropriate technological solutions for the group. Executive management makes recommendations to the board, at which level decisions are taken. Continued focus is given to the efectiveness and improvement of operating systems in order to increase functionality and promote enhanced reporting capabilities for better management. The audit and risk committee annually considers independent assurance on the efectiveness of the technology and information, including outsourcing.

20 Nictus Limited / Integrated annual report 2021

Governance outcome three: Adequate and effective control continued

Governance outcom	e three: Adequate and efective controlcontinued
Principle 13	Nictus application
Compliance governance “The governing body should govern in 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”	Nictus has a compliance culture with a legal compliance programme, which supports eforts to identify and comply with applicable laws and regulations. Compliance also forms part of Nictus’ code of conduct. The board and the audit and risk committee are regularly briefed on new laws and regulations by the company secretary, professional service providers and JSE sponsors. The company secretary acts as legal compliance ofcer, while certain compliance functions in the insurance segment are outsourced to independent, suitably experienced and qualifed service providers. One of the key areas focused on during the current reporting period was to navigate the ever-evolving and dynamic implications of COVID-19. Additional reporting requirements and changing legislative requirements impacting the companies within the group were identifed and complied with, within the context, guidance and interpretations available at any given point in time.
Principle 14	Nictus application
Remuneration governance “The governing body should ensure that the organisation remunerates fairly, responsibly and transparently so as to promote the achievement of strategic objectives and positive outcomes in the short, medium and long term”	The remuneration and nomination committee is responsible for determining just and equitable remuneration policies for the group and making related recommendations to the board. The group’s remuneration policy incorporates the recommended practices of King IVTM. It aims to appeal to and retain those individuals who will support and contribute towards achieving the group’s desired results and strategy. The policy, philosophy and strategy are encapsulated in the following: Remuneration should: •Contribute towards appealing to and retaining motivated and loyal employees; •Refect a direct correlation with the vision and results of the group; •Be reviewed and benchmarked annually; •Support the strategy of the group; and •Reward performance and motivate employees. The remuneration report, policy and implementation report are presented on pages 24 to 27 of this integrated annual report.
Principle 15	Nictus application
Assurance “The governing body should ensure that assurance services and functions enable an efective control environment, and that these support the integrity of information for internal decision-making and of the organisation’s external reports”	Nictus has developed a combined assurance model, which provides a coordinated approach to assurance activities in respect of key risks facing the group, with oversight by the audit and risk committee. This includes internal risk management, compliance functions and internal and external audit reporting. Nictus has a risk-based internal audit function, with a charter approved by the audit and risk committee and the board. Internal audit focuses on governance, risk management, the system of internal controls, follows a systematic approach, and investigates and reports on control defciencies, fraud, corruption, unethical behaviour and irregularities.

Nictus Limited / Integrated annual report 2021 21

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CORPORATE GOVERNANCE REPORT continued

Governance outcome four: Trust, good reputation and legitimacy

Principle 16	Nictus application
Stakeholder engagement “In the execution of its governance roles and responsibilities, the governing body should adopt a stakeholder- inclusive approach that balances the needs, interests and expectations of material stakeholders in the best interests of the organisation over time”	The board tasks management with the management of stakeholder relationships, including the identifcation of important stakeholder groups and the development of strategies and policies to manage these relationships efectively. Constructive stakeholder engagement within the group is facilitated through formal and informal mechanisms and shareholders are encouraged to attend the group’s annual general meeting. Nictus strives to achieve an appropriate balance between various stakeholder groups’ interests and expectations in taking decisions in the best interest of the group and ultimately its shareholders, who are treated equitably. The board and the group’s external auditor will be available at the annual general meeting to respond to any shareholder queries.
Principle 17	Nictus application
Responsible investing “The governing body of an institutional investor organisation should ensure that responsible investment is practised by the organisation to promote good governance and the creation of value by the companies in which it invests”	The function of the investment committee is to evaluate and to advise the board on all group and subsidiary company investments of substantial monetary value or business importance, including the involvement in the formulation of investment policies, principles and practices to achieve optimum return on investments. The investment committee is chaired by the chairperson of the group and further consists of the group managing director and the group fnancial director.

The composition of the board, its committees and attendance of meetings is summarised in the following table:

Name Status	Board Audit and risk committee Remune- ration and nomination committee Social and ethics committee Investment committee
Professor Barend J Willemse Independent non-executive chairperson	4/4 √2/2 √3/3 √C 4/4
Gerard Swart* Independent non-executive	4/4 √2/2 √C 2/2
Nicolaas C Tromp Non-executive	4/4
Eckhart H Prozesky Executive_(Financial)_	4/4 √4/4
Gerard R de V Tromp Executive_(Managing)_	4/4 √2/2 √4/4
Philippus J de W Tromp Non-executive	4/4 √C 2/2
Cornelius J de Vrye Independent non-executive	4/4 √C 2/2 √3/3
Sarita Martin# Independent non-executive	0/0 √0/0 √C 1/1
Stephanus J Gerber Managing executive: Corporate Guarantee (South Africa) (RF) Limited	√2/2

√ Indicates board committee membership and “C” indicates board committee chairperson. The figures in each column indicate the number of meetings attended out of the maximum possible number of meetings for the respective director.

* Gerard Swart resigned as a member of the board, and thus as chairperson and member of the remuneration and nomination committee and member of the audit and risk committee, as from 1 February 2021.

# Sarita Martin was appointed as an independent non-executive director, as a member and chairperson of the remuneration and nomination committee and member of the audit and risk committee, effective 1 February 2021.

22 Nictus Limited / Integrated annual report 2021

Governance framework

Board committees

The board has established committees to assist it to fulfil its duties. The committees are all constituted by charters, which are approved by the board and reviewed annually. The board committees are as follows:

Audit and risk committee

The audit and risk committee consists of three independent non-executive directors and discharges its duties as set out, inter alia , in the audit and risk committee charter, the JSE Listings Requirements and the Companies Act of South Africa. The audit and risk committee assumes the risk management function of the group.

An extensive risk-identifying procedure is followed, with input from all operational subsidiaries, to identify and evaluate business threatening risks. The committee meets at least biannually.

The internal and external auditors attend the meetings by invitation and have unrestricted access to the chairperson and members of the audit and risk committee.

Social and ethics committee

The social and ethics committee is chaired by a non-executive director and includes an executive director and a group managing executive, as appointed by the board. The committee meets biannually. The committee oversees the group’s social development and ethics management, good corporate citizenship, sustainability strategies and preferred employer policies. The committee meets at least biannually.

Investment committee

The function of the investment committee is to evaluate and advise the board on all group and subsidiary investments of substantial monetary value or business importance, including involvement in the formulation of investment policies, principles and practices to achieve optimum return on investments. The investment committee is chaired by the chairperson of the group and further consists of the group managing director and the group financial director. The managing executive of the insurance segment has an ex-officio seat on the committee, which meets at least biannually.

Remuneration and nomination committee

The remuneration and nomination committee consists of three independent non-executive directors and is responsible for determining just and equitable remuneration policies for the group and making related recommendations to the board. The remuneration and nomination committee also assumes the function of a nomination committee and is responsible for the process of nominating candidates to the board, succession planning in respect of board members and the evaluation of the performance of the board members. The committee meets biannually.

Nictus Limited / Integrated annual report 2021 23

Governance

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REMUNERATION REPORT

Remuneration packages are reviewed and benchmarked against independent comparable market data in order to recognise differentiation between high, average and underperformers. Evaluations of remuneration packages are undertaken annually.

Background statement

The details pertaining to the composition and operation of the remuneration and nomination committee are set out in the corporate governance report.

Further focus areas may include development of incentive programmes to reward senior management for achieving longer-term predetermined outcomes at predetermined time frames.

The remuneration and nomination committee undertakes extensive analysis of different reports on remuneration trends and practices within the relevant industries in order to establish the most appropriate benchmark for determining directors’ remuneration, taking into account the size, nature, scale and complexity of the group and its operations, in relation to the available market benchmarks. There were no significant changes to the approach implemented during the previous financial year. The board believes that the approach remains appropriate in the prevailing economic climate.

No remuneration consultants have been engaged by the remuneration and nomination committee or the board during the past financial year.

Overview of the remuneration policy

The group’s remuneration policy incorporates the recommendations of King IV[TM] . It aims to appeal to and retain those individuals who will support and contribute towards achieving the group’s desired results and strategy.

To achieve the group’s policy, philosophy and strategy, the remuneration should:

• Contribute towards appealing to and retaining motivated and loyal employees;

• Reflect a direct correlation with the vision and results of the group;

• Be reviewed and benchmarked annually;

• Support the strategy of the group; and

The resolutions presented to shareholders at the 2020 annual general meeting of the company for the approval of the remuneration policy and remuneration implementation report were passed by 100% in favour of each resolution by all shareholders present or represented by proxy.

The remuneration and nomination committee is satisfied that the objectives of the group remuneration policy have been achieved during the year under review.

The remuneration policy and related benchmarks are reviewed and reconsidered annually by the board with the assistance of the remuneration and nomination committee.

Areas of focus for the immediate future remain managing the company through the impact of the COVID-19 pandemic and current economic crises with which South Africa is confronted. Specific care and continuous focus will be on employee retention and to carefully manage employee well-being and efficiency in the workplace. Nictus strives to provide job security and all considerations will be evaluated in achieving such outcome.

• Reward performance and motivate employees.

Structure of executive remuneration

Total cost-to-company forms the basis of the remuneration package for senior management and executive directors. The package consists of a cash component and benefits. Remuneration is linked to challenging long- and shortterm financial and non-financial performance targets and sustainable profits attributable to shareholders.

Incentive remuneration is offered to meet performance levels during the year in terms of guidelines determined by the board.

Incentive bonus plan

Executive directors and senior management participate in an incentive bonus plan which is based on the achievement of predetermined and agreed targets set for each director and member of senior management in each specific segment in order to achieve the group’s targets.

24 Nictus Limited / Integrated annual report 2021

Retirement benefits

A total cost-to-company approach to remuneration packages is followed and no retirement benefits are offered by the group. The group encourages employees to make provision for retirement and offers assistance where the need arises.

Executive service contracts

Executive directors have service agreements with notice periods of 30 days. The retirement age is set at 60 years, while directors may negotiate further terms past the age of 60 on an individual basis. No contractual entitlements on termination of employment exist, but compliance to the relevant labour laws and regulations is ensured.

Succession planning

The board continuously reviews the succession planning throughout the group and is informed of senior level requirements. The objective is to ensure that continuity is provided to develop a pool of individuals with potential and to cater for development and future placement. The ongoing restructuring of the group in terms of top management bears testimony to the commitment of the group in its pursuit of realising its ideal future.

a non-executive director as defined in the Companies Act of South Africa, King IV[TM] and the MOI of the company. The board and each of its committees have charters, which set out their responsibilities.

Non-executive directors are expected to provide leadership, expertise and knowledge on strategy and business, contribute to the planning process of the group and ultimately assume the role as custodians of the governance process.

Non-executive directors receive market-related fees. Nonexecutive directors are paid fees for their services on the basis of their related fiduciary duties and attendance of board and committee meetings.

No contractual arrangements for compensation for loss of office exist, nor do non-executive directors receive any incentives or participate in any of the group’s incentive schemes. Annual fees payable to non-executive directors for the period between the annual general meetings to be held on 1 September 2021 and August 2022, are to be approved by the shareholders at the annual general meeting on 1 September 2021. Fees for the period commencing on the aforesaid date were recommended by the directors after having been considered and recommended by the remuneration and nomination committee.

Board evaluation process

A participative internal evaluation of the board’s performance and the structural environment is undertaken annually. Overall, the board is considered to be balanced and effective. In spite of continuous progress made, there will always remain areas for improvement.

Non-executive directors

Non-executive directors are expected to perform the tasks and duties normally associated with the position of

Remuneration implementation report

The remuneration and nomination committee recommended remuneration changes to the general staff complement, executive management and the non-executive directors. The latter was approved by shareholders and the implementation applied for the 2021 financial year was as follows: General staff 0,0% Executive management 0,0% Non-executive directors 0,0%

Executive management remuneration for the 2020/2021 year*:

Executive management remuneration for the 2020/2021 year*:
Figures in R’000	Paid by the company
	Basic salary Bonuses Total
2021 Gerard R de V Tromp# Eckhart H Prozesky Stephanus J Gerber@
	420 – 420
	1 560 300 1 860
	1 400 310 1 710
	3 380 610 3 990
2020 Gerard R de V Tromp# Eckhart H Prozesky Stephanus J Gerber	420 – 420 1 560 390 1 950 1 238 292 1 530
	3 218 699 3 917

* Classified as short-term employee benefits. No long-term employee benefits are payable.

# As disclosed in note 27 to the financial statements, a management fee of R2,775 million (2020: R3,130 million) was paid to a related party, Veritas Eksekuteurskamer Proprietary Limited, for services rendered by Gerard R de V Tromp as executive director.

@ Although no remuneration increases were granted given the circumstances of the 2021 financial year, Stephanus J Gerber was promoted to chief executive officer of Corporate Guarantee (South Africa) (RF) Limited, resulting in an adjustment to his remuneration.

Nictus Limited / Integrated annual report 2021 25

Governance

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REMUNERATION REPORT continued

No contractual entitlements on termination of employment exist, but compliance to the relevant labour laws and regulations is ensured.

Incentive bonuses were awarded within the ambit of the relevant boards’ discretion, based on predetermined financial and non-financial targets achieved.

Shareholders are given an opportunity to vote on separate non-binding advisory resolutions pertaining to the remuneration policy and remuneration implementation report. In the event that 25% or more of shareholders vote against one or both non-binding advisory resolutions, Nictus commits to engaging with such shareholders to determine the reasons for their dissenting vote(s) and to possibly reassess the group’s remuneration policy and/or implementation thereof to the satisfaction of the shareholders. Any shareholders who wish to engage with us in relation to the remuneration policy or the remuneration implementation report are invited to do so via the nominee company secretary, Willem Boshoff at groupsec@nictus.com.na.

Non-executive fees 2021/2022

Non-executives’ fees are presented to, and approved at the annual general meeting by means of a special resolution. Recommended fees are presented to the remuneration and nomination committee for consideration, based on market research, which submits its recommendation to the board, and thereafter to shareholders at the annual general meeting for approval. In view of the levels of responsibility being placed on directors and benchmarks for comparable companies, the fees for non-executive directors for the 2021/2022 year, as set out below, have been recommended for approval.

From 1 September 2021

Board-related Board membership R171 600 per year Board chairperson R337 600 per year Committee-related Audit and risk committee membership R42 900 per year Audit and risk committee chairperson R120 120 per year Remuneration and nomination R42 900 per year committee membership Remuneration and nomination R55 750 per year committee chairperson Social and ethics committee membership R21 450 per year Social and ethics committee chairperson R27 885 per year Investment committee membership R42 900 per year Investment committee chairperson R42 900 per year

Non-executive directors will be paid an amount of R42 900 per day per meeting in respect of board or special meetings, should the number of these additional meetings exceed five per annum. They will also be paid a pro rata amount per hour for additional time spent.

Statement by the chairperson of the remuneration and nomination committee

The remuneration and nomination committee functions in accordance with its charter, which is reviewed annually and approved by the board. The chairperson of the remuneration and nomination committee reports regularly to the board.

The remuneration and nomination committee has applied its mind and provided guidance to ensure that all employees are remunerated in accordance with the approved remuneration policy aimed at fair, responsible and transparent remuneration. Remuneration within the group is based on a combination of factors including performance, levels of decision-making, consequence of error, market research (i.e. cost of living increase, annual salary benchmarking, etc.) and incentives to ensure long-term value for the employee and group.

The remuneration and nomination committee is satisfied that it has complied with its remuneration policy during the financial year ended 31 March 2021, and that the group remunerates fairly, responsibly and transparently so as to promote the achievement of strategic objectives and positive outcomes in the short, medium and long term.

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Sarita Martin

Chairperson: remuneration and nomination committee

22 June 2021

26 Nictus Limited / Integrated annual report 2021

REMUNERATION POLICY

The group remuneration policy aims to appeal to and retain those individuals who will support and contribute towards achieving the group’s desired results and performance.

Objective

The policy, philosophy and strategy are encapsulated in the following:

Remuneration should:

• Contribute towards appealing to and retaining motivated and loyal employees;

• Reflect a direct correlation with the vision and results of the group;

• Be reviewed and benchmarked annually;

• Support the strategy of the group; and

Remuneration incentives

Short-term incentives

The incentive scheme is aimed at achieving group performance, which is set out in the rules. To qualify, staff must:

• Meet predetermined and agreed annual targets; and

• Perform exceptionally well.

Employees who have transgressed the group code of conduct are ineligible to participate in the incentive scheme and extraneous factors do not influence the incentive evaluation.

• Reward performance and motivate employees.

Long-term incentives

Remuneration structure

The group remuneration strategy makes provision for:

• A total cost-to-company approach consisting of a cash component and benefits;

• A linkage to challenging long- and short-term financial and non-financial performance and sustainable profits;

• Short-term incentives based on meeting agreed performance levels; and

• Long-term incentives based on meeting long-term performance levels.

The incentive scheme is aimed at retaining employees and meeting group performance as set out in the rules over a number of years.

• Senior management and executive directors are eligible to participate; and

• The remuneration and nomination committee determines the structure and percentile quantum of the incentive.

The allocation is determined by the executive committee and reported to the remuneration and nomination committee.

Governance

Composition of the total remuneration package

The factors considered in structuring the total remuneration package are:

• Review of packages on an annual basis, internally and externally, to ensure their integrity;

• Recognised market research is applied in structuring and evaluating packages;

• Organisational profiles are considered for use in the evaluation process;

The remuneration and nomination committee stands at the forefront of developing remuneration policies and reviewing the philosophy strategy and practice to meet best practice and achieve the group’s overall objectives.

Variation

The policy may be varied by the remuneration and nomination committee at any time within the structure of the delegated authority as contained in the approved charter.

• Performance evaluation and development requirements are considered during the process;

• The scarcity of appropriately qualified staff influences package structure; and

• The total remuneration package consists of a cash component and benefits.

Nictus Limited / Integrated annual report 2021 27

Governance

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CORPORATE SOCIAL RESPONSIBILITY REPORT

Foreword by the chairperson

Nictus commits itself to continuous growth in its contribution as a good corporate citizen for the benefit of all its stakeholders.

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----- Start of picture text -----

Community involvement
development
Community relations
Social development
[Sport development]
[Education]
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Overall
Gauteng
Western Cape
[Limpopo]
----- End of picture text -----

The 2021 financial year was a challenging period for the company with the onset of the COVID-19 pandemic. The changes and adaptation needed were immense and we, as a company, had to stay afloat and ensure that all our stakeholders were affected as little as possible through our understanding of the various parameters and actions taken in managing the effects of the pandemic.

Looking back, and with the grace of God, we prevailed and thrived as a company in our aim to be wealth creators.

Report 2021

The committee conducted research in accordance with the Organisation for Economic Co-operation and Development principles, in line with the charter and mandate of the board as well as the Social and Ethics Committee Handbook issued by the Ethics Institute of South Africa.

Although we were forced to work in a different way, remotely and with social distancing challenges, our employee relations and stakeholder engagement were found to be at acceptable levels. Training was continuously done throughout the year in areas that were lacking as well as social areas where there was a need.

The group performed on par relative to equal opportunities and strives to employ the best suitable candidate for a position, irrespective of race and gender. We were comfortable with the research conducted in relation to race and gender equality as well as the progress made toward the certification for broad-based black economic empowerment during the year under review.

Health and safety are continuously monitored against the Occupational Health and Safety Act guidelines and changes were made where there were shortfalls. The committee was comfortable with the issues addressed and ground gained on this matter.

The company strives to maintain a high ethical culture and we upheld our values and adhered to our code of conduct.

Involvement 2021

I am pleased to report that contributions made in the areas where we were involved more than doubled from the previous year.

Conclusion

Although it has been a challenging year, we found that monitoring compliance with the relevant social, ethical and legal requirements and best practice codes plays an evergreater part in long-term sustainability. We are committed to adhering to and improving on all social aspects and to contributing to all stakeholders and being a good corporate citizen.

We are comfortable that the social and ethics guidelines set and values of the company were adhered to during the financial year.

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Philippus J de W Tromp Chairperson: social and ethics committee

28 Nictus Limited / Integrated annual report 2021

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Financial statements

30 Directors’ responsibilities and approval

31 Managing director’s and financial director’s responsibility statement 31 Certificate of the company secretary

• 32 Audit and risk committee report

• 34 Directors’ report

• 37 Independent auditor’s report

40 Statements of financial position

41 Statements of profit or loss and other comprehensive income

42 Statements of changes in equity

44 Statements of cash flows

• 45 Significant accounting policies

• 58 Notes to the annual financial statements

Nictus Limited / Integrated annual report 2021 29

Financial statements

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DIRECTORS’ RESPONSIBILITIES AND APPROVAL

Directors’ responsibility statement

The directors are required by the Companies Act of South Africa to maintain adequate accounting records and are responsible for the content and integrity of the group annual financial statements and company annual financial statements and related financial information included in this report. It is their responsibility to ensure that the financial statements fairly present the state of affairs of the group and company as at 31 March 2021 and the results of their operations and changes in equity and cash flows for the year then ended, in conformity with International Financial Reporting Standards (IFRS) and the requirements of the Companies Act of South Africa. The directors are also responsible for the preparation of the directors’ report. The external auditor is engaged to express an independent opinion on the group annual financial statements and company annual financial statements.

The group annual financial statements and company annual financial statements are prepared in accordance with IFRS and the requirements of the Companies Act of South Africa 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 company and place considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the board 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 policies and 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 that 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.

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 financial statements. Any system of internal financial control can, however, provide only reasonable, and not absolute, assurance against material misstatement or loss.

The directors have reviewed the group’s and company’s budgets for the year ending 31 March 2022 and, in light of this review and the current financial position, they are satisfied that the group and company have access to adequate resources to continue in operational existence for the foreseeable future. The directors have made an assessment of the group’s and company’s ability to continue as going concerns and there is no reason to believe that the businesses will not be going concerns in the year ahead.

The auditor is responsible for reporting on whether the group annual financial statements and company annual financial statements are fairly presented in accordance with the applicable financial reporting framework.

Approval of the group annual financial statements and company annual financial statements

The group annual financial statements and company annual financial statements of Nictus Limited, which have been prepared on the going concern basis, were approved by the board on 22 June 2021 and were signed by:

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Gerard R de V Tromp Authorised director Group managing director

Professor Barend J Willemse Authorised director Chairperson

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.

30 Nictus Limited / Integrated annual report 2021

MANAGING DIRECTOR’S AND FINANCIAL DIRECTOR’S RESPONSIBILITY STATEMENT

The directors, whose names are stated below, hereby confirm that:

• The annual financial statements set out on pages 40 to 104, fairly present in all material respects the financial position, financial performance and cash flows of the issuer in terms of IFRS;

• No facts have been omitted or untrue statements made that would make the annual financial statements false or misleading;

• Internal financial controls have been put in place to ensure that material information relating to the issuer and its consolidated subsidiaries have been provided to effectively prepare the financial statements of the issuer; and

• The internal financial controls are adequate and effective and can be relied upon in compiling the annual financial statements, having fulfilled our role and function within the combined assurance model pursuant to principle 15 of King IV[TM] . Where we are not satisfied, we have disclosed to the audit and risk committee and the auditors the deficiencies in design and operational effectiveness of the internal financial controls and any fraud that involves directors, and have taken the necessary remedial action.

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Gerard R de V Tromp Group managing director

Eckhart H Prozesky Group financial director

22 June 2021

CERTIFICATE OF THE COMPANY SECRETARY

In our opinion, as company secretary, we hereby confirm, in terms of the Companies Act of South Africa that, for the year ended 31 March 2021, the company has lodged with the Commissioner of the Companies and Intellectual Property Commission, all such returns and notices as are required of a public company in terms of the Companies Act of South Africa and that all such returns and notices are true, correct and up to date.

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Willem H Boshoff Veritas Eksekuteurskamer Proprietary Limited Company secretary

22 June 2021

Nictus Limited / Integrated annual report 2021 31

Financial statements

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AUDIT AND RISK COMMITTEE REPORT

I am pleased to present the group audit and risk committee report for the financial year ended 31 March 2021.

The chairperson and members of the committee were individually re-elected at the 2020 annual general meeting of Nictus Limited, in compliance with the requirements of the Companies Act of South Africa. The committee continues to fulfil the function of the audit and risk committee requirement in terms of the Insurance Act in respect of Corporate Guarantee (South Africa) (RF) Limited, a wholly-owned subsidiary of Nictus Limited.

The committee operates in terms of the board-approved charter, and its three elected members, one of which is the chairperson of the board, are all independent non-executive directors. During the year, one of the members, Gerard Swart, retired after a long period of being a key member to this committee. We also welcome Sarita Martin as a new member to the committee.

The committee’s work includes oversight of risk management; all of its members are financially literate and bring business and financial acumen to the committee.

The group managing director, the group financial director and representatives of the external and internal auditors are invited to attend the committee meetings.

The committee met twice during the year and engaged, among other work, in considering the reappointment of PricewaterhouseCoopers Inc. as auditor to the Nictus group of companies. PricewaterhouseCoopers Inc. was recommended for reappointment as the group and company external auditor based on recent performance and regulatory reviews of the firm, with Jorge M Goncalves acting as the designated audit partner for the current financial year ending 31 March 2021. During the year, the 2020 group annual financial statements were subject to scrutiny from the JSE/regulatory investigations and this was successfully addressed. Internal audit reports are provided to the committee at each meeting. Internal audit’s activity is governed by an internal audit charter which is approved by the group audit and risk committee and is reviewed annually. The charter defines the purpose, authority and responsibilities of the function. The committee reviewed the charter and measured its effectiveness during the year under review.

The committee’s key objectives and responsibilities which were met during the period are as follows:

• Determine whether management has created and maintains an effective control environment and that they demonstrate and stimulate the necessary respect for the internal control structure among all parties;

• Ensure that the company has established appropriate financial reporting procedures and that these procedures are operating effectively, which should include consideration of all entities included in the group annual financial statements, to ensure that it has access to all the financial information of the company to allow the company to effectively prepare and report on its financial statements;

• Assess the external auditor’s and designated external audit partner’s suitability for appointment in accordance with the JSE Listings Requirements and the information detailed in paragraph 22.15(h) therein;

• Review the scope and outcome of external and internal audits. The review is to include an assessment of the efficiency of the audit function, ensuring that emphasis is placed in areas where the committee, management and the auditor believe special attention is necessary;

• Ensure that the appointment of the auditor is presented and included as a resolution at the annual general meeting of Nictus, pursuant to section 61(8) of the Companies Act of South Africa;

• Ensure that the board makes informed decisions and is aware of the implications of such decisions regarding accounting policies, practices and disclosures;

• Provide a safeguard of directors’ responsibilities by informing the board on issues of importance to the business and the status of the financial reporting;

• Review and recommend to the board for approval the group’s annual and interim reports;

• Assist the board in its evaluation of the adequacy and effectiveness of the risk management system;

• Assist the board in the identification of the build-up and concentration of the various risks to which the insurer is exposed;

• Assist the board in identifying and regularly monitoring all material risks to ensure that its decision-making capability and accuracy of its reporting are adequately maintained;

• Facilitate and promote communication, through reporting structures, regarding the adequacy and effectiveness of the risk management system or any other related matter, between the board and managing executives;

32 Nictus Limited / Integrated annual report 2021

• Introduce such measures as may serve to enhance the adequacy and effectiveness of the risk management system; and

• Coordinate the monitoring of risk management on an enterprise-wide and individual business unit basis.

The committee does not rely only on the internal control processes but receives and regularly reviews the findings of both the internal and external auditors covering:

• A system of internal control;

• Compliance with relevant laws and regulations; and

• The credibility, independence and objectivity of both the external and internal auditor.

The committee also reviews changes in legislation to ensure compliance by companies in the group. The committee reports its findings to the board, which thereafter has the responsibility of ensuring compliance with legislation.

The committee has adopted a policy of limiting the non-audit work undertaken by the external auditor. Prior approval of any consulting work in excess of R250 000 is required.

The external and internal auditors have unrestricted access to committee members.

The committee is satisfied that:

• It has complied with the responsibilities set out in its charter, as well as the relevant legal and regulatory responsibilities based on the information and explanations given by management and discussions with the external auditor regarding the results of their audit;

• The financial director has the necessary training, expertise and experience to discharge his duties and responsibilities;

• The board is aware of the implications and actions required to apply and explain the principles of King IV[TM] ;

• There was no material breakdown in the internal financial controls that was noted or reported during the financial year under review; and

• The external auditor is considered to be independent of the company/group and is thereby able to conduct its audit functions without any undue influence from the company/group.

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Cornelius J de Vrye

Chairperson: audit and risk committee

Nictus Limited / Integrated annual report 2021 33

Financial statements

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DIRECTORS’ REPORT

to the shareholders of Nictus Limited

Your directors have pleasure in reporting on the activities and financial results of the group for the year ended 31 March 2021.

Review of subsidiaries

Details of subsidiaries are dealt with in note 5 to the group annual financial statements.

Review of subsidiaries Details of subsidiaries are dealt with in note 5 to the group annual fnancial statements.
Figures in R’000	2021 2020
The interest of the company in the aggregate net proft after tax of subsidiaries is: Proft/(loss) after taxation	10 627 (726)

The subsidiaries of the company are mainly involved in furniture retail and short-term insurance in South Africa.

Financial results

For the year under review, the group’s profit before taxation amounted to R11,47 million compared to profit before taxation of R3,22 million in the previous year. The company’s profit before taxation for the year was R9,15 million compared to profit before taxation of R3,66 million in the previous year.

Segmental analysis

A detailed segmental analysis is included in note 36 to the group annual financial statements.

Directors

Directors
	Date of initial appointment Date of re-election Date of resignation/ retirement
Executive Gerard R de V Tromp_(Group managing director) Eckhart H Prozesky(Group fnancial director)_	18 November 2014 22 August 2018 1 March 2015 22 August 2018
Non-executive Philippus J de W Tromp Nicolaas C Tromp	1 April 2012 14 October 2020 27 April 1979 21 August 2019
Independent non-executives and members of the audit and risk committee Professor Barend J Willemse_(Chairperson_) Gerard Swart Cornelius J de Vrye Sarita Martin	15 June 2010 14 October 2020 15 October 2013 21 August 2019 1 February 2021 1 November 2018 21 August 2019 1 February2021

Shareholding

Shareholding
Composition of shareholders	Number of shareholders % Number of shares %
Ordinary shares Non-public shareholders Directors and associates Public shareholders
	11 1,48 41 986 527 78,56
	11 1,48 41 986 527 78,56
	733 98,52 11 456 973 21,44
	744 100,00 53 443 500 100,00

34 Nictus Limited / Integrated annual report 2021

Distribution of shareholders	Number of shareholders % Number of shares %
Ordinary shares Banks/brokers Close corporations Individuals Insurance companies Nominees and trusts Other corporations Private companies Public companies
	17 2,28 81 982 0,15
	1 0,13 2 0,00
	408 54,84 1 536 391 2,87
	1 0,13 9 375 0,02
	290 38,98 12 277 318 22,97
	4 0,54 43 172 0,08
	20 2,69 39 488 545 73,90
	3 0,41 6 715 0,01
	744 100,00 53 443 500 100,00

	Number of shares %
Shareholders, other than directors, with an interest above 5% in stated capital Landswyd Beleggings Proprietary Limited Namprop Proprietary Limited Trocor Proprietary Limited PC Investment Holdings ProprietaryLimited
	24 926 623 46,64
	6 254 503 11,70
	5 919 964 11,08
	4 207 272 7,87

As at 31 March, the directors, prescribed officers and their associates (as defined in terms of the JSE Listings Requirements) had the following direct and indirect beneficial interest in the stated capital of the company:

following direct and indirect benefcial interest in the stated capital of the company:
	Number of shares 2021 2020
Direct interests Professor Barend J Willemse Eckhart H Prozesky Stephanus J Gerber Indirect interests Professor Barend J Willemse Nicolaas C Tromp, Gerard R de V Trompand Philippus J de W Tromp	50 000 50 000 425 000 325 000 158 000 158 000 45 165 45 165 41 308 36240 948 338
	41 986 52741 526 503

There have been no changes in directors’ interests between the financial year end and the date of approval of the annual financial statements.

Nictus Limited / Integrated annual report 2021 35

Financial statements

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DIRECTORS’ REPORT continued

Analysis of executive directors’ share options as at 31 March 2021

There were no outstanding share options at year end held by the directors in the current or prior financial year.

Events after the reporting date

The directors are not aware of any matter or circumstances since the end of the financial year and up to the date of this report which require adjustments to or disclosure in the financial statements.

Stated capital

There were no changes in stated capital during the current and prior financial year.

The 196 556 500 (2020: 196 556 500) unissued ordinary shares are under the control of the directors in terms of a resolution of shareholders passed at the last annual general meeting and in terms of the MOI, but subject to compliance with the relevant regulations i.e. the Companies Act of South Africa and the JSE Listings Requirements.

Dividends

Final dividend

The board, within its discretion, has declared a final dividend of 5,00 cents per Nictus ordinary share (ordinary share) (2020: 3,00 cents per ordinary share) for the year ended 31 March 2021, to all ordinary shareholders recorded in the books of Nictus at the close of business on Friday, 23 July 2021 which will be paid on Monday, 26 July 2021.

The cash dividend timetable is structured as follows:

• Declaration date is Wednesday, 30 June 2021;

• The last day to trade cum dividend in order to participate in the dividend is Tuesday, 20 July 2021;

Company secretary

Veritas Eksekuteurskamer Proprietary Limited Block C, 1st floor The Main Straight Office Park, 392 Main Road Bryanston 2191 PO Box 2878, Randburg 2125

Registered offices

Republic of South Africa

Nictus Limited Block C, 1st floor The Main Straight Office Park, 392 Main Road Bryanston 2191 PO Box 2878, Randburg 2125

Namibia

Nictus Limited Nictus Building, 1st floor 140 Mandume Ndemufayo Avenue, Windhoek, Namibia Private Bag 13231, Windhoek, Namibia

22 June 2021

• The shares commence trading ex -dividend from the commencement of business on Wednesday, 21 July 2021;

• The record date is Friday, 23 July 2021; and

• The dividend is to be paid on Monday, 26 July 2021.

Shares will not be rematerialised or dematerialised between Wednesday, 21 July 2021 and Friday, 23 July 2021, both days inclusive.

36 Nictus Limited / Integrated annual report 2021

INDEPENDENT AUDITOR’S REPORT

to the shareholders of Nictus Limited

Report on the audit of the consolidated and separate financial statements

Our audit approach

Overview

Our opinion

In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of Nictus Limited (the Company) and its subsidiaries (together the Group) as at 31 March 2021, and its consolidated and separate financial performance and its 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.

What we have audited

Nictus Limited’s consolidated and separate financial statements set out on pages 40 to 104 comprise:

• the consolidated and separate statements of financial position as at 31 March 2021;

• the consolidated and separate statements of profit or loss and other comprehensive income for the year then ended;

• the consolidated and separate statements of changes in equity for the year then ended;

• the consolidated and separate statements of cash flows for the year then ended; and

• the notes to the financial statements, which include a summary of significant accounting policies.

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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group in accordance with the Independent Regulatory Board for Auditors’ Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performing audits of financial statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent with the corresponding sections of the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards).

Overall group materiality

• Overall group materiality: R573 200, which represents 5% of consolidated profit before tax.

Group audit scope

• The Group consists of three components,

• Group being the Company and two subsidiaries.

• scoping We performed full scope audits on all three components based on their financial significance and statutory audit requirements.

• Key audit matters Key audit matters

• We have determined that there are no key audit matters to communicate in our report.

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the consolidated and separate financial statements. In particular, we considered where the directors made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

Materiality

The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements.

Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality for the consolidated financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

Nictus Limited / Integrated annual report 2021 37

Financial statements

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INDEPENDENT AUDITOR’S REPORT continued

Overall group materiality	R573 200.
How we determined it	5% of consolidated proft before tax.
Rationale for the materiality benchmark applied	We chose consolidated proft before tax as the benchmark because, in our view, it is the benchmark against which the performance of the Group is most commonly measured by users and is a generally accepted benchmark. Nictus Limited is a proft-driven entity. We chose 5% which is consistent with quantitative materiality thresholds used for proft-oriented companies in this sector.

How we tailored our group audit scope

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates.

The Group consists of three components, being the Company and two subsidiaries. We performed full scope audits on all three components based on their financial significance and statutory audit requirements.

In establishing the overall approach to the Group audit, we determined the type of work that needed to be performed by us, as the group engagement team for both the group and the components. All testing was performed centrally by the group audit team. By performing the procedures outlined above, we obtained sufficient and appropriate audit evidence regarding the financial information of the Group to provide a basis for our opinion on the consolidated financial statements as a whole.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated and separate financial statements of the current period. We have determined that there are no key audit matters to communicate in our report.

Other information

The directors are responsible for the other information. The other information comprises the information included in the document titled “Nictus Limited integrated annual report 2021 for the year ended 31 March”, which includes the Directors’ Report, the Audit and Risk Committee Report and the Certificate of the Company Secretary as required by the Companies Act of South Africa. The other information does not include the consolidated or the 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 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 identified above 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, 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 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.

38 Nictus Limited / Integrated annual report 2021

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 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 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, actions taken to eliminate threats or safeguards applied.

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 PricewaterhouseCoopers Inc. has been the auditor of Nictus Limited for 2 years.

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PricewaterhouseCoopers Inc.

Director: Jorge Goncalves Registered Auditor

Johannesburg, South Africa 22 June 2021

Nictus Limited / Integrated annual report 2021 39

Financial statements

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STATEMENTS OF FINANCIAL POSITION

as at 31 March 2021

Figures in R’000 Note(s)	GROUP 2021 2020	COMPANY 2021 2020
Assets Non-current assets Property, plant and equipment 3 Intangible assets 4 Investments in subsidiaries 5 Right-of-use asset 6 Investments 7 Deferred tax assets 8 Trade, insurance and other receivables 11		351 941 22 22 73 100 69 942 2 396 – 5 338 4 581 – – – –
	15 132 15 580
	251 702
	– –
	10 045 1 514
	26 177 32 168
	83 2 421
	5 556 5 485
	57 244 57 870	81 207 75 486
Current assets Inventories 9 Trade, insurance and other receivables 11 Investments 7 Cash and cash equivalents 12 Current tax receivable 24		6 6 14 308 14 065 – – 9 713 5 658 – –
	10 176 10 796
	346 906 432 555
	180 151 192 173
	76 679 56 014
	– 72
	613 912 691 610	24 027 19 729
Total assets	671 156 749 480	105 234 95 215
Equity and liabilities Equity Stated capital 13 Revaluation reserve 14 Retained earnings		25 969 25 969 – – 71 211 63 141
	25 969 25 969
	1 152 1 152
	76 474 68 434
	103 595 95 555	97 180 89 110
Liabilities Non-current liabilities Deferred tax liabilities 8 Lease liabilities 6		2 609 3 115 1 995 –
	2 609 3 115
	8 506 71
	11 115 3 186	4 604 3 115
Current liabilities Loans from group companies 10 Trade and other payables 15 Insurance contract liability 16 Lease liabilities 6		139 409 2 872 2 581 – – 439 –
	– –
	10 769 8 306
	544 047 640 705
	1 630 1 728
	556 446 650 739	3 450 2 990
Total liabilities	567 561 653 925	8 054 6 105
Total equityand liabilities	671 156 749 480	105 234 95 215

40 Nictus Limited / Integrated annual report 2021

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

for the year ended 31 March 2021

Figures in R’000 Note(s)	GROUP 2021 2020	COMPANY 2021 2020
Revenue 17 Efective interest revenue	55 919 50 894	20 100 16 600 – –
	1 996 2 416
Total revenue Cost of sales	57 915 53 310	20 100 16 600 – –
	(26 243) (25 714)
Gross proft Other income 18 Investment income/(loss) from operations 20 Notional interest allocation 16 Claims paid 16 Operating expenses 19 Administrative expenses 19	31 672 27 596	20 100 16 600 371 1 465 1 275 (1 856) – – – – (3 740) (4 799) (8 482) (7 623)
	1 012 942
	39 688 42 895
	(15 070) (30 032)
	(11 725) (7 527)
	(19 841) (19 974)
	(14 060) (13 858)
Results from operating activities Investment income 20 Finance expenses 21	11 676 42	9 524 3 787 – 3 250 (378) (3 381)
	– 3 441
	(212) (260)
Proft before taxation Taxation (expense)/credit 22	11 464 3 223	9 146 3 656 506 (459)
	(1 842) 417
Proft for the year Other comprehensive income Items that will not be reclassifed to proft or loss: Revaluation of land and buildings Income tax relatingto these items 22	9 622 3 640	9 652 3 197 – – – –
	– (2 146)
	– 601
Other comprehensive income for theyear, net of tax	– (1 545)	– –
Total comprehensive income for theyear	9 622 2 095	9 652 3 197
Proft attributable to: Owners		9 652 3 197
	9 622 3 640
Total comprehensive income attributable to: Owners		9 652 3 197
	9 622 2 095
Basic earnings per share (cents) 35 Diluted basic earningsper share (cents) 35	18,00 6,81 18,00 6,81

Nictus Limited / Integrated annual report 2021 41

Financial statements

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STATEMENTS OF CHANGES IN EQUITY for the year ended 31 March 2021

Figures in R’000	GROUP Stated capital Revaluation reserve Retained earnings Total equity
Balance as at 1 April 2019 Total comprehensive income for the year Proft for the year Other comprehensive income Transfer of gain on disposal of land and buildings measured at fair value through other comprehensive income to retained earnings	25 969 7 983 61 489 95 441 – – 3 640 3 640 – (1 545) – (1 545) – (5 286) 5 286 –
Total comprehensive income for theyear	– (6 831) 8 926 2 095
Transactions with the owners of the company Distributions to the owners of the company Dividends paid Prescribed dividends	– – (2 004) (2 004) – – 23 23
Total transactions with the owners of the company	– – (1 981) (1 981)
Balance as at 31 March 2020	25 969 1 152 68 434 95 555
Total comprehensive income for the year Proft for theyear
	– – 9 622 9 622
Total comprehensive income for theyear	– – 9 622 9 622
Transactions with the owners of the company Distributions to the owners of the company Dividends paid Prescribed dividends
	– – (1 603) (1 603)
	– – 21 21
Total transactions with the owners of the company	– – (1 582) (1 582)
Balance as at 31 March 2021	25 969 1 152 76 474 103 595
Note(s)	13 14

42 Nictus Limited / Integrated annual report 2021

Figures in R’000	COMPANY Stated capital Retained earnings Total equity
Balance as at 1 April 2019 Total comprehensive income for the year Proft for theyear	25 969 61 925 87 894 – 3 197 3 197
Total comprehensive income for theyear	– 3 197 3 197
Transactions with the owners of the company Distributions to the owners of the company Dividends paid Prescribed dividends	– (2 004) (2 004) – 23 23
Total transactions with the owners of the company	– (1 981) (1 981)
Balance as at 31 March 2020	25 969 63 141 89 110
Total comprehensive income for the year Proft for theyear
	– 9 652 9 652
Total comprehensive income for theyear	– 9 652 9 652
Transactions with the owners of the company Distributions to the owners of the company Dividends paid Prescribed dividends
	– (1 603) (1 603)
	– 21 21
Total transactions with the owners of the company	– (1 582) (1 582)
Balance as at 31 March 2021	25 969 71 211 97 180
Note(s)	13

Nictus Limited / Integrated annual report 2021 43

Financial statements

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STATEMENTS OF CASH FLOWS

for the year ended 31 March 2021

Figures in R’000 Note(s)	GROUP 2021 2020	COMPANY 2021 2020
Cash fows from operating activities Cash (utilised by)/generated from operations 23 Investment income received from operations Disposal/(acquisition) of investments Short-term investments at amortised cost disinvested/(invested) Dividends received Dividends paid Finance expenses paid Tax refund/(paid) 24		(1 646) 3 071 473 3 250 – – – – 7 668 185 (1 603) (2 004) (378) (3 381) – –
	(33 272) 14 896
	34 551 49 393
	14 433 (49 619)
	8 062 (55 665)
	777 1 233
	(1 603) (2 004)
	(212) (260)
	68 (1 302)
Net cashgenerated from/(utilised in) operatingactivities	22 804 (43 328)	4 514 1 121
Cash fows from investing activities Acquisition of property, plant and equipment 3 Proceeds on sale of property, plant and equipment Acquisition of investments Loans repaid by related party Proceeds from share buy-back by subsidiary Proceeds on disposal of subsidiary		(103) (550) 140 – (123) (1 551) – 33 906 – 9 625 – 5
	(544) (198)
	182 –
	(122) (1 551)
	– 38 081
	– –
	– 5
Net cash (utilised in)/generated from investingactivities	(484) 36 337	(86) 41 435
Cash fows from fnancing activities Payment of lease liabilities Repayments to subsidiarycompanies		(103) – (270) (37 238)
	(1 655) (1 603)
	– –
Net cash utilised byfnancingactivities	(1 655) (1 603)	(373) (37 238)
Total cash movement for the year Total cash sold by subsidiary for the year Cash and cash equivalents at the beginningof theyear	20 665 (8 594)	4 055 5 318 – – 5 658 340
	– (32)
	56 014 64 640
Total cash and cash equivalents at the end of theyear 12	76 679 56 014	9 713 5 658

44 Nictus Limited / Integrated annual report 2021

SIGNIFICANT ACCOUNTING POLICIES

for the year ended 31 March 2021

1. Presentation of the financial statements

Nictus Limited (Nictus or the company) is a company incorporated and domiciled in the Republic of South Africa. The group annual financial statements as at and for the year ended 31 March 2021 comprise the company and its subsidiaries. Where reference is made to group it should be interpreted as group or company as the context requires.

Nictus is a retailer of household furniture, electrical appliances and home electronics sold through the Nictus Meubels Proprietary Limited brand as well as a non-life insurer through the Corporate Guarantee (South Africa) (RF) Limited brand.

The group and company annual financial statements have been prepared in accordance with and in compliance with International Financial Reporting Standards (IFRS) and its interpretations adopted by the International Accounting Standards Board (IASB), the JSE Listings Requirements, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, and the requirements of the Companies Act of South Africa. They were authorised for issue by the company’s board of directors on 22 June 2021.

Basis of measurement

The financial statements have been prepared on the historical cost basis, except for the following material items in the statement of financial position:

• Land and buildings are measured at revalued amounts;

• Insurance contract liabilities; and

• Financial instruments classified at fair value through profit or loss are measured at fair value.

These accounting policies are consistent with those applied in the previous year, except as indicated otherwise in the case of new accounting standards implemented effective 1 April 2020.

Adoption of new and revised accounting policies

The group is eligible and has elected the temporary exemption from IFRS 9 Financial Instruments as the standard will be adopted with IFRS 17 Insurance Contracts . Refer to note 31 for more information regarding the latter.

The group was not materially affected by any new and revised accounting standards, amendments to standards or new interpretations during the year.

1.1 Significant judgements and estimates

In preparing the financial statements in conformity with IFRS, management is required to make estimates and assumptions that affect the application of accounting policies and the

amounts represented in the financial statements and related disclosures. Use of available information, historical experience and various other factors that are believed to be reasonable in the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the financial statements.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.

Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statement is included in the following notes:

• Note 1.17 – Classification of insurance contracts

• Note 8 – Utilisation of tax losses

Classification of insurance contracts

A significant judgement area for the group is whether a contingency policy and a loan/cession agreement with a policyholder form a single unit of account. This impacts the assessment on whether significant insurance risk is transferred to the group as well as the accounting standard that is relevant to the arrangement.

The group issues contingency policies, while also offering loans (secured advances) to certain policyholders. The policyholders may cede their contingency policies as security for these secured advances.

The group considers whether the contingency policies transfer significant insurance risk to the group. In performing this assessment, management needs to identify all contracts that are entered into simultaneously with a single counterparty (or contracts that are otherwise interdependent), as these form a single contract.

The settlement amounts payable to the policyholders under the contingency policies depend on whether the policyholders also entered into secured advances. The outstanding secured advance balances are settled before the group settles the liabilities under the contingency policies. These agreements are therefore interdependent, as the value of the net policyholder liabilities depend on the value of the outstanding secured advances. Management has concluded on this basis that these agreements form a single unit of account.

The arrangement with the policyholder is regarded as a single contract when determining whether significant insurance risk is transferred to the group. The group

Nictus Limited / Integrated annual report 2021 45

Financial statements

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SIGNIFICANT ACCOUNTING POLICIES continued

for the year ended 31 March 2021

assessed that the single contracts do transfer significant insurance risk to the group. The contracts are therefore in the scope of IFRS 4, the insurance standard. If these were not considered to form a single contract, the secured advances would have been accounted for under IAS 39, the financial instruments standard, separately from the contingency policies. (Refer to accounting policy 1.6 for the accounting treatment of the secured advance component and accounting policy 1.17 for the accounting treatment of the insurance contract component.)

Utilisation of tax losses

Judgement is required in determining the recognition of income taxes due to the complexity of legislation.

The group recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences and tax losses can be utilised. Assessing the recoverability of deferred income tax assets requires the group to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws.

1.3 Property, plant and equipment

Items of property, plant and equipment are measured at cost/revalued amounts less accumulated depreciation and accumulated impairment losses. The cost of 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.

Costs include costs incurred initially that are directly attributable to the acquisition of an item of property, plant and equipment.

Only land and buildings are carried at revalued amounts, determined from market-based evidence by appraisals undertaken by professional valuers at least every five years or as required on an ad hoc basis and by the group’s directors’ valuation on an annual basis, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Formal revaluations are performed annually by the directors such that the carrying amount does not differ materially from that which would be determined using fair value at the reporting date.

1.2 Investments in subsidiaries

Subsidiaries are entities controlled by the group. The group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the group financial statements from the date on which control commences until the date on which control ceases.

Intra-group balances and transactions, and any unrealised gains and losses or income and expenses arising from intra-group transactions, are eliminated in preparing the group financial statements.

Investments in subsidiaries are stated at cost less accumulated impairment losses in the company financial statements.

When the group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related non-controlling interest and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.

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. The increase is recognised in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss.

Any decrease in an asset’s carrying amount, as a result of a revaluation, is recognised in profit or loss in the current period. The decrease is recognised in other comprehensive income to the extent of any credit balance existing in the revaluation surplus in respect of that asset. The decrease recognised in other comprehensive income reduces the amount accumulated in the revaluation reserve in equity.

On the subsequent sale or retirement of revalued property, the attributable revaluation surplus remaining in the property revaluation reserve is transferred directly to retained earnings.

Subsequent costs

The group recognises, in the carrying amount of an item of property, plant and equipment, the cost of replacing part of such item when that cost is incurred and if it is probable that the future economic benefits embodied with the item will flow to the group and the cost of the item can be measured reliably. All other costs are recognised in profit or loss as an expense as incurred.

46 Nictus Limited / Integrated annual report 2021

Depreciation

Depreciation is recognised in profit or loss and is calculated on the depreciable amount on a straight-line basis over the estimated useful life of each major component of an item of property, plant and equipment. Items of property, plant and equipment are depreciated from the date they are installed and are ready for use. Land is not depreciated.

The depreciable amount is the difference between the cost of an item of property, plant and equipment and its residual value.

Residual value is the estimated amount that the group would currently obtain from disposal of the item of property, plant and equipment, after deducting the estimated costs of disposal, if the item of property, plant and equipment was already of age in the condition expected at the end of its useful life.

The estimated useful lives for current and comparative years are as follows:

are as follows:
Item	Average useful life
Buildings Motor vehicles Leasehold improvements Plant and machinery Furniture and fttings Generator equipment Shop fttings Solar equipment Ofce equipment	50 years
	5 years
	Over the lease term
	3 to 20 years
	3 to 10 years
	15 years
	3 years
	5 years
	3 to 5years

The depreciation method, residual value and the useful life of each item of property, plant and equipment are reviewed at each reporting date and adjusted if appropriate.

The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

1.4 Earnings and diluted earnings per share

The group presents earnings per share and diluted earnings per share data for its ordinary shares. Earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the company by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share is calculated by dividing profit or loss attributable to ordinary shareholders of the company, after the adjustment for the effects of all dilutive potential ordinary shares, by the weighted average number of ordinary shares outstanding during the period.

1.5 Intangible assets

An intangible asset is recognised when:

• It is probable that the expected future economic benefits that are attributable to the intangible asset will flow to the entity; and

• The cost of the intangible asset can be measured reliably.

Intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.

Acquired computer software is capitalised as an intangible asset at cost where the recognition criteria are met. External costs that are directly associated with the development and production of identifiable computer software products controlled by the company, and that will probably generate economic benefits exceeding one year, are recognised as intangible assets.

Recognition of costs in the carrying amount of computer software ceases when the computer software is in a condition necessary for it to be capable of operating in the manner intended by management.

Costs associated with maintaining computer software programs are capitalised as intangible assets only if they qualify for recognition. In all other cases these costs are recognised as an expense as incurred.

Amortisation is provided on a straight-line basis in profit or loss over their estimated useful lives to their residual values from the date they are available for use.

The estimated useful lives for the current and comparative years are as follows:

years are as follows:
Item	Useful life
Computer software	3years

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. The gain or loss arising from the derecognition of an intangible asset is included in profit or loss when the item is derecognised. The gain or loss arising from the derecognition of an intangible asset is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

Nictus Limited / Integrated annual report 2021 47

Financial statements

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SIGNIFICANT ACCOUNTING POLICIES continued

for the year ended 31 March 2021

1.6 Financial instruments

Non-derivative financial instruments

Initial recognition

Financial instruments are recognised when, and only when, the group becomes party to the contractual provisions of the particular instrument. Regular purchases and sales of financial assets are accounted for at trade date i.e. the date that the group commits itself to purchase or sell the asset.

Derecognition

Financial assets are derecognised if the group’s contractual rights to the cash flows arising from the financial asset have expired or if the group transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset. Financial liabilities are derecognised if the group’s obligations specified in the contract expire or are discharged or cancelled.

Initial measurement

Non-derivative financial instruments comprise short-term investments, financial instruments at fair value through profit or loss, loans and receivables, trade and other receivables, cash and cash equivalents, interest-bearing borrowings and trade and other payables.

Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs.

Subsequent measurement

Subsequent to initial recognition, non-derivative financial instruments are measured as set out below. Non-derivative financial instruments that are of a short-term nature are not discounted due to the insignificance of the difference between the carrying value and the fair value. The carrying value less impairment allowance of short-term trade receivables and the carrying value of short-term payables are deemed to approximate their fair values. The fair value of financial instruments for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the group for similar financial instruments.

Trade, insurance and other receivables

Trade, insurance and other receivables are measured at amortised cost less impairment losses.

Secured advances, included in trade, insurance and other receivables, and contingency policies form single insurance contracts in scope of IFRS 4 (refer to accounting policy 1.17). The secured advances components are included in, and measured as, trade, insurance and other receivables based on the group’s accounting policy.

Short-term investments

Short-term investments consist of short-term deposits with an original maturity date of more than three months. Short-term investments are measured at amortised cost.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances, call deposits and deposits with an original maturity date of less than three months. Unit trusts, where the majority of the underlying instruments have original maturities of less than three months, and the investment is made to meet short-term operational obligations as they fall due, will be classified as cash and cash equivalents. Cash and cash equivalents are measured at amortised cost.

Interest-bearing borrowings

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are measured at amortised cost with any difference between cost and redemption value being recognised in profit or loss over the period of the borrowings on an effective interest basis.

Loans from group companies are classified as financial liabilities at amortised cost.

Trade and other payables

Trade and other payables are carried at amortised cost using the effective interest method.

Financial instruments at fair value through profit or loss Investments at fair value through profit or loss

An instrument is classified at fair value through profit or loss if it is held-for-trading or is designated as such upon initial recognition.

Financial instruments are designated at fair value through profit or loss if the group manages such investments and makes purchase and sale decisions based on their fair value. Upon initial recognition, attributable transaction costs are recognised in profit or loss when incurred. Financial instruments at fair value through profit or loss are measured at fair value and changes therein are recognised in profit or loss.

Listed investments held by the group are classified at fair value through profit or loss. The fair values are calculated by reference to stock exchange market prices and/or the market value of debt securities, the latter being quoted on the JSE Debt Market, at the close of business on the reporting date.

48 Nictus Limited / Integrated annual report 2021

The underlying instruments of the unit trust investments consist of investments in money market instruments, listed debt securities and listed equities. These investments are fair valued based on the quoted or published closing market price per unit at the close of business on the reporting date.

Fair value estimation

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measure date in the principal or in its absence, the most advantageous market to which the group has access at that date. The fair value of a liability reflects its non-performance risk.

The fair value of financial instruments traded in active markets (such as trading securities) is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the group is the current closing price as reflected on the recognised exchange.

The group measures fair values using the following fair value hierarchy that reflects the significance of the inputs in making the measurements.

Level 1: Quoted market price in an active market for an identical instrument.

Level 2: Valuation techniques based on observable inputs either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation techniques include inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation.

1.7 Income tax and deferred tax

Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in profit or loss except to the extent that it relates to a business combination or items recognised directly in equity or in other comprehensive income.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

The following temporary differences are not provided for:

• The initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;

• Temporary differences relating to investments in subsidiaries to the extent that the group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

• Taxable temporary differences arising on the initial recognition of goodwill.

The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset the current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the unused tax losses and deductible temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

The company withholds dividends tax on behalf of its shareholders at a rate of 20% on dividends declared unless shareholders are exempt. Amounts withheld are not recognised as part of the company’s tax charge, but rather as part of the dividend paid recognised directly in equity.

Where withholding tax is withheld on dividends received, the dividend is recognised as the gross amount with the related withholding tax recognised as part of the tax expense unless it is otherwise reimbursable, in which case it is recognised as an asset.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable or receivable in respect of previous years.

Nictus Limited / Integrated annual report 2021 49

Financial statements

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SIGNIFICANT ACCOUNTING POLICIES continued

for the year ended 31 March 2021

1.8 Leases

The company assesses whether a contract is, or contains a lease, at the inception of the contract.

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 determines 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/company 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.

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 company is a lessee, except for short-term leases of 12 months or less, or leases of low-value assets. For these leases, the company recognises the lease payments as an operating expense (note 6) 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.

Details of leasing arrangements where the company is a lessee are presented in note 6 Leases (group as lessee).

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 right-ofuse assets comprise the following:

• The initial amount of the corresponding lease liability;

• Any lease payments made at or before the commencement date; and

• Any initial direct costs incurred.

Right-of-use assets are subsequently measured at cost less accumulated depreciation and accumulated impairment losses.

The right-of-use asset is presented as a separate line item on the statement of financial position.

Right-of-use assets are depreciated over the shorter period of the lease term and useful life of the underlying asset. Depreciation starts at the commencement date of a lease.

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.

The depreciation charge for each year is recognised in profit or loss.

1.9 Inventories

Lease liability

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; and

• Lease payments in an optional renewal period if the company is reasonably certain to exercise an extension option.

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 22).

Inventories are measured at the lower of cost and net realisable value. The technique for the measurement of the cost of inventories is the standard cost method. The cost formula applied is the weighted average cost.

The cost of retail inventory – inventory held by the furniture retail segment – comprises all costs incurred to procure and deliver the inventories to the retail stores.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated selling costs.

When inventories are sold, the carrying amounts of those inventories are derecognised as an expense – cost of sales – in profit or loss in the period in which the related revenue is recognised. The amount of any write-down of inventories to their net realisable value and all losses of inventories are recognised as an expense in profit or loss in the period the write-down or loss occurs.

50 Nictus Limited / Integrated annual report 2021

Obsolete, damaged and slow-moving retail inventory is identified on a continuous basis and written down to its net realisable value.

1.10 Impairment of assets

Non-derivative financial assets

Financial assets not classified at fair value through profit or loss are assessed for impairment at each reporting date to determine whether there is any objective evidence that they are impaired.

A financial asset is considered to be impaired if objective evidence indicates that one or more events that occurred after the initial recognition of the asset have had a negative effect on the estimated future cash flows of that asset.

Financial assets measured at amortised cost

The group considers evidence of impairment for financial assets measured at amortised cost at both a specific asset and collective level. All individually significant assets are assessed for specific impairment. Those found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Assets that are not individually significant are collectively assessed for impairment by grouping together assets with similar risk characteristics.

In assessing collective impairment, the group uses historical trends of the probability of default, the timing of recoveries and the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate. Losses are recognised in profit or loss and reflected in the allowance account against loans and receivables. When an event occurring after the impairment was recognised causes the amount of impairment loss to decrease, the decrease in impairment loss is recognised in profit or loss.

Indicators of impairment

Objective evidence that financial assets are impaired includes:

• Default or delinquency by a debtor;

• Restructuring of an amount due to the group on terms that the group would not otherwise consider;

• Observable data indicating that there is a measurable decrease in expected cash flows from a group of financial assets.

Non-financial assets

The carrying amounts of the group’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.

An impairment loss is recognised in profit or loss if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent that it reverses a previous revaluation on the same asset.

A cash-generating unit is a group of assets that are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less cost to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Impairment losses recognised in respect of cash-generating units are allocated to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

1.11 Stated capital

Ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects.

• Indications that a debtor will enter bankruptcy;

• Adverse changes in the payment status of borrowers or issuers; or

Nictus Limited / Integrated annual report 2021 51

Financial statements

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SIGNIFICANT ACCOUNTING POLICIES continued

for the year ended 31 March 2021

1.12 Employee benefits

Short-term employee benefits

The cost of short-term employee benefits (those employee benefits other than termination benefits) that are expected to be settled wholly before 12 months after the reporting date are recognised in profit or loss 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.

The expected cost of profit sharing and incentive payments is recognised as an expense in profit or loss when there is a legal or constructive obligation to make such payments as a result of past performance.

1.13 Revenue

The group’s revenue comprises the following:

• Revenue from contracts with customers:

• Sale of goods;

• Rendering of services; and

• Finance income on instalment sales.

• Insurance-related revenue:

• Earned premium income.

The company’s revenue comprises the following:

• Management fee from wholly-owned subsidiaries; and

• Dividends received from wholly-owned subsidiaries.

Group

Sale of goods, rendering of services and finance income on instalment sales

A subsidiary is in the business of furniture retail. Revenue from contracts with customers is recognised when control of the goods or services is transferred to the customer at an amount that reflects the consideration to which the subsidiary company expects to be entitled in exchange for those goods or services.

Revenue from sales of furniture is recognised at the point in time when control of the furniture is transferred to the customer, generally upon the conclusion of the sale transaction inside the furniture store. The group allocates a transaction price to each inventory item – the performance obligation – which depicts the amount of consideration to which the entity expects to be entitled in exchange for transferring the promised goods to the customer.

Revenue in respect of services rendered is recognised at a point in time or over time as the services are rendered. The services predominantly include administration fees, service fees and transport recoveries earned.

Variable consideration

The retail contracts for the sale of furniture provide customers with a right of return. The group undertakes at its election, either to enforce at the request of the customer any warranty given by any manufacturer or supplier of the goods, or to cede the benefit of such warranty to the customer on such conditions for recession of the warranty as the group may reasonably impose.

If it is probable that trade discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue when the sales are recognised.

Significant financing component

Using the practical expedient in IFRS 15, the group does not adjust the promised amount of consideration for the effects of a significant financing component if it expects, at contract inception, that the period between the transfer of the promised goods or service to the customer and the payment by the customer for that goods or service will be less than 12 months.

The group enters into payment arrangements with some of its customers who elect to enter into an instalment sale agreement, for a period up to 24 months, and accordingly charges finance costs on the amount outstanding. Finance income comprises interest on instalment debtors arising from credit sales. The earned portion of interest received is recognised as revenue. Interest is earned from the date that the sales contract is concluded, over the period of the contract, based on the terms and conditions of the instalment sale agreement.

Earned insurance premium

For earned insurance premium recognition and measurement refer to note 1.17.

Company

Management fees from wholly-owned subsidiaries

The company provides specific management and/or businessrelated services to its subsidiaries with regard to certain processes and functions. Management fees are recognised as revenue by the company when services are rendered to subsidiaries, predominantly on a month-to-month basis.

52 Nictus Limited / Integrated annual report 2021

Dividend income from wholly-owned subsidiaries

Dividend income from subsidiaries is recognised as revenue in the company financial statements. Dividend income is recognised on the date that the company’s right to receive payment is established – the dividend declaration date.

Group and company Contract assets

A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the group performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.

Trade receivables

A receivable represents the company’s right to an amount of consideration that is unconditional (i.e. only the passage of time is required before payment of the consideration is due).

Contract liabilities

A contract liability is the obligation to transfer goods or services to a customer for which the group has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the company can transfer goods or services to the customer, a contract liability is recognised when the payment is made. Contract liabilities are recognised as revenue when the company performs under the contract.

1.14 Other income

Transactions not recognised as revenue or finance and investment income are classified as other income and include external insurance claims, profit on disposal of property, plant and equipment, diverse recoveries and ad hoc rebates received.

Other income is recognised in profit or loss when the right to receive payment is established at the amount receivable.

1.15 Investment income and finance expenses

Investment income comprises interest income, fair value adjustments on funds invested and dividend income. Interest income is recognised as it accrues in profit or loss, using the effective interest method. Investment income on the assets of the insurance segment and the investments of the company are recognised as investment income from operations as investments are part of their day-to-day operations. Dividend income is recognised in profit or loss on the date that the group’s right to receive payment is established, which, in the case of quoted securities, is the ex -dividend date. Interest and dividend income are presented separately and not as part of the fair value changes of the financial assets measured at fair value through profit or loss.

Financing expenses comprise interest paid on borrowings calculated using the effective interest method.

1.16 Functional and presentation currency

Functional and presentation currency and foreign currency transactions

The company’s functional currency is the South African Rand. The financial statements have been presented in South African Rands, rounded to the nearest thousand unless stated otherwise.

Transactions in foreign currencies are translated to the functional currency of the group entities at exchange rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate at that date.

1.17 Classification of insurance policies

In return for payment of an insurance premium, Corporate Guarantee (South Africa) (RF) Limited, a wholly-owned subsidiary of the company and registered South African nonlife insurer, undertakes to indemnify the policyholder for loss suffered by reason of the occurrence of any of the event(s) defined in the multi-peril contingency policy (policy or policies), occurring during the period of insurance, in accordance with the terms and conditions of the policy, by payment up to the policy indemnity limit or, at the insurer’s sole discretion, by replacement, reinstatement or repair.

Policies under which the group accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder or other beneficiary if a specified uncertain future event (the insured event) adversely affects the policyholder or other beneficiary are classified as insurance contracts as envisaged by IFRS 4 Insurance Contracts .

The contingency policies that the group sells are insurance contracts as envisaged in scope of IFRS 4. A policyholder may also elect to take out a secured advance with the group. The contingency policy is pledged and ceded to the group as security for the secured advance. In terms of the guidance in IFRS 4, where a secured advance is provided to a policyholder, the agreements between the group and the policyholder are considered to be a single insurance contract due to the interdependency between the agreements (refer to note 1.1 for the information relating to significant judgement). The group’s accounting policy is to present separately the secured advances component that form part of the insurance contracts (refer to accounting policy 1.6) and include it in trade and other receivables.

Nictus Limited / Integrated annual report 2021 53

Financial statements

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SIGNIFICANT ACCOUNTING POLICIES continued

for the year ended 31 March 2021

The insurance contract liability predominantly consists of the premium provision that relates to the unexpired terms of issued policies which can be accurately measured. The policies are also of a short-term basis, with the period of insurance not exceeding 12 months from issue.

Premiums and renewal premiums

Premiums written comprise the premiums on insurance contracts entered into during the financial year, irrespective of whether they relate in whole or in part to a later reporting period. Premiums are disclosed gross of commission payable and exclude value added tax. Premiums written include adjustments to premiums written in prior reporting periods.

The earned portion of premiums received constitute and is recognised as revenue. Premiums are earned from the date of attachment of risk.

Cancellation and expired premiums

Cancellation and expired premiums comprise the premiums on insurance contracts entered into previously, being cancelled in terms of the insurance policy stipulations or the period of insurance expiring in terms of the policy duration. The amount is recognised as an expense on the transaction date. The expensed amount is included in net written premium during the reporting period.

The cancellation and expired premiums reduce the unearned premium provision and impose a corresponding adjustment to reduce the provision of same.

Unearned premium provision

The provision for unearned premiums comprises the proportion of premiums written that relates to the unexpired terms of policies issued reduced by claims incurred, computed separately for each insurance contract.

Claims incurred

Claims incurred consist of claims and claims handling and related expenses paid during the financial year together with the movement in the provision for outstanding claims, including provisions for claims incurred but not yet reported (IBNR), and related expenses together with any other adjustments to claims from previous years. Where applicable, deductions are made for salvage and other recoveries. Outstanding claims comprise provisions for the company’s estimate of the undiscounted ultimate cost of settling all claims incurred but unpaid at the reporting date.

Claims incurred are recognised in profit or loss upon receipt of a valid claim in terms of the policy, measured in terms of same, to compensate the policyholder for the adverse effect of the insured event.

While the directors consider that the gross provisions for claims are fairly stated on the basis of the information currently available to them, the ultimate liability will vary as a result of subsequent information and events and may result in significant adjustments to the amounts provided. Adjustments to the amounts of claims provisions established in prior years are reflected in the financial statements for the period in which the adjustments are made and disclosed separately if material. The methods used to value these provisions, and estimates made, are reviewed regularly.

Liability adequacy test

The liability recognised for insurance contracts is tested for adequacy by discounting current estimates of all future contractual cash flows and comparing this amount to the carrying value of the liability. Where a shortfall is identified, an additional provision is made and the group recognises the shortfall in profit or loss for the year.

Notional interest

A monthly notional interest is allocated to the experience account of the policy. Notional interest is calculated on the positive cash balance of the experience account, at a rate determined by the group, according to market conditions. The notional interest will not be forfeited, even if claims were made against the experience account – it is always calculated on the remaining balance in the account. The notional interest accrues and is paid to the policyholder on expiry or cancellation of the policy. The notional interest liability is disclosed as part of the insurance contract liability balance and measured in terms of IFRS 4.

Secured advances

Secured advances include advances made to companies, property companies and other entities in the normal course of business of the insurance segment. These advances could be secured by assets, rights to claims in the company, mortgage bonds, pledges and suretyships. Currently, these advances are predominantly secured by policy benefits being ceded to the group. Various repayment terms, none of which exceed 12 months, and interest rates apply. Cash flows with regard to secured advances are solely payments of principal and interest on the principal amount outstanding. In its current form, these secured advances are closely linked to the policies and accounted for separately from same in terms of IFRS 4.

1.18 Segment reporting

An operating segment is a component of the group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the group’s other components and for which discrete financial information

54 Nictus Limited / Integrated annual report 2021

is available. All operating segments’ operating results are reviewed regularly by the group’s managing director, who is the chief operating decision maker, to make decisions pertaining to resources to be allocated to the segment and to assess its performance.

Segment results

Segment results consist of segment revenue less segment expenses.

Segment revenue

Segment revenue consists of revenue reported in the group’s profit or loss that is directly attributable to a segment and the relevant portion of group revenue that can be allocated on a reasonable basis to a segment, whether from sales to external customers or from transactions with other segments of the group, but excluding non-specific revenue interest or dividend income and also excluding gains on sales of investments or gains on extinguishments of debt (unless the segment’s operations are primarily of a financial nature).

Segment expense

Segment expense consists of expenses resulting from the operating activities of a segment that are directly attributable to the segment and the relevant portion of expenses that can be allocated on a reasonable basis to the segment, including expenses relating to sales to external customers and expenses relating to transactions with other segments within the group, excluding non-operating interest incurred, losses on sales of investments or losses on extinguishments of debt (unless the segment’s operations are primarily of a financial nature) and income tax.

General administrative expenses, such as head office expenses, and other expenses that arise at group level and relate to the group as a whole, are also excluded from segment expense. Costs incurred at group level on behalf of a segment, however, are included in segment expense if they relate to the segment’s operating activities and they can be directly attributed or allocated to the segment on a reasonable basis.

Segment assets

Segment assets consist of those assets that are employed by a segment in its operating activities and are either directly attributable to the segment or can be allocated on a reasonable basis.

Segment liabilities

Segment liabilities consist of those operating liabilities that result from the operating activities of a segment that are either directly attributable to the segment or can be allocated on a reasonable basis to the segment.

1.19 Determination of fair values

A number of the group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

Property, plant and equipment

The fair value of land and buildings is estimated by using a combination of the income capitalisation method and the depreciated replacement value method. This method requires the net annual income generated by the property, based on market trends, to be capitalised at an appropriate rate of return to reflect risk, specific investment demands and the overall condition of the structures. The group uses alternative valuation methods where deemed more appropriate at the financial position reporting date.

Investments in equity, debt securities and unit trusts

The fair value of financial assets at fair value through profit or loss is determined by reference to their quoted closing market price at the reporting date.

The fair values of the financial assets were determined as follows:

• The fair values of listed or quoted investments are based on the quoted closing market prices;

• The fair values of debt securities are based on the quoted closing market prices as reflected on the JSE Debt Market. The securities are regularly traded on the active market; and

• The fair values of the unit trust investments are based on the quoted put (exit) price provided or published by the fund manager.

1.20 Company-specific accounting policies

Financial instruments

Financial instruments are recognised when, and only when, the company becomes party to the contractual provisions of the particular instrument.

The company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the right to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

Nictus Limited / Integrated annual report 2021 55

Financial statements

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SIGNIFICANT ACCOUNTING POLICIES continued

for the year ended 31 March 2021

The company enters into transactions whereby it transfers assets recognised in the statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognised.

The company derecognises a financial liability when its contractual obligations are discharged, cancelled or expire. The company also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value. On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.

Non-derivative financial instruments Recognition and initial measurement

Non-derivative financial assets comprise investments, trade and other receivables and cash and cash equivalents. The company initially recognises trade receivables on the date that these are originated. All other financial assets are recognised on the trade date, which is the date that the company becomes party to the contractual provisions of the instrument.

A trade receivable and loans and receivables without a significant financing component are initially measured at the transaction price. Other financial assets are initially measured at fair value plus, for an item not at fair value through profit or loss, transaction costs that are directly attributable to its acquisition or issue.

Classification and subsequent measurement

On initial recognition, a financial asset is classified as measured at amortised cost; debt investments at fair value through other comprehensive income, equity instruments at fair value through other comprehensive income; or at fair value through profit or loss.

Financial assets are not reclassified subsequent to their initial recognition unless the company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

The objective of the company’s business model in relation to all financial assets is to hold assets to collect contractual cash flows. In assessing whether the contractual cash flows are solely payments of principal and interest, the company considers the contractual terms of the instrument.

Financial assets at amortised cost

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated at fair value through profit or loss:

• It is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

In assessing whether the contractual cash flows are solely payments of principal and interest, the company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the company considers:

• Contingent events that would change the amount or timing of cash flows;

• Terms that may adjust the contractual coupon rate, including variable rate features;

• Prepayment and extension features; and

• Terms that limit the company’s claim to cash flows from specified assets (e.g. non-recourse features).

For purposes of this assessment, “principal” is defined as the fair value of the financial asset on initial recognition. “Interest” is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by the loss allowances for expected credit losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.

Financial assets at amortised cost comprise trade and other receivables, loans to group companies and cash and cash equivalents.

Financial liabilities at amortised cost

Trade and other payables are recognised when the company becomes a party to the contractual provisions, and are measured, at initial recognition, at fair value plus transaction costs, if any.

Trade and other payables are subsequently measured at amortised cost using the effective interest method.

56 Nictus Limited / Integrated annual report 2021

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 expenses.

Trade and other payables expose the company to liquidity risk and possibly to interest rate risk. Refer to note 28 for details of risk exposure and the management thereof.

Financial assets at fair value through profit or loss

All financial assets not classified as measured at amortised cost or at fair value through other comprehensive income as described above are measured at fair value through profit or loss. On initial recognition, the company may irrevocably designate a financial asset at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.

Impairment of assets Non-derivative financial assets

The company recognises loss allowances for expected credit losses on financial assets measured at amortised cost.

Loss allowances for trade receivables without a significant financing component are measured at an amount equal to lifetime expected credit losses. The company has elected to measure loss allowances for trade receivables which have a significant financing component at an amount equal to lifetime expected credit losses. Loss allowances for other financial assets measured at amortised cost are measured at an amount equal to 12-month expected credit losses, unless there has been a significant increase in credit risk since initial recognition in which case the loss allowance is measured at an amount equal to lifetime expected credit losses.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the company considers

reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the company’s historical experience and includes forwardlooking information. The company assumes that the credit risk on trade and other receivables has increased significantly if it is more than 30 days past due. The company considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the company in full, or the financial asset is more than 90 days past due.

At each reporting date, the company assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit-impaired includes the following observable data:

• Significant financial difficulty of the borrower or issuer;

• A breach of contract such as a default or being more than 90 days past due;

• The restructuring of a loan or advance by the group on terms that the company would not consider otherwise;

• It is probable that the borrower will enter bankruptcy or other financial reorganisation; and

• The disappearance of an active market for a security because of financial difficulties.

Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument. The 12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date. The maximum period considered when estimating expected credit losses is the maximum contractual period over which the group is exposed to credit risk.

Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the group expects to receive). Expected credit losses are discounted at the effective interest rate of the financial asset.

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

Nictus Limited / Integrated annual report 2021 57

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS

for the year ended 31 March 2021

2. New standards and interpretations not yet effective

At the date of authorisation of the group annual financial statements and company annual financial statements for the year ended 31 March 2021, the following standards and interpretations were in issue, but not yet effective:

ended 31 March 2021,	the following standards and interpretations were in issue, but not yet efective:
	Standard/interpretation Efective date: years beginning on or after
IFRS 16	“Leases” COVID-19-related Rent Concessions Amendment Annual periods beginning on or after 1 April 2021*
Various standards	Phase 2 amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – interest rate benchmark (IBOR) reform Annual periods beginning on or after 1 April 2021*
IAS 1	Amendment to IAS 1 “Presentation of Financial Statements” on Classifcation of Liabilities as Current or Non-current Annual periods beginning on or after 1 April 2021*
IFRS 3 amendment	Defnition of a Business Combination Annual periods beginning on or after 1 April 2022*
IAS 16 amendments	Amendments to Property, Plant and Equipment on Proceeds before Intended Use Annual periods beginning on or after 1 April 2022*
IAS 37 amendments	Amendments on Onerous Contracts – Cost of Fulflling a Contract Annual periods beginning on or after 1 April 2022*
Various standards	Annual improvements cycle 2018 – 2020 Annual periods beginning on or after 1 April 2022*
IFRS 17	Insurance Contracts Annual periods beginning on or after 1 April 2023*
IFRS 9	Financial Instruments Annual periods beginning on or after 1 April 2023*

* All standards and interpretations will be adopted at their effective date despite early application being permitted under IFRS (except for those standards and interpretations that are not applicable to the entity).

The directors are of the opinion that the impact of the application of the remaining standards and interpretations will be as follows:

“Leases” COVID-19-related Rent Concessions Amendment (IFRS 16)

The IASB has provided lessees (but not lessors) with relief in the form of an optional exemption from assessing whether a rent concession related to COVID-19 is a lease modification, provided that the concession meets certain conditions. Lessees can elect to account for qualifying rent concessions in the same way as they would if they were not lease modifications. In many cases, this will result in accounting for the concession as a variable lease payment.

The impact of the above on the financial statements of the group is not expected to be significant and the application of this standard will be done on a case-by-case basis.

Phase 2 amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – interest rate benchmark (IBOR) reform

The IASB has undertaken a two-phase project to consider what, if any, reliefs are to be provided in light of IBOR reform. The Phase 1 amendments, issued in September 2019, provided temporary reliefs from applying specific hedge accounting requirements to relationships affected by uncertainties arising as a result of IBOR reform (the Phase 1 reliefs). The Phase 2 amendments that were issued on 27 August 2020 address issues that arise from the implementation of the reforms, including the replacement of one benchmark with an alternative one.

No impact on the financial statements of the group is expected.

58 Nictus Limited / Integrated annual report 2021

2. New standards and interpretations not yet effective continued

Amendment to IAS 1 “Presentation of Financial Statements” on Classification of Liabilities as Current or Non-current

The IASB issued a narrow-scope amendment to IAS 1 Presentation of Financial Statements , to clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Classification is unaffected by the expectations of the entity or events after the reporting date (e.g., the receipt of a waiver or a breach of covenant). The amendment also clarifies what IAS 1 means when it refers to the “settlement” of a liability.

These amendments should be applied for annual periods beginning on or after 1 January 2022, retrospectively in accordance with IAS 8. Earlier application is permitted.

The impact on the financial statements of the group is not expected to be significant and the application of this standard will be done on a case-by-case basis.

Amendment to IFRS 3 Definition of a Business Combination

The IASB has updated IFRS 3 Business Combinations to refer to the 2018 Conceptual Framework for Financial Reporting in order to determine what constitutes an asset or a liability in a business combination.

In addition, the IASB added a new exception in IFRS 3 for liabilities and contingent liabilities. The exception specifies that for some types of liabilities and contingent liabilities, an entity applying IFRS 3 should instead refer to IAS 37 Provisions, Contingent Liabilities and Contingent Assets , or IFRIC 21 Levies , rather than the 2018 Conceptual Framework.

The IASB has also clarified that the acquirer should not recognise contingent assets, as defined in IAS 37, at the acquisition date.

These amendments should be applied for annual periods beginning on or after 1 January 2022.

The impact on the financial statements of the group is not expected to be significant and the application of this standard will be done on a case-by-case basis.

Amendments to IAS 16 Property, Plant and Equipment on Proceeds before Intended Use

The amendment to IAS 16 prohibits an entity from deducting from the cost of an item of PPE any proceeds received from selling items produced while the entity is preparing the asset for its intended use (e.g., the proceeds from selling samples produced when testing a machine to see if it is functioning properly). The proceeds from selling such items, together with the costs of producing them, are recognised in profit or loss.

No impact on the financial statements of the group is expected.

Amendments to IAS 37 Onerous Contracts – Cost of Fulfulling a Contract

The amendment clarifies which costs an entity includes in assessing whether a contract will be loss-making. This assessment is made by considering unavoidable costs, which are the lower of the net cost of exiting the contract and the costs to fulfil the contract. The amendment clarifies the meaning of “costs to fulfil a contract”. Under the amendment, costs to fulfil a contract include incremental costs and the allocation of other costs that relate directly to fulfilling the contract.

The impact on the financial statements of the group is not expected to be significant and the application of this standard will be done on a case-by-case basis.

Nictus Limited / Integrated annual report 2021 59

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

2. New standards and interpretations not yet effective continued

Annual improvements cycle 2018 – 2020

These amendments include the following minor changes:

• IFRS 1 First-time Adoption of IFRS has been amended for a subsidiary that becomes a first-time adopter after its parent. The subsidiary may elect to measure cumulative translation differences for foreign operations using the amounts reported by the parent at the date of the parent’s transition to IFRS;

• IFRS 9 Financial Instruments has been amended to include only those costs or fees paid between the borrower and the lender in the calculation of “the 10% test” for derecognition of a financial liability. Fees paid to third parties are excluded from this calculation;

• IFRS 16 Leases – amendment to the illustrative example 13 that accompanies IFRS 16 to remove the illustration of payments from the lessor relating to leasehold improvements. The amendment intends to remove any potential confusion about the treatment of lease incentives; and

• IAS 41 Agriculture has been amended to align the requirements for measuring fair value with those of IFRS 13. The amendment removes the requirement for entities to exclude cash flows for taxation when measuring fair value.

The impact on the financial statements of the group is not expected to be significant and the application of this standard will be done on a case-by-case basis.

IFRS 17 Insurance Contracts

IFRS 17 supersedes IFRS 4 Insurance Contracts and aims to increase comparability and transparency about profitability. The new standard introduces a new comprehensive model (general model) for the recognition and measurement of liabilities arising from insurance contracts. In addition, it includes a simplified approach and modifications to the general measurement model that can be applied in certain circumstances and to specific contracts, such as:

• Insurance contracts issued;

• Reinsurance contracts held;

• Direct participating contracts; and

• Investment contracts with discretionary participation features.

Under the new standard, investment components are excluded from insurance revenue and service expenses. Entities can also choose to present the effect of changes in discount rates and other financial risks in profit or loss or other comprehensive income.

The new standard includes various new disclosures and requires additional granularity in disclosures to assist users to assess the effects of insurance contracts on the entity’s financial statements.

A subsidiary, being an insurance company, contracted a suitable external IFRS advisor to assist with the process of determining the impact of IFRS 17 and this process was concluded during the financial year ended 31 March 2020. Despite the latter, the group used the additional 12-month extension granted to the insurance industry for the adoption of IFRS 17 to conduct further analysis and consultations to determine an accurate impact of IFRS 17. More detailed disclosure on the impact of the new standard will be provided in future financial statements.

IFRS 9 Financial Instruments

On 24 July 2014, the IASB issued the final IFRS 9 Financial Instruments standard which replaces earlier versions of IFRS 9 and completes the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement .

This standard includes changes in the measurement bases of the group’s financial assets to amortised cost, fair value through other comprehensive income or fair value through profit or loss. Even though these measurement categories are similar to IAS 39, the criteria for classification into these categories are significantly different. In addition, the IFRS 9 impairment model has been changed from an “incurred loss” model from IAS 39 to an “expected credit loss” model.

The change from an incurred loss model to an expected credit loss model when assessing the impairment of trade receivables is not expected to have a significant impact on the company under the new standard based on the nature of the customer base and the level of historical credit losses.

The group and insurance subsidiary are eligible and have elected the temporary exemption from IFRS 9 (refer to note 31 for the required disclosures).

60 Nictus Limited / Integrated annual report 2021

3. Property, plant and equipment

Figures in R’000	2021 2020
	Cost/ valuation Accumulated depreciation and impairments Carrying value Cost/ valuation Accumulated depreciation and impairments Carrying value
GROUP At valuation Land and buildings At cost Leasehold improvements Ofce equipment Furniture and fttings Motor vehicles Generator equipment Shop fttings Solar equipment	14 000 – 14 000 14 000 – 14 000 202 (78) 124 88 (67) 21 716 (432) 284 598 (302) 296 300 (36) 264 74 (11) 63 998 (538) 460 1 078 (418) 660 – – – 269 (2) 267 – – – 480 (480) – 281 (281) – 281 (8) 273
	16 497 (1 365) 15 132 16 868 (1 288) 15 580
COMPANY At cost Ofce equipment Motor vehicles Generator equipment Solar equipment	528 (351) 177 425 (245) 180 295 (121) 174 295 (74) 221 – – – 269 (2) 267 281 (281) – 281 (8) 273
	1 104 (753) 351 1 270 (329) 941

Nictus Limited / Integrated annual report 2021 61

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

3. Property, plant and equipment continued

Reconciliation of movement in the carrying value of property, plant and equipment

Figures in R’000	GROUP Opening carrying value Additions Disposals Revaluation Depreciation and impairment Closing carrying value
2021 At valuation Land and buildings At cost Leasehold improvements Ofce equipment Furniture and fttings Motor vehicles Generator equipment Solar equipment
	14 000 – – – – 14 000
	21 171 (11) – (57) 124
	296 147 – – (159) 284
	63 226 – – (25) 264
	660 – (30) – (170) 460
	267 – (153) – (114) –
	273 – – – (273) –
	15 580 544 (194) – (798) 15 132
2020 At valuation Land and buildings At cost Leasehold improvements Ofce equipment Furniture and fttings Motor vehicles Generator equipment Shop fttings Solar equipment	16 146 – – (2 146) – 14 000 42 – – – (21) 21 286 148 – – (138) 296 29 50 (10) – (6) 63 830 – – – (170) 660 294 – – – (27) 267 27 – – – (27) – 372 – – – (99) 273
	18 026 198 (10) (2 146) (488) 15 580

62 Nictus Limited / Integrated annual report 2021

3. Property, plant and equipment continued

Reconciliation of movement in the carrying value of property, plant and equipment continued

Reconciliation of moveme	nt in the carrying value of property, plant and equipmentcontinued
Figures in R’000	COMPANY Opening carrying value Additions Disposals Revaluation Depreciation and impairment Closing carrying value
2021 At cost Ofce equipment Motor vehicles Generator equipment Solar equipment
	180 103 – – (106) 177
	221 – – – (47) 174
	267 – (153) – (114) –
	273 – – – (273) –
	941 103 (153) – (540) 351
2020 At cost Ofce equipment Motor vehicles Generator equipment Solar equipment	289 – – – (109) 180 268 – – – (47) 221 – 269 – – (2) 267 – 281 – – (8) 273
	557 550 – – (166) 941

Pledged as security

None of the group’s or company’s property, plant and equipment are mortgaged or encumbered.

Nictus Limited / Integrated annual report 2021 63

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

3. Property, plant and equipment continued

Revaluations

Land and buildings consists of business premises situated on Erf 2134, Ferndale, Johannesburg (property), measuring 8 030m[2] . The property was valued by the company’s directors as at 31 March 2021. The valuation was based on initial terms agreed between the company and an unrelated third party to sell the property subsequent to year end. The key input under this approach is the consideration offered for the purchase of the property. The sale of the property within the next

12 months is not assessed as highly probable as at 31 March 2021. The directors updated their assessment of the fair value of the property, taking into account the most recent independent valuation, effective 31 March 2020. The directors determined that the property’s value is within a range of reasonable fair value estimates. Ownership of the property changed during the prior financial year with Kruben Holdings Proprietary Limited selling its business, which included the property, as a going concern to Corporate Guarantee (South Africa) (RF) Limited, a fellow subsidiary at the time. Despite the ownership change, the property remained within the group. The effective date of this transaction was 1 March 2020. No depreciation has been recognised in the current or prior period in respect of the property. The directors have assessed the residual value of the property as at 31 March 2021 and calculated that the residual value approximates the current carrying value.

Fair value hierarchy

Fair value hierarchy
Figures in R’000	Level 1 Level 2 Level 3	Level 4
Land and buildings – 2021 Land and buildings – 2020	– – 14 000	14 000
	– – 14 000	14 000
Figures in R’000		Land and buildings
Reconciliation of fair value assets in Level 3 Balance as at 1 April 2020 Fair value measurements
		14 000
		–
Balance as at 31 March 2021		14 000

64 Nictus Limited / Integrated annual report 2021

4. Intangible assets

Intangible assets
Figures in R’000	2021 2020
	Cost Accumulated amortisation and impairment losses Carrying value Cost Accumulated amortisation and impairment losses Carrying value
GROUP Computer software Trademark	2 328 (2 099) 229 2 328 (1 648) 680 22 – 22 22 – 22
	2 350 (2 099) 251 2 350 (1 648) 702
COMPANY Computer software Trademark	356 (356) – 356 (356) – 22 – 22 22 – 22
	378 (356) 22 378 (356) 22

Reconciliation of movement in the carrying value of intangible assets

Figures in R’000	Opening carrying value Amortisation Closing carrying value
GROUP 2021 Computer software Trademark
	680 (451) 229
	22 – 22
	702 (451) 251
2020 Computer software Trademark	1 179 (499) 680 22 – 22
	1 201 (499) 702
COMPANY 2021 Computer software Trademark
	– – –
	22 – 22
	22 – 22
2020 Computer software Trademark	– – – 22 – 22
	22 – 22

Pledged as security

There is no restricted title on computer software and no computer software has been pledged as security for liabilities of the group or the company. As at 31 March 2021, there were no contractual commitments relating to intangible assets.

Nictus Limited / Integrated annual report 2021 65

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

5. Investments in subsidiaries

Investments in subsidiaries
Name of company Held by	Voting power	Shares at cost
	2021 % 2020 %	2021 R’000 2020 R’000
Corporate Guarantee (South Africa) (RF) Limited Nictus Limited Nictus Meubels ProprietaryLimited Nictus Limited	100,00 100,00	42 900 42 900 41 220 41 220
	100,00 100,00
Impairment of investments in subsidiaries		84 120 84 120 (11 020) (14 178)
Carryingvalue at the end of theyear		73 100 69 942
Accumulated impairment allowances Opening balance Currentyear: impairment losses (reversed) (refer to note 19)		14 178 16 416 (3 158) (2 238)
		11 020 14 178

On 31 March 2020, the company sold its interest in Kruben Holdings Proprietary Limited as it could not be aligned to fit into the company’s strategy. It was sold to Willem H Boshoff as a shelf company. The results of Kruben Holdings Proprietary Limited were previously disclosed as part of the furniture retail segment (refer to note 36).

As a result of prior period trading losses, the investment in Nictus Meubels Proprietary Limited has been impaired. The current and prior year’s reversals, based on trading profits generated by Nictus Meubels Proprietary Limited, have been accounted for in profit or loss as part of operating expenses. The remaining impairment is based on the recoverable amount, constituting the value in use of the subsidiary as at 31 March 2021.

The company has no sponsored entities.

All subsidiaries’ principal place of business and country of incorporation is in South Africa.

6. Leases

The group entered into three new lease agreements during the past year for retail space and a storeroom with regard to the furniture retail segment and office space from a Nictus perspective, which constitute multi-year lease agreements. These leases generally do not exceed an initial period of 60 months. Periods covered by an option to extend the lease, if the lessee is reasonably certain to exercise that option, are also taken into account. The latter is unlikely in a furniture retail environment given the amount of external factors to be considered before extending a lease agreement.

The lease payments for the above-mentioned lease agreements are discounted using the lessee’s incremental borrowing rate as the interest rate implicit in the lease could not be readily determined.

A lease contract relating to the Louis Trichardt retail and store space is not included in the IFRS 16 calculation and is treated as a short-term lease. Negotiations are ongoing as at 31 March 2021 to formalise the specifics with regard to future periods and subject to rental finalisation.

66 Nictus Limited / Integrated annual report 2021

6. Leases continued

Amounts recognised in the statement of financial position

Right-of-use assets

The statement of financial position shows the following amounts relating to leases:

Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Opening balance Adjustment on adoption of IFRS 16 – 1 April 2019 Lease – straight-lining accrual adjustment New lease contracts entered into during the fnancial year Derecognition of right-of-use asset on early termination of existing lease contracts Depreciation recognised	1 514 –	– – – – – – 2 537 – – – (141) –
	– 3 402
	– (319)
	10 381 –
	(165) –
	(1 685) (1 569)
Net carryingamounts of right-of-use assets	10 045 1 514	2 396 –

Lease liabilities

The statement of financial position shows the following amounts relating to leases:

Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Opening balance Adjustment on adoption of IFRS 16 – 1 April 2019 New lease contracts entered into during the fnancial year Derecognition of lease liability on early termination of existing lease contracts Lease concession – COVID-19 relief (note 23) Finance charges incurred (note 21) Finance charges paid Lease liabilityrepayment	1 799 –	– – – – 2 537 – – – – – 42 – (42) – (103) –
	– 3 402
	10 381 –
	(191) –
	(198) –
	212 260
	(212) (260)
	(1 655) (1 603)
Net carryingamounts of lease liabilities	10 136 1 799	2 434 –

The maturity analysis of lease liabilities is as follows:

The maturity analysis of lease liabilities is as follows:
Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Within one year Between one and two years Between two and fveyears	2 275 1 835	592 – 633 – 1 594 –
	2 400 73
	7 266 –
_Less:_Finance charges component	11 941 1 908	2 819 – (385) –
	(1 805) (109)
Non-current component Current component	10 136 1 799	2 434 –
	8 506 71	1 995 – 439 –
	1 630 1 728

Nictus Limited / Integrated annual report 2021 67

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

6. Leases continued

Amounts recognised in the statement of profit or loss

The statement of profit or loss shows the following amounts relating to leases:

Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Depreciation charge of right-of-use assets Interest expense (included in fnance expense (note 21)) Expense on short-term leases included in operating expenses (note 19)	1 685 1 569 212 260 1 090 1 200	141 – 42 – 675 1 032

7. Investments

Investments
Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
At fair value through proft or loss Listed shares Listed debt securities Unit trusts In 2021 and 2020, listed debt securities consist of senior unsecured foating rate notes held in a Southern African bank which are redeemable between 31 May 2021 and 31 October 2022, which earn interest at a rate of three-month JIBAR + 300 basis points per annum or three-month JIBAR + 225 basis points per annum; the applicable rate of return is adjusted on a quarterly basis. A register containing particulars of companies in which shares and unit trusts are held is available for inspection at the registered ofce and head ofce of the group. Amortised cost Short-term investments Short-term investments consist of short-term deposits with an original maturity date of more than three months. Due to the short-term nature of these deposits and the market-related interest rate attached to them, the carrying value approximates the fair value.		26 26 – – 5 312 4 555 – –
	6 856 5 979
	17 105 17 258
	122 860 133 535
	59 507 67 569
Total investments	206 328 224 341	5 338 4 581
Disclosure Non-current assets At fair value through proft or loss* Current assets At fair value through proft or loss Amortised cost		5 338 4 581
	26 177 32 168
	26 177 32 168	5 338 4 581
	180 151 192 173	– –
	120 644 124 604	– – – –
	59 507 67 569
	206 328 224 341	5 338 4 581

* These financial assets are mandatorily measured at fair value through profit or loss at a company level.

Refer to note 1.19 on determining the fair value of financial assets.

Refer to note 28 on financial risk management for the sensitivity analysis.

68 Nictus Limited / Integrated annual report 2021

7. Investments continued

Fair value hierarchy of financial assets at fair value through profit or loss

For financial assets recognised at fair value, disclosure is required of a fair value hierarchy which reflects the significance of the inputs used to make the measurements. Unit trusts consist of investments in collective investment schemes and the valuation technique is based on a quoted put (exit) price provided by the relevant fund managers. The only observable inputs with regard to unit trusts are the closing units and closing price. There were no transfers between the levels for the reporting period.

Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Level 1 Listed shares Listed debt securities Unit trusts		26 26 – – 1 688 1 424
	6 856 5 979
	17 105 17 258
	3 961 3 549
	27 922 26 786	1 714 1 450
Level 2 Unit trusts		3 624 3 131
	118 899 129 986

Interests in unconsolidated structured entities

Unit trust – Investment 1

The fund aims primarily to provide a high level of income. The secondary aim is to maximise total return (the combination of income and capital growth). The fund invests primarily in high income-bearing bonds, cash and other interest-bearing securities. The fund is actively managed. As at year end, the group’s interest in the unit trust totalled R62,45 million (2020: R71,11 million) compared to a total unit trust size of R20,40 billion (2020: R18,40 billion).

Unit trust – Investment 2

In order to achieve its objective, the portfolio will predominantly invest in a diversified range of local and global dividendyielding equity securities and non-equity securities, including redeemable preference shares, liquid instruments and other interest-bearing securities and instruments. As at year end, the group’s interest in the unit trust totalled R6,18 million (2020: R5,81 million) compared to a total unit trust size of R1,29 billion (2020: R1,32 billion).

Unit trust – Investment 3

The fund aims to produce compound total returns in excess of the MCSI World Index over the medium to long term. The fund invests up to 100% in equity. The investment process of the fund is unconstrained, seeking to invest in companies with predictable revenue growth that produce sustainable economic value over the long term. As at year end, the group’s and company’s interest in the unit trust totalled R1,27 million (2020: R1,12 million) and R0,42 million (2020: R0,37 million), respectively, compared to the total unit trust size of R9,38 billion (2020: R12,07 billion).

Unit trust – Investment 4

The unit trust can invest in a wide variety of assets, such as cash, government and corporate bonds, inflation-linked bonds and listed property, both in South Africa and internationally. The unit trust has a flexible mandate with no prescribed maturity or duration limits for its investments. The unit trust is actively managed. As at year end, the group’s interest in the unit trust totalled R41,95 million (2020: R47,68 million) compared to a total unit trust size of R43,01 billion (2020: R44,71 billion).

Unit trust – Investment 5

The fund seeks to provide a return on investment that tracks, as consistently as possible, international equity markets, as measured by the MSCI World Index with dividends reinvested. As at year end, the group’s and company’s interest in the fund totalled R1,21 million (2020: R0,96 million) and R0,31 million (2020: R0,24 million), respectively, compared to the total fund size of R4,98 billion (2020: R3,07 billion).

Nictus Limited / Integrated annual report 2021 69

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

7. Investments continued

Interests in unconsolidated structured entities continued

Unit trust – Investment 6

These unit trusts constitute smaller investments in equity-based funds. The underlying unit trusts will invest in equities on a global basis, for some of which the objective is to achieve long-term capital growth by outperforming the MSCI Emerging Markets Total Return Net Index over a rolling three-year period. The underlying unit trusts invest up to 100% in equity. As at year end, the group’s and company’s interest in these funds totalled R1,72 million (2020: R1,40 million) and R0,80 million (2020: R0,63 million), compared to the combined total unit trust(s) size in excess of R400 billion (2020: R350 billion and more).

Unit trust (Exchange traded fund) – Investment 7

The investment policy of the portfolio shall be to track the FTSE/JSE Preference Share Index as closely as possible, by buying only constituent securities in the same weightings in which they are included in the Index and selling only securities which are excluded from the Index from time to time as a result of quarterly Index reviews or corporate actions. The investment constitutes an exchange traded fund. As at year end, the group’s and company’s interest in the fund totalled R3,29 million (2020: R2,77 million) and R1,69 million (2020: R1,42 million), respectively, compared to the total fund size of R0,30 billion (2020: R0,25 billion).

Unit trust (Exchange traded fund) – Investment 8

This exchange traded fund is one of the most simplest and cost-efficient methods to invest directly in actual gold. It continuously tracks the gold spot price. As at year end, the group’s interest in the fund totalled R0,68 million (2020: R0,78 million), compared to the total fund size of R15,84 billion (2020: R18,64 billion).

8. Deferred tax assets/(liabilities)

Deferred tax assets/(liabilities)
Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Reconciliation of movement for the year Balance at the beginning of the year Current period movements: – Recognised in proft or loss – Recognised in other comprehensive income		(3 115) (2 656) 506 (459) – –
	(694) (3 038)
	(1 832) 1 743
	– 601
	(2 526) (694)	(2 609) (3 115)
The net deferred tax assets/(liabilities) comprise: Deferred tax assets Deferred tax liabilities		– – (2 609) (3 115)
	83 2 421
	(2 609) (3 115)
	(2 526) (694)	(2 609) (3 115)
The net deferred tax assets/(liabilities) comprise the following temporary diferences: Available tax losses Accruals IFRS 16-related assets and liabilities Revaluation of land and buildings Fair value gains on investments Loss – impairment and sale of investments Other receivable – contingency policy (note 11) Capital allowances		360 115 710 295 11 – – – (54) (14) 324 422 (3 960) (3 857) – (76)
	792 2 127
	963 480
	11 –
	(448) (448)
	(232) 658
	348 422
	(3 960) (3 857)
	– (76)
	(2 526) (694)	(2 609) (3 115)

Deferred tax assets in respect of available tax losses and deductible temporary differences have been recognised to the extent that the directors are of the opinion that sufficient future taxable profits will be available in the foreseeable future to enable the group and its subsidiary companies to utilise the available tax losses and deductible temporary differences.

70 Nictus Limited / Integrated annual report 2021

8. Deferred tax assets/(liabilities) continued

Tax rates

The deferred tax rate applied to the fair value adjustments of financial assets or revaluations of owner-occupied property is determined by the expected manner of recovery. Where the expected recovery is through a sale, the capital gains tax rate of 22,4% (2020: 22,4%) has been used. If the expected manner of recovery is through indefinite use, the corporate tax rate of 28% (2020: 28%) has been applied.

If the manner of recovery is partly through use and partly through sale, a combination of capital gains tax rate and corporate tax rate has been used.

The following deferred tax assets have not been recognised by the group and company in respect of available tax losses and deductible temporary differences due to the fact that there is not sufficient certainty at the reporting date whether the subsidiary or company would be able to generate sufficient taxable income in the immediate future to utilise the available tax losses and deductible temporary differences.

Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Estimated available tax losses Tax losses recognised in determiningdeferred tax assets	7 431 14 197	2 732 2 295 (2 732) (2 295)
	(4 381) (7 596)
Unrecognised tax losses	3 050 6 601	– –
Unrecognised deferred tax assets pertaining to unutilised tax losses	854 1 848	– –

The estimated tax losses will be available to the company and the respective subsidiaries indefinitely per the Income Tax Act as long as the entities are trading. There is currently no intention for the company or the subsidiaries to cease trading activities.

9. Inventories

Inventories
Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Merchandise Consumables	10 128 10 733	– – 6 6
	48 63
Provision for inventorywrite-downs	10 176 10 796	6 6 – –
	– –
	10 176 10 796	6 6

No inventories have been written down to net realisable value.

Inventory pledged as security

No inventory has been encumbered or pledged as security.

Nictus Limited / Integrated annual report 2021 71

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

10. Loans from group companies

Loans from group companies
Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Secured advances from Corporate Guarantee (South Africa) (RF) Limited Current loans from Nictus Meubels ProprietaryLimited	– –	– (83) (139) (326)
	– –
	– –	(139) (409)
Reconciliation – loans from subsidiary companies Opening balance as at 1 April Secured advances repaid to subsidiary companies Loans repaid to subsidiary companies Finance expenses accrued Finance expensespaid		(409) (37 647) 83 10 035 187 27 203 (336) (3 381) 336 3 381
	– –
	– –
	– –
	– –
	– –
	– –	(139) (409)

Loans from subsidiary companies

Loans due to subsidiaries bear interest at the Standard Bank of South Africa Limited prime lending rate minus 1%, are unsecured and repayable on demand.

The carrying values of loans from group companies approximate their fair value due to the market-related interest rates applicable to the loans.

Secured advances from subsidiary companies

Secured advances due to subsidiaries bear interest at the Standard Bank of South Africa Limited prime lending rate minus 2%, are secured and repayable within 12 months. The contingency policy receivable was pledged as security (refer to note 11).

The carrying values of secured advances from group companies approximate their fair value due to the market-related interest rates applicable to the loans.

Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Disclosure Current liabilities		(139) (409)
	– –
	– –	(139) (409)

The carrying amounts of loans from group companies are denominated in South African Rands.

72 Nictus Limited / Integrated annual report 2021

11. Trade, insurance and other receivables

Trade, insurance and other receivables
Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Trade receivables: furniture Insurance receivables: premium debtors Prepayments Secured advances Other receivable – contingency policy Deposits Value added tax Sundrydebtors	14 748 15 312	– – – – 137 243 – – 14 141 13 775 – – 1 1 29 46
	39 017 21 118
	425 437
	298 015 400 513
	– –
	26 36
	20 338
	211 286
	352 462 438 040	14 308 14 065
Split between non-current and current portions Non-current Current		– – 14 308 14 065
	5 556 5 485
	346 906 432 555
	352 462 438 040	14 308 14 065

General

The carrying amounts of short-term trade receivables are deemed to approximate their fair values.

The maximum exposure to credit risk at the reporting date is as disclosed in note 28.

Trade receivables include instalment sale agreements relating to furniture and household appliances that are sold to customers using instalment sale agreements, which are non-cancellable and which are on average for a period of two years. Goods sold by the furniture retail segment are sold subject to retention of title clauses, so that in the event of non-payment, the group has a secured claim.

As at 31 March 2021, the future minimum instalment sale agreements and premium debtors payments receivable within one year amounting to R52,2 million (2020: R34,8 million) and R5,6 million (2020: R5,5 million), respectively, are receivable between one and two years, and are included in trade receivables.

Other receivable – contingency policy (company)

The “Other receivable – contingency policy” relates to the contingency policy (policy) entered into by the company (insured) and Corporate Guarantee (South Africa) (RF) Limited (insurer), a subsidiary of the company (i.e. a related party). The policy provides that the insurer, in return for the payment of a premium, undertakes to indemnify the insured for any loss suffered resulting from the occurrence of certain insured events.

The insurer maintains an “experience account” throughout the period of insurance in respect of the policy. The balance of this experience account will be calculated as the total of all premiums received plus premiums receivable (including premiums receivable for the unexpired portion of the insurance period), less commission and claims paid, less fees as indicated in the policy schedule, plus a notional interest allocation calculated on the positive cash balance at a notional interest rate determined within the discretion of the insurer. The balance of the experience account on expiry date, if positive, will be paid to the insured as an experience bonus by the insurer.

Nictus Limited / Integrated annual report 2021 73

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

11. Trade, insurance and other receivables continued

Other receivable – contingency policy (company) continued

The experience bonus will only be paid on written acknowledgement by the insured that it accepts the payment as full and final settlement of its rights under the policy and that the insured will have no further claim against the insurer. In addition, the experience bonus will only become payable after receipt of payment by the insurer of any outstanding premiums payable for the full period of insurance (including the unexpired portion of the period of insurance), or alternatively written confirmation by the insured that the insurer may set off the amount of such outstanding premiums against the balance on the experience account in order to pay the experience bonus net of outstanding premiums. The existence of the experience account provides the insured with a contractual right to receive cash in the form of either claim settlement or experience bonus at expiry or cancellation of the policy.

Consequently, the experience bonus meets the definition of a financial asset, being a contractual right to receive cash or another financial asset from another entity, which is measured at amortised cost.

Secured advances (group)

Secured advances include advances made to companies, property companies, individuals and other entities in the normal course of business. These advances are secured by assets, rights to insurance benefits/claims in Corporate Guarantee (South Africa) (RF) Limited, mortgage bonds, pledges and suretyships. Various repayment terms, none of which exceed 12 months, and interest rates apply. Cash flows with regard to secured advances are solely payments of principal and interest on the principal amount outstanding.

on the principal amount outstanding.
Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
The ageing of trade and other receivables at the reporting date was: Gross Not past due Past due 0 – 30 days Past due 31 – 90 days Past due 91+ days		14 307 14 064 – – – – 1 1
	351 306 437 512
	488 432
	451 330
	1 209 378
	353 454 438 652	14 308 14 065
Impairment allowance Not past due Past due 0 – 30 days Past due 31 – 90 days Past due 91+ days		– – – – – – – –
	(380) (315)
	(45) (40)
	(58) (43)
	(509) (214)
	(992) (612)	– –
Net carryingvalue	352 462 438 040	14 308 14 065

As at 31 March 2021, group trade and other receivables of R1,54 million (2020: R0,82 million) were past due but no impairment allowance was raised. From a company perspective, R0,001 million (2020: R0,001 million) was past due but no impairment allowance was raised. The directors are of the opinion that the impairment allowance raised is adequate and past experience indicates that trade and other receivables past due but not impaired are recoverable.

74 Nictus Limited / Integrated annual report 2021

11. Trade, insurance and other receivables continued

Secured advances (group) continued

Secured advances (group)continued
Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Reconciliation of movement in impairment allowance Opening balance Impairment allowance raised		– – – –
	612 483
	380 129
	992 612	– –

12. Cash and cash equivalents

Cash and cash equivalents
Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Cash and cash equivalents consist of: Cash on hand Bank balances Short-term deposits*		7 7 264 259 9 442 5 392
	19 16
	2 677 1 596
	73 983 54 402
	76 679 56 014	9 713 5 658

* Short-term deposits included a call deposit amounting to R5,64 million (2020: Rnil). The rights, title and interest in and to the aforementioned deposit are subject to a cession/pledge in favour of an independent third party. The group’s exposure has been fully mitigated due to collateral provided in favour of the group by a Corporate Guarantee (South Africa) (RF) Limited policyholder.

Included in cash and cash equivalents are investments made in terms of the various South African insurance regulations to comply with necessary liquidity requirements.

Short-term deposits include a unit trust investment of R47,08 million (2020: R30,90 million). The fund invests in call accounts and short-term money market instruments, the majority with original maturities less than three months. The investment has been made to meet short-term operational obligations as they fall due.

The carrying amount of cash and cash equivalents is deemed to approximate its fair value.

The borrowing capacity, as determined by the MOI, is unrestricted and at the discretion of the directors.

Nictus Limited / Integrated annual report 2021 75

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

13. Stated capital

Stated capital
Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Authorised – no par value shares 250 million ordinary shares of no par value 10 million redeemable cumulative preference shares of nopar value		250 000 250 000 10 000 10 000
	250 000 250 000
	10 000 10 000
	260 000 260 000	260 000 260 000
Issued – no par value shares Opening balance – ordinary shares (53 443 500 (2020: 53 443 500)) Movement		25 969 25 969 – –
	25 969 25 969
	– –
Closing balance – ordinary shares (53 443 500 (2020: 53 443 500))	25 969 25 969	25 969 25 969

All ordinary shares rank equally with regard to the company’s residual assets.

Unissued ordinary shares are under the control of the directors in terms of a resolution of shareholders passed at the last annual general meeting and in terms of the MOI, but subject to compliance with the relevant regulations i.e. the Companies Act of South Africa and the JSE Listings Requirements. This authority remains in force until the next annual general meeting.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of shareholders of the company. All issued share capital is fully paid up.

14. Revaluation reserve

Revaluation reserve
Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
The revaluation reserve relates to property that is carried at its revalued amount. As at 1 April Gross revaluation recognised in other comprehensive income Deferred tax efect Transfer to retained earnings on disposal of land and buildings		– – – – – – – –
	1 152 7 983
	– (2 146)
	– 601
	– (5 286)
As at 31 March	1 152 1 152	– –

76 Nictus Limited / Integrated annual report 2021

15. Trade and other payables

Trade and other payables
Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Accruals Personnel/management fee-related Other Trade payables Sundry creditors Value added tax	5 396 3 534	2 570 1 112
	3 462 1 905	2 460 1 053 110 59
	1 934 1 629
	4 266 1 886	88 83 88 1 286 126 100
	197 189
	910 2 697
	10 769 8 306	2 872 2 581

The group’s and company’s exposure to liquidity risk related to trade and other payables is disclosed in note 28. For fair value disclosure, refer to note 30.

16. Insurance contract liability

Insurance contract liability
Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Gross provision for unearned premiums Grossprovision for notional interest	537 417 625 274	– – – –
	6 630 15 431
	544 047 640 705	– –
Analysis of movements in gross provision for unearned premiums Opening balance Change in gross provision for unearned premiums Claims paid Net underwriting result Net written premiums Gross premiums received Gross renewal premiums Gross cancellation and expired premiums		– – – –
	625 274 539 767
	(87 857) 85 507
	(11 725) (7 527)	– – – – – –
	(4 550) (4 467)
	(71 582) 97 501
	107 938 113 523	– – – – – –
	615 279 661 194
	(794 799) (677 216)
	537 417 625 274	– –
Analysis of movements in notional interest provision Opening balance Notional interest charge to proft or loss Notional interestpaid		– – – – – –
	15 431 13 641
	15 070 30 032
	(23 871) (28 242)
	6 630 15 431	– –

Nictus Limited / Integrated annual report 2021 77

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

16. Insurance contract liability continued

Process used to determine significant assumptions

Insurance risks are unpredictable and the group recognises that it is impossible to forecast with certainty, future claims payable under existing insurance contracts. Over time, the group has developed a methodology that is aimed at establishing insurance provisions that have a reasonable likelihood of being adequate to settle all of its insurance obligations.

Claim provisions

The group’s outstanding claim provisions include notified claims as well as IBNR claims.

Notified claims

Each notified claim is assessed on a separate, case-by-case basis with due regard to the specific circumstances, information available from the insured and/or loss adjuster and past experience with similar claims. The group employs staff experienced in claims handling and applies standardised policies and procedures around claims assessment. The provision for each notified claim includes value added tax, where applicable. There were no unpaid notified claims as at 31 March 2021.

Claims incurred but not reported (IBNR)

Insurers are permitted to apply simplified methods in valuing technical provisions, subject to satisfying the principle of proportionality. As a result of the nature of Corporate Guarantee (South Africa) (RF) Limited’s business, and the likely scale of the IBNR provision, it is proportionate to adopt a simplified method to consider the contribution of IBNR claims to the IFRS technical provisions.

Due to the short duration between the occurrence, reporting and settlement of claims, applying a simplified method for calculating the contribution of IBNR claims to the IFRS claim provisions would be proportionate to the nature and scale of the risks faced by Corporate Guarantee (South Africa) (RF) Limited. The reserve resulting from this method is likely to be negligible. Subsequent to year end, claims amounting to Rnil (2020: R1,67 million) were received and settled by Corporate Guarantee (South Africa) (RF) Limited relating to the financial year ended 31 March 2021.

The adequacy of this provision is assessed on an annual basis as part of the liability adequacy test performed on the total of insurance contract liabilities.

Assumptions

Considering the nature of the insurance contracts sold, it is expected that all insurance liabilities will be settled within 12 months from the reporting date.

17. Revenue

Revenue
Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Revenue from contracts with customers Sale of goods* Rendering of services# Management fees from subsidiaries Dividends received Insurancepremium income	39 644 38 900	– –
	38 452 37 620	– – – –
	1 192 1 280
	– –	12 600 16 600 7 500 – – –
	– –
	16 275 11 994
	55 919 50 894	20 100 16 600
Insurance premium income in terms of IFRS 4 consists of: Net written premiums (note 16) Change in netprovision for unearnedpremiums (note 16)		– – – –
	(71 582) 97 501
	87 857 (85 507)
	16 275 11 994	– –

* The sale of goods consists of revenue from goods transferred to customers at a point in time.

# Rendering of services consists of revenue from services provided to customers over time amounting to R0,41 million (2020: R0,18 million). The remainder is provided at a point in time.

78 Nictus Limited / Integrated annual report 2021

18. Other income

Other income
Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Loss on sale of property, plant and equipment Loss on sale of subsidiary Guarantee fees received Other services rendered Insurance claim Sundry expense Advertising recoveries Bad debts recovered Portfolio management fee – rebate Movement – contingency policybalance	(12) – – (23) 222 19 – 26 113 366 – (43) 252 181 164 166 273 250 – –	(13) – – – – – 17 – – 281 – – – – – – – – 367 1 184
	1 012 942	371 1 465

19. Administrative and operating expenses

Results from operating activities for the year are stated after accounting for the following:

Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Administrative expenses Advertising expenses Allowance for trade receivables impairment raised Auditors’ remuneration Assessment rates and municipal charges Bad debt written of Consulting fees Insurance premium expenses Lease payments – short-term leases Loss on scrapping/derecognition of equipment Management fees paid to related party Other administrative expenses Secretarial fees Telephone and IT-related expenses Travel expenses Operating expenses Amortisation of intangible asset Depreciation of property, plant and equipment Depreciation of right-of-use asset Employee costs and directors' emoluments – Salaries – Medical aid contributions – Fees for services as directors (refer to note 27) Insurance premium expenses Professional fees Commission and fee expenses – third parties Other operating expenses Reversal of impairment against investments in subsidiaries	14 060 13 858	8 482 7 623
	1 131 1 322	– – – – 1 359 836 24 – – – 723 450 – – 675 1 032 – – 3 730 2 775 214 468 238 238 1 435 1 235 84 589
	380 129
	2 113 1 644
	1 275 1 177
	225 196
	748 459
	– 163
	1 090 1 200
	– 10
	3 730 2 775
	983 1 621
	367 388
	1 777 1 738
	241 1 036
	19 841 19 974	3 740 4 799
	451 499	– – 540 167 141 – 6 019 5 917
	798 488
	1 685 1 569
	14 583 14 707
	10 347 10 747	2 309 2 289 59 51 3 651 3 577
	272 235
	3 964 3 725
	151 31	33 836 – – – – 165 117 (3 158) (2 238)
	571 840
	829 974
	773 866
	– –

Nictus Limited / Integrated annual report 2021 79

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

20. Investment income

Investment income
Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Investment income from operations Dividends received Loss on sale of subsidiary Financial assets at fair value through proft or loss* Proft on disposal of investments Fair value adjustments Unit trusts Listed debt securities Listed shares Interest received#		168 185 – (1 886) 634 (155)
	777 1 233
	– –
	4 360 (4 290)
	350 1 482	455 – 179 (155)
	4 010 (5 772)
	2 493 (3 256)	178 (131) – – 1 (24)
	(153) 60
	1 670 (2 576)
	34 551 45 952	473 –
	39 688 42 895	1 275 (1 856)
Investment income Bank and other Loan to relatedparty		– 308 – 2 942
	– 499
	– 2 942
	– 3 441	– 3 250
	39 688 46 336	1 275 1 394

* Represents income on financial assets measured mandatorily at fair value through profit or loss at a company level.

# Represents income on financial assets measured at amortised cost at a company level.

21. Finance expense

Finance expense
Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Loans from subsidiaries Secured advances from subsidiaries Lease liability(IFRS 16)	– – – – (212) (260)	(332) (2 566) (4) (815) (42) –
	(212) (260)	(378) (3 381)

80 Nictus Limited / Integrated annual report 2021

22. Taxation (expense)/credit

Taxation (expense)/credit
Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Major components of the tax expense Current taxation Recognised in proft or loss – current year charge Recognised in proft or loss – adjustment for current tax ofpriorperiods		– – – –
	– (1 326)
	(10) –
	(10) (1 326)	– –
Deferred taxation Recognised in proft or loss – current year (charge)/credit Recognised in other comprehensive income – current year credit		506 (459) – –
	(1 832) 1 743
	– 601
	(1 832) 2 344	506 (459)
	(1 842) 1 018	506 (459)
Reconciliation of the efective tax expense Reconciliation between tax at the statutory tax rate and the efective tax rate: Proft before taxation Other comprehensive income		9 146 3 656 – –
	11 464 3 223
	– (2 146)
Tax at the applicable tax rate of 28% (2020: 28%) Tax rate adjusted for: Proft on sale of investments Ordinary dividends received Fair value adjustment on listed shares, listed debt securities and unit trusts Impairment recognised – subsidiary sold Loss on sale of subsidiary South African Revenue Services (SARS) – interest and penalties reversed Expenses of a capital nature Impairment provision reversed (Under)/overprovision previous year Utilisation/(accumulation) of unrecognised deferred tax asset – assessed loss-related Increase in unrecognised taxable temporary diferences Administration fees – buying and selling of listed shares Change in unrecognised deductible temporarydiferences	11 464 1 077	9 146 3 656 (2 561) (1 024) 26 – 2 147 52 10 (9) – – – (105) – – – – 884 627 – – – – – – – – – –
	(3 210) (302)
	26 83
	218 345
	224 (323)
	– 422
	– (6)
	2 1
	– (5)
	– –
	(12) 111
	994 (124)
	7 686
	(1) (4)
	(90) 134
Efective taxation	(1 842) 1 018	506 (459)

Nictus Limited / Integrated annual report 2021 81

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

23. Cash (utilised by)/generated from operations

Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Proft before taxation Other comprehensive income Adjustments for: Depreciation of property, plant and equipment Depreciation of right-of-use asset Loss on disposal of property, plant and equipment Amortisation of intangible asset Net impairments and movements in credit loss allowances Leasehold property balance adjustment on initial recognition (note 6) IFRS 16-related adjustment on early termination of lease agreement Lease liability balance adjustment – COVID-19 concession Dividend income Investment income Finance expenses Investment income from operations Impairment of investments in subsidiary Impairment reversed on investments in subsidiaries Loss on sale of subsidiary Proft on disposal of investments Inventories lost or written of Fair value adjustments on investments Revaluation of land, buildings and property Receivable from SARS increase – interest-related Changes in working capital: Working capital disposed of with sale of subsidiary Decrease/(increase) in inventories Decrease/(increase) in trade and other receivables (Decrease)/increase in insurance contract liability Increase/(decrease) in trade and otherpayables	11 464 3 223	9 146 3 656 – – 540 166 141 – 13 – – – – – – – – – – – (7 668) (185) – (3 250) 378 3 381 (473) – – 1 886 (3 158) (2 238) – – (455) – – – (179) 155 – – – – – – – – (243) (1 207) – – 312 707
	– (2 146)
	798 488
	1 685 1 569
	12 10
	451 499
	380 129
	– 319
	(26) –
	(198) –
	(777) (1 233)
	– (3 441)
	212 260
	(34 551) (45 952)
	– –
	– –
	– 23
	(350) (1 482)
	77 364
	(4 010) 5 772
	– 2 146
	(6) (2)
	– (20)
	543 (1 041)
	85 198 (32 490)
	(96 658) 87 297
	2 484 604
	(33 272) 14 896	(1 646) 3 071

24. Tax paid

Tax paid
Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Balance receivable at the beginning of the year Interest accrued on tax receivable Current tax for the year recognised in proft or loss Reduction in tax liability – disposal of subsidiary Balance receivable at the end of theyear	72 70	– – – – – – – – – –
	6 2
	(10) (1 326)
	– 24
	– (72)
Tax received/(paid) duringthe current fnancialyear	68 (1 302)	– –

82 Nictus Limited / Integrated annual report 2021

25. Dividends

Dividends
Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Ordinary dividend paid – on 5 October 2020* – on 22 July2019#		1 603 – – 2 004
	1 603 –
	– 2 004
	1 603 2 004	1 603 2 004

Ordinary dividends paid

* The board, within its discretion, declared a final dividend of 3,00 cents per ordinary share for the year ended 31 March 2020 on 11 September 2020, to all ordinary shareholders recorded in the books of Nictus Limited at the close of business on Friday, 2 October 2020. The dividend was paid on Monday, 5 October 2020.

# The board, within its discretion, declared a final dividend of 3,75 cents per ordinary share for the year ended 31 March 2019 on 28 June 2019, to all ordinary shareholders recorded in the books of Nictus Limited at the close of business on Friday, 19 July 2019. The dividend was paid on Monday, 22 July 2019.

26. Related parties

Relationships Subsidiaries Refer to note 5 Other related parties Nictus Holdings Limited Veritas Eksekuteurskamer Proprietary Limited Auas Motors Proprietary Limited Nictus Proprietary Limited Corporate Guarantee (South Africa) (RF) Limited and Insurance Company of Namibia Limited Members of key management Gerard R de V Tromp (Managing director and key management of the group) Eckhart H Prozesky (Financial director and key management of the group) Philippus J de W Tromp (Non-executive director) Nicolaas C Tromp (Non-executive director) Stephanus J Gerber (Chief executive officer: Insurance segment) Independent non-executive directors Professor Barend J Willemse Gerard Swart (retired effective 1 February 2021) Cornelius J de Vrye Sarita Martin (appointed effective 1 February 2021)

A person or a close member of that person’s family is related to a reporting entity if that person; has control or joint control of the reporting entity, has significant influence over the reporting entity or is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. Key management personnel have been identified as the executive directors, non-executive directors and the managing executives of segments within the group.

Close members of the family related to key management would also be defined as related parties. Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the group and include; that person’s children and spouse or domestic partner, the children of that person’s spouse or domestic partner and dependants of that person or that person’s spouse or domestic partner.

Commonly, an entity would be related to the reporting entity if a member of key management is also a member of the key management personnel of that entity (other related parties), or the entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

Nictus Limited / Integrated annual report 2021 83

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

26. Related parties continued

Transactions with key management personnel

Directors and prescribed officers of the company and their immediate relatives beneficially control 78,56% (2020: 77,70%) of the voting shares of the company. Details pertaining to directors’ and key management’s compensations are set out in note 27.

Similar policies are applied to key personnel at subsidiary level who are not defined as key management personnel at group level.

Certain directors of the group are also non-executive directors of other public companies which may transact with the group. The relevant directors do not believe that they have significant influence over the financial and operational policies of those companies. Those companies are therefore not regarded as related parties.

The following transactions were entered into between subsidiaries of the group and key management (as defined) and/or organisations in which key management personnel have significant influence:

organisations in which key management personnel have signifcant infuence:
Figures in R’000	2021 2020
Related party balances GROUP Loan due by related company Secured advance to key management Amounts included in gross provision for unearned premiums – refer to note 16 Veritas Eksekuteurskamer Proprietary Limited Key management Amounts included in gross provision for notional interest – refer to note 16 Veritas Eksekuteurskamer Proprietary Limited Keymanagement	– 4 174 223 (408) (580) (218) (254) (3) (8) – (1)
COMPANY Loan accounts – refer to note 10 Loan from subsidiaries Loan due by related company Secured advances – refer to note 11 Secured advance from subsidiaries Amounts included in trade and other receivables – refer to note 11 Corporate Guarantee (South Africa) (RF) Limited	(139) (326) – 4 – (83) 14 150 13 775

84 Nictus Limited / Integrated annual report 2021

26. Related parties continued

Transactions with key management personnel continued

Related partiescontinued Transactions with key management personnelcontinued
Figures in R’000	2021 2020
Related party transactions GROUP Interest received from related party (Nictus Holdings Limited) Management fees expensed to related party (Veritas Eksekuteurskamer Proprietary Limited) Secretarial fees paid to related party (Veritas Eksekuteurskamer Proprietary Limited) Rental received from other related parties Insurance premium cancellation paid to related party (Veritas Eksekuteurskamer Proprietary Limited) Insurance premium cancellation paid to key management Notional interest allocation Veritas Eksekuteurskamer Proprietary Limited Keymanagement	– (2 942) 3 730 2 775 367 388 – (13) 191 – 43 – 15 30 7 13
COMPANY Interest received from related party (Nictus Holdings Limited) Interest paid to subsidiaries Management fees received from subsidiaries Management fees expensed to related party (Veritas Eksekuteurskamer Proprietary Limited) Rental paid to subsidiaries Dividend received from subsidiary Insurance premiums paid to subsidiary Secretarial fees paid to related party (Veritas Eksekuteurskamer Proprietary Limited) Movement – contingency policy balance (Corporate Guarantee (South Africa) (RF) Limited) Insurance claims received from subsidiary Goodspurchased from subsidiary	– (2 942) 336 3 381 (12 600) (16 600) 3 730 2 775 675 1 089 (7 500) – – 805 238 238 (367) (1 184) – (281) – 27

Loans due to subsidiaries, excluding preference shares, bear interest at the Standard Bank of South Africa Limited prime lending rate minus 1%, are unsecured and repayable on demand.

Inter-company trade receivables and payables are subject to the same terms and conditions applied to the general public. Interest is charged at market-related rates and settlement is expected to be made in cash.

Refer to note 27 for directors’ emoluments.

No guarantees nor doubtful debt were provided for relating to related party balances.

Nictus Limited / Integrated annual report 2021 85

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

27. Directors’, key management’s and prescribed officers’ remuneration

Figures in R’000	Paid by the company Paid by the subsidiaries
	Basic salary Bonuses Directors’ fees* Total
Executive directors 2021 Gerard R de V Tromp# Eckhart H Prozesky
	420 – – 420
	1 560 300 – 1 860
	1 980 300 – 2 280
2020 Gerard R de V Tromp# Eckhart H Prozesky	420 – – 420 1 560 390 – 1 950
	1 980 390 – 2 370

* Classified as short-term employee benefits. No long-term employee benefits are payable.

# A management fee of R2,775 million (2020: R3,130 million) was paid to a related party, Veritas Eksekuteurskamer Proprietary Limited, for services rendered by Gerard R de V Tromp as executive director.

Figures in R’000	Directors’ fees – company Directors’ fees – subsidiaries Basic salary – company* Total
Non-executive directors 2021 Professor Barend J Willemse Gerard Swart Philippus J de W Tromp Nicolaas C Tromp Cornelius J de Vrye Sarita Martin
	455 74 – 529
	252 – – 252
	186 – – 186
	160 74 – 234
	292 – – 292
	26 – – 26
	1 371 148 – 1 519
2020 Professor Barend J Willemse Gerard Swart Philippus J de W Tromp Nicolaas C Tromp Cornelius J de Vrye	485 74 – 559 236 – – 236 118 – – 118 92 74 – 166 276 – – 276
	1 207 148 – 1 355

* Classified as short-term employee benefits. No long-term employee benefits are payable.

86 Nictus Limited / Integrated annual report 2021

27. Directors’, key management’s and prescribed officers’ remuneration continued

Directors’, key management’s and prescribed ofcers’	remunerationcontinued
Figures in R’000	Paid by the subsidiaries
	Basic salary Bonuses Total
Prescribed ofcers other than directors 2021 Stephanus J Gerber
	1 400 310 1 710
	1 400 310 1 710
2020 Stephanus J Gerber	1 238 292 1 530
	1 238 292 1 530

* Classified as short-term employee benefits. No long-term employee benefits are payable.

28. Financial risk management

The group’s activities expose it to a variety of financial risks from the use of financial instruments: market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk.

This note presents information about the group’s exposure to each of the above risks, the group’s objectives, policies and processes for measuring and managing risk and the group’s management of capital. Further quantitative disclosures are included throughout these group financial statements.

The board of directors has overall responsibility for the establishment and oversight of the group’s risk management framework. The board has an audit and risk committee which is responsible for developing and monitoring the group’s risk management policies.

The group’s risk management policies are established to identify and analyse the risks faced by the group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the group’s activities. The group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The group audit and risk committee oversees how management monitors compliance with the group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the group.

Liquidity risk

Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due. The group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the group’s reputation.

The group monitors its cash flow requirements on a daily basis against monthly projections and focuses on optimising its cash return on investments. Typically, the group ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 30 days, including the servicing of financial obligations. This excludes the potential impact of extreme circumstances that cannot reasonably be predicted such as natural disasters. With regard to the group, the contractual maturities of secured advances, R298 million (2020: R400 million), disclosed as part of trade and other receivables, would mirror that of the insurance contract liabilities due to the interdependent nature that exists. At the end of the reporting period, and for purposes of managing liquidity risk, the group held cash and cash equivalents, together with a portion of investments amounting to R142 million (2020: R181 million), that are available to meet cash flow obligations within a period of 30 days.

Nictus Limited / Integrated annual report 2021 87

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

28. Financial risk management continued

The following are the contractual maturities of non-derivative financial liabilities and insurance liabilities, including interest payments and excluding the impact of netting agreements. The amounts disclosed in the table are the contractual undiscounted cash flows.

Figures in R’000	Carrying amount Contractual cash fows Less than 6 months 6 to 12 months Between 1 and 2 years Between 2 and 5 years
2021 GROUP Trade payables Other payables Insurance contract liabilities* Lease liabilities
	4 266 4 266 4 266 – – –
	5 593 5 593 5 593 – – –
	544 047 537 417 361 809 175 608 – –
	10 136 11 941 1 128 1 147 2 400 7 266
COMPANY Loans from group companies Trade payables Other payables Lease liabilities
	139 139 139 – – –
	88 88 88 – – –
	2 658 2 658 2 658 – – –
	2 434 2 819 291 301 633 1 594
2020 GROUP Trade and other payables Insurance contract liabilities Lease liabilities	5 609 5 609 5 609 – – – 640 705 640 705 453 529 187 176 – – 1 799 1 799 989 739 71 –
COMPANY Loans from group companies Trade and otherpayables	409 409 409 – – – 2 481 2 481 2 481 – – –

* As at 31 March 2021, the contractual cash flows associated with insurance contract liabilities exclude the gross provision for notional interest as no current contractual obligation exist relating to same.

Market risk

Market risk is the risk associated with changes in market prices, such as interest rates and equity prices that will affect the group’s income or the value of its holdings in financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

The group incurs financial liabilities and acquires assets in order to manage market risks. All such transactions are carried out within the guidelines set by the group executive committee.

Interest rate risk

The group adopts a policy of ensuring that its exposure to changes in interest rates and borrowings is limited by setting the terms and conditions of loans to adjust with changes in market conditions. The group also aims to ensure that the profit margin is sufficient to cover any rate change.

Other market price risk

The group investment committee monitors the mix of listed debt and equity securities and unit trusts in its investment portfolio based on market expectations. Material investments within the portfolio are managed on an individual basis and all buy and sell decisions are approved by the directors of the relevant segment.

The primary goal of the group’s investment strategy is to maximise profitability through well-managed investments. Management is assisted by external advisors in this regard.

88 Nictus Limited / Integrated annual report 2021

28. Financial risk management continued

Interest rate risk

The group is exposed to interest rate risk as the majority of its interest-bearing financial assets are on a variable rate basis.

Exposure to interest rate risks

At the reporting date, the interest rate profile of the group’s interest-bearing financial instruments was:

Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Variable rate instruments Financial assets at amortised cost Financial assets at fair value through proft or loss Secured advances Financial liabilities		6 089 2 531 3 624 3 131 – – (139) (409)
	110 487 82 514
	118 899 129 986
	298 015 400 513
	– –
	527 401 613 013	9 574 5 253

Sensitivity analysis

An increase of 100 basis points in interest rates at the reporting date would have increased profit/(loss) and increased/ (decreased) equity by the amounts shown below. A decrease of 100 basis points would have an equal but opposite effect on profit. This analysis assumes that all other variables remain constant. This analysis was performed on the same basis for 2020.

Figures in R’000	GROUP 2021 2020	COMPANY 2021 2020
Variable rate instruments	5 274 6 130	96 53

Price risk

The group is exposed to equity securities price risk because of investments held by the company and the group’s insurance subsidiary and classified on the statement of financial position at fair value through profit or loss. To manage its price risk arising from investments in listed equity securities, debt securities and unit trusts, the company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the company.

At the reporting date, the price risk impact of the group’s financial instruments was:

Figures in R’000	10% increase in market prices 2021 10% decrease in market prices 2021 10% increase in market prices 2020 10% decrease in market prices 2020
GROUP Listed shares Listed debt securities Unit trusts	686 (686) 598 (598) 1 711 (1 711) 1 726 (1 726) 12 286 (12 286) 13 354 (13 354)
COMPANY Listed shares Unit trusts	3 (3) 3 (3) 531 (531) 456 (456)

Nictus Limited / Integrated annual report 2021 89

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

28. Financial risk management continued

Foreign exchange risk

The group and company operate locally and are exposed to limited foreign exchange risk, primarily the US Dollar. Foreign exchange risk arises from investments denominated in a currency that is not the functional currency of the group and company. The investments are reviewed regularly in conjunction with external investment professionals. As at year end, the group’s and company’s interest in investments that are exposed to foreign exchange fluctuations amounted to R8,32 million (2020: R5,34 million) and R3,62 million (2020: R3,11 million), respectively.

The group reviews its foreign currency exposure, including commitments, on an ongoing basis.

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, and arises primarily from the group’s receivables from customers and investments in short-term deposits.

Trade and other receivables

The group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the group’s customer base, including the default risk of the industry and country in which customers operate, has less of an influence on credit risk.

Geographically the concentration of credit risk is in South Africa.

The board has established a credit policy for each segment under which each new customer is analysed individually for creditworthiness before the group’s standard payment and delivery terms and conditions are offered. The group’s review includes external ratings obtained from an external credit bureau, reviews of claims history for insurance contracts, where available, and in some cases bank references.

Purchase limits are established for each customer, which represent the maximum opening amount without requiring approval from the subsidiary’s executive management. These limits are reviewed when required per customer. Customers who fail to meet the group’s benchmark creditworthiness may transact with the group only on a cash basis.

The majority of the group’s customers have been transacting with the group for a number of years, and losses have occurred infrequently. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or legal entity, geographic location, industry, ageing profile, maturity and existence of previous financial difficulties or insurance claims.

Trade and other receivables relate only to the group’s end-user customers. Customers that are graded as high risk are restricted by tighter credit limits and their trading activity is monitored monthly by management.

Goods and services are sold subject to retention of title clauses, so that in the event of non-payment, the group has a secured claim.

The group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets.

Secured advances include advances made to companies, property companies and other entities in the normal course of business of the insurance segment. These advances are secured by assets, rights to claims in the company, mortgage bonds, pledges and suretyships to the amount of R436,34 million (2020: R622,82 million). Various repayment terms and interest rates apply. There is therefore no credit risk associated with these advances.

90 Nictus Limited / Integrated annual report 2021

28. Financial risk management continued

Credit risk continued

Investments

The group limits its exposure to credit risk by only investing in short-term investments or reputable institutions. These investments in the insurance subsidiary company are based on the requirements as set out in the Insurance Act (Short-term Insurance Act of South Africa prior to 1 July 2018).

The investment portfolios are determined monthly by the group investment committee with sufficient financial and investment background. This committee reviews the valuation and returns on investments monthly for listed investments and non-listed investments to determine whether the investment portfolio requires change.

Given this, management does not expect any counterparty to fail to meet its obligations other than specifically provided for at year end.

Company-specific disclosure

Trade receivables are collected over a period of 12 months based on the terms of the contract. The company measures the loss allowance at an amount equal to lifetime expected credit losses for all trade receivables and insurance assets.

Estimated credit losses are determined based on an analysis of the ageing of trade receivables and insurance assets, and past write-off history for a period of two and a half years.

The following table provides information regarding the aggregated credit risk exposure for financial instruments and other assets of the company with and without an external credit rating as at 31 March (credit ratings assigned are the international scale credit ratings issued by S&P Global Ratings agency):

scale credit ratings issued by S&P Global Ratings agency):
Figures in R’000	AA/A BB/B* Unrated Total
2021 GROUP Investments – debt securities Investments – unit trusts Investments – short-term deposits Trade, insurance and other receivables Cash and cash equivalents – bank balances Cash and cash equivalents – cash on hand Cash and cash equivalents – short-term deposits
	– 17 105 – 17 105
	– 122 860 – 122 860
	– 59 507 – 59 507
	– – 53 765 53 765
	– 2 677 – 2 677
	– – 19 19
	– 73 983 – 73 983
	– 276 132 53 784 329 916
COMPANY Trade, insurance and other receivables# Cash and cash equivalents – bank balances Cash and cash equivalents – cash on hand Cash and cash equivalents – short-term deposits
	– – 14 141 14 141
	– 264 – 264
	– – 7 7
	– 9 442 – 9 442
	– 9 706 14 148 23 854

* As at 31 March 2021, at group level, approximately 72% of aggregated credit risk exposure relating to these categories of credit ratings represented exposure to the major South African banks and Republic of South Africa government bonds.

# The company did assess the underlying financial asset(s) that constitute trade and other receivables as at year end to quantify expected credit losses or identify indicators of impairment loss at that date. Based on the assessment, the potential effect of expected credit losses is considered immaterial and no evidence was found to support any undue credit risk associated with the financial asset(s). The risk associated with these unrated instrument(s) is managed based on a deep understanding of the counterparties’ financial position and regular reporting regarding same; this includes quarterly regulatory reporting to the Prudential Authority.

Nictus Limited / Integrated annual report 2021 91

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

28. Financial risk management continued

Credit risk continued

Company-specific disclosure continued

Financial risk managementcontinued Credit riskcontinued Company-specifc disclosurecontinued
Figures in R’000	AA/A BB/B* Unrated Total
2020 GROUP Investments – debt securities Investments – unit trusts Investments – short-term deposits Trade, insurance and other receivables Cash and cash equivalents – bank balances Cash and cash equivalents – cash on hand Cash and cash equivalents – short-term deposits	– 17 258 – 17 258 2 668 121 936 – 124 604 – 67 569 – 67 569 – – 36 430 36 430 – 1 596 – 1 596 – – 16 16 – 54 402 – 54 402
	2 668 262 761 36 446 301 875
COMPANY Trade, insurance and other receivables# Cash and cash equivalents – bank balances Cash and cash equivalents – cash on hand Cash and cash equivalents – short-term deposits	– – 13 775 13 775 – 259 – 259 – – 7 7 – 5 392 – 5 392
	– 5 651 13 782 19 433

* As at 31 March 2020, at group level, approximately 80% of aggregated credit risk exposure relating to these categories of credit ratings represented exposure to the major South African banks and Republic of South Africa government bonds.

# The company did assess the underlying financial asset(s) that constitute trade and other receivables as at year end to quantify expected credit losses or identify indicators of impairment loss at that date. Based on the assessment, the potential effect of expected credit losses is considered immaterial and no evidence was found to support any undue credit risk associated with the financial asset(s). The risk associated with these unrated instrument(s) is managed based on a deep understanding of the counterparties’ financial position and regular reporting regarding same; this includes quarterly regulatory reporting to the Prudential Authority.

Insurance risk

Terms and conditions of insurance contracts

Corporate Guarantee (South Africa) (RF) Limited is licensed as a non-life insurer in terms of section 23 of the Insurance Act, 18 of 2017 to conduct insurance business and operations, subject to the classes and subclasses of insurance business defined as part of the insurer’s licensing conditions.

Corporate Guarantee (South Africa) (RF) Limited underwrites finite risk policies to a defined target market which concentrates primarily on small and medium enterprises in the commercial market and secondarily on the lower end of the corporate commercial market as well as the higher end of the personal market. In the personal segment, the group does not cater for the insurance needs of the general public. Commercial and personal clients are carefully selected according to a strategy of prudent risk selection.

Corporate Guarantee (South Africa) (RF) Limited aims to deliver innovative and tailored insurance risk solutions to its clients allowing them to retain some insurance risk and effectively operate as autonomous insurance entities. The finite risk policies expose Corporate Guarantee (South Africa) (RF) Limited to specific risks and include profit participation measures to promote good risk management among the insured. The terms and conditions of insurance contracts that have a material effect on the amount, timing and uncertainty of future cash flows arising from insurance contracts are set out in the notes. Currently, Corporate Guarantee (South Africa) (RF) Limited offers one type of insurance contract, being a contingency policy to cover insurance risk.

92 Nictus Limited / Integrated annual report 2021

28. Financial risk management continued

Insurance risks continued

Insurance risk and policies for mitigating insurance risk

The primary activity of Corporate Guarantee (South Africa) (RF) Limited relates to the assumption of the risk of loss from events involving persons or organisations. Such risks relate to the following classes of business; property, agriculture, transportation, motor, accident and health, guarantee, liability and miscellaneous from an insured event within South Africa. As such, the group is exposed to uncertainty surrounding the timing, severity and frequency of claims under insurance contracts.

The theory of probability is applied to the pricing and provisioning for a portfolio of insurance contracts. The principal risk is that the frequency and severity of claims is greater than expected and that Corporate Guarantee (South Africa) (RF) Limited does not charge premiums appropriate for the risk accepted. Insurance events are, by nature, random, and the actual number and size of events during any one year may vary from those estimated using established statistical techniques.

Corporate Guarantee (South Africa) (RF) Limited manages its insurance risk through underwriting limits, approval procedures for new clients, pricing guidelines, centralised management of risk and monitoring of emerging issues. These actions are described below.

Underwriting strategy

Corporate Guarantee (South Africa) (RF) Limited’s underwriting strategy seeks diversity to ensure a balanced portfolio and is based on a portfolio of similar risks spread over a large geographical area. The underwriting strategy is continuously monitored, updated and determines the classes of business to be written, the territories in which business is to be written and the industry sectors to which Corporate Guarantee (South Africa) (RF) Limited is prepared to accept exposure. The strategy is cascaded down by the respective segment board to management that set the limits for management by client size, class of business, region and industry in order to enforce appropriate risk selection within the portfolio. In addition, management meets monthly to review underwriting information including premium income and loss ratios by class, region and industry.

Concentrations of insurance risk and policies mitigating the concentrations

Within the insurance process, concentrations of risk may arise where a particular event or series of events could impact heavily upon Corporate Guarantee (South Africa) (RF) Limited’s resources. The group monitors the concentration risk by geographical area and class of business. Corporate Guarantee (South Africa) (RF) Limited is broadly represented across South Africa, with the majority of clients being concentrated in the Western Cape. Corporate Guarantee (South Africa) (RF) Limited has exposure to specific classes of insurance business, with approximately 84% of all exposure being represented by the classes of business; property, agriculture and guarantees as at the reporting date.

Exposure relating to catastrophic events

Corporate Guarantee (South Africa) (RF) Limited sets out the total aggregate exposure that it is prepared to accept in certain regions to a range of events such as natural catastrophes. The aggregate position is reviewed annually.

Corporate Guarantee (South Africa) (RF) Limited considers that its most significant exposure would arise in the event of a major environmental disaster. This analysis has been performed through identifying key concentration of risks based on different classes of business exposed in the event of such an incident.

Other risk and policies for mitigating these risks

Insurance companies are exposed to the risk of false, invalid and exaggerated claims. Measures are in place to improve Corporate Guarantee (South Africa) (RF) Limited’s ability to proactively detect fraudulent claims.

Claims development

Corporate Guarantee (South Africa) (RF) Limited is liable for all insured events that occur during the term of a contract, even if the loss is discovered after the end of the contract term, subject to predetermined time scales dependent on the nature of the insurance contract. Corporate Guarantee (South Africa) (RF) Limited is therefore exposed to risk that claim reserves will not be adequate to fund historical claims (run-off risk). To manage run-off risk, Corporate Guarantee (South Africa) (RF) Limited takes all reasonable steps to ensure that it has appropriate information regarding its claim exposures and adopts sound reserving practices. Consequently, Corporate Guarantee (South Africa) (RF) Limited’s history has proven the reserves to be sufficient to fund the actual claims paid.

Nictus Limited / Integrated annual report 2021 93

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

28. Financial risk management continued

Insurance risks continued

Claims development continued

Corporate Guarantee (South Africa) (RF) Limited takes all reasonable steps to ensure that it has appropriate information regarding its claims exposures. Given the uncertainty in establishing claims provisions, however, it is possible that the final outcome may prove to be different from the original liability established. The uncertainty about the amount and timing of claims payments is, however, typically resolved within a year.

The majority of Corporate Guarantee (South Africa) (RF) Limited’s insurance contracts are classified as "short tail", meaning that any claim is settled within a year after the loss date.

In terms of IFRS 4, an insurer need only disclose claim run-off information where uncertainty exists about the amount and timing of claim payments not resolved within one year. Corporate Guarantee (South Africa) (RF) Limited does not underwrite business that is "long tail" in nature.

Capital management

The board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The board of directors monitors both the demographic spread of shareholders as well as the return on capital, which the group defines as total shareholders’ equity and the level of dividends to ordinary shareholders. Capital primarily consists of contributed share capital and retained earnings.

The board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. The group’s target is to achieve a return on shareholders’ equity based on an accepted sovereign bond and risk factor. The group does not have external debt. Cash resources within the group are utilised for any capital commitments.

There were no changes in the group’s approach to capital management during the year.

Corporate Guarantee (South Africa) (RF) Limited is required to demonstrate its solvency to the Prudential Authority in accordance with the Insurance Act. Corporate Guarantee (South Africa) (RF) Limited therefore needs to maintain sufficient shareholder assets (own-funds), over and above the assets required to meet insurance contract liabilities to support a multiple of the solvency capital requirement (SCR). Corporate Guarantee (South Africa) (RF) Limited also undertakes an own risk solvency assessment in addition to meeting the minimum requirements set by the Prudential Authority. Corporate Guarantee (South Africa) (RF) Limited’s objective is to maintain a strong own-funds position to enhance investor, policyholder and market confidence and to stimulate business growth through the optimisation of business opportunities.

The SCR is calculated in accordance with the Prudential Standards as issued by the Prudential Authority. The SCR is calculated quarterly and included as part of the quantitative reporting template which purpose is to demonstrate that Corporate Guarantee (South Africa) (RF) Limited, as insurer, has sufficient capital resources to withstand a 1-in-200-year event, as per the requirements of the Financial Standards for Insurers implemented with effect from 1 July 2018.

The SCR specifically covers the following key areas of risk to Corporate Guarantee (South Africa) (RF) Limited:

• Interest rate risk;

• Equity, currency and property risk;

• Counterparty spread and default risk;

• Concentration risk;

• Non-life underwriting risk; and

• Operational risk.

Corporate Guarantee (South Africa) (RF) Limited has complied with all SCR requirements during the current and prior financial year.

94 Nictus Limited / Integrated annual report 2021

29. Financial assets by category

The accounting policies for financial assets have been applied to the line items below:

Financial assets by category The accounting policies for fnancial assets have been applied to the line items	below:
Figures in R’000	Loans and receivables at amortised cost Fair value through proft or loss Total
2021 GROUP Investments Trade and insurance receivables Secured advances Short-term deposits Cash and cash equivalents
	– 146 821 146 821
	53 765 – 53 765
	298 015 – 298 015
	59 507 – 59 507
	76 679 – 76 679
	487 966 146 821 634 787
COMPANY Investments Trade and other receivables Cash and cash equivalents
	– 5 338 5 338
	14 141 – 14 141
	9 713 – 9 713
	23 854 5 338 29 192
2020 GROUP Investments Trade and insurance receivables Secured advances Short-term deposits Cash and cash equivalents	– 156 772 156 772 36 430 – 36 430 400 513 – 400 513 67 569 – 67 569 56 014 – 56 014
	560 526 156 772 717 298
COMPANY Investments Trade and other receivables Cash and cash equivalents	– 4 581 4 581 13 775 – 13 775 5 658 – 5 658
	19 433 4 581 24 014

Refer to note 1.19 for the determination of fair values for financial assets.

The carrying amounts of the financial assets at amortised cost approximate their fair values.

Nictus Limited / Integrated annual report 2021 95

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

30. Financial liabilities by category

The accounting policies for financial liabilities have been applied to the line items below:

Financial liabilities by category The accounting policies for fnancial liabilities have been applied to the line items below:
Figures in R’000	Financial liabilities at amortised cost Total
2021 GROUP Lease liabilities Trade and otherpayables
	10 136 10 136
	9 859 9 859
	19 995 19 995
COMPANY Loans from group companies Lease liabilities Trade and otherpayables
	139 139
	2 434 2 434
	2 746 2 746
	5 319 5 319
2020 GROUP Lease liabilities Trade and otherpayables	1 799 1 799 5 609 5 609
	7 408 7 408
COMPANY Loans from group companies Trade and otherpayables	409 409 2 481 2 481
	2 890 2 890

Refer to note 1.19 for the determination of fair values for financial liabilities.

The carrying amounts of the financial liabilities at amortised cost approximate their fair values.

96 Nictus Limited / Integrated annual report 2021

31. Additional disclosures required by amendments to IFRS 4 when applying the temporary exemption from IFRS 9

The activities of the group are predominantly connected with insurance. In this regard, management has assessed the following:

• The group has not previously applied any version of IFRS 9;

• The total carrying amount of liabilities arising from contracts within the scope of IFRS 4 for the year ended 31 March 2016 represents 98% of total liabilities. The insurer’s activities are predominantly connected with insurance; and

• The total carrying amount of liabilities connected with insurance, which includes liabilities under IFRS 4 and investment contract liabilities measured at fair value under lAS 39, for the year ended 31 March 2016, is equivalent to 98% of total liabilities.

There has been no significant change in the group’s activities that warrants a reassessment of the above information.

The amendment of IFRS 4 Insurance Contracts requires entities to disclose the fair value at the end of the reporting period and the change in fair value during the period for groups of financial assets with contractual cash flows that are solely payments of principal and interest and other financial assets separately.

There is no publicly available information that relates to the groups’ application of IFRS 9. The group has elected the temporary exemption from applying IFRS 9, in terms of IFRS 4, and all the required disclosure in terms of IFRS 4 is included in this note for the current and prior reporting periods.

The group has assessed that the following financial assets have contractual cash flows that meet the solely payments of principal and interest criteria:

• Loans and receivables – loans;

• Loans and receivables – investment held in preference shares;

• Trade receivables – furniture;

• Insurance receivables – premium debtors;

• Investments – short-term deposits;

• Cash and cash equivalents – bank balances;

• Cash and cash equivalents – cash on hand; and

• Cash and cash equivalents – short-term deposits.

The remaining financial assets held by the entity have contractual cash flows that do not represent solely payments of principal and interest. This group includes the following financial assets:

• Investments – listed shares;

• Investments – listed debt securities; and

• Investments – unit trust investments.

Nictus Limited / Integrated annual report 2021 97

Financial statements

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31. Additional disclosures required by amendments to IFRS 4 when applying the temporary exemption from IFRS 9 continued

The fair value and change in fair value of the two groups of financial assets are disclosed in the following table:

Figures in R’000		Change in value
	Opening balance	Other movements- related Fair value- related Closing balance
As at 31 March 2021 Solely payments of principal and interest – fnancial assets (amortised cost)* Trade receivables – furniture Insurance receivables – premium debtors Investments – short-term deposits Cash and cash equivalents – bank balances Cash and cash equivalents – cash on hand Cash and cash equivalents – short-term deposits Other – fnancial assets at fair value through proft or loss Investments – listed shares Investments – listed debt securities Investments – unit trust investments
	15 312	(564) – 14 748
	21 118	17 899 – 39 017
	67 569	(8 062) – 59 507
	1 596	1 081 – 2 677
	16	3 – 19
	54 402	19 581 – 73 983
	5 979	(793) 1 670 6 856
	17 258	– (153) 17 105
	133 535	(13 168) 2 493 122 860
As at 31 March 2020 Solely payments of principal and interest – fnancial assets (amortised cost)* Loans and receivables – loans Loans and receivables – investment held in preference shares Trade receivables – furniture Insurance receivables – premium debtors Investments – short-term deposits Cash and cash equivalents – bank balances Cash and cash equivalents – cash on hand Cash and cash equivalents – short-term deposits Other – fnancial assets at fair value through proft or loss Investments – listed shares Investments – listed debt securities Investments – unit trust investments	33 910 4 175 14 433 30 710 11 904 916 19 63 705 10 687 10 198 89 007	(33 910) – – (4 175) – – 879 – 15 312 (9 592) – 21 118 55 665 – 67 569 680 – 1 596 (3) – 16 (9 303) – 54 402 (2 132) (2 576) 5 979 7 000 60 17 258 47 784 (3 256) 133 535

* The carrying value of assets held at amortised cost approximate their fair values.

Secured advances are measured in terms of IFRS 4 and will therefore not be classified and measured in terms of IFRS 9 in future.

98 Nictus Limited / Integrated annual report 2021

31. Additional disclosures required by amendments to IFRS 4 when applying the temporary exemption from IFRS 9 continued

The following table represents the entity’s exposure to credit risk on financial assets that meet the solely payments of principal and interest criteria:

principal and interest criteria:
Figures in R’000	AA/A BB/B Unrated Total
As at 31 March 2021 Solely payments of principal and interest – fnancial assets (amortised cost) Trade receivables – furniture Insurance receivables – premium debtors Investments – short-term deposits Cash and cash equivalents – bank balances Cash and cash equivalents – cash on hand Cash and cash equivalents – short-term deposits
	– – 15 740 15 740
	– – 39 017 39 017
	– 59 507 – 59 507
	– 2 677 – 2 677
	– – 19 19
	– 73 983 – 73 983
As at 31 March 2020 Solely payments of principal and interest – fnancial assets (amortised cost) Trade receivables – furniture Insurance receivables – premium debtors Investments – short-term deposits Cash and cash equivalents – bank balances Cash and cash equivalents – cash on hand Cash and cash equivalents – short-term deposits	– – 15 924 15 924 – – 21 118 21 118 – 67 569 – 67 569 – 1 596 – 1 596 – – 16 16 – 54 402 – 54 402

In the case of financial assets held at amortised cost, the amounts disclosed are the carrying amounts applying IAS 39, before adjusting for any impairment allowances.

The table above includes R1,7 million (2020: R0,7 million) trade receivables that are not considered to have low credit risk as defined in note 1.20. The fair value of these financial assets as at 31 March 2021 and 31 March 2020 is equal to their carrying value.

32. Commitments

Authorised capital expenditure

The group has not entered into any contracts to purchase property, plant and equipment.

Nictus Limited / Integrated annual report 2021 99

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

33. Going concern

The financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. Management has considered the potential implications of COVID-19 and the measures taken to control it in assessing the entity’s ability to continue as a going concern.

COVID-19 pandemic

The World Health Organisation announced the COVID-19 outbreak as a pandemic on 11 March 2020, which has significantly affected lives, entities and economic activity around the world. Many countries around the world have, among other radical actions, implemented national lockdowns as part of attempts to contain the spread of the virus. In South Africa, a hard lockdown was announced commencing on 27 March 2020, whereafter a phased reopening of the South African economy followed from 1 May 2020. With a 12-month history and valuable experience gained as to how to function and live with COVID-19, we doubt that hard lockdowns will be applicable going forward. The availability and distribution of vaccines globally is a positive, although the effectiveness against future variants of the virus, coupled with the slow roll-out in South Africa of same, could seriously hamper the impact thereof.

It is not possible to provide accurate estimates of the financial effects of the pandemic on the group which is inherently uncertain, but the following can be communicated at this time; the group is committed to the same areas of focus as applied during the financial year ended 31 March 2021:

• The health and safety of our employees remains a top priority together with avoiding/limiting job losses within the group;

• We are committed to working with our customers and clients throughout this period of change and uncertainty in the best interest of all stakeholders involved;

• The group is committed to a disciplined approach to cost and capital expenditure to manage its available resources; and

• Liquidity and cash flows remain a key aspect in weathering times of uncertainty. This is and will remain a priority as we move forward.

Impact on capital reserves

We are fortunate to have a strong capital base to carry the group during times of uncertainty and adverse economic conditions. The COVID-19 outbreak will bring about an extended period of reduced economic activity, particularly in South Africa. We are of the opinion that the group has sufficient capital reserves to carry itself through the months and years to come.

Impact on revenue

Revenue from the sale of goods will be negatively affected during the 2022 financial year, primarily due to increased unemployment and weaker consumer demand. The segment’s availability of inventory, despite general supply chain disruptions, and availability of working capital, will assist in keeping up with consumer demand, albeit at reduced levels. The insurance segment foresees reduced premium income, however, a diverse client base across different industries should mute the possible decline.

Value of investments

Potentially reduced investment values are expected due to reductions in market values of the group’s investments in equities, bonds and unit trust funds. Up to the date of publication of the 2021 financial statements, markets have recovered most of the declines experienced during March 2020. It is important to note that the recovery of investments and the extent thereof could be primarily ascribed to positive sentiment, accommodative macroeconomic policies together with enormous liquidity on offer from central banks globally at historically low interest rates rather than economic fundamentals and the strength of same. The group’s investment portfolio remains conservatively positioned with the required liquidity in mind.

Impact on insurance claims

For Corporate Guarantee (South Africa) (RF) Limited, the accurate prediction of the increase in claims to be expected during and following the COVID-19 pandemic is near impossible. Various scenarios have been modelled informing our investment decisions and the level of liquidity across the investment portfolio is sufficient to absorb a wide range of adverse scenarios.

100 Nictus Limited / Integrated annual report 2021

34. Events after the reporting date

There were no material events after the reporting date and up to the date of approval of these financial statements that required adjustment or disclosure in the group and company financial statements for the year ended 31 March 2021, other than that a dividend of 5,00 cents per share was declared by the directors subsequent to year end, payable to shareholders registered on 26 July 2021.

35. Earnings per share

Basic earnings per share

The basic earnings per ordinary share from operations for the year is 18,00 cents (2020: 6,81 cents). The calculation of basic earnings per share from operations is based on profit of R9,62 million (2020: profit of R3,64 million) and a weighted average number of shares in issue of 53 443 500 (2020: 53 443 500).

Diluted earnings per share

The diluted earnings per share from operations for the year is 18,00 cents (2020: 6,81 cents). The calculation of the diluted earnings per share from operations is based on profit of R9,62 million (2020: profit of R3,64 million) and a weighted average number of shares in issue of 53 443 500 (2020: 53 443 500).

Headline earnings per share

The headline earnings per share from operations for the year is 18,02 cents (2020: 6,86 cents). The calculation of headline earnings per share from operations is based on profit of R9,63 million (2020: profit of R3,66 million) and a weighted average number of shares in issue of 53 443 500 (2020: 53 443 500).

Diluted headline earnings per share

The diluted headline earnings per share from operations for the year is 18,02 cents (2020: 6,86 cents). The calculation of the diluted headline earnings per share from operations is based on profit of R9,63 million (2020: profit of R3,66 million) and a weighted average number of shares in issue of 53 443 500 (2020: 53 443 500).

Figures in R’000	Proft on ordinary activities Taxation Non- controlling interest Net proft
Reconciliation between earnings and headline earnings: 2021 Proft before taxation Adjustments for: Loss on disposal ofproperty,plant and equipment
	11 464 (1 842) – 9 622
	12 (3) – 9
Headline earnings	11 476 (1 845) – 9 631
2020 Proft before taxation Adjustments for: Loss on disposal of property, plant and equipment Loss on disposal of subsidiary	3 223 417 – 3 640 10 (3) – 7 23 (6) – 17
Headline earnings	3 256 408 – 3 664

Nictus Limited / Integrated annual report 2021 101

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

36. Group segmental analysis

Group segmental analysis
Figures in R’000	Furniture retail1	Insurance2
	2021 2020	2021 2020
Segment revenue Revenue from contracts with customers Sale of goods# Rendering of services@ Efective interest revenue Rental income Dividend income Management fees Insurancepremium income	41 640 41 316	– –
	38 452 37 620 1 192 1 280 1 996 2 416	– – – – – –
	– 1 029 – – – – – –	– – – – – – 16 330 12 429
Total revenue from external customers Inter-segment revenue	41 640 42 345 – –	16 330 12 429 – –
Total segment revenue	41 640 42 345	16 330 12 429
Segment result Proft/(loss) before fnancing expenses, depreciation, amortisation and taxation Depreciation and amortisation Financingcosts	5 375 86 (1 953) (2 102) (264) (730)	10 118 831 (301) (287) – –
Proft/(loss) before taxation Taxation credit/(expense)	3 158 (2 746) – 1 438	9 817 544 (2 348) 38
Proft/(loss) for theyear	3 158 (1 308)	7 469 582
Segment assets*	43 696 35 306	612 073 710 234
Segment liabilities*	13 461 8 264	562 693 660 823
Cash fows from operatingactivities	9 286 (2 894)	9 087 (27 353)
Cash fows from investingactivities	(166) 20 636	3 456 10 425
Cash fows from fnancingactivities	(5 052) (14 728)	– –
Capital expenditure	(397) (153)	(44) (43)

1 The segment has two furniture retail stores in South Africa. Nictus places the customer first by continually striving towards excellence. Helpful personnel provide service with dedication and motivation, while maintaining integrity, focus and sound values. Products are of the highest quality and provide excellent value for money. Stores are situated in Louis Trichardt and Polokwane as at year end. The segment was negatively affected in the prior year by the operational results of Kruben Holdings Proprietary Limited which formed part of this segment up until 31 March 2020, the date on which the company was sold to an external third party. The loss relating to Kruben Holdings Proprietary Limited amounted to R3,55 million.

• 2 The insurance segment of the group is run through Corporate Guarantee (South Africa) (RF) Limited, which brings a unique approach to non-life

insurance through the alternative risk transfer model. The head office is currently situated in Bryanston and utilises group administration staff.

* The segment assets and liabilities include tax assets and liabilities and have been included in the elimination column to agree to the amounts per the financial statements. On the next page, a reconciliation is performed to reflect the amount for segment assets and liabilities as defined in the accounting policies.

• # The sale of goods consists of revenue from goods transferred to customers at a point in time.

• @ Rendering of services consists of revenue from services provided to customers over time amounting to R0,41 million (2020: R0,18 million). The remainder is provided at a point in time.

102 Nictus Limited / Integrated annual report 2021

	Head ofce	Eliminations	Consolidated
	2021 2020	2021 2020	2021 2020
	– –	– –	41 640 41 316
	– – – – – –	– – – – – –	38 452 37 620 1 192 1 280 1 996 2 416
	– – 7 500 – 12 600 16 600 – –	– (1 029) (7 500) – (12 600) (16 600) (55) (435)	– – – – – – 16 275 11 994
	20 100 16 600 – –	(20 155) (18 064) – –	57 915 53 310 – –
	20 100 16 600	(20 155) (18 064)	57 915 53 310
	10 205 7 204 (681) (167) (378) (3 381)	(11 087) (2 082) – – 430 3 851	14 611 6 039 (2 935) (2 556) (212) (260)
	9 146 3 656 506 (459)	(10 657) 1 769 – (600)	11 464 3 223 (1 842) 417
	9 652 3 197	(10 657) 1 169	9 622 3 640
	105 234 95 215	(89 847) (91 275)	671 156 749 480
	8 054 6 105	(16 647) (21 267)	567 561 653 925
	4 514 1 121	(83) (14 202)	22 804 (43 328)
	(86) 41 435	(3 688) (36 159)	(484) 36 337
	(373) (37 238)	3 770 50 363	(1 655) (1 603)
	(103) (550)	– –	(544) (746)

Nictus Limited / Integrated annual report 2021 103

Financial statements

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued

for the year ended 31 March 2021

36. Group segmental analysis continued

Group segmental analysiscontinued
Figures in R’000	2021 2020
Reconciliation between consolidated segment assets and liabilities and total consolidated assets and liabilities Assets Segment assets Deferred tax Current tax receivable	671 073 746 987 83 2 421 – 72
Consolidated assets	671 156 749 480
Liabilities Segment liabilities Deferred tax Current taxpayable	564 952 650 810 2 609 3 115 – –
Consolidated liabilities	567 561 653 925
Segment assets Furniture retail Insurance	43 696 35 306 612 073 710 234
Head ofce and eliminations	655 769 745 540 15 387 3 940
	671 156 749 480
Segment revenue Furniture retail Insurance	41 640 42 345 16 330 12 429
Head ofce and eliminations	57 970 54 774 (55) (1 464)
	57 915 53 310
Proft/(loss) for the year Furniture retail Insurance	3 158 (1 308) 7 469 582
Head ofce and eliminations	10 627 (726) (1 005) 4 366
	9 622 3 640

104 Nictus Limited / Integrated annual report 2021

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Shareholder information

106 Notice of annual general meeting 113 Electronic participation 115 Form or proxy

117 Notes to the form of proxy 119 Definitions, ratios and terms

Nictus Limited / Integrated annual report 2021 105

Shareholder information

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NOTICE OF ANNUAL GENERAL MEETING

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Nictus Limited

(Incorporated in the Republic of South Africa) Registration number RSA: 1981/011858/06 Registration number NAM: 781/11858 JSE share code: NCS ISIN number: NA0009123481 (Nictus or the company)

Notice is hereby given that the annual general meeting of the shareholders of Nictus (shareholders) in respect of the financial year ended 31 March 2021 will be held on Wednesday, 1 September 2021 at 15:00 (South African time), to deal with the business as set out below and to consider and, if deemed appropriate, pass with or without modification the ordinary and special resolutions set out in this notice.

In light of the COVID-19 pandemic the board has, in the circumstances, determined that it is necessary, prudent and preferable that the annual general meeting be held by way of electronic participation only, and not by way of a physical meeting. The annual general meeting will accordingly only be accessible through electronic communication, as permitted by the JSE Limited (JSE) and in accordance with the provisions of the Companies Act of South Africa, 71 of 2008 (the Companies Act of South Africa) and the company’s Memorandum of Incorporation (MOI). The company has retained the services of The Meeting Specialist Proprietary Limited (TMS) to remotely host the annual general meeting on an interactive electronic platform in order to facilitate remote participation and voting by shareholders. TMS will also act as scrutineer for purposes of the annual general meeting.

Please refer to point 9 of the notice of annual general meeting for details.

vote at the annual general meeting. The last day to trade in order to be entitled to participate in and vote at the annual general meeting is therefore Tuesday, 17 August 2021.

2. General purpose of the annual general meeting

The general purpose of the annual general meeting is to:

• 2.1 Consider and, if deemed appropriate, pass with or without modification the resolutions set out hereunder; and

• 2.2 Deal with any business that may lawfully be dealt with at the annual general meeting.

3. Presentation of the group audited annual financial statements

The consolidated audited annual financial statements of the company and its subsidiaries, incorporating the reports of the auditor, the audit and risk committee, the directors, the social and ethics committee and the remuneration and nomination committee for the year ended 31 March 2021, will be presented to shareholders as required in terms of section 30(3)(d) read with section 61(8)(a) of the Companies Act of South Africa.

4. Resolutions for consideration and approval

4.1 Ordinary resolution 1: Re-election of Cornelius J de Vrye as a director

“Resolved that Cornelius J de Vrye, who retires by rotation in terms of clause 16.3.2 of the MOI, be and is hereby re-elected as a director of the company.”

In order for this ordinary resolution number 1 to be passed, the support of more than 50% (fifty percent) of the voting rights exercised on the resolution by shareholders present in person, or represented by proxy, at the annual general meeting, is required.

1. Record date

The board of directors of the company (the board) has determined that the record date, as contemplated in section 59(1) of the Companies Act of South Africa and the JSE Limited (JSE) Listings Requirements, for the purpose of determining which shareholders of the company are entitled to:

• 1.1 Receive notice of the annual general meeting is Friday, 25 June 2021; and

• 1.2 Participate in and vote at the annual general meeting is Friday, 20 August 2021. Accordingly, only shareholders who are registered in the register of members of the company, or their proxies, on Friday, 20 August 2021 will be entitled to participate in and

A brief curriculum vitae is set out on page 11 of the integrated annual report of which this notice forms part.

4.2 Ordinary resolution 2: Re-election of Professor Barend J Willemse as a director

“Resolved that Professor Barend J Willemse, in terms of clause 16.3.2 of the MOI, be and is hereby re-elected as a director of the company.”

In order for this ordinary resolution number 2 to be passed, the support of more than 50% (fifty percent) of the voting rights exercised on the resolution by shareholders present in person, or represented by proxy, at the annual general meeting, is required.

106 Nictus Limited / Integrated annual report 2021

A brief curriculum vitae is set out on page 10 of the integrated annual report of which this notice forms part.

4.3 Ordinary resolution 3: Re-election of Nicolaas C Tromp as a director

“Resolved that Nicolaas C Tromp, in terms of clause 16.3.2 of the MOI, be and is hereby re-elected as a director of the company.”

In order for this ordinary resolution number 3 to be passed, the support of more than 50% (fifty percent) of the voting rights exercised on the resolution by shareholders present in person, or represented by proxy, at the annual general meeting, is required.

A brief curriculum vitae is set out on page 10 of the integrated annual report of which this notice forms part.

4.4 Ordinary resolution 4: Election of Sarita Martin as a director

“Resolved that Sarita Martin, in terms of clause 16.2.9.1 of the MOI, be and is hereby elected as a director of the company.”

In order for this ordinary resolution number 4 to be passed, the support of more than 50% (fifty percent) of the voting rights exercised on the resolution by shareholders present in person, or represented by proxy, at the annual general meeting, is required.

A brief curriculum vitae is set out on page 11 of the integrated annual report of which this notice forms part.

4.5 Ordinary resolution 5: Non-binding approval of the remuneration policy

“Resolved to approve, by way of a non-binding advisory vote, the remuneration policy of the company as set out on page 27 of the integrated annual report of which this notice forms part.”

In order for this ordinary resolution number 5 to be passed, the support of more than 50% (fifty percent) of the voting rights exercised on the resolution by shareholders present in person, or represented by proxy, at the annual general meeting, is required.

4.6 Ordinary resolution 6: Non-binding approval of the remuneration implementation report

“Resolved to approve, by way of a non-binding advisory vote, the remuneration implementation report of the company as set out on page 25 of the integrated annual report of which this notice forms part.”

In order for this ordinary resolution number 6 to be passed, the support of more than 50% (fifty percent) of the voting

rights exercised on the resolution by shareholders present in person, or represented by proxy, at the annual general meeting, is required.

The remuneration report of the remuneration and nomination committee (which includes the remuneration policy and implementation report) is set out on pages 24 to 27 of the integrated annual report of which this notice forms part.

The JSE Listings Requirements require, and the King IV[TM] Report on Corporate Governance for South Africa, 2016 (King IV[TM] ) recommends, that a company’s remuneration policy and implementation report be tabled for separate nonbinding advisory votes by shareholders at each annual general meeting. This enables shareholders to express their views on the company’s remuneration policy and the implementation report. Ordinary resolutions numbers 5 and 6 are of a non-binding advisory nature only. The board will, however, take the outcome of the non-binding advisory votes into consideration when considering amendments to the group’s remuneration policy.

Shareholders are reminded that in terms of the JSE Listings Requirements and King IV[TM] , should 25% or more of the votes cast be against one or both of these non-binding ordinary resolutions, Nictus undertakes to engage with shareholders as to the reasons therefore and undertakes to appropriately address legitimate and reasonable objections and concerns raised.

4.7 Ordinary resolution 7: Re-election of Cornelius J de Vrye as a member and chairperson of the audit and risk committee

“Resolved that Cornelius J de Vrye, a director of the company who fulfils the requirements of section 94(4) of the Companies Act of South Africa, be and is hereby re-elected as a member and chairperson of the audit and risk committee of the company, to hold office until the conclusion of the next annual general meeting of the company, subject to his re-election as a director of the company pursuant to ordinary resolution number 1.

In order for this ordinary resolution number 7 to be passed, the support of more than 50% (fifty percent) of the voting rights exercised on the resolution by shareholders present in person, or represented by proxy, at the annual general meeting, is required.

4.8 Ordinary resolution 8: Re-election of Professor Barend J Willemse as a member of the audit and risk committee

“Resolved that Professor Barend J Willemse, a director and chairperson of the board who fulfils the requirements contemplated in section 94(4) of the Companies Act of South

Nictus Limited / Integrated annual report 2021 107

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NOTICE OF ANNUAL GENERAL MEETING continued

Africa, be and is hereby re-elected as a member of the audit and risk committee of the company, to hold office until the conclusion of the next annual general meeting of the company, subject to his re-election as a director of the company pursuant to ordinary resolution number 2.”

In order for this ordinary resolution number 8 to be passed, the support of more than 50% (fifty percent) of the voting rights exercised on the resolution by shareholders present in person, or represented by proxy, at the annual general meeting, is required. Shareholders’ attention is specifically drawn to the dual role of Professor Barend J Willemse, being an independent non-executive chairperson of the board and also a member of the audit and risk committee of the company.

4.9 Ordinary resolution 9: Election of Sarita Martin as a member of the audit and risk committee

“Resolved that Sarita Martin, a director of the company who fulfils the requirements contemplated in section 94(4) of the Companies Act of South Africa, be and is hereby elected as a member of the audit and risk committee of the company, to hold office until the conclusion of the next annual general meeting of the company, subject to her election as a director pursuant to ordinary resolution number 4.”

In order for this ordinary resolution number 9 to be passed, the support of more than 50% (fifty percent) of the voting rights exercised on the resolution by shareholders present in person, or represented by proxy, at the annual general meeting, is required.

4.10 Ordinary resolution 10: Reappointment of PricewaterhouseCoopers Inc. as the independent external auditor

“Resolved that PricewaterhouseCoopers Inc. (with the designated external audit partner being Jorge M Goncalves) be and is hereby reappointed as the independent external auditor of the company, in terms of the MOI and the Companies Act of South Africa, to hold office until the conclusion of the next annual general meeting of the company.”

The audit and risk committee of the company recommended the reappointment of PricewaterhouseCoopers Inc. and Jorge M Goncalves, following its assessment of the performance and independence of PricewaterhouseCoopers Inc. and Jorge M Goncalves and being satisfied that no governance guidelines have been breached and that they have complied with the provisions of the JSE Listings Requirements and the Companies Act of South Africa.

In order for this ordinary resolution number 10 to be passed, the support of more than 50% (fifty percent) of the voting

rights exercised on the resolution by shareholders present in person, or represented by proxy, at the annual general meeting, is required.

4.11 Ordinary resolution 11: Authority to issue ordinary shares

“Resolved that the board be and is hereby authorised by way of a general authority to issue up to 30% (thirty percent) of the authorised but unissued shares in the share capital of the company, excluding treasury shares, as at the date of passing of this ordinary resolution, at their discretion, for cash and/or to grant options to subscribe for such 30% (thirty percent) of the company’s issued share capital, for such purposes and on such terms and conditions as they may determine, provided that such transaction(s) are subject to the JSE Listings Requirements, the Companies Act of South Africa and the following conditions:

• 4.11.1 This authority shall only be valid until the next annual general meeting of the company but shall not extend beyond 15 (fifteen) months from the date of passing of this resolution;

• 4.11.2 The issue of the shares must be made to persons qualifying as public shareholders as defined in the JSE Listings Requirements, and not to related parties;

• 4.11.3 The shares which are the subject of the issue must be of a class already in issue, or where this is not the case, must be limited to such shares or rights that are convertible into a class already in issue;

• 4.11.4 Must be published in a SENS announcement, in accordance with the JSE Listings Requirements, giving full details of the issue, after any issue representing, on a cumulative basis within one financial year, 5% (five percent) of the number of shares in issue prior to the issue concerned; and

• 4.11.5 In determining the price at which an issue of shares for cash will be made in terms of this authority, the maximum discount permitted shall be 10% (ten percent) of the weighted average traded price of the ordinary shares on the JSE, measured over the 30 (thirty) business days prior to the date that the price of the issue is agreed between the company and the party subscribing for the shares.”

In order for this ordinary resolution number 11 to be passed, the support of more than 75% (seventy-five percent) of the voting rights exercised on the resolution by shareholders present in person, or represented by proxy, at the annual general meeting, is required.

4.12 Ordinary resolution 12: Signing authority

“Resolved that each director, or the secretary of the company, be and is hereby authorised to do all such things and sign

108 Nictus Limited / Integrated annual report 2021

all such documents as may be necessary for, or incidental to the implementation of the resolutions passed at the annual general meeting of the company and set out in this notice.”

In order for this ordinary resolution number 12 to be passed, the support of more than 50% (fifty percent) of the voting rights exercised on the resolution by shareholders present in person, or represented by proxy, at the annual general meeting, is required.

4.13 Special resolution 1: Approval of nonexecutive directors’ remuneration

“Resolved that the company be and is hereby authorised to pay remuneration to its non-executive directors for their services as directors, as contemplated in sections 66(8) and 66(9) of the Companies Act of South Africa, and that the remuneration structure and amounts as set out as follows, be and are hereby approved until such time as rescinded or amended by the shareholders by way of a special resolution.”

Name of director	Proposed fees*
	Annual fee R Board R Audit and risk committee R Remu- neration and nomination committee R Social and ethics committee R Investment committee R
Professor Barend J Willemse Sarita Martin Cornelius J de Vrye Philippus J de W Tromp Nicolaas C Tromp	466 300 337 600 42 900 42 900 – 42 900
	270 270 171 600 42 900 55 770 – –
	334 620 171 600 120 120 42 900 – –
	199 485 171 600 – – 27 885 –
	171 600 171 600 – – – –

* Non-executive directors will be paid an amount of R42 900 per day per meeting in respect of board or special meetings, should the number of these additional meetings exceed five per annum. They will also be paid a pro rata amount per hour for additional time spent.

Special resolution number 1 is required in terms of section 66 of the Companies Act of South Africa, which requires that non-executive directors’ remuneration for their services as directors may be paid by a company only in accordance with a special resolution approved by shareholders within the previous two years.

In order for special resolution number 1 to be passed, the support of at least 75% (seventy-five percent) of the voting rights exercised on the resolution by the shareholders present in person, or represented by proxy, at the annual general meeting, is required.

The reason for this resolution is to obtain approval for the payment of the non-executive directors’ remuneration and the effect will be that the non-executive directors are paid in accordance with this resolution.

4.14 Special resolution 2: General authority to repurchase shares

“Resolved that the company, in terms of its MOI, or one of its wholly-owned subsidiaries, in terms of such wholly-owned

subsidiary’s MOI, as the case may be, and subject to the relevant subsidiary passing the necessary special resolution, be and is hereby authorised by way of a general authority to acquire the company’s own securities, upon such terms and conditions and in such amounts as the directors may from time to time decide, subject to the JSE Listings Requirements and the Companies Act of South Africa and subject to the following:

• 4.14.1 This general authority shall be valid until the

company’s next annual general meeting, provided that it shall not extend beyond 15 (fifteen) months from the date of passing of this resolution;

• 4.14.2 The repurchase being effected through the order book operated by the JSE trading system, without any prior understanding or arrangement between the company and the counterparty;

• 4.14.3 Repurchases may not be made at a price greater than 10% (ten percent) above the weighted average of the market value of the ordinary shares for the 5 (five) business days immediately preceding the date on which the transaction is effected;

• 4.14.4 An announcement being published as soon as the company has repurchased ordinary shares

Nictus Limited / Integrated annual report 2021 109

Shareholder information

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NOTICE OF ANNUAL GENERAL MEETING continued

constituting, on a cumulative basis, 3% (three percent) of the initial number of ordinary shares (the number of ordinary shares in issue at the time that this general authority is granted), and for each 3% (three percent) in aggregate of the initial number of ordinary shares repurchased thereafter in accordance with the JSE Listings Requirements;

• 4.14.5 The number of shares which may be acquired pursuant to this authority in any one financial year may not in the aggregate exceed 20% (twenty percent) of the company’s issued share capital as at the date of passing of this special resolution or, in the case of an acquisition by a subsidiary of the company, 10% (ten percent) in aggregate of the number of issued shares of any class of shares of the company, taken together with all shares held by all the subsidiaries of the company;

• 4.14.6 The company and/or its subsidiaries may not repurchase securities during a prohibited period as defined in the JSE Listings Requirements, unless it has in place a repurchase programme where the dates and quantities of securities to be traded during the relevant period are fixed (not subject to any variation) and full details of the programme have been submitted to the JSE in writing, prior to the commencement of the prohibited period. The company must instruct an independent third party, which makes its investment decisions in relation to the company’s securities independently of, and uninfluenced by the company, prior to the commencement of the prohibited period to execute the repurchase programme submitted to the JSE;

• 4.14.7 At any point in time the company may only appoint one agent to effect any repurchases on its behalf;

• 4.14.8 The board must pass a resolution that they authorised the repurchase and that the company and its subsidiaries have passed the solvency and liquidity test set out in section 4 of the Companies Act of South Africa and that since the test was performed, there have been no material changes to the financial position of the company and its subsidiaries (collectively, the group); and

• 4.14.9 The directors, having considered the effects of the maximum repurchase permitted, are of the opinion that for a period of 12 (twelve) months after the date of the notice of the annual general meeting:

• 4.14.9.1 The company and the group will be able, in the ordinary course of business, to pay its debts;

• 4.14.9.2 The working capital of the company and the group will be adequate for ordinary business purposes;

• 4.14.9.3 The assets of the company and the group, fairly valued in accordance with International Financial Reporting Standards, will exceed the liabilities of the company and the group; and

• 4.14.9.4 The company’s and the group’s ordinary share capital and reserves will be adequate for ordinary business purposes.”

Section 48 of the Companies Act of South Africa authorises the board of directors of a company to approve the acquisition of its own shares subject to the provisions of sections 46 and 48 of the Companies Act of South Africa having been met. The Companies Act of South Africa and the JSE Listings Requirements require the approval of at least 75% (seventy-five percent) of the votes cast by shareholders present in person, or represented by proxy, at the annual general meeting, for special resolution number 2 to become effective.

4.15 Special resolution 3: Financial assistance to entities related or inter-related to the company, in terms of section 45 of the Companies Act of South Africa

“Resolved that, as a general approval, the company may, in terms of section 45(3)(a)(ii) of the Companies Act of South Africa, provide any direct or indirect financial assistance (financial assistance will herein have the meaning attributed to it in section 45(1) of the Companies Act of South Africa) to any related or inter-related company or to any juristic person who is a member of or related to any such company/ies (related and inter-related will herein have the meaning attributed to it in section 2 of the Companies Act of South Africa), subject to compliance with the remainder of section 45 of the Companies Act of South Africa, as the board may deem fit and on the terms and conditions, to the recipient/s, in the form, nature and extent and for the amounts that the board may determine from time to time.”

In order for special resolution number 3 to be passed, the support of at least 75% (seventy-five percent) of the voting rights exercised on the resolution by the shareholders present in person, or represented by proxy, at the annual general meeting, is required.

The effect of special resolution number 3, if adopted, is to confer the authority on the board to authorise financial assistance to companies related or inter-related to the company or to any juristic person who is a member of or related to any such companies generally as the board may deem fit, on the terms and conditions, and for the amounts that the board may determine from time to time, for a period of two

110 Nictus Limited / Integrated annual report 2021

years from the date of the adoption of the special resolution and in particular as specified in the special resolution.

5. Additional information

The following additional information, which may appear elsewhere in the integrated annual report, is provided in terms of the JSE Listings Requirements for purposes of the general authority to repurchase the company’s shares set out in special resolution number 2 above:

• 5.1 Major shareholders – pages 34 and 35 of the integrated annual report of which this notice forms part; and

• 5.2. Stated capital of the company – page 76 of the integrated annual report of which this notice forms part.

6. Directors’ responsibility statement

The directors in office, whose names appear on pages 10 and 11 of the integrated annual report, of which this notice forms part, collectively and individually accept full responsibility for the accuracy of the information pertaining to special resolution number 2 and certify that, to the best of their knowledge and belief, there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that the special resolutions contain all information required by the JSE Listings Requirements.

7. Material changes

Other than the facts and developments reported on in the integrated annual report, there have been no material changes in the affairs or financial position of the company and its subsidiaries since the company’s financial year end and the date of signature of the integrated annual report.

8. Directors’ intention regarding the general authority to repurchase the company’s shares

The directors have no specific intention, at present, for the company to repurchase any of its 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 shareholders.

9. Participation, voting and proxies

• 9.1 Please note that, in terms of section 62(3)(e) of the Companies Act of South Africa:

• 9.1.1 A shareholder entitled to attend and vote at the annual general meeting is entitled to appoint one or more proxies to attend, participate in

and vote at the annual general meeting in place of that shareholder; and

• 9.1.2 A proxy need not also be a shareholder of the company.

• 9.2 Shareholders who wish to participate electronically in and/or vote at the annual general meeting are required to complete the electronic participation form available on page 113 of the integrated annual report, of which this notice forms part, and email it to TMS at proxy@tmsmeetings.co.za or alternatively contact them on +27 11 520 7950/1/2 as soon as possible, but in any event no later than 15:00 (South African time) on Monday, 30 August 2021. TMS will assist shareholders with the requirements for electronic participation in, and/or voting at, the annual general meeting.

• 9.3 Shareholders will be liable for their own network charges in relation to electronic participation in and/ or voting at the annual general meeting. Any such charges will not be for the account of the company, the JSE and/or TMS. The company, the JSE or TMS cannot be held accountable in the case of loss of network connectivity or other network failure due to insufficient airtime, internet connectivity, internet bandwidth and/or power outages which prevent any such shareholder from participating in and/or voting at the annual general meeting.

• 9.4 Shareholders are advised, and strongly encouraged, to participate in the annual general meeting electronically and, for administrative ease, to make use of proxy voting as outlined in this notice.

• 9.5 Shareholders are further advised that in terms of section 63(1) of the Companies Act of South Africa, any person (including proxies) attending, participating in or voting at the annual general meeting must present reasonably satisfactory identification before being entitled to attend or participate in and vote at the annual general meeting. TMS is obliged to validate (in consultation with the company and, in particular, the company’s transfer secretaries, Computershare Investor Services Proprietary Limited (Computershare), and your Central Securities Depository Participant (CSDP) each shareholder’s entitlement to participate in and/or vote at the annual general meeting, before providing you with the necessary means to access the annual general meeting and the associated voting platform. Forms of identification include valid identity documents, driver’s licences and passports.

Nictus Limited / Integrated annual report 2021 111

Shareholder information

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NOTICE OF ANNUAL GENERAL MEETING continued

• 9.6 All beneficial owners whose shares have been dematerialised through a CSDP, broker or nominee other than with “own name” registration, must provide the CSDP, broker or nominee with their voting instructions in terms of their custody agreement should they wish to vote at the annual general meeting. Alternatively, they may request the CSDP, broker or nominee to provide them with a letter of representation, in terms of their custody agreements, should they wish to participate in the annual general meeting electronically.

• 9.7 Unless you advise your CSDP, broker or nominee, in terms of the agreement between you and your CSDP, broker or nominee by the cut-off time stipulated therein, that you wish to participate in the annual general meeting electronically or nominate a proxy to represent you at this annual general meeting, your CSDP, broker or nominee will assume that you do not wish to attend the annual general meeting or nominate a proxy.

• 9.8 Forms of proxy (which form may be found enclosed) must be dated and signed by the shareholder appointing a proxy and must be emailed to TMS at proxy@tmsmeetings.co.za. Forms of proxy must be received not later than 15:00 on Monday, 30 August 2021. Before a proxy exercises any rights

of a shareholder at the annual general meeting, such form of proxy must be so delivered. Thereafter, forms of proxy must be handed to the chairperson of the annual general meeting before the appointed proxy may exercise any rights of the shareholder at the annual general meeting. If required, additional forms of proxy may be obtained from the registered offices of the company, the transfer secretaries or TMS, whose details are set out on the inside back cover.

• 9.9 Attention is drawn to the “Notes” to the form of proxy.

• 9.10 The completion of a form of proxy does not preclude any shareholder attending the annual general meeting.

By order of the board

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Nictus Limited

Veritas Eksekuteurskamer Proprietary Limited Company secretary

Bryanston

30 June 2021

112 Nictus Limited / Integrated annual report 2021

ELECTRONIC PARTICIPATION

in the Nictus Limited virtual annual general meeting to be held on Wednesday, 1 September 2021

The annual general meeting

Shareholders or their proxies who wish to participate in the annual general meeting via electronic communication (participants), must apply to the company’s meeting scrutineers to do so by emailing the form below (the application) to the email address of the company’s meeting scrutineers, TMS, by no later than 15:00 on 30 August 2021. The email address is as follows: proxy@tmsmeetings.co.za.

Shareholders who have dematerialised their shares, other than those shareholders who have dematerialised their shares with “own name” registration, should contact their CSDP or broker in the manner and time stipulated in their agreement with their CSDP or broker:

• To furnish them with their voting instructions; and

• In the event that they wish to participate in the meeting, to obtain the necessary authority to do so.

Participants will be able to vote during the annual general meeting through an electronic participation platform. Such participants, should they wish to have their vote(s) counted at the annual general meeting, must provide TMS with the information requested below.

Each shareholder, who has complied with the requirements below, will be contacted between 30 August 2021 and 1 September 2021 via email/mobile with a unique link to allow them to participate in the virtual annual general meeting.

The cost of the participant’s phone call or data usage will be at his/her own expense and will be billed separately by his/her own service provider.

The participant’s unique access credentials will be forwarded to the email/cell number provided below.

Application form

Name and surname of shareholder

Name and surname of shareholder representative

(if applicable)

ID number of shareholder or representative

Email address

Cell number

Telephone number

Name of CSDP or broker

(if shares are held in dematerialised format)

SCA number/broker account number or

Own name account number

Number of shares

Signature

Date

By signing this form, I agree and consent to the processing of my personal information above for the purpose of participation in the annual general meeting.

Nictus Limited / Integrated annual report 2021 113

Shareholder information

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ELECTRONIC PARTICIPATION continued

Terms and conditions for participation at the Nictus Limited annual general meeting to be held on 1 September 2021 via electronic communication

• The cost of dialling in using a telecommunication line/webcast/web-streaming to participate in the annual general meeting is for the expense of the participant and will be billed separately by the participant’s own service provider.

• The participant acknowledges that the telecommunication lines/webcast/web-streaming are provided by a third party and indemnifies the company, the JSE and TMS and/or their third-party service providers against any loss, injury, damage, penalty or claim arising in any way from the use or possession of the telecommunication lines/webcast/web-streaming, whether or not the problem is caused by any act or omission on the part of the participant or anyone else. In particular, but not exclusively, the participant acknowledges that he/she will have no claim against the company, the JSE and TMS and/or its third-party service providers, whether for consequential damages or otherwise, arising from the use of the telecommunication lines/webcast/ web-streaming or any defect in or from total or partial failure of the telecommunication lines/webcast/web-streaming and connections linking the telecommunication lines/webcast/web-streaming to the annual general meeting.

• Participants will be able to vote during the annual general meeting through an electronic participation platform. Such participants, should they wish to have their vote(s) counted at the annual general meeting, must act in accordance with the requirements set out above.

• Once the participant has received the link, the onus to safeguard this information remains with the participant.

• The application will only be deemed successful if this application form has been fully completed and signed by the participant and delivered or emailed to TMS at proxy@tmsmeetings.co.za and in the manner set out above.

Shareholder name

Signature

Date

Important: You are required to attach a copy of your identity document/driver’s licence/passport when submitting the application.

114 Nictus Limited / Integrated annual report 2021

FORM OF PROXY

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Nictus Limited

(Incorporated in the Republic of South Africa) Registration number RSA: 1981/011858/06 Registration number NAM: 781/11858 JSE share code: NCS ISIN number: NA0009123481 (Nictus or the company)

To be completed by certificated shareholders and dematerialised shareholders with “own name” registration only

For use by shareholders of the company holding certificated shares and/or dematerialised shareholders who have elected “own name” registration, nominee companies of Central Securities Depository Participants’ (CSDP) and brokers’ nominee companies, registered as such at the close of business on Friday, 27 August 2021 (the voting record date), at the annual general meeting of the company to be held on Wednesday, 1 September 2021, commencing at 15:00 (South African time), or at any adjournment thereof.

If you are a dematerialised shareholder, other than with “own name” registration, do not use this form. Dematerialised shareholders, other than with “own name” registration, should provide instructions to their appointed CSDP or broker in the form as stipulated in the agreement entered into between the shareholder and the CSDP or broker.

I/We

of

(address)

being the holder/s of

shares in the company, do hereby appoint:

or, failing him/her

2.

or, failing him/her

3. the chairperson of the annual general meeting,

as my/our proxy to attend, speak and, on a poll, vote on my/our behalf at the above-mentioned annual general meeting of members or at any adjournment thereof, and to vote or abstain from voting as follows on the ordinary and special resolutions to be proposed at such meeting:

Nictus Limited / Integrated annual report 2021 115

Shareholder information

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FORM OF PROXY continued

	For	Against	Abstain	Precluded from voting in terms of the Companies Act of South Africa or the JSE Listings Requirements
Ordinaryresolution 1:Re-election of Cornelius J de Vrye as a director
Ordinaryresolution 2:Re-election of Professor Barend J Willemse as a director
Ordinaryresolution 3:Re-election of Nicolaas C Trompas a director
Ordinaryresolution 4:Election of Sarita Martin as a director
Ordinaryresolution 5:Non-bindingapproval of the remunerationpolicy
Ordinary resolution 6:Non-binding approval of the remuneration implementation report
Ordinary resolution 7:Re-election of Cornelius J de Vrye as a member and chairperson of the audit and risk committee
Ordinary resolution 8:Re-election of Professor Barend J Willemse as a member of the audit and risk committee
Ordinary resolution 9:Election of Sarita Martin as a member of the audit and risk committee
Ordinary resolution 10:Reappointment of PricewaterhouseCoopers Inc. with the designated external audit partner being Jorge M Goncalves as the independent external auditor
Ordinaryresolution 11:Authorityto issue ordinaryshares
Ordinaryresolution 12:Signingauthority
Special resolution 1:Approval of non-executive directors’ remuneration
Special resolution 2:General authorityto repurchase shares
Special resolution 3:Financial assistance to entities related or inter-related to the company, in terms of section 45 of the Companies Act of South Africa

Please indicate with an “X” in the appropriate spaces provided above how you wish your vote to be cast.

If you wish not to cast your votes in respect of less than all of the ordinary shares that you own in the company, however, insert the number of ordinary shares held in respect of which you desire to vote.

Signed at

on

Signature

Assisted by me, where applicable (name and signature)

2021

116 Nictus Limited / Integrated annual report 2021

NOTES TO THE FORM OF PROXY

1. Each shareholder is entitled to appoint one or more proxies (who need not be a shareholder(s) of the company) to participate in place of that shareholder at the annual general meeting.

2. A shareholder may insert the name of a proxy or the names of two alternative proxies of the shareholder’s choice in the space provided, with or without deleting “the chairperson of the annual general meeting”. The person whose name stands first on the form of proxy and who is present at the annual general meeting shall be entitled to act as proxy to the exclusion of the persons whose names follow.

3. A shareholder’s instructions to the proxy have to be indicated by the insertion of an “X” or the relevant number of votes exercisable by that shareholder in the appropriate box provided. Failure to comply with the above shall be deemed to authorise the chairperson of the annual general meeting, if the chairperson is the authorised proxy, to vote in favour of the ordinary and special resolutions at the annual general meeting, or any other proxy to vote or to abstain from voting at the annual general meeting, as he/she deems fit, in respect of all the shareholder’s votes exercisable thereat.

4. A shareholder or his/her proxy is not obliged to vote in respect of all the ordinary shares held by such shareholder or represented by such proxy, but the total number of votes for or against the ordinary and special resolutions and in respect of which any abstention is recorded may not exceed the total number of votes to which the shareholder or his/her proxy is entitled.

5. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity has to be attached to this form of proxy, unless previously recorded by the company’s transfer secretaries or waived by the chairperson of the annual general meeting.

6. The chairperson of the annual general meeting may reject or accept any form of proxy that is completed and/or received other than in accordance with these instructions and notes.

7. Any alterations or corrections to this form of proxy have to be initialled by the signatory(ies).

8. The completion and lodging of this form of proxy shall not preclude the relevant shareholder from participating in the annual general meeting to the exclusion of any proxy appointed in terms hereof, should such shareholder wish to do so.

9. All beneficial owners of ordinary shares who have dematerialised their shares through a CSDP or broker, other than those shareholders who have elected to dematerialise their shares with “own name” registrations, and all beneficial owners of ordinary shares who hold certificated shares through a nominee, must provide their CSDP, broker or nominee with their voting instructions. Voting instructions must reach the CSDP, broker or nominee in sufficient time to allow the CSDP, broker or nominee to advise TMS of this instruction no less than 48 hours before the time appointed for the holding of the meeting. Should you, as the beneficial owner, however, wish to participate in the meeting, you may do so by requesting your CSDP, broker or nominee to issue you with a letter of representation in terms of the custody agreement entered into with your CSDP, broker or nominee. Letters of representation must be lodged with TMS not less than 48 hours before the time appointed for the holding of the meeting. Shareholders who hold certificated shares with their own name and shareholders who have dematerialised their shares with “own name” registrations must lodge their completed proxy forms with TMS via email at proxy@tmsmeetings.co.za not less than 48 hours before the time appointed for the holding of the meeting (excluding Saturdays, Sundays and public holidays).

10. Forms of proxy have to be emailed to TMS at proxy@tmsmeetings.co.za. Forms of proxy must be received not later than 15:00 on Monday, 30 August 2021. Thereafter, forms of proxy must be handed to the chairperson of the annual general meeting before the appointed proxy may exercise any rights of the shareholder at the annual general meeting.

Summary of rights established by section 58 of the Companies Act of South Africa, 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 (section 58(2)).

Nictus Limited / Integrated annual report 2021 117

Shareholder information

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NOTES TO THE FORM OF PROXY continued

1. 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)).

2. 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)).

3. A copy of the proxy instrument must be delivered to the company, or to any other person acting on behalf of the company, before the proxy exercises any rights of the shareholder at a shareholders’ meeting (section 58(3 (c)) and in terms of the company’s MOI at least 48 hours before the annual general meeting commences.

4. Irrespective of the form of instrument used to appoint a proxy:

5. 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. 6.2 The appointment is revocable unless the proxy appointment expressly states otherwise (section 58(4)(b)); and

7. 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)).

8. 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 (section 58(5)).

9. A proxy is entitled to exercise, or abstain from exercising, any voting right of the shareholder without direction, except to the extent that the MOI or proxy instrument provides otherwise (section 58(7)).

10. If a company issues an invitation to shareholders to appoint one or more persons named by the company as a proxy, or supplies a form of proxy instrument: 10.1 The invitation must be sent to every shareholder entitled to the notice of the annual general 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:

      • 10.2.1 Bear a reasonably prominent summary of the rights established in section 58 of the Companies Act of South Africa (section 58(8)(b)(i));

      • 10.2.2 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

      • 10.2.3 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 annual general 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 annual general meeting at which it was intended to be used, subject to paragraph 7 (section 58(8)(d)).

11. 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 of South Africa or the 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)).

118 Nictus Limited / Integrated annual report 2021

DEFINITIONS, RATIOS AND TERMS

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----- Start of picture text -----

||||||
|---|---|---|---|---|
|Companies Act of South Africa|Companies Act of South Africa, 71 of 2008|
|CSDP|Central Securities Depository Participant|
|IAS|International Accounting Standards|
|IASB|International Accounting Standards Board|
|IBNR|Incurred but not yet reported|
|IBOR|Interbank offered rates|
|IFRS|International Financial Reporting Standards|
|IRBA Code|Independent Regulatory Board for Auditors’ Code of Professional Conduct for Registered Auditors|
|ISAs|International Standards on Auditing|
|IT|Information technology|
|JSE|JSE Limited|
|King IV|[TM]|King IV|[TM]|Report on Corporate Governance for South Africa, 2016|
|MOI|Memorandum of Incorporation|
|SAICA|South African Institute of Chartered Accountants|
|SARS|South African Revenue Service|
|SCR|Solvency capital requirement|
|SENS|Stock Exchange News Service|
|The company|Nictus Limited|
|The group|Nictus Limited, the holding company of the group, and all its subsidiaries|
|TMS|The Meeting Specialist Proprietary Limited|

----- End of picture text -----

Nictus Limited / Integrated annual report 2021 119

Shareholder information

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DEFINITIONS, RATIOS AND TERMS continued

Financial definitions

Financial defnitions
Average net assets	The sum of net assets at the end of the current year and the previous year, divided by two.
Current ratio	Current assets to current liabilities.
Dividend cover	Basic earnings divided by ordinary dividends paid in the current year.
Dividends per share	Dividends for the year divided by the number of shares in issue at the date of each dividend
	declaration.
Basic earnings per share	Proft or loss for the year after adjusting for non-controlling interest, divided by the weighted
	average number of shares in issue during the year.
Earnings yield (%)	Headline earnings per share to market price at year end.
Headline earnings per share	Headline earnings divided by the weighted average number of shares in issue during the year.
Liability ratio	The sum of non-current interest-bearing borrowings and current liabilities to total equity
	adjusted for deferred taxation.
Net asset turn	Revenue divided by average net assets.
Net assets	Total assets less non-interest-bearing debt and insurance contract liabilities.
Net worth per share	Equity attributable to equity holders of the company divided by the number of ordinary shares in
	issue at year end.
Operating income to turnover	Operating income before fnancing costs divided by revenue.
Price earnings ratio	Market price at year end to headline earnings per share.
Return on assets managed	Operating proft before fnancing costs expressed as a percentage of average net assets.
Return on shareholders’ equity	Proft or loss attributable to the owners for the year expressed as a percentage of equity
	attributable to the owners.
Weighted average number of	The number of shares determined by relating the number of days within the year that a
shares in issue during the year	particular number of shares have been entitled to share in earnings to the total number
	of days in the year.

120 Nictus Limited / Integrated annual report 2021

CONTACT INFORMATION

Nictus Limited

(Nictus or the company) (Incorporated in the Republic of South Africa) Registration number RSA: 1981/011858/06 Registration number NAM: 781/11858 JSE share code: NCS ISIN number: NA0009123481 www.nictuslimited.co.za

Registered office of the company Head office

Nictus Limited Block C, 1st floor The Main Straight Office Park 392 Main Road, Bryanston 2191 South Africa

PO Box 2878 Randburg 2125 South Africa

Windhoek office

1st floor, Nictus Building 140 Mandume Ndemufayo Avenue Windhoek, Namibia

Private Bag 13231 Windhoek, Namibia

Company secretary

Veritas Eksekuteurskamer Proprietary Limited

Registration number: 1984/007487/07 Block C, 1st floor The Main Straight Office Park 392 Main Road, Bryanston 2191 South Africa

Auditor and reporting accountant PricewaterhouseCoopers Inc.

4 Lisbon Lane, Waterfall City Jukskei View 2090 Private Bag X36 Sunninghill 2157 South Africa

JSE Sponsor One Capital Sponsor Services Proprietary Limited

17 Fricker Road Illovo 2196 South Africa

Transfer secretaries

Computershare Investor Services Proprietary Limited

15 Biermann Avenue Rosebank 2196 South Africa

PO Box 61051 Marshalltown 2107

Annual general meeting scrutineers

The Meeting Specialist Proprietary Limited

JSE Building One Exchange Square 2 Gwen Lane Sandown 2196 South Africa

PO Box 62043 Marshalltown 2196

PO Box 2878 Randburg 2125 South Africa

www.nictuslimited.co.za

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