VUNANI LIMITED — Annual Report 2021

Jul 6, 2021

Integrated Report for the year ended 28 February 2021

Focus. Commitment. Purpose

Contents

	About this report	1
	FY21 salient highlights	3
	Reflections from our chairman and chief executive officer	4
	VUNANI AT A GLANCE
01	How we evolved	8
	Investment case	10
	Five-year financial review	11
	Our response to Covid-19	12
	OUR STRATEGY
02	Our definition of success	14
	Strategy scorecard	15
	Our value-creating business model	16
	Risk management	18
	OUR PERFORMANCE
03	Our people	24
	Stakeholder engagement	25
	Economic context	29
	Chief financial officer's report	30
	Business segment review	33
	Sustainability	39
	GOVERNANCE
04	Our leadership	42
	Corporate governance	43
	Remuneration report	49
	Investment committee report	54
	Nomination committee report	55
	Social, ethics and transformation committee report	56
	ANNUAL FINANCIAL STATEMENTS
05	Audit and risk committee report	58
	Consolidated financial statements	68
	Company financial statements	157
	SHAREHOLDER INFORMATION
06	Analysis of shareholders	170
	Shareholders' diary	171
	Notice of annual general meeting	172
	Form of proxy
	General information	183
	Acronyms, abbreviations and definitions	184

About this report

Vunani is an independent black-owned and -managed diversified financial services group with a unique positioning in the South African financial services sector.

This integrated report aims to present comprehensive information which will assist stakeholders to properly assess the group's economic, social, environmental and governance performance. It promotes a consistent and efficient approach to reporting, enhances our accountability to stakeholders and supports integrated thinking, decision-making and actions.

SCOPE AND BOUNDARY

The integrated report covers the financial period from 1 March 2020 to 28 February 2021.

Vunani's scope of reporting remains focused on its reportable business segments, which are detailed on pages 33 to 38. The content included in this integrated report is considered beneficial and relevant to Vunani's stakeholders. The content specifically aims to provide stakeholders with an understanding of the economic, environmental, social and governance matters pertaining to the group and their related impact on the group in order to enable stakeholders to evaluate the group's ability to create and sustain value.

APPROACH TO REPORTING

Vunani strives to provide a holistic view of the group in one document and regards this process as a valuable opportunity to engage with its stakeholder groups. In compiling the report, we were guided by international and South African reporting guidelines and best practice including King IVTM*, the International Integrated Reporting Framework issued in December 2013, as well as South African legislation including:

• X Companies Act;
• X JSE Listings Requirements;
• X International Financial Reporting Standards; and
• X SAICA Financial Reporting Guides as issued by the accounting practices committee.

ESTABLISHING MATERIALITY

The board has considered matters viewed as material to the business of Vunani and its stakeholders. These are determined through board discussion, market research, engagement with our stakeholders, continuous risk assessments and the review of prevailing trends in our industry and the global economy. The report discloses the group's approach to sustainability and identifies and explains the material social, governance and environmental issues facing the group and their impact.

The issues we have identified as material in terms of the impact on Vunani's long-term sustainability include:

• X the uncertain economic conditions in South Africa;
• X consistently low economic growth;
• X muted investor confidence;
• X the impact of Covid-19; and
• X the fluctuating value of the rand.

These material issues are addressed throughout this integrated report.

The information relating to sustainability has not been assured for the current reporting period. An overview on the group's strategy and sustainability is presented on pages 15 and 39 of this integrated report.

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

About this report (continued)

ASSURANCE

We undertake the following assurance to ensure reporting integrity:

Business process	Nature of assurance	Assurance provider
Consolidated annual financial statements	External audit	KPMG Inc.
B-BBEE	B-BBEE scorecard review	Empowerlogic Proprietary Limited
B-BBEE	B-BBEE rating	Empowerlogic Proprietary Limited
Internal audit	Independent internal audit	MASA Risk Advisory Services
JSE requirements	Compliance with listings requirements	Grindrod Bank

FORWARD-LOOKING STATEMENTS

This integrated report contains forward-looking statements that, unless otherwise indicated, reflect the company's expectations as at 28 February 2021. Actual results may differ materially from the company's expectations if known and unknown risks or uncertainties affect its business, or if estimates or assumptions prove inaccurate. The company cannot guarantee that any forward-looking statement will materialise and accordingly, readers are cautioned not to place undue reliance on any forward-looking statements. The company disclaims any intention, and assumes no obligation, to update or revise any forward-looking statement, even if new information becomes available as a result of future events or for any other reason, other than as required by the JSE Listings Requirements.

BOARD RESPONSIBILITY STATEMENT

This report was prepared under the supervision of the chief financial officer, Tafadzwa Mika CA(SA).

The Vunani board of directors confirms its responsibility for the integrity of the integrated annual report, the content of which has been collectively assessed by the directors who believe that all material issues have been addressed and are fairly presented. The board, after applying its collective mind to the preparation and presentation of the report, concluded that it was presented in accordance with the relevant standards, legislation and guidelines described in the "About this report" section and approved it for publication on 5 July 2021.

FEEDBACK

A hard copy of this integrated report is available on request as well as online at https://www.vunanilimited.co.za/ investor-relations/integrated-reports/

We are committed to improving this report each year and therefore, we appreciate and encourage constructive feedback. Please forward comments to: info@vunaniintegratedreport2021.co.za

FY21 salient highlights

FINANCIAL HIGHLIGHTS

Revenue

R558.7m (2020: R344.8 million)

Profit from continuing operations

R20.1m (2020: R58.9 million)

Headline earnings per share

7.2c (2020: 0.6c)

Dividend declared

7.5c (2020: nil)

Cash generated from operating activities

R95.7m (2020: R73.0 million)

NON-FINANCIAL HIGHLIGHTS

UNBUNDLED PRIVATE EQUITY ASSETS TO SHAREHOLDERS IN FEBRUARY 2021

FINANCIAL MAIL RANKINGS: EXECUTION: FIXED INTEREST INSTRUMENTS: VUNANI SECURITIES RANKED 10TH

Reflections from our chairman and chief executive officer

Lionel Jacobs Independent non-executive chairman

Butana Khoza Chief executive officer

The year was marked by the impact of Covid-19, making it a difficult and challenging year. Under the circumstances Vunani performed admirably well and delivered a good set of results. Adapting quickly, our priority remained the well-being of our staff and ensuring they were able to work from home. This enabled the business to continue operating.

FINANCIAL OVERVIEW

Notwithstanding the impact of Covid-19, EBITDA increased 20% to R102.0 million (2020: R85.4 million), before consolidated impairments and fair value adjustments. The growth was largely due to an improved performance across all the businesses relative to the previous year, as well as the consolidation of the Oracle Insurance Eswatini and fund management business in Botswana.

All the operating divisions made a positive contribution to cash generation, using EBITDA and adjusted EBITDA, which further considers fair value adjustments. However, the group results have highlighted a significant drop in profit after tax and earnings, due to the performance of the group's insurance subsidiary, Oracle bore the full brunt of the second wave of the Covid-19 pandemic, with a significant increase in underwriting losses in the last quarter of the financial year. This impacted operational performance and resulted in significant provisions for actuarial liabilities, which resulted in negative fair value adjustments and impairment to the value-in-force business intangible asset, all of which had a significant and negative impact on earnings. The group results would have been exceptional save for this event. See the CFO's report page 30 for further detail.

UNBUNDLING AND RESTRUCTURE

As a group we have been debating an unbundling for quite a few years because the board felt the real value of Vunani Limited had been shrouded by the mixture of private equity and financial services. We therefore proceeded with the unbundling of the private equity assets into Vunani Capital Partners which listed on the Equity Express Securities Exchange ("EESE") on 15 June 2021. Early results already reflect more value in the Vunani Limited share, an indication that the market has recognised this positive move.

Our strategic focus is now solely on financial services and we have already seen positive developments, particularly in the funds management side of the business where there has been an encouraging increase in the amount of funds managed (over 25% growth in Assets Under Management over the last financial year). Coupled with the fact that management's attention is no longer divided, this augers well for the expansion of financial services going forward on a "clean" basis.

The year was marked by the impact of Covid-19, making it a difficult and challenging year. Under the circumstances Vunani performed admirably well and delivered a good set of results.

Being a recently restructured financial services business, the key strategic objective is to grow the cash profits of the group as an underpin to becoming a reputable sustainable dividend player in the market. That suggests that all businesses need to make a positive contribution to revenue and EBITDA.

Balance sheet debt has reduced substantially and therefore debt service costs should reflect a concomitant decline.

DIVIDEND

The group has as a primary objective, the attractive and sustainable growth in operating profit and the payment of a growing dividend to its shareholder over time. This is the first year in which the group has declared both an interim and final dividend. An interim dividend of 5 cents per share was paid to ordinary shareholders in December 2020, (2020: 7.4 cents (5.92 cents net of dividend withholding tax). A final dividend of 7.5 cents per share (2020: nil) was declared out of income reserves on 4 June 2021.

GOVERNANCE

Vunani remains committed to being a good corporate citizen and ensuring best practice corporate governance standards are in place in all businesses.

The group prizes treating clients fairly, embracing transparency and ethical business conduct (see page 43 for more detail on governance).

We continue to be highly sensitive to the plight of communities where we and our clients operate, particularly given the impact of Covid-19. See page 12 for more detail.

OUR PEOPLE

An experienced and stable management team is a key feature of the Vunani Limited group, which is now solely focused on financial services, and this auger well for future success

We tackled the challenge of operating under Covid-19 primarily due to the dedication and commitment of our management and staff, driven by calm leadership at all times, focused on caring for our people. While we had a few staff members contract the disease during the year, thankfully they all recovered. Sadly, one colleague passed away from the disease post year-end.

We implore all managers and staff to continue observing all Covid-19 protocols and reiterate that they have the full support of the board to do so.

A message from the Chairman and Chief Executive Officer (continued)

THE BOARD

Dr Xolile Guma retired from the board effective 13 May 2021. We thank him for his eight years of service and wish him all the very best in his retirement.

LOOKING AHEAD

Vunani is now completely focused on growing the financial services businesses and we have already seen the fruits of this in the short time since unbundling.

Despite the impact of Covid-19 on the economy the group continues to see numerous opportunities in the market. Each emerging opportunity will be evaluated on its merits to ensure that it augments the Vunani platform and is accretive to the group. Covid-19 continues to be a reality in our day-to-day lives and it is critical that the health of all Vunani's staff remains of paramount importance. Vunani will continue to follow all government-related protocols and work from home strategies to keep its staff safe. We are cautiously optimistic that the performance of the last year can be turned around and that it can fuel growth in the immediate and long-term future.

APPRECIATION

We thank all our stakeholders and loyal clients for their continued support. We show our appreciation in particular to our dedicated and loyal employees for their commitment in a challenging period. Appreciation to the board and its sub-committees who supported and guided management, ensuring that the strategy is pursued with discipline.

Lionel Jacobs Butana Khoza

Independent non-executive chairman Chief executive officer

5 July 2021

01 VUNANI AT A GLANCE

FOCUS

How we evolved	8
Investment case	10
Five-year financial review	11
Our response to Covid-19	12

Vunani Limited Integrated Report for the year ended 28 February 2021 7

How we evolved

HOW WE EVOLVED

Vunani is an independent black-owned and managed diversified financial services group with a unique positioning in the South African financial services sector.

Owner-managed by professionals who have a passion for entrepreneurship, Vunani has become known as one of the country's leading boutique providers. Its robust operational platform supports an innovative and fully integrated range of products and services that can be customised and packaged to meet the needs of clients in both the public and private sectors.

VUNANI'S HISTORY

Vunani was established in the late 1990s and listed on the JSE's AltX in November 2007 and transferred onto the main board in 2019. The group's objective right from the start was to gain a competitive advantage through meaningful Broad-Based Black Economic Empowerment ("B-BBEE") and by consistently providing the best services and expertise available in the local financial services sector. After two decades, Vunani has established a solid and respected footprint in South Africa and the rest of Africa. It has secured a differentiated market positioning through its commitment to BEE and by maintaining a management team of the highest calibre. Together with the strength and breadth of its structure, this has made Vunani a force to be reckoned with both at home and abroad.

KEY MILESTONES

To be South Africa's foremost boutique financial MISSION services group.

To differentiate the group through a strong focus on its commitment to BEE and operating businesses. Recruitment of high-calibre management and staff, coupled with the prudent and successful management of these businesses, is core to the group's strategy and the way in which it does business.

inherent in the share price and allow the two distinct businesses to operate in a more focused manner, allowing each of the businesses to focus on achieving their respective strategic goals.

Vunani is a focused financial services group holding majority interests in the businesses that it owns with key themes such as asset accumulation, through fund management or fund administration, where there is the potential for synergies to be extracted across the group.

Vunani looks to diversify its activities in its underlying businesses where a strong skill set has been developed so that it can leverage off client relationships. Acquisition opportunities will be considered where these fit the financial services theme and have the potential to extract value across the group.

The main subsidiaries held by Vunani after the VCP unbundling are Fairheads Benefit Services, Fairheads Financial Services, Vunani Fund Managers, Vunani Fund Managers Botswana, Vunani Corporate Finance, Vunani Securities, Vunani Capital Markets, and Oracle Insure.

339 employees

STAFF

As at 28 February 2021, the group employed 339 people in the companies in which it holds more than a 50% equity interest. Each individual employed by the group makes an important contribution to its overall success. Vunani is therefore committed to the application of employment equity in the workplace and to the transformation principles embodied within the B-BBEE Codes of Good Practice.

Investment case

Leadership team focused on safe, sustainable operational delivery as an enabler for growth

Responsible business behaviour which impacts positively on all stakeholders and increases long-term shareholder value

B-BBEE ownership of 77.7%

High-calibre and competent management and staff

Financial boutique business with diverse revenue streams

Strong focus on cost and cash management and capital allocation

Key player in the financial markets

Identifying and optimising investment opportunities in Africa's fastgrowing markets

Strong group liquidity and balance sheet position

Technical institutional memory embedded in the leadership team

Five-year financial review

STATEMENT OF COMPREHENSIVE INCOMETotal revenue (R'000)	188 613	351 233	425 329	462 156	558 690
	February	February	February	February	February
	20171	20181	2019	2020	2021
Results from operating activities profit/(loss) (R'000)	49 758	61 427	112 416	56 376	(7 306)
Profit/(loss) for the year (R'000)	40 038	45 556	90 252	39 468	(159)
Headline earnings (R'000)	24 213	39 980	88 553	884	11 597

Headline earnings per share (cents) 19.2 25.2 54.7 0.6 7.2

STATEMENT OF FINANCIAL POSITION

Equity attributable to equity holders (R'000)

	February20171	February20181	February2019	February2020	February2021
Total assets (R'000)	1 284 289	1 282 156	798 944	1 620 446	1 191 268
Total liabilities (R'000)	931 510	882 819	321 295	1 062 683	857 784
Net tangible asset value per share (cents)	221.2	242.5	291.2	302.2	173.8

SHARE PRICE STATISTICS

	161 296	164 897	161 156	161 156	161 156
Number of shares in issue at year-end ('000)

February 2017 February 2018 February 2019 February 2020 February 2021 Closing price at end of the year (cents) 220 300 200 199 245 Closing high for the year (cents) 220 320 300 280 275 Closing low for the year (cents) 117 180 112 103 116 Volume traded during the year ('000) 8 504 1 531 5 483 2 589 2 471 Ratio of volume traded to shares in issue (at year-end) (%) 5.27 0.92 3.40 1.61 1.53

Notes:

Note 1 – For continuing and discontinued operations.

Our response to Covid-19

Covid-19 has had an extraordinary impact on almost every country in the world leading to the World Health Organization ("WHO") declaring it a pandemic in March 2020. Governments and monetary authorities around the world responded swiftly with varied measures to try and combat the impact of Covid-19 on public health and its unavoidable impact on economic growth. These events saw a significant increase in market volatility with stock markets across the globe losing significant value.

Countries started imposing measures from travel bans to lockdowns to help curb the rising infection numbers with the governments declaring a state of emergency, instituting lockdown restrictions and closing borders as a means to curb the spread of the virus.

The Covid-19 pandemic has had a severe effect on the economies in which Vunani operates in with governments announcing several emergency measures to relieve businesses that are impacted by the virus.

HOW VUNANI RESPONDED

Vunani immediately put a pandemic plan in place which is primarily focused on:

• X compliance with regulations on the movement of people;
• X emphasis on personal hygiene;
• X employee distancing techniques in the work environment;
• X maximum utilisation of the capacity to work from home; and
• X continuous communication to staff, clients and other stakeholders.

Vunani's operations were declared essential services and the group continued to operate on a limited staff basis, with only core staff on site.

CLIENTS AND PARTNERS

Our response for clients and partners included:

X Engaging with them on a one-on-one basis to ensure them that we were able to continue operating during the pandemic.

EMPLOYEE WELL-BEING AND HEALTH AND SAFETY

At all times our priority was the health and safety of our employees as well as customers and the following steps were introduced:

• X Hybrid remote working policy implemented and increased spending to equip employees to work from home.
• X Additional health and safety protocols introduced at the offices.

COMMUNITY SUPPORT DURING COVID-19

The group has a very wide footprint and touches many communities, some of which are highly impoverished. We have had firsthand experience of the desperation in some of these communities through the disruption to some of our businesses. Accordingly, our respective businesses have identified a number of community-based non-government organisations and community leaders to facilitate helping of communities with hunger alleviation, hygiene and sanitation and clothing.

We will continue to monitor any requests for assistance as this situation continues.

COMMUNICATING IN A CRISIS

Communication is a key factor during a crisis and we paid a lot of attention to it throughout the year. Vunani ensured a continuous, timely and transparent communication with all stakeholders.

02

OUR STRATEGY

COMMITMENT Our definition of success 14 Strategy scorecard 15

Our value-creating business model	16
Risk management	18

Our definition of success

Vunani defines success in the achievement of the following key goals:

1. BE A GOOD AND RESPONSIBLE CORPORATE CITIZEN

Facilitate meaningful transformation in South Africa

Live our commitment to this objective at Vunani, which is an independent, black-owned and -managed group

Consistently commit to the principles of B-BBEE and the goals of the National Development Plan ("NDP")

Strategy scorecard

Strategic objective	Strategic response	2021 performance	Looking forward
Achieve a positiveand consistentreturn forshareholders	•Focus efforts on organic growth,intergroup collaboration andsynergies•Addition of new products/serviceofferings for clients•Closely monitor capitalisation ofeach business and redeploy capitalaccordingly•Identify new complementarybusiness opportunities in SADC	•Protected and grew our currentclient base•Continued focus on intergroupcollaboration and synergies•Restructured the financial servicesand private equity segments intotwo separate businesses andunbundled the private equitybusiness•Leveraged strategic partnerships	•Identify accretivebusinesses that arein line with growthand diversificationstrategy•Continue to protectcurrent client base
Maintain an optimalcapital Needs visualgrid/line toseparate pointsstructure relative tothe strategicobjectives of thegroup	•Maintain good relationships withbankers•Identify additional sources ofcapital for businesses	•Improved framework for cashand capital allocation andmonitoring•Met our funding requirements soas to enhance the fundingrelationships with our bankers	•Continuousengagement withcurrent andpotential debt andequity funders•Improve creditcontrol and cashmanagement
Maintain a robustand steadyinfrastructure thatsupports andfacilitatesopportunities ineach segmentInnovate throughtechnology	•Invest in the right level ofinfrastructure that has sufficientcapacity, backup and redundancyto support the operationalrequirements of the group•Increase interaction with clients andservice providers to understandchanging needs, businessrequirements and availablesolutions	•Facilitated transition to alternativesoftware providers where newacquisitions are transferred fromformer parent systems•Developed new software tosupport new products	•Adoption of cloudbased platforms
Investing in talentedindividuals to ensurethat each segment isdriven byexperienced leadersand staffed byskilled people whoshare in the group'svision	•Employ qualified individuals withthe requisite skill set•Develop our people through formaland informal training programmesbased on their individual careerprogression objectives•Appropriately reward staff forperformance through short-termincentives ("STIs") and long-termincentives ("LTIs"), which areuncomplicated and transparent	•Promoted a high-performanceculture.•Continued with analyst trainingprogrammes•Enhanced internal trainingprogrammes	•Facilitate leadershipdevelopment andsuccession plans fornew set of businesssegment leaders
Continue to improveour B-BBEE rating	•Contribute to the societies that weoperate in•Support transformation through:o Employment practiceso Supplier and enterprisedevelopmento Upskilling staff	•Improved diversity throughemployment equity objectives•79.79% black ownership•Contributed to supplier andenterprise developmentprogrammes	•Improve currentB-BBEE scorecardrating

Our value-creating business model

OUR INPUTS

Financial Capital

The multi-source pool of funds that supports operating activities group-wide and enables the businesses to execute their respective focused business strategy.

• Share capital of R696.5m (2020: R696.5m)
• Retained income decreased by R209.1m (2020: R10.3m)
• Operational cash flow generated R71.5m (2020: R52.5m)
• Financial liabilities advanced of R0.6m (2020: R38.0m)
• Financial liabilities repaid of R25.1m (2020: R30.8m)

Human & Intellectual Capital

Our people in their discipline teams, their niche skills-sets, knowledge bases and experience, within our group culture, supported by our systems and processes – and how these are applied to add value to our products and services. This accumulates into our IP assets of institutional memory, brand and reputation.

• Continued in investment in up- and on-skilling staff
• R5.2m (2020: R5.5m) investment in systems and process development
• • Financial Mail rankings: Execution: Fixed interest instruments: Vunani Securities ranked 10th

Social and Relationship Capital

The loyal network of our key stakeholders and the supportive dialogue that informs an effective group strategy.

• 361 shareholders at 28 February 2021
• Continued investment in community development initiatives
• The South African Institute of Chartered Accountants (www.saica.co.za)
• The South African Institute of Stockbrokers (www.sais.co.za)
• The Chartered Financial Analyst Society of South Africa (www.cfasociety.org/southafrica)
• The Investment Analysts Society of Southern Africa (www.iassa.co.za). • The JSE (www.jse.co.za)
• The Institute of Directors (Southern Africa) (www.iodsa.co.za) • The Association of Black Securities and Investment Professionals
• (www.absip.co.za)

Natural Capital

Our accountability for appreciation and preservation of natural resources consumed and deployed in delivery of our products and services, particularly, as a financial services group how our concerns in this regard impact on deploying financial capital.

• Focus on recycling of paper and computer equipment to minimise footprint

OUR BUSINESS ACTIVITIES

• Asset administration

Primarily administration of death benefits on behalf of minor dependants of deceased members of our retirement fund.

o Revenue of R144.6m (2020: R139m)

o Assets under administration R7.3bn (2020: R6.76bn)

• Fund management

Fund management services to institutional, corporate and retail clients via single-asset and multi-asset class funds (equity; bonds; money market).

o Revenue of R133.6m (2020: R94.9m)

o Funds under management R51.5bn (2020: R39.7bn)

• Insurance

Insurance services included provision of short-term insurance and medical aid as well long-term life insurance and employee benefits.

o Revenue of R217.4m (2020: R59.7m)

• Investment banking

Institutional securities broking, advisory services including JSE sponsor, M&A and bond origination:

Advisory services

o Revenue of R16.9m (2020: R14.0m)

Institutional securities broking

o Revenue of R46.3m (2020: R36.9m)

2 KEY STRATEGIC OBJECTIVES

1. GROWTH

1. DIVERSIFICATION

Our focus areas:

• Focus businesses on financial services following unbundling
• Focus on adding new products/services on current platform
• Focus on maximising synergies in financial services businesses
• Invest in IT systems to help improve quality of service to our clients
• Improve client interaction to help retain key clients
• Identify acquisition opportunities in financial services business in SADC
• Implementation of LTIs to retain key staff

OUR VALUE CREATED

For our shareholders

• Loss of R0.2m (2020: Profit of R39.5m)
• Segment profit as follows:
  • o Fund management R18.0m (2020: R10.6m)
  • o Asset administration R19.6m (2020: R16.6m)
  • o Insurance loss of R37.3m (2020: profit or loss of R35.6m)
  • o Investment banking of R19.7 (2020: loss of R3.9m)
  • o Discontinued operation (private equity and fund management) loss of R20.2m (2020: R19.4m)
• Financial liabilities repaid of R25.1m (2020: R30.8m)
• Share price of high of 275c (2020: 280c)
• Dividends paid of R8.1m (2020: R11.9m)
• Tax to national fiscus R14.9m (2020: R19.3m)
• Sell-side reports by Merchantec

For our people

• 339 employees (2020: 335 employees)
• 66% (2020: 65%) of staff are female
• R246.8m (2020: R208.6m) spent on salaries
• Staff participated in LTI scheme

For our communities and country

• Donated furniture to schools in areas we operate in
• Donations to schools in areas that we operate in
• Donations of food parcels to communities in areas that we operate in
• Enterprise and supplier development initiatives to support small businesses
• R14.9m (2020: R19.2m) paid in taxes

For the environment

• Recycling of old IT equipment
• Purchasing refurbished IT equipment
• Use of rain water tanks at Sandton offices

OUR TRADE-OFFS

We acknowledge that the following have a short-term reductive effect on financial capital. The trade-off is that these are key drivers of the long-term sustainability of the group:

• Expansion both of existing businesses and through acquisition
• Diversification of our offering and our footprint
• Investment in up- and on-skilling our people and improving systems and process
• Spend on good corporate citizenry including: regulatory compliance; preserving natural resources; contributing to socio-economic transformation in South Africa

Expansion boosts financial capital over the longterm and offers value to our human capital by offering ever-widening opportunities for crossskilling, learning and movement within the group and our operating regions. Similarly spend on good corporate citizenry helps build our social licence to operate with authorities and communities.

We further deem certain time and resource input critical to the outcome we are intending to create, albeit while acknowledging the trade-off as it diverts some focus from core business. This is most true with regard to stakeholder engagement. As we consider stakeholder relations to be central to our long-term sustainability, this trade-off is acceptable to the group as it enables a well-informed strategy which can deliver gains in all other capitals.

3 KEY SUCCESS MEASURABLES

Adding value for our shareholders and other stakeholders

Being a good corporate citizen

Making a real contribution to socio-economic transformation in South Africa

Risk management

KEY RISKS AND MITIGATING CONTROLS

Vunani operates in a highly regulated environment and the board acknowledges that, with assistance from the audit and risk committee, it is accountable for the risk management processes as well as the systems of internal control.

Risk management is a central part of the group's strategic management. It is a structured process whereby risks associated with the group's activities are identified and plans are put in place to manage and mitigate those risks.

The process followed to identify the key risks and areas of focus is summarised below:

Identify key business objectives

Identify events that could impact the achievement of these objectives

Assess the inherent likelihood and potential impact of these events

Consider the controls that have been implemented to mitigate the risk and their effectiveness in order to determine the level of residual risk

Where the residual risk is not allayed to an acceptable level, implement additional procedures

OBJECTIVES AND APPROACH

The group's risk management objectives ensure that strategic and operational risks are identified, documented and managed appropriately. Risk management forms an integral part of normal business practice, with a culture of risk awareness promoted throughout the group.

Key to this is management working together to identify the significant risks that the group faces and developing mitigation plans. This includes implementing appropriate internal controls and identifying risk owners to take responsibility for individual risks and the management of those risks.

Vunani is exposed to a wide range of risks, some of which may have a material impact. Identifying these risks and developing plans to manage them is part of each business unit's directive. Group management assesses these risk registers periodically and the board, through its audit and risk sub-committee, receives assurances from senior management regarding the effectiveness of the risk management process. The board remains responsible for overall risk management.

Risk management plans and processes are presented, discussed and approved at audit and risk committee meetings in line with the audit and risk committee's work plan for the year.

The process encompasses both an enterprise-wide risk assessment and divisional assessments. The plans and processes include risk registers detailing significant strategic and operational risks facing the group, existing controls, perceived control effectiveness and the level of risk tolerance. Risks that are below acceptable tolerance levels require a plan for the implementation of additional controls and management's actions to bring these risks within acceptable levels.

Internal audit provides a written assessment of the system of internal controls, including financial controls and risk management processes, and conducts annual reviews to assess the adequacy of the risk management process. To meet its obligations, internal audit has to work with underlying businesses and design, test and embark on a combined assurance review process that is risk-based and draws upon appropriate functional expertise.

Furthermore, each operating subsidiary that is subject to regulatory supervision has an appointed compliance officer who is responsible for liaising with the regulator and ensuring compliance with all the relevant regulations.

The process described above is undertaken both at group level and at an operating entity level.

KEY RISKS The group has identified the following key risks and areas of focus in terms of the capital bases employed within the group: Capital Key risks identified Probability assuming no mitigating controls Impact Mitigating controls Financial capital The group's ability to meet its financial obligations and the maintenance of working capital. • Executive committee manages a dashboard of metrics, designed to ensure that the group has a good sense of how individual businesses are performing and ensure timeous response to adverse developments. • Daily cash management by heads of operating businesses. • CFO, and ultimately the CEO, responsible for overall group cash management. • Monthly management meetings with each operating business to track financial performance, cash generation and changes to the business environment. • Executive management supports non-performing business areas and assists them to return to profitability. • Financial management process includes profit and cash flow forecasts, taking changes in the business environment into account. • Board analysis of group's performance and its ability to meet its obligations on both a short- and long-term basis. Unnecessarily expending resources on activities that will not yield the desired objectives. • Strategy review is embedded into regular interaction between group management and subsidiary executives. • Group executives and heads of business formulate strategy based on group's objectives. This is documented and implementation monitored. Human capital The inability to attract and recruit and retain competent, skilled, experienced and talented individuals. • Recruitment and assessment procedures go beyond the conventional and decisions around key skills are discussed at different levels of the organisation. • Importance given to reward and incentive mechanisms at all levels. • Combination of market-related salaries and short- and LTIs. Social and relationship capital The evolution of BEE and transformation legislation and its increasing imperative means that the current level of compliance may not be sufficient to secure business. • BEE is integral to doing business and transformationcentric processes are embedded into each business. • Periodic interactive workshops at each business to formulate a strategy to improve BEE ratings. Key Medium High Low

Risk management (continued)

Capital	Key risks identified	Probabilityassuming nomitigatingcontrols	Impact	Mitigating controls
Intellectualcapital	Group subsidiariesoperate in a highlycompetitive marketwhere the productsare relativelycommoditised. Priceand service factorsare an importantconsideration, whichcould have asignificant impact onthe performance.			•Operational management keeps abreast ofenvironmental developments ensuring productsand services remain relevant and in demand.•Monitoring and tracking of progress in productand business development activities.•Client relationship management and retentionare an integral part of management's functions.
	Insufficient and/orinappropriate riskmanagement andmitigation processesat a group andoperational level.			•Group risk is assessed from the top-down, as wellas bottom-up, based on the potential risks toachieving strategic objectives.•Operating businesses consider risks that are particularto their respective businesses.•Risks are documented in risk registers, categorised interms of priority and submitted to the group audit andrisk committee.
	Non-compliance interms of theregulations thatgovern the variousbusiness activitieswithin the group,some of which areonerous.			•Dedicated personnel appointed at operational level tomonitor compliance and interact with regulators asrequired.
	The approach tomaking, managingand realisinginvestments isundertaken in amanner that is notstructured and/ordisciplined.			•Investment committee ensures that all existing andprospective investments are subjected to the necessaryscrutiny to justify their inclusion in the group's portfolioand the allocation of capital.•Investment committee meets regularly to evaluateprogress and to ensure that there is accountabilityfor the investments the group makes.

Capital	Key risks identified	Probabilityassuming nomitigatingcontrols	Impact	Mitigating controls
Manufacturedcapital	Significant relianceon informationtechnology andcommunicationsystems. This is apervasive risk thataffects the group asa whole.			•IT Steerco as well as an outsourced IT service providermanages relationships with internal stakeholders andall external service providers to ensure that a highservice level is maintained.•IT Steerco and IT service provider ensure that thegroup's IT strategy is appropriately formulated andimplemented in the most cost-effective manner.•A separate IT risk register is maintained andprocesses are put in place to ensure that the keyIT-related risks are mitigated to an acceptable level.
Naturalcapital	Vunani's privateequity focus includesmining-relatedinitiatives. Thesebusinesses wereunbundled inFebruary 2021.			•Investments of this nature are always made inpartnership with well-established companies withindustry experience.•Ensure industry-specific knowledge and expertise is inplace to ensure the group can responsibly extractvalue from its investments.

Risk management (continued)

COMBINED RISK ASSURANCE MODEL

The group has adopted a combined risk assurance model to manage its risk. The model was designed to provide an assurance map to indicate who assures what risk and to whom this assurance is reported. It is a tool to assess and improve the functionality of the "lines of defence" applicable to each risk.

The "four lines of defence" are reflected in the model below.

	People andprocesses	Management,supervisionand oversight	Riskmanagementandcompliance	Internal auditaction	Boardcommitteeoversight	Independentexternalassurance
Top-down approach	Risk registercombinedriskassurancemodel	Subsidiaryboards	Chieffinancialofficer	Review,advisory,report toaudit and riskcommittee	Audit andriskcommittee	Review,and report toaudit and riskcommittee
Combined riskassurance process		Line 1	Line 2		Line 3	Line 4
Bottom-up approach	Enterpriseriskassessmentprocess bysubsidiaries,feeding intorisk register	Subsidiaryboards	Chieffinancialofficer	Review,advisory,report toaudit and riskcommittee	Audit andriskcommittee	Review,and report toaudit and riskcommittee

This combined risk assurance process has provided us with a better understanding and control of our risks and has provided management with a tool to address the group's significant risks.

As part of the above processes, significant risks identified during the reporting period, together with significant risks identified by senior management, were compiled into a group risk register. This register is monitored by the audit and risk committee on a regular basis.

The board is satisfied with management's process of determining material issues, risks, and opportunities and that the risk management is effective in continuously identifying and evaluating risks and opportunities and ensuring that these risks are managed in line with our business strategy.

03 OUR PERFORMANCE

PURPOSE

Our people	24
Stakeholder engagement	25
Economic context	29
Chief financial officer's report	30
Business segment review	33
Sustainability	39

Our people

People are the lifeblood of our business and critical to our success. We encourage our people to live by our core values and employee code that support a work culture that is transparent, respectful, non-exploitative, and fair (especially with regard to compensation and benefits).

The company complies with employment laws and is committed to protecting human rights. The head of HR is responsible for our HR strategy and ensuring it aligns with the overall group strategy. Our code of ethics and disciplinary code are communicated to all employees.

Stakeholder engagement

The engagement with our key stakeholders is a critical element that contributes to the achievement of our strategic objectives and creating sustainable long-term value for the group and stakeholders alike. These engagements contribute directly and indirectly to the way we do business and our reputation as a financial services group.

We strive to ensure open and transparent engagement with all stakeholders. Engagement with key stakeholders is facilitated through various levels of interaction that are aimed at providing insight into our strategy, significant business developments, material issues, operating business performance and prospects.

The manner in which we engage with our stakeholders, and the frequency with which we do so, varies according to each identified stakeholder group. We communicate with various stakeholders through our website, stakeholder presentations, site visits, annual general meetings ("AGMs"), interaction with the media, one on-one meetings, community forums and ongoing informal and formal discussions.

The group's executive and operational management bodies identify stakeholder groups and the issues and areas of concern that may impact these stakeholders. The most appropriate level of management then assumes responsibility for engagement, identification of further stakeholder concerns and determining the most appropriate action to be followed to address these concerns.

The group chief executive officer oversees all stakeholder engagement and plays a key role in analysing relevant issues and concerns and providing guidance on appropriate responses.

Stakeholder engagement (continued)

Stakeholder	Key interest	Engagement
Financiers	•Reducing and managing debt•Regular discussions with funders•Compliance with variouscovenants and undertakings•Liquidity management	•Informing funders of relevant developments•Management of finance facility through performancemanagement programmes•Regular tracking of finance covenants•Repayment of loans in terms of agreed timelines•Regular contact sessions around status of operationsand specific initiatives•Quarterly submission of management accounts
Suppliers	•Building relationships to ensurebusiness continuity•Service delivery and quality•Agreed terms of service•On-time delivery of services•Honouring agreed termsof service	•Regular contact with suppliers•Implementing enterprise and supplier developmentinitiatives•Correspondence regarding product features andservice offerings•Implementation and monitoring of service levelagreements•Maintained close relationships with suppliers
Customers	•High product quality•Efficient and timely delivery ofproduct•Competitive pricing structures•High service levels•Extensive relationship building	•Feedback from clients informs enhancement of productsand services•Regular visits to and engagement with customers•Conscious effort to meet expectations where applicable•Continual product and service quality monitoring•Contract review processes•Formalised business dealings: one-on-one meetings,telephone conversations, and corporate website•Facilitation of workshops and training
Service providers	•SLAs•Outsourced contract agreements•Regular contact with strategicservice providers	•Maintain close relationships with service providers•Implementation and continual monitoring of SLAs•Adherence of outsourced contracts – daily reports,weekly production monitoring meetings and monthlyreporting against plans

Our key stakeholders and the issues that concern them are outlined below:

Stakeholder	Key interest	Engagement
Shareholders	•Strength of board•Earnings and sustainability•Dividend payments•B-BBEE•Communicating the valueproposition•Organic and acquisitive growthof each operating business•Profitability of strugglingbusinesses•Utilisation of investor relationsteam•Strength of asset base•Diversified footprint andsegments•Strong management team•Restructuring or selling failingbusinesses	•IR strategy reviewed annually•SENS announcements•Interim and final results presentations andteleconferences•Regularly updated website•Dissemination of information through a definedcontact list•Calls with strategic shareholders if and when required•Regular engagements with key shareholders
Employees	•Staff development and careerplanning•Learning and development•Diversity and empowerment•Recognition of performance•Work-life balance•Employment equity and diversitymanagement•Giving first preference to internalstaff for vacancies•Succession and personaldevelopment plans•Performance-based short- andLTI schemes	•Display of key labour legislation at the workplace•Monitoring of staff demographics and responding togaps•Regular staff engagement and communication, both atgroup and segmental levels•Training facilitated, based on individual goals andcompany-specific requirements•Annual ethical climate and employee wellness surveys•Annual staff wellness day encouraging healthawareness and work-life balance•Periodic policies and practices audit•Staff development initiatives

Stakeholder engagement (continued)

Stakeholder	Key interest	Engagement
Media	•Integrity of communications withall stakeholders•Understanding the Vunanibusiness	•One-on-one engagement with financial and tradeeditors and journalists to ensure that Vunani's strategyis well understood and accurately reported•Circulation of press releases•Media alerts through SENS announcements•Media strategy reviewed annually•Interim and final results presentations•Specific direct engagements
Regulators andGovernment	•Regulatory and legislativecompliance to FSCA standards•B-BBEE codes•Compliance with all relevantlaws and regulations•Maintenance of sufficientqualifying capital•Giving back to society	•Operations visits•Annual submission of annual regulatory complianceand update reports•Tax certificates of good standing•Compliance register system to manage and track allregulatory matters•PAIA manual•Periodic reporting to the FSCA•Contact via compliance advisors•Personal contact with relationship managers atregulatory and industry associations•Formal meetings when required•Reporting to:o Department of Labouro Department of Trade and Industryo South Africa Revenue Serviceo JSEo CIPC

Economic context

What started off as an extraordinary year amidst a rapidly spreading global pandemic that forced economies into lockdown on an unprecedented scale, became a real challenging year as trading conditions remained tight as the year progressed amidst various cycles of easing and reintroduction of stringent containment measures amongst South Africa's major trading partners. Besides the trade-related indirect detrimental impact on "open" economies like South Africa's, the domestic economy did not escape the direct impact of the crises either as it was forced into an initial hard lock-down phase barely a month into Vunani's 2020/21 financial year. Since the South African economy already found itself firmly in recession at that point, it was always going to be a very challenging year for the generation of earnings which would be exacerbated by the Covid-19 pandemic impact.

As could be expected, monetary and fiscal authorities rushed to stem the tide by injecting liquidity into the system by aggressively lowering interest rates and the cost of borrowing in an effort to entice consumers to continue spending, while fiscal authorities embarked upon a massive public sector spending spree in an effort to underpin overall demand. South African authorities also implemented various support measures which included a R500 billion fiscal support package and the aggressive reduction of the benchmark interest rate by the South African Reserve Bank, essentially halving it by cutting the Bank's repurchase rate by an aggregate 300 basis points over the course of the first half of calendar year 2020.

Even though the lock-down has gradually been lifted as the year progressed, business confidence slumped to an all-time low and consumption suffered as consumers struggled to make ends meet amidst wide-spread job losses and salary cuts. Economies were pushed into deep contraction as aggregate output levels plummeted and economies shrunk on an unprecedented scale.

By the end of the financial year most economies, including South Africa's had rebounded somewhat and were set for a significant technical rebound in real output growth off the low base of the previous year's contraction, but it will be a long road to recovery from the destruction of the pandemic as the hope is for most economies to recover to pre-pandemic levels of output in two years' time at best – for many it will take much longer.

All were not negative, though. Precious metal prices surged following an initial slump in March 2020, while oil prices plummeted, culminating in South Africa registering a sizeable trade surplus, which led to the first annual surplus in decades on the balance of the current account. The low oil price, coupled with a more resilient Rand-exchange rate subsequent to an initial period of weakening, also contributed to a steep moderation in inflation to levels around 2%, which allowed for significant monetary policy easing.

Nevertheless, South Africa's fiscal challenges and the potential lasting tax burden thereof are of particular concern, while persistent structural challenges remain as illustrated by forced electricity load-shedding even amidst lockdown while the economy was not operating at capacity. Still, the improvement in global trade conditions as vaccination programs allow for the further easing of restrictions and for the recovery to gain traction and culminate in improved import demand, should render further assistance to South Africa's economic recovery. Moreover, despite prevailing struggling economies, financial markets have been buoyed by massive stimulus measures and early indications of economic recovery. Still, while significant damage has been done to the South African economy as illustrated by it shrinking by about 7% in 2020, we do expect a rebound in real GDP growth to around 4% in 2021.

Chief financial officer's report

The majority of the group's businesses performed well in the tough environment, except for the insurance business which was negatively impacted by Covid-19-related claims in the last few months of the year.

Tafadzwa Mika

Chief financial officer

EXECUTIVE SUMMARY

The financial year ended 28 February 2021 was a challenging one for Vunani, due to the tough economic environment, which had various challenges including ratings downgrades, rand volatility and tough markets as well as the impact of operating in a Covid-19 environment. The majority of the group's businesses performed well in the tough environment, except for the insurance business which was negatively impacted by Covid-19-related claims in the last few months of the year. The business was impacted by negative fair value actuarial adjustments as well impairment of its intangible asset. The group managed to successfully unbundle its private equity assets to its shareholders in February 2021. As a result of this unbundling the private equity assets are presented as discontinued operations in the current year results.

The group's continuing operations made a profit of R20.1 million, compared to R58.9 million in 2020, whilst the discontinued operations made a loss of R20.2 million compared to R19.4 million in 2020. Overall the group made a loss of R0.2 million compared to a profit of R39.5 million in 2020. The decrease in profitability is mainly attributable to the challenges incurred in the insurance business and negative fair value adjustments related to the discontinued operations. In the 2021 financial year the group consolidated the Oracle insurance business and Vunani Fund Managers Botswana for a full year compared to one quarter in 2020. The group had increases in revenue from operations, revenue from investments, other income, interest on investments and equity accounted earnings during the year. The group's earnings per share decreased by 42% to 12.9 cents (2020: 22.3 cents), while net asset value per share decreased by 42% to 173.8 cents (2020: 302.2 cents) as result of the unbundling. An interim ordinary dividend of 5.0 cents per share (4.0 cents net of dividend withholding tax) was paid to ordinary shareholders on 21 December 2020. A final dividend of 7.5 cents was declared to shareholder on 4 June 2021 (2020: nil).

The consolidated results for the group are based on the results of the business segments as summarised on pages 33 to 38 of this report. For material events between the end of the reporting period and the date on which the annual financial results were approved by the board, refer to note 51 on page 156.

Statement of comprehensive income

The insurance segment contributed the highest percentage of the group's revenue at R217.4 million (2020: R59.7 million) due to the consolidation of a full year of results. The asset administration segment contributed the next highest percentage of the group's revenue at R144.6 million (2020: R139.2 million) due to increased AUA. This is followed by the fund management segment as the third highest contributor, with revenues of R133.6 million 2020: (R94.8 million) due to increased funds under management. The investment banking revenues increased to R63.2 million (2020: R50.1 million) despite tough trading conditions and economic environment.

Other income increased to R26.1 million (2020: R9.8 million) mainly as a result of the reinsurance recoveries from the Insurance segment. The finalisation of the purchase price allocation of the VFMB business resulted in a bargain purchase gain of R0.5 million in the prior year combined bargain purchase of R34.9 million was recognised (2020: R34.9 million).

Investment income totalled R4.5 million (2020: R3.1 million), in the form of dividends from Vunani's listed and insurancerelated investments. The group earned interest from investments of R18.3 million (2020: R6.0 million) from the insurancerelated investments.

The group recorded negative fair value adjustments of R44.1 million (2020: R10.8 million). The negative fair value adjustments is mainly attributable to the group's insurance liabilities. Due to the impact of Covid-19-related claims on the insurance business, negative actuarial fair value adjustments of R67.9 million were accounted for to take into account the claims experience for the financial year.

The value-in-force intangible asset was impaired by R41.5 million. The basis of the impairment calculation is a discounted cash flow of the group life assurance and permanent health insurance. As a result of the impact of Covid-19, the profit margins of both businesses decreased. This resulted in a significant reduction of the value-in-force intangible asset. The group also incurred impairment of trade and other receivables of R7.0 million (2020: R2.7 million).

Equity accounted earnings improved to R1.4 million compared to R0.2 million in 2020. This includes Vunani's share of post-tax earnings for Phakamani Impact Capital which was disposed of in February 2021.

Operating expenses increased by 62% in the reporting period. This increase was due to the consolidation of Oracle and VFMB for the full year. Staff costs, including remuneration and costs for STIs and LTIs, accounted for 49% of expenditure, remaining the group's single-largest line item. This is appropriate for a financial services group, where success and sustainability is dependent on investment in human capital.

Insurance benefits and claims accounted for 30% of the expenditure for the year which is in line with the additional revenue earned from Oracle. Communications and information costs accounted for 4% of expenditure, as these are critical given the nature of Vunani's business. It is important to note that many of the group's communications expenses are dollar-denominated and that fluctuations in the value of the rand had a direct impact on these. The group remains very sensitive to costs and minimising expenditure is an ongoing management priority.

Finance income increased to R7.2 million for the year compared to R4.8 million in 2020 as a result of the increase in cash generated from operations. Finance costs decreased to R7.6 million for the year compared to R8.2 million in 2020, due to the reduction of interest rates and debt repayments made during the year.

The income tax expense was a positive R10.1 million compared to an expense of R11.2 million in 2020. This is due to the deferred tax credit of R11.4 million from the impairment of value-in-force intangible, as well refunds received from the receiver of revenue.

The discontinued operations contributed a loss of R20.2 million compared to R19.4 million. The loss is mainly attributable to impairments and negative fair value adjustments of R29.9 million (2020: R21.4 million). As part of the unbundling process the underlying investments that were unbundled were fairly valued on the effective date of the transaction.

As a result of the hyperinflation in Zimbabwe, the group had negative other comprehensive income of R5.0 million (2020: R12.4 million).

Chief financial officer's report (continued)

Statement of financial position

As a result of the unbundling of the private equity assets the group's statement of financial position has reduced when compared to the prior year.

Goodwill is tested for impairment annually and, for the year ended 28 February 2021, no impairment was necessary. Goodwill was valued at R139.8 million as at that date. The intangible assets that arose due to the consolidation of Fairheads in 2017 and the Oracle acquisition in 2019 decreased as a result of the annual amortisation charge. As detailed previously the value-in-force intangible asset was impaired by R41.5 million. This value-in-force intangible asset represents the present value of future pre-tax profits embedded in the acquired insurance or investment in DPF contracts.

The group has insurance-related investments of R398.1 million (2020: R286.6 million) and insurance-related liabilities of R456.9 million (2020: R398.0 million). The increase in insurance-related investments is a result of the asset allocation strategy. The increase in insurance-related liabilities is as a result of actuarial fair value adjustments.

Accounts receivable and payable from trading activities relate to outstanding settlements in the securities trading business. Trades were settled on a T+3 basis on 28 February 2021, so the receivables and payables reflected on the statement of financial position account for settlement within three business days after the end of the year.

The authorised stated capital as at 28 February 2021 was 500 million ordinary shares of no par value (2020: 500 million ordinary shares of no par value). As at 28 February 2021, 161 155 915 shares were in issue (2020: 161 155 915). The share-based payments reserve movement of R3.3 million is attributable to the current period IFRS 2 charge (2020: R5.0 million). The transfer between reserves of R1.5 million (2020: R1.3 million) relates to shares transferred to employees on vesting. The group utilised its treasury shares worth R6.8 million (2020: R3.6 million) to settle part of its obligation to employees. The foreign currency translation reserve reduced to R2.4 million compared to R9.5 million in 2020 as a result of the disposal of PVAM as part of the VCP unbundling. Non-controlling interests reduced by R17.1 million as result of the losses incurred in Oracle and disposals related to the VCP unbundling.

There was a decrease in other financial liabilities due to repayments made during the year as well as debt that was disposed of as part of the unbundling.

Cash flow

Cash flow and cash equivalents decreased to R195.8 million during the reporting period (2020: R236.7 million). This decrease is mainly attributable to the acquisition of insurance-related investments. Net cash generated by operating activities increased by 36% to R71.5 million (2020: R52.5 million). This was driven by the improved performances of the underlying operating businesses. The increase in cash outflow from investing activities mainly attributable to the acquisition of insurance investments of R68.8 million. The group will continue to try and improve cash generation to assist in its expansion strategy.

Conclusion

During the year Vunani continued its strategic approach of becoming a financial services group by unbundling the private equity assets. The group believes this focused approach will result in significant benefits to shareholders in the short-, medium- and long-term. The group will continue to focus on growing to operating businesses whilst managing costs diligently. We at Vunani are optimistic that this will lead to further growth during the next financial year.

Tafadzwa Mika Chief financial officer

5 July 2021

Business segment review

FUND MANAGEMENT

Vunani Fund Managers

Vunani Fund Managers is a boutique fund management business that has been operating since 1999. It offers a range of investment products to both institutional and retail clients, including retirement funds, medical schemes, corporates, parastatals and trusts. Its product range has domestic and global reach, which is offered through both single-asset and multi-asset funds.

The company has strong capabilities and a proven track record in the areas of specialist equity, specialist bonds, property funds and multi-asset funds. Its bespoke approach to investing is based on delivering solutions that are customised to meet client needs and on establishing strong and lasting relationships with those clients. This approach is supported by diligent risk management processes that have enabled the company to deliver positive returns, especially in the areas of absolute return funds (CPI+ range), specialist bonds, property, core domestic equity and global equity.

The portfolio construction skills and risk management capabilities of the company's team of highly experienced investment professionals enable it to deliver world-class investment solutions. Its primary objective is to achieve investment returns that exceed agreed benchmarks and, in order to achieve this, it recruits and retains talented investment professionals. It also strives to continuously improve its market share.

Performance outcomes

Revenue: R106.6 million (2020: R90.3 million)

Assets under management: R51.5 billion (2020: R39.7 billion)

Retained key investment professionals

Performance review

Despite the tough economic environment, the business continues to improve its revenue generation and profitability. This was driven by an increase in AUM of 30% from the prior year as well as the launch of four branded unit trusts through the Boutique Collective Investments platform. The underlying performance of the individual portfolios have declined as a result of the volatility in the markets.

The impact of Covid-19 has resulted in less face-to-face interactions with clients which made business development challenging. Business development is critical in securing new AUM. Despite these challenges the company did experience a good inflows, resulting in the solid improvement in fee income.

Strategic objectives	Key performance indicators	Performance achieved FY2020	Performance achieved FY2021
Generate a good annualreturn on equity	A minimum ROE of 25%per year	ROE of 39%	ROE of 56%
Recruit and retain talentedinvestment professionals	Recruitment and retention oftop investment professionals	Retained key individuals	Retained key individuals
Increase market share	Obtain a 5% to 10% increasein market share	Top 10 black asset managers(2019 BEE.conomics survey)	Top 10 black asset managers(2020 BEE.conomics survey)
Provide relevant andcost-effective investmentproducts	High levels of performanceand new inflows	Second and third quartileperformance with someproducts	Second and third quartileperformance with someproducts
		43% increase in AUM	30% increase in AUM

OUTLOOK

Continued business development and asset gathering is critical for the continued success of the business. The VFM brand is well established, and clients are increasingly aware of the company's product offering. This is critical as potential clients need to be comfortable with the capabilities of business. The company will also continue to focus on growing its retail book through it branded unit trusts on the Boutique Collective Investments platform which were launched in 2020, as this will help grow assets under management. The continued performance of the underlying portfolios will be a key emphasis in the current year to ensure additional fees are earned by the company. Despite operating in tough economic conditions, the outlook for the for the company in particular is conservatively optimistic.

Business segment review (continued)

ASSET ADMINISTRATION

Fairheads

The asset administration segment comprises the group's investment in Fairheads Benefit Services Proprietary Limited ("Fairheads"), which is held through Mandlalux Proprietary Limited ("Mandlalux") and Fairheads Financial Services Proprietary Limited ("FFS").

Fairheads is a niche trust and beneficiary fund administrator responsible for administering funds on behalf of minor dependants of deceased retirement fund members. It has two key client groups: members and their guardians, who make use of its services; and retirement fund trustees, who make the decision to place the funds due to beneficiaries in the company's care.

Fairheads' primary objective is to provide impeccable service delivery to its members because, in many cases, the funds it pays to them contribute significantly to their overall household income and, as importantly, to educational outcomes. The company has therefore developed strong relationships with members and their guardians based on openness and transparency.

FFS' focus is on tracing dependants on behalf of unclaimed benefit funds as well as administration of pension backed housing loans.

Performance review

Fairheads performed well during the reporting period, contributing R144.6 million to group revenue (2020: R139.2 million). This was attributable to a growth in assets under administration ("AUA"), which increased revenue, as well as to a reduction in costs and finance charges on external debts. As a result, profit increased by 18% to R19.6 million (2020: R16.6 million).

Like the rest of the group, the company nevertheless operates in a constrained economic environment that shows little growth and is highly price competitive, but which is also marked by poor service delivery to members. It differentiates itself on the quality of its service and on the personal relationships it cultivates with members and their guardians. In this way it aims to maintain a premium market positioning in relation to its competitors.

Strategic objectives	Key performance indicators	Performance achieved FY2020	Performance achieved FY2021
Generate a good annual ROE	ROE of 15% per year	ROE of 15%	ROE OF 11%
Increase AUA	Progressively increase AUAyear-on-year	AUA of R7.3 billion	AUA of R6.8 billion
Enhance operatingcompetitors efficiencies	Continuously improve AUAper employee	AUA of R37.6 millionper employee	AUA of R36.5 millionper employee

OUTLOOK

The outlook for Fairheads is positive as the company continues to increase it AUA as well as gaining clients from its competitors. This growth is necessary to ensure growing trading volumes in the market so that the businesses has a solid base from which to operate.

During the past year the unclaimed benefits and tracing businesses have seen good growth. The focus for the next year is to continue growing this business to diversify the revenue streams and improve profitability.

INSURANCE

Oracle Insurance Eswatini

Oracle Insure is an insurance business that has been operating in Eswatini since 2008. The company specialises in both long-term and short- term products. In December 2019 as part of a consortium with key management of Oracle the acquisition of an effective 52% of the business was finalised by the group.

The company's long-term insurance products are split into life products and pension and provident fund products. The life products include group life assurance, group life cover, group funeral policies, income continuation benefits and disability benefits. The pension and provident fund products are both defined contribution products.

Through its 100% held subsidiary the company provides various short-term insurance products. These include car, household, building, bicycle, watercraft and all risk insurance. It also provides health insurance products which include major in-patient benefits, major disease benefits, medical savings, health platform benefits and a rewards program. The company also provided short-term commercial insurance products. These include car, contents, building, electronic equipment, business interruption, all risk insurance, personal liability, public liability, fidelity guarantee, money insurance and motor traders insurance.

Oracle has re-insurance agreements with A-rated reinsurers. For the long-term insurance business Hanover Re have been contracted since July 2019 as our re-insurance partner. For the short-term business African Re Corporation (SA) Ltd leads our short-term treaty and they are supported by XL RE Europe SE (Dublin), GIC Re South Africa Ltd, Echo Rucksversicherungs, Bryte and Ezulwini Re-insurance Co Ltd (legislated). All of these partners are market leaders.

The portfolio construction skills and risk management capabilities of the company's team of highly experienced investment professionals enable it to deliver world-class investment solutions. Its primary objective is to achieve investment returns that exceed agreed benchmarks and, in order to achieve this, it recruits and retains talented investment professionals. It also strives to continuously improve its market share.

Oracle's management team has several years' experience in the insurance industry.

Business segment review (continued)

INSURANCE (continued)

Performance review

Oracle contributed a loss R37.3 million compared to a profit of R35.6 million in the prior. During the financial year the company was impacted by the Covid-19 second wave in Eswatini. This resulted in above average death claims for the year. This necessitated increased provisions on actuarial liabilities, which had a significant impact on financial performance and the embedded value of the business. During the year the segment incurred negative fair value adjustments of R44.1 million (2020: R2.7 million) and an impairment of the value-in-force intangible asset of R41.0 million. The value in force business intangible asset represents the present value of the various insurance policies Oracle has.

Strategic objectives	Key performance indicators	Performance achieved FY2020	Performance achieved FY2021
Generate a good annual returnon equity	A minimum ROE of 25%per year	ROE of 52%	Negative ROE due to losses
Increase market share	Obtain a 5% to 10% increasein market share	Secured two new clients	Secured several new clients inthe health and short-termbusiness
Provide innovative products toretain and attract customers	Introduce two new productsa year	Two new products duringthe year	New product role out delayeddue to impact of Covid-19

OUTLOOK

The company was negatively impacted by Covid-19 in the 2021 financial year, which affected profitability. As a result of this the business will carefully review its reinsurance treaties when they are up for renewal. The business has launched some exciting new products in collaboration with South African industry players, which should give it some competitive edge in the market. The company will also look at actively increasing its client base through active business development strategies. The Eswatini government has begun its Covid-19 vaccination roll out. The business will continuously monitor this roll out as this will determine the impact of a potential third wave in the country, which will ultimately affect profitability.

INVESTMENT BANKING: ADVISORY SERVICES

Vunani Corporate Finance

Vunani Corporate Finance offers the full range of classic corporate finance services, enabling clients to buy and sell companies. Its services include capital raising; advice on mergers, acquisitions and disposals; and transaction structuring. As it is a JSE and A4X sponsor, it can also assist with the listing of companies, as well as with the ongoing support required to ensure compliance and to enhance growth potential and sustainability.

The company operates across all sectors, but its core focus is in mining, financial services and the structuring of B-BBEE deals. Its capabilities in the mining sector are particularly strong, as its highly experienced advisory team is able to provide advice from both a financial and operational perspective. Clients in this sector have included exploration companies as well as some of the country's biggest corporates

The primary objective of the advisory services segment is to consistently grow revenue and profitability by providing expert professional advice and superior service to its clients. In order to do this, its supplementary objective is to maintain a good pipeline of deals.

Revenue: R16.9 million (2020: R14.0 million) Profit: R5.5 million (2020: Loss: R0.2 million) Performance outcomes

Performance review

Despite the many challenges it faced in the operating environment, Vunani Corporate Finance performed relatively well during the reporting period, as revenue increased to R16.9 million (2020: R14.0 million) which resulted in a profit of R5.5 million compared to a small loss for the prior year.

Socio-economic uncertainty, low growth and muted investor confidence do, however, mean that large, multi-billion-rand mergers and acquisitions remain rare. The mid-cap market nevertheless continues to be active, with many corporates and large companies disposing of non-core assets and entering into B-BBEE transactions. At present – and for the foreseeable future – deals such as these are expected to make up the bulk of the company's business.

Strategic objectives	Key performance indicators	Performance achieved FY2020	Performance achieved FY2021
Consistently increase revenueyear-on-year	A minimum of 10% per year	Revenue decreased by 22%due to increased time tofinalise deals	Revenue increased by 21%due to increase in finalisedtransactions
Generate a good annual	A minimum ROE of 25%	Negative ROE as a result of	ROE of 47% as a result of
return on equity	per year	current year losses	increase in profitability
Grow mandates with leading	Add two new mandates	Two new mandates were	Three new mandates were
companies in the market	per year	concluded during the year	concluded during the year
Further entrench Vunani in the	Close one transaction for	No SOE mandate signed	No SOE mandate signed
SOE space	an SOE per year	during the year	during the year

OUTLOOK

In order to ensure that the company remains profitable the key focus of the current year is to diversify its client base as well as ensuring that the work for its clients is of repetitive nature (valuations, retainers, sponsor work, internal re-organisations). The business is also focused on becoming an accredited JSE valuation expert to diversify its product offering. Another key focus area for the next year to relaunch the advisory services debt origination business targeting opportunities to raise debt on behalf of some smaller municipalities and corporates. The business also intends to continue growing its portfolio of SOE transactions as struggling SOEs would need help in restructuring and raising capital.

The business has a strong pipeline of transactions, as well as mandates from blue-chip corporates. Due to the tough economic climate transactions are taking longer than normal to finalise and this will inevitably impact on revenue in the short-term. The successful completion of the these transactions will ensure that the business continues to be profitable.

Business segment review (continued)

INVESTMENT BANKING: INSTITUTIONAL SECURITIES BROKING

Vunani Securities and Vunani Capital Markets

The institutional securities broking segment manages equity, derivative and capital market trading services for institutional clients. These are delivered through Vunani Securities, which handles equity, derivative and related trading, and Vunani Capital Markets, which handles fixed-interest business offerings in bonds and money market instruments.

Despite difficult trading conditions throughout the reporting period, Vunani Securities continues to focus on becoming the foremost stockbroking service provider in South Africa. The company trades primarily in domestic stocks and has wide coverage in the midcap section of the market.

Vunani Capital Markets, in turn, has a deep understanding of the money markets and bond markets and exceptional execution capabilities. The company is also renowned for its high standard of ethics and its uncompromising work ethic. The team's performance has been recognised by several top 10 Financial Mail rankings for fixed interest services.

Performance review

The segment has seen a significant turnaround from the prior year following a successful restructure. This resulted in a lower cost base for the segment. The impact of improved performance in VCM and the addition of new revenue streams in VS resulted in a 25% increase in revenue. Both businesses were deemed to be essential services and as a result were able to trade throughout the lockdown. As a result of the lower cost base and improved revenue, the segment made a profit of R14.2 million compared to a loss of R3.7 million in the prior year.

Strategic objectives	Key performance indicators	Performance achieved FY2020	Performance achieved FY2021
Generate a good annualreturn on equity	A minimum ROE of 15%per year	Negative ROE due to losses	23% ROE due to improvedrevenue
Provide quality serviceto our clients	Top 10 ranking inFinancial Mail rankings	Ranked 8th in Fixed interestexecution	Ranked 10th in Fixed interestexecution
Diversify revenue streamsthrough addition of newproduct	Add one new product offeringevery year	Introduced transition tradingservices during the year	No new revenue streams,but successfully finalised a fewtransitional trades
Develop and expandrelationships with clients	Increase the number ofinstitutional clients and developrelationships directly with assetowners	Five institutional clients addedduring the period	Three institutional clients addedduring the period

OUTLOOK

Despite still operating in a Covid-19 environment the economy is expected to grow during 2021. This growth is necessary to ensure growing trading volumes in the market so that the businesses has a solid base from which to operate.

Vunani Securities and Vunani Capital Markets focus for the next year is to diversify their revenue streams, as well as improving on delivering service to their current client base. A key focus for the next year will be actively growing the transition trading business. Both companies will also continue to focus on engaging and developing relationships with asset owners as well as institutional clients in order to secure trading potential. The successful execution of the strategies will enable the business to continue to be profitable in this tough economic environment.

Sustainability

Sustainability reporting is the practice of measuring, disclosing and accounting to internal and external stakeholders regarding organisational performance towards the goal of sustainable development. The information in this report sets out Vunani's sustainable business practices for the year ended 28 February 2021 and has not been assured.

OUR FOCUS ON SUSTAINABILITY BY CAPITAL

	Vunani's focus areas
Financial capitalFinancial sustainability is critical to businesssustainability and we focus on group and segmentprofitability, cash generation, having sufficientcapital and efficient deployment thereof andmonitoring the share price and marketcapitalisation	•Ongoing monitoring of financial performance of the group,with bi-annual reporting to shareholders•Regular interaction with various levels of stakeholders•Projection of capital utilisation monitored by business segments•Use of forecasts, budgets and cash projections to monitor andmanage liquidity
Human capitalOur people are the cornerstone of our businessand to ensure sustainability we focus on trainingand development, employee incentives and healthand safety	•Financial assistance and paid study leave•Support of staff through learnership programmes•Vunani training academy•Short and long-term incentive programmes•Graduate recruitment programmeRefer to Our people page 24
Social and relationship capitalMaintaining strong stakeholder relationsand delivering social value – being a goodcorporate citizen	•Regular interaction with all stakeholders•Promotion of B-BBEE•Promoting economic growth through enterprise and supplierdevelopment•Providing financial support to various education initiativesRefer to Stakeholder engagement page 25
Intellectual capitalAs primarily a services company protectingour intellectual capital and institutionalmemory is paramount as is ensuring brandand reputation management	•Safeguarding the group's intellectual property through theimplementation of appropriate controls•Aligning employee and company interests•Appointment of a public relations and investor relations manager•Regular review of the brand to ensure it relates to our stakeholders
Manufactured capitalEnsuring a sustainable information technologyinfrastructure, which includes physical hardware,off site services, internally developed andpurchased systems is critical	•Formulation of appropriate processes to ensure ongoing availabilityof all information technology platforms
Natural capitalEnsuring environmental sustainabilityincludes using natural resources in aconservative manner and using technology,where possible, as an alternative.	•Awareness created amongst staff of prudent consumption of water,electricity and paper•Recycling facilities (including e-waste)•Use of rain water tanks at buildings

04

GOVERNANCE

Our leadership	42
Corporate governance	43
Remuneration report	49
Investment committee report	54
Nomination committee report	55
Social, ethics and transformation committee report	56

Our leadership

Please refer to https://www.vunanilimited.co.za/about-vunani/leadership/ for detailed CVs.

ETHAN DUBE (62) Executive deputy chairman MSc (Statistics), Executive

MBA (Sweden) Skills brought to Vunani: strategic leadership, management, financial, board and committee experience

BUTANA KHOZA (54) Chief executive officer BCom, PG Dip (Accounting), CA(SA) Skills brought to Vunani: management, financial, operational, board and

committee experience

TAFADZWA MIKA (38) Chief financial officer BAcc, CA(SA) Skills brought to Vunani: financial and capital management

MARK ANDERSON (61) Executive director BCom (Hons), CTA, CA(SA) Skills brought to Vunani: business

development and corporate advisory, investment, management, leadership, board and committee experience

LIONEL JACOBS (77) Independent non-executive chairman BCom, MBA

Skills brought to Vunani: management, leadership, board and committee experience, negotiating, investment

NAMBITA MAZWI (47) Independent non-executive director

BProc LLB, Dip Company Law, Programme in Business Leadership Skills brought to Vunani: legal, strategic leadership, management, corporate advisory, board and committee experience

SITHEMBISO N MTHETHWA (51) Non-executive director

BCom (Maritime Economics) Skills brought to Vunani: business development and corporate advisory, negotiating, investment, strategic leadership

GORDON NZALO (54) Independent non-executive director

BCom, BAcc, CA(SA)

Skills brought to Vunani: financial, capital management, board and committee experience, auditing

JOHN MACEY (58) Independent non-executive

director B Bus Sci (Hons), BCom (Hons), CA(SA) Skills brought to Vunani: financial, capital management, board and committee experience

MARCEL JA GOLDING (59)

Non-executive director BA (Hons)

Skills brought to Vunani: Strategic leadership, mining, management, board and committee experience

Non-executive directors

Independent non-executive directors Executive directors

42 Vunani Limited Integrated Report for the year ended 28 February 2021

Corporate governance

ETHICAL LEADERSHIP

Vunani is committed to upholding the highest standards of ethics, transparency and good governance in the interest of all our stakeholders and we adopt stringent compliance measures.

The group's governance, ethics and values is the sole responsibility of the board and is supported through the social, ethics and transformation committee as a mandate. The board is obligated to lead ethically and effect leadership within a framework of prudent and effective control, thereby ensuring that ethics are managed and that Vunani is a responsible corporate citizen.

The board supports the principles of King IV and derives its rights and duties from the board charter. Vunani materially complies with the principles of King IV as set out in detail on our King IV in application report on our website.

Employees are expected to disclose any conflicts of interest and vetting is undertaken at the point of appointment. In addition, a standard protocol for the declaration of gifts to management is implemented in line with a gifts policy. Ethics, bribery and anti-corruption policies are in place to which all employees are required to adhere. No contraventions of the codes and policies were reported during the year.

No instances of fraud, corruption or anti-competitive behaviour were reported during the year.

GOVERNANCE STRUCTURE

The Board

Lionel Jacobs (Independent non-executive chairman) Ethan Dube (Executive deputy chairman) ~ Butana Khoza (CEO) ~ Tafadzwa Mika (CFO) ~ Gordon Nzalo* John Macey* Marcel Golding# Mark Anderson~ Nambita Mazwi* Sithembiso N Mthethwa#

*~ Executive director *Independent non-executive director # Non-executive*

KEY RESPONSIBILITIES

• Promoting the interests of stakeholders and acting fairly and responsibly;
• Formulating and approving strategy;
• Ensuring the correct implementation of corporate governance, risk management and internal control policies and structures;
• Retaining effective control over the business;
• Providing strategic leadership;
• Leading the group in achieving its goals and objectives;
• Managing the performance and affairs of the group;
• Delegating authority to management and monitoring and evaluating the implementation of policies, strategies and business plans; and
• Embracing transparency, integrity and ethical business conduct.

Corporate governance (continued)

(refer to page 56 for full report)

I Ross** T Mika~ N Chonco**

44 Vunani Limited Integrated Report for the year ended 28 February 2021

THE BOARD

The board is composed of individuals with a diverse range of skills, knowledge and experience. It is made up of six non-executive directors and four full-time, salaried executive directors. King IV recommends that the majority of the non-executive directors be independent and, accordingly, most of Vunani's non-executive directors are independent in terms of both the King IV guidelines and the JSE Listings Requirements.

In terms of the adopted group broad diversity policy the minimum female representation on the board is 10%. The promotion of gender diversity at board level is therefore a priority for Vunani. In accordance with the group's voluntary broad diversity policy targets, it aims to double this percentage by 2022.

The board composition is currently 70% black and 30% non-black directors. The promotion of racial diversity at board level is very important for Vunani. In accordance with the group's voluntary broad diversity policy, it aims to ensure that at least 50% of its directors are black. The board is satisfied that it has fulfilled its responsibilities in accordance with its charter for the reporting period.

Board performance

During the 2021 financial year, the board:

• Measured its progress against strategic objectives
• Actively managed its risk
• Ensured that the group adheres to best-practice corporate governance
• Oversaw the unbundling of the private equity assets
• Manage the group's response to Covid-19 pandemic

In the 2022 financial year, the board intends to:

• Support and guide the executive team
• Increase focus on growing underlying financial services businesses
• Monitor and measure progress against strategic objectives

Board and committee meeting attendance

Director	Boardmeetings(4 meetings)	Audit andrisk(5 meetings)	Remunerationcommittee(2 meeting)	Social ethicsandtransformationcommittee(1 meeting)	Investmentcommittee(1 meeting)	Nominationcommittee(no meetings)
Lionel Jacobs
(Independent non-executive chairman)	4	N/A	2	N/A	1	N/A
Ethan Dube (executive deputy chairman)	4	N/A	2	N/A	1	N/A
Butana Khoza (CEO)	4	5	2	N/A	1	N/A
Tafadzwa Mika (CFO)	4	5	2	1	1	N/A
Dr XP Guma*	3	N/A	N/A	N/A	N/A	N/A
Gordon Nzalo	4	5	N/A	N/A	N/A	N/A
John Macey	4	5	2	1	1	N/A
Marcel Golding	4	N/A	2	N/A	1	N/A
Mark Anderson	5	N/A	N/A	N/A	1	N/A
Nambita Mazwi	4	5	N/A	1	N/A	N/A
Sithembiso Mthethwa	4	N/A	N/A	N/A	1	N/A

*Resigned in May 2021

BOARD APPOINTMENTS

Directors are appointed in a formal and transparent manner. Nomination and approval of appointees to the board and its committees is carried out in accordance with the remuneration and nomination charter. Directors are at liberty to accept other board appointments as long as they do not conflict with Vunani's business interests and do not detrimentally affect the performance of the directors involved.

Vunani's memorandum of incorporation ("MOI") requires that one-third of the directors of the company, with the exception of the executive directors, retire by rotation and offer themselves for re-election by shareholders at the AGM. Accordingly, N Mazwi, J Macey and G Nzalo were all re-elected during the AGM that took place on 21 October 2020. M Golding, L Jacobs and S Mthethwa will retire by rotation and offer themselves for re-election at the upcoming AGM.

DIRECTORS' INDUCTION AND TRAINING

A JSE induction programme is in place at Vunani and it is mandatory for all new directors to attend this course. The new directors are provided with an induction pack including the group ethics policy among other policies. The group also covers the cost of attendance at appropriate external training courses.

On an annual basis the group through discussion with the board members identifies training which its members may find beneficial. The company secretary takes responsibility for managing and coordinating this process.

DECLARATION OF INTEREST

In line with the requirements of section 75 of the Companies Act (Act 71 of 2008), directors are obliged to disclose any material interests in contracts at every board meeting. The disclosures are noted and kept in a separate register of directors' disclosures.

BOARD MEETINGS

The board recognises that careful preparation of an agenda and supporting documentation for board meetings enhances productivity and strengthens the board's strategic and supervisory role. The agenda and supporting documentation for board meetings is distributed to all directors before each meeting. The appropriate executive director provides explanations and motivations for items of business requiring decisions in the meeting.

Discussions at board meetings are open and constructive and no single director has unfettered powers in the decision-making process. Consensus is sought on items requiring decisions and on emerging issues that could affect the business. When necessary, decisions are also made by written resolution between scheduled meetings, as provided for in the company's MOI and the Companies Act.

Directors have access to all relevant company information, records, executive officers and members of senior management within the group. They are apprised, whenever relevant, of new legislation and changing commercial risks that may affect the business interests of the company. In fulfilling their responsibilities, directors may seek professional advice from external professional advisors at the company's expense.

A formal self-assessment by the board was conducted during the year and the board was satisfied that it operates effectively according to an approved board charter, which sets out its duties and responsibilities. The board annually undergoes a comprehensive and rigorous review and evaluation of the independence of those non-executive directors (including, if applicable, the chairman), classified as, "independent", and has satisfied itself that, notwithstanding the fact that certain directors have been on the board for over nine years, all the directors classified as, "independent", are independent and act in an independent manner.

FINANCIAL REPORTING

The group provides financial reports to its shareholders biannually. Details regarding significant transactions are reported in the appropriate format, as required by the JSE Listings Requirements, and in accordance with the International Financial Reporting Standards ("IFRS"). The affected directors are JR Macey, GN Nzalo and NS Mazwi.

INTERNAL AUDIT

MASA Risk Advisory Services was reappointment as the external provider of internal audit services to the group was confirmed during the year. An internal audit plan for the 2021 financial year was presented to and approved by the audit and risk committee.

The internal audit plan is based on an assessment of risk areas identified by the internal auditors and management and is reviewed and updated annually. The approved internal audit plan was executed in various stages throughout the 2021 financial year. This process included a risk-based assessment of the adequacy and effectiveness of the group's systems of internal controls and risk management procedures.

Internal audit reports directly to the audit and risk committee, and the internal audit representatives attended all the audit and risk committee meetings during the year. At each meeting, they provided feedback to the committee covering progress in relation to the audit plan, highlighting areas of significant control weakness and presenting recommendations to correct these weaknesses.

The key responsibilities of the internal audit include:

• evaluating the group's governance processes and ethics;
• performing an objective assessment of the effectiveness of risk management and the internal control framework;
• systematically analysing and evaluating business processes and associated controls; and
• investigating and reporting on any instances of fraud, corruption, unethical behaviour and irregularities as appropriate.

COMPANY SECRETARY

The company secretary plays a vital role in the corporate governance of the group and is responsible for ensuring that the board complies with statutory regulations and procedures.

Together with the sponsor, the company secretary ensures compliance with listings requirements and is responsible for the submission of the annual compliance certificate to the JSE.

CIS Company Secretaries Proprietary Limited ("CIS") is the outsourced company secretary for Vunani Limited. CIS is led by Nyanisa Majavu and Future Bhonkwane is the principal consultant. He holds a Postgraduate Diploma in Compliance from UJ and an associate member of Chartered Governance Institute of South Africa (formerly CSSA). He has extensive experience in the company secretarial and corporate governance arenas. In accordance with the JSE Listings Requirements, an assessment of Mr Bhonkwane is performed annually by the entire board, including the executive directors.

Based on the annual assessment conducted by the board during the 2021 financial year, the board is satisfied that Mr Bhonkwane has the requisite qualifications, competence and experience to fulfil the functions required by the group company secretary. The academic and professional qualifications of the entire CIS team were externally verified prior to the company being appointed.

The board is also satisfied that an arm's-length relationship is maintained between the company secretary and the board and its sub-committees and confirms that neither Mr Bhonkwane nor any members of staff at CIS are directors or public officers of the group or any of its subsidiaries.

INDUSTRY ASSOCIATIONS

Vunani is currently represented at the following industry associations or organisations:

• Vunani Securities and Vunani Capital Markets are members of the JSE (www.jse.co.za).

Certain Vunani employees are members of or are registered with the following professional associations:

• The South African Institute of Chartered Accountants (www.saica.co.za);
• The South African Institute of Stockbrokers (www.sais.co.za);
• The Chartered Financial Analyst Society of South Africa (www.cfasociety.org/southafrica);
• The Investment Analysts Society of Southern Africa (www.iassa.co.za);
• The JSE (www.jse.co.za);
• The Institute of Directors (Southern Africa) (www.iodsa.co.za); and
• The Association of Black Securities and Investment Professionals (www.absip.co.za).

Certain Vunani group companies are:

• Licensed as financial service providers by the Financial Sector Conduct Authority (www.fsca.co.za);
• Registered with the JSE as a sponsor in terms of the JSE Listings Requirements; and
• Members of the Association for Savings and Investment South Africa (www.asisa.co.za).

DEALING IN SECURITIES

A formal policy is in place whereby all directors and employees are prohibited from trading in the group's securities during defined closed periods. These periods run from the end of the interim and annual reporting periods until the financial results have been disclosed on SENS. Similar restrictions apply during any period in which the company is trading under a cautionary notice or where they may be in possession of price sensitive information.

In terms of the JSE Listings Requirements and group policy, the directors, the company secretary, employees and directors of major subsidiaries, which contribute more than 25% to Vunani Limited's revenue, require advance approval from the chief financial officer for dealings in Vunani shares. Once a trade is executed, details are released on SENS.

INFORMATION TECHNOLOGY GOVERNANCE

The audit, risk and compliance committee is responsible for IT governance on behalf of the board and reviews the reports from management and external assurance providers to ensure that an adequate and effective IT system is maintained. Vunani's IT steering committee ("Steerco") is a sub-committee of the audit, risk and compliance committee and is responsible for the implementation of an IT governance framework at group level to ensure that IT expenditure and investments in IT infrastructure are managed effectively and are aligned with business objectives.

The IT Steerco comprises Vunani executive directors and executive managers from the group's various subsidiaries.

The committee:

• oversaw the value delivery on IT infrastructure and operations;
• reviewed IT-related risks;
• ensured that intellectual property contained in information systems is protected;
• ensured that adequate business arrangements are in place for disaster recovery;
• ensured that all personal information is treated by the company as an important business asset and is identified; and
• ensured adequate safeguards are in place to improve cybersecurity.
• reviewed its long-term IT strategy.

The committee plans to:

• implement cloud-based technology

LEGAL COMPLIANCE

The board is ultimately responsible for ensuring compliance with laws and regulations. In regularly reviewing the company's governance structures, the board exercises and ensures effective and ethical leadership, always acting in the best interests of the company and at the same time concerning itself with the sustainability of its business operations.

New legislation that affects the group is discussed at board meetings with the assistance of the company secretary. The chief financial officer is responsible for ensuring compliance with the external regulations including JSE, King IV as well as internal systems of control.

No fines or non-monetary sanctions were imposed on the group for non-compliance with any laws or regulations during the year under review, nor has the group been party to any legal actions for anti-competitive behaviour or antitrust.

Vunani has complied with the provision of the Companies Act particularly with reference to the incorporation provisions set out therein and has operated in conformity with its MOI.

Remuneration report

The remuneration committee makes proposals to the board regarding the remuneration policy and the remuneration of individual directors. The remuneration committee's report apprises shareholders and other stakeholders of the work done by the committee in the period under review.

The committee is chaired by independent non-executive director JR Macey and further comprises independent non-executive director Ll Jacobs and non-executive director MJA Golding. Attendance at committee meetings is set out on page 45.

The committee assists the board in discharging its duties related to:

• motivating individuals in line with the overall business strategy in order to maximise shareholder value;
• setting levels of remuneration that are fair, reasonable, relevant and competitive;
• encouraging executives and staff to promote ethical culture and corporate citizenship;
• consistently applying policies and practices throughout the group; and
• fostering a focus on long-term sustained performance and growth within the group.

During FY2021, the committee:

• continued to ensure that the remuneration of individuals is in line with performance and market benchmarks;

aligned short-term executive remuneration with the group's performance; and

• ensured the allocation of long term incentives to executives and key members of management as a means of retention and performance incentivisation.

In FY2022 the committee intends to:

• review the remuneration of low-level employees to bridge the gap between the lowest and highest paid employees;
• evaluate the fairness of short term incentive structures relative to the industry and sectors in which the various businesses operate;
• benchmark the remuneration of non-executive directors; and
• review the composition of executive total remuneration.

SHAREHOLDER ENGAGEMENT

At the AGM on 21 October 2020 both the remuneration policy and remuneration implementation report received a 100% non-binding advisory vote from our shareholders. In the event that the remuneration policy and implementation report are voted against by 25% of the votes, the committee will engage the shareholders regarding their concerns and provide clarity to them as soon as possible. We are committed to providing any clarification on any issues raised by shareholders in the future. At the meeting there were no specific concerns raised about the policy.

The committee is comfortable that Vunani's remuneration policy largely achieved its objectives. In order to improve the remuneration policy, the committee used benchmarking data from salary surveys to guide the decision-making process.

The remuneration policy and implementation report will be put to shareholders for a non-binding advisory vote at the next AGM in line with King IV.

No independent remuneration consultants were used during the year.

REMUNERATION PHILOSOPHY AND POLICY

The group recognises that it operates in a competitive environment and that one of the drivers of its performance is its people. It therefore remunerates at levels that attract, retain and motivate employees of the highest calibre and rewards them for good performance.

The group defines total remuneration as a combination of all types of reward, including financial, non-financial, direct and indirect. It rewards individual performance while nevertheless ensuring that there is a distribution of remuneration around the market median. The executive directors have service contracts with the group, which may be terminated with one month's written notice. None of the executive directors has a fixed-term contract.

Remuneration report (continued)

Components of total remuneration

The components of total remuneration are split between total guaranteed pay ("TGP"), short-term incentive STIs and long-term incentive LTIs.

Level	TGP	STI	LTI
Key management
(including the CEO and executive directors)	Guaranteed cost to company Performance bonus		Equity-settled share plan
Senior management	Guaranteed cost to company Performance bonus		Equity-settled share plan
General employees	Guaranteed cost to company Performance bonus		Equity-settled share plan

TGP

The levels of TGP are reviewed and revised annually.

Criteria for determining remuneration increases include inflation ("CPI"), market comparisons, group performance, individual performance and affordability based on group budgets. The remuneration committee approves annual salary increases.

Provident fund contributions are based on a scale of between 10% and 27.5% of total annual remuneration, with individual contributions being selected by employees themselves. These contributions ensure monetary security and dignity for employees and, in the case of death, for their beneficiaries.

Remuneration consists of the following guaranteed components and is applicable to all employees:

• Basic salary;
• Group life assurance;
• Medical aid; and
• Provident fund.

STIs

Annual incentive bonuses are paid if key performance targets, which include but are not limited to financial targets, are met.

All employees are eligible to participate in the group's incentive bonus scheme, which is well established within each of the business units. The bonus is conditional on both company and individual performance. It is paid annually subject to the achievement of performance targets against key performance indicators that have been agreed to by the chief executive and the remuneration committee.

The short-term executive incentive plan is based on the following principles:

• as the group's executive directors provide leadership, support and guidance to all subsidiaries, incentives are dependent on overall group performance;
• incentives are biased towards realisations and therefore non-cash items and minority interests are discounted when determining the adjusted profit pool;
• the profit pool is split between investment activities and noninvestment activities, which are treated differently;
• the incentive on the investment pool is based on a carried interest model according to which the reward is calculated as a percentage of the realised capital growth after a notional cost of capital charge has been applied; and
• the incentive on the non-investment pool is calculated as a percentage of the adjusted profit pool on a sliding scale.

The table below shows the pay mix of the executive directors at the various levels of performance:

	TGP	STI	LTI
Below-threshold performance
Position
CEO/CFO/Executive	85%	0%	15%
Target performance
Position
CEO/CFO/Executive	57%	33%	10%
Stretch performance
Position
CEO/CFO/Executive	44%	48%	8%

Performance condition and weightings	Performance period	Strategic purpose	Positive outcome
Financial (75%)	One-year	An entrepreneurial culture thatrewards individual performance	Improvementofgroupcash
•Group profit			generation,profitabilityofsubsidiaries and investments,
•Realisation of investments		and contribution to generation ofsustainable annual returns	dividend payment and growth in
•Cost efficiency			market value.
Strategic initiatives (25%)	One year	Enhance the profile of the group	Positive media coverage, receipt
•Client satisfaction		amongst stakeholders (Investors,	of awards, strong share price
•Be more agile, innovative		regulators, the board)	movement
•Transformation		Bearesponsiblecorporatecitizen	Contribution to the communitieswe work in
•Competitive growth in relative
sectors

LTIs

The group has one share scheme in place, the conditional share scheme, which is a LTI.

The company implemented the share scheme in November 2015. The conditional share scheme entitles employees to receive performance and retention shares in the company upon the fulfilment of certain performance conditions.

The conditional awards were made on 11 November 2015, 29 February 2016, 24 February 2017, 26 February 2018, 15 January 2021 and 26 February 2021.

The shares will vest on the fulfilment of certain performance conditions at the end of a three-year period. Performance conditions include financial and non-financial measures. It is anticipated that allocations will be made annually.

Performance condition and weightings	Performance period	Strategic purpose	Positive outcome
Financial performance (60%)	One year	To attract, retain and motivate	Improved group profit that will
Individual performance (40%)		key employees	improve the shareholder return

Remuneration report (continued)

EXECUTIVE DIRECTORS' REMUNERATION

The group adheres to the guidelines for executive remuneration as set out in King IV. Overall remuneration principles include:

• establishing an appropriate and competitive balance between fixed and variable remuneration structures in order to achieve performance excellence;
• establishing a performance-oriented culture with a pay-for performance approach that aligns with sustainable shareholder value;
• using market and industry benchmarks to ensure competitive remuneration that is aligned to the market median; and
• driving sustainable business results through short-term and long-term performance-driven incentives.

Please refer to the implementation report below and note 47 on page 140 of the annual financial statements for details of the executive directors' remuneration.

NON-EXECUTIVE DIRECTORS' REMUNERATION

Non-executive directors receive fixed fees for their services as directors of the board and as members of board committees. The remuneration committee proposes the fees for non-executive directors, and these are confirmed by the board and approved by shareholders. Fees are reviewed annually, and non-executive directors do not participate in the group's incentive bonus plan or share option schemes.

For details regarding fees paid during the current period and prior year, refer to note 47 on page 140 of the financial statements.

PRESCRIBED OFFICERS

Prescribed officers fall into a category created by the 2008 Companies Act. The purpose of this category is to include within the scope of the Act anyone who fulfils the role of a director but who is operating – whether intentionally or otherwise – under a different designation.

In order to comply with the requirements of the Act, the group discloses all remuneration paid to prescribed officers in its annual financial statements. Details for the reporting period are available in note 70 on page 166.

IMPLEMENTATION REPORT

Total remuneration (single figure)

The single figure remuneration disclosure below is in terms of the King IV principles:

Figures in R'000	Salaries	Providentfund andmedical aidcontributions	Bonusaccrued	Share-basedpayment	Total
2021
E Dube	4 300	904	5 911	737	11 852
NM Anderson	3 023	434	3 982	493	7 932
BM Khoza	2 875	632	3 982	493	7 982
T Mika	1 352	151	1 805	248	3 556
	11 550	2 121	15 680	1 971	31 322
2020
E Dube	4 022	888	3 319	906	9 135
NM Anderson	2 900	408	2 236	607	6 151
BM Khoza	2 714	594	2 236	607	6 151
T Mika	1 173	131	881	304	2 489
	10 809	2 021	8 672	2 424	23 926

Total LTI awards

2021	Award date	Vesting date	Openingnumber('000)	Awardedduringthe year('000)	Forfeitedduringthe year('000)	Vestedduring theyear	Awardprice pershare(cents)	Closingnumber('000)	Cashreceivedfromawardssettled	Indicativevalue ofunvestedshares(R'000)
E Dube	15/01/2021	28/02/2023	1 123	787	–	874	199-237	1 036	–	2 538
NM Anderson	26/02/202115/01/2021	26/02/202428/02/2023	751	526	–	584	199-237	693	–	1 698
BM Khoza	26/02/202115/01/2021	26/02/202428/02/2023	751	526	–	584	199-237	693	–	1 698
T Mika	26/02/202115/01/2021	26/02/202428/02/2023	357	238	–	297	199-237	298	–	730
	26/02/2021	26/02/2024
			5 579	2 597	–			1 195	–	6 664

The details of the long-term awards made to the executive directors are disclosed below:

2020	Openingnumber('000)	Awardedduringthe year('000)	Forfeitedduringthe year('000)	Vestedduring theyear	Awardprice pershare(cents)	Closingnumber('000)	Cashreceivedfromawardssettled	Indicativevalue ofunvestedshares(R'000)
E Dube	1 123	–	–	655	234	468	–	931
NM Anderson	751	–	–	441	234	310	–	617
BM Khoza	751	–	–	441	234	310	–	617
T Mika	357	–	–	250	234	107	–	617
	2 982	–	–	1 787		1 195	–	2 378

STI PERFORMANCE OUTCOMES

The STI performance outcomes for the financial year is shown below:

Key performance indicator	Weight	Target	ED	MA	BK	TM	Achieved
Dividend growth	10%	10% growth	✓	✓	✓	✓	✓
Revenue growth	15%	10% growth	✓	✓	✓	✓	✓
Cash generation	20%	10% growth	✓	✓	✓	✓	✓
New business	20%	10% growth	✓	✓	✓	✓	✓
Strategic initiatives	35%	Exco Assessment	✓	✓	✓	✓	✓

PAYMENTS ON TERMINATION OF EMPLOYMENT

The employment contracts of members of the executive management do not contain clauses that would entitle them to additional remuneration in the event of termination of their contracts. In the event of termination of employment, any payments made to the executive will be in terms of legislation and any unvested LTI shares will be dealt with in terms of the rules of the scheme and reason for termination.

There were no payments for termination of employment during the year.

COMPLIANCE

There were no deviations from the remuneration policy during the reporting period.

Investment committee report

The primary purpose of the investment committee is to consider projects, acquisitions and the disposal of assets in line with the group's overall strategy.

The committee is chaired by independent non-executive JR Macey and further comprises executive directors E Dube and NM Anderson, non-executive director S Mthethwa, independent non-executive director LI Jacobs and independent committee member A Pieterse. Attendance at committee meetings is set out on page 45.

The committee assists the board in discharging its duties related to:

• the disposal or transfer of any business, share, asset or other investment within the limits of its authority;
• the establishment of or acquisition of any business either directly or indirectly;
• the encumbering of any assets in any manner whatsoever;
• any transactions or agreements with related parties as defined in the JSE Listings Requirements;
• the liquidation or winding-up, de-registration or the discontinuance or suspension of any business activities;
• the implementation of any re-structuring, merger or joint venture agreements;
• the amendment of the MOI of any designated group company;
• any variation to the authorised and/or issued share capital or rights attaching to any shares or class of shares of any designated group company;
• any matter concerning the financing of capital or borrowings which would have the effect of directly or indirectly reducing the proportionate shareholding of any ordinary shareholder in a designated group company;
• the issue of guarantees or other similar undertakings of any nature; and
• a change in the business of any designated group company; and performing such other investment-related functions as may be designated by the board from time to time.

During the reporting period, the committee:

• considered and approved the acquisition of the Nedbank book for Fairheads; and
• monitored the investment strategy and policies in order to ensure that investments are in line with group strategy.

In FY2022 the committee intends to:

• review the impact of significant transactions on the group's capital; and
• identify investment opportunities in order to ensure sustainable growth for the group.

LEVELS OF AUTHORITY

The approval of investment transactions by the committee is subject to the limits of authority as specified in the JSE Listings Requirements. Transactions exceeding a set financial limit also require shareholder approval.

The limits of authority approved by Vunani's board are as follows:

1. All investments amounting up toR3 million are at the sole discretionof the executive management ofVunani and these investments do notrequire committee or board approval.	R3 millionThe sole discretionof the executivecommittee
2. All investments in excess of R3 millionand up to a maximum of R30 millionrequire approval by the committee.No board approval is required.	R30 millionRequires theapproval of theinvestmentcommittee
3. All investments with an exposure inexcess of R30 million are reviewedby the committee and recommendedto the board for approval. Anyapproved investment proposal isreferred to the board together withthe committee's recommendation forthe board's final determination.	+R30 millionRequires finalapproval from theboard.

JR Macey

Investment committee chairman

Nomination committee report

The nomination committee makes proposals to the board regarding the nomination the evaluation and re-appointment of directors, and the appointment and induction of new directors.

The committee is chaired by independent non-executive director LI Jacobs and further comprises independent non-executive director JR Macey. Attendance at committee meetings is set out on page 45.

The committee assists the board in discharging its duties related to:

• reviewing the performance of the executive directors;
• developing succession plans for the CEO and executive directors;
• identifying, evaluating, recommending and approving appointees to the board and board committees;
• considering and making recommendations on a periodic basis regarding the composition and membership of the board, the needs of the board and any gaps perceived in the composition of the board;
• conducting annual evaluations of the effectiveness and performance of the board as a whole and considering the contribution of each non-executive director; and
• reviewing the board's training, development and orientation needs, including induction programmes for new directors and training and development needs arising from the annual director/board performance evaluation process and the annual board training/workshop programme.

During the reporting period, the committee:

• approved broad diversity policy;
• reviewed the nomination committee charter; and
• approved the appointment of an additional member of the social, ethics and transformation committee.

In FY2022 the committee intends to:

• review the gender diversity policy and targets; and
• review the racial diversity policy of the board

LI Jacobs

Nomination committee chairman

Social, ethics and transformation committee report

The social, ethics and transformation committee was established to monitor adherence to ethical standards, to provide guidelines for acceptable behaviour and to allow for formal oversight of the group's activities, all with reference to the prevailing codes of best practice.

The committee is chaired by independent non-executive director NS Mazwi and further comprises executive director T Mika and non-board members I Ross and N Chonco. Attendance at committee meetings is set out on page 45.

The committee assists the board in discharging its duties related to:

• the group's legal obligations;
• prevailing codes of good practice pertaining to social and economic development and good corporate citizenship;
• the environment, health and public safety, including the impact of the company's activities and of its products or services;
• consumer relationships, including the company's policies and record relating to advertising, public relations and compliance with consumer protection laws;
• labour and employment matters;
• assessment of potential CSI projects;
• compliance with applicable laws and regulations; and
• transformation policies.

During the year the committee:

• continued to monitor the implementation of the group's CSI strategy and projects;
• exercised oversight of the legal universe and changes affecting the group;
• reviewed policies relating to labour and employment matters; and
• reviewed the membership of the committee and ensured it is in line with King IV.

In the 2022 financial year, the committee intends to:

• review laws and regulations affecting the group;
• monitor compliance of the group's ethics policy and employment equity plan.

SOCIAL, ETHICS AND TRANSFORMATION COMMITTEE SUB-COMMITTEES

The social and ethics committee has one sub-committee that assists it in discharging its duties to the board.

HEALTH AND SAFETY COMMITTEE ("HS COMMITTEE")

The HS committee was established in terms of the Occupational Health and Safety Act, with a mandate to ensure the continued provision and maintenance of a safe and healthy working environment.

The committee assists the social and ethics committee by:

• conducting health and safety audits;
• identifying potential hazards, risks and dangers;
• conducting inspections of the working environment;
• investigating incidents; and
• making recommendations regarding health and safety to the social and ethics committee.

B-BBEE Commission Compliance Report (in terms of Section 13G(2) of the Broad-Based Black Economic Empowerment Act):

Industry/sector	Financial Services
Relevant code of good practice FSC Generic
Name of verification agency	Empowerlogic Proprietary
	Limited
Name of technical signatory	P Govender

Information as verified by the B-BBEE verification professional as per scorecards:

B-BBEE elements	Targetscore	Bonuspoints	Actualscoreachieved
Equity ownership	25	–	22.41
Management control	20	–	13.11
Skills development	20	–	14.99
Enterprise and supplier
development	35	3	20.82
Social-economic development	5	–	4.76
Total score	105	3	76.09
Priority elements achieved	5/5
Empowering supplier status	Yes
Final B-BBEE status	Level 5

NS Mazwi

Social, ethics and transformation committee chairman

The financial statements have been audited in terms of Section 30 of the Companies Act of South Africa, 2008.

The financial statements were published on 5 July 2021.

The financial statements have been prepared under the supervision of the group chief financial officer, Tafadzwa Mika CA(SA).

ANNUAL FINANCIAL STATEMENTS

Financial Statements

Audit and risk committee report	58
Directors' responsibility statement and approvalof the annual financial statements	60
CEO and CFO responsibility statement	61
Certification by the company secretary	61
Directors' report	62
Independent auditor's report	64

Group

Consolidated statement of comprehensive income	68
Consolidated statement of financial position	69
Consolidated statement of changes in equity	70
Consolidated statement of cash flows	71
Notes to consolidated and separatefinancial statements	72

Company

Separate statement of comprehensive income	157
Separate statement of financial position	158
Separate statement of changes in equity	159
Separate statement of cash flows	160
Notes to the separate financial statements	161

Audit and risk committee report

For the year ended 28 February 2021

The audit and risk committee operates under a formal mandate that has been approved by the board and has conducted its affairs in compliance and discharged its responsibilities as stipulated in the committee terms of reference.

Audit and risk committee members

The committee's composition is in line with the requirements of the Companies Act of South Africa, comprising three independent non-executive directors. The committee held four meetings during the year as detailed below:

Committee composition andmeeting attendance	22 May 2020	17 June 2020	25 Aug 2020	25 Oct 2020	8 Feb 2021
G Nzalo*	P	P	P	P	P
JR Macey	P	P	P	P	P
NS Mazwi	P	P	P	P	P

* Independent non-executive chairman

The members of the committee have the necessary financial skills and experience to adequately fulfil their duties as members of the committee.

The chief executive officer, chief financial officer, group financial manager and representatives from external and internal audit attend the committee meetings by invitation.

Key terms of reference

The committee's roles and responsibilities include its statutory duties as defined in the Companies Act of South Africa and the responsibilities assigned to it by the board and these were performed as detailed below:

During the year under review, the committee undertook the following:

External audit

• f Considered and satisfied itself that the external auditor was independent.
• f Approved the fees to be paid to the external auditor for the 2021 engagement.
• f Determined the nature and extent of all non-audit-related services performed.
• f Confirmed that the auditor and the designated auditor are accredited by the JSE, as required in the JSE Listings Requirements.
• f Confirmed that no reportable irregularities had been identified or reported by the auditors under the Auditing Profession Act.

Internal audit

• f Recommended the appointment of the new internal audit service providers.
• f Reviewed and approved the annual internal audit plan and evaluated the independence, effectiveness and performance of the internal audit function.
• f Reviewed issues raised by internal audit and the adequacy of corrective action taken by management in response.
• f Reviewed the effectiveness of the company's systems of internal control, including internal financial control and business risk management and the maintenance of effective internal control systems.
• f Reviewed the co-operation and co-ordination between the internal and external audit functions and co-ordinated the formal internal audit work plan with external auditors to avoid duplication of work.
• f Assessed the adequacy of the performance of the internal audit function and found it to be satisfactory.

Adequacy and functioning of the group's internal control

• f Reviewed the plans and work outputs of the external and internal auditors and concluded that these were adequate to address all significant financial risks facing the business.
• f As noted above, the committee also reviewed reporting around the adequacy of the internal controls and, based on this, concluded that there had been no material breakdowns in internal control, including financial controls, business risk management and the maintenance of effective material control systems.
• f After due care and proper consideration, the chief executive officer and financial director are satisfied that the annual financial statements for the year ended 28 February 2021 reflect an accurate reflection of the group's performance. (Paragraph 3.84(k))

Finance function and chief financial officer

• f Satisfied itself of the appropriateness of the qualifications, expertise and experience of the chief financial officer, Tafadzwa Mika.
• f Considered the expertise, resources and experience of the finance function, and concluded that these were satisfactory.

Integrated report

• f Reviewed the integrated report, including the audit report on the financial statements prior to board approval.
• f Satisfied themselves that the financial statements were prepared on a going-concern basis.
• f Considered the appropriateness of accounting policies and any changes thereto and the adequacy of disclosures in the integrated report.
• f Reviewed the accounts and financial statements taken to ensure they present a balanced and comprehensive assessment of the position, performance and prospects of the company.
• f Ensured that appropriate financial reporting procedures exist and are working, which includes consideration of all entities included in the consolidated group IFRS financial statements.
• f Ensured that it had access to all the financial information of the group to enable the effective preparation of the integrated report.

Legal, regulatory and corporate governance requirements

• f Confirmed the company secretary relationship is at arm's-length.
• f Ensured the establishment and maintenance of effective processes for compliance with applicable statutory and regulatory requirements.
• f Monitored compliance with the Companies Act of South Africa, the JSE Rules and Listings Requirements, and all other applicable legislation and governance codes.
• f Reviewed compliance matters that could have a significant impact on the financial statements.

Risk management and IT governance

The committee is responsible for the group's risk management and IT governance. The committee has regular feedback from those charged with governance of risk management and IT. During the period the committee:

• f reviewed and approved the group's risk management plan;
• f reviewed the group risk registers containing pertinent risks; and
• f reviewed the group's policies on the risk assessment and risk management and were satisfied with the risk management plan and policies.

Recommendation of the integrated report for approval by the board

Based on the information and explanations given by management and discussions with the internal auditor and the independent external auditor regarding the results of their audits, the committee is satisfied the financial statements of Vunani Limited and the group for the year ended 28 February 2021 comply, in all material respects, with the requirements of the Companies Act of South Africa, International Financial Reporting Standards ("IFRS"), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, and the JSE Listings Requirements.

GS Nzalo Chairman of the audit and risk committee

5 July 2021 Sandton

Directors' responsibility statement and approval of the financial statements

for the year ended 28 February 2021

The directors are responsible for the preparation and fair presentation of the consolidated and separate annual financial statements of Vunani Limited, which comprise the consolidated and separate statements of financial position at 28 February 2021, and the consolidated and separate statements of comprehensive income, the consolidated and separate statements of changes in equity and the consolidated and separate statements of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, in accordance with International Financial Reporting Standards ("IFRS") and the requirements of the Companies Act of South Africa, and the directors' report.

The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error, and for maintaining adequate accounting records and an effective system of risk management.

The directors have made an assessment of the company's and group's ability to continue as a going concern and have no reason to believe the business will not be a going concern in the year ahead. The directors have reviewed the group's cash flow forecast for the year to 28 February 2022 and, in light of this review and the current financial position, they are satisfied that Vunani Limited and its subsidiaries have, and have access to, adequate resources to continue in operational existence for the foreseeable future and have continued to adopt the going concern basis in preparing the financial statements.

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

Approval of consolidated and separate financial statements

The directors acknowledge and accept full responsibility for the preparation and integrity of the information presented in the company and group annual financial statements for the year ended 28 February 2021. The company and group annual financial statements of Vunani, which have been prepared in accordance with the Companies Act, the company's MOI and comply with ("IFRS").

The consolidated and separate annual financial statements of Vunani Limited, as identified in the first paragraph, were approved by the board of directors on 5 July 2021 and are signed on their behalf by:

BM Khoza T Mika Chief executive officer Chief financial officer Authorised director

5 July 2021 Sandton

CEO and CFO responsibility statement

After due careful and proper consideration

• i. The directors, whose names are stated below, hereby confirm that after due, careful and proper consideration,
  • a. the annual financial statements set out on pages 68 to 168, fairly present in all material respects the financial position, financial performance and cash flows of the issuer in terms of IFRS;
  • b. no facts have been omitted or untrue statements made that would make the annual financial statements false or misleading;
  • c. 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
  • d. 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 the King Code.

Where we are not satisfied, we have disclosed to the audit 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.

BM Khoza T Mika Chief executive officer Chief financial officer

5 July 2021 Sandton

Certification by the company secretary

In terms of section 58(2) of the Companies Act, and Companies Regulations 2011, we hereby certify to the best of our knowledge and belief, that for the financial year ended 28 February 2021, Vunani Limited has lodged with the Companies and Intellectual Properties Commission, all such returns and notices as are required in terms of the Companies Act of South Africa, and that all such returns appear to be true, correct and up-to-date.

CIS Company Secretaries Proprietary Limited Company secretary

5 July 2021 Sandton

Directors' report

for the year ended 28 February 2021

Review of activities

Main business and operations

The company was incorporated on 1 December 1997 and carries on the business of a financial services company with certain strategic investments. It has operations in fund management, asset administration and investment banking (institutional securities broking and advisory services). The private equity (commodities trading and other investments) segment was unbundled out of Vunani Limited and as such has been reflected as a discontinued operation.

The operating results and state of affairs of the group and company are fully set out in the attached financial statements and do not in our opinion require any further comment, other than information below.

VCP Unbundling

In order to improve transparency in the financial reporting of the Financial Services Assets and Private Equity Assets of Vunani, a decision was made by the board to separate these assets through the VCP unbundling whereby the VCP Shares held by Vunani would be unbundled by way of a distribution in specie to shareholders pro rata to their respective shareholdings in Vunani. In addition to improved financial reporting transparency, the board also believes that the VCP unbundling, will over time, eliminate the discount between the TNAV of Vunani and the price at which Vunani shares trade on the JSE. The Conditions Precedent in respect of the VCP unbundling were fulfilled as announced on 1 February 2021 and accordingly the VCP unbundling was effected 11 February 2021. Refer to note 29 for the impact of the unbundling on the statement of financial position.

Discontinued operations

The unbundling of the private equity assets represented a major line of the group's business. In terms of IFRS the private equity assets have been presented as discontinued operations in the current year. The comparative information for the year ended 29 February 2020 consolidated statement of comprehensive income and related notes have been presented to disclose the discontinued operations separately from continuing operations. Refer to note 28 for the details of the discontinued operations.

Impairment of intangible assets

The VIF intangible asset acquired that arose in on the acquisition of Oracle is reviewed for impairment through a discounted cash flow (DCF) valuation on an annual basis. This valuation method references the results of the EV calculations for the relevant products. This embedded value methodology uses a number of assumptions relating to future cash flows. The underlying assumptions of the VIF asset were reviewed by the statutory actuary using historical GLA (group life assurance) and PHI (permanent health insurance) data. This resulted in reduced profit margins for both lines of business which led to an impairment of the VIF asset of R41.5m. Refer to note 16.

2021 Performance

Vunani's performance for the year ended 28 February 2021 has shown a significant decline compared to the prior period to 29 February 2020. This was due to the impact of Covid-19 on the insurance business and losses from discontinued operations. The insurance business was negatively affected by the impact of the second wave is Eswatini, as it incurred significantly higher death claims during the period. As a result of this significant actuarial reserving was required to take into account the impact of the claims experience of the year. The value in-force intangible asset was impaired during the year by R41.5 million as result of a decrease in profitability of certain income streams as a result of the pandemic. The discontinued operations made a loss as result of negative fair value adjustments as well a decline in performance of the commodity trading operations. The other business segments showed an improved performance when compared to the prior year.

Declaration of dividends

A gross interim dividend of 5c per shares was paid in the current year. A gross final dividend of 7.5c was declared after the end of the financial year. Refer to note 50 of the financial statements.

Special resolutions

• 1. It was resolved that the non-executive directors' remuneration was approved with effect from 21 October 2020 until the next annual general meeting.
• 1. It was resolved by special resolution that, subject to the company's Memorandum of Incorporation, the Companies Act and the JSE Listings Requirements in force from time to time, the company and/or any subsidiary of the company, be and are hereby authorised to repurchase or purchase shares issued by the company.
• 1. It was resolved that approval was provided authorising the group to provide direct or indirect financial assistance to any related or inter-related companies.
• 1. It was resolved that the company's Memorandum of Incorporation be amended to create the rights, terms and privileges attached to the company's preference shares as per the terms in the unbundling circular distributed to shareholders.
• 1. It was resolved that the company approve the issue of preference shares to Vunani Capital Partners as per the terms in the unbundling circular distributed to shareholders.
• 1. It was resolved that the issuance of the company option to Vunani Capital Partners was approved as per the terms in the unbundling circular distributed to shareholders.

Share capital

Details of the company's authorised and issued share capital at 28 February 2021 are shown in notes 30 and 65 to the financial statements.

Directors

The directors of the company for the financial year and up to the date of this report are as follows:

Executive directors Non-executive directors BM Khoza (Chief executive officer) GS Nzalo – independent* T Mika (Chief financial officer) JR Macey – independent*

• E Dube (Executive deputy chairman) LI Jacobs (Chairman) independent NM Anderson NS Mazwi – independent* XP Guma – independent # S Mthethwa M Golding
• * Having served for more than nine years as an independent non-executive director, the director's independence was considered and assessed by the board and the board is satisfied that there are no factors that impair their independence. The director continues to be classified as an independent non-executive director.

XP Guma resigned on the 13 May 2021.

Secretary

The Company Secretary is CIS Company Secretaries Proprietary Limited.

Shareholding of directors

The shareholding of directors in the issued share capital of the company as at 28 February 2021 was as follows:

		Number of shares held
Shareholding per director	Beneficiallydirect('000s)	Beneficiallyindirect('000s)	Totalnumber ofshares('000s)
E Dube	366	25 284	25 650
BM Khoza	564	14 779	15 343
NM Anderson	1 278	14 779	16 057
T Mika	528	–	528
	2 736	54 842	57 578

E Dube acquired 10 000 shares on 14 June 2021, 18 000 shares on 28 June 2021 and 10 000 shares on 2 July 2021. There have been no other changes in shareholding of the directors of the listed company between 28 February 2021 and the date of approval of the integrated report.

Auditor

KPMG Inc. was reappointed as auditor to the company at the AGM held on 21 October 2020.

Independent auditor's report

To the shareholders of Vunani Limited

Report on the audit of the consolidated and separate financial statements

Opinion

We have audited the consolidated and separate financial statements of Vunani Limited (the group and company) set out on pages 68 to 168 which comprise the consolidated and separate statements of financial position at 28 February 2021, and the consolidated and separate statements of comprehensive income, the consolidated and separate statements of changes in equity and the consolidated and separate statements of cash flows for the year then ended, and notes to the consolidated and separate financial statements, including a summary of significant accounting policies.

In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of Vunani Limited at 28 February 2021, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the consolidated and separate financial statements section of our report. We are independent of the group and company in accordance with the 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). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated and separate financial statements of the current period. These matters were addressed in the context of our audit of the consolidated and separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

How the matter was addressed in our audit
With the assistance of our actuarial specialists,our procedures included:
f Obtaining an understanding of the methodologies andassumptions applied in determining the VIF asset value andidentifying those areas within the valuations where specificdiscretion is being applied. This is achieved through readingthe basis and assumption reports prepared by management'sactuaries as well as a review of the projection models appliedto determine the result.
f Assessing the appropriateness of the valuation methodologyapplied against common actuarial practice andactuarial guidance.f Independently assessing the reasonability of key assumptionsmade and used in the valuation.
f Assessing the adequacy of the disclosures in theconsolidated financial statements in accordance with IAS 38,Intangible assets.

Key audit matter	How the matter was addressed in our audit
Valuation of insurance contract liabilities(relates to the consolidated financial statements)Refer to note 2.22 insurance contracts – IFRS 4 accounting policy;note 35 insurance contract liabilities and note 36 contract holderliabilities: assumptions and estimates	With the assistance of our actuarial specialists,our procedures included:
At 28 February 2021, the carrying amounts of the group's insurancecontract liabilities amounted to R103.3 million.Insurance contracts are those under which the group accepts significantinsurance risk from another party (contract holder) by agreeing to paycompensation if a specified uncertain future event (the insured event)adversely affects the contract holder. The insurance contract liabilitiesare measured under IFRS 4, Insurance Contracts (IFRS 4) in accordancewith the financial soundness valuation basis as set out in the actuarialprofessional guidance note SAP 104.In valuing these insurance contract liabilities management considerskey assumptions that may include assumptions determined using pastexperience as a guide which introduces significant judgement in thedetermination of the insurance contract liabilities.Significant judgements are required over the inputs to the carryingamounts of these liabilities in the life business. These include inter aliamortality and morbidity rates, expense assumptions and discount rates.	f Obtaining an understanding of the methodologies andassumptions applied in determining the valuation of theinsurance contract liabilities and identifying those areas withinthe valuations where specific discretion is being applied.f Considering the appropriateness of the accounting andvaluation methodology applied against IFRS 4 andcompliance with the latest actuarial guidance and legislation.f Independently assessing the reasonability of key assumptionsmade and used in the valuation. Economic assumptions weretested against market information from the Bond Exchangeof South Africa, and claims ratios and discontinuance/lapserates were compared to actual recent experience such asprojection terms to assess their reasonableness.f Assessing the adequacy of the disclosures in the consolidatedfinancial statements in accordance with IFRS 4.
Given the relative magnitude and the judgement involved in determiningthe value of these liabilities, the valuation of insurance contract liabilitieswas considered a key audit matter in our audit of the consolidatedfinancial statements.Accounting for restructure and unbundling transaction(relates to the consolidated and separate financial statements)Refer to note 2.1 basis of consolidation accounting policy; note 2.2.3derecognition accounting policy; note 2.20 foreign currenciesaccounting policy; note 28 discontinued operations, note 29 VCP
unbundling and note 60 other investmentsIn the current year, the group entered into a restructure and unbundlingtransaction, which resulted in the private equity segment of the group,and some smaller parts of the fund management segment, being soldto a new company, Vunani Capital Partners Proprietary Limited ("VCP")as a dividend in specie.The restructure and unbundling transaction resulted in a numberof complexities with respect to considerations required in termsof accounting for the transaction in terms of IFRS, determining thevaluations of the businesses being unbundled and the consequential taximplications. As such, this has been considered as a key audit matterin our audit of the consolidated and separate financial statements.	Our procedures included:f Obtaining an understanding of the restructure and unbundlingtransaction which included:(a) Inspecting the final contracts' terms and conditions, and(b) Discussions with management and inspection of minutesof meetings, resolutions and other documents, to confirmour understanding of the transaction, as well as therequired accounting and tax treatment, and effectivedates of the respective steps in the transaction.f Assessing the accounting entries processed by managementon the effective date of the transaction, and ensuringcompliance with IFRS and tax requirements respectively.f With the assistance of our valuation specialists, recalculatingthe carrying amount of the final distribution in specie of theVCP shares to the shareholders of Vunani Limited.
	f Assessing the adequacy of the disclosures in the consolidatedfinancial statements in accordance with IFRS 5, Non-currentAssets Held for Sale and Discontinued Operations.

Independent auditor's report (continued)

Other information

The directors are responsible for the other information. The other information comprises the information included in the document titled "Vunani Limited Integrated Report for the year ended 28 February 2021", which includes the Report of the audit and risk committee, the Certification by the Company Secretary and the Directors' report as required by the Companies Act of South Africa. The other information does not include the consolidated and separate financial statements and our auditor's report thereon.

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

In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, 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 company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group and/or the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the consolidated and separate financial statements

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

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• f 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.
• f 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.
• f Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
• f Conclude on the appropriateness of the directors' use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's and the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated and separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the group and/or the company to cease to continue as a going concern.
• f 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.
• f 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 KPMG Inc. has been the auditor of Vunani Limited for 12 years.

KPMG Inc. Registered Auditor Per WGE Pretorius Chartered Accountant (SA) Registered Auditor Director 5 July 2021 4 Christiaan Barnard Street Foreshore Cape Town 8000

Consolidated statement of comprehensive income

for the year ended 28 February 2021

		VUNANI LIMITED – Group
			Represented
Figures in R'000	Notes	2021	2020
Continuing operations
Revenue	5	558 690	344 757
Other income	6	26 141	9 837
Bargain purchase gain	7	530	34 889
Investment revenue	8	4 458	3 097
Interest received from investments	9	18 342	6 023
Impairment of intangible asset	10	(41 502)	–
Impairments	11	(7 024)	(2 438)
Fair value adjustmentsEquity-accounted earnings (net of income tax)	10	(44 050)1 403	(10 818)175
Net profit on disposal of assets		56	–
Operating expenses	12	(506 605)	(312 033)
Results from operating activities		10 439	73 489
Finance income	13	7 169	4 782
Finance costs	13	(7 620)	(8 149)
Net finance costs		(451)	(3 367)
Profit before income tax		9 988	70 122
Income tax credit/(expense)	14	10 078	(11 237)
Profit for the year from continuing operations		20 066	58 885
Loss from discontinued operations (net of taxation)	28	(20 225)	(19 417)
(Loss)/profit for the year		(159)	39 468
Other comprehensive income
Items that are or may be subsequently reclassified to profit or loss		(5 114)	(11 981)
Exchange differences on translating foreign continuing operations		428	373
Exchange differences on translating foreign discontinued operations		(5 004)	(9 297)
Hyperinflation adjustments on discontinued operations		(538)	(3 057)
Total comprehensive income for the year		(5 273)	27 487
Profit/(loss) for the year attributable to:
Equity holders of Vunani Limited		20 667	35 893
Non-controlling interest		(20 826)	3 575
		(159)	39 468
Total comprehensive income for the year attributable to:
Equity holders of Vunani Limited		17 177	28 126
Non-controlling interest		(22 450)	(639)
		(5 273)	27 487
Basic earnings per share (cents)	42	12.9	22.3
Basic and diluted earnings per share from continuing operations (cents)		24.3	33.9
Basic and diluted loss per share from discontinued operations (cents)		(11.4)	(11.6)
Basic headline earnings per share (cents)	42	7.2	0.6
Basic headline earnings per share from continuing operations (cents)		33.6	12.2
Basic headline loss per share from discontinued operations (cents)		(26.4)	(11.6)

The comparative figures have been re-presented to reflect the impact of the discontinued operation. Refer to note 28 for more details on the discontinued operations.

Consolidated statement of financial position

at 28 February 2021

		VUNANI LIMITED – Group
Figures in R'000	Note	2021	2020
Assets
Property, plant and equipment*	15	17 964	27 903
Goodwill	16	139 766	139 766
Intangible assets	16	136 315	188 924
Investments in associates	17	553	59 787
Loans to associates	17	–	5 285
Other investments	18	11 307	107 020
Insurance related investments	19	398 084	286 589
Deferred tax asset	23	56 485	45 529
Other non-current assets	24	–	33 302
Total non-current assets		760 474	894 105
Other investments	18	3 265	4 432
Inventory	21	–	65 631
Taxation prepaid	37	1 799	3 150
Reinsurance assets	20	24 689	20 136
Loans to associates	17	1 210	1 460
Trade and other receivables	25	80 754	98 328
Accounts receivable from trading activities	26	105 700	286 531
Trading securities		162	143
Cash and cash equivalents	27	213 235	246 530
Total current assets		430 814	726 341
Total assets		1 191 288	1 620 446
Equity
Stated capital	30	696 497	696 497
Treasury shares	30	(675)	(748)
Share-based payments reserve	31	426	5 624
Foreign currency translation reserve		(2 366)	(9 509)
Accumulated loss		(413 830)	(204 775)
Equity attributable to equity holders of Vunani Limited		280 052	487 089
Non-controlling interest		53 452	70 674
Total equity		333 504	557 763
Liabilities
Other financial liabilities	32	23 494	46 408
Lease liabilities	33	4 499	12 339
Investment contracts	34	367 380	310 585
Insurance contract liabilities	35	89 472	78 348
Deferred tax liabilities	23	34 841	50 562
Total non-current liabilities		519 686	498 242
Other financial liabilities	32	33 387	42 145
Lease liabilities	33	10 433	7 336
Taxation payable	37	9 959	9 031
Insurance contract liabilities	35	13 796	11 600
Trade and other payables	38	147 039	198 506
Accounts payable from trading activities	26	105 998	285 956
Trading securities		3	15
Bank overdraft	27	17 483	9 852
Current liabilities		338 098	564 441
Total liabilities		857 784	1 062 683
Total equity and liabilities		1 191 288	1 620 446
Shares in issue (000s)		161 156	161 156
Net asset value per share (cents)		173.8	302.2
Net tangible asset value per share (cents)		2.5	98.3

* Included in property, plant and equipment is the right-of-use assets recognised in terms of IFRS 16. Refer to note 33.

Consolidated statement of changes in equity

for the year ended 28 February 2021

						Total	VUNANI LIMITED – Group
Figures in R'000	Statedcapital	Treasuryshares	Share-basedpaymentreserve	Foreigncurrencytranslationreserve	Accumulatedloss	attributableto equityholders	Noncontrollinginterest	Totalequity
Balance as at 28 February 2019 – AuditedTotal comprehensive income for the year	696 497	(56)	5 506	(1 742)	(230 936) 469 269			8 380 477 649
Profit for the year	–	–	–	–	35 893	35 893	3 575	39 468
Other comprehensive income for the year	–	–	–	(7 767)	–	(7 767)	(4 214)	(11 981)
Total comprehensive income for the period	–	–	–	(7 767)	35 893	28 126	(639)	27 487
Transactions with owners, recorded directlyin equity
Acquisition of treasury shares	–	(4 246)	–	–	–	(4 246)	–	(4 246)
Transfer of treasury shares	–	3 554	(3 554)	–	–	–	–	–
Share-based payments	–	–	5 009	–	–	5 009	–	5 009
Dividends paid	–	–	–	–	(11 912)	(11 912)		(1 244) (13 156)
Transfer between reserves*	–		(1 337)	–	1 337	–	–	–
Acquisition of non-controlling interestBusiness combination	––	––	––	––	843–	843–	(843)65 020	–65 020
Total transactions with owners, recordeddirectly in equity	–	(692)	118	–		(9 732) (10 306)	62 933	52 627
Balance as at 29 February 2020 – Audited	696 497	(748)	5 624	(9 509)	(204 775) 487 089			70 674 557 763
Total comprehensive income for the year
Profit for the year	–	–	–	–	20 667	20 667	(20 826)	(159)
Other comprehensive income for the year	–	–	–	(3 490)	–	(3 490)	(1 624)	(5 114)
Total comprehensive income for the period	–	–	–	(3 490)	20 667	17 177	(22 450)	(5 273)
Transactions with owners, recorded directlyin equity
Acquisition of treasury shares	–	(6 771)	–	–	–	(6 771)	–	(6 771)
Transfer of treasury shares	–	6 844	(6 844)	–	–	–	–	–
Share-based payments	–	–	3 295	–	–	3 295	–	3 295
Dividends paid	–	–	–	–	(8 055)	(8 055)	(102)	(8 157)
Transfer between reserves*	–	–	(1 492)	–	1 492	–	–	–
Dividends paid – in specie&	–	–	–	–	(210 863) (210 863)			– (210 863)
Acquisition of non-controlling interest$	–	–	–	–	(1 820)	(1 820)	1 820	–
Disposal of subsidiaries@	–	–	(157)	10 633	(10 476)	–	3 510	3 510
Total transactions with owners,recorded directly in equity	–	73	(5 198)	10 633	(229 722) (224 214)			5 228 (218 986)
Balance as at 28 February 2021 – Audited	696 497	(675)	426	(2 366)	(413 830) 280 052		53 452	333 504

* Shares that were issued as part of the share-based payment scheme vested. The shares were transferred out of the share trust (held as treasury shares) to the qualifying employees. The cumulative share-based payment expense in the reserve has been transferred between the non-distributable reserve and retained income on vesting.

& The dividend in specie relates to the Vunani Capital Partners ("VCP") unbundling, refer to note 29.

$ The addition to non-controlling interest relates to the adjustment to the preliminary purchase price allocation, which has been finalised in the current year. Refer to note 7.

@ Relates to the discontinued operations. Refer to note 28.

Consolidated statement of cash flows

for the year ended 28 February 2021

		VUNANI LIMITED – Group
Figures in R'000	Notes	2021	2020
Cash flows from operating activities
Net cash generated by operating activities	40	95 688	73 017
Investment revenue received		157	11 588
Finance income received		7 190	9 970
Finance costs paid		(8 541)	(9 720)
Dividends paid to shareholders		(8 055)	(11 912)
Dividends paid to non-controlling interest	44	(102)	(1 244)
Income tax paid	41	(14 891)	(19 247)
Net cash generated by operating activities		71 446	52 452
Cash flows from investing activities
Acquisition of subsidiaries net of cash acquired		–	82 473
Disposal of subsidiaries net of cash	22,29	(8 126)	–
Acquisition of property, plant and equipment	15	(2 162)	(1 180)
Proceeds from disposal of property, plant and equipment	15	380	1 322
Proceeds from repayment of loans to associates		1 535	6 167
Advances to investment and loans to associates		–	(2 494)
Dividends received from associates	17	5 572	3 571
Acquisition of intangible assets – computer software	16	(5 209)	(5 519)
Acquisition of other investments	18	(1 955)	–
Proceeds on disposal of other investments	18	1 982	13 685
Proceeds on disposal of insurance investments	19	298 849	213 680
Acquisition of insurance investments	19	(367 651)	(4 349)
Net cash (outflow)/inflow from investing activities		(76 785)	307 356
Cash flows from financing activities
Acquisition of treasury shares		(4 659)	(4 246)
Advances of other financial liabilities		608	38 037
Repayments of other financial liabilities		(25 063)	(20 830)
Repayments of insurance liabilities		–	(175 158)
Increase in insurance liabilities		–	4 350
Repayment of lease liabilities – capital repayment		(6 444)	(7 402)
Net cash outflow from financing activities		(35 558)	(165 249)
Net (decrease)/increase in cash and cash equivalents		(40 897)	194 559
Effect of movement in exchange rates on cash held		(29)	(2 341)
Cash and cash equivalents at the beginning of the year		236 678	44 460
Total cash and cash equivalents at end of the year	27	195 752	236 678

Vunani Limited Integrated Report for the year ended 28 February 2021 71

for the year ended 28 February 2021

Reporting activities

Vunani Limited ("the company") is a company domiciled in South Africa at Vunani House, Vunani Office Park, 151 Katherine Street in Sandton. The Consolidated and Separate Financial Statements of the company at and for the year ended 28 February 2021 comprise the company and its subsidiaries (together referred to as the "group") and the group's interest in associated entities. The group operates in the financial services industry.

1. BASIS OF PREPARATION

1.1 Statement of compliance

The company's financial statements are prepared in accordance with IFRS as issued by the IASB, its interpretations adopted by the IASB, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, Financial Pronouncements as issued by Financial Reporting Standards Council, the JSE Debt Listings Requirements, and the South African Companies Act.

The Consolidated and Separate Financial Statements have been prepared under the supervision of T Mika, CA(SA), the group chief financial officer.

The financial statements, which have been prepared on the going concern basis, were authorised for issue by the board of directors on 5 July 2021.

1.2 Basis of measurement

The financial statements are prepared on the historical cost basis, except for certain financial instruments (which include other investments, insurance related investments, insurance contracts, other non-current assets and certain other financial liabilities), which are measured at fair value, and insurance liabilities, which are measured in terms of the Financial Soundness Valuation basis as set out in actuarial guidance issued by the Actuarial Society of South Africa in Standard of Actuarial Practice (SAP) 104.

1.3 Presentation currency

The financial statements are presented in South African Rand, which is the company's presentation currency.

All financial information presented in South African Rand have been rounded to the nearest thousand unless indicated otherwise.

1.4 Use of estimates and judgements

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Although estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis.

Revisions to accounting estimates are recognised in the period in which the estimate is revised, if revision affects only that period, or in the period of revision and future periods if the revision affects both current and future periods.

Information about assumptions and estimation uncertainties which have the most significant effect on the financial statements are set out below:

• f Notes 18, 19, 24, 32 and 48.4 determining fair value of financial instruments based on significant unobservable inputs.
• f Note 16 impairment test of goodwill and intangible assets: key assumptions underlying recoverable amounts.
• f Notes 17 and 48.3 equity accounted investees: whether the group has significant influence and impairment losses on loans to associates.
• f Note 23 utilisation of tax losses: the availability of future taxable profit against which deductible temporary differences and tax losses carried forward can be utilised.
• f Note 25 measurement of ECLs allowance for trade and other receivables: key assumptions in determining average loss rates.
• f Note 34, 35 and 36 investment contract liabilities designated as at fair value profit and loss, insurance contracts and investment contracts with discretionary participation features ("DPF") valued using the financial soundness valuation basis as set out in SAP 104 – Calculation of the value of the assets, liabilities, and capital adequacy requirement of long-term insurers.

2. ACCOUNTING POLICIES

The accounting policies applied in the preparation of the Consolidated and Separate Financial Statements are in terms of IFRS and are consistent with those applied in the previous consolidated annual financial statements. The group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

A number of other new standards are also effective in the current year, but they do not have a material effect on the group's financial statements.

2.1 Basis of consolidation

The consolidated financial statements include the assets, liabilities and results of operations of the holding company, its subsidiaries and investments in associates.

2.1.1 Subsidiaries

Subsidiaries are entities controlled by the group. The group controls the 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 consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the group.

The company accounts for subsidiaries at cost less accumulated impairment losses in the separate financial statements.

2.1.2 Investments in associates

Associates are those entities in which the group has significant influence, but not control, over the financial and operating policies. Significant influence is the power to participate in the financial and operating policy decisions but not control them.

Investments in associates are accounted for using the equity method ("equity-accounted investees") and are recognised initially at cost. The consolidated financial statements include the group's share of profit or loss and other comprehensive income of the equity accounted investee from the date that significant influence commences until the date that significant influence ceases.

When the group's share of losses exceeds its interest in an equity-accounted investee, the carrying amount of that interest, including any long-term investments for which settlement is neither planned nor likely to occur in the foreseeable future, is reduced to nil, and the recognition of further losses is discontinued, except to the extent that the group has an obligation or has made payments on behalf of the investee.

When the group loses control of a subsidiary and as a result of that the remaining interest is accounted for as an associate, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee.

The company accounts for associates at cost less accumulated impairment losses in the separate financial statements.

2.1.3 Non-controlling interests

Non-controlling interests are measured at either their proportionate share of the acquiree's identifiable net assets or at fair value at acquisition date.

Changes in the group's interest in a subsidiary that do not result in loss of control are accounted for as equity transactions.

2.1.4 Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised profit or loss arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the group's interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

for the year ended 28 February 2021

2. ACCOUNTING POLICIES (CONTINUED)

2.2 Financial instruments

2.2.1 Recognition and initial measurement

Trade receivables are initially measured when they are originated. All other financial assets and financial liabilities are initially recognised when the group becomes a party to the contractual provisions of the instrument.

A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss ("FVTPL"), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

2.2.2 Classification and subsequent measurement

Financial assets

On initial recognition, a financial asset is classified as measured at amortised cost or FVTPL.

Financial assets are not reclassified subsequent to its initial recognition unless the group 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.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

• f it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
• f its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

All financial assets not classified as measured at amortised cost as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

The group classifies non-derivative financial instruments into the following categories: FVTPL and financial assets at amortised cost.

Financial assets – Business model assessment:

The group makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed, and information is provided to management. The information considered includes:

• f the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management's strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the sale of the assets;
• f how the performance of the portfolio is evaluated and reported to the group's management;
• f the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed; and

how managers of the business are compensated – e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

Financial assets – Assessment whether contractual cash flows are solely payments of principal and interest:

For the 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).

In assessing whether the contractual cash flows are solely payments of principal and interest, the group 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.

Derivative financial assets

Derivatives are recognised initially at fair value. Any directly attributable costs are recognised in profit or loss as they are incurred. Subsequent to initial recognition, derivatives are measured at fair value and changes therein are recognised in profit or loss. Included in derivative financial assets are trading securities and the Black Wattle Option (refer to note 24).

Other non-current assets

Other non-current assets consist of derivative and non-derivative financial assets not included in other investments and trade and other receivables. Other non-current assets include the derivative option which relates to the group's investment in Black Wattle and certain other loans (refer to note 24). Other loans are classified as financial assets and are subsequently measured at amortised cost.

Other investments

Other investments are classified as at fair value through profit or loss. Other investments are recognised when the company becomes a party to the contractual provisions of the instrument. The investments are measured, at initial recognition, at fair value. Transaction costs are added to the initial carrying amount for those investments which have been designated as at fair value through other comprehensive income. All other transaction costs are recognised in profit or loss. Other investments are subsequently measured at fair value with changes in fair value recognised in profit or loss. Other investments are not subject to impairment provisions.

Loans to associates

Loans to associates are classified as financial assets subsequently measured at amortised cost. They have been classified in this manner because the contractual terms of these loans give rise, on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding, and the company's business model is to collect the contractual cash flows on these loans. The amortised cost is the amount recognised on the loan initially, minus principal repayments, plus cumulative amortisation (interest) using the effective interest method of any difference between the initial amount and the maturity amount, adjusted for any loss allowance.

Trade and other receivables

Trade and other receivables, excluding, when applicable, VAT and prepayments, are classified as financial assets subsequently measured at amortised cost. They have been classified in this manner because their contractual terms give rise, on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding, and the company's business model is to collect the contractual cash flows on trade and other receivables. Trade and other receivables are recognised when the company becomes a party to the contractual provisions of the receivables. They are measured, at initial recognition, at fair value plus transaction costs, if any. The amortised cost is the amount recognised on the receivable initially, minus principal repayments, plus cumulative amortisation (interest) using the effective interest method of any difference between the initial amount and the maturity amount, adjusted for any loss allowance.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances used by the group in the management of short-term commitments. Bank overdrafts that are repayable on demand and form an integral part of the group's cash management system are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Cash and cash equivalents are measured at amortised cost.

Financial liabilities

The group classifies non-derivative financial liabilities into the following categories: financial liabilities at FVTPL and financial liabilities at amortised cost.

Financial liabilities at amortised cost

Other financial liabilities, accounts payable from trading activities, and trade and other payables are recognised initially at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest method.

Financial liabilities at fair value through profit or loss

The group designates certain financial liabilities at fair value through profit or loss on initial recognition. Ring-fenced structured entities have historically been used to house the group's geared equity investments and any financial liabilities that relate to such investments. Financial assets and liabilities that arise in terms of these ring-fenced structures are both fair valued through profit or loss in terms of IFRS 9.

for the year ended 28 February 2021

2. ACCOUNTING POLICIES (CONTINUED)

2.2 Financial instruments (continued)

2.2.3 Derecognition

Financial assets

The group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights 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.

The group enters into transactions whereby it transfers assets recognised in its 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.

Financial liabilities

The group derecognises a financial liability when its contractual obligations are discharged or 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.

2.2.4 Offsetting

Financial assets and financial liabilities are off-set and the net amount presented in the statement of financial position when, and only when, the company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

2.2.5 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.

Treasury shares

Where share capital is repurchased, and held by a subsidiary or a trust, the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognised as a deduction from equity*.*

2.3 Dividend policy

The company distributes dividends to its shareholders as and when determined by the board of directors of Vunani Limited, subject always to:

• f the liquidity and solvency requirements of the Companies Act of South Africa;
• f any banking or other funding covenants by which Vunani Limited is bound from time to time; and
• f the operating requirements referred to in this policy.

2.4 Property, plant and equipment

2.4.1 Recognition and measurement

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

Cost includes expenditure that is directly attributable to the acquisition of the asset. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Gains and losses on the disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised within net profit or loss on disposal of assets.

2.4.2 Subsequent costs

The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the group, and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

2.4.3 Depreciation

Depreciation is calculated on the depreciable amount, which is the cost of an asset less its residual value.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the group will obtain ownership by the end of the lease term.

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

Leasehold improvements	Remaining lease period
Motor vehicles	4 years
Furniture and fittings	6 years
Office equipment	3 – 5 years
Computer equipment	3 years
Buildings	40 years

Land is not depreciated.

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted, if appropriate.

2.5 Goodwill

Goodwill arises on the acquisition of business combinations.

Acquisitions of non-controlling interests are accounted for as transactions with equity holders in their capacity as equity holders and therefore no goodwill is recognised as a result of such transactions.

Goodwill is measured at cost less accumulated impairment losses and is tested for impairment on an annual basis.

2.6 Intangible assets

2.6.1 Recognition and measurement

Intangible assets that are acquired by the group and have finite useful lives are measured at cost less accumulated amortisation and accumulated impairment losses.

2.6.2 Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally-generated goodwill and brands, is recognised in profit or loss as incurred.

2.6.3 Amortisation

Amortisation is calculated on the cost of the asset.

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, from the date that they are available for use, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful life for the current and comparative periods is as follows:

Brand	15 years
Customer lists	8 years
Software	10 years
Value-in-force acquired	30 years
Software – internally developed	5 years

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted, if appropriate.

for the year ended 28 February 2021

2. ACCOUNTING POLICIES (CONTINUED)

2.7 Impairment

2.7.1 Non-derivative financial assets

Financial instruments and contract assets

The group recognises loss allowances for expected credit losses ("ECLs") on:

f financial assets measured at amortised cost.

Loss allowances for trade receivables, loans to associates and contract assets are always measured at an amount equal to lifetime ECLs.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the group 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 group's historical experience and informed credit assessment and including forward-looking information.

The group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The group considers a financial asset to be in default when:

• f the borrower is unlikely to pay its credit obligations to the group in full, without recourse by the group to actions such as realising security (if any is held); or
• f the financial asset is more than 90 days past due.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

Twelve-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the company is exposed to credit risk.

Measurement of ECLs

ECLs 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).

ECLs are discounted at the effective interest rate of the financial asset.

Credit impaired financial assets

At each reporting date, the group 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:

• f significant financial difficulty of the borrower or issuer;
• f a breach of contract such as a default or being more than 90 days past due;
• f the restructuring of a loan or advance by the group on terms that the group would not consider otherwise;
• f it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
• f the disappearance of an active market for a security because of financial difficulties.

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 cashflows discounted at the asset's original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account against receivables. Interest on the impaired asset continues to be recognised through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss. Interest is calculated on the amortised cost when the asset is credit impaired, and if it moves back to Stage 2 interest recognition resumes on the gross carrying amount.

Incorporation of forward-looking information

The group incorporates forward-looking information into both the assessment of whether the credit risk of an instrument has increased significantly since its initial recognition and the measurement of ECL. The group has identified key drivers of credit risk and credit losses for each portfolio of financial instruments and, using an analysis of historical data, has estimated relationships between macro-economic variables and credit risk and credit losses. Historical loss rates are appropriately adjusted to reflect the expected future changes in the portfolio condition and performance.

Presentation of allowance for ECL in the statement of financial position

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

Write-off

The gross carrying amount of a financial asset is written off when the group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery of balances from customers or receivables. The group expects no significant recovery from the amount written off. The group writes off a financial asset when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the counterparty has been placed under liquidation or has entered into bankruptcy proceedings. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the group's procedures for recovery of amounts due. Any recoveries made are recognised in profit or loss.

2.7.2 Non-financial assets

The carrying amounts of the group's non-financial assets other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss. For goodwill, the recoverable amount is estimated annually.

For impairment testing, assets 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 or cash generating units. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its fair value less cost to sell and its value in use. Value in use is based on the estimated future cash flows, 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 or CGU.

In respect of other assets, 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. An impairment loss in respect of goodwill is not reversed.

2.8 Employee benefits

2.8.1 Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The group operates a retirement scheme, the assets of which are held in separate trustee-administered funds. The retirement scheme is funded by payments from employees and the relevant group entity. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the periods during which services are rendered by employees. Pre-paid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

for the year ended 28 February 2021

2. ACCOUNTING POLICIES (CONTINUED)

2.8 Employee benefits (continued)

2.8.2 Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

2.8.3 Long-term employee benefits

The Company shall determine the value of any long-term employee benefit obligations using the projected unit credit method. This method will attribute the benefit to the period of service under the plan's benefit formula, the date at which services by the employee first leads to the benefit of the plan, and the date when further service the employee will lead to no material amount. This includes the probability that some employees will not satisfy the vesting requirements.

2.9 Share-based payment transactions

Share-based arrangements in which the group receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions, regardless of how the equity instruments are obtained by the group.

The grant date fair value of equity-settled share-based payment awards granted to employees is recognised as an employee expense with a corresponding increase in the share-based payment reserve in equity over the period that the employees become unconditionally entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

The equity instruments granted to employees of the subsidiary are recognised as an increase in the investment in the subsidiary in the separate financial statements, as the subsidiary receives services from employees that are paid for by the parent – thereby increasing the value of the subsidiary. The amount recognised as an additional investment is based on the grant-date fair value of the share-based payment. The increase in the investment and the corresponding increase in equity for the equity settled share-based payment is recognised by the parent over the vesting period of the share-based payment.

The valuation approach is based on risk-neutral valuation principles and excludes marketability assessments. The fair value of equity-settled awards is determined at the grant date and only updated for changes to non-market conditions at subsequent year-end valuations. As a result, inputs, and assumptions such as the spot share price and dividend yield are not updated at each subsequent year-end valuation date.

2.10 Revenue

The group generates revenue from trading activities, fees from advisory services, brokerage, fund management fees, asset administration fees, management fees from other investments and commodities trading activities.

2.10.1 Services rendered

Revenue from services rendered including management and advisory fees. Management fees are recognised in profit or loss in proportion to the stage of completion of the transaction at the reporting date. Advisory fees are recognised in profit or loss in proportion to the stage of completion or completion of milestones related to the transaction at the reporting date.

2.10.2 Commissions

Commissions comprise brokerage, asset administration and fund management fees arise when the group acts in the capacity of an agent rather than as the principal in a transaction. The revenue recognised is the net amount of commission earned by the group. This is recognised when the transaction giving rise to the commission is concluded.

2.10.3 Trading revenue

Trading revenue consists of trading income earned from bond and money market trading activities. Trading income is recognised upon the successful conclusion of trades.

2.10.4 Commodities trading revenue

Commodities trading revenue consists of revenue from coal and boron trading and processing activities and revenue earned from commodities trading. The revenue from commodities trading is recognised when the product is delivered and has been accepted by the customer.

2.10.5 Insurance premiums

Insurance premiums and annuity considerations receivable from insurance contracts and investment contracts with discretionary participation feature ("DPF") are recognised as revenue in profit or loss, gross of commission and reinsurance premiums and excluding taxes and levies. Where annual premiums are paid in instalments, the outstanding balance of these premiums is recognised when due. Short-term insurance premiums are accounted for when receivable, net of a provision for unearned premiums relating to risk periods that extend to the following year. Receivables arising from insurance and investment contracts with DPF are recognised under trade and other receivables.

2.10.6 Fee and commission income on investment contracts

Fees received on investment management service contracts

Fees charged for investment management services provided in conjunction with an investment contract are recognised as revenue as the services are provided. Initial fees that exceed the level of recurring fees and relate to the future provision of services are deferred and released on a straight-line basis over the lives of the contracts.

Front-end fees

Front-end fees are deferred and released to revenue when the services are rendered, over the expected term of the contract on a straight-line basis.

2.11 Other income

Sundry income

Income is recognised when the recognised when there is reasonable assurance that, the group will comply with the relevant conditions stipulated in the contracts and the income will be received.

Reinsurance recoveries

Reinsurance recoveries are accounted for in the same period as the related claim.

2.12 Investment revenue

Investment revenue 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.

2.13 Interest received from investments

Interest received from investments consists of interest on financial assets at amortised cost and investments. Interest from investments is recognised as it accrues in profit or loss, using the effective interest method.

2.14 Finance income and finance costs

The group's finance income and finance costs include interest income and interest expense. Interest income or expense is recognised using the effective interest method. Interest income is recognised using the agreed rate on with the relevant counterparty.

The "effective interest rate" is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

• f the gross carrying amount of the financial asset; or
• f the amortised cost of the financial liability.

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

for the year ended 28 February 2021

2. ACCOUNTING POLICIES (CONTINUED)

2.15 Commodities trading costs

The related cost of providing services recognised as revenue in the current period is included in commodities related trading costs.

2.16 Inventories

Inventories relating to coal and boron are measured at the lower of cost and net realisable value. Agriculture trading inventory is measured at fair value less costs to sell and is excluded from IAS 2, as the sales are performed as a broker trader.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Fair value is the price that would be received to sell as an asset in an orderly transaction between market participants at the measurement date. The fair value is the price the company pays for the inventory on date of acquisition. Costs directly incurred to sell the inventory will not be capitalised to inventory and will be expensed to profit and loss.

When inventories are sold, the carrying amount of those inventories are recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, are recognised as a reduction in the amount of inventories recognised as an expense in the period In which the reversal occurs.

2.17 Income tax

Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss, except to the extent that it relates to items recognised directly in equity or other comprehensive income.

Current taxation comprises taxation payable calculated based on the expected taxable income for the year, using the taxation rates enacted or substantively enacted at the reporting date, and any adjustment of taxation payable for previous years.

Deferred taxation is provided based on temporary differences. Temporary differences are differences between the carrying amounts of assets or liabilities for financial reporting purposes and their tax bases.

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

Deferred taxation is charged to profit or loss, except to the extent that it relates to a transaction that is recognised directly in equity or other comprehensive income, or a business combination that is an acquisition. The effect on deferred taxation of any changes in taxation rates is recognised in the profit or loss, except to the extent that it relates to items previously charged or credited directly to equity or other comprehensive income.

Deferred taxation is not recognised for the following temporary differences:

The initial recognition of goodwill, initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and associates to the extent that the parent is able to control the timing of the reversal of the temporary differences and they will not reverse in the foreseeable future.

A deferred taxation asset is recognised to the extent that it is probable that future taxable profits will be available against which the associated unused taxation losses and deductible temporary differences can be utilised. Deferred taxation assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related taxation benefit will be realised. Deferred tax assets or liabilities are offset if there is a legally enforceable right to offset current tax liabilities or assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, and they intend to settle current tax liabilities or assets on a net basis or their tax assets or liabilities will be realised simultaneously.

2.18 Dividends withholding tax

Dividends withholding tax is a tax on shareholders receiving dividends and is applicable to all dividends declared on or after 1 April 2012.

The company withholds dividend tax on behalf of its shareholders at a rate of 20% on dividends declared. Amounts withheld are not recognised as part of a 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 at the gross amount with the related withholdings tax recognised as part of tax expense unless it is otherwise reimbursable in which case it is recognised as an asset.

2.19 Earnings per share ("EPS")

Basic earnings per share

Earnings per share is calculated using the weighted average number of ordinary shares in issue during the period and is based on the profit after tax attributable to ordinary shareholders. For the purpose of calculating earnings per share, treasury shares are deducted from the number of ordinary shares in issue.

Headline earnings per share

Headline earnings is calculated by starting with the basic earnings number in terms of IAS 33 and then excluding all re-measurements that have been identified in terms of Circular 1/2021 issued by SAICA.

Diluted headline earnings per share

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

2.20 Segment reporting

An operating segment is a component of the group that engages in business activities from which it may earn revenue and incur expenses, including revenue or expenses that relate to transactions with any of the group's other components. All operating segments' operating results are reviewed regularly by the group's chief executive officer who is defined by the group as the group's chief operating decision maker, to make decisions about resources to be allocated to each segment and assess its performance, and for which discrete financial information is available.

The group has the following operating segments:

Continuing operating segments

• f Fund management operations comprise institutional and retail product offerings, which include equities, bonds, inflation-linked bonds and property, as well as absolute return funds and smart beta funds.
• f Asset administration a niche beneficiary fund administrator responsible for administering funds on behalf of minor dependants of deceased retirement fund members.
• f Insurance the segment provides short term insurance, medical aid, individual life and employee benefits in Eswatini.
• f Advisory services whose function is to provide corporate advisory and investment services.

Discontinued operating segments

• f Commodities trading operations include coal processing and commodities trading activities.
• f Other investments the segment holds the group's listed and unlisted investments in the mining and property sectors and investments in Africa.

2.21 Foreign currencies

Foreign currency transactions

Transactions in foreign currencies are translated into the functional currency at the exchange rate ruling at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets or liabilities denominated in foreign currencies are recognised in profit or loss.

Non-monetary assets or liabilities, measured at historical cost in a foreign currency, are translated using the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the foreign exchange rates at the dates the fair value was determined.

for the year ended 28 February 2021

2. ACCOUNTING POLICIES (CONTINUED)

2.21 Foreign currencies (continued)

Foreign operations

The results and financial position of foreign operations that have a functional currency different from the group's presentation currency are translated into Rand, as follows:

• f assets and liabilities are translated at the foreign exchange rate ruling at the reporting date; and
• f income and expenses are translated at average exchange rates for the year, to the extent that such average rates approximate rates ruling at the dates of the transactions.

Exchange differences arising on translation are recognised directly in other comprehensive income and presented in the foreign currency translation reserve. When a foreign operation is sold, such exchange differences are reclassified to profit or loss as part of the gain or loss on sale.

2.22 Leases

The group assesses whether a contract is or contains a lease, at inception of the contract. The group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less and leases of low value assets. For these leases, the group recognises the lease payments as an operating expense 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 assets are consumed.

The lease liabilities are measured at the present value of lease payments, discounted using the incremental borrowing rate. The weighted average incremental borrowing rate applied to lease liabilities recognised is between 7% and 10.86%.

The lease liability is presented as a separate line in the consolidated 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 the lease payments made.

The group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever: a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.

The group has lease contracts for corporate offices and small office equipment leases of low value assets. The terms and conditions of the lease contracts are negotiated on an individual basis. Extension and termination options are included in a number of leases across the group. In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options are only included in the lease term if the lessee is reasonably certain to extend the lease. Each lease generally imposes a restriction that the property can only be used by the group unless permission is given by the lessor to sublet, and that the buildings must be returned to their original condition at the end of the lease.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated over the shorter period of the lease term and the useful life of the right-of-use asset. The depreciation starts the commencement date of the lease. The right-of-use assets are presented as part of property plant and equipment in the consolidated statement of financial position.

2.23 Insurance contracts – IFRS 4

Insurance and investment contracts

Oracle Insurance issues contracts that transfer insurance risk or financial risk or both. As a result of the different risks transferred by contracts, for the purposes of valuation and profit recognition, contracts are divided into investment and insurance contracts. Insurance contracts are those contracts that transfer significant insurance risk to the group, whereas investment contracts transfer financial risk.

Classification of contracts

The classification of contracts is performed at the inception of each contract. The classification of the contract at inception remains the classification of the contract for the remainder of its lifetime. There is one exception to this principle:

If the terms of an investment contract change significantly, the original contract is derecognised and a new contract is recognised with the new classification.

Insurance contracts

Insurance risk is risk, other than financial risk, transferred from the holder of a contract to the issuer. Insurance risk is significant if an insured event could cause an insurer to pay benefits on the occurrence of an insured event that are significantly more than the benefits payable if the insured event did not occur, excluding scenarios that lack commercial substance.

Insurance contracts may transfer financial risk as well as insurance risk. However, in all instances where significant insurance risk is transferred, the contract is classified as an insurance contract. Significant insurance risk exists even if the insured event is extremely unlikely or even if the expected present value of contingent cash flows is a small proportion of the expected present value of all the remaining contractual cash flows.

Insurance contracts are those under which the group accepts significant insurance risk from another party (contract holder) by agreeing to pay compensation if a specified uncertain future event (the insured event) adversely affects the contract holder.

Investment contracts

Financial risk is the risk of a possible future change in one or more of a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index or other variable, provided that in the case of a non-financial variable, the variable is not specific to a party to the contract. The group designates investment contract liabilities at fair value through profit or loss upon initial recognition as their fair value is dependent on the fair value of underlying financial assets, derivatives and/or investment property are designated at inception as at fair value through profit or loss. The group designates these investment contracts to be measured at fair value through profit or loss because it eliminates or significantly reduces a measurement or recognition inconsistency, referred to as an accounting mismatch, that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases.

Contracts with discretionary participation features

The group issues insurance and investment contracts containing discretionary participation features ("DPF").

These contracts are smoothed bonus and conventional with-profit business. All contracts with DPF are accounted for in the same manner as insurance contracts. Where a contract has both investment with DPF and investment components, the policy is classified as investment with DPF.

Measurement

The liabilities relating to insurance contracts and investment contracts with DPF are measured in accordance with the financial soundness valuation ("FSV") basis as set out in professional guidance note SAP 104 – Calculation of the value assets, liabilities and Capital Adequacy Requirement ("CAR") of long-term insurers. The FSV basis uses best estimate assumptions regarding future experience together with compulsory and discretionary margins for prudence and deferral of profit emergence.

Assumptions used in the valuation basis are reviewed periodically and any changes in non-economic estimates are reflected in profit or loss as they occur. Economic changes in estimate are stabilised as they occur and are reflected in profit or loss according to a specified release pattern.

The valuation bases used for the major classes of contract liabilities before the addition of the margins described under the heading of compulsory and discretionary margins below, were as follows:

• f For smoothed bonus business the liability is taken as the sum of the fund accounts being the retrospective accumulation of premiums net of charges and benefit payments at the declared bonus rates.
• f For individual smoothed bonus business, the liability is taken as the sum of the fund accounts less the present value of future charges not required for risk benefits and expenses.
• f For with-profit annuity business, the liability is taken as the discounted value of projected future benefit payments and expenses. Future bonuses are provided for at bonus rates supported by the assumed future investment return.
• f For the above classes of business, bonus stabilisation accounts (BSAs), are held in contract holder liabilities in addition to the liabilities described above.
• f For conventional non-profit business, including non-profit annuities and guaranteed endowment business, the liability is taken as the difference between the discounted value of future expenses and benefit payments and the discounted value of future premium receipts.

for the year ended 28 February 2021

2. ACCOUNTING POLICIES (CONTINUED)

2.23 Insurance contracts – IFRS 4 (continued)

The major classes of contract liabilities are disclosed below.

Compulsory and discretionary margins

In the valuation of liabilities, provision is made for the explicit compulsory margins as required by SAP 104 – Calculation of the value of the assets, liabilities and CAR of long-term insurers. The following additional discretionary margins are held in order to release profits as they are earned:

The main discretionary margins utilised in the valuation are as follows:

Additional BSAs are held for the benefit of shareholders to provide an additional layer of protection under extreme market conditions against the risk of removal of non-vested bonuses caused by fluctuations in the values of assets backing smoothed bonus liabilities. This liability is in addition to the policyholder BSA described elsewhere, and is not distributed as bonuses to policyholders under normal market conditions.

For certain books of business which are ring-fenced per historic merger or take-over arrangements, appropriate liabilities are held to ensure appropriate capitalisation of future profits in line with the terms of the related agreements.

An additional margin is held to reduce the risk of future losses caused by the impact of market fluctuations on capitalised fees and on the assets backing guaranteed liabilities. This liability is built up retrospectively and utilised if adverse market conditions cause a reduction in the capitalised value of fees or in the value of assets backing guaranteed liabilities.

Additional prospective margins are held in respect of premium and decrement assumptions and asset-related fees on certain product lines to avoid the premature recognition of profits that may give rise to future losses if claims experience turns out to be worse than expected. This allows profits to be recognised in the period in which the risks are borne by the group. For certain books of business, future charges arising from the surrender of smoothed bonus individual policies are not recognised until surrender occurs.

Liabilities for immediate annuities are set equal to the present value of expected future annuity payments and expenses, discounted using an appropriate market-related yield curve as at the reporting date. The yield curve is based on risk-free securities (either fixed or CPI-linked, depending on the nature of the corresponding liability), adjusted for credit and liquidity spreads of the assets held in the portfolio. Implicit allowance is made for expected credit losses to avoid a reduction in liabilities caused by capitalisation of credit spreads.

Embedded derivatives

The group does not separately measure embedded derivatives that meet the definition of an insurance contract, and the entire contract is measured as an insurance contract. All other embedded derivatives are separated and carried at fair value, in accordance with APN 110: Allowance for embedded investment derivatives if they are not closely related to the host insurance contract and meet the definition of a derivative. Embedded derivatives that are separated from the host contract are at fair value through profit or loss.

Unearned premium provision

The provision for unearned premiums represents the proportion of the current year's premiums written that relate to risk periods extending into the following year, computed separately for each insurance contract using the 365th method.

Liability adequacy test

The FSV methodology meets the requirements of the liability adequacy test in terms of IFRS 4 Insurance Contracts. However, at each reporting date the adequacy of the insurance liabilities is assessed to confirm that the carrying amount of the insurance liabilities, measured in accordance with the FSV basis, less any related intangible assets, such as the value of in-force business acquired, is adequate in relation to the estimated future cash flows.

Future cash flows are based on best estimates in accordance with the FSV basis, but excluding compulsory margins as described in SAP 104 as well as any discretionary margins.

If the liabilities prove to be inadequate the deficiency is recognised in profit or loss.

Reinsurance contracts held

Contracts entered into by the group with reinsurers under which the group is compensated for losses on one or more contracts issued by the group and that meet the classification requirements for insurance contracts are classified as reinsurance contracts held. The benefits to which the group is entitled under its reinsurance contracts held are recognised as reinsurance assets. These assets consist of short-term balances due from reinsurers (classified as receivables), as well as longer term receivables (classified as reinsurance assets) that are dependent on the expected claims and benefits arising under the related reinsured insurance contract. Amounts recoverable from or due to reinsurers are measured consistently with the amounts associated with the reinsured insurance contracts and in accordance with the terms of each reinsurance contract.

Impairment of reinsurance assets

If there is objective evidence that the reinsurance asset is impaired, the group reduces the carrying amount of the reinsurance asset to its recoverable amount and recognises that impairment loss in profit or loss. The impairment loss is calculated using the same method adopted for loans and receivables.

Insurance premiums

Insurance premiums and annuity considerations receivable from insurance contracts and investment contracts with discretionary participation feature ("DPF") are recognised as revenue in profit or loss, gross of commission and reinsurance premiums and excluding taxes and levies. Where annual premiums are paid in instalments, the outstanding balance of these premiums is recognised when due. Short-term insurance premiums are accounted for when receivable, net of a provision for unearned premiums relating to risk periods that extend to the following year. Receivables arising from insurance and investment contracts with DPF are recognised under trade and other receivables.

Reinsurance premiums

Reinsurance premiums are recognised as an expense in accordance with the applicable reinsurance treaties. Reinsurance premiums are recognised when due for payment and accounted for in the same accounting periods as the premiums for the related direct insurance.

Insurance benefits and claims

Insurance benefits and claims incurred under insurance contracts and investment contracts with DPF include death, disability, maturity, annuity and surrender payments and are recognised in profit or loss based on the estimated liability for compensation owed to the contract holder. Death, disability and surrender claims are recognised when incurred. These claims also include claim events, which occurred before the reporting date, but have not been fully processed. Claims in the process of settlement are recognised in trade and other payables in the statement of financial position. Maturity and annuity claims are recognised when they are due for payment. Outstanding claims are recognised in insurance liabilities.

Reinsurance recoveries

Reinsurance recoveries are accounted for in the same period as the related claim.

Acquisition costs

Acquisition costs, disclosed as sales remuneration, consist of commission payable on insurance contracts and investment contracts with DPF and expenses directly related thereto (including bonuses payable to sales staff and the group's contribution to their retirement and medical aid funds). These costs are expensed when incurred. The FSV basis makes implicit allowance for the recoupment of acquisition costs; therefore, no explicit deferred acquisition cost asset is recognised in the statement of financial position for contracts valued on this basis.

2.24 IAS 29 Financial Reporting in Hyperinflationary Economies

On 11 October 2019 the Zimbabwe Public Accountants and Auditors Board's announced that Zimbabwe is in hyperinflation. Consequently, Vunani applied IAS 29 in accounting for the group's operations in Zimbabwe, where Vunani held 65% of Purpose Asset Management (Private) Limited's ("PVAM") equity to 11 February 2021, when the investment was unbundled to shareholders.

General price index

IAS 29 requires transactions and balances to be stated in terms of the measuring unit current at the end of the reporting period, using a general price index, to account for the effect of loss of purchasing power during the period. The group has elected to use the Zimbabwe CPI, provided by the Zimbabwe Reserve Bank, as the general price index as this provides an observable published indicator of changes in the general purchasing power of the country.

The CPI index for the current year of 2 475% (2020: 551.6%).

for the year ended 28 February 2021

2. ACCOUNTING POLICIES (CONTINUED)

2.24 IAS 29 Financial Reporting in Hyperinflationary Economies (continued)

Impact on the statement of financial position

The carrying amounts of non-monetary assets and liabilities carried at historical cost have been adjusted to reflect the change in the general price to the end of the reporting period. Where non-monetary items are restated above their recoverable amount, an impairment loss is recognised directly in profit and loss. Non-monetary items that are held at fair value, net realisable value or using a revaluation model are not restated as these assets are recognised based on current price levels. Monetary items are already expressed in the measurement unit current as the end of the reporting period and do not require an adjustment for the general price index.

In addition, under hyperinflation, assets, liabilities and the statement of comprehensive income are translated from the functional currency of PVAM to the functional currency of the group at the spot exchange rate at the reporting date rather than the spot exchange rate ruling at the transaction date.

Impact on the statement of comprehensive income

All items recognised in the statement of comprehensive income are restated by applying the change in the general price index from the dates when the items of income and expenses were initially earned or incurred to the end of the reporting period.

Impact on the statement of cash flows

All items in the statement of cash flows are expressed in terms of the general price index at the end of the reporting period. The resultant statement of cash flows is prepared to reflect cash flows during the year measured at the current purchasing power at the end of the reporting period and as such is not reflecting actual cash flows during the year.

Deferred taxation

At the end of the reporting period, following the indexation of non-monetary items under hyperinflation accounting, deferred tax is accounted for using IAS 12 principles. The deferred taxation relating to opening statement of financial position has been determined using a two-step approach of:

• 1. remeasuring the deferred taxation items in accordance IAS 12 after restating the nominal carrying amounts of its non-monetary items at the date of the opening statement of financial position of the reporting period by applying the measuring unit at that date; and
• 1. thereafter, the deferred taxation items remeasured in step 1 have been restated for the change in the measuring unit from the date of the opening statement of financial position of the reporting period to the end of the reporting period.

Exchange rate used at year end

The results, cashflows and financial position of PVAM, which is accounted for as an entity operating in hyperinflationary economy and has a functional currency different from the presentation currency of the group, have translated into the presentation currency of the group, at the spot rate of exchange ruling at the reporting date.

Impact of hyperinflation on the group's results

The group presents any exchange and hyperinflation differences resulting from the translation of a hyperinflationary foreign operation in other comprehensive income as part of the foreign currency translation reserve.

2.25 New standards and interpretations not yet adopted

In terms of IFRS, the group and company are required to include in their financial statements disclosures about the future impact of standards and interpretations issued but not yet effective at the issue date.

A number of new standards, amendments to standards and interpretations are not effective for annual periods beginning on or after 1 January 2020 and have not been applied in preparing these (consolidated and separate) financial statements. Those which may be relevant to the group and company are set out below. The group and company do not plan to adopt these standards early. These will be adopted in the period that they become mandatory unless otherwise indicated.

All standards and interpretations will be adopted at their effective dates (except for the effect of those standards and interpretations that are not applicable to the entity).

The directors will assess the impact of the new standards on the group's consolidated in the period in which they are effective. The table below details the standards and interpretations issued but not yet effective:

Standard	Details of amendment	Effective annualperiods beginningon or after	Expected impact
IFRS 3, BusinessCombinations	Definition of a Business:Reference to the Conceptual Framework:The amendment updates a reference inIFRS 3 to the Conceptual Framework for FinancialReporting without changing the accountingrequirements for business combinations.	1 January 2022	The standard willimpact the group whenit accounts for anybusiness combination,as such the group willapply the amendmentsto the definition of abusiness.
IFRS 1 First-timeAdoption ofInternationalFinancial ReportingStandards	Annual Improvements to IFRS Standards2018– 2020: Extension of an optional exemptionpermitting a subsidiary that becomes a first-timeadopter after its parent to measure cumulativetranslation differences using the amounts reportedby its parent, based on the parent's date oftransition to IFRSs. A similar election is available		No impact as the parentapplies IFRS.
to an associate or joint venture.IFRS 10 ConsoliSale or Contribution of Assets between andated FinancialInvestor and its Associate or Joint VentureStatements(Amendments to IFRS 10 and IAS 28):Narrow scope amendment addresses anacknowledged inconsistency between therequirements in IFRS 10 and those in IAS 28(2011), in dealing with the sale or contribution ofassets between an investor and its associate orjoint venture.		The effective dateof this amendmenthas been deferredindefinitely untilfurther notice	Standard will beassessed when itspractical to do so.
IFRS 9 FinancialInstruments	Annual Improvements to IFRS Standards2018– 2020: The amendment clarifies which feesan entity includes when it applies the "10 percent" test in assessing whether to derecognise afinancial liability.	1 January 2022	The standard willunlikely have amaterial impact on theclassification of thegroup's liabilities.
IAS 8 AccountingPolicies, Changesin AccountingEstimates and Errors	Definition of Accounting Estimates: Theamendments clarify how companies shoulddistinguish changes in accounting policies fromchanges in accounting estimates, by replacingthe definition of a change in accounting estimateswith a new definition of accounting estimates.Under the new definition, accounting estimatesare "monetary amounts in financial statementsthat are subject to measurement uncertainty". Therequirements for recognising the effect of changein accounting prospectively remain unchanged.	1 January 2023	The standard willunlikely have amaterial impact onthe recognition ofaccounting estimates
IAS 1 Presentationof FinancialStatements	fClassification of Liabilities as Current orNon-current: Narrow-scope amendments toIAS 1 to clarify how to classify debt and otherliabilities as current or non-current.	1 January 2023	The standard willunlikely have amaterial impact on theclassification of debt
	fDisclosure of Accounting Policies: Theamendments require companies to disclosetheir material accounting policy informationrather than their significant accountingpolicies, with additional guidance added tothe Standard to explain how an entity canidentify material accounting policy informationwith examples of when accounting policyinformation is likely to be material.	1 January 2023	and other financialliabilities and changesto accounting policies

for the year ended 28 February 2021

2. ACCOUNTING POLICIES (CONTINUED)

2.25 New standards and interpretations not yet adopted (continued)

Standard	Details of amendment	Effective annualperiods beginningon or after	Expected impact
IFRS 17 Insurancecontracts	IFRS 17 defines clear and consistent rules thatwill significantly increase the comparability offinancial statements. Under IFRS 17, the generalmodel requires entities to measure an insurancecontract at initial recognition at the total of thefulfilment cash flows (comprising the estimatedfuture cash flows, an adjustment to reflect the timevalue of money and an explicit risk adjustmentfor non-financial risk) and the contractual servicemargin. The fulfilment cash flows are remeasuredon a current basis each reporting period. Theunearned profit (contractual service margin) isrecognised over the coverage period. Aside fromthis general model, the standard provides, as asimplification, the premium allocation approach.This simplified approach is applicable for certaintypes of contract, including those with a coverageperiod of one year or less. For insurancecontracts with direct participation features, thevariable fee approach applies. The variable feeapproach is a variation on the general model.When applying the variable fee approach, theentity's share of the fair value changes of theunderlying items is included in the contractualservice margin. As a consequence, the fair valuechanges are not recognised in profit or loss in theperiod in which they occur but over the remaininglife of the contract.	1 January 2023	This standard willhave a major impacton the disclosuresrelated to insurancesegment. Based oninitial assessment thefinancial statements willneed to disaggregatedto a product linelevel and disclosureof assumptions,methodologies andrational for judgementsestimated will berequired. The valuationpolicy and riskmanagement frameworkwill need to be updated.
IAS 1, Presentationof FinancialStatements	Amendments to IAS 1, Presentation of FinancialStatements, clarify that the classification ofliabilities as current or non-current is basedsolely on a company's right to defer settlementat the reporting date. The right needs to beunconditional and must have substance. Theamendments also clarify that the transfer of acompany's own equity instruments is regardedas settlement of a liability, unless it results fromthe exercise of a conversion option meeting thedefinition of an equity instrument.	1 January 2022	The standard willunlikely have an impacton the group's financialresults.
IAS 37, Provisions,ContingentLiabilities andContingent Assets	Amendments to IAS 37, Provisions, ContingentLiabilities and Contingent Assets, clarify thatwhen assessing if a contract is onerous, thecost of fulfilling the contract includes all coststhat relate directly to the contract – i.e. a fullcost approach. Such costs include both theincremental costs of the contract (i.e. costs acompany would avoid if it did not have thecontract) and an allocation of other direct costsincurred on activities required to fulfil the contract– e.g. contract management and supervision, ordepreciation of equipment used in fulfilling thecontract.	1 January 2022	The standard willhave an impact on thefinancial statementswhen the group entersinto onerous contracts.

Standard	Details of amendment	Effective annualperiods beginningon or after	Expected impact
IAS 16, Property,Plant andEquipment	Proceeds before Intended Use, introduce newguidance. Proceeds from selling items (e.g.samples) before the related PPE is available forits intended use can no longer be deducted fromthe cost of PPE. Instead such proceeds shouldbe recognized in profit or loss, together with thecosts of producing those items (to which IAS 27applies). Accordingly, a company will need todistinguish between:	1 January 2022	The standard willunlikely have an impacton the group's financialresults.
	fcosts of producing and selling items before thePPE is available for its intended use; andfcosts of making the PPE available for its
	intended use.
	Making this allocation of costs may requiresignificant estimation and judgement. Companiesin the extractive industry in particular may needto monitor costs at a more granular level.
	The amendments apply retrospectively but onlyfor new PPE that reach their intended use onor after the beginning of the earliest periodpresented in the financial statements in which theentity first applies the amendments. They can beearly adopted.
IAS 12 IncomeTaxes	Deferred Tax related to Assets and Liabilitiesarising from a Single Transaction: Theamendment clarifies how a company accountsfor income tax, including deferred tax, whichrepresents tax payable or recoverable in thefuture. In specified circumstances, companies areexempt from recognising deferred tax when theyrecognise assets or liabilities for the first time.The aim of the amendments is to reduce diversityin the reporting of deferred tax on leases anddecommissioning obligations, by clarifying whenthe exemption from recognising deferred taxwould apply to the initial recognition of suchitems.	1 January 2023	The standard's impactwill be reasonablyestimated closer to itseffective date.
IFRS 16	COVID-19-Related Rent Concessions: Amendmentproviding lessees with an exemption fromassessing whether a COVID-19-related rentconcession (a rent concession that reduces leasepayments due on or before 30 June 2022) is alease modification.	1 June 2020 (Theexemption wasextended by oneyear with effectfrom 1 April 2021)	The standard willunlikely have an impacton the group's financialresults.

for the year ended 28 February 2021

3. DETERMINATION OF FAIR VALUES

Fair value

The fair value of a financial instrument is the price that would be received for the sale of an asset or paid for the transfer of a liability in an orderly transaction between market participants at the measurement date. Underlying the definition of fair value is a presumption that an entity is a going concern without any intention or need to liquidate, to curtail materially the scale of its operations or to undertake a transaction on adverse terms. Fair value is not, therefore, the amount that an entity would receive or pay in a forced transaction, involuntary liquidation or distressed sale.

The existence of published price quotations in an active market is the best evidence of fair value and, where they exist, they are used to measure the financial asset or financial liability. A market is considered to be active if transactions occur with sufficient volume and frequency to provide pricing information on an ongoing basis. Financial instruments fair valued using quoted prices would generally be classified as level 1 in terms of the fair value hierarchy and when fair valued indirectly (i.e. derived from prices) will be classified as level 2.

Where a quoted price does not represent fair value at the measurement date or where the market for a financial instrument is not active, the group establishes fair value by using valuation techniques. These valuation techniques include reference to the value of the assets of the underlying business, earnings multiples (e.g. unlisted investments), discounted cash flow analysis (e.g. unlisted investments, loans and advances) and various option pricing models.

Inputs used in valuation techniques for loans and advances, other investments, investments in associates and other financial liabilities, include discount rates, expected future cash flows, dividend yields, earnings multiples, volatility, equity prices and commodity prices.

Valuation methodologies and techniques applied for level 3 financial instruments include a combination of discounted cash flow analysis, application of earnings multiples on sustainable after tax earnings and current and projected net asset values to determine overall reasonability. The valuation technique applied to specific financial instruments depends on the nature of the financial instrument and the most appropriate valuation technique is determined on that basis.

After the valuations of the unlisted financial assets and liabilities are performed, these are presented to the group's investment committee for independent review. All significant valuations are approved by the investment committee.

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. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability. Fair values have been determined for measurement and/or disclosure purposes based on the following methods:

3.1 Investments in listed equity and debt securities

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

3.2 Unlisted investments

Unlisted investments are fair valued annually by the directors using generally accepted valuation techniques. As with any valuation, a degree of subjective judgement is involved. These valuation techniques include reference to the value of the assets of underlying business, earnings multiples (e.g. unlisted investments), discounted cash flow analysis (e.g. unlisted investments, loans and advances) and various option pricing models. Operating businesses are valued using a combination of the following: discounted cash flow analysis, application of earnings multiples on sustainable after-tax earnings, current and projected net asset values to determine overall reasonability. The cash flows are based on expected future dividends that will be paid by the businesses.

3.3 Derivative financial assets

The derivative is measured initially at fair value and subsequently at fair value with changes in fair value recognised in profit or loss.

The valuation technique used is the Monte-Carlo Simulation technique, which includes unobservable inputs used in the valuation of the Black Wattle Option.

3.4 Non-derivative financial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date.

3.5 Financial liabilities at fair value through profit or loss

The group's financial liabilities held at fair value through profit or loss are all linked to listed equity investments held by the group through certain investments in associates. The fair value adjustments that relate to financial liabilities are not a result of the group's inability to discharge its obligation, but rather in terms of the agreements with its lenders. The terms of the financial liability are such that, in the event that asset fair value falls below the face value of the liability, the group is not obligated to pay the full face of the debt, but rather a value that is directly linked to the value of the related asset. The full fair value adjustment is considered to be as a result of a change in market conditions.

4. FINANCIAL RISK MANAGEMENT

The group and company has exposure to the following risks from its use of financial instruments:

• f Liquidity risk
• f Credit risk
• f Market risk

This note presents information about the group's exposure to 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 financial statements.

Risk management framework

The board of directors has overall responsibility for the establishment and oversight of the group's risk management framework. The board 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 oversee 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.

4.1 Liquidity risk

Liquidity risk is the risk that the group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. 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.

4.2 Credit risk

Credit risk is the risk of financial loss to the group and company if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

The group and company manage this risk by transacting with customers that have good credit records and good standing in the markets.

Financial assets, which potentially subject the group to concentrations of credit risk, consist principally of trade and other receivables, loans to associates, accounts receivable from trading activities, reinsurance assets, insurance related investments and cash and cash equivalents. Refer to note 48.3 for more details.

The trade and other receivables relate to trade receivables and intercompany loan. Loans granted to associates are reviewed annually for recoverability and impaired, if necessary.

The group's exposure to credit risk is influenced mainly by the individual characteristics of each client. However, management also considers the factors that may influence the credit risk of its client base, including the default risk of the industry. Each client is analysed individually for creditworthiness. The group reviews accounts receivable monthly. Other impairment indicators considered include bankruptcy and the insolvency of clients. Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument. Twelve month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The group deposits cash surpluses with major banks of good credit standing to address the related credit risk. Based on the high credit rating of the banks cash carries insignificant risk.

for the year ended 28 February 2021

4. FINANCIAL RISK MANAGEMENT (CONTINUED)

4.3 Market risk

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

The group is exposed to interest rate risk as it borrows funds at variable interest rates. The group generally adopts a policy of ensuring that its exposure to changes in interest rates is limited by either fixing the rate or by linking the rate to the prime rate over the period of the respective loan. The group does not account for any fixed-rate financial liabilities, at FVTPL, and the group does not designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the reporting date would not affect profit or loss. ECLs 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). ECLs are discounted at the effective interest rate of the financial asset.

The group is exposed to equity price risk on its listed investments that are not ring-fenced through underlying funding arrangements. The investments are not hedged and the pricing is reviewed daily. This risk is managed by linking the debt to the value of the underlying assets. This will ensure that the group will limit the amount payable on the underlying debt by limiting it to the value of the asset.

4.4 Currency risk

The group is exposed to currency risk on its investments in foreign operations, where fluctuations in exchange rates against the rand could impact the financial results. Exchange differences arising on translation are recognised directly in other comprehensive income. The group's investments in foreign operations are not hedged. Exchange differences on loans with foreign entities are recognised directly in profit or loss.

4.5 Capital management

The board's policy is to maintain a strong capital base to maintain investor, creditor and market confidences and to sustain future development of the business. The board of directors monitors the return on capital, which the group defines as: result from operating activities divided by total shareholders' equity and non-controlling interests. The board of directors also monitors the level of dividends to ordinary shareholders.

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 capital structure of the group consists of debt and equity as disclosed in the statement of financial position.

In all externally-regulated entities, there are capital adequacy requirements for the day-to-day operations. Each entity has a compliance officer who is responsible for monitoring these requirements. The compliance officers report to the board of directors of each entity to ensure the requirements are met. There have been no instances of non-compliance reported to the board of directors throughout the reporting year.

Figures in R'000	2021	2020
Gearing ratio
Total debt	857 784	1 062 683
Less: Cash and cash equivalents	(213 235)	(246 530)
Net debt	644 549	816 153
Equity	280 052	486 178
Total capital managed	924 601	1 302 331
Debt equity ratio	230.16%	167.87%

Figures in R'000	2021	2020
REVENUE
Revenue includes trading revenue, fees earned from advisory services, brokerage, fundmanagement fees, asset administration fees, management fees, commodities tradingrevenue and insurance premiums.
Revenue	558 690	344 757
Disaggregation of revenue
The revenue relating to the core business operations of the group has been disaggregatedas follows:
Major products/service lines
Continuing operations
Trading revenue
Bond trading (services transferred at point in time)	10 259	9 108
Money market (services transferred at point in time)	6 694	3 320
Insurance premiums, commission and fee incomeAdvisory (services transferred over time)	16 922	13 969
Brokerage (services transferred at point in time)	29 295	24 508
Fee and commission income on investment contracts (services transferred over time)	9 214
Insurance premiums (services transferred over time)	208 174	59 723
Fund management (services transferred over time)	133 553	94 884
Asset administration (services transferred over time)	144 579	139 245
	558 690	344 757
Discontinued operations
Fund management (services transferred at point in time)	4 239	1 926
Management fees (services transferred at point in time)	6 890	10 057
Commodities trading (products transferred at point in time)	18 014	105 416
	29 143	117 399
Timing of revenue recognition – Continuing operations
Services transferred over time	512 442	307 821
Services transferred at a point in time	46 248	36 936
External revenue (per operating segments note 45)	558 690	344 757
Timing of revenue recognition – Discontinued operations
Services transferred over timeServices transferred at a point in time	4 2396 890	1 92610 057
Products transferred at a point in time	18 014	105 416
External revenue (per operating segments note 45)	29 143	117 399

Performance obligations and revenue recognition policies

Revenue is measured based on the consideration specified in the a contract with a customer. The group recognises revenue when it transfers control over a good or service to a customer.

Revenue from contracts with customers is recognised when (or as) the group satisfies a performance obligation, this is due over time or at a point in time. Invoices are raised at the point when the goods are accepted at the customer's premises, and at the end of each month and over time when a performance obligation is met. There are no significant differences in the timing and recognition of revenue from these services or goods and therefore there is no significant impact on the financial statements.

The group recognises receivables (no contracts assets or liabilities are recognised) as it will have unconditional rights to revenue that would have been recorded from the rendering of goods or services.

for the year ended 28 February 2021

Figures in R'000	2021	2020
The group's revenue has increased despite Covid-19. The insurance revenue has beenaccounted for the full 12 months compared to three months in the prior year. The revenuefrom Vunani Fund Managers Botswana was accounted for 12 months compared to twomonths in the prior year.
6.OTHER INCOME
Sundry income	9 978	3 463
Directors' feesAccounting fees	587–	4844
Reinsurance recoveries	15 576	5 886
	26 141	9 837
Reinsurance recoveries have increased due to the group accounting for 12 months ofincome in the current period compared to three months in the prior year.
7.BARGAIN PURCHASE
Bargain purchase	530	34 889
In the prior year the group acquired investments in Oracle Insure and Vunani FundManagers Botswana ("VFMB"), which resulted in a bargain purchase gain of R34.9 million.In the current year the purchase price allocation for the VFMB was finalised, which resultedin an additional bargain purchase gain of R0.5 million. A contingent liability initiallyrecognised on the preliminary purchase price allocation of VFMB did not materialise,which necessitated an adjustment to preliminary purchase price allocation. There were nochanges to preliminary price allocation of Oracle Insure.
8.INVESTMENT REVENUE
Dividend income
Dividend income from listed investments	691	1 598
Dividend income from unlisted investments	3 7674 458	1 4993 097
9.INTEREST RECEIVED FROM INVESTMENTS
Interest received from insurance related investmentsInterest from loans and other receivables	18 32220	5 041982
	18 342	6 023
Interest received from insurance related investments have increased due to the groupaccounting for 12 months of interest in the current period compared to three months in theprior year. Interest income is calculated using the effective interest rate.
10.FAIR VALUE ADJUSTMENTS
Fair value adjustments on financial assets and liabilitiesAdjustments on financial assets and liabilities at fair value through profit or loss comprisethe following:
Fair value adjustments to third party liabilities	(11 124)	3 184
Fair value adjustments to investment contract liabilities	(56 795)	(7 432)
Insurance – related investmentsOther investments (refer to note 18)	22 0011 868	(1 080)(5 490)
Other investments – listed investments	1 868	(5 844)
Other investments – unlisted investments	–	354
	(44 050)	(10 818)
Refer to note 48.4 for details of assumptions used in determining the fair values of otherinvestments.

	Figures in R'000	2021	2020
11.	IMPAIRMENTS
	Expected credit loss impairment loss on trade and other receivables	(7 024)	(2 738)
	Impairment reversal on loans to associates	–	300
	Impairment of value of in-force business ("VIF")	(41 502)	–
		(48 526)	(2 438)

Impairments have increased in the current year due to increase in the expected credit losses raised on trade and other receivables and the impairment on the VIF intangible asset that arose on the acquisition of Oracle. Due to the impairment of the VIF asset, the deferred tax liability previously recognised on the recognition of the asset had to be reversed, resulting in the R11.4 million positive tax adjustment.

	Figures in R'000	2021	2020
12.	OPERATING EXPENSESOperating expenses are arrived at after taking the following into account:
	Amortisation of intangible assets	16 316	12 402
	Depreciation	10 240	10 572
	External auditor's remuneration	8 137	3 466
	Current year	7 406	3 389
	Prior year	731	77
	Internal auditor's remuneration
	Current period	260	290
	Directors' remuneration and benefits (refer to note 47)	32 732	25 231
	Non-executive directors' fees	1 410	1 305
	Salaries	11 550	10 809
	Bonuses accrued	15 680	8 672
	Provident fund and medical aid contributions	2 121	2 021
	Equity-settled share-based payment charge	1 971	2 424
	Prescribed officers' remunerations (refer to note 70)	19 178	9 464
	Staff costs (excluding directors' and prescribed officers' emoluments)	168 521	151 481
	Staff provident fund and medical aid contributions (excluding directors' and prescribed
	officers' emoluments)	12 196	6 224
	Equity-settled share-based payment charge (excluding directors)	1 246	2 428
	Insurance related costs *
	Claims incurred	105 151	29 468
	Reinsurance premium	47 183	13 989
	* Insurance related costs have increased due to the group accounting for 12 months of expenses in the currentperiod compared to three months in the prior year.
13.	FINANCE INCOME AND FINANCE COSTS
	Interest received – SARS	2 156	–
	Interest received – cash and cash equivalents	5 013	4 782
	Finance income	7 169	4 782
	Interest charge – bank overdraft	(707)	(611)
	Interest charge – long-term borrowings (refer to note 32)	(5 144)	(5 918)
	Interest charge – debentures (refer to note 32)	(115)	(255)
	Interest charge – trade and other payables	(4)	(49)

13. FINANCE INCOME AND FINANCE COSTS

Interest received – SARS	2 156	–
Interest received – cash and cash equivalents	5 013	4 782
Finance income	7 169	4 782
Interest charge – bank overdraft	(707)	(611)
Interest charge – long-term borrowings (refer to note 32)	(5 144)	(5 918)
Interest charge – debentures (refer to note 32)	(115)	(255)
Interest charge – trade and other payables	(4)	(49)
Interest charge – operating lease liabilities	(1 650)	(1 316)
Finance costs	(7 620)	(8 149)
Net finance expense	(451)	(3 367)
Interest expense on financial liabilities measured at amortised cost	(7 620)	(8 149)

for the year ended 28 February 2021

Figures in R'000	2021	2020
14.INCOME TAX
Current tax expense	(16 638)	(18 613)
Current yearPrior year tax refund	(22 417)5 779	(18 613)–
Deferred tax expenseCurrent year	26 716	7 376
Origination and reversal of temporary differences	26 716	7 376
Total income tax recognised in profit or loss	10 078	(11 237)
Reconciliation of effective tax rate	%	%
Company tax rate	28.0	28.0
Donations, share-based payments, legals fees and interest &	79.5	2.9
Impairments	–	(0.1)
Equity-accounted earnings	(3.9)	(0.1)
Dividend income	(1.9)	(1.2)
Bargain purchase	(1.5)	(13.9)
Fair value gains or losses at Capital Gains Tax rate	(1.0)	0.3
Tax rate differences**	0.2	0.1
Unrecognised deferred tax assets	–	2.3
Fair value adjustments not taxed (asset recovered through dividends received)	–	(2.1)
Dividend withholding tax	4.0	–
Previously unrecognised deferred tax assets	(25.4)	–
Deferred tax asset utilised #	(120.9)	–
Prior year tax refund	(57.9)	–
	(100.9)	16.0

Basis of calculation

The above is a numerical reconciliation between the average effective tax rate and the applicable tax rate. The applicable tax rate is the national income tax rate of 28.0%. The effective Capital Gains Tax rate is 22.4%.

** The corporate tax rates for Botswana is 22%, Malawi is 30%, Swaziland is 27.5%, Zambia is 35% and Zimbabwe is at 24.72%.

• & The increase relates to non-deductable interest from a subsidiary and IAS 19 expenditure in the holding company that is not deductable
• # During the year the group utilised its assessed losses, refer to note 23 for more information

	Figures in R'000	Land	Buildings	Leaseholdimprovements	Motorvehicles	Furnitureand fittings	Officeequipment	Computerequipment	Rightof-useasset	Total
15.	PROPERTY, PLANT ANDEQUIPMENTCost
	Balance at28 February 2019	1 075	5 111	5 537	1 987	2 656	2 301	16 246	–	34 913
	Acquisition through businesscombinationAdditions	––	––	(14)155	775–	4812	443361	2 930662	1 122–	5 7371 180
	IFRS 16 right-of-use assetDisposalsEffects of movement in	––	––	––	––	––	––	–(1 322)	24 782–	24 782(1 322)
	exchange rates	(513)	(2 032)	–	5	6	35	(25)	53	(2 471)
	Balance at29 February 2020	562	3 079	5 678	2 767	3 145	3 140	18 491	25 957	62 819
	AdditionsIFRS 16 right-of-use assetUnbundlingDisposalsEffects of movement inexchange rates	––(738)–176	––(2 953)–(126)	––(214)(87)–	––(1 987)––	––(635)(153)1 285	––(743)––	2 162–(309)(140)(1 300)	2 573––14	2 1622 573(7 579)(380)49
	Balance at28 February 2021	–	–	5 377	780	3 643	2 397	18 904	28 544	59 645
	Accumulated depreciationand impairment lossesBalance at28 February 2019DepreciationDisposals	–––	(857)(20)–	(4 812)(341)–	(934)(314)–	(2 249)(168)–	(1 717)(267)–	(13 367)(2 087)4	–(7 787)–	(23 936)(10 984)4
	Balance at29 February 2020	–	(877)	(5 153)	(1 248)	(2 417)	(1 984)	(15 450)	(7 787)	(34 916)
	DepreciationDisposalsUnbundling	–––	(11)–888	(146)–86	(369)–1 395	(560)–610	(224)–452	(1 513)135211	(7 719)––	(10 542)1353 642
	Balance at28 February 2021	–	–	(5 213)	(221)	(2 367)	(1 756)	(16 617)	(15 506)	(41 681)
	Carrying amountsAt 28 February 2019At 29 February 2020	1 075562	4 2542 202	725525	1 0531 519	407728	5841 156	2 8793 041	–18 170	10 97727 903
	At 28 February 2021	–	–	164	559	1 276	641	2 287	13 038	17 964

	2021	2020
Property plant and equipment per aboveRight-of-use asset – refer to note 33	4 92613 038	9 73318 170
Total property, plant and equipment per the statement of financial position	17 964	27 903

The movement in PPE represents the impact of the unbundling transaction.

for the year ended 28 February 2021

Figures in R'000	Goodwill	Customerlists	Brand	Software	Value ofin-forcebusinessacquired	Software	Total
16.GOODWILL ANDINTANGIBLE ASSETSCost
Balance at 28 February 2019	192 697	87 883	7 977	34 832	–	–	323 389
Acquired through businesscombinationsAdditions	––	––	––	––	119 643	–5 519	119 6435 519
Balance at 29 February 2020Additions	192 697–	87 883–	7 977–	34 832–	119 643	5 5195 209	448 5515 209
Balance at 29 February 2021	192 697	87 883	7 977	34 832	119 643	10 728	453 760
Accumulated amortisationand impairment
Balance at 28 February 2019Amortisation	(52 931)–	(45 827)(7 209)	(1 153)(532)	(7 548)(3 483)	–(997)	–(181)	(107 459)(12 402)
Balance at 29 February2020	(52 931)	(53 036)	(1 685)	(11 031)	(997)	(181)	(119 861)
AmortisationImpairment	––	(7 209)–	(532)–	(3 483)–	(3 988)(41 502)	(1 104)–	(16 316)(41 502)
Balance at 28 February 2021	(52 931)	(60 245)	(2 217)	(14 514)	(46 487)	(1 285)	(177 679)
Carrying amountsAt 28 February 2019At 28 February 2020	139 766139 766	42 05634 847	6 8246 292	27 28423 801	–118 646	–5 338	215 930328 690
At 29 February 2021	139 766	27 638	5 760	20 318	73 156	9 443	276 081

Goodwill and intangibles in the group arose from the business combinations of Vunani Securities Proprietary Limited, Vunani Fund Managers Proprietary Limited and Mandlalux Proprietary Limited.

The intangible assets arose on the acquisition of Mandlalux Proprietary Limited (customer list, brand and software) and Oracle Life and Insure (value of in-force business acquired). In addition, Mandlalux Proprietary Limited has internally generated computer software.

The goodwill that arose on the acquisitions of the businesses relate to synergies from combining operations and other intangible assets that do not qualify for separate recognition.

Impairment

It is the group's policy to test the impairment of goodwill on an annual basis.

Intangibles assets are tested for impairment when there is an indicator the asset is impaired. The value in-force acquired is reviewed for impairment losses through the liability adequacy test and written down for impairment if necessary.

For the purposes of impairment testing, goodwill has been allocated to the following CGUs (operating companies) as follows:

Figures in R'000	2021	2020
Vunani Fund Managers Proprietary Limited	27 703	27 703
Vunani Securities Proprietary Limited	6 420	6 420
Mandlalux Proprietary Limited	105 643	105 643
	139 766	139 766

Assumptions applied in testing for the impairment of goodwill Vunani Fund Managers Proprietary Limited

The carrying amount of goodwill that arose through the business combination is R27.7 million.

The recoverable amount was determined as the fair value less costs of disposal of the company.

The fair value less costs of disposal is determined using the funds under management at the date of disposal. The fair value measurement was categorised as a level 3 fair value based on the valuation technique used.

An established industry benchmark for valuing fund management companies is to apply a percentage to the funds under management. The percentage can vary based on a combination of factors, inter alia, quantum of funds under management; profitability; average term of mandates; average management fees charged and growth prospects. As any or all these factors improve, the higher the percentage applied. In applying the impairment test to goodwill held in respect of the investment in Vunani Fund Managers, fair value has been determined on the basis of a percentage of the funds under management. This percentage has been set at 1%, which is consistent with previous periods, and applied to R51.5 billion (2020: R39.7 billion) funds under management at 28 February 2021 to arrive at a fair value of R514.7 million (2020: R396.4 million). The value has been determined solely for the purpose of the impairment test.

The recoverable amount of the CGU exceeds the carrying amount of the cash generating by R455.2 million (2020: 345.2 million). As a result, the group does not believe that the goodwill is impaired.

Vunani Securities Proprietary Limited

The carrying amount of goodwill that arose through the business combination is R6.4 million.

The recoverable amount was determined as the value-in-use of the company. The key assumptions used in the calculation of the recoverable amount are discount rates and EBITDA growth rate. The values assigned to the key assumption represented management's assessments for future trends in the securities broking industries and were based on internal sources and historical data.

An after tax discount rate of 15.26% (2020: 15.41%) was used in the valuation based on analysis of factors affecting the securities broking industries and the current performance of the business. The pre-tax discount rate amounted to 15.85% (2020: 16.00%).

Four years' cash flows were included in the discounted cash flow model. The cash flows were adjusted to take into account the expected growth rate of the EBITDA. An EBITDA rate of 3% (2020: 3%) was used and a terminal value of R71.4 million (2020: R17.9 million). A minimal growth in EBITDA of 3% was used due to the decline in values and volumes traded within the stockbroking industries.

Management has identified one key assumption for which there could be a reasonably possible change that could cause the carrying amount to exceed the recoverable amount. The amount by which this one assumption would need to change individually in order for the estimated recoverable amount to equal the carrying amount of the CGU would be EBITDA growth rate of negative 3% (2020: 3%).

The recoverable amount of the CGU exceeds the carrying amount of the cash generating by R58.4 million (2020: R1.8 million). As a result of the above the group does not believe that the goodwill needs to be impaired.

Mandlalux Proprietary Limited

The carrying amount of goodwill that arose through the business combination is R105.6 million.

The recoverable amount was determined as the value in use of the company. The key assumptions used in the calculation of the recoverable amount are weighted average cost of capital and free cash flows. The values assigned to the key assumption represented management's assessments for future trends in the asset administration business and were based on internal sources and historical data.

A weighted average cost of capital of 14.63% (2020 14.04%) was used in the valuation. The pre-tax discount rate amounted to 15.18% (2020: 14.55%). Five years' cash flows were included in the discounted cash flow model. The cash flows were adjusted to take into account the expected growth rate of the EBITDA. An EBITDA rate of 4% (2020: 5%) and a terminal value of R434.8 million (2020: R526.4 million) was used.

for the year ended 28 February 2021

16. GOODWILL AND INTANGIBLE ASSETS (CONTINUED)

Management has identified one key assumption for which there could be a reasonably possible change that could cause the carrying amount to exceed the recoverable amount. The amount by which this one assumption would need to change individually in order for the estimated recoverable amount to equal the carrying amount of the CGU would be an EBITDA growth rate of negative 5% (2020: 5%).

The recoverable amount of the CGU exceeds the carrying amount of the cash generating unit by R177.4 million (2020: R154.9 million). As a result of the above, the group does not believe that the goodwill is impaired.

Value in-force asset

The acquisition of Oracle Life and Oracle Insure resulted in the recognition of intangible assets of R119.6 million and deferred tax on intangible asset of R32.9 million at acquisition date. The VIF asset is amortised over 30 years.

The intangibles will be amortised as follows:

Value of in-force business acquired 360 months

Valuation of intangible assets

On acquisition of a portfolio of insurance or investment with DPF contracts, the group recognises an intangible asset representing the VIF asset. The VIF asset represents the present value of future pre-tax profits embedded in the acquired insurance or investment with DPF contract business. The VIF asset is recognised gross of tax, with the deferred tax liability accounted for separately in the statement of financial position.

Measurement

The fair value calculation of the VIF asset on acquisition is based on actuarial principles that take into account future premium and fee income, claim outgo, mortality, morbidity and persistency probabilities together with future costs and investment returns on the underlying assets. The profits are discounted at a rate of return allowing for the risk of uncertainty of the future cash flows. This calculation is particularly sensitive to the assumptions regarding discount rate, future investment returns and the rate at which policies discontinue.

Impairment

The VIF asset is reviewed for impairment losses through the liability adequacy test and written down for impairment if necessary.

The VIF asset acquired is reviewed for impairment through a discounted cash flow ("DCF") valuation to determine its value in use. This valuation method references the results of the EV calculations for the relevant products. This embedded value methodology uses a number of assumptions relating to future cash flows. A discount rate of 13.7% (2020: 13.3%) was used in the DCF.

The underlying assumptions of the VIF asset were reviewed by the statutory actuary using historical GLA (group life assurance) and PHI (permanent health insurance) data. This resulted in reduced profit margins for both lines of business which led to a significant reduction in the VIF asset. The recoverable amount at 28 February 2021 was calculated as R73.2 million (2020: R118.7 million).

VIF Valuations assumptions

	Investment Contracts	Employee Benefits	Retail – Funeral	Retail – Credit Life
Net premiums	Annual recurringpremiums over the last 12months	API (office premium)	API (office premium)	API (earned officepremium)
Growth	Growth in contributions equal to salary inflation		n/a
Lapses	All exits :15% ofAUM Scheme exits: 5%of API	6%	20%	10%
Claims ratio	n/a	64.25% of riskpremium (approx.85% * API)	25% of API	40% of API
Fees	Guaranteed:1.3% of AUM, 5% of APIAccelerator:0.3% of AUM, 4% of API	n/a	n/a	n/a
Profit share	n/a	n/a	50% whereapplicable	50% whereapplicable
Commission	2%	1.35%	3.6%	For recurringpremiums:22.85%or 14.90%
Expenses	% of APIGuaranteed: 9%Accelerator: 22%	16% of API	5% of API	17% % of APIEconomic
Economic		Investment return based on underlying assets
Projection period	30 years	30 years	30 years	Loan term(max 30 year)

Economic assumptions

Risk Discount Rate	Nominal +3.4%
Equities	Nominal +3.5%
Property	Nominal +2.5%
Corporate Bonds	Nominal +1.0%
Cash	Nominal -2.0%
Inflation
CPI	(1+Nominal)/(1+Real)-1
Salary	CPI+0%

Yield Used

CPI (1+Nominal)/(1+Real)-1

for the year ended 28 February 2021

Figures in R'000	Investmentin associate	Loans toassociates	Total
17.INVESTMENTS IN AND LOANS TO ASSOCIATES
Balance at 29 February 2020Loans repaidImpairmentUnbundledDisposalDividends paidEquity-accounted earnings	59 787–(2 811)(66 630)(1 899)(5 572)17 678	6 745(2 935)–(2 600)–––	66 532(2 935)(2 811)(69 230)(1 899)(5 572)17 678
Balance at 28 February 2021	553	1 210	1 763
2020Balance at 28 February 2019Decrease in investments in associatesLoans advancedLoans repaidImpairment reversal on loans to associates (refer to note 11)Dividends paidEquity-accounted earnings	53 390*–––(3 571)9 968	10 118–2 494(6 167)300––	63 508*2 494(6 167)300(3 571)9 968
Balance at 29 February 2020	59 787	6 745	66 532

* Amount less than R1 000.

Accounting considerations

IAS 28 defines an associate as an entity over which an investor has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control of those policies.

The group holds more than 20% of the voting power of its associate investee companies and has meaningful representation on the board of directors of these associate companies. The group has the ability to participate in policy-making processes which include dividend decisions.

The group equity accounts certain investments where it holds 50% or more of the equity of a company. This is as a result of the group not having control of the company based on the shareholders' agreements in place that limits the group's ability to direct the relevant activities of the investee company.

Impairments

The group reviews the recoverability of investments in associates and loans to associates by considering a broader range of information when assessing credit risk and measuring expected credit losses, including past events (cumulative loses are in excess of carrying amounts), current conditions (loss making investees), reasonable and supportable forecasts that affect the expected collectability of the future cash flows from the investees. This includes both quantitative and qualitative information and analysis, based on the group's historical experience and informed credit assessment and including forward-looking information.

The group applies IFRS 9 to other financial instruments in an associate to which the equity method is not applied. These include long-term interests that, in substance, form part of the entity's net investment in an associate. The group applies IFRS 9 to such long-term interests before it applies the impairment testing standard. In applying IFRS 9, the group does not take account of any adjustments to the carrying amount of long-term interests that arise from applying this Standard.

Due to the decrease in performance of Alliance Capital Limited during the year, the investment was tested for impairment. The recoverable amount was determined to be its value in use. The value in use was calculated using a DCF. A discount rate of 36% was used in the calculation, the value in use was determined to be R2.0 million (2020: R4.8 million).

Refer to note 48.3 for additional disclosures on impairment of financial assets.

Disposals

During the year, the group disposed of its 51% investment in Phakamani Impact Capital Proprietary Limited for R2.4 million.

Material associates' statement of financial position are presented below:

Figures in R'000	Currentassets	Cashand cashequivalents	Non-currentassets	Totalassets	Currentliabilities	Noncurrentliabilities	Totalliabilities	Netassets
2021
Orion Properties 14Proprietary LimitedOther immaterial	94	97	602	794	–	(2 558)	(2 558)	(1 764)
associates& #	–	267	5 849	6 116	(549)	(20 306)	(20 855)	(14 739)
	94	364	6 452	6 910	(549)	(22 864)	(23 413)	(16 503)

* Less than R1 000.

& The group has interests in a number of individually immaterial associates. Most of the associate companies have dormant operations or are investment holding entities which do not trade.

The non-current liabilities amounts relate to loans from shareholders.

As part of the unbundling, the investments in Alliance Capital Limited, Black Wattle Colliery Proprietary Limited and Verbicept Proprietary Limited were disposed off.

Figures in R'000	Currentassets	Cashand cashequivalents	Non-currentassets	Totalassets	Currentliabilities	Noncurrentliabilities	Totalliabilities	Netassets
2020
Alliance Capital Limited$Black Wattle Colliery	59 746	4 677	10 770	75 192	(64 480)	(3 882)	(68 362)	6 831
Proprietary Limited(refer to note 24)	54 166	26 430	192 039	272 635	(215 811)	(28 636)	(244 446)	28 188
Orion Properties 14Proprietary Limited	–	61	1 306	1 368	(2 921)	(404)	(3 325)	(1 958)
Phakamani Impact CapitalProprietary Limited	30 911	13 662	–	44 573	(41 475)	(1 000)	(42 475)	2 098
Verbicept ProprietaryLimited	–	10	130 333	130 343	(57)	(77 554)	(77 611)	52 732
Other immaterialassociates&	958	9 230	6 292	16 481	(10 211)	(24 032)	(34 243)	(17 762)
	145 781	54 070	340 740	540 591	(334 956)	(135 508)	(470 463)	70 128

* Less than R1 000.

$ The company is incorporated in Malawi.

& The group has interests in a number of individually immaterial associates. Most of the associate companies have dormant operations or are investment holding entities which do not trade.

for the year ended 28 February 2021

17. INVESTMENTS IN AND LOANS TO ASSOCIATES (CONTINUED)

Associates' net carrying amount is presented below:

Figures in R'000	Effectiveownership	Cost ofinvest-ment	Loans toassociates	Impairments	Cumulativeequityearningsnet ofdividends	Netcarryingamount
2021
Before Sunset Properties 37
Proprietary Limited	25%	*	–	–	–	*
English Breeze Investments
(Private) Limited	50%	1	–	–	–	1
K2015(SA) Proprietary Limited	31%	*	1 999	(1 999)	–	–
Marudi Proprietary Limited	50%	*	2 546	(2 546)	–	–
Micawber 534 Proprietary
Limited	48%	*	5 160	(5 160)	–	*
Orion Properties 14 Proprietary
Limited	39%	*	1 210	–	(882)	328
Papillon in Flight Proprietary
Limited	26%	3 191	–	(3 191)	–	–
Isilo Investments (RF) ProprietaryLimited	51%	*	–	–	133	133
Space Launch Investments
(Private) Limited	50%	1	1 860	(1 860)	–	1
Vunani Solar Power Proprietary
Limited#	26%	1 300	–	–	–	1 300
		4 493	12 775	(14 756)	(749)	1 763

* Less than R1 000.

Acquired in terms of vendor financed transaction (refer to note 32.2 for the corresponding liability).

A reconciliation of the movements in associates is shown below:

	Investmentat cost	Loans toassociates	Total
Investment at cost and loans to associatesCumulative impairmentsCumulative equity earnings net of dividends	4 493(3 191)(749)	12 775(11 565)–	17 268(14 756)(749)
	553	1 210	1 763

Associates' net carrying amount is presented below:

Figures in R'000	Effectiveownership	Cost ofinvest-ment	Loans toassociates	Impairments	Cumulativeequityearningsnet ofdividends	Netcarryingamount
2020
Alliance Capital Limited	45%	4 803	–	–	955	5 758
Before Sunset Properties 37
Proprietary Limited	25%	*	–	–	–	*
BetBio Zambia Limited	45%	*	–	–	–	*
Black Wattle Colliery Proprietary
Limited (refer to note 24)	38%	*	–	–	–	*
English Breeze Investments
(Private) Limited	50%	1	–	–	–	1
K2015(SA) Proprietary Limited	31%	*	3 398	(2 073)	–	1 325
Newshelf 1361 Proprietary
Limited	25%	*	5 738	(5 738)	–	*
Marudi Proprietary Limited	50%	*	2 546	(2 472)	–	74
Micawber 534 Proprietary Limited	48%	*	5 160	(5 160)	–	*
Orion Properties 14
Proprietary Limited	39%	*	1 460	–	(979)	481
Papillon in Flight
Proprietary Limited	26%	3 191	–	(3 191)	–	–
Phakamani Impact Capital
Proprietary Limited	51%	5	500	–	835	1 340
Isilo Investments (RF)
Proprietary Limited	51%	*	–	–	135	135
Space Launch Investments
(Private) Limited	50%	1	1 860	(1 860)	–	1
Vunani Properties
Proprietary Limited	70%	*	3 732	–	–	3 732
Vunani Solar Power
Proprietary Limited#	26%	1 300	–	–	–	1 300
Verbicept Proprietary Limited	50%	13 465	(346)	–	39 267	52 386
		22 766	24 048	(20 494)	40 212	66 532

* Less than R1 000.

Acquired in terms of vendor financed transaction (refer to note 32.2 for the corresponding liability).

A reconciliation of the movements in associates is shown below:

	Investmentat cost	Loans toassociates	Total
Investment at cost and loans to associatesCumulative impairments	22 766(3 191)	24 048(17 303)	46 814(20 494)
Cumulative equity earnings net of dividends	40 212	–	40 212
	59 787	6 745	66 532

for the year ended 28 February 2021

17. INVESTMENTS IN AND LOANS TO ASSOCIATES (CONTINUED)

Material associates' statement of comprehensive income is presented below:

Figures in R'000	Revenue/Otherincome	Fair valueadjustments	Depreciationandamortisation	Interestincome	Interestexpense	Incometax(expense)	Otherexpenses	Profit/(Loss)and totalcomprehensiveincome
for the year ended28 February 2021Orion Properties 14Proprietary LimitedOther immaterialassociate companies&	51–	––	––	––	––	––	(1 317)–	(1 266)–
	51	–	–	–	–	–	(1 317)	(1 266)

& The group has interests in a number of individually immaterial associates. Most of the associate companies have dormant operations or are investment holding entities which do not trade.

* Less than R1 000.

Material associates' statement of comprehensive income is presented below:

								Profit/(Loss)
			Depreciation			Income		and total
		Fair value	and	Interest	Interest	tax		Other comprehensive
Figures in R'000	Revenue	adjustments	amortisation	income	expense	expense	expenses	income
for the year ended29 February 2020Alliance Capital
LimitedBlack Wattle Colliery	19 621	–	(678)	4 058	(5 672)	(31)	(16 208)	1 090
Proprietary Limited(refer to note 24)	566 690	–	(35 816)	–	(2 512)	(7 044)	(503 076)	18 242
Orion Properties 14Proprietary LimitedPhakamani Impact	556	–	–	–	(14)	–	(1 664)	(1 122)
Capital ProprietaryLimited	14 275	–	(131)	–	(27)	(395)	(12 342)	1 380
Verbicept ProprietaryLimited	644	10 239	–	3	–	(3 748)	(74)	7 064
Other immaterialassociate companies&	59 568	–	(27)	–	–	–	(52 291)	7 250
	661 354	10 239	(36 652)	4 061	(8 225)	(11 218)	(585 655)	33 904

& The group has interests in a number of individually immaterial associates. Most of the associate companies have dormant operations or are investment holding entities which do not trade.

* Less than R1 000.

A reconciliation of the investments in and loans to associates:

Figures in R'000	Effectiveownership	Net assetvalue	Share of netassets	Loans toassociates	Goodwill/(Bargainpurchase)	Losses notaccounted	for Impairments	BlackWattleoption	Net carrying amount
2021OrionProperties 14ProprietaryLimitedOtherimmaterialassociatecompanies&	39.0%	(1 764)(14 736)	(882)(7 094)	1 21011 565	–4 493	–7 226	–(14 756)	––	3281 434
		(16 500)	(7 976)	12 775	4 493	7 226	(14 756)	–	1 763

* Less than R1 000.

A reconciliation of the investments in and loans to associates:

Figures in R'000	Effectiveownership	Net assetvalue	Share ofnet assets	Loans toassociates	Goodwill/(Bargainpurchase)	Losses notaccountedfor	Impairments	BlackWattleoption	Netcarryingamount
2020AllianceCapital LimitedBlack WattleCollieryProprietaryLimited	45.0%	6 831	3 074	–	2 684	–	–	–	5 758
(refer to note24)OrionProperties 14	37.5%	28 188	10 571	–	–	–	–	(10 571)	*
ProprietaryLimitedPhakamaniImpact Capital	39.0%	(1 958)	(979)	1 460	–	–	–	–	481
ProprietaryLimitedVerbicept	51.0%	2 098	835	500	5	–	–	–	1 340
ProprietaryLimitedOtherimmaterialassociate	50.0%	52 732	52 732	(346)	–	–	–	–	52 386
companies&		(17 763)	(9 212)	22 434	4 493	9 346	(20 494)	–	6 567
		70 128	57 021	24 048	7 182	9 346	(20 494)	(10 571)	66 532

* Less than R1 000.

All associates are incorporated in the Republic of South Africa, with the exception of English Breeze Investments (Private) Limited and Space Launch Investments (Private) Limited, which operate in Zimbabwe and Marudi Proprietary Limited, which operates in Botswana. The carrying amounts of associates are shown net of impairment losses.

Associates that have different year-ends to the group are equity-accounted on the basis of the associates' year-end audited/unaudited financial information (which is within three months of the group's financial year end).

The group has accounted for losses incurred by associates to the extent of investments made.

The group has not recognised losses totalling R7.2 million (2020: R9.4 million) in relation to its interests in associates, because the group has no obligation in respect of these losses.

for the year ended 28 February 2021

17. INVESTMENTS IN AND LOANS TO ASSOCIATES (CONTINUED)

Below is a description of the nature of the operations and activities of associates:

Associate Nature of operations and activities

Before Sunset Properties 37 Proprietary Limited Dormant entity English Breeze Investments (Private) Limited Investment holding company K2015(SA) Proprietary Limited Property development and investment projects Marudi Proprietary Limited Investment holding company Micawber 534 Proprietary Limited Dormant entity Orion Properties 14 Proprietary Limited Property development projects Papillon in Flight Proprietary Limited Dormant entity Isilo Investments (RF) Proprietary Limited Steel – high volume customers Space Launch Investments (Private) Limited Investment holding Vunani Solar Power Proprietary Limited Dormant entity

The following investments were sold and or unbundled during the year:

Alliance Capital Limited Asset management BetBio Zambia Limited Gaming activities Black Wattle Colliery Proprietary Limited Mining operations Newshelf 1361 Proprietary Limited Energy and resources Phakamani Impact Capital Proprietary Limited Enterprise development Verbicept Proprietary Limited Investment holding Vunani Properties Proprietary Limited Property development and investment projects

Figures in R'000	2021	2020
18.OTHER INVESTMENTS
Balance at the beginning of the year	111 452	94 484
Fair value adjustments - continuing operations	1 868	(5 490)
Fair value adjustments - discontinued operations	(18 727)	19 262
Additions	1 955	–
Foreign exchange (loss)/gain	(41)	60
Disposals	(1 982)	(13 685)
Unbundled	(79 953)	–
Transferred to other receivables	–	(50)
Acquired through business combination	–	16 871
Balance at the end of the year	14 572	111 452
Non-current	11 307	107 020
Current	3 265	4 432
	14 572	111 452

Refer to note 48.4 for additional disclosures on fair value of other investments.

			Investments
2021	Number ofshares held('000s)	% holding	ListedR'000	UnlistedR'000	Fair valueR'000
Non-current
Johannesburg Stock Exchange Limited	95	*	11 307	–	11 307
PowerHouse Africa Holdings ProprietaryLimited@	*	15	–	–	–
Other investments – non-current			11 307	–	11 307
Current
Listed investments held by Vunani FundManagers Botswana Proprietary Limited	*	*	3 265	–	3 265
Other investments – current			3 265	–	3 265
Total other investments			14 572	–	14 572

* Less than 1 000 shares or R1 000 or 0.1%.

@ The investment in PowerHouse has been fair valued to nil (2020: R nil).

Determination of fair values

Listed investments

The fair values of listed investments (that are traded in an actively traded market) are determined with reference to quoted bid prices at 28 February 2021 on the relevant securities exchanges. Listed investments are classified at fair value through profit or loss.

Major unlisted investments

The fair value of unlisted investments is determined using appropriate valuation techniques that may include, but are not limited to, discounted cash flow analysis, current and projected net asset value calculations and earnings multiple. Unlisted investments are classified at fair value through profit or loss.

			Investments
2020	Number ofshares held(000s)	% holding	ListedR'000	UnlistedR'000	Fair valueR'000
Non-current
African Legend Investment ProprietaryLimited	2 248	2.4	–	18 283	18 283
Butsanani Energy Investment HoldingsProprietary Limited	*	33.3	–	73 601	73 601
Ferrox Proprietary Limited	7 200	1.04	–	5 638	5 638
Johannesburg Stock Exchange Limited	95	*	9 498	–	9 498
PowerHouse Africa Holdings ProprietaryLimited	*	15	–	–	–
Other investments – non-currentCurrent			9 498	97 522	107 020
Listed investments held by Vunani FundManagers Botswana Proprietary Limited	*	*	3 274	–	3 274
Listed investments held by Purpose VunaniAsset Management (Private) Limited	709	*	1 158	–	1 158
Other investments – current			4 432	–	4 432
Total other investments			13 930	97 522	111 452

* Less than 1 000 shares or R1 000 or 0.1%.

for the year ended 28 February 2021

Figures in R'000	2021	2020
19.INSURANCE-RELATED INVESTMENTS
The insurance related investments relate to the group's investment in Oracle.
Equity securities	125 083	84 346
Collective investment schemes	46 434	41 527
Debt securities	82 612	13 502
Funds on deposit and other money market instruments	85 174	109 263
Government stock	58 781	37 951
	398 084	286 589
Open ended	171 516	125 873
Non-current	226 568	160 716
	398 084	286 589
Instruments with no maturity date have been classified as open ended. Management isunable to provide a reliable estimate of maturity, given factors such as the volatility of therespective markets. Management's intention is to hold these assets for more than one year.
The insurance – related investments are reconciled as follows:
Opening balance	286 589	–
Additions through business combination	–	490 616
Fair value adjustment (note 10)	22 001	(1 080)
Interest	20 692	6 384
Investments	367 651	4 349
Disinvestments	(298 849)	(213 680)
	398 084	286 589
20.REINSURANCE ASSETSThe reinsurance assets relate to the group's investment in Oracle.The reinsurance assets are made up of:
Reinsurance assets	6 600	9 181
Premium debtors	12 213	9 892
Reinsurance debtors	5 876	1 063
	24 689	20 136
The reinsurance assets are reconciled as follows:
Opening balance	20 136	–
Additions	7 134	2 064
Additions through business combination	–	17 807
Change in reinsurance asset movement	(2 581)24 689	26520 136
Reinsurance assets represent the reinsurer's share of insurance liabilities.
Deferred acquisition cost: Short term Insurance (DAC)
Balance at beginning	1 483	–
Additions through business combination	–	1 140
Increase in DAC due to additional acquisition costs paid during the period	5 677	343
Decrease in DAC due to acquisition costs being recognised in profit or loss	(4 471)	–
	2 689	1 483

		2021	2020
21.	INVENTORYInventory comprises:
	Work in progress	–	10 851
	Finished goods	–	54 780
		–	65 631
	With effect from 1 March 2020 the group disposed of a portion of the commoditiesbusiness, this resulted in inventory of R63.6 million being sold (refer to note 22).The balance of the inventory was sold as part of the unbundling.
22.	DISPOSAL OF A PORTION OF THE COMMODITIES TRADING BUSINESS
	On 1 March 2020 the group disposed a portion of the commodities trading businessheld within Vunani Resources Proprietary Limited. The disposal resulted in a decrease inthe group's property, plant and equipment, inventory, trade and other receivables, otherfinancial liabilities and trade and other payables. The disposal was for no consideration.
	The impact is detailed below:
	Property, plant and equipment	(52)
	Inventory	(63 614)
	Cash and cash equivalents	(8 056)
	Trade and other receivables	(16 222)
	Other financial liabilities	2 804
	Trade and other payables	85 838
	Net assets and liabilities	698

Notes to the consolidated financial statements (continued)

for the year ended 28 February 2021

Figures in R'000	2021	2020
DEFERRED TAX
Deferred tax comprises:
Deferred tax asset	56 485	45 529
Deferred tax liabilities	(34 841)	(50 562)
	21 644	(5 033)
Recognised deferred tax asset and liabilities comprise:
Fair value adjustments
Other investments	1 018	352
Other financial liabilities	–	1 456
Intangible assets	(37 246)	(52 684)
Trade and other receivables	2 271	955
Accruals	12 833	8 567
Tax losses carried forward	42 859	36 394
Prepayments	(90)	(74)
	21 644	(5 033)
Reconciliation of movement in deferred tax
Balance at the beginning of the year	(5 033)	20 575
Recognised in profit or loss *	26 716	7 430
Business combination	–	(33 060)
Effect of exchange differences	(39)	22
Balance at the end of the year	21 644	(5 033)
Deferred tax assets acquired through business combination relate to deductible temporary
differences.
*less than R1 000Unrecognised deferred tax assets
Estimated tax losses available for utilisation against future taxable income	170 737	168 144
Recognised as deferred tax assets	(151 443)	(130 008)
Unrecognised estimated tax losses carried forward not accounted for in deferred tax	19 294	38 136
Estimated capital tax losses available for utilisation against future capital tax profit	8 730	9 367
Recognised as deferred tax assets	–	–
Unrecognised estimated capital tax losses carried forward not accounted for in deferred tax	8 730	9 367

The group has recognised certain deferred tax assets as they are expected to be utilised against future taxable profits. The basis of future taxable profits has been established through a detailed budgeting process performed by the group. The group's budgeting process is based on a bottom-up approach. Each operating entity in the group has its own detailed monthly budget for the next year. The budgets also include forecasts for the next three years, which are adjusted for expected changes in revenues for the forecasted years. These are then incorporated to create a group budget.

The deductible temporary differences do not expire under current tax legislation. Deferred tax assets have in instances not been recognised in respect of estimated tax losses carried forward because it is not probable that future taxable profit will be available against which the group can utilise the benefits therefrom.

* Included in the deferred tax recognised in profit or loss is previously unrecognised tax asset utilised of R2.5 million and utilisation of deferred tax assets of R12.1 million.

Figures in R'000	Otherloans	Black WattleOption	Total
OTHER NON-CURRENT ASSETS
2021
Balance at the beginning of the yearFair value adjustment	––	33 302(5 183)	33 302(5 183)
Sold during the year	–	(28 119)	(28 119)
Balance at the end of the year	–	–	–
2020
Balance at the beginning of the year	3 683	70 881	74 564
Fair value adjustment	–	(37 579)	(37 579)
Settled during the year	(3 683)	–	(3 683)
Balance at the end of the year	–	33 302	33 302
Figures in R'000		2021	2020
Non-current
Black Wattle Option		–	33 302
Total		–	33 302
During the year the option was disposed of as part of the unbundling of assets,
refer to note 28 and 29.Other loans
C4Life Proprietary Limited		–	–
The loan bears no interest and has been fully impaired.
Non-current		6 724	6 724
Cumulative impairment		(6 724)	(6 724)
Zibuyile Healthcare Proprietary Limited		–	–
The loan is unsecured, bears no interest and has been fully impaired.
Current		798	798
Impairment		(798)	(798)
Vendor financed loan		–	–
Vunani Capital Proprietary Limited advanced a loan to a non-related third party to finance
their acquisition of a 10.71% investment in Mandlamart Proprietary Limited. In the prior year,the group acquired the 10.71%, which resulted in an increase in the group´s investment in
Mandlamart and a settlement of the outstanding loans.
Non-current		–	3 683
Settled during the year		–	(3 683)
		–	–

for the year ended 28 February 2021

Black Wattle Option 24. OTHER NON-CURRENT ASSETS (continued)

During the 2010 financial year, Vunani Mining Proprietary Limited ("Vunani Mining"), a subsidiary of Vunani Limited, obtained a 37.5% interest in Black Wattle through a vendor financed transaction. The 37.5% shareholding consists of 22.5% A ordinary shares and 15% ordinary shares. Vunani Mining has classified this investment as an associate as it has the ability to exercise significant influence in the company.

Vunani Mining is not entitled to share in the economic benefits of ownership until such time as the debt associated with the acquisition is settled. The debt would be redeemed through dividends received by Vunani Mining on the A ordinary shares. Cash flows relating to the 15% ordinary shares will be paid to Vunani Mining. The risks and rewards of ownership have not passed to Vunani Mining and accordingly Vunani Limited equity accounts 0% of Black Wattle in profit or loss (refer to note 17).

Vunani Mining benefits from the upside of the investment being dividends and the capital growth; however, it does not bear the downside of the risk. The substance of the transaction is a call option with dividend rights. Vunani Mining has therefore recognised an in-substance call option.

The option is a derivative financial instrument as defined by IFRS and is classified at fair value through profit or loss. The derivative is measured initially at fair value and subsequently at fair value with changes in fair value recognised in profit or loss.

On day one in 2010, the fair value of the in-substance call option was significantly greater than the R375 that was paid. The fair value amounted to R17.9 million. Since only R375 was paid, this resulted in a day-one gain of R17.9 million. The full gain was recognised over a five-year period, to February 2016.

	Figures in R'000	2021	2020
	Fair value of option to acquire investment in Black Wattle Colliery Proprietary Limited	–	33 302
	Carrying value at year-end	–	33 302
	Level 3 fair value hierarchy
	The fair value measurement for the derivative financial instrument has been classified as alevel 3 fair value based on the inputs of the valuation technique used (refer to note 48.5).
25.	TRADE AND OTHER RECEIVABLESTrade debtorsSundry accounts receivableLoan receivable from holding companyAllowance for impairment	73 06616 687132(9 131)	74 89928 832132(5 535)
		80 754	98 328
	Reconciliation of movement in allowance for impairmentBalance at the beginning of the yearIncrease in impairment allowanceTransferred as part of unbundlingUtilised	(5 535)(7 024)1 3642 064	(3 375)(4 564)–2 404
	Balance at the end of the year	(9 131)	(5 535)
	Factors considered in impairmentThe group assesses impairment of trade and other receivables on a portfolio basis groupingthose that possess shared credit risk characteristics. These have then been grouped based onthe days past due. The group has therefore concluded that the expected loss rates calculatedon the trade receivables are a reasonable approximation of the loss rates.

2021
Ageing of trade and other receivables:
Not past due	66 545
Past due 1 – 30 days	5 789
Past due 31 – 60 days	4 219
Past due 61 – 90 days	247
Past due 91 days and greater	9 067
	85 867

25. TRADE AND OTHER RECEIVABLES (continued)

Figures in R'000	2021
Expected credit lossesDefault ratesNot past due0.03%Past due 1 – 30 days0.50%Past due 31 – 60 days0.3%Past due 61 – 90 days0.8%Past due 91 days and greater100%	(19)(29)(14)(2)(9 067)
	(9 131)
Trade and other receivablesTrade and other receivables – no ECLs *Expected credit loss allowance	85 8674 018(9 131)
Trade and other receivables net of credit loss	80 754
Figures in R'000	2020
Ageing of trade and other receivables:Not past duePast due 1 – 30 daysPast due 31 – 60 daysPast due 61 – 90 daysPast due 91 days and greater	74 0202 4158 4649685 32491 191
Expected credit lossesDefault ratesNot past due0.01%Past due 1 – 30 days0.22%Past due 31 – 60 days1.36%Past due 61 – 90 days8.37%Past due 91 days and greater100%	(10)(5)(115)(81)(5 324)
	(5 535)
Trade and other receivablesTrade and other receivables – no ECLsExpected credit loss allowance	91 19112 672(5 535)
Trade and other receivables net of credit loss	98 328

* Included in trade and other receivables are loans receivable from holding company and sundry debtors on which no credit losses have been raised.

Notes to the consolidated financial statements (continued)

for the year ended 28 February 2021

26.	Figures in R'000	2021	2020
	ACCOUNTS RECEIVABLE AND PAYABLE FROM TRADING ACTIVITIESAccounts receivable from trading activitiesAccounts receivable	105 700	286 531
	Accounts payable from trading activitiesAccounts payable from trading activities	105 998	285 956

These amounts arise primarily from securities trading activities that the group, through its subsidiary Vunani Securities Proprietary Limited ("Vunani Securities"), carries out on behalf of its clients.

The accounts receivable from stockbroking activities represents amounts due from clients for the purchases of equities and the accounts payable from stockbroking activities represents amounts due to clients for sales of equities. No set-off of receivables and payables is permitted as Vunani Securities has no legal right to do so as the transactions are with different counterparties with differing settlement dates.

Vunani Securities must ensure the settlement of all transactions executed by them on behalf of clients. The Settlement Authority (which is a separate entity established in terms of the JSE Rules and Directives) is responsible for the management of the settlement of these transactions and the management of the risks associated with such settlement.

Both Vunani Securities and the Settlement Authority monitor settlements and ensure that the obligation of members and their clients are met on settlement date. The Settlement Authority monitors uncommitted settlements (i.e. trades where there is either insufficient cash or dematerialised scrip to facilitate settlement) and has the authority to take all necessary action when the settlement of a transaction in equity securities is unlikely to take place on settlement date. The Settlement Authority has the ability to buy and sell equity securities as well as borrow cash as agent on behalf of a member to ensure settlement.

Vunani Securities is protected by a clause in its controlled account mandate which states that where the controlled client fails to put the member in a position before the required time to settle the transaction on settlement day, the controlled client will forfeit any rights the client may have had in respect of the said transaction. The clause also states that the client shall remain liable for any losses, costs and charges incurred or charges imposed by the member which affect the said transaction. This is covered in the material obligations section of the controlled account mandate signed by the client.

In addition, Vunani Securities ensures that no purchase transaction takes place unless the controlled client has sufficient funds in their account, which are held at JSE Trustees Proprietary Limited, and on the sell side, that the client has sufficient equity securities in dematerialised form before a sale is executed.

Figures in R'000	2021	2020
27.CASH AND CASH EQUIVALENTS
Cash and cash equivalents include the following components:
Cash at bank and cash in hand	127 523	92 138
Short-term deposits	85 712	154 391
Bank overdraft	(17 483)	(9 852)
Cash and cash equivalents in the statement of cash flows	195 752	236 678

Included in cash and cash equivalents is R0.9 million (2020: R0.9 million) pledged to the group's banks to cover guarantees in respect of the leasehold premises.

28. DISCONTINUED OPERATIONS

A strategic decision was made in October 2020 to dispose of the group's private equity segment and a smaller portion of the fund management business. This culminated in the group unbundling its private equity business to Vunani Capital Partners, through an internal restructuring process. As this unbundling related to a major line of the group's business, the related activities have been presented as a discontinued operation. The impact of the unbundling on the statement of financial position is shown in note 29.

The comparative information for the year ended 29 February 2020 consolidated statement of comprehensive income and related notes have been presented to disclose the discontinued operations separately from continuing operations.

The impact on the statement of comprehensive income is shown below:

Figures in R'000	2021	2020
RevenueOther incomeInvestment revenue	29 1432 796–	117 3993 1139 289
Profit on disposal of unbundled assetsImpairmentsFair value adjustments	25 038(5 199)(24 752)	–(1 826)(19 552)
Equity-accounted earnings (net of income tax)Commodities trading related costsOperating expenses	16 275(17 229)(43 817)	9 793(83 374)(51 955)
Results from operating activities	(17 745)	(17 113)
Finance incomeFinance costs	1(947)	31(1 652)
Net finance costs	(946)	(1 621)
Loss before income taxIncome tax expense	(18 691)(1 534)	(18 734)(683)
Loss for the year	(20 225)	(19 417)
Other comprehensive incomeItems that are or may be subsequently reclassified to profit or loss	(5 542)	(12 354)
Exchange differences on translating foreign operationsHyperinflation adjustments*	(5 004)(538)	(9 297)(3 057)
Total comprehensive income for the yearDiscontinued operations loss for the year attributable to:	(25 767)	(31 771)
Equity holders of Vunani LimitedNon-controlling interest	(18 226)(1 999)	(18 680)(737)
	(20 225)	(19 417)
Discontinued operations total comprehensive income for the period attributable to:Equity holders of Vunani LimitedNon-controlling interest	(21 828)(3 939)	(26 710)(5 061)
	(25 767)	(31 771)
Basic loss per share (cents) from discontinued operationsBasic loss per share from discontinued operations (cents)Basic headline loss per share (cents) from discontinued operations	(11.4)	(11.6)
Basic headline loss per share from discontinued operations (cents)Cash flows from discontinued operations	(26.4)	(11.6)
Net cash (utilised)/generated by operating activitiesNet cash outflow from investing activitiesNet cash inflow from financing activities	(9 823)(5 756)7 519	7 169(214)2 425
Net cash (outflow)/inflow for the period	(8 060)	9 380

* The hyperinflation adjustments related to the fund management business in Zimbabwe.

Notes to the consolidated financial statements (continued)

for the year ended 28 February 2021

29. VCP UNBUNDLING

In order to improve transparency in the financial reporting of the Financial Services Assets and Private Equity Assets of Vunani, a decision was made by the board to separate these assets through the VCP unbundling whereby the VCP Shares held by Vunani would be unbundled by way of a distribution in specie of R210.9 million to shareholders pro rata to their respective shareholdings in Vunani. In addition to improved financial reporting transparency, the board also believes that the VCP unbundling, will over time, eliminate the discount between the TNAV of Vunani and the price at which Vunani shares trade on the JSE. The unbundling was for no consideration.

The Conditions Precedent in respect of the VCP unbundling were fulfilled as announced on 1 February 2021 and accordingly the VCP unbundling was effected 11 February 2021.

The impact of the unbundling on the statement of financial position is summarised below:

Figures in R'000	2021
Property, plant and equipment	(3 884)
Investments in associates and loans to associates	(72 041)
Other investments	(79 953)
Other non-current assets	(28 119)
Inventory	(2 017)
Cash and cash equivalents	(70)
Trade and other receivables	(11 869)
Other financial liabilities	(9 789)
Deferred tax asset and liabilities	(342)
Trade and other payables	3 041
Net assets and liabilities	(205 043)

Figures in R'000	2021	2020
STATED CAPITALAuthorised
500 000 000 (2020: 500 000 000) ordinary shares of no par value	–	–
Issued161 155 915 (2020: 1161 155 915) ordinary shares of no par valueTreasury shares (number of shares held at year-end 275 711 (2020: 314 982))	696 497(675)	696 497(748)
	695 822	695 749
Reconciliation of movement in number of shares issued ('000):Balance at the beginning of the year	161 156	161 156
Balance at the end of the year	161 156	161 156
All issued shares are fully paid. Unissued ordinary shares are under the control of thedirectors in terms of a resolution of members passed at the last annual general meeting. Thisauthority remains in force until the next annual general meeting.Reconciliation of movement in stated capital (R'000):Balance at the beginning of the year	696 497	696 497
Balance at the end of the year	696 497	696 497
Cumulative redeemable preference sharesAuthorised1 000 000 cumulative, redeemable preference shares of no par value	–	–
Issued500 000 cumulative, redeemable preference shares of no par value	500 000	–
	500 000	–
Reconciliation of movement in number of shares issued ('000):Issued during the year	500 000	–
Balance at the end of the year	500 000	–
Reconciliation of movement in preference share capital (R'000):Issued during the yearDerecognised during the year	18 243(18 243)	–
Balance at the end of the year	–	–

As part of the unbundling of private equity assets the company issued 500 000 preference shares to Vunani Capital Partners in relation to the African Legend investment shares. The terms of the preference shares are such that, inter alia, all contractual rights to cash flows related to the African Legend shares and the African Legend distributions, will be transferred to Vunani Capital Partners.

In terms of IFRS 9: Financial Instruments an entity shall derecognise a financial asset when the contractual rights to the cash flows from the financial asset (i.e. the African Legend Shares) are transferred to another entity and when substantially all of the risks and rewards of ownership of the financial asset are transferred (i.e. the African Legend Distributions to Vunani Capital Partners). Based on this pass-through arrangement, the African Legend shares have been derecognised and accordingly no liability is raised for the VL Preference Shares.

Notes to the consolidated financial statements (continued)

for the year ended 28 February 2021

	Figures in R'000	2021	2020
31.	SHARE-BASED PAYMENTS
	Share-based payments reserve	426	5 624

Conditional share scheme

The company implemented a conditional share scheme in November 2015, whereby employees would be awarded performance and retention shares in the company upon vesting (which takes place over a three-year service period) and when certain conditions have been met. The company implemented a conditional share scheme plan in November 2015, whereby employees would be entitled to receive performance and retention shares in the company upon vesting (which takes place over a three year service period). The shares were issued on 15 January 2021 and 26 February 2021. The details of the share-based payment arrangements for shares that have not yet fully vested are as follows:

The fair value (excluding forfeitures) is calculated as the share price at grant date, reduced for expected dividends over the vesting period, multiplied by the number of performance shares granted. The final fair value (including forfeitures) is obtained by multiplying the above with the proportion of shares that is assumed to stay in service.

As at 28 February 2021, 100% of the shares granted on 26 February 2018 had vested.

The details of the share-based payment arrangements are below:
Number of shares at grant date – 15 Jan 2021	2 500 000
Number of shares at grant date – 26 Feb 2021	2 500 000
Fair value at grant date – 15 Jan 2021	5 942
Fair value at grant date – 26 Feb 2021	4 982
Share price at grant date – 15 Jan 2021	2.75
Share price at grant date – 26 Feb 2021	2.45
Vesting period – 15 Jan 2021	2.12 years
Vesting period – 26 Feb 2021	3.00 years
Assumed dividends payable – 15 Jan 2021	1.25% – 2.25%
Assumed dividends payable – 26 Feb 2021	1.25% – 2.25%
Forefeiture rate –15 Jan 2021	5%
Forefeiture rate – 26 Feb 2021	5%

Employee expenses	2021	2020
Share option expenses in 2014 to 2016	14 877	14 877
Transferred to retained income in 2016	(2 006)	(2 006)
Share options expensed in 2017	3 229	3 229
Share options expensed in 2018	5 981	5 981
Transferred to retained income in 2018	(435)	(435)
Share options expensed in 2019	7 844	7 844
Transferred to retained income in 2019@	(23 984)	(23 984)
Transfer to treasury shares	(3 554)	(3 554)
Share options expensed in 2020	5 009	5 009
Transferred to retained income in 2020@	(1 337)	(1 337)
Share options expensed in 2021	3 295	–
Transferred to retained income in 2021@	(1 492)	–
Transfer to treasury shares	(6 844)	–
Disposal of subsidiaries	(157)	–
Total expense recognised as employee costs	426	5 624

@ Shares that were issued as part of the share-based payment scheme vested. The shares were transferred out of the share trust (held as treasury shares) to the qualifying employees. The cumulative share-based payment expense in the reserve has been transferred between the non-distributable reserve and retained income on vesting.

31. SHARE-BASED PAYMENTS (continued)

			Number of shares
		2021	2020
26 February 2018 share issueBalance at the beginning of the yearGranted during the year		3 432–	3 612–
Forefeited during the year		( 361)	( 180)
Balance at the end of the year		3 071	3 432
Excercised at 28 February 202115 January 2021 share issueBalance at the beginning of the yearGranted during the yearForefeited during the year		3 071–2 500–	––––
Balance at the end of the year		2 500	–
Excercisable at 28 February 202126 February 2021 share issueBalance at the beginning of the yearGranted during the yearForefeited during the year		––2 500–	–––
Balance at the end of the year		2 500	–
Excercisable at 28 February 2021		–
Figures in R'000		2021	2020
OTHER FINANCIAL LIABILITIESOther financial liabilities comprise:Carried at amortised cost		56 881	82 054
Capital		56 878	81 933
Accrued interest		3	121
Carried at fair value through profit or loss		–	6 499
		56 881	88 553
Balance at the beginning of the yearAccrued interest – debenturesAccrued interest – long-term borrowingsAdvancesDerecognitionRepaymentsFair value adjustments through profit or loss	Reconciliation of movement of other financial liabilities	88 5531155 1442 668(9 835)(30 249)485	78 3192555 91838 037(8 173)(27 033)1 230
Balance at the end of the year		56 881	88 553
Balance at the beginning of the yearFair value adjustments through profit or lossDerecognition	Reconciliation of cumulative fair value adjustments	6 499485(6 984)	5 663836–
Balance at the end of the year		–	6 499
Carried at amortised cost
32.131 March 2021.	Development Bank of Southern AfricaRedeemable, cumulative debentures in Vunani Capital Proprietary Limited, with fixedinterest at 9.09%, secured by an investment in Lexshell 630 Proprietary Limited.The debentures redeemable date was amended from 30 September 2020 to	1 136	2 213
Opening balanceAccrued interest		1 1333	2 13281

Notes to the consolidated financial statements (continued)

for the year ended 28 February 2021

	Figures in R'000	2021	2020
32.2	Vendor financed loan – Vunani Solar Power Proprietary LimitedThis loan relates to the acquisition cost of the investment in Vunani Solar PowerProprietary Limited. This liability is unsecured, interest-free and will be repaid usingthe dividends from Vunani Solar Power Proprietary Limited. No dividends areexpected from Vunani Solar Power Proprietary Limited in 2021 (refer to note 15).	1 300	1 300
32.3	Other financial liabilitiesLoans are unsecured, interest-free and have no fixed terms of repayment.	4 267	5 057
32.4	Nedbank LimitedThe loan relates to the acquisition of Fairheads International Holdings (SA)Proprietary Limited ("Fairheads") by Mandlalux Proprietary Limited ("Mandlalux").The medium-term loan is repayable by monthly instalments of capital and interest(based on a straight-line amortisation schedule) and is subject to a cash sweep.The loan is repayable by August 2022. The loan is secured in terms of surety issuedby Fairheads to Nedbank Limited amounting to R75.3 million and equity cure ofR12 million.	25 405	40 250
	Opening balanceInterestRepayments	40 2502 459(17 304)	56 5324 886(21 168)
32.5	ABSA Bank LimitedThe loan relates to the acquisition of Oracle Insurance. The medium-term loan isrepayable by monthly instalments of capital and interest (based on a straight-lineamortisation schedule).The loan is unsecured, bears interest at prime plus 1.6%and is repayable by 28 November 2023.	24 063	32 823
	Opening balanceInterestRepayments	32 8232 590(11 350)	35 000992(3 169)
32.6	Finance lease liabilityThis represents secured liabilities in Mandlalux in terms of an instalment saleagreements for the acquisition of furniture and equipment. At year end the bookvalue of the assets financed were R721 975 (2020: R328 928).	710	411
	Opening balanceInterestAdvancesRepayments	41195608(404)	9840584(311)
	Total carried at amortised cost	56 881	82 054
32.7	Carried at fair value through profit or loss on initial recognitionForce Holdings Proprietary LimitedThis represents the value of the option granted to Force Holdings Proprietary Limitedto acquire Vunani's shareholding in Verbicept Proprietary Limited, at a 10% discountto the fair value calculated in terms of an agreement with Force Holdings ProprietaryLimited. The liability was disposed of as part of the unbundling transaction.	–	6 499
	Total carried at fair value through profit or loss	–	6 499
	Total financial liabilities	56 881	88 553
	Less: Current financial liabilities	(33 387)	(42 145)
	Non-current financial liabilities	23 494	46 408

Force Holdings Proprietary Limited

Ring-fenced special purpose entities have historically been used to house the group's geared equity investments and any financial liabilities that relate to such investments. Financial assets and liabilities that arise in terms of these ring-fenced structures are both fair valued through profit or loss in terms of IFRS 9.

The fair value adjustments that relate specifically to financial liabilities are not as a result of the group's inability to discharge its obligation, but rather in terms of the agreements with its lenders. The terms of the financial liabilities are such that in the event that the fair value of the asset falls below the face value of the liability, the group is not obligated to pay the full fair value of the debt, but rather a value that is directly linked to the value of the related asset. The full fair value adjustment is considered to be as a result of a change in market conditions and no portion relates to changes in the group's own credit risk.

33. LEASES – IFRS 16

Figures in R'000	Right-of-useasset	Leaseliability
Balance as at 1 March 2020	18 170	(19 675)
Foreign exchange movements	14	(121)
Payments	–	8 094
Depreciation expense	(7 719)	–
Interest expense	–	(1 650)
Additions	2 573	(1 580)
	13 038	(14 932)
Balance as at 1 March 2019	17 949	(18 900)
Other movements *	6 833	(6 900)
Foreign exchange movements	53	(63)
Payments	–	8 718
Depreciation expense	(7 787)	–
Interest expense	–	(1 316)
Business combination	1 122	(1 214)
	18 170	(19 675)

* The other movements relate to remeasurements of lease liabilities as a result of modifications to the lease agreements.

Impact on the statement of comprehensive income

Figures in R'000	2021	2020
Depreciation on the right-of-use assetRent expenseInterest expenseExpenses relating to low value leases	7 719(8 094)1 65072	7 787(8 718)1 316–
	1 347	385

Right-of-use asset

The right-of-use asset of R13.0 million (2020: R18.2 million) is included in property plant and equipment.

Lease liabilities	14 932	19 675
Current portion of lease liabilities	10 433	12 339
Non-current portion	4 499	7 336

Notes to the consolidated financial statements (continued)

for the year ended 28 February 2021

Figures in R'000	2021	2020
INVESTMENT CONTRACTSThe investment contracts relate to the group's investment in Oracle.
The investment contracts are reconciled as follows:Opening balance	310 585	–
Deposits	–	4 350
Additions through business combination	–	473 961
Fair value adjustments	56 795	7 432
Contract benefit payments	–	(175 158)
	367 380	310 585
Investment contracts with DPF
Investment contracts at fair value through profit or loss	–	249 792
Total investment contract liability	367 380	60 793
	367 380	310 585
Movement in investment contracts with DPF
Balance at beginning	249 792	–
Additions through business combinationTransfer to/(from) policyholder liabilities under insurance contracts	–	244 741
Increase in retrospective liabilities	–	5 051
Transfer to Investment contract liability	(249 792)	–
	–	249 792
Movement in investment contracts at fair value through profit or loss
Balance at beginning	60 793	–
Additions through business combination	–	229 220
Transfer to Investment contracts at fair value through profit or loss	249 792	–
Contract holder movements	56 795	(168 427)
Deposits received	–	4 350
Contract benefit payments	–	(175 158)
Fair value adjustment to policyholder liabilities	56 795	2 381
	367 380	60 793

Investment contracts with DPF

The value of investment contracts with DPF is the retrospective accumulation of the fair value of the underlying assets, which is a reasonable approximation of the fair value of this financial liability.

35.INSURANCE CONTRACT LIABILITIES
Long-term insurance contracts – grossLess: recovery from reinsurers (note 20)	89 472(6 600)	78 348(9 181)
Long-term insurance contracts – net	82 872	69 167
Movement in long-term insurance contract liabilities
Balance at beginning	78 348	–
Additions through business combination	–	81 532
Movement in long-term insurance contract liabilities
Transfer to/(from) policyholder liabilities under insurance contracts	11 124	(3 184)
	89 472	78 348

Figures in R'000	2021	2020
INSURANCE CONTRACT LIABILITIES (continued)The insurance contracts liabilities relate to the group's investment in Oracle.The insurance contracts liabilities are made up of:
35.1Health Incurred but not reported ("IBNR")Short term Unearned Premium Reserve ("UPR")Short term Incurred but not reported ("IBNR")	1 88510 3701 541	1 8477 1772 576
	13 796	11 600
The insurance contracts liabilities are reconciled as follows:Opening balanceAdditions through business combinationRecognition of premium income	11 600–3 193	–14 363(872)
Decrease in IBNR	(997)	(1 891)
	13 796	11 600
35.2Health insurance contracts – claims incurred not yet reportedLess: recovery from reinsurers	1 885–	1 847–
	1 885	1 847
Analysis of movements in outstanding claims:Balance at the beginning of the yearAdditions through business combination	1 847–	–1 467
Under provision in the prior yearBalance at the end of the year	381 885	3801 847
Health claims incurred but not yet reported (IBNR)Health IBNRThe IBNR Reserve for health claims is calculated taking into account available datawhich will influence the claiming pattern of the medical book. Adjustments are madefor seasonality within the claiming patterns. On an annual basis the actual claims arecompared to the reserved claims and adjustments and refinements are made to thereserving methodology in the ensuing financial year.
Short term insurance contracts are broken down as follows
35.3Short term Insurance: Unearned Premiums	10 370	8 660
35.4Short term Insurance: IBNR	1 541	2 576
Short term insurance contracts	11 911	11 236
35.5Unearned PremiumsBalance at beginningAdditions through business combinationPremium income receivedRecognition of premium income	8 660–30 418(28 708)	–8 049611–
Balance at end	10 370	8 660
35.6IBNRBalance at beginningAdditions through business combinationDecrease in outstanding claims	2 576–(1 035)	–4 847(2 271)
Balance at end	1 541	2 576

The decrease in IBNR was due to change in methodology used to calculate short term IBNR. This was changed to the Bornheutter-Ferguson method to calculate IBNR based on the Insurance business' own historic data, as the previous calculation was based on the previous owners group data.

Notes to the consolidated financial statements (continued)

for the year ended 28 February 2021

36. CONTRACT HOLDER LIABILITIES: ASSUMPTIONS AND ESTIMATES

The valuation of contract holder liabilities is a function of methodology and assumptions. The methodology is described in the accounting policies on page 85 to 87. The assumptions used are best estimate assumptions, with the addition of explicit compulsory margins as required by SAP 104 – Calculation of the value of the assets, liabilities and capital adequacy requirement of long-term insurers; and the discretionary margins in the accounting policies.

The process used to decide on best estimate assumptions is described below:

Mortality and disability

Annuity business:

Mortality assumptions are based on the PA90 standard table, less two years in age.

PHI claims in payment:

Disability claim recovery probabilities are based on adjusted GLTD-87 tables.

Expenses

The current level of expenses allocated to the products categories are used for setting the expense assumptions. The current level of expenses are the expenses as per the income statement

The basis used to determine per policy renewal expenses is based on:

• f Budget F2022 expenses to determine current level of expenses per policy
• f A Functional Cost Analysis (FCA), unchanged from the previous valuation
• f Estimated volumes for business at the valuation date

All expenses were allocated as at 29 February 2021.

Non-recurring expenses are identified and excluded from the analysis.

Investment returns

Market-related information is used to derive assumptions in respect of investment returns, discount rates used in calculating contract holder liabilities and renewal expense inflation.

These assumptions take into account the asset mix backing each liability type and are suitably adjusted for tax and investment expenses.

Yields from the published South African forward yield curve as at valuation date are used to discount expected cash flows at each duration.

The assumed renewal expense inflation rate is based on the difference between South African nominal and real yield curves rate.

Investment guarantee

The investment guarantee is not material and was estimated using historical APN110 compliant provisions and growth in the underlying investments.

Tax

Products where prospective reserves are held are not subject to tax and hence no tax assumption is necessary.

Basis and other changes

Assumptions and methodologies used in the financial soundness valuation basis are reviewed at the reporting date and the impact of any resulting changes in actuarial estimates is reflected in the statement of comprehensive income as they occur.

Basis and other changes increased the excess of assets over liabilities at 28 February 2021 by R2.6m (2020:R 4.8m). The major contributors to this change were as follows:

IBNR reviews, including claim ratios based on experience investigation and claim delays (set equal to industry averages). This led to a R7.8m release of reserves

PHI claims in payment data correction relating to 3 claims with both incident and reported dates prior to February 2021, resulting in a strain of R3.0m.

The expense basis was reviewed and updated to align with the more recent expense allocations to the various products categories. This resulted in a strain of R1.9m.

Other miscellaneous changes contributed R0.3m to the basis change strain.

The insurance contract liabilities are measured in accordance with the South African professional actuarial guidance (SAP 104 guidance note). Liabilities are not very sensitive to risk rates and expenses as all prospective liabilities are claims-in-payment (where the impact of risk rates are normally limited), with small expense components. Liabilities are relatively sensitive to valuation discount rates – however the above doesn't take into account the movement in assets which can counter this movement if appropriately matched assets are held.

Sensitivity to changes in assumptions have been considered in accordance with the Advisory Practice Note 107 issued by the Actuarial Society of South Africa These sensitivities are changes in experience that could occur in the future Below is a table setting out the changes to the value placed on In force business. The value placed on the In force business is most sensitive to changes in the Expense, Insurance and Lapse assumptions In addition, any change to the risk profile of the business could prompt a review of the risk margin captured in the risk discount rate, which could lead to a change in the value measure

Figures in R'000		Discountrate	Interest rate	Equityvalues	Equityreturns	Expenses	Lapses	Insurance
Value In forceCost of CapitalNet value in	Base77.8(4.6)	+1%72.7(4.4)	+1%80.1(4.6)	-10%77.1(4.6)	-1%78.4(4.6)	-10%86.5(4.6)	-10%83.9(4.6)	-5%84.2(4.6)
forceNet valuein force	73.2	68.3	75.5	72.5	73.8	81.9	79.3	79.6
percentagechanges		-7%	3%	-1%	1%	12%	8%	9%

Factors affecting demographic risks the insurance business:

• f The most significant factors that could substantially change the frequency of claims are epidemics or widespread changes in lifestyle (smoking, exercise, eating), resulting in more or earlier claims
• f Economic conditions can potentially affect retrenchment claims as well as morbidity claims where benefits are determined in terms of the ability to perform an occupation.
• f Medical advances can potentially affect the size and severity of medical claims (including critical illness claims).

Anti-selection, such as where a client who has a pre-existing condition or disease purchases a product where a benefit will be paid on death or in the event of contracting such a disease.

The effect of selective terminations, which means policyholders are less likely to terminate voluntarily if the cover is more likely to be needed in the foreseeable future.

f Concentration risk, which is the risk of a large number of claims from a single event or in a particular geographical area.

Demographic risks are managed as follows:

• f Risk premiums on most smoothed bonus and market-related contracts may be adjusted within the terms and conditions of the contracts. The ability of the company to adjust these charges so that on average they reflect actual mortality experience reduces mortality risk. There is residual mortality risk resulting from delays in identifying worsening experience and adjusting charges as well as marketing pressures and client expectation management.
• f To reduce cross-subsidisation of risks and the possibility of anti-selection, premium rates differentiate on the basis of some or all of age, gender, occupation, smoker status, education, income level, geographic region and the results of underwriting investigations. Experience investigations have shown that these are reliable indicators of the risk exposure. – A guarantee period shorter than the policy term applies to most risk business, and enables the Group to review premium rates on in-force contracts during the life of the contracts. The guarantee period on whole-life products is generally within the range of 10 to 15 years. – All policy applications are subject to underwriting rules. Applications for risk cover above certain limits are reviewed by experienced underwriters and evaluated against established standards.
• f Compulsory testing for HIV is carried out in all cases where the applications for risk cover exceed limits specified for a product. Where HIV tests are not required, this is fully reflected in the pricing and experience is closely monitored.

Notes to the consolidated financial statements (continued)

for the year ended 28 February 2021

36. CONTRACT HOLDER LIABILITIES: ASSUMPTIONS AND ESTIMATES (continued)

Underwriting is done to identify non-traditional risks and take appropriate action, such as applying additional premium loadings or altering benefit terms.

f Additional provisions are held in respect of the potential deterioration of the mortality experience of supplementary benefits and direct marketing business

Reinsurance agreements are used to limit the risk on any single policy and aggregation of policies. Sums assured above a negotiated retention level are reinsured on a risk premium basis

Concentration risk is reduced by diversification of business over a large number of uncorrelated risks and several classes of insurance,

	Figures in R'000	2021	2020
37.	NET TAXATION PAYABLEThe net tax payable includes the following:
	Current tax payable	4 823	1 533
	Business combination	–	2 118
	Dividends withholding tax (payable as a result of securities broking activities)	74	87
	Securities transfer tax (payable as a result of securities broking activities)	3 263	2 143
		8 160	5 881
38.	TRADE AND OTHER PAYABLESFinancial liabilities
	Trade creditors	21 814	112 433
	Other payables	42 440	24 487
	Accrued expenses	23 576	18 821
	Insurance trade and other payablesContingent consideration liability	49 452–	32 6582 370
		137 282	190 769
	Non-financial liabilities
	Value added tax (VAT)	5 231	2 872
	Accrued leave pay	4 543	4 865
		9 774	7 737
		147 056	198 506

The decrease in trade creditors relates mainly to the disposal of the boron and agriculture division. Refer to note 22.

39. RETIREMENT BENEFITS

Defined contribution plan

It is the policy of the group to provide retirement benefits to all its employees through a defined contribution provident fund, which is subject to the Pension Funds Act of 1956. The group is under no obligation to cover any unfunded benefits.

Employees make an election to join the provident fund and their contributions to the fund are included with staff costs as detailed in note 12.

Figures in R'000	2021	2020
CASH GENERATED BY OPERATING ACTIVITIES
Profit before income tax expense from continuing operations	9 988	70 122
Loss before income tax expense from discontinued operations	(18 691)	(18 734)
Adjusted for:
Depreciation of property, plant and equipment	2 822	3 197
Depreciation of right-of-use assets	7 719	7 787
Equity-accounted earnings (net of income tax)	(17 678)	(9 968)
Fair value adjustments	883	26 387
Fair value adjustments to third party insurance liabilities	11 124	(3 184)
Fair value adjustments to investment contract liabilities	56 795	7 432
Change in reinsurance assets movement	2 580	(265)
Short-term insurance: Incurred but not reported (IBNR)	(997)	1 891
Short-term insurance: Unearned premiums	4 400	872
Short term Insurance: DAC	(1 206)	–
Bargain purchase gain	(530)	(34 889)
Impairment of investments in associates	2 811	–
Impairment reversal on loans to associates	–	(300)
Impairment loss on trade and other receivables	9 412	4 564
Impairment on VIF asset	41 502	–
Inventory write off	1 517	–
Profit on disposal of subsidiaries	(17 831)	–
Amortisation of intangible assetsShare-based payments expense	16 3163 295	12 4025 009
Recycling of foreign currency translation reserve through profit or loss	(7 263)	–
Foreign currency translation loss	29	1 885
IAS 19 – employee benefit costs	4 551	–
Interest received from investments and finance income	(25 511)	(10 836)
Investment revenue	(4 458)	(12 386)
Finance costs	8 567	9 801
Changes in working capital:
Increase in trading securities	(31)	(78)
Decrease in inventory	–	(36 647)
(Decrease)/increase in trade and other receivables	(19 922)	22 836
Increase in trade and other payables	32 777	33 071
Increase in reinsurance assets	(7 134)	(3 074)
Decrease in insurance liabilities	–	(2 763)
Decrease in accounts receivable and payable from trading activities	(148)	(1 115)
Cash generated by operating activities	95 688	73 017
INCOME TAX PAID
Payable at beginning of the year	(1 533)	(1 430)
Current year tax charge	(18 181)	(19 350)
Payable at end of the year (refer to note 37)	4 823	1 533
	(14 891)	(19 247)

Notes to the consolidated financial statements (continued)

for the year ended 28 February 2021

Figures in R'000	2021	2020
BASIC AND HEADLINE EARNINGS PER SHARE
Basic earnings per share (cents)	12.9	22.3
Basic and diluted earnings per share from continuing operations (cents)Basic and diluted loss per share from discontinued operations (cents)	24.3(11.4)	33.9(11.6)
Basic headline earnings per share (cents)	7.2	0.6
Basic headline earnings per share from continuing operations (cents)Basic headline loss per share from discontinued operations (cents)	33.6(26.4)	12.2(11.6)
Basic and diluted earnings per shareThe calculation of basic and diluted earnings per share at 28 February 2021 was basedon the profit attributable to ordinary shareholders of R20.7 million (2020: R35.9 million),and a weighted average number of ordinary shares outstanding of 160.2 million(2020: 160.6 million), and 160.2 million (2020: 160.6 million) in the case of dilutedearnings per share, calculated below:Headline and diluted headline earnings per shareThe calculation of headline and diluted headline earnings per share at 28 February2021 was based on headline earnings attributable to ordinary shareholders of R11.6 million(2020: R0.9 million), and a weighted average number of ordinary shares outstanding of160.2 million (2020: 160.6 million), and 160.2 million (2020: 160.6 million) in the case ofdiluted headline earnings per share, calculated as follows:Basic and diluted loss – continuingBasic and diluted loss – DiscontinuedHeadline and diluted headline earnings – continuingHeadline and diluted headline earnings – DiscontinuedWeighted average number of ordinary shares ('000s)Issued ordinary shares at the beginning of the year	38 893(18 226)161 156	54 573(18 680)161 156
Effect of own shares held	(941)	(540)
Weighted average number of shares in issue during the year	160 215	160 616
Number of shares in issue at the end of the year	161 156	161 156
Dilutive weighted average number of ordinary shares ('000s)Dilutive weighted average number of ordinary shares ('000s)Issued ordinary shares at the beginning of the yearEffect of own shares held	161 156(941)	161 156(540)
Diluted weighted average number of shares in issue during the year	160 215	160 616
Number of shares in issue at the end of the year	161 156	161 156
Potential dilutive sharesThe shares issued as part of the employee share incentive scheme could potentially dilutebasic earnings in the future. The employee shares do not have a dilutive effect in thecurrent year.In the current year, 5.615 million share options (2020: 3.003 million) were excluded fromthe diluted weighted-average number of shares calculation because their effect would havebeen anti-dilutive.The average market value of the company's shares for the purposes of calculating thedilutive effect of share options was based on quoted market prices at the beginning of theyear and at year end.Shares issued as part of the share incentive scheme ('000s)	–	–

42. BASIC AND HEADLINE EARNINGS PER SHARE (continued)

Figures in R'000	2021	2020
Net asset value per share (cents)Net asset value per share is the equity attributable to equity holders of Vunani Limited,utilising all shares in issue, including treasury shares.Net tangible asset value per share (cents)Net tangible asset value per share is the equity attributable to equity holders of Vunani	173.8	302.2
Limited, (excluding goodwill and intangible assets) utilising all shares in issue, includingtreasury shares.	2.5	98.3
Headline earningsProfit for the year attributable to equity holders of VunaniAdjusted for:	20 667	35 893
IFRS 16 leasesLease modification gain	–	(120)
Profit on disposal of unbundled assets
Profit on disposal of unbundled assets	(25 038)	–
Non-controlling interest	932	–
Taxation	–	–
Business combinationBargain purchase gain	(530)	(34 889)
Impairment of intangible assets
Impairment of VIF asset	41 502	–
Non-controlling interest	(14 523)	–
Deferred taxation	(11 413)	–
	11 597	884
Headline and diluted headline earnings per share (cents)	7.2	0.6
Basic headline and diluted earnings per share from operationsBasic headline and diluted loss per share from discontinued operations	33.6(26.4)	12.2(11.6)

43. COMMITMENTS

Guarantees and sureties provided

The group has provided guarantees and sureties to third parties as at 28 February 2021 (including investments in associates) in the amount of R157.4 million (2020: R164.1 million). The probability of the liability materialising in terms of these guarantees and sureties is dependent on the performance of the underlying businesses that are servicing the debt that is linked to the guarantees and sureties.

Notes to the consolidated financial statements (continued)

for the year ended 28 February 2021

44. NON-CONTROLLING INTEREST

The following table summarises the information relating to each of the group's subsidiaries' material non-controlling interest ("NCI") before intra-group eliminations. Intra-group transactions and balances that eliminate on consolidation are reflected separately.

Figures in R'000	VunaniProp714ProprietaryLimited	PurposeVunaniAssetManagement(Private)Limited #	VunaniFundManagersBotswanaLimited &	OracleInsuranceProprietaryLimited –Consolidated	TelosProprietaryLimited	Otherindividuallyimmaterialnoncontrollinginterests	entitiesunbundled #	Intragroupeliminations	Total
2021
NCI percentage	22%	35%	40%	48.3%	22.4%
Non-current assets	328	–	4 149	484 812	35 000	8 682	–
Current assets	32 989	–	11 299	179 003	5 752	11 341	–
Non-current liabilities	–	–	(236)	(476 970)	–	(236)	–
Current liabilities	(27 744)	–	(9 086)	(87 590)	(22 838)	(19 395)	–
Net assets	5 573	–	6 126	99 255	17 914	392
Carrying amount of
NCI	1 226	–	2 450	47 907	4 013	(2 144)	–	–	53 452
Revenue	–	4 239	26 953	217 388	14 400	–	18 003
Profit/(loss)	7 985	(9 578)	652	(41 900)	11 114	1 261	(8 250)
OCI	–	(5 542)	788	–	–	–	–
Total comprehensive
income	7 985	(15 120)	1 441	(41 900)	11 114	2 702	(8 250)
Profit/(loss) allocated
to NCI	1 757	(3 352)	261	(20 224)	2 490	394	(2 151)	–	(20 826)
OCI allocated to NCI	–	(1 940)	315	–	–	–	–	–	(1 624)
Net (decrease)/increasein cash and cash
equivalents	(2)	–	(107)	(22 244)	–	–	–	–	(22 353)
Dividends paid tonon-controlling interest	102	–	–	–	–	–	–	–	102

* Less than R1 000.

As part of the unbundling the group disposed of NCI relating to Purpose Vunani and Vunani Resources. Refer to note 27 & 28 for more information.

Purpose Vunani Asset Management (Private) Limited

NCI opening balance	1 782
Profit for the year	(3 352)
FCTR for the year	(1 940)
NCI disposed off	3 510

& Vunani Fund Managers Botswana (Proprietary) Limited

In the prior year, group acquired 60% investment in Vunani Fund Managers Botswana (Proprietary) Limited. In the current year, the purchase price allocation was finalised which resulted in an increase in the net assets allocated to non-controlling interest by R1.8 million as a transaction between equity holders.

Net assets acquired	4 549
Non-controlling interest	(1 820)
Purchase price	2 000
Gain on bargain purchase	729
Recognised in the prior year	199
Recognised in the current year	530

44. NON-CONTROLLING INTEREST (continued)

Figures in R'000	VunaniProp714ProprietaryLimited	PurposeVunaniAssetManagement(Private)Limited	VunaniResourcesProprietaryLimited	OracleInsuranceProprietaryLimited -Consolidated	Telos(Proprietary)Limited	Otherindividuallyimmaterialnon-controllinginterests	Intragroupeliminations	Total
2020
NCI percentage	22%	35%	25%	48.3%	22.4%
Non-current assets	481	3 326	1 080	415 787	35 000	8 694
Current assets	26 883	2 088	99 135	213 546	4 800	12 969
Non-current liabilities	–	(194)	–	(422 274)	–	(362)
Current liabilities	(29 313)	(130)	(91 675)	(65 904)	(33 000)	(28 159)
Net assets	(1 949)	5 090	8 540	141 155	6 800	(6 858)
Carrying amount of
NCI	(429)	1 782	2 135	68 131	1 523	(2 468)	–	70 674
Revenue	–	1 926	104 205	59 723	9 600	4 569
Profit/(loss)	(962)	365	(3 462)	6 445	6 800	5 204
OCI	–	(12 354)	–	–	–	373
Total comprehensive
income	(962)	(11 989)	(3 462)	6 445	6 800	5 577
Profit/(loss) allocated
to NCI	(212)	128	(866)	3 111	1 523	(109)	–	3 576
OCI allocated to NCI	–	(4 324)	–	–	–	110	–	(4 214)
Net
increase/(decrease)
in cash and cash
equivalents	*	*	2 012	87 936	–	1 364
Dividends paid to
non-controlling interest	1 244	–	–	–	–	–		1 244

* Less than R1 000.

Notes to the consolidated financial statements (continued)

for the year ended 28 February 2021

45. OPERATING SEGMENTS

The group has seven reportable segments being fund management, asset administration, advisory services, institutional securities broking, insurance, commodities trading and other investments. The group's strategic business segments, offering different products and services, are managed separately, requiring different skill, technology and marketing strategies. For each of the strategic business segments, the group's chief Executive officer reviews internal management reports on a monthly basis. The group's chief executive officer is the chief operating decision maker.

The fund management and other investments segments are geographically located in South Africa and, on a smaller scale, in Botswana, Malawi and Zimbabwe. The institutional securities broking, commodities trading, asset administration and advisory services segments are geographically located in South Africa. The insurance segment, located in Eswatini, was acquired during the year.

There are no single major customers.

The following summary describes the operations in each of the group's reportable segments:

Basis of measurement

The group uses the following principles to determine segment profit or loss, segment assets and segment liabilities:

Any transactions between segments are eliminated.

All segment profits or losses and the group's profits or losses are measured in the same manner, using the accounting policies described in notes 1 to 3.

All segment assets and liabilities and the group's assets and liabilities are measured in the same manner, using the accounting policies described in notes 1 to 3.

There have been no changes from prior periods in the measurement methods used to determine reported segment profit or loss, except for the impact of new standards.

Following the decision to restructure the group's assets, the fund management operations in Malawi, Zimbabwe and the private equity segments has been shown as a discontinued operation. Comparative segmental disclosures have been adjusted to reflect the impact of the discontinued operations.

Continuing operations

2021Figures in R'000	Fundmanage-ment	Assetadmini-stration	Advisoryservices	Institutionalsecuritiesbroking	Insurance	Total
Revenue	133 553	144 579	16 922	46 248	217 388	558 690
Finance income and interest
received from investments	1 945	2 338	385	1 477	19 366	25 511
Finance costs	(136)	(3 183)	(1 607)	(161)	(2 533)	(7 620)
Depreciation	(2 911)	(4 123)	(1 419)	(54)	(1 733)	(10 240)
Amortisation of intangible assets	–	(12 328)	–	–	(3 988)	(16 316)
Impairment of value in force
business intangible asset	–	–	–	–	(41 502)	(41 502)
Fair value adjustments	60	–	–	1 808	(45 917)	(44 049)
Equity accounted earnings	–	–	1 403	–	–	1 403
Income tax income/(expense)	(7 474)	(3 284)	1 773	2 039	17 024	10 078
Reportable segment profit/(loss)
after tax	17 996	19 600	5 550	14 190	(37 270)	20 066
Reportable segment assets	93 024	217 589	78 010	141 014	661 652	1 191 289
Investment in associates	–	–	1 763	–	–	1 763
Capital expenditure	–	–	–	–	–	–
Reportable segment liabilities	(34 322)	(52 377)	(61 539)	(120 834)	(588 708)	(857 780)

* Less than R1 000.

45. OPERATING SEGMENTS (continued)

Discontinued operations

2021Figures in R'000	Fundmanage-ment	Commoditiestrading	Otherinvestments	Total
Revenue	4 239	18 014	6 890	29 143
Finance income and interest received from investments	–	1	–	1
Finance costs	–	(947)	–	(947)
Depreciation	–	(300)		(300)
Amortisation of intangible assets	–	–	–	–
Impairment reversal of loans to associates	–	–	–	–
Fair value adjustments	(1 347)	–	(26 216)	(27 563)
Equity accounted earnings	(676)	1 007	15 944	16 275
Income tax income/(expense)	(1 649)	276	(161)	(1 534)
Reportable segment profit/(loss) after tax	3 194	(16 604)	(6 815)	(20 225)
Reportable segment assets	–	–	–	–
Investment in associates	–	–	–	–
Reportable segment liabilities	–	–	–	–

2020

Continuing operations

Figures in R'000	Fundmanage-ment	Assetadmini-stration	Advisoryservices	Institutionalsecuritiesbroking	Insurance	Total
Revenue	94 884	139 245	13 969	36 936	59 723	344 757
Finance income and interest
received from investments	1 225	2 614	1 039	772	5 156	10 806
Finance costs	(39)	(5 527)	(1 100)	(204)	(1 279)	(8 149)
Depreciation	(1 939)	(5 397)	(2 360)	(44)	(832)	(10 572)
Amortisation of intangible assets	–	(11 405)	–	–	(997)	(12 402)
Impairment reversal of loans to
associates	–	–	300	–	–	300
Fair value adjustments	88	–	–	(5 844)	(5 062)	(10 818)
Equity accounted earnings	–	–	175	–	–	175
Income tax income/(expense)	(6 098)	(5 681)	39	1 320	(817)	(11 237)
Reportable segment profit/(loss)
after tax	10 663	16 575	(248)	(3 694)	35 589	58 885
Reportable segment assets	86 811	227 602	7 373	297 365	628 099	1 247 250
Investment in associates	–	–	–	–	–	–
Capital expenditure	–	–	–	–	–	–
Reportable segment liabilities	(36 702)	(71 209)	(2 434)	(293 070)	(523 501)	(926 916)

* Less than R1 000.

Discontinued operations

Figures in R'000	Fundmanage-ment	Commoditiestrading	Otherinvestments	Total
Revenue	1 926	105 416	10 057	117 399
Finance income and interest received from investments	–	31	–	31
Finance costs	–	(1 397)	(255)	(1 652)
Depreciation	(58)	(354)	–	(412)
Amortisation of intangible assets	–	–	–	–
Impairment reversal of loans to associates	–	–	–	–
Fair value adjustments	181	(664)	(19 069)	(19 552)
Equity accounted earnings	(490)	–	10 284	9 794
Income tax income/(expense)	1	(73)	(532)	(604)
Reportable segment profit/(loss) after tax	(125)	(9 425)	(9 867)	(19 417)
Reportable segment assets	5 414	92 789	274 993	373 196
Investment in associates	5 758	–	54 029	59 787
Reportable segment liabilities	(332)	(91 675)	(43 760)	(135 767)

Notes to the consolidated financial statements (continued)

for the year ended 28 February 2021

46. RELATED PARTIES

Relationships

Associates Refer to note 17 Directors Refer to note 47

Majority shareholder Bambelela Capital Proprietary Limited

		Effective equity holding
Direct and indirect subsidiaries	2021	2020
Vunani Capital Proprietary Limited	100%	100%
Invest West Real Estate Proprietary Limited	100%	100%
Ingwecron Proprietary Limited %	–	75%
Komur Mining (Private) Limited ** %	–	75%
Lexshell 630 Investments Proprietary Limited	100%	100%
Loato Properties Proprietary Limited	100%	100%
Locivert Proprietary Limited	100%	100%
Mandlamart Proprietary Limited	100%	100%
Mandlalux Proprietary Limited	100%	100%
Fairheads Benefit Services Proprietary Limited	100%	100%
Fairheads International Holdings Proprietary Limited	100%	100%
Fairheads Financial Services Proprietary Limited	100%	100%
Olimonox Proprietary Limited	100%	100%
Purpose Vunani Asset Management (Private) Limited ** %	–	65%
Spaciros Proprietary Limited	51%	51%
Vunani Capital Zimbabwe (Private) Limited **	75%	75%
Vunani Passenger Logistics Proprietary Limited	100%	100%
Vunani Fund Managers Proprietary Limited	70%	70%
Vunani Mining Proprietary Limited %	–	100%
Vunani Private Clients Stockbroking Proprietary Limited	100%	100%
Vunani Mining and Resources Proprietary Limited	75%	75%
Vunani Sponsors Proprietary Limited	100%	100%
Vunani Resources Proprietary Limited %	–	75%
Ginolor Proprietary Limited %	–	51%
Vunani Ssafen Karoo Proprietary Limited %	–	51%
Vunani Ssafen Amerfoot Proprietary Limited %	–	51%
Vunani Mion Properties Proprietary Limited	61%	61%
Almecel Proprietary Limited	61%	61%
Vunani Property Asset Management Proprietary Limited	100%	100%
Vunani Africa Investments Proprietary Limited	100%	100%
Vunani Holdings Swaziland Proprietary Limited &	80%	80%
AME Capital (Proprietary) Limited $	60%	60%
Vunani Fund Managers Botswana (Proprietary) Limited	60%	60%
Telos Proprietary Limited &	77%	77%
Oracle Insurance (Proprietary) Limited &	52%	52%
Oracle Life (Proprietary) Limited &	52%	52%
Vunani Securities Proprietary Limited	100%	100%
Vunani Nominee Proprietary Limited	100%	100%
Vunani Capital Investments Proprietary Limited	100%	100%
Vunani Capital Markets Proprietary Limited	100%	100%
VProp714 Proprietary Limited	78%	78%
Dreamworks Investments 125 Proprietary Limited	66%	66%
Vunani Share Incentive Scheme Trust	100%	100%

All the above direct and indirect subsidiaries' financial results are consolidated.

% The company was disposed of during the year as part of the unbundling. Refer to note 28 on discontinued operations for more information.

& The company is registered and conducts business in Eswatini.

$ The company is incorporated and conducts its business in Botswana.

Other related parties

Akkersbloom Enterprises (Private) Limited **#

Tutuni Investments Proprietary Limited #

Vunani Fund Managers Share Trust

** The company is incorporated and conducts its business in Zimbabwe.

# Vunani has entered into a legal agreement with the shareholders and the companies which entitles Vunani, inter alia, to the economic benefits accruing from the activities of the companies. The directors of these companies are executive directors of Vunani. These directors are responsible for the strategic and operational activities of these companies and therefore on this basis, 100% of the company's results have been consolidated in the group's results.

46. RELATED PARTIES (continued)

Related party balances and transactions

All related party balances and transactions were eliminated on consolidation except for those balances and transactions with associates (refer to note 17) and directors (refer to note 47) and disclosed below.

Loan with the majority shareholder

Vunani Capital Proprietary Limited has an operating loan with the ultimate holding company, Bambelela Capital Proprietary Limited of R132 000 (2020: R132 000) (refer to note 25).

Vunani Fund Managers Share Trust

Vunani has established a trust, the primary objective of which is to provide long-term incentives to key staff at Vunani Fund Managers ("VFM") and to align the interests of eligible employees and the long term goals of VFM. To effect this transaction, a Sale of Shares and Loan Agreement was entered into between Vunani Capital (VC) and the Trustees of the VFM Share Trust in the 2019 financial period.

This Agreement was concluded on commercial terms whereby VC sold 30% of its shareholding in VFM to the trust for a consideration of R16 680 000. VC furthermore recorded that it would allow the purchase price to remain outstanding as a loan. The loan bears interest at the prime rate and will be repaid through dividends received on the VFM shares (minimum of 20% of the dividend received with any greater amount at the discretion of the trustees), with an envisaged final repayment date of 28 February 2030.

The beneficiaries of the trust would be awarded participatory interests equivalent to its 30% shareholding in VFM. The beneficiary's participatory rights would vest over time. Once vested their participatory interests would entitle them to dividends. The trust would earn dividends from its shareholding in VFM. 20% of any dividends received by the trust would be used to repay the loan from VC. The balance of the dividends can be used to, pay dividends to participatory right holders, fund any disposal of participatory interests and invest in other assets.

The Sale Agreement does not provide the VC with recourse as security or otherwise to the Sale Shares as settlement of the loan.

for the year ended 28 February 2021

47. DIRECTORS' REMUNERATION AND BENEFITS

No loans were made to directors during the year (2020: R nil). There were no material transactions with directors, other than the following:

Figures in R'000	Non-executivedirectors'fees	Salaries	Bonusesaccrued	Providentfund andmedical aidcontributions	Current yearsharebasedpaymentexpense	Total
2021
E Dube	–	4 300	5 911	904	737	11 852
NM Anderson	–	3 023	3 982	434	493	7 932
BM Khoza	–	2 875	3 982	632	493	7 982
T Mika	–	1 352	1 805	151	248	3 556
LI Jacobs (Chairman)	339	–	–	–	–	339
G Nzalo	183	–	–	–	–	183
JR Macey	237	–	–	–	–	237
N Mazwi	183	–	–	–	–	183
XP Guma	156	–	–	–	–	156
S Mthethwa	156	–	–	–	–	156
M Golding	156	–	–	–	–	156
Total	1 410	11 550	15 680	2 121	1 971	32 732
2020
E Dube	–	4 022	3 319	888	906	9 135
NM Anderson	–	2 900	2 236	408	607	6 151
BM Khoza	–	2 714	2 236	594	607	6 151
T Mika	–	1 173	881	131	304	2 489
LI Jacobs (Chairman)	320	–	–	–	–	320
G Nzalo	173	–	–	–	–	173
JR Macey	198	–	–	–	–	198
N Mazwi	173	–	–	–	–	173
XP Guma	147	–	–	–	–	147
S Mthethwa	147	–	–	–	–	147
M Golding	147	–	–	–	–	147
Total	1 305	10 809	8 672	2 021	2 424	25 231

Short-term benefits to key management personnel amounted to R27 905 (2020: R19 868).

Aggregate amounts paid to directors amounts to:

Figures in R'000	2021	2020
For services as directors of the companyTotal remuneration and benefits received from companyTotal remuneration and benefits received from company's subsidiaries and fellow	1 410	1 305
subsidiaries	31 322	23 926
	32 732	25 231

There are no service contracts for non-executive directors. The executive directors have service contracts with the group terminable upon one month's written notice. No executive director has a fixed-term contract.

Prescribed officers

Details of prescribed officers and key management personnel are disclosed in note 70 (Vunani Limited company financial statements).

47. DIRECTORS' REMUNERATION AND BENEFITS (continued)

Shareholdings per director of the company (including non-executive directors) and major operating subsidiaries

		Number of shares held
2021	Beneficiallydirect('000s)	Beneficiallyindirect('000s)	Total numberof shares held('000s)
E Dube	366	25 284	25 650
NM Anderson	1 278	14 779	16 057
BM Khoza	564	14 779	15 343
T Mika	528	–	528
R Krepelka	2 990	–	2 990
M Brown	2 616	–	2 616
G Gould	2 616	–	2 616
L Jacobs	33	–	33
S Mthethwa	–	6 217	6 217
M Golding	–	30 040	30 040
	10 991	91 099	102 090

E Dube acquired 10 000 shares on 14 June 2021, 18 000 shares on 28 June 2021 and 10 000 shares on 2 July 2021. There have been no other changes in shareholdings of the other directors between 28 February 2021 and the approval of the integrated report.

2020	('000s)	('000s)	('000s)
E Dube	311	24 634	24 945
NM Anderson	806	14 779	15 585
BM Khoza	–	14 779	14 779
T Mika	275	–	275
JJ Rossouw	615	401	1 016
R Krepelka	2 990	–	2 990
M Brown	2 616	–	2 616
G Gould	2 616	–	2 616
L Jacobs	33	–	33
S Mthethwa	–	7 200	7 200
M Golding	–	30 040	30 040
	10 262	91 833	102 095

Notes to the consolidated financial statements (continued)

for the year ended 28 February 2021

	Figures in R'000	Note	Carryingamount	Undiscountedcontractualcash flows	Less than1 year	1 – 5 years	Greaterthan5 years
48.	FINANCIAL INSTRUMENTS48.1Liquidity risk2021
	Non-derivative financial liabilities		(838 470)	(842 171)	(310 634)	(524 696)	(6 842)
	Non-interest-bearingTrade and other payables(excluding VAT and leave pay)		(137 282)	(137 282)	(137 282)	––	––
	Accounts payable from tradingactivitiesOther financial liabilities at		(105 998)	(105 998)	(105 998)	–	–
	amortised costOther financial liabilities at fair		(55 745)	(55 745)	(5 567)	(50 178)	–
	value through profit or lossFixed interest rate instruments –		–	–	–	–	–
	DBSAVariable interest rate instrumentsInvestment contractsInsurance contract liabilities		(1 136)(67 661)(367 380)(103 268)	(1 140)(71 358)(367 380)(103 268)	(1 140)(46 851)–(13 796)	–(17 666)(367 380)(89 472)	–(6 842)––
	2020
	Non-derivative financial liabilities		(975 663)	(990 201)	(855 753)	(108 862)	(25 587)
	Non-interest-bearingTrade and other payables					–	–
	(excluding VAT and leave pay)Accounts payable from trading		(190 769)	(190 769)	(190 769)	–	–
	activitiesOther financial liabilities at		(285 956)	(285 956)	(285 956)	–	–
	amortised costOther financial liabilities at fair		(6 357)	(6 357)	(6 357)	–	–
	value through profit or lossFixed interest rate instruments –		(6 499)	(6 499)	(6 499)	–	–
	DBSA		(2 213)	(2 262)	(2 262)	–	–
	Variable interest rate instruments		(83 336)	(97 825)	(41 725)	(30 514)	(25 587)
	Investment contractsInsurance contract liabilities		(310 585)(89 948)	(310 585)(89 948)	(310 585)(11 600)	–(78 348)	––

Management of liquidity risk

Liquidity risk is the risk that the group will encounter difficulty in meeting obligations associated with financial and insurance liabilities (that are settled by delivering cash or another financial asset), arising because of the possibility that the group could be required to pay its liabilities earlier than expected.

The group's approach to managing liquidity is by managing its working capital, capital expenditure and other financial obligations, and 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. Ultimate responsibility for liquidity risk management rests with the board of directors. Typically the group ensures that it has sufficient cash on hand to meet operational expenses, including the servicing of financial obligations. The group also has access to R20.0 million overdraft facilities, which may be used to manage its financial obligations if necessary.

48. FINANCIAL INSTRUMENTS (continued)

48.1 Liquidity risk (continued)

Managing liquidity risk of insurance liabilities

Contract holder liabilities

Expected cash flows, i.e. the estimated timing of repayment of the amounts recognised in the statement of financial position, are disclosed for these liabilities in the maturity analysis below. The assumptions used to calculate the statement of financial position value of these liabilities are disclosed in note 36.

Contractual cash flows for investment contract liabilities with DPF are disclosed in the maturity analysis below.

The earliest contractual maturity date is used for these liabilities.

The contractually required cash flows for policies that can be surrendered are the surrender values of such policies. It is assumed that surrender values are contractually available on demand and therefore these policies are disclosed as open-ended.

For policies with no surrender value, the estimated contractual cash flow is disclosed.

Figures in R'000	2021	2020
Market risk
Interest rate risk
The company's interest rate exposure is as follows:
Fixed rate instruments
Financial liabilities	(1 136)	(2 213)
Variable rate instruments
Financial assets	213 235	246 530
Financial liabilities	(67 661)	(83 336)
	144 438	160 980
Cash flow sensitivity analysis for fixed rate instruments
A sensitivity analysis has not been included for fixed rate instruments as they are not
sensitive to interest rate risk.
Cash flow sensitivity analysis for variable rate instruments
A change of 50 basis points in the interest rates at the reporting date would have
increased/(decreased) profit or loss and equity by the amount shown below. This
analysis assumes that all other variables remain constant.
Effect on statement of comprehensive income (profit/(loss)) and equity before taxation
50 bps increase	728	805
50 bps decrease	(728)	(805)
Management of interest rate risk
The group generally adopts a policy of ensuring that its exposure to changes in
interest rates is limited by either fixing the rate or by linking the rate to the prime rate
over the period of the respective loan.Equity price risk
The company's equity price risk is as follows:
Unlisted financial assets at fair value through profit or loss
Other investments	–	97 522
Other non-current assets	–	33 302
Insurance related investments	143 956	117 782
Listed financial assets at fair value through profit or loss
Other investments	14 572	13 930
Insurance related investments	254 127	168 807
Trading securities	162	143
	412 817	431 486

for the year ended 28 February 2021

48. FINANCIAL INSTRUMENTS (continued)

48.2 Market risk (continued)

Figures in R'000		2021	2020
	A change of 10% in the fair value of investment at the reporting date would haveincreased/(decreased) equity and profit or loss by the amount shown below. Thisanalysis assumes that all other variables remain constant.Effect on statement of comprehensive income (profit/(loss)) and equity before taxation
	10% increase10% decrease	41 282(41 282)	43 149(43 149)
	Market price riskThe group is exposed to market price changes on inventory held at fair value less
	cost to sell.Inventory - held at fair value less cost to sell	–	6 342
		–	6 342
	A change of 10% in the fair value of market prices on inventory held at fair value atthe reporting date would have increased/(decreased) equity and profit or loss by theamount shown below. This analysis assumes that all other variables remain constant.Effect on statement of comprehensive income (profit/(loss)) and equity before taxation
	10% increase10% decrease	––	634(634)
	Foreign currency riskThe group is exposed to foreign currency risk on its investments in subsidiaries,investments in associates that carry businesses outside of the Republic of South Africaand other investments held in foreign countries. The group does not hedge againstforeign currency exposures on its investments.The group's exposure to the changes in the US dollar on the profit or loss recognisedin its consolidated financial statements is analysed below.Effect on statement of comprehensive income (profit/(loss)) and equity before taxation
	10% increase in USD10% decrease in USD	69(69)	1 2501 038
48.3	Credit riskCredit risk is the risk that one party to a financial instrument will cause a financialloss for the other party by failing to discharge an obligation.The carrying amount of financial assets represents the maximum credit exposure.The maximum exposure of credit risk was:Loans to associates (net of impairment)Accounts receivable from trading activitiesTrade and other receivables (net of impairment)Cash and cash equivalentsReinsurance assetsInsurance related investments	1 210105 70079 944213 23524 689398 084	6 745286 53198 328246 53020 136286 589
		822 862	944 859

Credit risk management on insurance related balances:

One of the tools that the group uses to manage its credit risk is through a group credit policy for money market and debt instruments. Within Eswatini's jurisdictions, there is little rated paper, apart from government bonds. Local investments made within Eswatini's jurisdictions must be approved by the Eswatini board and reported to the group Investment Committee. No exposure is permitted to leveraged credit instruments, e.g. instruments where exposure to an entity or small group of entities can cause greater losses across the portfolio than the proportionate share of the defaulting entity or entities, without the group Investment Committee approval.

Where a credit risk is entirely borne by a contract holder in a pure linked investment contract, and this is made explicit in the contract and acknowledged by the contract holder in writing, the risk will not be aggregated with the group's risks. This applies to special contracts and structured products

Unless the asset manager has a fully-fledged credit analysis capability, credit quality will be based on ratings assigned by recognised ratings agencies. Lower credit quality than that implied by the rating may be assumed if the manager feels the credit quality is overstated.

Money market instruments are those instruments with an original (legal) maturity not exceeding one year. As in the case of debt instruments the two major credit risks that are managed are probability of default and concentration of exposure to individual entities. Probability of default is managed by limiting exposure to the various short term credit rating bands. Investment is only permitted in rated issuers or issues, unless no rated issuers or issues are available. Where a short-term rating is not available, the long-term rating of the issuer is converted to a short-term rating. Default probabilities at a long term level of BBB (equivalent to short term rating F3) and below, are significantly riskier based on historic information and hence not appropriate for money market investments. The risk of exposure to individual entities is managed through diversification. Limits are placed on the maximum exposure per issuer directly linked to credit bands.

There is no limit on the exposure of categories F1 and F1+ instruments, but a limit of 25% of the total portfolio is assigned to the category F2 instruments. For each of these categories there are an implied minimum number of issuers to reach the maximum exposure in a category. There is no need for a risk budgeting approach given the limited number of restricted categories.

Provisions of the Eswatini Insurance Act No 7 of 2005 have the effect of limiting exposure to individual issuers due to the inadmissibility of assets for regulatory purposes if specified limits are breached.

The company's maximum exposure to credit risk is through the following classes of assets; and is equal to their carrying values.

Figures in R'000	2021	2020
Reinsurance assets	24 689	20 136
Insurance related investments	398 084	286 589
Equity securities	125 083	84 346
Collective investment schemes	46 434	41 527
Debt securities	82 612	13 502
Funds on deposit and other money market instruments	85 174	109 263
Government stock	58 781	37 951
	422 773	306 725

Reinsurance assets

Receivables arising from insurance contracts and investment contracts with DPF and reinsurance contracts.

Collective investment schemes and Unit linked investments

Unit linked investments comprise local and foreign collective investment schemes as well as other unit linked investments. Collective investment schemes are categorised into property, equity or interest-bearing instruments based on a minimum of 55% per category of the underlying asset composition of the fund by value. In the event of no one category meeting this threshold, it is classified as a mixed assets class. Money market collective investment schemes are categorised as such.

for the year ended 28 February 2021

48. FINANCIAL INSTRUMENTS (continued)

48.3 Credit risk (continued)

Unlisted and unquoted unit-linked instruments are mainly exposed to equity, comprising investments in hedge funds and private equity funds, or interest-bearing instruments, comprising mezzanine funding and structured guaranteed income products. Where Oracle is the contract holder of an investment contract at another institution, but does not have title to the underlying investment assets, it is allocated to a mixed asset class.

Money market collective investment schemes are included in funds on deposit and other money market instruments less than 90 days.

Security and credit enhancements

For debt securities, unit linked investments and cash and cash equivalents, the credit risk is managed through the company's credit risk exposure policy described above.

Amounts receivable in terms of long-term insurance contracts and investment contracts with DPF are limited to and secured by the underlying value of the unpaid policy benefits in terms of the policy contract.

Reinsurance is placed with reputable companies. The credit rating of the company is assessed when placing the business and where there is a change in the status of the reinsurer. If a reinsurer fails to pay a claim, the company remains liable for the payment to the contract holder.

Insurance-related liabilities

Figures in R'000	2021	2020
Investments contracts	367 380	310 584
With discretionary participation featuresAt fair value through profit or loss	–367 380	249 79160 793
Insurance contract liabilities	89 472	78 348
Total liabilities	456 852	388 932

The following table provides an analysis of the fair value of financial liabilities not carried at fair value on the statement of financial position:

Liabilities
Investment contracts	–	249 791

Investment contracts with DPF

The value of investment contracts with DPF is the retrospective accumulation of the fair value of the underlying assets, which is a reasonable approximation of the fair value of this financial liability.

The table below reconciles the contract holder liabilities for each category to the total liability in the statement of financial position. Each category represents distinct financial risks. Some categories may include both insurance and investment contracts.

	Insurance	Investmentwith DPF	Investment	Total2021
	R'000	R'000	R'000	R'000
Contracts with DPFGroup contracts with DPF	–	–	–	–
Smoothed bonus	–	–	–	–
Market related business	–	–	367 380	367 380
Group market-related business	–	–	367 380	367 380
Other business	–	89 472	–	89 472
Non-profit annuity business	–	89 472	–	89 472
Other non-profit business	–	–	–	–
Total contract holder liability	–	89 472	367 380	456 852

	Insurance	Investment	Investment	Total
	R'000	with DPFR'000	R'000	2020R'000
Contracts with DPFGroup contracts with DPF	–	249 791	–	249 791
Smoothed bonus	–	249 791	–	249 791
Market related business	–	–	60 793	60 793
Group market-related business	–	–	60 793	60 793
Other business	78 348	–	–	78 348
Non-profit annuity businessOther non-profit business	22 74955 599	––	––	22 74955 599
Total contract holder liability	78 348	249 791	60 793	388 932

Contracts with discretionary participation features

Bonuses are declared taking into account a number of factors, including actual investment returns, previous bonus rates declared and contract holders' reasonable expectations. Bonuses are generally designated as vesting bonuses, which cannot be removed or reduced on death and maturity or non-vesting bonuses, which can be removed or reduced. Declared bonuses are usually a combination of both vesting and non-vesting bonuses.

For smoothed bonus business bonus stabilisation accounts (BSAs) are held equal to the difference between the fund accounts, or between discounted value of projected future benefit payments for with-profits annuity business, and the market value of the underlying assets. A positive BSA is undistributed surplus in the asset portfolio that is earmarked for future distribution to contract holders. The full value of the underlying assets is recognised as a liability. Market risk is however borne only in respect of the vested benefits. At 28 February 2021 the value of the underlying assets comfortably exceeded the liability in respect of vested benefits.

If the smoothing process has resulted in a negative BSA because of a downward fluctuation in the market value of the backing assets, the liabilities are reduced to reflect the amount that can reasonably be expected to be recovered through under-distribution of bonuses during the ensuing three years, provided that the statutory actuary is satisfied that if the market values of assets do not recover, future bonuses will be reduced to the extent necessary. The company is exposed to market risk to the extent that a negative BSA cannot reasonably be expected to be recovered through under-distribution of bonuses during the ensuing three years.

The only smoothed bonus business currently held is employee benefits guaranteed fund business.

The market value of underlying assets as a percentage of accumulated fund accounts was greater than 99,3 % for all of these classes of smoothed bonus business as at 28th February 2021.

The market value of the underlying assets in respect of all smooth bonus business at 28 February 2021 was R 247.7 million (2020: R229.1 million).

Non-profit annuity business

Benefit payments on non-profit annuities are fixed and guaranteed at inception (except to the extent that they are exposed to mortality insurance risk).

In order to reduce market risk, projected liability outflows on annuity business are closely matched by an actively managed combination of bonds of appropriate duration and interest rate derivatives. Any residual mismatch profit or loss as well as any credit risk for these policies are borne by the shareholder.

The calculation is based on discount rates derived from the zero coupon yield curve. The average rate that produces the same result is 9.79% (2020: 9.30%).

for the year ended 28 February 2021

48. FINANCIAL INSTRUMENTS (continued)

48.3 Credit risk (continued)

Insurance risk

Insurance risk is the risk that benefit payments and expenses exceed the carrying amount of the company's insurance liabilities. Insurance events are random and the actual number and amount of claims and benefits will vary from year to year. Statistically, the larger the portfolio of similar insurance contracts, the smaller the relative variability of the expected outcome will be. Similarly, diversification of the portfolio with respect to risk factors reduces insurance risk.

Mortality, morbidity and medical risks

Underwriting processes are in place to manage exposure to death, disability and medical risks. The most significant measures are:

Premium rates are required to be certified by the statutory actuary as being financially sound.

Regular experience investigations are conducted and used to set premium rates.

Reinsurance arrangements are negotiated in order to limit the risk on any individual contract.

Mortality, morbidity and medical risks

The nature of risks varies depending on the class of business. The material classes of business most affected by these risks are discussed below:

Group insurance business

These are contracts that provide life and/or disability cover to members of a group (e.g. clients or employees of a specific company).

Factors affecting these risks:

Contracts are similar to individual insurance contracts but there is greater risk of correlation between claims on group schemes because the assured lives live in the same geographical location or work in the same industry.

Underwriting processes may be streamlined, with cover supplied up to certain limits without underwriting.

How risks are managed:

Reinsurance arrangements are in place to limit the risk on each individual life. In addition, catastrophe cover is used to limit the risk of a large number of claims arising as a result of a single event.

Rates are based on scheme experience and are reviewed annually.

Rate reviews take into account known trends such as worsening experience due to AIDS.

Contract Persistency Risk

Contract holders generally have a right to terminate the contract completely before expiry of the contract term.

Economic conditions and/or consumer trends can influence persistency rates.

Expenses incurred in the acquisition of contracts are expected to be recouped over the term of the policy. These may not be recovered where the premiums are reduced or the contract terminated early.

Terminations can have the effect of increasing insurance risk, for example contract holders whose health has deteriorated are less likely on average to terminate a contract providing medical or death benefits.

The liability held for some contracts may be less than the termination benefit payable. The net company surplus will reduce if these contracts terminate early.

How risks are managed:

Where withdrawal benefits are payable on termination, these can be adjusted to recover certain expenses. However, market and legislative forces may restrict the extent to which this may be done in future.

Market value adjustments are applied to scheme terminations if the market value of the assets are below the fund accounts at the date of termination.

Impairment losses

The ageing of financial assets at the reporting date was:

Figures in R'000	Total	Loans toassociates	Accountsreceivablefrom tradingactivities
2021
Stage 1	106 910	1 210	105 700
Stage 2	–	–	–
Stage 3	11 565	11 565	–
Impairment	(11 565)	(11 565)	–
	106 910	1 210	105 700
2020
Stage 1	293 276	6 745	286 531
Stage 2	–	–	–
Stage 3	17 303	17 303	–
Impairment	(17 303)	(17 303)	–
	293 276	6 745	286 531

Reconciliation of movement in allowance for impairment of financial assets:

Figures in R'000	2021	2020
Balance at the beginning of the year	(22 838)	(14 848)
Impairment of associates previously raised	–	(7 020)
Impairment current year – discontinued operations	(2 811)	–
Utilised	2 064	2 404
Write off of loans	–	890
Impairment loss on trade and other receivables	(7 024)	(4 564)
Impairment reversal/(loss) on loans to associates	–	300
Unbundled	9 913	–
Balance at the end of the year	(20 696)	(22 838)

Impairment of financial assets

IFRS 9's impairment requirements use more forward-looking information to recognise expected credit losses ("ECL") – the ECL model. Instruments within the scope of the requirements included loans and other debt type financial assets measured at amortised cost, and trade receivables measured under IFRS 9.

Recognition of credit losses is no longer dependent on the group first identifying a credit loss event. Instead, the group considers a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

Measurement of the ECL is determined by a probability weighted estimate of credit losses over the expected life of the financial instrument.

Trade and other receivables

The group makes use of a simplified approach in accounting for trade and other receivables and records the loss allowance as lifetime (ECLs). These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. The group uses its historical experience, external indicators and forward-looking information to calculate the ECL using a provision matrix.

The group assesses impairment of trade receivables on a portfolio basis grouping those that possess shared credit risk characteristics. These have then been grouped based on the days past due. The group has therefore concluded that the expected loss rates calculated on the trade receivables are a reasonable approximation of the loss rates.

for the year ended 28 February 2021

48. FINANCIAL INSTRUMENTS (continued)

Other financial assets 48.3 Credit risk (continued)

The group uses an allowance account to record its credit losses on advances. It applies the general impairment approach in determining the ECLs. ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default.

The group considers an advance in default when they are handed over to the legal process. However, in certain cases, the group may also consider an advance to be in default when internal or external information indicates that the group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the group. The financial assets are written off when there is no reasonable expectation of recovering the contractual cash flows.

The group has established a policy to perform an assessment, at the end of each reporting period, of whether a financial asset's credit risk has increased significantly since initial recognition, by considering the change in the risk of default occurring over the remaining life of the financial instrument.

The group groups its advances into Stage 1, Stage 2 and Stage 3, as described below:

Stage 1: Stage 1 includes financial instruments that have not had a significant increase in credit risk since initial recognition or that have low credit risk at the reporting date. For these assets, 12-month expected credit losses are recognised and interest revenue is calculated on the gross carrying amount of the asset (that is, without deduction for credit allowance). 12-month ECL are the expected credit losses that result from default events that are possible within 12 months after the reporting date. It is not the expected cash shortfalls over the 12-month period but the entire credit loss on an asset weighted by the probability that the loss will occur in the next 12 months.

Stage 2: includes financial instruments that have had a significant increase in credit risk since initial recognition (unless they have low credit risk at the reporting date) but that do not have objective evidence of impairment. For these assets, lifetime ECL are recognised, but interest revenue is still calculated on the gross carrying amount of the asset. Lifetime ECL are the expected credit losses that result from all possible default events over the expected life of the financial instrument. Expected credit losses are the weighted average credit losses with the probability of default as the weight.

Stage 3: includes financial assets that have objective evidence of impairment at the reporting date. For these assets, lifetime ECL are recognised and interest revenue is calculated on the net carrying amount (that is, net of credit allowance).

The entity considers a financial instrument defaulted and therefore Stage 3 (credit-impaired) for ECL calculations in all cases when the borrower enters the legal stage of the advance management process. At this time the loans are managed individually.

Concentration of credit risk

The majority of the group's trade and other receivables and loans advanced to associates are located domestically except for the small amount of debtors and loans located in Botswana, Swaziland, Zimbabwe and Zambia. The group does not have a wide variety of counterparties.

Refer to 48.2 for more information

48.4 Fair values

The fair value of a financial instrument is the price that would be received for the sale of an asset or paid for the transfer of a liability in an orderly transaction between market participants at the measurement date. Underlying the definition of fair value is a presumption that an entity is a going concern without any intention or need to liquidate, to curtail materially the scale of its operations or to undertake a transaction on adverse terms. Fair value is not, therefore, the amount that an entity would receive or pay in a forced transaction, involuntary liquidation or distressed sale.

Valuation methodologies

The objective of a fair value measurement is to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions.

Quoted price

A financial instrument is regarded as quoted in an active market if quoted prices are readily available from an exchange, industry group, pricing service or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. The appropriate quoted market price for an asset held or a liability to be issued is usually the current bid price and, for an asset to be acquired or a liability held, the asking price.

The existence of published price quotations in an active market is the best evidence of fair value and, where they exist, they are used to measure the financial asset or financial liability. A market is considered to be active if transactions occur with sufficient volume and frequency to provide pricing information on an ongoing basis. Financial instruments fair valued using quoted prices would generally be classified as level 1 in terms of the fair value hierarchy and when fair valued indirectly (i.e. derived from prices) will be classified as level 2.

Valuation techniques

Where a quoted price does not represent fair value at the measurement date or where the market for a financial instrument is not active, the group establishes fair value by using an alternative valuation technique. These valuation techniques may include:

• f earnings multiples;
• f discounted-cash flow analysis;
• f various option pricing models;
• f using recent arm's length market transactions between knowledgeable parties; and
• f reference to the value of the net assets of the underlying business.

In applying valuation techniques, the group uses estimates and assumptions that are consistent with available information about the estimates and assumptions that market participants would use in setting a price for the financial instrument.

Valuation techniques applied by the group would result in financial instruments being classified as level 2 or level 3 in terms of the fair value hierarchy. The determination of whether a financial instrument is classified as level 2 or level 3 is dependent on the significance of observable inputs versus unobservable inputs in relation to the fair value of the financial instrument.

Valuation methodologies and techniques applied for level 3 financial instruments include a combination of discounted cash flow analysis, application of earnings multiples on sustainable after-tax earnings and/or current and projected net asset values to determine overall reasonability. The valuation technique applied to specific financial instruments depends on the nature of the financial instrument and the most appropriate valuation technique is determined on that basis.

Observable markets

Quoted market prices in active markets are the best evidence of fair value and are used as the basis of measurement, if available. A determination of what constitutes "observable market data" will necessitate significant judgement. It is the group's belief that "observable market data" comprises:

• f prices or quotes from an exchange or listed markets in which there are sufficient liquidity and activity;
• f proxy observable market data that is proven to be highly correlated and has a logical, economic relationship with the instrument that is being valued; and
• f other direct and indirect market inputs that are observable in the marketplace.

Data is considered by the group to be "observable" if the data is verifiable, readily available, regularly distributed, from multiple independent sources and transparent.

Data is considered by the group to be "market-based" if the data is reliable, based on consensus within reasonable narrow, observable ranges, provided by sources that are actively involved in the relevant market and supported by actual market transactions.

It is not intended to imply that all of the above characteristics must be present to conclude that the evidence qualifies as observable market data. Judgement is applied based on the strength and quality of the available evidence.

for the year ended 28 February 2021

48. FINANCIAL INSTRUMENTS (continued)

48.4 Fair values (continued)

Inputs to valuation techniques

Inputs are selected on a basis that is consistent with the characteristics of the instrument that market participants would take into account in a transaction for that instrument. Inputs to valuation techniques applied by the group include, but are not limited to, the following:

Discount rate: Where discounted-cash flow techniques are used, estimated future cash flows are based on management's best estimates and the discount rate used is a market rate at the reporting date for an instrument with similar terms and conditions.

The time value of money: The business may use well-accepted and readily observable general interest rates, or an appropriate swap rate, as the benchmark rate to derive the present value of a future cash flow.

Foreign currency exchange prices: Active currency exchange markets exist for most major currencies, and prices are quoted daily on various trading platforms and in financial publications.

Commodity prices: Observable market prices are available for those commodities that are actively traded on exchanges in South Africa and other commercial exchanges.

Volatility: Measures of the volatility of actively traded items can be reasonably estimated by the implied volatility in current market prices. In the absence of an active market, a methodology to derive these volatilities from observable market data will be developed and utilised.

Dividend yield: Dividend yield is represented as a percentage and is calculated by dividing the value of dividends paid in a given year per share held by the value of one share.

Earnings multiples: This is the share price divided by earnings per share (EPS).

The following table sets out the group's principal valuation techniques used in determining the fair value of financial assets and financial liabilities classified as level 2 and 3 in the fair value hierarchy:

Assets	Valuation technique	Key inputs
Loans and advances	Discounted cash flows	Discount rates
Other investments	Discounted cash flows, adjusted net assetvalue, earnings multiples, third-partyvaluations, dividend yields	Discount rates, valuation multiples,dividend growth, foreign exchange rates
Investments in associates	Discounted cash flows, earnings multiples,dividend yields	Discount rates, valuation multiples,dividend growth
Insurance related investments	discounted cash flows, adjusted quotedprices	market related yields, nominal discountrate, quoted prices
Liabilities
Other financial liabilities	Earnings multiples, dividend yields	Earnings, dividend growth

Review of significant valuations

After the valuations of the unlisted financial assets and liabilities are performed, these are presented to the group's investment committee for independent review.

The valuation methodologies, techniques and inputs applied to the fair value measurement of the financial instruments have been applied in a manner consistent with that of the previous financial year.

	2021		2020
Figures in R'000	Carryingamount	Fair value	Carryingamount	Fair value
Financial assets measured at fair value
Other investments	14 572	14 572	111 452	111 452
Insurance related investments	398 084	398 084	286 589	286 589
Other non-current assets	–	–	33 302	33 302
Trading securities	162	162	143	143
Financial assets at amortised cost
Loans to associates	1 210	1 110	6 745	4 986
	414 028	413 928	438 231	436 472
Financial liabilities measured at fair valueOther financial liabilities at fair value through profit
or loss	–	–	(6 499)	(6 499)
Trading securities	(3)	(3)	(15)	(15)
Investment contracts	(367 380)	(367 380)	(310 585)	(310 585)
Insurance contract liabilities	(89 472)	(89 472)	(78 348)	(78 348)
Financial liabilities at amortised cost
Other financial liabilities	(56 881)	(53 845)	(82 054)	(79 256)
Insurance contract liabilities	(13 796)	(13 796)	(11 600)	(11 600)
	(527 532)	(524 496)	(489 101)	(486 303)
Total	(113 504)	(110 568)	(50 870)	(49 831)

The carrying amounts of cash and cash equivalents, accounts receivable from trading activities, trade and other receivables, reinsurance assets, bank overdraft, accounts payable from trading activities and trade and other payables reasonably approximate their fair values and are therefore not included in the table above.

The value of investment contracts with DPF is the retrospective accumulation of the fair value of the underlying assets, which is a reasonable approximation of the fair value of this financial liability.

for the year ended 28 February 2021

48. FINANCIAL INSTRUMENTS (continued)

48.5 Fair value hierarchy

The table below analyses recurring fair value measurements for financial assets and financial liabilities. These fair value measurements are categorised into different levels in the fair value hierarchy based on inputs to valuation techniques used. The different levels are defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair value of financial assets and liabilities as shown in note 48.4 is categorised as follows for the purpose of IFRS 13 Fair Value Measurement.

Figures in R'000	Level 1	Level 2	Level 3	Total
2021
Financial assets designated at fair value through
profit or loss	268 699	143 956	–	412 655
Financial assets measured at fair value	162	–	–	162
Financial assets at amortised cost	–	–	1 110	1 110
Financial liabilities designated at fair value through
profit or loss	(3)	(367 380)	–	(367 383)
Financial liabilities at amortised cost	–	–	(157 113)	(157 113)
	268 858	(223 424)	(156 003)	(110 569)
2020
Financial assets designated at fair value through
profit or loss	182 738	117 782	130 823	431 343
Financial assets measured at fair value	143	–	–	143
Financial assets at amortised cost	–	–	4 986	4 986
Financial liabilities designated at fair value through
profit or loss	(15)	(310 585)	(6 499)	(317 099)
Financial liabilities at amortised cost	–	–	(169 204)	(169 204)
	182 866	(192 803)	(39 894)	(49 831)

The level 3 unobservable inputs for the assets and liabilities at amortised cost instruments is an after-tax discount rate of 9.04%. A significant increase in the rate would result in a decrease in the fair value of these assets or liabilities.

There has been no transfers between levels of fair value hierarchy.

Figures in R'000	2021	2020
Level 3 financial instruments at fair value comprise:Balance at beginning of yearTotal gains or losses in profit or lossSalesTransfer to trade and other receivables	124 324(25 859)(98 465)–	143 440(19 066)–( 50)
Balance at end of the year	–	124 324

48.5 Fair value hierarchy (continued)

Effect of changes in significant unobservable inputs

The fair value measurement of financial instruments are, in certain circumstances, measured using valuation techniques that include assumptions that are not market observable. Where these scenarios apply, the group performs a sensitivity analysis on the fair value of the relevant instruments. The following information is intended to illustrate the potential impact of the relative uncertainty in the fair value of financial instruments for which valuation is dependent on unobservable inputs and which are classified as level 3 in the fair value hierarchy. However, the disclosure is neither predictive nor indicative of future movements in fair value.

A change of 10% in the unobservable inputs of the investment and liability at the reporting date would have increased/(decreased) equity and profit or loss by the amount shown below. This analysis assumes that all other variables remain constant.

Effect on statement of comprehensive income (profit/(loss)) and equity before taxation.

Net asset value	2021	2020
10% increase	–	2 392
10% decrease	–	(2 392)
Free cash flow
10% increase	(5 274)	2 613
10% decrease	5 274	(18 050)
Foreign exchange movement
10% increase	69	1 250
10% decrease	(69)	1 038

49. GOING CONCERN

The consolidated financial statements have been prepared on a going-concern basis. The group has recognised a net loss after tax of R0.2 million for the year ended 28 February 2021, and as at that date current assets exceed current liabilities by R92.7 million.

The board undertook processes to ensure that the going-concern principle applies, which include:

• f the group's financial budgets and a 12-month rolling cash flow forecast;
• f the performance of underlying business operations and their ability to make a positive contribution to the group's objectives;
• f the capital structure, liabilities and quality of the assets underpinning the statement of financial position; and
• f the banking facilities and the group's assets to ensure that these are sufficient to fund imminent liabilities and meet the group's working capital requirements.

Management has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future and that the group will extinguish liabilities in the normal course of business at the amounts stated in the condensed consolidated financial statements.

The board is of the view that, based on its knowledge of the group, assumptions regarding the outcome of the key processes under way and specific enquiries it has made, the group has adequate resources at their disposal to settle obligations as they fall due and the group will continue as going concern for the foreseeable future.

Notes to the consolidated financial statements (continued)

for the year ended 28 February 2021

49. GOING CONCERN (continued)

COVID-19 IMPLICATIONS

The group has been successfully operating with no restrictions and has been able to adjust to the "new normal" of working-from home. The board and management continue to actively engage, communicate and monitor the impact of Covid-19 on the group's businesses to ensure the sustainability of the group given the conceivable adverse consequence on the economy. The group continues to carefully monitor the impact of Covid-19 on its businesses and has put strategic plans in place to ensure minimum disruptions.

Management continue to stringently monitor debtors to ensure the appropriate credit lines are expanded and are focused on cost containment. Given the abovementioned, management believes the company is a going concern and will continue to operate into the foreseeable future.

50. DIVIDENDS

Dividends paid

An interim dividend of 5 cents per share per share was paid to ordinary shareholders in December 2020, (2020: 7.4 cents (5.92 cents net of dividend withholding tax). Total cash of R8.1 million (2020: R11.4 million) (net of treasury shares held) was paid to ordinary shareholders.

Dividend declared

Notice is hereby given that a gross ordinary dividend of 7.5 cents per share (2020: 5.0 cents per share) has been declared out of income reserves on 4 June 2021 and are payable to ordinary shareholders in accordance with the following timetable.

In terms of dividend tax effective since 1 April 2012, the following additional information is disclosed:

• f The local Dividend Withholding Tax rate is 20%
• f 161 155 915 shares are in issue
• f The gross ordinary dividend is 7.50000 cents per share for shareholders exempt from paying Dividend Withholding Tax
• f The net ordinary dividend is 6.00000 cents per share for ordinary shareholders who are not exempt from Dividend Withholding Tax

Timetable	2021
Declaration and finalisation date announcementLast day to trade cum dividend	Monday, 7 JuneTuesday, 22 June
Shares commence trading ex-dividend	Wednesday, 23 June
Record date	Friday, 25 June
Dividend payment date	Monday, 28 June

No dematerialisation or rematerialisation of shares will be allowed for the period from Wednesday, 23 June 2021 to Friday, 25 June 2021, both dates inclusive.

Dividends are declared in the currency of the Republic of South Africa. The directors have confirmed that the company will satisfy the liquidity and solvency requirements immediately after the payment of the dividend.

51. EVENTS AFTER REPORTING DATE

There have been no material events between the period end and the date of the signing of the results.

Separate statement of comprehensive income

for the year ended 28 February 2021

		VUNANI LIMITED – Company
Figures in R'000	Note	2021	2020
Management fees	52	1 410	1 305
Investment revenueFair value adjustments	5354	193 245(10 052)	6 325240
Profit on disposal of assetsOperating expenses	5556	9 695(11 893)	–(7 605)
Results from operating activitiesFinance income	57	182 405*	2652
Profit before income taxTaxation	58	182 405–	267(149)
Profit for the year		182 405	118
Total comprehensive income for the year		182 405	118

* less than R1000

Separate statement of financial position

at 28 February 2021

		VUNANI LIMITED – Company
Figures in R'000Note	2021	2020
Assets
Investments in subsidiaries59	420 982	417 687
Other investments60	–	18 283
Loan to subsidiary companies61	–	14 580
Loan to share trust62	735	–
Deferred tax asset63	–	–
Total non-current assets	421 717	450 550
Cash at bank64	2	3
Total current assets	2	3
Total assets	421 719	450 553
Equity
Stated capital65	696 497	696 497
Share-based payment reserve	9 221	12 770
Accumulated loss	(307 727)	(271 211)
Equity attributable to equity holders	397 991	438 056
Liabilities
Loans from subsidiary companies61	17 142	11 097
Other financial liabilities66	4 551	–
Total non-current liabilities	21 693	11 097
Trade and other payables67	2 035	1 400
Current liabilities	2 035	1 400
Total equity and liabilities	421 719	450 553

Separate statement of changes in equity

for the year ended 28 February 2021

	VUNANI LIMITED – CompanyShare
Figures in R'000	Statedcapital	basedpaymentreserve	Accumu-lated loss	Totalequity
Balance at 28 February 2019Total comprehensive income for the periodLoss for the period	696 497–	11 315–	(259 403)118	448 409118
Total comprehensive income for the year	–	–	118	118
Transactions with owners, recorded directly in equityDividends paidShare-based paymentsVesting of share awards*	–––	–5 009(3 554)	(11 926)––	(11 926)5 009(3 554)
Total transactions with owners	–	1 455	(11 926)	(10 471)
Balance at 29 February 2020	696 497	12 770	(271 211)	438 056
Total comprehensive income for the yearProfit for the year	–	–	182 405	182 405
Total comprehensive income for the year	–	–	182 405	182 405
Transactions with owners, recorded directly in equityDividends paid - in specieDividends paidShare-based paymentsVesting of share awards*	––––	––3 295(6 844)	(210 863)(8 058)––	(210 863)(8 058)3 295(6 844)
Total transactions with owners	–	(3 549)	(218 921)	(222 470)
Balance at 28 February 2021	696 497	9 221	(307 727)	397 991

* Shares that were issued as part of the share-based payment scheme vested. The shares were transferred out of the share trust (held as treasury shares) to the qualifying employees. The cumulative share-based payment expense in the reserve has been transferred between the share-based payment reserve and retained income on vesting.

DIVIDENDS

Figures in R'000	2021	2020
Ordinary dividendsOrdinary dividend number 6 of 5.0 cents (4.00 cents net of dividend withholding tax) per sharewas paid to ordinary shareholders on 21 December 2020, (Ordinary dividend number 5 of7.4 cents (5.92 cents net of dividend withholding tax) per share was paid to ordinary shareholders
on 30 July 2019.	8 058	11 926

Separate statement of cash flows

for the year ended 28 February 2021

		VUNANI LIMITED – Company
Figures in R'000	Note	2021	2020
Cash flows from operating activitiesCash utilised by operationsInvestment revenue received	68	(5 297)361	(6 387)6 325
Interest received from banksDividends paid	57	*(8 058)	2(11 926)
Cash utilised by operating activities		(12 994)	(11 986)
Cash flows from investing activitiesLoans repaid by subsidiary company		6 948	10 721
Cash inflow from investing activities		6 948	10 721
Cash inflow from financing activitiesLoans advanced from subsidiary company		6 045	1 266
Cash inflows from financing activities		6 045	1 266
Net decrease in cash and cash equivalentsCash and cash equivalents at the beginning of the year		(1)3	12
Total cash and cash equivalents at the end of the year	64	2	3

* less than R1000

Notes to the separate financial statements

for the year ended 28 February 2021

	Figures in R'000	2021	2020
52.	MANAGEMENT FEESManagement fees	1 410	1 305
53.	INVESTMENT REVENUEDividend received from investmentsDividend received from subsidiaries	–193 245	2 1804 145
		193 245	6 325
54.	FAIR VALUE ADJUSTMENTSOther investments – unlisted investments	(10 052)	240
55.	PROFIT ON DISPOSALProfit on disposal of assets	9 695	–
56.	OPERATING EXPENSESOperating expenses include:Auditor's remuneration – current yearAuditor's remuneration – prior yearDirectors' emoluments paid by company (refer note 47)	2 0101 2001 410	1 238–1 305
57.	FINANCE INCOMERecognised in profit or lossInterest income – cash and cash equivalents	*	2
58.	INCOME TAXDeferred taxationNo taxation is payable in the current year as the company has an estimated tax loss ofR11.7 million (2020: R11.8 million) available for set-off against future taxable income.	–	149
	Reconciliation of effective tax rateIncome tax rateTax exempt incomeDisallowable expenditure – investment holding companyFair value adjustments (recovered via dividends)Profit on disposalDeferred tax assets not raised	%28.0(29.7)1.61.5(1.5)––	%28.0(663.3)547.5(25.2)–168.855.8

	% Holding		Cost of investment
Figures in R'000	2021	2020	2021	2020
59.INVESTMENTS IN SUBSIDIARIESInvestment in subsidiaries held at costVunani Capital Proprietary LimitedVunani Securities Proprietary LimitedVunani Capital Markets Proprietary Limited	100100100	100100100	399 38519 5951 168	396 33619 4631 054
Vunani Capital Investments Proprietary Limited*VProp714 Proprietary Limited	10078	10078	–834	–834
			420 982	417 687

* The investment in Vunani Capital Investments Proprietary Limited was impaired to nil.

for the year ended 28 February 2021

59. INVESTMENTS IN SUBSIDIARIES (continued)

A reconciliation of the movement in investment in subsidiaries is as follows:

	VunaniCapitalProprietaryLimited	VunaniSecuritiesProprietaryLimited	VunaniCapitalMarketsProprietaryLimited	Total
Balance at the beginning of the yearShare-based payments	396 3363 049	19 463132	1 054114	416 8533 295
Balance at the end of the year	399 385	19 595	1 168	420 148

Factors considered in impairment

The company assesses whether there is any indication that an asset may be impaired. The company reviews the budgets of the subsidiary, which include projected revenue, profits and cash flow forecasts. The valuations of underlying assets of the subsidiary are also reviewed. Investments in subsidiaries are impaired if the company believes that the carrying amount of the investment may be higher than its recoverable amount.

Figures in R'000	2021	2020
Accumulated impairment
Investment in Vunani Capital Proprietary Limited	(313 600)	(313 600)
Investment in Vunani Capital Investments Proprietary Limited	(4 655)	(4 655)
	(318 255)	(318 255)

	Figures in R'000	Number ofshares	Unlisted	Fair value
60.	OTHER INVESTMENTS2021African Legend Investment Proprietary LimitedFair value adjustment	–	––	––
			–	–
	2020African Legend Investment Proprietary LimitedFair value adjustment	2 248	–18 283	–18 283
			18 283	18 283

Fair value adjustment of investment

As part of the unbundling of private equity assets the company issued 500 000 preference shares to Vunani Capital Partners in relation to the African Legend investment shares. The terms of the preference shares are such that, inter alia, all contractual rights to cash flows related to the African Legend shares and the African Legend distributions, will be transferred to Vunani Capital Partners.

In terms of IFRS 9: Financial Instruments an entity shall derecognise a financial asset when the contractual rights to the cash flows from the financial asset (i.e. the African Legend Shares) are transferred to another entity and when substantially all of the risks and rewards of ownership of the financial asset are transferred (i.e. the African Legend Distributions to Vunani Capital Partners). Based on this pass-through arrangement, the African Legend shares have been derecognised and accordingly no liability is raised for the Preference Shares issued.

	Figures in R'000	2021	2020
61.	LOANS TO/(FROM) SUBSIDIARIESLoan to/(from) subsidiary
	Vunani Capital Proprietary Limited	(3 869)	14 580
	The loan to Vunani Capital Proprietary Limited is unsecured, interest free.No ECL were raised on the loan to subsidiary in the prior year as there is limited credit risk.The company has considered the historic pattern of repayment of contractual cash flowsand the ability of the subsidiary to settle the loan in concluding that an ECL impairmentallowance would be immaterial.
	Loan from subsidiaryVunani Capital Markets Proprietary Limited	(13 273)	(11 097)
	The loans from Vunani Capital Markets is unsecured, interest free and is not repayable withinthe next 12 months.
62.	LOAN TO SHARE TRUSTVunani Share Incentive Scheme Trust	735	–
	The loan to the share trust is unsecured and bears interest at the official SARS interest rate.The loan has no fixed terms of repayment. No interest was recognised in the current year asit would have been immaterial.
	There is limited credit risk with the loan to the share trust, as the company does not have anyintention to recall the loan. There is no expected repayment terms and thus the probabilityof default will almost be minimum. Covid-19 has had no impact on the ECL measurement,as such, no ECL has been raised on the loan balance in the current year.
63.	DEFERRED TAX ASSETRecognised deferred tax asset arises on:Tax losses carry-forward	–	–
	Reconciliation of movement in deferred taxBalance at the beginning of the yearRecognised against profit or loss	––	149(149)
	Balance at end of the year	–	–
	Estimated tax losses available for utilisation against future taxable incomeRecognised as deferred tax asset	12 437–	11 797–
	Unrecognised estimated tax losses carried forward not accounted for in deferred tax	12 437	11 797
64.	CASH AT BANKCash comprise:Cash at bank	2	3

Notes to the separate financial statements (continued)

for the year ended 28 February 2021

Figures in R'000	2021	2020
STATED CAPITAL AND SHARE CAPITALAuthorised
500 000 000 (2020: 500 000 000) ordinary shares of no par value1 000 000 cumulative, redeemable preference shares of no par value	––	––
Issued - Ordinary shares161 155 915 (2020: 161 155 915) ordinary shares of no par value	696 497	696 497
All issued shares are fully paid. Unissued ordinary shares are under the control of thedirectors in terms of a resolution of members passed at the last annual general meeting. Thisauthority remains in force until the next annual general meeting.
Reconciliation of movement in number of shares issued ('000s):Balance at the beginning of the year	161 156	161 156
Balance at end of the year	161 156	161 156
Reconciliation of movement in stated capital (R'000):Balance at the beginning of the yearBalance at end of year	696 497696 497	696 497696 497
Issued - Preference shares
500 000 preference shares	–	–
Reconciliation of movement in number of shares issued (000s):Balance at the beginning of the year	–	–
Shares issued	500 000	–
Balance at the end of the year	500 000	–
Reconciliation of movement in redeemable preference shares (R'000):Balance at the beginning of the yearShares issuedDerecognition of preference shares	–18 243(18 243)	–––
Balance at end of year	–	–

As part of the unbundling of private equity assets the company issued 500 000 preference shares to Vunani Capital Partners Limited in relation to the African Legend investment shares. The terms of the preference shares are such that, inter alia, all contractual rights to cash flows related to the African Legend shares and the African Legend distributions, will be transferred to Vunani Capital Partners.

In terms of IFRS 9: Financial Instruments an entity shall derecognise a financial asset when the contractual rights to the cash flows from the financial asset (i.e. the African Legend Shares) are transferred to another entity and when substantially all of the risks and rewards of ownership of the financial asset are transferred (i.e. the African Legend Distributions to Vunani Capital Partners). Based on this pass-through arrangement, the African Legend shares have been derecognised and accordingly no liability is raised for the VL Preference Shares.

	Figures in R'000	2021	2020
66.	OTHER FINANCIAL LIABILITIES	4 551	–
	This represents the IAS 19 adjustment for long-term employee benefits in terms of theagreement entered into with the VFM Share trust. Refer to note 46.
67.	TRADE AND OTHER PAYABLESSundry payables	2 035	1 400
68.	CASH UTILISED BY OPERATIONSProfit before income tax	182 405	267
	Adjusted for:Investment revenueFinance income	(193 245)*	(6 325)(2)
	Fair value adjustmentsIAS 19 – employee benefit costsProfit on disposal of assets	10 0524 551(9 695)	(240)––
	Changes in working capital:Increase in trade and other payables	(5 932)635	(6 300)(87)
	Cash utilised by operations	(5 297)	(6 387)

* Less than R1000

69. RELATED PARTIES

Relationships

Majority shareholder Bambelela Capital Proprietary Limited Subsidiaries Refer to note 46 Directors Refer to note 47

* The parent does not produce financial statements for public use.

	Note	2021	2020
Related party balances
Investments in subsidiaries	59	420 982	417 687
Loan to subsidiary company	61	–	14 580
Loan from subsidiary companies	61	(17 142)	(11 097)
Loan to share trust	62	735	–
Related party transactions
Revenue – management fees (from Vunani Capital Proprietary Limited)	52	1 410	1 305

Directors' remuneration and benefits (refer to note 47).

for the year ended 28 February 2021

70. PRESCRIBED OFFICERS AND KEY MANAGEMENT PERSONNEL REMUNERATION AND BENEFITS

Figures in R'000	Basic salary	Bonuses	Provident fundand medicalaid	Share-basedpayments	Total
Lincoln O'shea*	1 774	271	181	–	2 226
Sam Mokorosi&	667	–	58	–	725
Shaun Naidoo&	1 444	1 292	161	103	3 000
Snowy Masakale%	2 376	–	324	27	2 727
Richard Krepelka	4 685	421	324	–	5 430
David Takis#	1 487	554	225	–	2 266
Thabo Moipolai@	1 867	647	290	–	2 804
	14 300	3 185	1 563	130	19 178

* Lincoln O'shea resigned as CEO of Vunani Securities on 4 December 2020.

& Shaun Naidoo was appointed CEO of Vunani Corporate Finance after Sam Mokorosi's resignation on 30 June 2020.

% Snowy Masakale was appointed CEO of Vunani Fund Managers.

David Takis is the CEO of Oracle Life and Insure.

@ Thabo Moipolai is the CEO of VFMB.

2020
Lincoln O'Shea	1 530	–	170	240	1 940
Sam Mokorosi	1 394	373	242	78	2 087
Kathy Gilbert	219	39	105	–	363
Richard Krepelka	4 441	689	307	–	5 437
	7 584	1 101	824	318	9 827

The prescribed officers have service contracts with the group companies terminable upon one month's written notice. No prescribed officer has a fixed-term contract.

		Figures in R'000	Carryingamount	Un-discountedcontractualcash flows	Less than1 year	1 – 5 years	Greater than5 years
71.		FINANCIAL INSTRUMENTS
	71.1	Liquidity risk2021Non-derivative financial liabilities	(19 177)	(19 177)	(2 035)	(17 142)	–
		Trade and other payablesLoan from subsidiary	(2 035)(17 142)	(2 035)(17 142)	(2 035)–	–(17 142)	––
		2020Non-derivative financial liabilities	(12 497)	(12 497)	(1 400)	(11 097)	–
		Trade and other payablesLoan from subsidiary	(1 400)(11 097)	(1 400)(11 097)	(1 400)–	–(11 097)	––

Management of liquidity risk

The company's approach to managing liquidity by managing its working capital, capital expenditure and cash flows, 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 company's reputation. Ultimate responsibility for liquidity risk management rests with the board of directors. Typically the company ensures that it has sufficient cash on hand to meet operational expenses, including the servicing of financial obligations. The company's current liabilities exceed its current assets, however, Vunani Limited has access to group overdraft facilities amounting to R20.0 million, which may be used to meet its financial obligations if necessary.

71. FINANCIAL INSTRUMENTS (continued)

		2021	2020
71.2	Credit risk
	The carrying amount of financial assets represents the maximum credit exposure.
	The maximum exposure of credit risk was:
	Loan to subsidiary company	–	14 580
	Loan to share trust	735	–
	Cash and cash equivalents	2	3
		737	14 583

Impairment losses

The ageing of financial assets at the reporting date was:

	Total	Loan tosubsidiarycompany	Loan tosharetrust
2020
Stage 1	735	–	735
2020
Stage 1	14 580	14 580	–

There is limited credit risk with the loan to the share trust, as the company does not have any intention to recall the loan. There is no expected repayment terms and thus the probability of default will almost be minimum. Covid-19 has had no impact on the ECL measurement, as such, no ECL has been raised on the loan balance in the current year.

No ECL were raised on the loan to subsidiary in the prior year as there is limited credit risk. The company has considered the historic pattern of repayment of contractual cash flows and the ability of the subsidiary to settle the loan in concluding that an ECL impairment allowance would be immaterial.

		2021Carrying		2020Carrying
	Figures in R'000	amount	Fair value	amount	Fair value
71.3	Fair values
	Financial assets at fair value
	Other investments	–	–	18 283	18 283
	Financial assets at amortised cost
	Loan to subsidiary company	–	–	14 580	11 845
	Loan to share trust	735	604	–	–
		735	604	32 863	30 128
	Financial liabilities at amortised cost
	Loan from subsidiary company	(17 142)	(13 321)	(11 097)	(8 277)
		(17 142)	(13 321)	(11 097)	(8 277)

The carrying amounts of cash and cash equivalents and trade and other payables reasonably approximate their fair values and therefore not included in the table above.

The fair values of the financial assets and liabilities at amortised cost are based on discounted cash flow analysis using observable discount rates: i.e. current prevailing interest rates. These rates take into account the impact of Covid-19, and consequently the determination of the fair values.

Notes to the separate financial statements (continued)

for the year ended 28 February 2021

71. FINANCIAL INSTRUMENTS (continued)

71.4 Fair value hierarchy

The table below analyses recurring fair value measurements for financial assets and financial liabilities. These fair value measurements are categorised into different levels in the fair value hierarchy based on inputs to valuation techniques used. The different levels are defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Figures in R'000	Level 1	Level 2	Level 3
2021
Financial assets measured at fair value	–	–	–
Financial assets measured at amortised cost	–	–	604
Financial liabilities measured at amortised cost	–	–	(13 321)
	–	–	(12 717)
2020
Financial assets measured at fair value	–	–	18 283
Financial assets measured at amortised cost	–	–	11 845
Financial liabilities measured at amortised cost	–	–	(8 277)
	–	–	21 850

Figures in R'000	2021	2020
A change of 10% in the unobservable inputs of the investment and liability at thereporting date would have increased/(decreased) equity and profit or loss by theamount shown below. This analysis assumes that all other variables remain constant.Effect on statement of comprehensive income (profit/(loss)) and equity before taxationFree cash flow
10% increase10% decrease	(2 066)(4 222)	(194)(3 818)
Net asset value
10% increase10% decrease	––	1 828(1 828)

72. GOING CONCERN

Prior to the approval of the financial statements the board undertook processes to ensure that the going-concern principle applies.

The company incurred a profit for the year ended 28 February 2021 of R182.5 million (2020: R0.1 million) and as of that date its total assets exceeded its total liabilities by R398.0 million (2020: R438.1 million). However, the current liabilities exceeded the current assets by R2.0 million (2020: R1.4 million). The current liabilities of R2.0 million were settled post year-end through related party funding.

Management has assessed the impact of COVID-19 on the company's ability to continue as a going concern. COVID-19 did not materially impact the company's going concern assessment.

The board is of the view that, based on its knowledge of the company, assumptions regarding the outcome of the key processes under way and specific enquiries it has made, the company will continue as a going concern for the foreseeable future.

06

SHAREHOLDER INFORMATION

Analysis of shareholders	170
Shareholders' diary	171
Notice of annual general meeting	172
Form of proxy	179
General information	183
Acronyms, abbreviations and definitions	184

Analysis of the shareholders

at 28 February 2021

		Percentage	Number of	Percentage
		of	shares	of shares
	Number of	shareholdersheld	held	held
	shareholders	%	('000s)	%
Analysis of shareholding
Close corporations	2	0.55	11	0.01
Foundations & charitable funds	1	–	*	*
Managed funds	2	0.55	1 373	0.85
Private companies	22	6.09	134 713	83.59
Public companies	1	0.28	300	0.19
Retail shareholders	318	88.09	23 256	14.43
Scrip lending	1	0.28	500	0.31
Share schemes	1	0.28	276	0.17
Stockbrokers and nominees	2	0.55	*	*
Trusts	11	3.05	727	0.45
Shareholding per share register	361	100	161 156	100
Range of shareholding
1 to 1 000	211	58.4	33	*
1 001 to 10 000	60	16.6	205	0.1
10 001 to 100 000	41	11.4	1 399	0.9
100 001 to 1 000 000	34	9.4	11 515	7.1
More than 1 000 000	15	4.2	148 004	91.9
	361	100	161 156	100
* less than 1000
Shareholder spread analysis
To the best knowledge of the directors and after reasonable
enquiry, as at 28 February 2021, the spread of shareholders, as
defined in the Listings Requirements of the JSE Limited, was as
follows:
Type of shareholder
Non-public shareholders	25	6.9	128 282	79.6
Directors and Associates (Excluding Employee Unit Schemes)
(Direct Holding)	10	2.8	10 991	6.8
Directors and Associates (Excluding Employee Unit Schemes)
(Indirect Holding)	5	1.4	61 059	37.9
Strategic Holders: Geomer Investments (Pty) Ltd (>10%)	1	0.3	30 040	18.6
Share Schemes	1	0.3	276	0.2
Vunani Group Trusts	8	2.1	25 916	16.1
Public shareholders	336	93.1	32 874	20.4
Total	361	100	161 156	100
Shareholdings greater than 5%
Bambelela Capital Proprietary Limited			79 360	49.2
Geomer Investments Proprietary Limited			30 040	18.6
Baleine Capital Proprietary Limited			10 000	6.2
			119 400	74.0

Shareholders' diary

Financial year-end	28 February 2021
Annual results announcement	7 June 2021
Annual report posted	5 July 2021
Annual general meeting	3 August 2021
Interim results announcement	October 2021

for the year ended 28 February 2021

Vunani Limited – Company (Incorporated in the Republic of South Africa) (Registration number: 1997/020641/06) JSE code: VUN ISIN: ZAE000163382 (the "company")

This document is important and requires your immediate attention.

If you are in any doubt about what action you should take, consult your broker, Central Securities Depository Participant ("CSDP"), legal advisor, banker, financial advisor, accountant or other professional advisor immediately.

If you have disposed of all your shares in the company, please forward this document, together with the attached form of proxy, to the purchaser of such shares or the broker, CSDP, banker or other agent through whom you disposed of such shares.

NOTICE IS HEREBY GIVEN to shareholders 25 June 2021, being the record date to receive notice of the annual general meeting ("AGM") for the year ended 28 February 2021 in terms of section 59(1)(a) of the Companies Act, 71 of 2008, as amended (the "Companies Act"), that the AGM of shareholders of the company will be conducted entirely, and be accessible by shareholders, through electronic communication as envisaged in the Act at 11:00 on Tuesday, 3 August 2021 to: (i) deal with such other business as may lawfully be dealt with at the AGM and (ii) consider and, if deemed fit to pass, with or without modification, the following ordinary and special resolutions, in the manner required by the Companies Act, as read with the JSE Limited Listings Requirements (the "JSE Listings Requirements"), which meeting is to be participated in and voted by shareholders in terms of section 62(3)(a), read with section 59, of the Companies Act.

Salient dates applicable to the AGM

Record date to be eligible to receive the notice of the AGM	25 June 2021
Last day to trade to be eligible to vote at the AGM	20 July 2021
Record date for determining those shareholders entitled to vote at the AGM	23 July 2021

Electronic meeting participation and section 63(1) of the Companies Act – Identification of meeting participants

Meeting participants (including proxies) are required to provide reasonably satisfactory identification before being entitled to attend or participate in shareholders' meetings. Should any shareholder, representative, or proxy for a shareholder wish to participate in the AGM electronically, that person should apply in writing including details on how the shareholder or representative or proxy for a shareholder can be contacted to The Meeting Specialist ("TMS"), via email at proxy@tmsmeetings.co.za and at the address below, to be received by TMS at least seven (7) business days prior to the AGM for TMS to arrange for the shareholder (or representative or proxy) to provide reasonably satisfactory identification to the transfer secretaries for the purposes of section 63(1) of the Act and for TMS to provide the shareholder (or representative or proxy) with details on how to access the AGM by means of electronic participation.

Before any person may attend or participate in a shareholders' meeting, they must present reasonably satisfactory identification and the person presiding at the meeting must be reasonably satisfied that the right of that person to participate and vote, either as a shareholder or as proxy for a shareholder, has been reasonably verified.

When reading the ordinary and special resolutions below, please refer to the explanatory notes for AGM resolutions on pages 173 to 177.

for the year ended 28 February 2021 (continued)

1. PRESENTATION OF ANNUAL FINANCIAL STATEMENTS

The consolidated audited financial statements of the company and its subsidiaries (as approved by the board of directors of the company), including the directors' report, the audit and risk committee report and the external auditor's report for the year ended 28 February 2021, as well as the report of the social and ethics committee, have been distributed as required and will be presented to shareholders. The complete annual financial statements are set out on pages 68 to 169 of the integrated annual report.

2. ORDINARY RESOLUTION NUMBER 1

Re-election of Mr LI Jacobs as an independent non-executive director

"It is hereby resolved that the re-election of Mr LI Jacobs who retires as an independent non-executive director of the company by rotation, in accordance with the company's MOI, and being eligible, offers himself for re-appointment in this capacity, be approved."

Please refer to page 42 of the integrated report for a brief biography.

3. ORDINARY RESOLUTION NUMBER 2

Re-election of Mr S Mthethwa as a non-executive director

"It hereby resolved that the re-election of Mr S Mthethwa, who retires as a non-executive director of the company by rotation, in accordance with the company's MOI, and being eligible, offers himself for re-appointment in this capacity, be approved."

Please refer to page 42 of the integrated report for a brief biography.

4. ORDINARY RESOLUTION NUMBER 3

Re-election of Mr MJ Golding as a non-executive director

"It hereby resolved that the re-election of Mr MJ Golding, who retires as a non-executive director of the company by rotation, in accordance with the company's MOI, and being eligible, offers himself for re-appointment in this capacity, be approved."

Please refer to page 42 of the integrated report for a brief biography.

5. ORDINARY RESOLUTION NUMBER 4

Re-election of Mr GS Nzalo as a member and chairman of the audit and risk committee: Section 94(2) of the Companies Act

"It is hereby resolved that Mr GS Nzalo be re-elected as a member and the chairman of the audit and risk committee, with immediate effect, in terms of section 94(2) of the Companies Act."

6. ORDINARY RESOLUTION NUMBER 5

Re-election of Mr JR Macey as a member of the audit and risk committee: Section 94(2) of the Companies Act

"It is hereby resolved that Mr JR Macey be re-elected as a member of the audit and risk committee, with immediate effect, in terms of section 94(2) of the Companies Act."

for the year ended 28 February 2021 (continued)

7. ORDINARY RESOLUTION NUMBER 6

Re-election of Ms NS Mazwi as a member of the audit and risk committee: Section 94(2) of the Companies Act

"It is hereby resolved that Ms NS Mazwi be re-elected as a member of the audit and risk committee, with immediate effect, in terms of section 94(2) of the Companies Act."

8. ORDINARY RESOLUTION NUMBER 7

Re-appointment of KPMG Inc. as auditor in terms of section 61(8)(c) of the Companies Act

"It is hereby resolved that, on the recommendation of the audit and risk committee, KPMG Inc., together with W Pretorius be and are hereby re-appointed as the independent auditors of the company (for its financial year ending 28 February 2022), and that their appointment be of full force and effect until the conclusion of the company's next AGM.

9. ORDINARY RESOLUTION NUMBER 8

General authority to directors to allot and issue authorised but unissued ordinary shares

"It is hereby resolved that the directors be and are hereby authorised to allot and issue, at their discretion, the unissued share capital of the company and/or grant options to subscribe for unissued shares, for such purposes and on such terms and conditions as they may determine, provided that such transaction(s) has/have been approved by the JSE Limited as and when required, and are subject to the JSE Listings Requirements and the Companies Act and shareholders hereby waive any pre-emptive rights thereto."

10. ORDINARY RESOLUTION NUMBER 9

General authority to directors to allot and issue ordinary shares for cash

"It is hereby resolved that, in terms of the JSE Listings Requirements, the mandate given to the directors of the company in terms of a general authority to issue securities for cash, as and when suitable opportunities arise, be renewed subject to the following conditions:

• any such issue of shares shall be to public shareholders as defined by the JSE Listings Requirements and not to related parties;
• any such issue of equity securities be of a class already in issue, or where this is not the case, must be limited to such securities or rights as are convertible into an existing class of equity securities;
• the authority shall only be valid until the next AGM of the company, provided it shall not extend beyond 15 months from the date of this AGM;
• an announcement giving details including impact on net asset value and earnings per share, will be published at the time of any such allotment and issue of shares representing, on a cumulative basis within one financial year, 5% or more of the number of shares of that class in issue prior to any such issues;
• that issues of shares (excluding issues of shares exercised in terms of any company/group share scheme) in any one financial year shall not, in aggregate, exceed 48 346 775 ordinary shares of no par value; and
• that, in determining the price at which an allotment and issue of shares will be made in terms of this authority, the maximum discount permitted will be 10% of the weighted average traded price of the class of shares to be issued over the 30 business days prior to the date that the price of issue is determined or agreed between the company and the party/parties subscribing for the securities."

Voting

In terms of the JSE Listings Requirements, the approval of 75% majority of votes cast in favour of ordinary resolution number 9 by shareholders present or represented by proxy at this AGM.

11. ORDINARY RESOLUTION NUMBER 10

Approval of remuneration policy (non-binding advisory vote)

"It is hereby resolved, through a non-binding advisory vote, that the company's remuneration policy (excluding the remuneration of non-executive directors and the members of board committees for their services as directors and members of committees) which is not to remunerate its executive directors for attendance at meetings, but rather to remunerate them in terms of an employment contract, be approved and endorsed."

12. ORDINARY RESOLUTION NUMBER 11

Approval of implementation report (non-binding advisory)

"It is hereby resolved, through a non-binding advisory vote, that the company's remuneration implementation report be approved and endorsed."

13. SPECIAL RESOLUTION NUMBER 1

Approval of remuneration payable to non-executive directors

"It is hereby resolved as a special resolution in terms of section 66(9) of the Companies Act, as read with section 65(11)(h), and subject to the provisions of the company's MOI that the company be and it is hereby authorised to pay remuneration to its non-executive directors for their service as directors as follows:

Chairman of the board	R388 131 per annum, includes remuneration for services
	provided to the group, including chairman of the nomination
	committee and member of the investment committee and
	remuneration committee
Base fee for other non-executive directors	R212 000 per annum
Chairman of the remuneration committee	R21 600 per annum in addition to the base fee
Chairman of audit and risk committee	R21 200 per annum, in addition to the base fee
Member of the audit and risk committee	R10 600 per annum, in addition to the base fee
Member of the remuneration committee	R10 600 per annum in addition to the base fee
Chairman of the social, ethics and transformation committee	R21 200 per annum in addition to the base fee
Chairman of investment committee	R10 000 per meeting in addition to the base fee
Member of investment committee	R5 000 per meeting in addition to the base fee

Special resolution number 1 is proposed in order to comply with the requirements of the Companies Act. The aforementioned rates have been recommended in order to ensure that the remuneration of non-executive directors remains competitive, thereby enabling the company to attract persons of the calibre, capability, skill and experience required in order to make a meaningful contribution to the company. The remuneration proposed is considered to be both fair and reasonable and in the best interests of the company.

14. SPECIAL RESOLUTION NUMBER 2

Repurchase of company shares

"It is hereby resolved by special resolution that, subject to the company's MOI, the Companies Act and the JSE Listings Requirements in force from time to time, the company and/or any subsidiary of the company, be and are hereby authorised to repurchase or purchase, as the case may be, shares issued by the company to any person, upon such terms and conditions and in such manner as the directors of the company or the subsidiary may from time to time determine, including that such securities be repurchased or purchased from share premium or capital redemption reserve fund, subject to the following:

• that the repurchase of securities be effected through the order book operated by the JSE trading system and be done without any prior understanding or arrangement between the company and the counterparty;
• that this general authority be valid only until the next AGM or the variation or revocation of such general authority by special resolution at any subsequent general meeting of the company, provided that it shall not extend beyond 15 months from the date of this resolution;

for the year ended 28 February 2021 (continued)

• that an announcement be made, giving such details as may be required in terms of the JSE Listings Requirements when the company has cumulatively repurchased 3% of the initial number (the number of that class of security in issue at the time that the general authority is granted) of the relevant class of securities and for each 3% in aggregate of the initial number of that class acquired thereafter;
• at any point in time the company may only appoint one agent to effect any repurchase of shares on the company's behalf;
• repurchases may not be made by the company and/or its subsidiaries during a prohibited period as defined in the JSE Listings Requirements unless a repurchase programme is in place where the dates and quantities of securities to be traded during the relevant period are fixed and full details of the programme have been disclosed in an announcement over SENS prior to the commencement of the prohibited period;
• the repurchase of shares shall not, in the aggregate, in any one financial year, exceed 20% of the company's issued capital and a maximum of 10% in aggregate of the company's issued capital may be repurchased in terms of the Companies Act, by the subsidiaries of the company, at the time this authority is given;
• the repurchase of securities may not be made at a price greater than 10% above the weighted average of the market value of the securities as determined over the five business days immediately preceding the date on which the transaction is effected; and
• the board of directors passing a resolution that they authorised the repurchase and that the company passed the solvency and liquidity test as set out in section 4 of the Companies Act and that, since the test was done, there have been no material changes to the financial position of the group."

The directors of the company or its subsidiaries will only utilise the general authority set out in special resolution number 2 above to the extent that they, after considering the effect of the maximum repurchase permitted, and for a period of 12 months after the date of the notice of this AGM, are of the opinion that:

• the company and the group will be able, in the ordinary course of business, to pay their debts;
• the assets of the company and the group will be in excess of the liabilities of the company and the group, the assets and liabilities being recognised and measured in accordance with the accounting policies used in the latest annual financial statements;
• the ordinary share capital and reserves of the company and the group are adequate for ordinary business purposes;
• the working capital of the company and the group will be adequate for ordinary business purposes; and
• the directors have passed a resolution authorising the repurchase, resolving that the company has satisfied the solvency and liquidity test as defined in the Companies Act and resolving that since the solvency and liquidity test had been applied, there have been no material changes to the financial position of the group.

For the purpose of considering special resolution number 2 and in compliance with the JSE Listings Requirements, the information listed below has been included in the company's integrated annual report, of which this notice of the AGM forms part, at the places indicated below:

• directors and management refer to page 42 of this integrated report;
• major shareholders refer to page 168 of this integrated report;
• directors' interests and securities refer to page 141 of this integrated report; and
• share capital of the company refer to pages 121 this integrated report.

Directors' responsibility

The directors, whose names are set out on page 42 of this integrated annual report, 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 other facts that have been omitted which would make any statement false or misleading and that all reasonable enquiries have been made and that the aforementioned special resolution contains all the information required by the JSE.

15. SPECIAL RESOLUTION NUMBER 3

Financial assistance

"It is hereby resolved as a special resolution that, subject to the requirements of the company's MOI and section 45 of the Companies Act, that the board of directors of the company may authorise the company to provide direct or indirect financial assistance by way of loan, guarantee, the provision of security or otherwise to:

• any of its present or future subsidiaries and/or any other company or corporation that is or becomes related or inter-related to the company for any purpose or in connection with any matter, including but not limited to, the subscription to any option, or any securities issued or to be issued by the company or a related or inter-related company, or for the purchase of any securities of the company or a related or inter-related company; and
• any of its present or future directors or prescribed officers (or any person related to any of them or to any company or corporation related or inter-related to any of them) or to any other person who is a participant in any of the company's share or other employee incentive schemes, for the purpose of, or in connection with, the subscription of any option, or any securities, issued or to be issued by the company or a related or inter-related company, or for the purchase of any securities of the company or a related or inter-related company, where such financial assistance is provided in terms of any such scheme that does not satisfy the requirements of section 97 of the Companies Act, such authority to endure until the next AGM of the company."

16. ORDINARY RESOLUTION NUMBER 11

Directors' authority to sign documentation

"It is resolved as an ordinary resolution that any director of the company and/or the company secretary be and hereby is authorised to sign any documents and to take any steps as may be necessary or expedient to give effect to all ordinary and special resolutions passed at this meeting."

Voting procedures and electronic participation

On a show of hands, every shareholder present in person or represented by proxy and entitled to vote shall have only one vote, irrespective of the number of shares such shareholder holds. On a poll, every shareholder present in person or represented by proxy and entitled to vote shall be entitled to one vote for every share held or represented by that shareholder. On a poll taken at any such meeting the shareholder entitled to more than one vote need not, if he votes, use all of his votes, or cast all the votes he uses in the same way:

• to furnish the company with his voting instructions; or
• in the event that he wishes to attend the AGM, to obtain the necessary letter of representation to do so.

The directors have made any provision for electronic voting at the AGM.

Litigation

The directors are not aware of any legal or arbitration proceedings (including any such proceedings that are pending or threatened), which may have or have had, in the recent past, being at least the previous 12 months, a material effect on the group's financial position.

Material change

Other than the facts and developments reported on in this integrated annual report, there have been no material changes in the financial or trading position of the group since the company's financial year-end and the signature date of this integrated annual report.

for the year ended 28 February 2021 (continued)

Quorum

A quorum for the purposes of considering the resolutions above shall consist of three shareholders of the company personally present or represented by proxy (and if the shareholder is a corporate body, the representative of the body corporate) and entitled to vote at the AGM. In addition, a quorum shall comprise 25% of all voting rights entitled to be exercised by shareholders in respect of the resolutions above.

The date on which shareholders must be recorded as such in the register maintained by the transfer secretaries, Singular Systems Proprietary Limited (25 Scott Street, Waverley, 2090), for the purposes of being entitled to attend, participate in and vote at the AGM is 23 July 2021.

Threshold for resolution approval

For ordinary resolutions, with the exception of ordinary resolution number 9 as detailed above, to be approved by shareholders, each resolution must be supported by more than 50% of the voting rights exercised on the resolution concerned.

For special resolutions and ordinary resolution number 8 to be approved by shareholders, each resolution must be supported at least 75% of the voting rights exercised on the resolution concerned.

PROXIES

A shareholder entitled to attend and vote at the AGM is entitled to appoint one or more proxies to attend, participate in and vote at the AGM in the place of the shareholder. A proxy need not also be a shareholder of the company.

Shareholders on the company share register who have dematerialised their ordinary shares through STRATE, other than those whose shareholding is recorded in their "own name" in the sub-register maintained by their CSDP, and who wish to attend the AGM in person, will need to request their CSDP or broker to provide them with the necessary authority to do so in terms of the custody agreement entered into between the dematerialised shareholders and their CSDP or broker.

Shareholders who have not dematerialised their shares or who have dematerialised their shares with "own-name" registration, and who are entitled to attend and vote at the AGM, are entitled to appoint one or more proxies to attend, speak and vote in their stead. A proxy need not be a shareholder and shall be entitled to vote on a show of hands or poll. It is requested that forms of proxy be forwarded so as to reach the transfer secretaries at least 48 hours prior to the AGM, alternatively proxies may be presented prior to the commencement of the AGM. If shareholders who have not dematerialised their shares or who have dematerialised their shares with "own-name" registration and who are entitled to attend and vote at the AGM do not deliver forms of proxy to the transfer secretaries timeously, such shareholders will nevertheless at any time prior to the commencement of the voting on the ordinary and special resolutions at the AGM be entitled to lodge forms of proxy in respect of the AGM, in accordance with the instructions therein with the chairman of the AGM.

By order of the board

B Khoza Chief executive officer

5 July 2021

FORM OF PROXY

Vunani Limited – Company

(Incorporated in the Republic of South Africa) (Registration number: 1997/020641/06) JSE code: VUN ISIN: ZAE000163382 (the "company")

To be completed by registered certificated shareholders and dematerialised shareholders with own-name registration only.

For use in respect of the AGM to be held at the company's offices, Vunani House, Vunani Office Park, 151 Katherine Street, Sandown, Sandton on Tuesday, 3 August 2021 at 11:00.

Ordinary shareholders who have dematerialised their shares with a CSDP or broker, other than with own-name registration, must arrange with the CSDP or broker concerned to provide them with the necessary letter of representation to attend the AGM or the ordinary shareholders concerned must instruct their CSDP or broker as to how they wish to vote in this regard. This must be done in terms of the custody agreement entered into between the shareholder and the CSDP or broker concerned.

I/We		(full names in BLOCK LETTERS)
of		(address)
Telephone (work)	Telephone (home)
being the holder(s) of		ordinary shares in the company, appoint (see note 1):
		or failing him/her,
		or failing him/her,

the chairman of the AGM,

as my/our proxy to act on my/our behalf at the AGM which is to be held for the purpose of considering and, if deemed fit, passing, with or without modification, the ordinary and special resolutions to be proposed thereat and at any adjournment thereof and to vote for or against such resolutions or to abstain from voting in respect of such resolutions, in accordance with the following instructions (see note 2):

	Number of votes (one vote per ordinary share)
	For	Against	Abstain
Ordinary Resolution number 1Re-election of Mr LI Jacobs as an independent non-executive director
Ordinary resolution number 2Re-election of Mr S Mthethwa as an independent non-executive director
Ordinary resolution number 3Re-election of Mr MJ Golding as a non-executive director
Ordinary resolution number 4Re-election of Mr GS Nzalo as a member and chairman of the audit and risk committee
Ordinary resolution number 5Re-election of Mr JR Macey as a member of the audit and risk committee
Ordinary Resolution number 6Re-election of Ms NS Mazwi as a member of the audit and risk committee
Ordinary Resolution number 7Re-appointment of KPMG Inc. as the auditor of the company
Ordinary Resolution number 8General authority to directors to allot and issue authorised but unissued ordinary shares
Ordinary Resolution number 9General authority to directors to allot and issue ordinary shares for cash
Ordinary Resolution number 10Approval of remuneration policy (non-binding advisory vote)
Ordinary resolution number 11Approval of remuneration implementation report (non-binding advisory vote)
Special resolution number 1Approval of remuneration payable to non-executive directors
Special resolution number 2Repurchase of company shares
Special resolution number 3Financial assistance
Ordinary Resolution number 12Directors' authority to sign documents

(Please indicate instructions to proxy in the space provided above by the insertion therein of the relevant number of votes exercisable.)

Each shareholder is entitled to appoint one or more proxies (who need not be a shareholder of the company) to attend, speak, and on a poll, vote in place of that shareholder at the AGM.

Signed at on 2021

Signature(s) Capacity

Please read the notes and summary on the reverse side hereof.

Notes to the form of proxy

Notes

• 1. A member may insert the name of a proxy or the names of two alternate proxies of the member's choice in the space(s) provided, with or without deleting "the chairman of the AGM". The person whose name stands first on this form of proxy and who is present at the AGM will be entitled to act as proxy to the exclusion of those whose names follow.
• 1. A member should insert an "X" in the relevant space according to how he wishes his votes to be cast. However, if a member wishes to cast a vote in respect of a lesser number of ordinary shares than he owns in the company, he should insert the number of ordinary shares held in respect of which he wishes to vote. Failure to comply with the above will be deemed to authorise the proxy to vote or to abstain from voting at the AGM as he deems fit in respect of all the member's votes exercisable at the AGM. A member is not obliged to exercise all of his votes, but the total of the votes cast and abstentions recorded may not exceed the total number of the votes exercisable by the member.
• 1. The completion and lodging of this form of proxy will not preclude the relevant member from attending the AGM and speaking and voting in person to the exclusion of any proxy appointed in terms hereof, should such member wish to so do.
• 1. The chairman of the AGM may reject or accept any form of proxy, which is completed and/or received, other than in compliance with these notes.
• 1. Shareholders who have dematerialised their shares with a CSDP or broker, other than with own name registration, must arrange with the CSDP or broker concerned to provide them with the necessary letter of representation to attend the AGM or the ordinary shareholders concerned must instruct their CSDP or broker as to how they wish to vote in this regard. This must be done in terms of the custody agreement entered into between the shareholders and the CSDP or broker concerned.
• 1. Any alteration to this form of proxy, other than the deletion of alternatives, must be signed, not initialled, by the signatory/ies.
• 1. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity (e.g. on behalf of a company, close corporation, trust, pension fund, deceased estate, etc.) must be attached to this form of proxy, unless previously recorded by the company or waived by the chairman of the AGM.
• 1. A minor must be assisted by his/her parent or guardian, unless the relevant documents establishing his/her capacity are produced or have been recorded by the company.
• 1. Where there are joint holders of shares:
• any one holder may sign this form of proxy; and
• the vote of the senior joint holder who tenders a vote, as determined by the order in which the names stand in the company's register of members, will be accepted.
• 1. To be valid, the completed forms of proxy must either: (a) be lodged or emailed to Transfersec@singular.co.za so as to reach the transfer secretaries by no later than the relevant time or (b) be lodged with the chairman of the AGM prior to the AGM so as to reach the chairman by no later than immediately prior to the commencement of voting on the ordinary and special resolutions to be tabled at the AGM.
• 1. The proxy appointment is revocable by the shareholders giving written notice of the cancellation to the company prior to the AGM or any adjournment thereof. The revocation of the proxy appointment constitutes a complete and final cancellation of the proxy's authority to act on behalf of the shareholders as of the later of: (i) the date stated in the written notice, if any or (ii) the date on which the written notice was delivered as aforesaid.
• 12.If the instrument appointing a proxy or proxies has been delivered to the company, any notice that is required by the Companies Act or the MOI to be delivered by the company to shareholders must (as long as the proxy appointment remains in effect) be delivered by the company to: (i) the shareholder or (ii) the proxy or proxies of the shareholder has directed the company to do so, in writing and pay it any reasonable fee charged by the company for doing so.

Summary of the rights

Established in terms of section 58 of the Companies Act

For purposes of this summary, "shareholder" shall have the meaning ascribed thereto in the Companies Act.

1. At any time, a shareholder of a company is entitled to appoint an individual, including an individual who is not a shareholder of that company, as a proxy, to participate in, and speak and vote at, a shareholders' meeting on behalf of the shareholder, or give or withhold written consent on behalf of such shareholder in relation to an decision contemplated in section 60 of the Companies Act.

• 1. A proxy appointment must be in writing, dated and signed by the relevant shareholder, and such proxy appointment remains valid for one year after the date upon which the proxy was signed, or any longer or shorter period expressly set out in the appointment, unless it is revoked in a manner contemplated in section 58(4)(c) of the Companies Act or expires earlier as contemplated in section 58(8)(d) of the Companies Act.
• 1. Except to the extent that the MOI of a company provides otherwise:
  • a. a shareholder of the relevant company 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 such shareholder;
  • b. a proxy may delegate his authority to act on behalf of a shareholder to another person, subject to any restriction set out in the instrument appointing the proxy; and
  • c. a copy of the instrument appointing a proxy must be delivered to the relevant company, or to any other person on behalf of the relevant company, before the proxy exercises any rights of the shareholder at a shareholders' meeting.
• 1. Irrespective of the form of instrument used to appoint a proxy, the appointment of the proxy is suspended at any time and to the extent that the shareholder who appointed that proxy chooses to act directly and in person in the exercise of any rights as a shareholder of the relevant company.
• 1. Unless the proxy appointment expressly states otherwise, the appointment of a proxy is revocable. If the appointment of a proxy is revocable, a shareholder may revoke the proxy appointment by cancelling it in writing, or making a later inconsistent appointment of a proxy, and delivering a copy of the revocation instrument to the proxy and the company.
• 1. The revocation of a proxy appointment constitutes a complete and final cancellation of the proxy's authority to act on behalf of the relevant shareholder as of the later of the date: (a) stated in the revocation instrument, if any or (b) upon which the revocation instrument is delivered to the proxy and the relevant company as required in section 58(4)(c)(ii) of the Companies Act.
• 1. If the instrument appointing a proxy or proxies has been delivered to the relevant company, as long as that appointment remains in effect, any notice that is required by the Companies Act or the relevant company's MOI to be delivered by such company to the shareholder, must be delivered by such company to the shareholder, or to the proxy or proxies, if the shareholder has directed the relevant company to do so in writing and paid any reasonable fee charged by the company for doing so.
• 1. A proxy is entitled to exercise, or abstain from exercising, any voting right of the relevant shareholder without direction, except to the extent that the MOI, or the instrument appointing the proxy provides otherwise.
• 1. If a company issues an invitation to shareholders to appoint one or more persons named by such company as a proxy, or supply a form of instrument for appointing a proxy:
  • a. such invitation must be sent to every shareholder who is entitled to notice of the meeting at which the proxy is intended to be exercised;
  • b. the invitation, or form of instrument supplied by the relevant company, must: (a) bear a reasonably prominent summary of the rights established in section 58 of the Companies Act; (b) contain adequate blank space, immediately preceding the name or names of any person or persons named in it, to enable a shareholder to write in the name and, if so desired, an alternative name of a proxy chosen by such shareholder and (c) provide adequate space for the shareholder to indicate whether the appointed proxy is to vote in favour or against the applicable resolution/s to be put at the relevant meeting, or is to abstain from voting;
  • c. the company must not require that the proxy appointment be made irrevocable; and
  • d. the proxy appointment remains valid only until the end of the relevant meeting at which it was intended to be used, unless revoked as contemplated in section 58(5) of the Companies Act.

Electronic participation in the Vunani Limited Virtual General Meeting held on 3 August 2021

THE GENERAL MEETING

• Shareholders or their proxies who wish to participate in the general meeting via electronic communication ("Participants"), must apply to the company's meeting scrutineers to do so by e-mailing the form below ("the application") to the e-mail address of the company's meeting scrutineers, The Meeting Specialist (Proprietary) Ltd ("TMS"), by no later than 05:00 pm on 27 July 2021. The e-mail address is as follows: proxy@tmsmeetings.co.za
• The application may also be posted, at the risk of the Participant, to TMS, PO Box 62043, Marshalltown, 2107, so as to be received by the meeting scrutineers by no later than the time and date set out above.
• Shareholders who have dematerialised their shares, other than those shareholders who have dematerialised their shares with "own name" registration, should contact their Central Securities Depository Participant ("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 general meeting through an electronic participation platform. Such Participants, should they wish to have their vote(s) counted at the general meeting, must provide TMS with the information requested below.
• Each shareholder, who has complied with the requirements below, will be contacted between 29 July and 2 August 2021 via email/mobile with a unique link to allow them to participate in the virtual 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 telephone service provider.
• The cut-off time, for administrative purposes, to participate in the meeting will be 05:00 pm on 27 July 2021.
• 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 general meeting.

Electronic participation in the Vunani Limited Virtual General Meeting held on 3 August 2021(continued)

TERMS AND CONDITIONS FOR PARTICIPATION AT THE VUNANI LIMITED GENERAL MEETING TO BE HELD ON 3 AUGUST 2021 VIA ELECTRONIC COMMUNICATION

• The cost of dialling in using a telecommunication line/webcast/web-streaming to participate in the general meeting is for the expense of the Participant and will be billed separately by the Participant's own telephone service provider.
• The Participant acknowledges that the telecommunication lines/webcast/web-streaming are provided by a third party and indemnifies Vunani Limited, the JSE Limited 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 Vunani Limited, the JSE Limited 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 it or from total or partial failure of the telecommunication lines/webcast/web-streaming and connections linking the telecommunication lines/webcast/web-streaming to the general meeting.
• Participants will be able to vote during the general meeting through an electronic participation platform. Such Participants, should they wish to have their vote(s) counted at the 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 e-mailed to TMS at proxy@tmsmeetings.co.za.

Shareholder name
Signature

Date

Important: You are required to attach a copy of your identity document/drivers licence/passport when submitting the application.

General information

Registration number	1997/020641/06
Country of incorporation and domicile	Republic of South Africa
Headquarters	Sandton, South Africa
JSE code	VUN
ISIN	ZAE000163382
Primary listing	Main board on the JSE
Listing date	27 November 2007
Secondary listing	A2X
Shares in issue at 28 February 2021	161 155 915
Business address and registered office	Vunani House,Vunani Office Park,151 Katherine Street,Sandown, Sandton,2196
Postal address	PO Box 652419,Benmore,2010
Transfer secretaries	Singular Systems Proprietary Limited25 Scott StreetWaverlyJohannesburg2090
JSE Sponsor	Grindrod Bank Limited
Website	www.vunanilimited.co.za
Telephone	+27 11 263 9500

Acronyms, abbreviations and definitions

FINANCIAL DEFINITIONS

Basic earnings per share ("EPS") (cents)	Earnings attributable to ordinary shareholders divided by theweighted average number of ordinary shares calculated in cents.
Diluted basic earnings per share (cents)	Earnings attributable to ordinary shareholders divided by theweighted average number of ordinary shares, adjusted for thepotential dilutive ordinary shares resulting from share-basedpayments calculated in cents.
Diluted headline earnings per share (cents)	Headline earnings attributable to ordinary shareholders divided bythe weighted average number of ordinary shares, adjusted for thepotential dilutive ordinary shares resulting from share-basedpayments calculated in cents.
Dividends per share (cents)	Total dividends paid to ordinary shareholders divided by the numberof ordinary shares issued calculated in cents.
Headline earnings	Determined in terms of the circular issued by the South AfricanInstitute of Chartered Accountants at the request of the JSE,by excluding from reported earnings specific separately identifiablere-measurements net of related tax and non-controlling interests.
Headline earnings per share ("HEPS") (cents)	Headline earnings divided by the weighted number of ordinaryshares calculated in cents.
Net asset value per share (cents)	Equity attributable to equity holders of Vunani Limited, divided bythe total shares in issue, including treasury shares calculatedin cents.
Return on equity (%)	Net income after tax attributable to equity holders of Vunani dividedby equity attributable to equity holders of Vunani Limited.
Return on investment (%)	Net income after tax attributable to the investment divided by thecost (equity and loans) of the investment.
Shares in issue (number)	The number of ordinary shares in issue as listed by the JSE.
Tangible net asset value per share (cents)	Equityattributabletoequityholdersof VunaniLimited,excluding goodwill and intangible assets divided by the total sharesin issue, including treasury shares calculated in cents.
Weighted average number of shares (number)	The number of shares in issue at the beginning of a period,adjusted for shares cancelled, bought back, or issued during theperiod, multiplied by a time-weighting factor.

SUBSIDIARIES AND ASSOCIATES

Alliance	Alliance Capital Limited
Black Wattle	Black Wattle Colliery Proprietary Limited
Fairheads	Fairheads International Holdings Proprietary Limited
Oracle	Oracle Insurance Eswatini Proprietary Limited
Mandlalux	Mandlalux Proprietary Limited
Mandlamart	Mandlamart Proprietary Limited
Purpose Vunani	Purpose Vunani Asset Management (Private) Limited
Vunani	Vunani Limited and its subsidiaries
Vunani Capital	Vunani Capital Proprietary Limited
Vunani Capital Markets	Vunani Capital Markets Proprietary Limited
Vunani Fund Managers	Vunani Fund Managers Proprietary Limited
Vunani Fund Managers Botswana	Vunani Fund Managers Proprietary Botswana Limited
Vunani Mion Properties	Vunani Mion Properties Proprietary Limited
Vunani Property Asset Management or VPAM	Vunani Property Asset Management Proprietary Limited
VProp714	VProp714 Proprietary Limited
Vunani Resources	Vunani Resources Proprietary Limited
Vunani Securities	Vunani Securities Proprietary Limited
Vunani Limited	A company incorporated in the Republic of South Africa, registrationnumber 1997/020641/06 JSE code: VUN ISIN: ZAE000163382Listed on the JSE

OTHER DEFINITIONS

Black	African, Coloured, Indian and South African Chinese people(who fall within the ambit of the definition of black people in therelevant legislation as determined by court ruling).
Broad-Based Black Economic Empowerment	Socio-economic term concerning formalised initiatives andprogrammes to enable historically disadvantaged black individualsand groups to participate gainfully and equitably in the mainstreameconomy.
Companies Act	The Companies Act of South Africa
CPI (%)	A South African index of prices used to measure the change in thecost of basic goods and services.
International Reporting Standards (IFRS)	International Reporting Standards issued by the InternationalAccounting Standards Board (IASB).
The board	Vunani Limited's board of directors
The group	Vunani Limited and its subsidiaries
The company	Vunani Limited and its subsidiaries
Special purpose vehicle	An entity created to accomplish a narrow and well-defined objective.

Definitions(continued)

ACRONYMS AND ABBREVIATIONS

AGM	Annual general meeting
AUA	Assets under administration
AUM	Assets under management
BBBEE or BEE	Broad-Based Black Economic Empowerment
bps	Basis points
CEO	Chief executive officer
CFA	Chartered Financial Analyst
CFD	Contract for difference
CFO	Chief financial officer
CPI	Consumer price index
DBSA	Development Bank of Southern Africa
EBITDA	Earnings before interest, tax depreciation and amortisation
EPS	Earnings per share
ETF	Exchange traded funds
ETN	Exchange traded notes
FSB	The Financial Services Board
FCTR	Foreign currency translation reserve
GAI	Governance Assessment Instrument
GDP	Gross domestic products
HEPS	Headline earnings per share
IFRS	International Financial Reporting Standards
IoDSA	Institute of Directors in Southern Africa
Framework	International Integrated Reporting Framework released by the International Integrated Reporting Council
ISIN	International Securities Identification Number
IT	Information technology
JSE	The JSE Limited, a licensed securities exchange
King IV	The King IV Report on Corporate Governance in South Africa
KPI	Key performance indicator
LSE	London Stock Exchange
LSM	Living standards measure
M&A	Mergers and acquisitions
MBA	Master of Business Administration
MD	Managing director
MOI	Memorandum of Incorporation
NCI	Non-controlling interest

OCI	Other comprehensive income
PVAM	Purpose Vunani Asset Management
PAT/PBT	Profit after tax/Profit before tax
ROE	Return on equity
ROI	Return on investment
SANAS	South African National Accreditation System
SARS	South African Revenue Services
SENS	Stock Exchange News Service
SPV	Special purpose vehicle
The group	Vunani Limited
The company	Vunani Limited
VCF	Vunani Corporate Finance, a division of Vunani Capital
VFM	Vunani Fund Managers
VFMB	Vunani Fund Managers Botswana
VSIST	Vunani Share Incentive Scheme Trust