Prospectus - Ecsponent Financial Investment Services · PDF fileAn abridged version of the...

Prospectus 2017

Limited

Prospectus

This prospectus is a copy of a registered prospectus [r51(4)(a)]

The definitions and interpretations commencing on page 5 of this Prospectus apply, mutatis mutandis, to this front cover.

The date of issue of this Prospectus is 22 September 2017. [R52(5)]

This Prospectus is prepared and issued in terms of the Companies Act relating to an offer for subscription of: ▪ 10 000 Class D Preference Shares at R100 per preference share; ▪ 10 000 Class E Preference Shares at R100 per preference share; and ▪ 10 000 Class G Preference Shares at R100 per preference share.

This Prospectus sets out an Offer to the general public to subscribe for the Offer Shares.

The Offer is not subject to a minimum subscription amount being raised. Application has been made to the JSE for the listing of the Offer Shares, and approval has been granted under share codes, ECSD1, ECSE1 and ECSG1, for Class D Preference Shares, Class E Preference Shares and Class G Preference Shares, respectively. The Offer Shares will be listed on the Main Board of the JSE, with effect from Wednesday, 4 October 2017.

Applicants who wish to subscribe for the Offer Shares must subscribe for a minimum amount of R10 000 per applicant in order for the application to be successful.

The Directors, collectively and individually, accept full responsibility for the accuracy of the information given in this Prospectus and certify that, to the best of their knowledge and belief, there are no facts that have been omitted which would make any statement herein false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that the Prospectus contains all information required by law.

The Debt Sponsor and Corporate Advisor, Auditors, Transfer Secretaries, Bankers and Company Secretary whose names are included on the inside front cover of this Prospectus, have consented in writing to act in the capacities stated and to their names being included in this Prospectus, and have not withdrawn such consent prior to the publication of the Prospectus.

The JSE takes no responsibility for the contents of the Prospectus, makes no representation as to the accuracy or completeness of any part of this Prospectus and expressly disclaims any liability for any loss arising from or in reliance upon the whole or any part of the Prospectus.

Copies of the Prospectus in English, may be obtained during normal business hours from the date of issue of this Prospectus until 10 business days after closing of the Offer, from the Company’s registered office, the details of which are set out in the “Corporate Information” section on the inside front cover of this Prospectus.

This Prospectus can also be obtained from Ecsponent’s website at www.ecsponentlimited.com.

2017An abridged version of the Prospectus will be released on SENS on Tuesday, 26 September

Offer opens at 09:00 on Tuesday, 26 September

Offer closes at 12:00 on Thursday, 28 September

Listing of the Offer Shares commences at 09:00 on Wednesday, 4 October

Ecsponent Limited Incorporated in the Republic of South Africa

Registration number 1998/013215/06JSE Code: ECS

ISIN: ZAE000179594(the “Company” or “Ecsponent”)

Debt sponsor and corporate advisorQuestco (Pty) Ltd

AuditorsNexia SAB&T Chartered Accountants Inc.

Date of issue: 22 September 2017

3Ecsponent Prospectus 2017

Corporate information

registered addressAcacia House, Green Hill Village Office Park, Corner of Nentabos and Botterklapper Street, The Willows, Pretoria East, 0181PO Box 39660, Garsfontein East, 0060

Date of incorporation of Ecsponent: 09 July 1998

Place of incorporation of Ecsponent: South Africa

Company secretaryMr DP van der Merwe

Acacia House, Green Hill Village Office Park, Corner of Nentabos and Botterklapper Street, The Willows, Pretoria East, 0181PO Box 39660, Garsfontein East, 0060

Debt sponsor and corporate advisorQuestco (Pty) Ltd(Registration number 2002/005616/07)

1st Floor, Yellow Wood House, Ballywoods Office Park33 Ballyclare Drive, Bryanston, 2021

AuditorsNexia SAB&T Chartered Accountants Inc.

119 Witch-Hazel Avenue, Highveld Technopark, Centurion, PretoriaPO Box 10512, Centurion, 0046

Transfer Secretaries Computershare Investor Services Proprietary Limited

(Registration number 2004/003647/07)Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196 (P.O. Box 61051, Marshalltown, 2107)

BankerFirst National Bank

First National BankMenlyn SquareCorner Lois Avenue and Gobie Street, NewlandsPretoria East, 0181(P.O. Box 36296, Menlo Park, 0102)

Corporate information 3

Definitions and interpretations 5

Section 1

Name, address and incorporation [R57] 12Directors, other office holders, or material third parties [R58] 14

History, state of affairs and prospects of the company [rR59] 17

Share capital of the company [R60] 22Options and preferential rights in respect of shares [R61(1)] 25

Commissions paid or payable [R62] 25

Material contracts [R63(1)] 25Interests of directors and promoters [R64(2)] 25

Material loans and borrowings [R65] 25Shares issued or to be issued, otherwise than for cash [R66] 26

Property acquisitions and disposals [R67] 26

Amounts paid or payable to promoters [R68] 26Preliminary expenses and issue expenses [R69] 26

Section 2Purpose of the offer of preference shares under this prospectus [R70(a)] 27

Time and date of the opening and of the closing of the offer [R71] 27

Particulars of the offer [R72] 28

Minimum subscription [R54(3); R73] 28

Section 3

Adequacy of capital [R74(2)(a)] 29Report by directors as to material changes [R75] 29

Statement as to listing on stock exchange [R76] 29

Report by the auditor where business undertaking to be acquired [R77] 30

Report by the auditor where company will acquire a subsidiary [R78] 30

Report by auditors of the company [R79] 30

Section 4

Corporate governance 31

Offers in South Africa only 31

Documents available for inspection [R53] 31

Section 5

Inapplicable or immaterial matters [R56] 32

Annexures

Annexure 1: Terms and conditions 33

Annexure 2: Procedures for acceptance 39

Annexure 3: South African taxation 41Annexure 4: Material borrowings and loans receivable 43

Annexure 5: Amendments to authorised and issued share capital 44

Annexure 6: Report by the auditor 46

Annexure 7: Corporate governance 48

Annexure 8: Historic information 80

Annexure 9: Exchange control 173

Annexure 10: Subscription and sale 174

Attachments:Application form in respect of the offer shares 177

Dividends tax – declaration and exemption 181

Table ofcontents

Click on a page number for quick access.


Definitions and interpretationsIn this Prospectus, unless otherwise stated or the context otherwise indicates, the words in the first column shall have the corresponding meanings stated opposite them in the second column and words in the singular shall include the plural and vice versa, words importing natural persons shall include corporations and associations of persons and any reference to one gender shall include the other genders.

"Affected Jurisdiction" a jurisdiction where the dissemination of the Prospectus or the making of the offer to subscribe for the Offer Shares may be illegal or fails to conform to the laws of such jurisdiction or requires any type of registration or the like with any regulator or public body or the like including, without limitation, the USA, Canada, Australia and Japan (absent an applicable exemption from registration requirements);

“Applicable Laws” in relation to any person, all and any statutes and subordinate legislation and common law, regulations, ordinances and by-laws, directives, codes of practice, circulars, guidance notices, judgments and decisions of any competent authority, or any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation and other similar provisions, from time to time, compliance with which is mandatory for that person;

“Applicable Procedures” the rules and operating procedures for the time being of Strate, the Participants and the JSE, as the case may be;

“Application Form” the application form for the application to subscribe for Class D Preference Shares, Class E Preference Shares and Class G Preference Shares, offered in terms of this Prospectus, and which is attached to this Prospectus;

“Beneficial Interest” ownership of a beneficial interest in a dematerialised Preference Share held directly in Strate, through a CSDP or Participant;

“Board” or “Directors” the board of directors of Ecsponent as at the date of this Prospectus;

“Books Disposal” the disposal by the Group of a book of debtors to Ecsponent Business Finance Proprietary Limited for a total purchase consideration of R9 million, payable in cash to Ecsponent CS, effective 29 February 2016;

“Broker” any person registered as a “broking member (equities)” in terms of the rules of the JSE, issued and published in accordance with the provisions of the FMA;

“Business Day” any day of the week, excluding Saturdays, Sundays and all official South African public holidays;

“Calculation Agent” Ecsponent, for the time being;

“Capital” Ecsponent Capital (RF) Limited (registration number 2009/015563/06), a public company duly registered and incorporated under the laws of South Africa, having its registered address at Acacia House, Green Hill Village Office Park, Corner of Nentabos and Botterklapper Street, The Willows, Pretoria East

“Certificated Shares” Shares which have not been dematerialised, title to which is represented by an Individual Certificate;

“CIPC” the South African Companies and Intellectual Property Commission;

“Clade” Clade Investment Management Proprietary Limited (registration number 2004/025680/07), a private company duly registered and incorporated with limited liability, under the laws of South Africa;

“Clade Acquisition” the acquisition of a 51% equity stake in Clade for a deferred cash consideration of R7 million, to be settled over a period of seven months in equal monthly instalments of R1 million each, and the issue of 19 095 617 Ordinary Shares in the Company;

“Clade Disposal” the disposal by Ecsponent of its 51% interest and loan accounts in Clade to Capital for a total consideration of R16 500 000, effective on 31 March 2017, as detailed in a circular to Shareholders dated 1 March 2017;

“Clade Disposal Agreement” the disposal agreement concluded between Ecsponent, Capital, Ecsponent Management Services and Clade on 20 December 2016 in order to give effect to the Clade Disposal;

“Class A Preference Share” a five year, fixed-rate, redeemable, cumulative, non-participating preference share of no par value, convertible on an Event of Default, with a Redemption Amount of 100% of the Initial Issue Price per Preference Share, attracting dividends at a rate of 10% per annum, not compounded, and subject to such further preferences, rights, limitations and other terms associated with such class set out in schedule 2 of the MOI and Annexure 1 of this Prospectus;


“Class B Preference Share” a five year, zero-rate, redeemable, non-participating preference share of no par value, convertible on an Event of Default, with a Redemption Amount of 170% of the Initial Issue Price per Preference Share, subject to the preferences, rights, limitations and other terms associated with such class set out in Schedule 2 of the MOI and Annexure 1 of this Prospectus;

“Class C Preference Share” a five year, variable-rate, redeemable, cumulative, non-participating preference share of no par value, convertible on an Event of Default, with a Redemption Amount of 100% of the Initial Issue Price per Preference Share, attracting dividends at a rate equal to Prime Rate plus 4% per annum, not compounded, and subject to such further preferences, rights, limitations and other terms associated with such class set out in Schedule 2 of the MOI and Annexure 1 of this Prospectus;

“Class D Preference Share” a five year, fixed-rate, redeemable, cumulative, non-participating Preference Share of no par value, convertible on an Event of Default, with a Redemption Amount of 100% of the Initial Issue Price, attracting dividends at a rate of 12.5% per annum, and subject to such further preferences, rights, limitations and other terms associated with such class set out in Schedule 2 of the MOI and Annexure 1 of this Prospectus;

“Class E Preference Share” a five year, fixed-rate, redeemable, convertible, cumulative, non-participating Preference Share of no par value, convertible on an Event of Default, with a Redemption Amount of 100% of the Initial Issue Price, attracting dividends at a rate of 11.25% per annum, and subject to such further preferences, rights, limitations and other terms associated with such class set out in Schedule 2 of the MOI and Annexure 1 of this Prospectus;

“Class F Preference Share” fixed-rate, cumulative, non-participating, perpetual Preference Shares of no par value in the share capital of the Company and with a Redemption Amount of 100% of the Initial Issue Price per Preference Share, should the Company elect to voluntarily redeem Class F Preference Shares, and subject to the preferences, rights, limitations and other terms associated with such class set out in Schedule 2 of the MOI and Annexure 1 of this Prospectus;

“Class G Preference Share” a five year, fixed-rate, redeemable, cumulative, non-participating preference share of no par value, convertible on an Event of Default, with a Redemption Amount of 100% of the Initial Issue Price, attracting dividends at a rate of 10% per annum, and subject to such further preferences, rights, limitations and other terms associated with such class set out in Schedule 2 of the MOI and Annexure 1 of this Prospectus;

“Common Monetary Area” collectively, South Africa, the Republic of Namibia and the Kingdoms of Lesotho and Swaziland;

“Companies Act” the South African Companies Act, No. 71 of 2008, as amended from time to time;

“Companies regulations” the regulations published by the Minister of Trade and Industry in terms of section 120 and 223 of the Companies Act;

“Company” Ecsponent;

“Computershare” or “Transfer Secretaries”

Computershare Investor Services Proprietary Limited (registration number: 2004/003647/07), a private company duly registered and incorporated under the laws of South Africa and having its registered address at Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196;

“Cryo-Save SA” Cryo-Save South Africa Proprietary Limited (registration number: 2010/009754/07), a private company duly registered and incorporated under the laws of SA and having its registered address at Acacia House, Green Hill Village Office Park, Corner of Nentabos and Botterklapper Street, The Willows, Pretoria East, and a subsidiary of Ecsponent;

“CSD” a central securities depository as defined in section 1 of the FMA;

“CSDP” a Central Securities Depository Participant, being a person accepted by the CSD as a Participant, as contemplated in terms of section 31 of the FMA and who is approved by the CSD, in terms of the rules of CSD;

“Day Count Fraction” in relation to the calculation of an amount for any period of time applicable to a Tranche of Preference Shares (where applicable), the day count fraction specified as such in the Terms and Conditions or the applicable pricing supplement released on SENS and, specifically, if “Actual/365” is specified, means the actual number of days in the Dividend Period divided by 365 (three hundred and sixty-five);

“Dividend Amount” the ZAR amount of dividends payable in respect of the Offer Shares, in accordance with Condition 11 (Entitlement to Dividends) of the Terms and Conditions;

“Dividend Commencement Date”

in relation to the Offer Shares - the first date from which dividends will accrue, being the Initial Issue Date;

“Dividend Finalisation Date” the day on which finalisation information regarding Dividend Amounts to be paid will be published on SENS, which will be eight Business Days before the Dividend Record Date, in line with Schedule 18 of the Listings Requirements, as amended from time to time;


“Dividend Last Day to Trade”

the last day to trade in Preference Shares cum-dividend, which will be the Tuesday (three Business Days) before the Dividend Record Date, in line with Schedule 18 of the Listings Requirements, as amended from time to time;

“Dividend Ex-Date” the date on which Preference Shares start trading ex-dividend, and will be one Business Day after the Dividend Last Day to Trade, in line with Schedule 18 of the Listings Requirements, as amended from time to time;

“Dividend Payment Date” the first business day after the Dividend Record Date;

“Dividend Period” in relation to the Offer Shares, each period beginning on (and including) the Dividend Commencement Date or any Dividend Payment Date and ending on the immediately following the Dividend Payment Date;

“Dividend rate” the rate to be used in calculating the Dividend Amount, which is a fixed rate 12.5%, 11.25% and 10% (per annum, not compounded) for the Class D, Class E and Class G Preference Shares, respectively;

“Dividend rate Determination Date”

in relation to the Offer Shares, the day on which the applicable Dividend Rate will be determined;

“Dividend record Date” the date on which Preference Shareholders must be recorded in the Register in order to qualify for a Dividend Amount, which will be the Friday (one Business Day) before the Dividend Payment Date, in line with Schedule 18 of the Listings Requirements, as amended from time to time;

“EBF” Ecsponent Business Finance Proprietary Limited (registration number 2012/069960/07), a private company duly registered and incorporated under the laws of South Africa;

“EBF Disposal” The disposal of Ecsponent’s acquired debt books to EBF, effective on 28 February 2016. The disposal consideration of R9 million was paid in cash to ECS in 12 equal instalments. The acquired debt books had a carrying value of R8.9 million on the effective date;

“EIH” Ecsponent Investment Holdings Proprietary Limited (registration number 2012/069960/07), a private company duly registered and incorporated under the laws of South Africa, having its registered address at Acacia House, Green Hill Village Office Park, Corner of Nentabos and Botterklapper Street, The Willows, Pretoria East;

“Ecsponent” Ecsponent Limited (registration number 1998/013215/06), a public company duly registered and incorporated under the laws of South Africa and listed on the Main Board of the JSE, having its registered address at Acacia House, Green Hill Village Office Park, Corner of Nentabos and Botterklapper Street, The Willows, Pretoria East;

“EAM” Ecsponent Asset Management Limited (registration number CO.2016/1545), a public company with limited liability duly registered and incorporated under the laws of the Republic of Botswana, a 70% owned subsidiary of ECS Holdings;

“ECS Botswana” Ecsponent Limited, formerly Escalator Investment Holdings Limited (registration number CO.2010/7658), a public company duly registered and incorporated under the laws of the Republic of Botswana, having its registered address at Exponential Building, 6th Floor, Plot 54351, New CBD, Gaborone, Botswana, a subsidiary of Ecsponent;

“ECS Holdings” Ecsponent Holdings Proprietary Limited (registration number CO.2014/3692), a private company duly registered and incorporated with limited liability in accordance with the laws of the Republic of Botswana with its main place of business situated within the jurisdiction of Botswana;

“ECS Holdings Disposal” the disposal by the Company of its 70% interest in, and loan accounts owing by ECS Holdings, to Projects, for a sale consideration of P30 300 000, effective on 31 March 2017, as detailed in a circular to Shareholders dated 1 March 2017;

“ECS Holdings Disposal Agreement”

the disposal agreement concluded between Ecsponent, Projects, Ecsponent Management Services and ECS Holdings on 20 December 2016 in order to give effect to the ECS Holdings Disposal;

“Ecsponent CS” Ecsponent Credit Services Proprietary Limited (registration number 2010/015744/07), a private company duly registered and incorporated under the laws of South Africa, having its registered address at Acacia House, Green Hill Village Office Park, Corner of Nentabos and Botterklapper Street, The Willows, Pretoria East, a subsidiary of Ecsponent;

“Ecsponent CS Assets Disposal”

the disposal of Ecsponent CS’ employee benefit assets to GetBucks Proprietary Limited for a purchase consideration of R52 million, effective on 1 June 2015;

“Ecsponent Financial Services”

Ecsponent Financial Services Proprietary Limited (registration number 2006/012668/07), a private company duly registered and incorporated under the laws of South Africa, having its registered address at Acacia House, Green Hill Village Office Park, Corner of Nentabos and Botterklapper Street, The Willows, Pretoria East, a subsidiary of Ecsponent;


“Ecsponent Swaziland” Ecsponent Limited (Swaziland) (registration number R7/38733), a public company duly registered and incorporated under the laws of Swaziland, and a subsidiary of Ecsponent;

“Ecsponent Holdings Swaziland”

Ecsponent Holdings Proprietary Limited (Swaziland) (registration number R7/42655), a private company duly registered and incorporated under the laws of Swaziland, and a subsidiary of Ecsponent;

“EDF” Ecsponent Development Fund Proprietary Limited (registration number: 2015/180072/07), a private company duly registered and incorporated under the laws of SA and having its registered address at Acacia House, Green Hill Village Office Park, Corner of Nentabos and Botterklapper Street, The Willows, Pretoria East, and a subsidiary of Ecsponent;

“EDF Acquisition” the original acquisition by EDF of its business in terms of an agreement dated 2 March 2016, between EDF and EIH, for a deferred purchase consideration of R119 million plus interest on the deferred consideration, effective on 30 June 2016, as detailed in a circular to Shareholders dated 31 March 2016;

“EDF Business” means the going concern business of EDF relating to the short-term financing activities provided to retail clients and to suppliers of government and municipal departments, and the subject to the EDF Disposal, and including: ▪ the impact finance loan portfolio; ▪ all fixtures and fittings, furniture and office equipment; ▪ the customer database and data management system; and

the operational liabilities (trade and other payables) relating to the day to day operations of the business;

“EDF Disposal” the related party disposal by EDF of the EDF Business, as a going concern, to EIH for a sale consideration of R83 894 491, as detailed in the circular to Shareholders dated 1 March 2017, effective 31 March 2017;

“EDF Disposal Agreement” the disposal agreement concluded between EDF and EIH on 20 December 2016 in order to give effect to the EDF Disposal;

“EFS Zambia” Ecsponent Financial Services Limited (registration number LCO.124263), a private company duly registered and incorporated with limited liability, in accordance with the laws of the Republic of Zambia;

“EFS Zambia Subscription” the issue of 1 500 000 new shares by EFS Zambia, equating to 75% of the total issued share capital in EFS Zambia, to GetBucks MU, for a consideration of ZMW7 500 000, effective 27 July 2017, as detailed in a circular to Shareholders dated 1 March 2017;

“EFS Zambia Subscription Agreement”

the subscription agreement concluded between Ecsponent, GetBucks MU and EFS Zambia on 30 December 2016 in order to give effect to the EFS Zambia Subscription;

“EPS” Ecsponent Procurement Services Proprietary Limited (registration number 2015/200863/07), a private company duly registered and incorporated in accordance with the laws of the Republic of South Africa, and a subsidiary of the Company;

“Esperite N.V” Esperite Group N.V. (registration number 27187482), a public holding company, duly registered and incorporated under Dutch law, having its registered address at Piet Heinstraat 11a, 7204 Zutpen, The Netherlands, dual listed on NYSE Euronext Amsterdam and Euronext Paris and specialising in harvesting and storing of stem cells. Esperite N.V. is a 50% shareholder in Cryo-Save SA;

“ETS” Ecsponent Treasury Services Proprietary Limited (registration number 2015/430938/07), a private company duly registered and incorporated in accordance with the laws of the Republic of South Africa, and a subsidiary of the Company;

“Event of Default” the events detailed in the MOI that would result in a conversion of the relevant class of Preference Shares into Ordinary Shares, being: ▪ default by the Company on repayment of the redemption price on the

redemption date; or ▪ non-payment of 3 (three) consecutive dividends;

“Exchange Control regulations”

the South African Exchange Control Regulations, 1961, as amended, promulgated in terms of section 9 of the South African Currency and Exchanges Act, 1933 (Act 9 of 1933), as amended or replaced from time to time;

“FMA” the South African Financial Markets Act, 2012 (Act 19 of 2012), as amended or replaced from time to time;

“GetBucks BW” GetBucks Proprietary Limited (registration number CO.2012/2454), a private company with limited liability, duly incorporated in accordance with the laws of the Republic of Botswana, an entity wholly owned by GetBucks MU;

“GetBucks MU” GetBucks Limited (registration number C38778/C1/GBL), a public company with limited liability, duly incorporated in accordance with the laws of the Republic of Mauritius, an entity wholly owned by MyBucks;


“GetBucks Zambia” GetBucks Financial Services Limited (registration number LCO.127234), a company with limited liability, duly incorporated in accordance with the laws of the Republic of Zambia, a subsidiary of GetBucks MU;

“Group” or “Ecsponent Group”

Ecsponent and its subsidiaries as at the Last Practicable Date;

“IFrS” the International Financial Reporting Standards, as amended from time to time;

“Individual Certificate” a Preference Share in the definitive registered form of a single certificate and being a certificate exchanged for a Beneficial Interest in accordance with Condition 13 (Exchange of Beneficial Interests and Replacement of Individual Certificates) of the Terms and Conditions and any further certificate issued in consequence of a transfer thereof;

“Initial Issue Date” the date at which a particular Series of Preference Shares is first issued by the Company (i.e. the date of the issue of the first Tranche of Preference Shares in a Series);

“Initial Issue Price” the price at which a Series of Preference Shares is first offered to the public (i.e. the Issue Price of the first Tranche of Preference Shares in a Series), being the Offer Price in respect of the Offer Shares;

“Issue Date” the date of issue of the Offer Shares, as set out in this Prospectus;

“Issue Price” the price paid per Preference Share in a particular Tranche of Preference Shares issued, which price may be at a discount or premium to the Initial Issue Price;

“JSE” the JSE Limited (registration number 2005/022939/06), a public company duly registered and incorporated under the laws of South Africa and licensed as a securities exchange under the FMA;

“JSE Debt Listings requirements”

the debt listings requirements of the JSE, as amended from time to time;

“King IV report” the King Report on Corporate Governance in South Africa, 2017;

“Last Practicable Date” 8 September 2017, being the last practicable date prior to the finalisation of this Prospectus;

“Ligagu” Ligagu Investment Proprietary Limited (registration number R7/29333), trading as GetBucks Swaziland, a private company duly registered and incorporated under the laws of South Africa;

“Ligagu Disposal” the disposal of Ecsponent’s 51% interest in Ligagu to Virtual Shared Services Proprietary Limited for a total consideration of R16 million, which became effective on 30 June 2016;

“Listings requirements” the listings requirements of the JSE, as amended from time to time;

“Listing Termination Date” the date on which the listing of the redeemed Preference Shares will be terminated, which will be two Business Days after the Redemption Record Date, in line with Schedule 18 of the Listings Requirements, as amended from time to time;

“Loan Implementation Agreement”

the agreement concluded between Ecsponent, EDF, ECS Holdings, Ecsponent Management Services, Sure Choice, Capital, Projects, Clade, EIH and EAM on 26 January 2017 in order to give effect to the Loan Consolidation;

“Loan Consolidation” the consolidation of all the loan accounts owing to/by the various parties to the Clade Disposal, the ECS Holdings Disposal, the EDF Disposal and the MyBucks Acquisition, and their group companies, whereby the various loan accounts will be consolidated into one single loan account between ETS and Capital, as further in the circular to Shareholders dated 1 March 2017;

“Mason Alexander” Mason Alexander Proprietary Limited (registration number 2015/351662/07), a private company with limited liability, duly incorporated in accordance with the laws of the Republic of South Africa, being a wholly owned subsidiary of Mylesland Investment Holdings Limited, a company beneficially owned by George Manyere and the holding company of Ecsponent;

“Material Transactions” collectively, the Ecsponent CS Assets Disposal, the EDF Acquisition, the EDF Disposal, the ECS Holdings Disposal, the Clade Acquisition, the Clade Disposal, the EFS Zambia Subscription, the EBF Disposal, the Sure Choice Disposal, the Ligagu Disposal, the MyBucks Acquisition and the Loan Implementation Agreement;

“MOI” the current Memorandum of Incorporation of Ecsponent as at the date of this Prospectus, which MOI which was amended through a written resolution set out in a circular to Shareholders dated 3 August 2017;

“MyBucks Acquisition” the related party acquisition by ECS Botswana of 1 100 000 ordinary shares in MyBucks, equal to 10.002% of the total issued ordinary share capital of MyBucks from Projects for a purchase consideration of R262 570 000 as detailed more fully in the circular to Shareholders dated 1 March 2017;

“MyBucks” MyBucks S.À. (companies number B 199.543), a public limited liability company (société à responsabilité limitée) organised under the laws of the Grand Duchy of Luxembourg, and listed on the Frankfort Stock Exchange;


“Offer” the offer for subscription of the Offer Shares made to the general public in terms of this Prospectus, which is an initial public offer as contemplated in the Companies Act;

“Offer Price” the price at which the Offer Shares are being offered pursuant to the Offer described in this Prospectus, being: ▪ R100 per Class D Preference Share; ▪ R100 per Class E Preference Share; and ▪ R100 per Class G Preference Share.

“Offer Shares” the 10 000 Class D Preference Shares, 10 000 Class E Preference Shares and 10 000 Class G Preference Shares, respectively;

“Participant” a CSDP, as defined above;

“Projects” Ecsponent Projects Proprietary Limited (registration number CO.2015/12033), a private company with limited liability, duly incorporated in accordance with the laws of the Republic of Botswana and a wholly owned subsidiary of Capital;

“Preference Shares” collectively, the Class A, Class B, Class C, Class D, Class E, Class F and Class G Preference Shares;

“Preference Shareholders” the holders in South Africa of Preference Shares;

“Prime rate” the publicly quoted basic rate of interest levied by First National Bank Limited (“FNB”) from time to time on overdraft, calculated on a 365-day year, irrespective of whether the applicable year is a leap year, and proved, prima facie, in the event of a dispute and in the absence of manifest error, by a certificate under the hand of any director or manager of FNB, whose appointment and authority need not be proved;

“Programme” the Ecsponent Limited ZAR5,000,000,000 Preference Share Programme under which Ecsponent may, from time to time, issue multiple Tranches of Preference Shares, as described in the Programme Memorandum;

“Programme Memorandum” the memorandum containing the terms and conditions of the Programme in terms of the Debt Listings Requirements, as initially approved by the JSE on 8 September 2014 and amendments thereto subsequently approved by the JSE on 15 December 2015 and on 22 September 2017;

“Prospectus” this bound document dated 22 September 2017 and issued by Ecsponent in terms of which the first Tranche of Class D, Class E and Class G Preference Shares under the Programme, being the Offer Shares, are offered to the public by way of an initial public offer;

“rand” or “r” or “ZAr” South African Rand, the official currency of South Africa;

“redemption Amount” in relation to a Tranche of Preference Shares, the principal amount specified in this Prospectus payable in respect of the Offer Shares upon the Redemption Payment Date;

“redemption Finalisation Date”

the day on which finalised information regarding the Redemption Amounts to be paid will be published on SENS, which will be eight Business Days before the Redemption Record Date, in line with Schedule 18 of the Listings Requirements, as amended from time to time;

“redemption Last Day to Trade”

the last day on which Preference Shares to be redeemed can be traded on the JSE, which will be three Business Days before the Redemption Record Date, in line with Schedule 18 of the Listings Requirements, as amended from time to time;

“redemption record Date” in relation to a Tranche of Class D Preference Shares, Class E Preference Shares and Class G Preference Shares, the date upon which the Class D, Class E and Class G Preference Shares are redeemed by the Issuer, respectively and the day on which the relevant Class D, Class E and Class G Preference Shareholders must be recorded in the Register in order to receive the Redemption Amount, in accordance with Condition 4 (Redemption of Preference Shares) of the Terms and Conditions;

“redemption Payment Date”

in relation to the Offer Shares, the date on which the Redemption Amount is payable to the holders thereof in accordance with Condition 4 (Redemption of Offer Shares) of the Terms and Conditions;

“redemption Suspension Date”

the day on which Preference Shares to be redeemed are suspended on the JSE trading system;

“register” means the register of Preference Shareholders maintained by the Transfer Secretaries in terms of Condition 15 (Register) of the Terms and Conditions:

“rOi” Return on Innovation Proprietary Limited (registration number 2011/125942/07), a private company with limited liability, duly incorporated in accordance with the laws of the Republic of South Africa, a subsidiary of Ecsponent;


“Salveo” Salveo Swiss Technologies Limited (registration number 2004/004630/06), a public company duly registered and incorporated under the laws of South Africa, a subsidiary of Ecsponent, having its registered address at Acacia House, Green Hill Village Office Park, Corner of Nentabos and Botterklapper Street, The Willows, Pretoria East;

“SENS” the Securities Exchange News Service of the JSE;

“Series” a Tranche of Preference Shares together with any further Tranche/(s) of Preference Shares which are:a) expressed to be consolidated and form a single series; andb) identical in all respects (including as to listing) except for their respective Issue

Dates, Dividend Commencement Dates and/or Issue Prices;

“Shares” or “Ordinary Shares”

ordinary shares of no par value in the issued share capital of Ecsponent;

“Shareholders” the registered holders of Ordinary Shares;

“SME” Small-Medium Enterprises;

“Strate” Strate Proprietary Limited (registration number 1998/022242/07), a private company duly registered and incorporated under the laws of South Africa and registered and licensed as a CSD in terms of the FMA or any successor CSD, or any additional or alternate depository approved by the Company;

“Subsidiaries” group companies over which Ecsponent has control, as contemplated in terms of IFRS;

“Sure Choice” Sure Choice Proprietary Limited (registration number CO.2009/2644), a private company incorporated with limited liability in accordance with the laws of the Republic of Botswana;

“Sure Choice Disposal” the disposal by ECS Botswana of its 50% interest in Sure Choice to GetBucks BW, for a sale consideration of P10 000 000, as further detailed in a circular to Shareholders dated 1 March 2017;

“Sure Choice Disposal Agreement”

the disposal agreement concluded between ECS Botswana, GetBucks MU, EAM and Sure Choice on 25 January 2017 in order to give effect to the Sure Choice Disposal;

“Terms and Conditions” the terms and conditions of the Offer Shares as set out in Annexure 1 of this Prospectus;

“Tranche” a particular issuance of Preference Shares issued to the market in a particular Series, of which all Preference Shares in a particular Tranche are identical in all respects (including as to listing, Issue Dates, Dividend Commencement Dates and Issue Prices). For the purposes of clarity, there may be several Tranches, issued on different Issue Dates, within any Series;

“USA” the United States of America; and

“VWAP” the volume weighted average price of a security.


Section 1Information about the Company [R56]

The Company [r57(1)(a); r57(1)(b)(i); r57(1)(c)]1.1. The Company was first incorporated as a

private company in March 1995, after which it converted into a public entity on 9 July 1998, with registration number 1998/013215/06. The Company’s registered address and primary place of business is Acacia House, Green Hill Village Office Park, Corner of Nentabos and Botterklapper Street, The Willows, Pretoria East.

Holding Company [r57(3)(a)]1.2 As at the Last Practicable Date, Mason Alexander

is the holding company of Ecsponent. Mason Alexander has its registered address at the 16th Floor, 1 Thibault Square, 1 Long Street, Cape Town, Western Cape, 8001.

Transfer secretary [r57(1)(b)(ii)]1.3 The physical address of the Transfer Secretaries,

being Computershare Investor Services Proprietary Limited, is Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196, South Africa and the postal address is PO Box 61051, Marshalltown, 2107.

Subsidiaries [r57(3)(b)]1.4 The Group structure is set out in the diagram

below as at the Last Practicable Date.

1. Name, address and incorporation [R57]

Listed on the JSE

50% Cryo-Save

South Africa (Pty) Ltd

100% Cryo-Save Namibia

(Pty) Ltd

50% Salveo Swiss

Technologies Ltd 10

0%

Lazaron Biotechnologies

(Pty) Ltd

51% VitaSave

(Pty) Ltd

100% Ecsponent Biotech

(Pty) Ltd50% Cryo-Save

South Africa (Pty) Ltd

100%

Ecsponent Financial Services

(Pty) Ltd 100%

Ecsponent Holdings (Pty) Ltd

(Swaziland)

84,7% Ecsponent

Swaziland Ltd

100% Ecsponent Ltd

(Botswana) 25% Ecsponent Financial

Services Limited (Zambia)

100%

Ecsponent Management Services Ltd 10

0% Ecsponent Treasury Services (Pty) Ltd

51% Return on Innovation

(Pty) Ltd

100%

Ecsponent Development Fund

(Pty) Ltd 100%

Ecsponent Procurement Services

(Pty) Ltd

100% Sanceda Collection

Services (Pty) Ltd

100% Sanceda Collections

(Pty) Ltd (Botswana)

51% Sanceda Swaziland

(Pty) Ltd

100% Ecsponent Credit

Services (Pty) Ltd


1.5 The names, dates and places of incorporation of the Company’s subsidiaries are set out in the table below. [R 57(3)(b)]

Name of subsidiary [r57(3)(b)]

Held by Place of incorporation [r57(3)(b)]

Date of incorporation [r57(3)(b)]

Cryo-Save SA (Pty) Ltd Ecsponent Ltd (SA) South Africa 17 May 2010

Cryo-Save Namibia (Pty) Ltd Cryo-Save SA (Pty) Ltd Namibia 8 June 2011

Ecsponent Management Services Ltd

Ecsponent Ltd (SA) South Africa 29 October 2002

Salveo Swiss Technologies Ltd Ecsponent Ltd (SA) South Africa 24 February 2004

Ecsponent Financial (Pty) Ltd Ecsponent Ltd (SA) South Africa 4 April 2011

Ecsponent Credit Services (Pty) Ltd

Ecsponent Ltd (SA) South Africa 28 July 2010

Ecsponent Financial Services (Pty) Ltd

Ecsponent Ltd (SA) South Africa 24 April 2006

Ecsponent Limited (Botswana) Ecsponent Ltd (SA) Botswana 26 April 2011

Sanceda Collections Botswana (Pty) Ltd

Ecsponent Ltd (Botswana) Botswana 13 October 2014

Ecsponent Holdings (Pty) Ltd (Swaziland)

Ecsponent Ltd (SA) Swaziland 24 February 2015

Ecsponent Limited Ecsponent Holdings (Pty) Ltd (Swaziland)

Swaziland 16 July 2013

Sanceda Collections Swaziland (Pty) Ltd

Sanceda Collections (Pty) Ltd Swaziland 2 August 2012

Sanceda Collections (Pty) Ltd Ecsponent Ltd (SA) South Africa 14 October 2011

Lazaron Biotechnologies (Pty) Ltd

Ecsponent Ltd (SA) South Africa 19 August 2011

Ecsponent Procurement Services (Pty) Ltd

Ecsponent Ltd (SA) South Africa 10 June 2015

Return on Innovation (Pty) Ltd Ecsponent Ltd (SA) South Africa 10 October 2011

Ecsponent Development Fund (Pty) Ltd

Ecsponent Ltd (SA) South Africa 5 June 2015

Ecsponent Treasury Services (Pty) Ltd

Ecsponent Ltd (SA) South Africa 8 December 2015

Ecsponent Biotech (Pty) Ltd Ecsponent Ltd (SA) South Africa 25 February 2016

VitaSave (Pty) Ltd Ecsponent Biotech (Pty) Ltd South Africa 23 February 2016


2. Directors, other office holders, or material third parties [R58]Overview of the board [r58(2)(a)]2.1 The Ecsponent Board currently comprises

two executive directors and six non-executive directors, of whom four are independent non-

executives. The names, ages, nationalities, business addresses, qualifications and capacities of the directors and prescribed officers of Ecsponent are set out below:

richard Connellan, FCIS, SAIS (71)Independent Non-Executive Chairman 2 Larnica Villas, 251 Willson Street, Fairland, Johannesburg, 2195

Richard provides the Group with a wealth of experience and is a well-respected figure in the South African listed environment. Formerly the executive director of the Takeover Regulations Panel (TRP), Richard is currently a consultant to corporate finance practitioners and the TRP. He teaches takeover law in conjunction with KAR Presentations and is a co-author of Commentary on South African Takeover Law (2015). He was a member of the King Task Group into Insider Trading Legislation, a member of the King III Committee on Corporate Governance (chairman of the takeovers and mergers sub-committee) and was a member of the Standing Advisory Committee on Company Law. In addition, Richard is a Fellow of the Institute of Chartered Secretaries and Administrators, as well as an elected member of the South African Institute of Stockbrokers (non-broking). He is a member of all Ecsponent board committees excluding the Audit and Risk committee, and chairs the Social and Ethics and the Nominations committees.

George Manyere (40)Non-Executive Vice Chairman 4 Arden Road, Newlands, Harare, Zimbabwe

George was appointed to the board as non-executive vice chairman in March 2017. Until recently, he was CEO of Brainworks Limited, a Mauritian registered investment holding company, focused on investments in the Zimbabwean hospitality, real estate, financial services and logistics sectors.

Prior to founding Brainworks in 2008, George was an investment professional with the International Finance Corporation (IFC), headquartered in Washington DC. George serves as a director on the boards of several companies. George holds a B.Acc (Hons) from the University of South Africa. He is a member of the Social and Ethics and Nominations committees.

Keith Alfred rayner (60)Independent Non-Executive 6 Carmel Place, 53 Melrose Street, Melrose Estate, Johannesburg, 2196

Keith is a member of the JSE Limited’s Issuer Regulation Advisory Committee and assisted the TRP with the compilation of regulations concerning fundamental transactions in the Companies Act, 2008. Widely recognised as an expert on the JSE Listings Requirements (JSE LR) and the Companies Act, Keith leverages his experience and knowledge advising the Ecsponent board.

In addition to numerous non-executive board appointments, Keith educates JSE-approved advisors and is at the forefront of developments regarding the JSE LR. Additionally, he is an independent non-executive director on Sibanye Gold Limited’s board of directors, a fellow of the Institute of Directors of South Africa, a non-broking member of the Institute of South African Stockbrokers. Keith is also a member of IAS, a past member of SAICA’s Accounting Practices Committee and a qualified South African Chartered Accountant. He is the chairman of the Remuneration and Nomination committee and a member of the Audit and Risk, Social and Ethics and Nominations committees.

Brandon rodney Topham (46)Independent Non-Executive 100A Club Avenue, Waterkloof Ridge, Pretoria, 0181

Brandon is a qualified Chartered Accountant and Attorney of the High Court of South Africa. He holds B Compt (Hons), BProc and LLM degrees. He is a member of the Institute of Directors in South Africa, an Associate Member of both the Institute of Chartered Management Accountants (UK) and of the Institute of Chartered Accountants in England & Wales (non-practicing). He is also an admitted Solicitor in England and Wales and a Certified Fraud Examiner (USA). He has served as a director of many companies and still serves on the boards of Telemasters Holdings Limited and SEESA Proprietary Limited. As a forensic accountant he has acted as an inspector for the Financial Services Board and has also worked with other regulators and government departments. He is the chairman of the Audit and Risk committee and is a member of the Social and Ethics, Nominations and Remuneration committees.


Patrick Matute (34)Non-Executive Beverley Court, 100, Nelson Mandela Avenue, Harare, Zimbabwe

Patrick was appointed to the board as non-executive director in October 2016 and has over eight years’ experience in corporate finance and private equity in Sub-Saharan Africa. Patrick started his career in 2008 with Questco, a boutique corporate finance company based in Johannesburg, South Africa. While at Questco, Patrick was involved in a number of corporate finance deals in the mining sector, industrial and financial services. In 2012, Patrick joined African Development Corporation (“ADC”) as an Investment Manager, focusing on financial services in Sub-Saharan African. ADC was listed on the Frankfurt Stock Exchange and had investments in nine African countries. Patrick joined Brainworks Limited in 2013 and has been involved in driving the advisory business and portfolio management for investee companies. Patrick is a member of the boards of Brainworks investee companies namely Dawn Properties Limited and FML Oil. Patrick holds a Master of Business Administration degree from Hult International Business School (Shanghai Campus), a Bachelor of Commerce Honours in Finance (University of the Witwatersrand, South Africa), and a Bachelor of Commerce (Finance) (NUST, Zimbabwe) and has completed CFA Level 1 and 2 exams. He is a member of the Social and Ethics and Nominations committees.

Willem Oberholzer (43)Non-Executive Vice Chairman Delmondo Office Park, Building Ravello, 169 Garsfontein Drive, Ashlea Gardens, Pretoria

Willem was appointed to the board as an independent non-executive director in March 2017. He is a CA(SA) and holds an M.Com (Tax), with 20 years’ experience in start-ups, company formations, company turn-arounds, mergers and acquisitions, complex tax structures, tax dispute resolutions and tax litigation. In addition to holding several directorships, he lectures to students studying towards Master’s degrees in Taxation at the University of Pretoria. He is a member of the Social and Ethics, Audit and Risk and Nominations committees.

Terence Patrick Gregory (58)Chief Executive Officer Acacia House, Green Hill Village Office Park, Corner of Nentabos and Botterklapper Street, The Willows, Pretoria East

Terence is a business executive with many years of board level experience in both the corporate and SME environments. Terence has previously been employed by prestigious organisations such as Mercedes-Benz SA, AFGRI, Imperial and McCarthy and as an entrepreneur was responsible for the development in South Africa of the Citroen and SsangYong organisations. He is a strategy and turn-around specialist with a track record of successful turnaround engagements. He is a member of the Social and Ethics committee.

Bryan Shanahan (32)Group Financial Director Acacia House, Green Hill Village Office Park, Corner of Nentabos and Botterklapper Street, The Willows, Pretoria East

Bryan was appointed as the Group’s Financial Director in December 2015 and is a qualified Chartered Accountant with experience across a wide range of industries and organisations. He held the position as audit manager with one of the big four international auditing firms and moved on to become part of the executive management team of a large manufacturing group operating in Africa, responsible for the group’s financial processes, reporting and project financing reviews.

Bryan’s experience includes financial statement audits and financial reporting for a wide range of entities, governance and control assessments, company turnaround projects, mergers and acquisitions, risk management and exposure to corporate finance disciplines. He is a member of the Social and Ethics committee.

Dirk van der Merwe (44)Company Secretary [R58(2)(b)(iii)]Acacia House, Green Hill Village Office Park, Corner of Nentabos and Botterklapper Street, The Willows, Pretoria East

Dirk was appointed as the company secretary in May 2016 and was previously the Group Financial Director from September 2010 until November 2015. In addition to the company secretary function, Dirk provides independent financial consulting services to large corporations. Before joining the Ecsponent Group in 2010 he gained experience in a wide range of industries and organisations during his career which included 10 years at one of the big four international audit firms progressing to an Associate Director level. Dirk is a qualified Chartered Accountant and a non-practicing certified information systems auditor.


2.2 All the above-mentioned directors are South African citizens, except for G Manyere and P Matute, who are Zimbabwean citizens.

Name and address of Auditors [r58(2)(b)(i)]2.3 Nexia SAB&T are the Company’s auditors, with its

registered address at 119 Witch-Hazel Avenue, Highveld Technopark, Centurion, 0046 (PO Box 10512, Centurion, 0046).

Name and address of Banker [r58(2)(b)(ii)]2.4 First National Bank is the Company’s banker, with

its registered address at Menlyn Square, Corner Lois Avenue and Gobie Street, Newlands, Pretoria East, 0181 (P.O. Box 36296, Menlo Park, 0102).

Name and address of Company Secretary [r58(2)(b)(iii)]2.5 Dirk van der Merwe is the Company Secretary,

with his business address at Acacia House, Green Hill Village Office Park, Corner of Nentabos and Botterklapper Street, The Willows, Pretoria East, 0181 (PO Box 39660, Garsfontein East, 0060).

2.6 The Company has not appointed stockbrokers or underwriters in respect of the Programme or this Prospectus. The Company has not appointed an attorney in respect of this Prospectus and makes use of an in-house legal counsel. [R 58(2)(b)(ii)].

Terms of office and service contracts entered into between Ecsponent and the Directors [r58(3)(a)]2.7 None of the Directors have fixed-term service

contracts with the Company. Each executive Director has entered into an employment contract which incorporates the normal terms of an

employment contract for executive Directors, including a notice period applicable to termination of employment. The Chief Executive Officer, Terence Gregory, is subject to a 6-month notice period, and the Group Financial Director, Bryan Shanahan, is subject to a 3-month notice period. None of the executive Directors are subject to restraints of trade.

2.8 A Nominations committee has been established which assists the Board in considering the appropriateness of appointments. Currently appointments made by the Board are temporary until approved by Shareholders at the annual general meeting of Shareholders.

2.9 A monthly retainer of R25 000 is payable for the company secretarial services to the Company Secretary. The Company Secretary is not a director of the Company.

2.10 No person has any special right to appoint or elect a director, other than as a result of their shareholding in the entity.

remuneration of Directors [r58(3)(b)]2.11 In addition to Shares issued to Directors as set

out in paragraph 2.13 and 2.14 below, the total remuneration, benefits and fees received by Directors and former directors for the 15-month period ended 31 March 2017, as extracted from the financial statements for that period, is set out below:

Director Emolumentsr

Bonusr

Fees(for services as director)

r

Totalr

ExecutiveTP Gregory 4 252 954 2 000 000 - 6 252 954B Shanahan 1 633 175 1 000 000 - 2 633 175E Engelbrecht2 1 757 038 - - 1 757 038Total 7 643 167 3 000 000 - 10 643 167

Non-executiveRJ Connellan1 - - 455 000 455 000K Rayner1 - - 425 000 425 000B Topham1 & 5 - - 425 000 425 000E Engelbrecht2 - - 90 000 90 000P Matute3 - - 90 000 90 000G Manyere3 - - 5 000 5 000W Oberholzer1 & 4 - - 5 000 5 000Total - - 1 495 000 1 495 000

1. Independent.2. Resigned as CEO effective 1 October 2016 and retained a non-executive directorship until his resignation from the Board on 31 May 2017. 3. P Matute was appointed on 3 October 2016 and G Manyere was appointed on 20 March 2017.4. W Oberholzer was appointed on 20 March 2017.5. An additional amount of R200 000 was approved post the financial year end for additional services rendered.


2.12 The payments listed above for executive Directors were made by Ecsponent Management Services and ETS, the management and treasury companies for the Ecsponent Group. No other payments are made by any Subsidiaries, or in any other manner, to Directors.

2.13 As proposed by the Company’s Remuneration Committee, Shareholders approved a decision to partially settle Directors’ fees for the non-executive Directors and Directors’ salaries for executive Directors for the 2016 calendar year through the issue of Ordinary Shares to the Directors in lieu of a cash settlement. Details of the shares issued are set out in Annexure 5.

2.14 Shareholders also approved the decision to settle the 2016 executive Director incentives through the issue of Ordinary Shares to the executive Directors in lieu of a cash settlement. Shareholders approved the issue of 7 672 602 Shares to TP Gregory, the Company’s Chief Executive Officer, and 4 349 794 Shares to B Shanahan, the Group Financial Director, on 31 March 2017 as settlement of the 2016 executive Director incentives.

2.15 No other remuneration was paid to Directors by way of management, consulting, technical or other fees, directly or indirectly, including commissions, gains or profit sharing arrangements and no post-

employment benefits, other long-term benefits or termination benefits payments are paid or accrue to any Director of the Group.

Borrowing powers of Directors [r58(3)(c)]2.16 In terms of the MOI of the Company, the Directors

may exercise all the powers of the Company to borrow money, as they consider appropriate, subject to the delegation of authority approved by the Board. The Board has passed a resolution to limit the Group borrowings to R2 billion, excluding the liabilities related to the Programme, and provided the Shareholders with written notice thereof.

2.17 Shareholders approved a general authority at the last annual general meeting of the Company, allowing the Company to enter into direct or indirect funding agreements in terms of section 44 and 45 of the Companies Act. At 31 March 2017, the Group’s borrowings, including the preference share liabilities, totalled R939.3 million (2015: R342.1 million).

2.18 Borrowing powers have not been exceeded during the previous three years.

3.1 History of the Company [r59(3)(a)] Ecsponent Limited was first incorporated as a

private company in March 1995, after which it converted to a public company on 9 July 1998 and has been in operation for 19 years. It was listed on the Venture Capital Market of the JSE on 6 August 1998 and transferred onto the Main Board of the JSE on 20 June 2016.

3.2 About the Company [r 59(2)(b)]3.2.1 Ecsponent functions as a holding company which

develops interests in operational subsidiaries. Ecsponent focuses on the following operational segments: ▪ Investment Services; ▪ Business Credit; and ▪ Equity Holdings.

3.2.2 Investment Services Ecsponent’s Investment Services business

unit provides an effective channel to market for financial services and products. Ecsponent leverages this network to market its own and third-party products through the network of FSB-accredited investment professionals.

The Group’s ability to raise capital to fund investment both in underlying assets and potential equity investments, is key to Ecsponent’s growth strategy. Investment services include capital raising that targets two market sectors, namely retail and institutional investors.

In South Africa, the primary channel to the retail market is preference share investments under the Programme. The preference share structures are based on redeemable preference shares that provide fixed returns on a capital growth, or monthly dividend basis. The Group also attracts institutional debt funding for its operations.

In Botswana, capital raising is entirely from institutional sources and is managed by the capital raising division. The South African model is replicated in Swaziland. Retail investment funds are obtained through the sale of local linked loan units.

In Zambia, the Group has joined forces with GetBucks MU, an international Fintech company that has now invested in EFS Zambia.

EFS Zambia holds a deposit-taking micro finance license and its investment products are deployed under the authority of the Bank of Zambia. These include a range of options from entry-level savings based on payroll deduction, to high-end retail investments. Management is currently negotiating institutional investment opportunities in the territory.

3.2.3 Business Credit The banking sectors of most sub-Saharan African

countries have significant growth potential but require funding to unlock the opportunities. Traditionally, credit provision in these countries

3. History, state of affairs and prospects of the Company [R59]


lags significantly behind development requirements – a situation aggravated by banks still applying traditional credit processes.

The result is financial exclusion and poor growth in the informal sector. Accordingly, it is almost impossible to address the maladies of poverty, development of disadvantaged business sectors, etc.

Ecsponent’s Business Credit unit addresses the demand for funding and other challenges that SMEs face.

The Secured SME Credit model provides wholesale funding to target niche businesses. The Group has developed a model to secure this funding that ensures Ecsponent does not take an unsecured position in respect of any credit agreement. The nature of these transactions is typically medium-term facilities, but with a short-term call up to ensure liquidity for the Group. Ecsponent’s success lies in its stringent credit vetting procedures of both the applicant businesses and the security, whilst understanding the nature of the business. Minimising risk to the Group is the key element to ensuring profitable growth.

Enterprise development funding and supply chain support provide large corporate business with an effective way of managing preferential procurement, improving reliable delivery whilst ensuring true social upliftment and skills transfer for local enterprises.

This offering combines the expertise of EDF and EPS. EPS, which is the procurement leg of enterprise development, was previously disclosed in the Private Equity pillar of the Group’s results.

The offering has been refined over years of providing funding and procurement support provides a holistic solution to assist businesses in South Africa: ▪ in achieving and maintaining B-BBEE

compliance standards; ▪ ensuring more reliable delivery; ▪ driving socio-economic development; and ▪ providing local enterprises with the skills

transfer and skills development they need to fulfil their duties and deliverables as preferred vendors.

The roll-out of the Group’s business credit offering into Africa replicates the South African model and leverages off the infrastructure, systems, products and management expertise of the local business.

3.2.4 Equity Holdings Ecsponent has a well-defined investment

philosophy and invests in companies that demonstrate a strong growth track-record, coupled with significant commercial potential that result in above average investment returns. The Group strives to acquire interests in developing high-tech businesses with high intellectual property and high barriers to entry. Currently, the Group’s equity investments holdings include investment in fintech, biotechnology and media intelligence.

3.2.4.1 Fintech MyBucks is a perfect fit in respect

of the Group’s target investment profile. Fintech is changing the way Africans transact, bank, and borrow. Smartphones with their feature rich operating systems,

provide platforms for apps that can make financial services accessible, convenient, and simple. As smartphone prices decrease, penetration levels are exceeding expectations. By 2020, it is projected that there will be 720 million smartphones in use on the continent.

MyBucks operates in 11 African, two European countries, as well as in Australia. Its back-end systems, proprietary banking, and mobile credit apps have been a catalyst for financial inclusion on the continent.

3.2.4.2 Biotechnology After decades of research, adult

stem cells have been proven to be generally safe and well

tolerated, with no systemic side effect. By enhancing the body’s own repair mechanisms, stem cell therapies offer the opportunity to

treat serious conditions, which have no effective cure today and cause a heavy economic burden on society.

Stem cell therapies are a key component of regenerative medicine, a medical field that holds many great promises of potentially restoring tissues or organs, or even growing new ones by activating the body’s own repair mechanisms will become common practice. Additionally, clinical trials are in advanced stages to use blood stem cells in the treatment of autism, cerebral palsy and brain injuries.

However, even more promising are the potential of mesenchymal stem cells (MSCs). Around 500 MSC-based clinical trials appear in the database of the US National Institute of Health for the treatment of hematological disease, graft-versus-host disease, organ transplantation, diabetes, inflammatory diseases, and diseases in the liver, kidney, and lung, as well as cardiovascular, bone and cartilage, neurological, and autoimmune diseases.

Despite these advances, Africa remains the only continent that does not have a public stem cell bank. This means that there is a severe global shortage of genetically compatible samples representative of South African demographics, which will drive the demand for a local alternative, albeit in the private sector. Going forward this creates a massive need for biotech companies across the continent and any investment in this sector will undoubtedly continue to prove lucrative.

3.2.4.3 Media Intelligence ROi provides strategic management

inputs across all media platforms from the rumblings on social media, through the wide variety of print media to radio and TV. This is managed through one intelligence

platform. The business provides empirical data enabling a strategic high ground for its corporate clients.


3.3 Prospects and state of affairs of Ecsponent and its subsidiaries [r59(3)(c)] and r59(3)(d)]

3.3.1 Ecsponent effects governance and oversight in respect of its Subsidiaries and provides central services such as administration, treasury, management accounting, IT, legal, HR and payroll, etc. Ecsponent adds value to its subsidiaries by: ▪ providing capital raising expertise; ▪ compliance with the Listings Requirements

and the associated governance; ▪ management support and access to industry

specialists; and ▪ access to Financial Services Board (“FSB”)

licences, as well as applicable regulatory licenses in countries outside of South Africa.

3.3.2 Directors’ view of prospects [r59(3)(c)(ii)] The prospects for Ecsponent are linked to the

prospects of the investee companies, details of which are set out below. Over the past two years, the Group has taken several strategic steps which the Directors believe have improved the future prospects of the Group.

3.3.3 A description of the material subsidiaries and their prospects is set out below: [r59(3)(c)(i)] The Group structure is set out in paragraph 1.4 of

this Prospectus.

Ecsponent Financial Services 3.4 Ecsponent Financial Services was incorporated

as a private company in South Africa on 24 April 2006 under the name Tiespro 69 (Pty) Ltd. The name was changed to Escalator Financial Services on 22 November 2011 and thereafter changed to Ecsponent Financial Services on 28 January 2014. Ecsponent Financial Services became a subsidiary of Ecsponent with effect from 25 July 2014, after its acquisition from Capital. [R59(3)(a)(i)]

3.5 Ecsponent Financial Services has 10 000 000 ordinary shares of R0.00001 each in issue, of which Ecsponent holds 100%. [R59(3)(d)(ii)(aa)]

3.6 Ecsponent Financial Services is registered with the FSB as a Financial Services Provider (licence number 32968) to provide intermediary services between product providers and the public in general. Ecsponent Financial Services’ main business is the provision of financial services and it has been appointed to act as intermediary between Ecsponent and the public as a placement agent.

3.7 Ecsponent Financial Services recruits and manages qualified advisors under its FSB licence to market

the products under the rules and regulations that are prescribed by the FSB. Advisors who are already registered with the FSB are also evaluated to market these products. [R59(3)(d)(ii)(bb)]

3.8 Director’s view of prospects [r59(3)(c)(ii)] Ecsponent Financial Services provides access to,

and control of, key elements of the channel to market financial products. FSB regulatory licences are an important component of the roll-out of the strategy and Ecsponent Financial Services provides the Group with the required licences, skills and infrastructure. The Group is currently expanding the range of products available to Ecsponent Financial Services which will result in improved client service and profitability.

EDF and EPS3.9 EDF was incorporated as a private company in

South Africa on 5 June 2015 and has been in operation for a year and 2 months. [R59(3)(a)(i)]

3.10 EDF has 1 000 no par value ordinary shares in issue, of which Ecsponent holds 100%. EDF became a subsidiary of Ecsponent on 5 June 2015. [R59(3)(d)(ii)(aa)];

3.11 EDF acquired the business conducted by EIH (i.e. the loan portfolio, intellectual property, marks, fixtures and fittings) as a going concern, which business had been in operation for 2 years and which acquisition was approved by Ecsponent Shareholders on 31 March 2017. [R59(3)(d)(ii)(bb)]

3.12 EPS, formerly Quilibet Trading (Pty) Ltd, which was acquired as a Subsidiary on 1 March 2015, represents the procurement leg of the business of EDF. EPS has been operating since its acquisition on 1 March 2015. EPS has 100 ordinary shares in issue, of which Ecsponent holds 100%.

3.13 Directors’ view of prospects [r59(3)(c)(ii)] EDF and EPS have an innovative business

approach which focuses on high impact, procurement transactions. It focuses on enterprise development funding as well as supply chain support to large corporate businesses. The innovative approach to funding allows SMEs with credible low risk transactions to access quick funding.

EDF has already established itself as a market leader in its field and operates in several countries including South Africa, Swaziland, Botswana and Zambia.

EDF is developing technology solutions to increase its capacity and deliver this funding at lower cost


levels than traditional lenders. The Board believes that EDF can continue to grow subject to the availability of capital and funding lines.

ECS Botswana 3.14 ECS Botswana was incorporated as a private

company in Botswana on 24 August 2010 under the name Loyn Proprietary Limited. On 21 November 2012, it converted to a public company. On 17 February 2014, ECS Botswana’s name was changed to Ecsponent Limited. It has been in operation for 5 years. [R59(3)(a)(ii)]

3.15 ECS Botswana has 1 000 ordinary shares of Pula1 each in issue, of which Ecsponent holds 100%. ECS Botswana became a subsidiary of Ecsponent on 25 July 2014 following the acquisition by Ecsponent of its interest in ECS Botswana. [R59(3)(d)(ii)(aa)];

3.16 ECS Botswana provides funding to selected financial services companies while also providing secured credit to small, medium and micro enterprises (SMMEs). ECS Botswana also represents the Group’s vehicle through which it holds its current listed equity investments.

[R59(3)(d)(ii)(bb)]

3.17 Directors’ view of prospects r59(3)(c)(ii)] The growth in the Botswana economy, stability

of the currency and demand for credit continues to drive growth of the Ecsponent operation in the territory. The Directors are confident that the growth will continue.

Ecsponent Swaziland and Ecsponent Holdings Swaziland3.18 Ecsponent Swaziland was incorporated as a

private company in Swaziland on 16 July 2013 and has been in operation for 4 years. Ecsponent Holdings Swaziland is the holding company of Ecsponent Swaziland and has been in operation for 2 years. R59(3)(a)(ii)]

3.19 Ecsponent Swaziland has 700 000 000 ordinary shares of E0.000001 each in issue of which Ecsponent holds 84.7%. Ecsponent Swaziland became a subsidiary of Ecsponent on 12 December 2013. [R59(3)(d)(ii)(aa)];

3.20 Ecsponent Holdings Swaziland has 700 ordinary shares of E1 each in issue of which Ecsponent holds 100%. Ecsponent Holdings Swaziland became a subsidiary of Ecsponent on 3 August 2015.

3.21 The Swaziland operations started in the first half of 2014 and provides enterprise development funding and secured credit to SMEs. To fund its operations Ecsponent Swaziland raises capital through the issuance of various classes of preference shares via a prospectus, offered to qualifying members of the public and institutions. The capital raised provides ongoing liquidity to the company’s credit operations, which includes consumer credit, factoring based finance and SME finance. [R59(3)(d)(ii)(bb)]

3.22 Directors’ view of prospects r59(3)(c)(ii)] 2016 witnessed the initiation of the roll-out of the

Group’s enterprise finance model in Swaziland. A co-operation agreement has been entered into with the Federation of the Swaziland Business Community in order to gauge demand for enterprise development services in Swaziland. The evaluation is well-advanced and Ecsponent Swaziland will shortly be engaging the local regulator to facilitate implementation.

The Group saw continued growth in the business credit and enterprise development sectors. During the 2017 financial year, Ecsponent Swaziland applied for registration as a Collective Investment Scheme, which will allow it the ability to offer different products in the Investment services division.

The country has ambitious goals which are targeted for realisation by 2022 and which require significant development in the country’s SME sector. The Directors believe that the Group is perfectly positioned to provide funding and services in support of the country’s objectives.

The Directors have confidence that the business

will continue to grow in the territory.

Cryo-Save SA3.23 Cryo-Save SA was incorporated as a private

company in South Africa on 17 May 2010 and has been in operation for 7 years. [R59(3)(a)(ii)

3.24 Cryo-Save SA has 200 no par value shares in issue of which Ecsponent holds 50%. Cryo-Save SA became a subsidiary of Ecsponent on 1 July 2011. Esperite NV holds the balance of the shares in Cryo-Save SA. [R59(3)(d)(ii)(aa)]

3.25 Cryo-Save SA provides for the harvesting and banking of stem cells from both cord blood as well as cord tissue.

3.26 Esperite NV’s Cryo-Save operation (“Cryo-Save”) is the leading international family stem cell bank and already stores over 280 000 samples from cord blood and umbilical cord tissue for new-borns and adipose tissue for adults. There are several diseases that can be cured by the use of stem cells, and the Directors believe the number of treatments will increase. Driven by its international business strategy, Cryo-Save is represented in 40 countries on three continents, with ultra-modern processing and storage facilities in Belgium, Germany, Dubai, South Africa and France.

3.27 Cryo-Save SA combines Cryo-Save’s leading expertise in stem cell processing and storage with Ecsponent’s local and African market expertise and offers customers the option of storing cord tissue and stem cells from cord blood in South Africa or off shore in Belgium. [R59(3)(d)(ii)(bb)]

3.28 Directors’ view of prospects [r59(3)(c)(ii)] The local and international demand for

cryogenically preserved stem cells and related products continues to grow exponentially. Management continue to investigate products and services which leverage the Group’s infrastructure and expertise.

Salveo 3.29 Salveo was incorporated as a public company in

South Africa on 24 February 2004 and has been in operation for 13 years. [R59(3)(a)(ii)]

3.30 Salveo has 369 970 339 no par value ordinary shares in issue of which Ecsponent holds 50%. Salveo initially became a subsidiary of Ecsponent on 24 February 2004, after which Ecsponent reduced its equity stake to 24% as a result of a public offering to raise working capital. During 2012 Ecsponent re-acquired the 76% from the minority shareholders and in April 2014 Esperite NV obtained a 50% interest in Salveo, with Ecsponent holding the remaining 50%. [R59(3)(d)(ii)(aa)];


3.31 Salveo is a Geneva based biotechnology group specialising in stem cell therapies and cryogenic stem cell storage. The group also provides high technology pre- and post- natal testing for genetic and other diseases. In addition, the group is in the forefront of international regenerative medicine developments.

3.32 The main aim and focus is to develop stem cell-related biotechnologies in South Africa, by leveraging health-enhancing knowledge and products into society through careful and ethical use of adult stem cells. This is done through collaboration with international consortiums, such as the Asian Pacific Cord Blood Bank Consortium, and overseas collaboration with leading individuals and companies. [R59(3)(d)(ii)(bb)]

3.33 Directors’ view of prospects [r59(3)(c)(ii)] The biotechnology sector is directly linked to the

fluctuations in the international economy and margins remain under pressure. During 2016, the group continued to protect its market share and is bullish about the prospects for the future.

rOi3.34 ROi has been in operation for 3 years. The Group

concluded an agreement to acquire 51% of ROi from Capital on 1 March 2016. The acquisition was in line with the Group’s growth strategy in that ROi is an opportunity that is high tech, offers high margins, high barriers to entry and can effectively be applied in both a South African as well as in an international context.

3.35 ROi has 1 000 ordinary shares of R1 each in issue.3.36 ROi provides strategic management inputs across

all media platforms from the rumblings on social media, through the wide variety of print media to radio and TV. This is managed through one intelligence platform. The business provides empirical data enabling a strategic high ground for its corporate clients.

3.37 Directors’ view of prospects [r59(3)(c)(ii)] With social media and mobile technology

pervading consumer behaviour, brands are no longer in control of their marketing and media messages. It is therefore no longer adequate for a brand to monitor media mentions alone. Instead, brands are compelled to listen, analyse and reflect on what consumers are saying about them.

ROi provides strategic management inputs across all media platforms - from the rumblings on social media, through the wide variety of print media to radio and TV. This is managed through one intelligence platform that provides empirical data which enables brands to watch for patterns, track sentiment and draw conclusions based on where

and when conversations happen to better serve their customers.

Ecsponent Management Services3.38 Ecsponent Management Services was incorporated

as a private company in South Africa on 29 October 2002 and has been in operation for 15 years. [R59(3)(a)(ii)]

3.39 Ecsponent Management Services has 98 512 287 no par value shares in issue of which Ecsponent holds 100%. It became a subsidiary of Ecsponent on 29 October 2002. [R59(3)(d)(ii)(aa)]

3.40 Ecsponent Management Services provides the Group with administrative and management services and allows management in the operational entities to focus on core business rather than back office functions.

[R59(3)(d)(ii)(bb)]

3.41 Directors’ view of prospects r59(3)(c)(ii)] Ecsponent Management Services is not a profit

entity, but a cost centre for the Group. The continued growth of the Group will result in the continued growth in the scope of activities performed by Ecsponent Management Services on behalf of the Group.

ETS3.42 ETS manages the Group’s treasury function on a

centralised basis and is the Group’s South African business credit vehicle.

3.43 ETS has 1 000 ordinary shares in issue and became a subsidiary of Ecsponent on 8 December 2015.

3.44 Prospects of Ecsponent Treasury Services ETS manages the Group’s SME loan facilities in

South Africa as a significant cash generating unit. These facilities were moved from Ecsponent Management Services during the latter part of 2016 as part of the Group’s re-organisation and restructuring. The continued growth of the Group will result in the continued growth in the scope of activities performed by ETS on behalf of the Group.

3.45 Material changes in the business of the Company [r59(3)(b)]

Save for the Material Transactions, the Directors are of the opinion that no other material changes have occurred in the past three years. [R59(3)(b)]

3.46 Fixed property owned and leased: [r59(3)(e)]

The Group does not own any fixed property. Details of the principal immovable property leased by the Group are set out below:

Name of Group company

Location Date of lease commencement

Date of lease termination

Monthly rental amount

Lease term

Ecsponent Financial Services Ltd Zambia

Shop Building 2 Central Park, Cairo Road, Lusaka

01-Oct-15 N/A ZMW39 585 Monthly


Celtis House, Eastwood Office Park, Lynnwood Road, Pretoria

01-Nov-16 30-Sep-17 ZAR65 065 11 months

Cryo-Save SA Acacia House, Cnr Nentabos and Botterklapper Streets, The Willows, Pretoria East

01-Oct-12 31-May-22 ZAR78 143 116 months

Ecsponent Botswana

Plot 54351, Gabarone, Botswana

01-Sep-13 31-Aug-18 BWP32 048 60 months

Return on Innovation

1st Floor, 22 Reedbuck Crescent, Corporate Park South, Old Pretoria Road, Midrand, 1685

01-Dec-14 30-Nov-17 ZAR15 196 36 months


Figures in r’000

15-months ended

31 March 2017 (Audited)

Year ended31 December

2015(Audited)

Year ended31 December

2014(Audited)

Revenue 321 795 144 705 57 396Profit before tax from continuing operations 87 818 25 015 6 650Profit after tax from continuing operations 64 724 17 228 4 049Profit after tax from discontinued operations 2 852 2 706 1 182Total profit after tax 67 576 19 934 5 231Preference shareholder dividends 127 306 24 733 1 467

3.47 Commitments for the purchase and construction of buildings and plant or machinery [r59(3)(f)]

The Company has no plans for, or commitments to, purchase, construct or install any buildings, plant or machinery.

3.48 Financial performance [r 59(3)(g)(i), r 59(3)(g)(ii), r 59(3)(g)(iii), r 59(4)(a)]

3.48.1 Consolidated financial performance of the Group is indicated below:

3.48.2 No dividends have been paid by the Group to Ordinary Shareholders. Class A Preference Shareholders receive a monthly dividend equal to 10% per annum and Class C Preference Shareholders receive a monthly dividend equal to Prime Rate plus 4% per annum. [R59(3)(g)(iii)-(v)]

3.48.3 It should be noted that the Company changed its year end from December to March in the

2016 financial year. Accordingly, the latest financial year will be for a 15-month period ending 31 March 2017. The annual financial results for the period ended 31 March 2017 were published on 29 June 2017.

3.48.4 The historic financial information of the Group for the 15-month period ended 31 March 2017, and

the two financial years ended 31 December 2015 and 31 December 2014 is set out in Annexure 8.

3.48.5 Financial statements of the Group have been prepared in accordance with the requirements of the Companies Act, the JSE Listings Requirements and IFRS and have been audited by the Group’s auditors, Nexia SAB&T.

3.48.6 In terms of Regulation 79 of the Companies Regulations, Annexure 6 contains a report by the auditors on the historical profits or losses of the Group for the preceding three periods, being the 15-month period ended 31 March 2017, and the financial years ended 31 December 2015 and

31 December 2014, and Ecsponent’s statement of financial position as at 31 March 2017.

4.1 The authorised and issued share capital of the Company as at the Last Practicable Date was as follows: [R60(a)(i)]

Authorised share capital r’000

Authorised Ordinary Shares (South Africa)1 000 000 000 000 Ordinary Shares of no par value No par valueAuthorised Preference Shares (South Africa)1 000 000 000 Class A Preference Shares No par value1 000 000 000 Class B Preference Shares No par value1 000 000 000 Class C Preference Shares No par value1 000 000 000 Class D Preference Shares No par value1 000 000 000 Class E Preference Shares No par value1 000 000 000 Class F Preference Shares No par value1 000 000 000 Class G Preference Shares No par value

4. Share capital of the Company [R60]


Office 2, First Floor, Block 2 Seadoone Office Park, 34 Seadoone Road, Amanzimtoti

01-May-15 N/A ZAR7 150 Monthly


195 Cape Road, Newton Park, Port Elizabeth

01-Jun-15 31-May-18 ZAR13 611 36 months


r’000

Ordinary Shares 1 079 550 795 ordinary shares of no par value 145 169Preference Shares570 519 Class A Preference Shares 54 5492 311 738 Class B Preference Shares 231 1747 109 514 Class C Preference Shares 710 951

Total 1 141 843

4.2 As at the Last Practicable Date, no Shares were held in treasury.

4.3 The issued Ordinary Shares and the Preference Shares of the Company issued in South Africa are listed on the JSE and no Ordinary Shares or Preference Shares of the Company are listed on any stock exchanges other than the JSE.

Preferential conversion and exchange rights [r60(1)(a)(ii)]4.4 Class F has no convertibility or exchange rights.

Class A, Class B, Class C, Class D, Class E and Class G Preference Shares are convertible into Ordinary Shares on an Event of Default.

Rights to dividends, profits and capital (including redemption rights) and rights on liquiditaion or distribution of capital [r60(1)(a)(ii)]4.5 Class A, Class B and Class C Preference Shares

rank concurrently with regard to dividend and capital repayments (excluding arrear amounts), and in priority to Ordinary Shares and Class D, Class E, Class F and Class G Preference Shares.

4.6 Class D, Class E, Class F and Class G Preference Shares rank in priority to Ordinary Shares with regards to dividend and capital payments.

4.7 All of the authorised and issued Ordinary Shares rank pari passu with each other in all respects and all the issued Ordinary Shares are fully paid.

4.8 Entitlement to dividends are set out below:4.8.1 Class A Preference Shareholders are entitled to

receive a monthly dividend equal to 10.00% per annum on the Initial Issue Price, payable monthly in arrears, not compounded;

4.8.2 Class C Preference Shareholders are entitled to receive a monthly dividend equal to Prime Rate plus 4% per annum on the Initial Issue Price, payable monthly in arrears, not compounded;

4.8.3 Class D Preference Shareholders are entitled to receive a monthly dividend equal to 12.5% per annum on the Initial Issue Price, payable monthly in arrears, not compounded;

4.8.4 Class E Preference Shareholders are entitled to receive a monthly dividend equal to 11.25% per annum on the Initial Issue Price, not compounded;

4.8.5 Class F Preference Shareholders are entitled to receive a monthly dividend equal to 10.00% per annum on the Initial Issue Price, payable monthly in arrears, not compounded; and

4.8.6 Class G Preference Shares will be entitled to receive a monthly dividend equal to 10% per annum on the Initial Issue Price, not compounded.

4.9 Other than Class A, Class B and Class C Preference Shares, no other preference shares are currently in issue.

4.10 Class A, Class C, Class D, Class E and Class G Preference Shareholders are redeemable after a five-year period at 100% of the Initial Issue Price. Class B preference shareholders are redeemable after a five-year period at 170% of the Initial Issue Price of the Class B Preference Share. Class F Preference Shares are perpetual and have no set redemption rights attached to them.

Voting rights – Ordinary shares4.11 In accordance with the MOI, at a general meeting

of the Shareholders of a particular class of shares, every shareholder present in person or by proxy shall have one vote on a show of hands, provided that a proxy shall, irrespective of the number of shareholders he represents, have only one vote. On a poll, every Shareholder present in person or by proxy shall have that proportion of the total votes in the Company equal to the aggregate amount the nominal value of the Shares held by that Shareholder bears to the aggregate of the nominal value of all the Shares issued by the Company in that class.

4.12 In terms of the MOI, the rights attaching to the Ordinary Shares may only be varied by a special resolution passed by the requisite majority of Shareholders at a general meeting.

Voting rights - Preference Shares4.13 Preference Shareholders will not be entitled to

voting rights in the ordinary course of business, but will be entitled to voting rights assigned to Preference Shareholders by the Companies Act and the MOI, but subject to the JSE Listings Requirements and the JSE Debt Listings Requirements, which arise in the following limited circumstances: ▪ during periods when any dividend (which has

been declared) or any part of, or Redemption Amount, remains in arrears and unpaid after three months from the Dividend Payment Date, or Redemption Payment Date, as applicable;

▪ resolutions are proposed which would directly affect any rights attaching to the Preference Shares or the interests of Preference Shareholders or to the class of Preference Share to which the Preference Share in question belongs; and/or

▪ a resolution is proposed in relation to the winding-up of the Company.


4.14 The rights attaching to Preference Shares may only be varied by an amendment of the MOI, which must be approved by Shareholders by way of a special resolution of Shareholders present (or represented by proxy) and voting, as well as by the approval of Preference Shareholders of the relevant class affected by the amendment, by way of a special resolution of that class of Preference Shareholders present (or represented by proxy) and voting.

4.15 In terms of the JSE Debt Listings Requirements, the variation of terms and conditions attached to the Preference Shares not provided for in

the MOI require the approval of 66.67% of Preference Shareholders of the affected class present and voting.

Alterations in the share capital of the Company over the past three years [r60(b)]4.16 Alterations to the authorised and issued share

capital is set out in Annexure 5, along with a summary of the Ordinary and Preference Shares that have been issued to the public in the preceding three years.

Issue of Class G Preference Shares4.17 The Offer Shares offered in terms of this

Prospectus will only be issued to the public and not to any related parties as defined in the JSE Listings Requirements.

Unissued Preference Shares4.18 The unissued Preference Shares are under the

control of the Directors.

Classification of Offer Shares4.19 Holders of Offer Shares receive a cumulative

dividend at the rate set out in paragraph 4.8. The Offer Shares do not have the right to

participate in any additional dividends declared to Ordinary Shareholders. The Offer Shares are redeemable after 60 months from the Initial Issue Date and as a result are classified as debt instruments and disclosed as such in the Company’s statement of financial position. The dividends declared are classified as finance costs and disclosed on this basis in the Company’s statement of profit and loss.

Directors’ interest in Shares [r60(1)(a)(iii)]4.20 The direct and indirect beneficial interests of the

Directors (and their associates) in the issued ordinary share capital of the Company at the Last Practicable Date, are set out in the table below:

Name Beneficial Total

Direct Indirect Shares Percentage

TP Gregory 38 634 423 - 38 634 423 3.6%B Shanahan 4 622 096 - 4 622 096 0.4%RJ Connellan 2 495 080 - 2 495 080 0.2%G Manyere - 604 801 625 458 062 243 56.0%P Matute - - - 0.0%W Oberholzer - - - 0.0%KA Rayner 3 349 366 - 3 349 366 0.3%BR Topham - 2 492 222 2 492 222 0.2%Total 49 100 965 607 293 847 656 394 812 60.8%

4.21 No Directors hold an interest in Ecsponent through any derivative position, no Shares have any

special rights attached to them and there are no deferred Shares.


5. Options and preferential rights in respect of shares [R61]Ecsponent has not entered into any contract or arrangement with any person whereby any option or preferential right of any kind was or is proposed

to be given to any such person(s) to subscribe for any securities of Ecsponent or any securities of its Subsidiaries.

6. Commissions paid or payable [R62]6.1 No amount has been paid, or accrued as payable,

within the preceding two years, as commission to any person, including commission so paid or payable to any sub-underwriter that is the holding company or a promoter or director or officer of the Company, for subscribing or agreeing to subscribe, or procuring, or agreeing to procure, subscriptions for any Ordinary Shares of the Company.

6.2 The Company has no arrangement with brokers to pay commissions on the sale of Preference

Shares. Ecsponent does however pay a placement fee to independent brokers of up to 4% of the capital raised.

7. Material contracts [R63(1)]7.1 The contracts listed below relate to existing

material contracts with regard to directors’ and management remuneration, secretarial and technical fees for the Company and its’ subsidiaries: [R63(1)(a)]

▪ Service agreement between the Company and Mr TP Gregory as CEO;

▪ Service agreement between the Company and Mr B Shanahan as CFO; and

▪ Engagement letter between the Company and DP van der Merwe, as the Company Secretary.

7.2 Material contracts entered into by the Group in the preceding two years relate to the EDF Acquisition, the EDF Disposal, the ECS Holdings Disposal, the Clade Acquisition, the Clade Disposal, the EFS Zambia Subscription, the Sure Choice Disposal, the MyBucks Acquisition, the Ligagu Disposal and the Loan Implementation Agreement. [R63(1)(b)]

8. Interests of directors and promoters [R64(2)]8.1 No consideration has been paid, or agreed to be

paid, to any director or related person or another company in which a director has a beneficial interest or of which such director is also a director, nor to any partnership, syndicate or other association of which the director is a member: [R64(2)(a)] ▪ to induce the director to become a director; or ▪ to qualify as a director; or ▪ for services rendered by the director or by

a company, partnership, syndicate or other

association in connection with the promotion or formation of the Company.

8.2 Other than the Shares beneficially held by the Directors, as set out in paragraph 4.20 above, the Directors had no direct or indirect interest in the promotion of the Company or any property acquired or proposed to be acquired, during the three years preceding the date of this Prospectus. [R64(2)(b)]

9. Material loans and borrowings [R65]9.1 Details of all material loan payables, as well

as intercompany loan payables are set out in Annexure 4. As at the Last Practicable Date, the Group had not undertaken any off-balance sheet financing.

9.2 The Group’s core business is the provision of credit and accordingly has a large loan book. Details are

contained in the annual report of the Group, as published on the Company’s website. As at the last practicable date, the Group had not advanced any loans other than in the ordinary course of business.


10. Shares issued or to be issued, otherwise than for cash [R66]The following Shares were issued in the preceding three years, otherwise than for cash: ▪ The issue of Shares as partial consideration for the

acquisition of Komo Finance Proprietary Limited; ▪ The issue of Shares in respect of the Clade

Acquisition; and

▪ The issue of Shares to Directors in lieu of remuneration and Directors’ fees.

Details of the above issues of shares for cash, including the number of price of the securities issued, is set out in Annexure 5.

11. Property acquisitions and disposals [R67]No property has been acquired or disposed of by the Group within the preceding three years.

12. Amounts paid or payable to promoters [R68]Ecsponent has not entered into any promoters’ agreements during the three years preceding the date of issue of this Prospectus. Accordingly, there were no

payments made to promoters within the three years prior to the Last Practicable Date.

13. Preliminary expenses and issue expenses [R69]The preliminary and issue expenses (excluding VAT and disbursements) relating to this Prospectus which have

been incurred or that are expected to be incurred by the Group are presented in the table below:

Nature of expense Paid/payable to [r69(b)(d)]

r [r69(a)(c)]

Debt Sponsor and Corporate Advisor ▪ with regards to the establishment of the Programme in 2014 ▪ with regards to update of the Programme in 2015 and 2017 ▪ with regards to the Prospectus

Questco750 000130 000300 000

Independent Reporting Accountants Nexia SAB&T 20 000South African Reserve Bank approval for initial Programme and subsequent updates

First National Bank 7 000

Review and registration of Prospectus CIPC 7 000Total 1 214 000


Section 2Information about the preference shares [R56]

1.1 Ecsponent‘s business model requires continuous funding for, inter alia, its financial services businesses and the Directors consider the issue of Preference Shares to be an appropriate source of funding for these ongoing business needs.

1.2 The Offer made under this Prospectus represents the First Tranche of Class D, Class E and Class G Preference Shares to be offered to the public, respectively, in terms of the Programme. The Company will continually issue Tranches of Preference Shares under the Programme on a regular basis.

1.3 The proceeds of Class D, Class E and Class G Preference Shares issued (and the proceeds of further issues of other classes of Preference Shares) will be used by Ecsponent to fund the future growth of the Company on an ongoing

basis, specifically the growth of its loan book, and for general corporate purposes. Funding will be raised through the issue of Preference Shares as and when needed and there is no minimum subscription amount.

1.4 The main purpose of the Offer and the listing of the Offer Shares is to: ▪ provide investors with an opportunity to

participate over the long-term in the capital growth and the income streams of the Company;

▪ provide the Company with a platform to raise funding to pursue growth, specifically with regard to the growth of the Company’s financial services business line; and

▪ enhance the public profile and general public awareness of Ecsponent.

1. Purpose of the offer of preference shares in terms of this Prospectus [R70(a)]

2. Time and date of the opening and of the closing of the offer [R71]2.1 The salient dates and times of the Offer are set out below.

2017Offer opens at 09:00 on Tuesday, 26 SeptemberOffer closes at 12:00 on Thursday, 28 SeptemberListing of the Offer Shares commences at 09:00 on Wednesday, 4 October

2.2 Applicants applying for the Offer Shares must inform their CSDP or Broker of their application by the cut-off time stipulated by their CSDP or Broker in terms of the agreement entered into between them.


3.1 The following Offer Shares are offered to the public in terms of this Prospectus:

Class of securities Number of securities Issue price per security

Class D Preference Shares 10 000 R100Class E Preference Shares 10 000 R100Class G Preference Shares 10 000 R100

3. Particulars of the offer [R72]

3.2 The Offer Shares are not secured or guaranteed. 3.3 Further terms and conditions attached to the

Offer Shares are summarised in Annexure 1. The summary in the said Annexure is not conclusive or exhaustive, and potential investors should refer to the MOI for full particulars on the rights,

privileges, terms and conditions attached to the Preference Shares.

3.4 No other Class D, Class E or Class G Preference shares have been issued in the preceding three years.

The listing of the Offer Shares is not conditional on raising a minimum amount and is not underwritten.

4. Minimum subscription [R54(3); R73]


Section 3Statements and reports relating to the offer [R56]

The Directors of the Company are of the opinion that the issued capital is adequate for the purposes of the business of the Group, for at least the next 12 months from the date of issue of this Prospectus.

1. Adequacy of capital [R74(2)(a)]

2.1 The Board has made due and careful enquiry of any changes that have occurred between the end of the latest financial period of the Company or any Subsidiary, being 31 March 2017, and the Last Practicable Date. Other than the Sure Choice Disposal, the EFS Zambia Subscription and the monthly issue of Tranches of Preference Shares,

there are no material changes in the assets or liabilities and in the financial or trading position of the Company or any Subsidiary from 31 March 2017 to the Last Practicable Date.

2.2 The above statement by the Directors regarding material changes has not been audited or reviewed by the Group’s auditors.

2. Report by Directors as to material changes [R75]

3.1 Application has been made to, and approved by, the JSE for the listing of the Offer Shares as Debt Instruments on the Main Board of the JSE under the following details:

Class D Preference Shares Class E Preference Shares

Abbreviated name: ECSPD JSE share code: ECSD1 Abbreviated name: ECSPE JSE share code: ECSE1

Class G Preference Shares

Abbreviated name: ECSPG JSE share code: ECSG1

3. Statement as to listing on a stock exchange [R76]


3.2 Exact details of the number of Offer Shares subscribed for and to be listed, as well as the ISIN code allocated on listing will be released on SENS one day prior to the date of listing.

Ecsponent does not intend to apply any funds received from the issue of the Offer Shares in order to acquire any business undertaking.

4. Report by the auditor where business undertaking to be acquired [R77]

Ecsponent does not intend to apply any funds received from the issue of the Offer Shares in order to acquire a Subsidiary.

5. Report by the auditor where company will acquire a subsidiary [R78]

In terms of Regulation 79 of the Companies Act, the auditor is required to prepare a report on the profits and losses, dividends and assets and liabilities of the Group. This information is set out in Annexure 6 of this Prospectus.

6. Report by auditors of the Company [R79]


Section 4Additional material information [R56]

The Company’s corporate governance statement is set out in Annexure 7 of this Prospectus.

1. Corporate governance

2.1 This Prospectus has been prepared for the purposes of complying with the Companies Act and the Regulations published in terms thereof. The information disclosed may not be the same as that which would have been disclosed if this Prospectus had been prepared in accordance with the laws and regulations of any jurisdiction outside of South Africa.

2.2 This Prospectus has been issued in connection with the offering of the Offer Shares in South Africa. The distribution of this Prospectus and the making of an offer for the Offer Shares may be restricted by law in certain jurisdictions. Persons into whose possession this Prospectus comes must inform themselves about and observe any and all such restrictions. This Prospectus does not constitute an offer or invitation to subscribe for

and/or purchase any Offer Shares in an Affected Jurisdiction. No one has taken any action that would permit a public offering of the Offer Shares to occur in an Affected Jurisdiction.

2.3 Neither the Offer Shares nor the Prospectus have been, nor will they be, registered under the US Securities Act, 1933 or with the regulatory authority of any state or jurisdiction of an Affected Jurisdiction and may not be offered, sold, pledged or otherwise transferred in an Affected Jurisdiction or to any national, resident or subject of an Affected Jurisdiction where any such offer, sale, pledge or transfer is prohibited. Neither this document nor any copy of it may be sent to or taken into an Affected Jurisdiction where the distribution of the Prospectus is prohibited.

2. Offer in South Africa only

3.1 The original or certified copies of the following documents will be available for inspection at the Company’s registered office and at the offices of the Transfer Secretaries during business hours from the date of issue of this Prospectus until 10 business days after closing of the Offer:3.1.1 the MOI of Ecsponent and its Subsidiaries;

[53(a)]3.1.2 all material contracts relating to the

Material Transactions; [53(b)]3.1.3 written consent by the Auditors, the

Corporate Advisor and Debt Sponsor and Banker to act in the capacity stated in the

Prospectus and for their name to appear therein and, if applicable, the reproduction therein of any report/s issued in relation thereto by them, including the section 79 report to be prepared by the Auditors; and [53(d) / section 102(2)]

3.1.4 the Powers of Attorney signed by the Directors authorising the signing of this Prospectus. [52(1)]

3.2 The documentation detailed in paragraph 3.1 above accompanied this Prospectus when it was filed with CIPC. [R51(4)(b)]

3. Documents available for inspection [R53]


Section 5Inapplicable or immaterial matters [R56]In terms of Regulation 56, the following regulations are not applicable or are immaterial to the Company and the Group:

▪ Regulation 63: Commission paid or payable in respect of underwriting; ▪ Regulation 67: Property acquired or to be acquired; ▪ Regulation 68: Amounts paid or payable to promoters; ▪ Regulation 73: Minimum subscription; ▪ Regulation 77: Report by auditor where business undertaking is to be acquired; ▪ Regulation 78: Report by auditor where company will acquire a subsidiary; and ▪ Regulation 80: Requirements for Prospectus of mining company.

Signed by T Gregory and B Shanahan in Pretoria on behalf of all of the directors of the company in terms of powers of attorney granted by them: [r52(1)]

T Gregory – CEO22 September 2017

B Shanahan – CFO22 September 2017 [54(4)]


Terms and Conditions of the Offer Shares and the Preference Shares in general [R60(a)(ii)]

Annexure 1

Words used in this section headed "Terms and Conditions of the Offer Shares and the Preference Shares in general" shall bear the same meanings as used in the section headed "Definitions and Interpretations" and as defined elsewhere in this Prospectus, except to the extent that they are separately defined in this section or the context otherwise requires.

Any reference in these Conditions to Strate shall, wherever the context permits, be deemed to include a reference to its successor in terms of the FMA (or any successor Act thereto), and any additional or alternate depository approved by the Company and the JSE. Any reference in these Terms and Conditions to the JSE shall, wherever the context permits, be deemed to include any exchange which operates as a successor exchange to the JSE.

1. Form and Denomination1.1 The Offer Shares will be issued in dematerialised

form, and will be held in Strate, in terms of Section 33 of the FMA, and will not be represented by any certificate or written instrument. Investors who subscribe for Offer Shares will become the holders of Beneficial Interests.

1.2 The Offer will be subject to a minimum denomination per applicant of ZAR 10 000 each.

1.3 The Offer Shares will be listed on the Main Board of the JSE, and will be subject to the JSE Debt Listings Requirements.

1.4 Beneficial Interests in Offer Shares held in Strate 1.4.1 Strate will hold the Offer Shares issued

pursuant to the Offer subject to the FMA and the Applicable Procedures.

1.4.2 All amounts to be paid and all rights to be exercised in respect of the Offer Shares held in Strate will be paid to and may be exercised by the CSDP’s or their nominees named in the Register, on behalf of the holders of Beneficial Interests.

1.4.3 A holder of a Beneficial Interest may exchange such Beneficial Interest for a certificated Preference Share, represented by an Individual Certificate, in accordance with Condition 13 (Exchange of Beneficial Interests and Replacement of Individual Certificates).

2. Title of the Offer Shares [4.12(e)]2.1 CSDP’s or their nominees will be named in the

Register as the holder of an Offer Share, unless an investor has elected own-name registration.

2.2 Strate maintains central securities accounts only for Participants. Beneficial Interests which are held by Participants, on behalf of their clients, will be held directly through Strate, and Strate will hold such Beneficial Interests, on

behalf of such Participants, through the central securities accounts maintained by Strate for such Participants.

2.3 The Participants are in turn required to maintain securities accounts for their clients. Beneficial Interests which are held by clients of Participants will be held indirectly through such Participants, and such Participants will hold such Beneficial Interests, on behalf of such clients, through the securities accounts maintained by such Participants for such clients. The clients of Participants may include the holders of Beneficial Interests or their custodians. The clients of Participants, as the holders of Beneficial Interests or as custodians for such holders, may exercise their rights in respect of the Beneficial Interests held by them in Strate only through their Participants, or their nominees.

2.4 In relation to each person shown in the records of Strate or the relevant Participant, as the case may be, as the holder of a Beneficial Interest, a certificate or other document issued by Strate or the relevant Participant, as the case may be, as to the aggregate nominal amount of such Beneficial Interest standing to the account of such person shall be prima facie proof of such Beneficial Interest.

2.5 Beneficial Interests may be transferred only in accordance with the Applicable Procedures.

2.6 Any reference in the Terms and Conditions to the relevant Participant shall, in respect of a Beneficial Interest, be a reference to the Participant appointed to act as such by the holder of such Beneficial Interest.

3. Status of Offer Shares [4.11(k)] [r60(a)(ii)]

3.1 Class D, Class E and Class G Preference Shares rank concurrently with regard to dividend and capital repayments, in priority to Ordinary Shares issued by the Company (excluding arrear


amounts), but after Class A, Class B and Class C Preference Shares.

3.1.1 Subject to Applicable Laws, in the event of the Company commencing business rescue proceedings (whether voluntarily or otherwise) or in the event of the dissolution of the Company or if the Company is placed into liquidation or wound-up the claims of the persons entitled to payment of amounts due in respect of the Preference Shares shall be subordinated to all other claims in respect of any other indebtedness of the Company, including Class A, Class B and Class C Preference Shares, except for the claims of other Class D, Class E and Class G Preference Shareholders.

3.2 Ecsponent currently has no other senior debt but has Class A, Class B and Class C Preference Shares issued and listed, which are classified as debt instruments.

3.3 No covenants apply to Ecsponent in terms of issuing the Offer Shares.

4. redemption of Offer Shares 4.1 The Offer Shares are automatically redeemable on

the fifth anniversary of the Initial Issue Date, at a price equal to 100% of the Initial Issue Price for Class D, Class E and Class G Preference Shares, respectively.

4.2 The redemption of Offer Shares shall take place in accordance with the Applicable Procedures and the FMA.

4.3 Redemption Amounts will be payable on the Redemption Payment Date to all Preference Shareholders named in the Register on the Redemption Record Date. The last day on which Preference Shares can be traded before redemption will be the Redemption Last Day to Trade. Preference Shares due for redemption will be suspended from trading on the JSE from the Redemption Suspension Date and will be finally delisted on the Listing Termination Date.

4.4 Finalised information regarding Redemption Amounts will be published on SENS on the Redemption Finalisation Date.

5. Voluntary redemption The Company shall be entitled (but not obliged) to redeem, at any time prior to the maturity date of any Class D, Class E or Class G Preference Share, or, in the case of a Class F Preference Share at any time, all or any class or classes of such shares, or any pro-rata portion of all or any classes of such shares, at the redemption price and provided that, such redemption takes place on a Monthly Dividend Payment Date (being the date in each month on which the Company pays dividends on each such class of Preference Shares as announced on SENS from time to time, determined in accordance with the timeline requirements of the JSE), and on that date all dividends payable will be paid in respect of that Preference Share.

6. Cancellation All Preference Shares which are redeemed in full will forthwith be cancelled. All Preference Shares so cancelled and the Preference Shares purchased and cancelled pursuant to Condition 8 (Purchases) below, shall be held by the Company and cannot be re-issued or resold. The Issuer shall notify Strate and the JSE of any cancellation of the Preference Shares so that such entities can record the reduction in the aggregate nominal amount of the Preference Shares in issue.

7. Notice of paymentsThe Company shall publish notification on SENS for as long as the Preference Shares are listed and if not listed, notify Strate, the JSE and Preference Shareholders registered as such on each Dividend Record Date and/or Redemption Record Date of the Dividend Amount / Redemption Amount payable on the following Dividend Payment Date / Redemption Payment Date.

8. Purchases The Company may, in accordance with the JSE Debt Listings Requirements, at any time repurchase Preference Shares at any price in the open market or otherwise. Such Preference Shares shall be cancelled and will thereafter not have any voting or other rights.

9. Entitlement to Dividends [r60(a)(ii)]

Dividends on Offer Shares9.1 Holders of Class D Preference Shares shall be

entitled to receive a cumulative Preferential Dividend, at a fixed rate of 12.5% per annum on the Initial Issue Price, not compounded, payable monthly in arrears on the dividend payment dates.

9.2 Holders of Class E Preference Shares shall be entitled to receive a cumulative Preferential Dividend, at a rate of 11.25% per annum on the Initial Issue Price, not compounded, payable monthly in arrears on the dividend payment dates.

9.3 Holders of Class G Preference Shares shall be entitled to receive a cumulative Preferential

Dividend, at a rate of 10% per annum on the Initial Issue Price, not compounded, payable

monthly in arrears on the dividend payment dates.

Publication of Dividend rate and Dividend Amount by the Calculation Agent

9.4 The Company shall notify Preference Shareholders of the Dividend Rate in the manner set out in Condition 16 (Notices).

General9.5 Only Preference Shareholders who are named in

the Register on the Dividend Record Date will be entitled to receive Dividend Amounts. Preference Shares will start trading ex-dividend from the Dividend Ex-Date. Preference Shares traded on or before the Dividend Last Day to Trade will be traded cum-dividend.

9.6 Finalisation information regarding Dividend Amounts will be published on the Dividend Finalisation Date.

Unclaimed dividends and prescription9.7 All unclaimed dividends may be invested by

the Company in trust for the benefit of the Company until claimed, and dividends that remain unclaimed for a period of 3 (three) years from the date on which they were declared may be declared by the Directors to be forfeited for the benefit of the Company.

10. Payments10.1 The Redemption Amount and Dividend Amount

shall be paid by the Company in Rand. The Company shall not be obliged to make payment of, and Preference Shareholders shall not be entitled to receive payment of, any amount due and payable under the Preference Shares by the Company, except in accordance with the ranking on priority of payment.


10.2 Payments will be subject in all cases to any fiscal or other laws and regulations applicable thereto in South Africa.

10.3 Payments to Preference Shareholders 10.3.1 Payments of Dividend Amounts and

Redemption Amounts in respect of the Preference Shares will be made to CSDP’s or their nominees as the holder of such Preference Shares (unless investors have chosen own-name registration), which in turn will transfer such funds, via the Participants, to the holders of Beneficial Interests.

10.3.2 Each of the persons reflected in the records of Strate or the relevant Participants, as the case may be, as the holders of Beneficial Interests shall look solely to Strate or the relevant Participant, as the case may be, for such person’s share of each payment so made by the Company.

10.3.3 The Company will not have any responsibility or liability for any aspect of the records relating to, or payments made on account of, Beneficial Interests, or for maintaining, supervising or reviewing any records relating to such Beneficial Interests. Payments of Dividend Amounts and Redemption Amounts in respect of Preference Shares held in Strate shall be recorded by the CSDP’s or their nominees, as the holder of the Preference Shares, distinguishing between dividends and principal and such record of payments by the registered holder of the Preference Shares shall be prima facie proof of such payments.

10.4 Method of payment10.4.1 All monies payable on or in respect of

each Preference Share shall be paid by electronic funds transfer to the account of the relevant Preference Shareholder as set forth in the Register at 17h00 (Johannesburg time) on the Dividend Record Date and/or Redemption Record Date, as the case may be, preceding the relevant Dividend Payment Date or Redemption Date, as the case may be, or, in the case of joint Preference Shareholders, the account of that one of them who is first named in the Register in respect of that Preference Share.

10.4.2 If several persons are entered into the Register as joint Preference Shareholders then payment to any one of them of any monies payable on or in respect of the Preference Share shall be an effective and complete discharge by the Company of the amount so paid, notwithstanding any notice (express or otherwise) which the Company may have of the right, title, interest or claim of any other person to or in any Preference Share or interest therein.

10.5 Payment day 10.5.1 If the date for payment of any amount

in respect of any Preference Share is not a Business Day, the holder thereof shall

not be entitled to payment until the next following Business Day and shall not be entitled to further interest or other payment in respect of such delay.

11. Administrative Fees11.1 The Company shall be entitled to an administration

fee in respect of the Class D, Class E and Class G Preference Shares, up to a maximum of 1% per annum on the Initial Issue Price, payable monthly in arrears on the Monthly Dividend Payment Dates (being the date in each month on which the Company pays dividends on each such class of Preference Shares as announced on SENS from time to time, determined in accordance with the timeline requirements of the JSE).

11.2 The administration fee is subject to the Value-Added Tax Act of 1991. The Company has the right to recover the monthly administration fee, from the monthly Preference Share dividend (plus the applicable VAT thereon).

12. Taxation 12.1 All payments (whether in respect of capital,

dividends or otherwise) in respect of the Preference Shares will be made free and clear of and without withholding or deduction for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by, or on behalf of, South Africa or any political subdivision of, or any authority or agency in or of, South Africa having power to tax, unless (where applicable) the withholding or deduction of such taxes, duties, assessments or governmental charges is required by law. In that event, the Company shall make such payments after such withholding or deduction has been made (where applicable) and shall account to the relevant authorities for the amount so required to be withheld or deducted. The Company shall not be obliged to make any additional payments to Preference Shareholders in respect of such withholding or deduction.

12.2 Refer to Annexure 3 of this Prospectus headed “South African Taxation” for the taxation implications for dividend payments and payment of Redemption Amounts.

13. Exchange of Beneficial Interests and

Replacement of Individual Certificates13.1 Exchange of Beneficial Interests

13.1.1 The holder of a Beneficial Interest may, in terms of the Applicable Procedures and subject to Section 42 of the FMA, by written notice to the holder’s nominated Participant or Strate, as the case may be, request that such Beneficial Interest be exchanged for Preference Shares in definitive form represented by an Individual Certificate (“Exchange Notice”). Such Exchange Notice shall specify the name, address and bank account details of the holder of the Beneficial Interest.

13.1.2 The holder’s nominated Participant will within five business days following receipt of the Exchange Notice notify the Company, and its Transfer Secretaries, that it is required to exchange such Beneficial Interest for Preference


Shares represented by an Individual Certificate and remove the details of the Preference Shares so exchanged from the dematerialised Preference Shares.

13.1.3 The Company, or its Transfer Secretaries will, as soon as is practicable but within 10 business days after receiving such notice, in accordance with the Applicable Procedures, procure that an Individual Certificate is prepared, authenticated and made available for delivery, to the holder of the Beneficial Interest at the registered office of the Transfer Secretaries; provided that joint holders of a Beneficial Interest shall be entitled to receive only one Individual Certificate in respect of that joint holding, and delivery to one of those joint holders shall be delivery to all of them.

13.1.4 The Transfer Secretaries will obtain the release of such dematerialised Preference Shares from Strate in accordance with the Applicable Procedures.

13.1.5 An Individual Certificate shall represent the aggregate nominal amount of Preference Shares held by the holder of the Beneficial Interest, and shall otherwise be in such form as may be agreed between the Company and the Transfer Secretaries and as governed by the Applicable Procedures.

13.2 replacement If any Individual Certificate is mutilated, defaced,

stolen, destroyed or lost it may be replaced at the office of the Transfer Secretaries on payment by the claimant of such costs and expenses as may be incurred in connection therewith and against the furnishing of such indemnity as the Transfer Secretaries may reasonably require. Mutilated or defaced certificates must be surrendered before replacements will be issued.

13.3 Death and sequestration or liquidation of Preference Shareholder

Any person becoming entitled to Preference Shares in consequence of the death, sequestration or liquidation of the relevant Preference Shareholder may, upon producing evidence to the satisfaction of the Company that he/she/it holds the position in respect of which he/she/it proposes to act under this paragraph or of his/her/its title, require the Transfer Secretaries to register such person as the holder of such Preference Shares or, subject to the requirements of this Condition, to transfer such Preference Shares to such person.

13.4 Costs Certificates shall be provided (whether by way

of issue, delivery or exchange) by the Company without charge, save as otherwise provided in these Conditions. Separate costs and expenses relating to the provision of certificates or the transfer of Preference Shares may be levied by other persons, such as the Participant, under the Applicable Procedures and such costs and expenses shall not be borne by the Company. The costs and expenses of delivery of certificates by a method other than ordinary post (if any) and, if the Company shall so require, taxes or governmental charges or insurance charges

that may be imposed in relation to such mode of delivery shall be borne by the Preference Shareholder.

14. Transfer of Offer Shares14.1 Beneficial Interests in the Preference Shares

may be transferred in terms of the Applicable Procedures through Strate.

14.2 Strate maintains accounts only for its Participants. Beneficial Interests which are held by Participants may be held directly through Strate. Participants are in turn required to maintain securities accounts for their clients.

14.3 Transfers of Beneficial Interests to and from clients of Participants occur, in terms of existing law and practice, by way of electronic book entry in the securities accounts maintained by the Participants for their clients. Transfers of Beneficial Interests among Participants occur through electronic book entry in the securities accounts maintained by Strate for the Participants.

14.4 Before any transfer is registered, all relevant transfer taxes (if any) must have been paid and such evidence must be furnished as the Transfer Secretaries reasonably requires as to the identity of the transferor and the transferee.

14.5 No transfer will be registered while the Register is closed as contemplated in Condition 15 (Register) below. The last time for a Preference Shareholder to register to qualify for payments of any Dividend Amount (if applicable) and Redemption Amount is 16h00 (Johannesburg time) on the Dividend Record Date or the Redemption Record Date, as the case may be.

14.6 If a transfer of a certificated Preference Share is registered the Transfer Form and cancelled certificate will be retained by the Transfer Secretaries.

15. register 15.1 The register of Preference Shares:

15.1.1 shall be kept at the registered office of the Transfer Secretaries or such other person as may be appointed for the time being by the Company to maintain the Register;

15.1.2 shall contain the names, addresses, e-mail addresses and bank account numbers of the selected Preference Shareholders’ Participants, or their nominees, unless own-name registration was selected;

15.1.3 shall show the total nominal amount of the Preference Shares held by Preference Shareholders;

15.1.4 shall show the dates upon which each of the Preference Shareholders was registered as such; and

15.1.5 shall be open for inspection at all reasonable times during business hours on Business Days by any Preference Shareholder or any person authorised in writing by a Preference Shareholder.

15.2 The Transfer Secretaries shall alter the Register in respect of any change of name, address, e-mail or account number of any of the Preference Shareholders of which it is notified.

15.3 Except as provided for in these Terms and Conditions or as required by law, in respect of Preference Shares, the Company will only recognise a Preference Shareholder as the owner of the Preference Shares registered in that


Preference Shareholder’s name as per the Register. 15.4 Except as provided for in these Terms and

Conditions or as required by law, the Company shall not be bound to enter any trust in the Register or to take notice of or to accede to the execution of any trust (express, implied or constructive) to which any Individual Certificate may be subject.

16. Calculation Agent, Transfer Secretaries, Paying Agent and Participant

Any third party appointed by the Company as calculation agent, paying agent, transfer secretaries or otherwise shall act solely as the agent of the Company and does not assume any obligation towards or relationship of agency or trust for or with any Preference Shareholder. The Company is entitled to vary or terminate the appointment of such agents and/or appoint additional or other agents and/or approve any change in the registered office through which any agent acts.

17. Notices17.1 All notices (including all demands or requests

under the Terms and Conditions) to the Preference Shareholders, unless indicated to the contrary herein, will be valid if: 17.1.1 transmitted electronically directly to that

person in a manner and form such that the notice can conveniently be printed by the recipient within a reasonable time and at a reasonable cost; and/or

17.1.2 for as long as the Preference Shares are listed on the JSE, if published on SENS (or in the manner prescribed from time to time in terms of the Debt Listings Requirements).

17.2 Any such notice shall be deemed to have been given on the day of first publication or hand delivery or on the 7th calendar day after the day on which it is mailed, if applicable and as the case may be.

17.3 Where any provision of these Terms and Conditions requires notice to be given to the Preference Shareholders of any matter other than a meeting of Preference Shareholders, such notice shall be given mutatis mutandis as set out above, subject to compliance with any other time periods prescribed in the provision concerned or in terms of the Act.

17.4 Whilst any of the Preference Shares are held in dematerialised form, notice shall be given by any holder of a Beneficial Interest to the Company via the holder’s relevant Participant in accordance with the Applicable Procedures.

18. Variation in the rights and amendment of conditions

18.1 Any changes to the terms and conditions of the Preference Shares must be approved by a resolution approved by holders of 66.67% of the Preference Shares present (or represented by proxy) and voting at a meeting where the changes are considered, unless variation in the rights and/or amendment of conditions require amendment of the MOI, in which case approval by special resolution of both Ordinary Shareholders and Preference Shareholders present (or represented by proxy) and voting will be required. In the instance of a combined meeting, the preference shares are limited to a vote of 24.99% of the total

number of all votes of all Shareholders present in person or by proxy at such general meeting.

18.2 Notifications regarding meetings to be held will be published on SENS for as long as the Preference Shares are listed on the JSE.

18.3 Accordingly, upon any such amendment the Company will call a meeting of all of the Preference Shareholders or a meeting of that class of Preference Shareholders or separate meetings of each of those classes of Preference Shareholders, as the case may be. Such meeting or meetings will be regulated by Condition 20 (Meetings of Preference Shareholders) and no proposed amendment will be made to these Terms and Conditions until such amendment has been approved by resolution referred to above at such meeting or meetings.

18.4 The Company may affect, without the consent of any Preference Shareholder, any amendment to these Terms and Conditions which is of a formal, minor or technical nature or is made to correct a manifest error or to comply with mandatory provisions of the law of South Africa. Any such amendment will be binding on Preference Shareholders and such amendment will be notified to Preference Shareholders in accordance with Condition 17 (Notices) below as soon as practicable thereafter.

19. Voting rights 19.1 Preference Shareholders will not be entitled to

voting rights in the ordinary course of business, but will be entitled to voting rights assigned to Preference Shareholders by the Companies Act and the MOI, and subject to the Listings Requirements, which arise in the following limited circumstances:19.1.1 During periods when any dividend

(which has been declared) or any part of it remains in arrears and unpaid after six months from the Dividend Payment Date thereof;

19.1.2 Resolutions are proposed which would directly affect any rights attaching to the Preference Shares or the interests of Preference Shareholders or to the class of Preference Share to which the Preference Share in question belongs; and/or

19.1.3 A resolution is proposed in relation to the winding-up of the Company.

20. Meetings of Preference Shareholders 20.1 The Company may at any time convene a

meeting of all Preference Shareholders or of all Preference Shareholders of a particular class upon at least 15 (fifteen) calendar days prior written notice (excluding any additional notice required in respect of notices which are posted) to such Preference Shareholders. This notice is required to be given in terms of Condition 17 (Notices). Such notice shall specify the date, place and time of the meeting to be held, which place shall be in South Africa, in addition to the reasons for the meeting.

20.2 Every director or duly appointed representative of the Company may attend and speak (in each case including but not limited to, by means of video conferencing, telephone and other electronic means) at a meeting of Preference Shareholders, but shall not be entitled to vote, other than as a proxy or representative of, or in his/her capacity as, a Preference Shareholder.


20.3 Preference Shareholders holding not less than 25% (twenty-five per cent) in nominal amount of the outstanding Preference Shares of a particular class shall be able to request the Company to convene a meeting of Preference Shareholders of that class. Should the Company fail to requisition such a meeting within 10 (ten) calendar days of such a request being received by the Company, the Preference Shareholders requesting such a meeting may convene such meeting.

20.4 A Preference Shareholder may by an instrument in writing (a “form of proxy”) signed by the holder or, in the case of a corporation, executed under its common seal or signed on its behalf by an attorney or a duly authorised officer of the corporation, appoint any person (a “proxy”) to act on his or its behalf in connection with any meeting or proposed meeting of the Preference Shareholders.

20.5 Any Preference Shareholder which is a corporation may by resolution of its directors or other governing body authorise any person to act as its representative (a “representative”) in connection with any meeting or proposed meeting of the Preference Shareholders.

20.6 Any proxy or representative appointed shall, so long as the appointment remains in force, be deemed for all purposes in connection with any meeting or proposed meeting of the Preference Shareholders specified in the appointment, to be the holder of the Preference Share to which the appointment relates and the holder of the Preference Shares shall be deemed for such purposes not to be the holder.

20.7 The chairperson of the meeting shall be appointed by the Company. The procedures to be followed at the meeting shall be as determined by the chairperson subject to the remaining provisions of this Condition 20 (Meetings of Preference Shareholders). Should the Preference

Shareholders requisition a meeting, and the Company fail to call such a meeting within ten calendar days of the requisition, then the chairperson of the meeting held at the instance of the Preference Shareholders shall be selected by a majority of Preference Shareholders present in person, by representative or by proxy.

20.8 At any such meeting, at least three Preference Shareholders present in person, by representative or by proxy, holding in aggregate not less than 25% (twenty-five percent) of the nominal amount of the relevant class of Preference Shares for the time being outstanding shall form a quorum for the transaction of business. On a poll, each Preference Shareholder present in person or by proxy at the meeting shall have the number of votes equal to the number of that relevant class of Preference Shares, held by the Preference Shareholder.

21. Further IssuesThe Company shall be at liberty from time to time without the consent of the Preference Shareholders to create and issue to the public further Preference Shares of a class having terms and conditions the same as any of the other classes of Preference Shares issued under the Programme or the same in all respects save for the amount and date of the first payment of dividends thereon, the Issue Price and the Issue Date, so that the further Preference Shares shall be consolidated to form a single Series with the relevant outstanding Preference Shares within a particular class.


Procedures for acceptance of the Offer

Annexure 2

1. General1.1. The Offer is an initial public offer of Class D, Class

E and Class G Preference Shares which is open to the general public. The following parties may not participate in the Offer: ▪ any person who may not lawfully participate in

the Offer; and/or ▪ any person acting on behalf of a minor or

deceased estate. 1.2. No documentary evidence of capacity to

apply need accompany the application for the subscription for Offer Shares, other than as set out in the Application Form, but Ecsponent reserves the right to call upon any applicant to submit such evidence for noting, which evidence will be held on file with the Transfer Secretaries or returned to the applicant at the applicant’s risk.

1.3. The Offer Shares will be issued in dematerialised form only and accordingly the application for subscription of the Offer Shares is made for the issue of the Offer Shares in dematerialised form.

1.4. Ecsponent reserves the right to reduce or cancel the issue of Offer Shares at any time prior to the proposed date of issue.

2. Applications for dematerialised Offer Shares

2.1. Application Forms must be submitted through a CSDP or Broker in accordance with the agreement governing the relationship between the applicant and the CSDP or Broker by the cut-off time stipulated by the CSDP or Broker. If you are in any doubt as to what action to take, you should consult your broker, attorney or other professional advisor immediately.

2.2. Applications may only be made on the Application Form (blue) which accompanies this Prospectus, and in accordance with the requirements, terms and conditions set out therein and in this Prospectus.

2.3. Application forms and additional copies of this Prospectus can be obtained during normal business hours from Ecsponent at Acacia House, Green Hill Village Office Park, Corner of Nentabos and Botterklapper Street, The Willows, Pretoria East as well as from the Debt Sponsor and Corporate Advisor and the Transfer Secretaries, the addresses of which are set out in the “Corporate Information” section of this Prospectus.

2.4. Any alterations on an application form must be authenticated by full signature.

2.5. Each application will be regarded as a single application.

3. PaymentEach application must be made to the subscriber’s CSDP or Broker in terms of the relevant custody agreement.

Payment of the total monetary value of the Offer Shares applied for in Rand will be made in terms of the existing agreement with the appointed CSDP or Broker.

4. receiptsReceipts will not be issued for applications, application monies or supporting documents received.

5. Issue and allocation of the Offer Shares

5.1. All Offer Shares subscribed for in terms of this Prospectus will be issued at the expense of Ecsponent. Offer Shares will be issued in South African Rand.

5.2. Issues will adhere to the recognised and standardised electronic clearing and settlement procedures operated within the JSE environment.

5.3. Successful applicants’ accounts with their CSDP or Broker will be credited with the allocated Offer Shares on the relevant settlement date. Delivery will be affected through an allotment of Offer Shares subscribed for, and not on a delivery versus payment basis.

5.4. The CSDP or Broker concerned will receive and hold the Offer Shares on the applicants’ behalf.

5.5. On the applicable settlement date, the applicant’s allocation of Offer Shares will be credited to the applicant’s CSDP or Broker against payment during the Strate settlement runs, prior to the opening of the market.

5.6. Fractions of Offer Shares will not be issued. If a fraction does arise, the treatment of such fraction, together with any consequential cash payment will be subject to the JSE Listings Requirements.

5.7. Shares must be fully paid up before issuance and will be freely transferable after such issuance.

6. Applications irrevocableApplications will be irrevocable and may not be withdrawn once received by Ecsponent and/or the Transfer Secretaries or Brokers / CDSPs.

7. CopiesCopies or reproductions of the Application Form will not be accepted, except at the discretion of the Directors.

8. reservation of rights 8.1. The Directors reserve the right to accept or refuse

any application(s), either in whole or in part in accordance with the procedure set out in this Prospectus, or to abate any or all application(s) (whether or not received timeously) in such manner as they may, in their sole and absolute discretion, determine. This reservation of rights applies to any applications for the Offer Shares during the subscription period.


8.2. The Directors have the right to increase the amount of permanent capital raised through the issue of preference shares by issuing further Tranches of preference shares in terms of the Programme and/or undertaking a separate private placement or subsequent public offer of preference shares not in terms of the Programme. Preference shares issued under the Programme may be listed on the Main Board of the JSE or on such other or additional financial exchange(s) as may be determined by the Company, subject to all Applicable Laws. Unlisted preference shares may also be issued under the Programme. Unlisted preference shares are not regulated by the JSE. The Applicable Pricing Supplement will specify whether or not a Trance of preference shares will be listed and, if so, on which financial exchange(s).

8.3. At the Last Practicable Date, no options or preferential rights of any kind have been granted, proposed or arranged with any persons to subscribe for the Offer Shares.

9. Over-subscription9.1. In the event of an over-subscription, the Board shall, in its sole discretion, determine an appropriate allocation mechanism, such that the Offer Shares will be allocated on an

equitable basis.9.2. There is no intention to extend a preference on

allotment of the Offer Shares to any particular individual, company or group in the event of an over-subscription of the Offer Shares pursuant to the Offer.

10. representationAny investor applying for or accepting the Offer Shares shall be deemed to have represented to Ecsponent that such investor was in possession of a copy of this Prospectus at that time. Any party applying for or accepting Preference Shares on behalf of another investor shall be deemed to have represented to Ecsponent that they are duly authorised to do so and warrant that they and the purchaser for whom they are acting as agent is duly authorised to do so in accordance with all relevant laws and such investor guarantees the payment of the issue price and that a copy of this Prospectus was in the possession of such investor for whom they are acting as agent.

11. Trading of Offer Shares11.1. Offer Shares may be traded only on the JSE in

electronic form (as dematerialised shares) and will be trading for electronic settlement in terms of Strate immediately following the listing thereof.

11.2. Strate is a system of “paperless” transfer of securities. If you have any doubt as to the mechanics of Strate please consult your Broker, CSDP or other appropriate adviser and you are referred to the Strate website (http://www.strate.co.za) for more detailed information.

11.3. Certain principal features of Strate are:11.3.1. electronic records of ownership replace

certificates and physical delivery of certificates;

11.3.2. trades executed on the JSE must, at the time of publication of this Prospectus, be settled within three Business Days (T + 3 basis);

11.3.3. all investors owning dematerialised Preference Shares or wishing to trade their Preference Shares on the JSE are required to appoint either a Broker or a CSDP to act on their behalf and to handle their settlement requirements;

11.3.4. for assistance in opening such an account with any CSDP or Broker, please visit the JSE’s website (www.jse.co.za) or Strate (www.strate.co.za/aboutstrate/participants) which will provide all the names and contact numbers of the members of the JSE who can assist with the opening of such share accounts. It will be necessary to complete a custody mandate and provide FICA verification to the chosen CSDP / Broker – a process similar to opening a bank account.

11.3.5. unless investors owning dematerialised Preference Shares specifically request their CSDP to register them as an “own-name” holder (which entails a fee), their respective CSDP’s or Broker’s nominee company holding Preference Shares on their behalf, will be the holder (member) of the Preference Shares in the relevant company and not the investor. Subject to the agreement between the investor and the CSDP or Broker (or the CSDP’s or Broker’s nominee company), generally in terms of the rules of Strate, the investor is entitled to instruct the CSDP or Broker (or the CSDP’s or Broker’s nominee company), as to how it wishes to exercise the rights attaching to the Preference Shares and/or to attend and vote at relevant shareholders’ meeting.

11.4. Subject to the agreement between the investor and the CSDP or Broker (or the CSDP’s or Broker’s nominee company), generally in terms of the rules of Strate, the investor is entitled to instruct the CSDP or Broker (or the CSDP’s or Broker’s nominee company), as to how it wishes to exercise the rights attaching to the Preference Shares and/or to attend and vote at Preference Shareholder meetings or Shareholder meetings at which the Preference Shareholders are entitled to vote.

12. Brokerages and commissionsMarket related commissions within a specified range will be payable to Brokers and/or agents who place Offer Shares. These will be negotiated individually with the Brokers.


South African Taxation

Annexure 3

Words used in this section headed “South African Taxation” shall bear the same meanings as used in the section headed “Definitions and Interpretations” and as defined elsewhere in this Prospectus, except to the extent that they are separately defined in this section or the context otherwise requires.

The comments below are intended as a general guide to the relevant tax laws of South Africa as at the date of the Prospectus. The contents of this section headed “South African Taxation” do not constitute tax advice and do not purport to describe all of the considerations that may be relevant to a prospective subscriber for or purchaser of any Preference Shares. Prospective subscribers for or purchasers of any Preference Shares should consult their professional advisers in this regard.

The Company is not obliged to gross-up any dividends payable in order to compensate investors for tax withheld.

Dividend withholding taxDividends are defined as any amount transferred or applied by a company that is a resident for the benefit or on behalf of any person in respect of any share in that company, whether that amount is transferred or applied:

a) by way of a distribution made by; orb) as consideration for the acquisition of any share

in, that company, but does not include any amount so transferred or applied to the extent that the amount so transferred or applied:i. results in a reduction of contributed tax capital

of the company;ii. constitutes shares in the company; oriii. constitutes an acquisition by the company

of its own securities by way of a general repurchase of securities.

Dividends received by resident and non-resident persons are subject to a dividend withholding tax at a current rate of 20% (“Dividend Tax”). Non-residents who reside in areas which are the subject of Double Tax Agreements (“DTA”) between SARS and the said area may be subject to a reduced Dividend Tax Rate.

The Company is obliged to withhold the applicable Dividend Tax from the dividends declared, unless the Company received confirmation that the beneficial owner of that dividend is exempt from dividend tax, or to withhold dividend tax at a reduced Dividend Tax rate, in terms of section 64F of the Income Tax Act, and a written undertaking to inform the Company should the beneficial owner not qualify for the exemptions listed in section 64F of the Income Tax Act or cease to be the beneficial owner (see the “Dividend Tax – Declaration and Exemption” form attached to the Prospectus to which this Annexure forms part).

The applicable forms to confirm the tax status of investors in line with section 64F can be obtained from the investors’ relevant CSDP’s or brokers, a copy of which is attached to this Prospectus.

The Preference Shares Subject to exemptions and reductions, both residents and non-residents will be subject to Dividends Tax at 20% on the dividends declared on the Preference Shares. Dividends tax will be withheld and paid over to SARS before payment is made to the Preference Shareholder.

Redemption Amounts which constitutes Contributed Tax Capital (“CTC”) will not constitute a dividend and will accordingly not attract Dividends Tax. Redemption Amounts that do not constitute CTC may be subject to Dividend Tax.

Income TaxGenerally, dividends are not subject to income tax in terms of section 10(1)(k) of the Income Tax Act. However, dividends may be subject to Income Tax where dividends are received by companies in respect of shares not owned by them, where dividends are received by companies on borrowed shares or if the dividends are re-characterised as income under section 8E (“Dividends on certain shares deemed to be interest in relation to the recipient thereof”) or section 8EA (“Dividends on third-party backed shares deemed to be income in relation to recipients thereof”) of the Income Tax Act (section 8E and section 8EA are described further below).

Dividends subject to Income Tax will not be subject to Dividend Tax in terms of section 64F(1)(k) of the Income Tax Act.

Income Tax Act, 58 of 1962 (“Income Tax Act”)


Section 8E: Dividends on certain shares deemed to be interest in relation to the recipient thereof In terms of section 8E, if a share qualifies as a “hybrid equity instrument”, dividends which accrue in respect of that share are regarded as income in the hands of the recipient and are taxable as such.

Section 8E defines a “hybrid equity instrument” to include, inter alia, any share, other than an equity share, if:(i) the issuer of that share is obliged to redeem it

within three years of its date of issue; or (ii) its holder has the option to have the share

redeemed within three years of its date of issue.

Other types of shares will be “hybrid equity instruments” if:a)

i. the issuer of that share is obliged to redeem it within three years of its date of issue;

ii. its holder has the option to have the share redeemed within three years of its date of issue; or

iii. at any time on the date of issue of that share, the existence of the company issuing that share.A) is to be terminated within a period of three

years; orB) is likely to be terminated within a period of

three years upon a reasonable consideration of all the facts at that time; and

b)i. they do not rank pari passu with other ordinary

shares or with at least one class of other ordinary shares of the company, as regards the participation in dividends; or

ii. any dividends payable on such share are calculated directly or indirectly with reference to any specified rate of interest or the time value of money; and

iii. the issuer of that share is obliged to redeem it within three years of its date of issue, or (ii) its holder has the option to have the share redeemed within three years of its date of issue; or

iv. (iii) the existence of the issuer is likely to be terminated within three years.

As the Preference Shares will be issued so as not to fall within the definition of hybrid equity instruments, dividends declared on the Preference Shares should not be regarded as income in terms of section 8E of the Income Tax Act.

Section 8EA: Dividends on third-party backed shares deemed to be income in relation to recipients thereofIn terms of section 8EA, if a share qualifies as a “third party backed share”, dividends which accrue in respect of that share are regarded as income in the hands of the recipient and are taxable as such.

A third party backed share is defined to include any preference share in respect of which an enforcement right is exercisable by the holder of that preference share or an enforcement obligation is enforceable as a result of any amount of any specified dividend, foreign dividend, return of capital or foreign return of capital attributable to that share not being received by or accruing to any person entitled thereto.

As the Preference Shares will not be guaranteed or otherwise secured, the provisions of section 8EA should not be applicable, and dividends will not be defined as income under section 8EA.

Should the investments in Preference Shares be classified as income in nature (as is generally the case with share traders), gains and losses made on the disposal of Preference Shares will be subject to Income Tax at the investors’ applicable Income Tax rate.

Capital Gains Tax (“CGT”)Should the investments in Preference Shares be classified as an investment of a capital nature, capital gains and losses of residents of South Africa on the disposal of Preference Shares are subject to capital gains tax (other than on redemption).

Non-resident investors are advised to consult their own professional advisers as to whether a disposal of Preference Shares will result in a liability to pay capital gains tax.

Securities Transfer Tax Act, no 25 of 2007 (“STT Act”) The STT Act imposes securities transfer tax (“STT”) on the transfer and on the redemption of the Preference Shares at a rate equal to 0.25%, as at the date of this Prospectus.

In the case of a transfer of unlisted Preference Shares, STT will be calculated on the higher of the consideration payable for the Preference Shares and their market value. In the case of listed Preference Shares, the STT will be calculated on the consideration payable. If the transfer was effected by a Participant, as defined in the STT Act and no consideration was declared or the amount declared was less than the lowest price of the share, the amount will be calculated on the closing price of the security.

Such STT in respect of (or applicable to) the transfer of Preference Shares will be for the account of the transferee.

In the case of a redemption of the Preference Shares, STT will be payable on the market value of the Preference Shares before such redemption. Such STT (and any future duties and/or taxes that may be introduced) in respect of (or applicable to) the redemption of Preference Shares will be for the account of the Company.

No STT will become payable on the issue, or potential conversion, of the Preference Shares.


Material borrowings and loans receivable [R65(2)]

Annexure 4

At the Last Practicable Date, Ecsponent had the following material borrowings and inter-company loans outstanding:

Loans payable The table below contains details of loans by the Group at the Last Practicable Date:

Lender Secured/Unsecured

Details of security

repayment terms

Amountr

Interest rate

Experite AG (formerly Cryo-Save AG) Unsecured - Repayable on demand

3 913 304 Interest free

Cryo-Save Labs Unsecured - Repayable on demand

1 741 472 Interest free

Esperite NV (formerly Cryo-Save NV) Unsecured - Repayable on demand

494 358 1-year EURIBOR

(European Interbank

Offered Rate) plus 1%

Esperite NV (formerly Cryo-Save NV) Unsecured - Repayable on demand

120 000 Interest free

GetBucks (Pty) Ltd (Botswana) Unsecured - Repayable on demand

1 419 180 24%

Standard Bank - Property bond Secured Secured over the property

purchased

Capital and interest

repayable over180 months

from 1 December

2014

894 920 South AfricanPrime + 0.55%

(11.05%, 2015: 10.8%)

per annum

Total 8 583 234


Amendments to authorised and issued share capital

Annexure 5

1. Amendments to the authorised share capital in the preceding 3 years from the Last Practicable Date:

1.1. Creation of additional classes of preference shares

At the annual general meeting of the Company held on 25 August 2015, 1 000 000 000 (one billion) Class G, five year, fixed-rate, redeemable, convertible, cumulative, non-participating Preference Shares of no par value in the share capital of the Company were created pursuant to the relevant change to the Company’s MOI.

In a circular to Shareholders dated 3 August 2017, the Company proposed certain amendments to the MOI of the Company, including the amendment of the terms and conditions attached to certain classes of Preference Shares, which amendments were approved by written resolution from the requisite number of Shareholders.

1.2. Increase in authorised Ordinary Share capitalOn 8 January 2015, shareholders approved a special resolution to increase the authorised ordinary share capital from 2 000 000 000 Ordinary Shares to 1 000 000 000 000 Ordinary shares.

2. Amendments to the issued Ordinary Share capital in the preceding 3 years from the Last Practicable Date:

2.1. rights offer 2014 [r60(c) / r62]In September 2014, the Company undertook a rights offer in terms of which it raised R100 million and issued a total of 454 456 317 Ordinary Shares at 14 cents each. The rights offer shares were offered to all Shareholders in proportion to their existing shareholdings. The rights offer was partially underwritten by Capital and no underwriting fee was payable. [R72(3)]

2.2. Acquisition issue for Komo Finance Proprietary Limited

Group issued 3 000 000 Shares to the shareholders of Komo Finance Proprietary Limited on 30 June 2014 for the acquisition of 51% of the share capital of that company, at a price of R1 per share. Due to the nature of this issue, the Shares were not offered to all Shareholders in proportion to their existing shareholdings. This is not considered by the Directors to be a material contract.

2.3. Acquisition issue for Clade Investment Management Proprietary Limited

On 30 June 2016, a 51% equity stake in Clade Investment Management Proprietary Limited was acquired in terms of which 19 095 617 Ecsponent Ordinary Shares were to be issued.

2.4. Specific repurchase and odd-lot offerIn March 2016, the Company undertook an odd-lot offer and a specific repurchase of Ordinary Shares at 20.55 cents per Share in order to reduce the ongoing administration costs associated with the Company’s large minority ordinary Shareholder base, as follows: ▪ an odd-lot offer to repurchase holdings equal to or

less than 532 Ordinary Shares (“the Odd-Lot Offer”); ▪ a specific offer to repurchase holdings of more than

532 Ordinary Shares and equal to or less than 10 000 Ordinary Shares (“the Specific Repurchase”).

Total Ordinary Shares repurchased by the Company (through election and expropriation) pursuant to the Odd Lot Offer equalled 51 476 Ordinary Shares. Total Ordinary Shares repurchased pursuant to the Specific Repurchase equalled 491 282.

2.5. Issue of shares to Directors in lieu of remuneration and Directors’ fees

The following shares have already been issued to Directors during the 2016 financial year in lieu of directors’ fees and salaries:


Director Date of issue Number of shares issued

Price of issue (cents)

Fees/remuneration

package settled

ExecutiveTP Gregory 31 May 7 100 515 18.58 1 319 299

30 June 155 884 17.87 27 86031 July 149 661 18.62 27 86031 August 159 066 17.51 27 86030 September 179 259 15.54 27 86031 October 181 257 15.37 27 86030 November 205 779 13.54 27 86031 December 205 397 13.56 27 86031 December 7 672 602 13.56 1 040 701

E Engelbrecht 31 May 841 481 18.58 156 35030 June 66 024 17.87 11 80031 July 63 389 18.62 11 80031 August 67 373 17.51 11 80030 September 75 925 15.54 11 800

Bryan Shanahan 31 July 31 694 18.62 5 90031 August 33 686 17.51 5 90030 September 37 962 15.54 5 90031 October 38 386 15,.37 5 90030 November 43 579 13.54 5 90031 December 86 996 13.56 11 80031 December 4 349 794 13.56 590 000

Non-executiverJ Connellan 31 May 635 080 18.58 118 000KA rayner 31 May 635 080 18.58 118 000Br Topham 31 May 635 080 18.58 118 000

2.6. rights offer 2017 [r60(c) / r62]In February 2017, the Company undertook a partially underwritten rights offer of 333 333 292 new Ordinary Shares (“Rights Offer Shares”) to qualifying shareholders at a subscription price of 15 cents per Rights Offer Share, in the ratio of 35.77420 Rights Offer Shares for every 100 Ecsponent Ordinary Shares held, as set out in a separate circular to Shareholders dated 7 February 2017. A total of 135 758 403 Ordinary Shares were issued to shareholders in terms of rights taken up and in terms of the obligations of the underwriter. [R72(3)]

3. Issue of Preference Shares:Following the initial public offer of the Class A, Class B and Class C Preference shares, the Company has issued multiple tranches of preference shares to the public over the past three years.

As at the Last Practicable Date, the following Preference Shares have been issued: ▪ 570 519 Class A Preference Shares, at a weighted

average issue price of R96.61 per Preference Share; ▪ 2 311 738 Class B Preference Shares, at a weighted

average issue price of R100 per Preference Share; and

▪ 7 109 514 Class C Preference Shares, at a weighted average issue price of R100 per Preference Share.

The Preference Shares are offered to public shareholders on an on-going basis and accordingly are not offered to all Preference Shareholders in proportion to their existing shareholdings.


Report by the Auditor in terms of Regulation 79 of the Companies Act in respect of Ecsponent

Annexure 6

In terms of Regulation 79 of the Companies Act, this annexure includes a report by the independent reporting accountants on the profits or losses of Ecsponent for the preceding three financial periods being the 15-month period ended 31 March 2017, and the years ending 31 December 2015 and 2014 as well as its statement of financial position as at 31 March 2017.

The DirectorsEcsponent Limited PO Box 3966Garsfontein East0060

IntroductionNexia SAB&T are the appointed auditors of Ecsponent Limited (“the Company”). Regulation 79 of the Companies Act of South Africa requires us to report on the following financial information (“financial information”), which is included in the prospectus of the Company to be issued on or about 22 September 2017: ▪ the consolidated and separate profits or losses of the

company in respect of the 15-month period ended 31 March 2017 and the years ended 31 December 2015 and 31 December 2014 as set out in Annexure 8 of the Prospectus;

▪ the consolidated and separate assets and liabilities of the company as at 31 March 2017, as set out in Annexure 8 to the prospectus;

The financial information has been extracted from the audited consolidated financial statements of the Company for the 15-month period ended 31 March 2017 and the years ended 31 December 2015 and 31 December 2014, which were prepared in accordance with International Financial Reporting Standards and the Companies Act of South Africa. We expressed an unqualified audit opinion on those audited consolidated financial statements in our reports dated 29 June 2017, 31 March 2015 and 30 June 2014, based on our audit which was conducted in accordance with International Standards on Auditing.

This financial information does not reflect the effects of events that may have occurred subsequent to the date of our audit report on those audited consolidated annual financial statements. Furthermore, the financial information does not contain all the disclosures required

by the International Financial Reporting Standards and the requirements of the Companies Act of South Africa and therefore reading the financial information is not a substitute for reading the audited consolidated financial statements of the Company.

Extraction of financial informationAs a result of the financial information being extracted from the audited consolidated financial statements, we can report that in the context of the audit performed on these annual financial statements: ▪ The financial information is not materially misstated

and is prepared on a basis consistent with the Companies Act of South Africa;

▪ The debtors and creditors included in the financial information did not include any material amounts that were not trade accounts;

▪ The provision for doubtful debts included in the financial information did not appear to be materially misstated;

▪ The provisions for inventory obsolescence or inventory overvaluation did not appear to be materially misstated; and

▪ In respect of the consolidated financial information, the intercompany profits have been eliminated.

responsibility of the directors for the financial informationThe directors are responsible for the audited consolidated financial statements, the extraction of the financial information therefrom, and the presentation of the financial information in accordance with the requirements of the Companies Act of South Africa.

Independent Auditor’s report in terms of Regulation 79 of the Companies Act of South Africa on the financial information included in the Prospectus


Report of factual findings on the material changes in the assets and liabilitiesIn accordance with Regulation 79(4)(b)(v) we are required to include a statement in our report, as to whether there have been any material changes in the assets and liabilities of the Company and its subsidiaries since the consolidated 15-month financial statements dated 31 March 2017.

As a result, we have performed the following procedures which were agreed with you: ▪ We reviewed the latest management accounts

including the consolidated management accounts of the Company and compared the categories of assets and liabilities to the consolidated statement of financial position dated 31 March 2017. Where movements in the assets and liabilities were in excess of 20%, these have been reported in the findings below.

▪ We reviewed minutes of meetings of the board of directors of the Company and its subsidiaries since 31 March 2017 to identify any matters regarding material changes in the assets and liabilities, such as the sale or purchase of a significant asset.

▪ We obtained a letter of representation from management confirming that there have been no material changes in the assets and liabilities of the Company and its subsidiaries since 31 March 2017.

Our engagement was undertaken in accordance with the International Standard on Related Services (ISRS) 4400: Engagements to Perform Agreed-Upon Procedures Regarding Financial Information. The procedures were performed solely to assist you in complying with Regulation 79(4)(b)(v) of the Companies Act of South Africa.

responsibilities of the DirectorsThe directors have the responsibility for the accuracy and completeness of the records, documents, explanations and other information provided to us for the purpose of performing the procedures and for determining whether the nature and scope of our work specified in this factual findings report is sufficient for the purposes of evaluating the material changes in the assets and liabilities of the Company and its subsidiaries.

responsibilities of the auditorAn agreed upon procedure engagement involves applying our expertise to perform procedures as agreed by us and the directors and reporting the factual findings from the procedures performed. We have complied with relevant ethical requirements, including the principles of integrity, objectivity, professional competence and due care.

Since an agreed upon procedure engagement is not an assurance engagement, we are not required to verify the accuracy or completeness of the information management has provided to us to complete the agreed upon procedure engagement. Because the above procedures do not constitute either an audit or a review made in accordance with International Standards on Auditing or International Standards on Review Engagements, we do not express any assurance on the material changes in the assets and liabilities of the Company and its subsidiaries. Had we performed additional procedures or had we performed an audit or review of the financial statements in accordance with International Standards on Auditing or International Standards on Review Engagements, other matters might have come to our attention that would have been reported.

FindingsWe report our findings as follows: ▪ On 15 September 2017, we compared the

below categories of assets and liabilities per the management accounts for the 5 months ended 31 August 2017 to the consolidated statement of financial position for the period ended 31 March 2017.- Non-current assets;- Current assets;- Non-current assets classified as held for sale;- Non-current liabilities;- Current liabilities; and- Non-current liabilities directly associated with

assets classified as held for sale.

For these categories of assets and liabilities, movements in excess of 20% were identified for the above categories stated, due to:- The conclusion on the sale of non-current assets

held for sale, which resulted in the realisation of the non-current assets held for sale and its related non-current liabilities held for sale;

- The issue of new preference shares subsequent to year end resulted in an increase in the non-current and current liabilities in excess of 20%;

- In line with the current business model, funds raised through the issue of new preference shares were utilised in new loans advances, resulting in an increase above 20% in current and non-current assets.

▪ Our findings relate only to the accounts and items specified above and do not extend to any financial statements of the Company taken as a whole.

ConsentWe consent to the inclusion of this report, which will form part of the prospectus to the shareholders of Ecsponent Limited, to be issued on or about 22 September 2017 in the form and context in which it appears. Our report should not to be used for any other purpose or be distributed to any other parties.

Yours faithfully

Nexia SAB&TPer: T.J. de Kock - DirectorRegistered Auditor and Reporting Accountant19 September 2017


Corporate Governance Statement [R54(1)(b)]

Annexure 7

The Group endorses the principles contained in the King IV Report on Corporate Governance and confirms its commitment to the principles of fairness, accountability, responsibility and transparency as advocated therein. The Board strives to ensure that the Group is ethically managed according to prudently determined risk parameters.

Two major areas not adopted by Ecsponent include the establishment of an internal audit function, and the fact that the chairman of the Board should not be a member of the audit committee. Shareholders have however approved the chairman being a member of the audit committee at the annual general meeting and the necessary disclosure in this regard was made in line with the JSE guidance.

The full register, addressing all the principles of the King IV Report and Code on Corporate Governance, including instances of non-compliance, is set out on the Company’s website (http://ecsponentlimited.com), at the following links:▪ King IV register: http://www.iodsa-gai.co.za/Reports/Public/ApplicationRegisterPractice.aspx?L=ba16f740-2d92-

4241-b2d2-c631428074cb▪ King IV Application register: http://www.iodsa-gai.co.za/Reports/Public/ApplicationRegisterPrinciple.

aspx?L=ba16f740-2d92-4241-b2d2-c631428074cb▪ JSE Corporate Governance Listing requirement: http://www.iodsa-gai.co.za/Reports/Public/JSE_

ListingRequirements.aspx?L=ba16f740-2d92-4241-b2d2-c631428074cb

As a result of the small size of the business and the low volume of transactions, management’s focus has been on the design and implementation of controls and no internal audit function had been established. The Group’s internal control environment is continually re-evaluated.

Principle 1 The governing body should lead ethically and effectively.Integrity: Good faith and best interestCommentary: Members of the Board act in good faith and in the best interests of the Company.

K IV™ P1 Prac 1.a.i

Satisfactorily Applied

Integrity: Conflicts of interestCommentary: Members of the Board avoid conflicts of interest but in instances where a conflict cannot be avoided, it is disclosed to the Board. The Board considers the impact of the conflict and proactively manages the situation.

K IV™ P1 Prac 1.a.ii


Integrity: EthicsCommentary: Directors and the Board collectively aspire to act ethically at all times, beyond mere legal compliance.

K IV™ P1 Prac 1.a.iii


Integrity: Ethical organisational cultureCommentary: Directors and the Board collectively set the tone for an ethical organisational culture. All deliberations, decisions and actions of board are based on fairness, accountability, responsibility, transparency.

K IV™ P1 Prac 1.a.iv


Competence: Working knowledgeCommentary: Directors are introduced to the Group via an information pack as well as an informal induction presented by the executive directors and tailored to the existing knowledge of the new director. It includes specific aspects relating to the Group, the industries and jurisdictions in with it operates as well as of the key laws, rules, codes and standards applicable.

K IV™ P1 Prac 1.b.i



Principle 1 Competence: Care, skill and diligenceCommentary: Directors act with due care, skill and diligence, and take reasonably diligent steps to ensure that they are informed about matters under discussion and placed before the Board for deliberation and final decision making.

K IV™ P1 Prac 1.b.ii


Competence: Continuous developmentCommentary: Directors are committed to continuous professional education in each of their professions and the further develop of their competence to lead effectively.

K IV™ P1 Prac 1.b.iii


responsibility: Strategy, policy, plans, oversight /monitoring of implementation/execution and performanceCommentary: Directors assume collective responsibility in the form of the Board of the Company for steering and setting the direction of the organisation; approving policy and planning; overseeing and monitoring of implementation and execution by management; and ensuring for accountability on organisational performance.

K IV™ P1 Prac 1.c.i


responsibility: Courage in risks and opportunitiesCommentary: Directors exercise due care and courage in considering opportunities for the further growth and improvement of the Group. The Board assess and considers the risks involved and if risks are managed to an acceptable level the Board demonstrates courage in supporting the venture.

K IV™ P1 Prac 1.c.ii


responsibility: Mitigation of negative outcomesCommentary: The Board takes collective responsibility for anticipating, preventing or bettering negative outcomes of the organisation’s activities.

K IV™ P1 Prac 1.c.iii


responsibility: Time and effortCommentary: Directors attend Board meetings and subcommittee meetings, devoting sufficient time and effort to prepare for these meetings.

K IV™ P1 Prac 1.c.iv


Accountability: Execution of responsibilitiesCommentary: Directors remain responsible for the execution of their responsibilities, even when these were delegated.

K IV™ P1 Prac 1.d


Fairness: Stakeholder-inclusivityCommentary: The Board promotes the stakeholder-inclusive approach of governance and takes account of the impact of the company's operations on internal and external stakeholders.

K IV™ P1 Prac 1.e.i


Fairness: Environment, society and future generationsCommentary: The Board directs the Company ensuring that its operations does not adversely affect the natural environment, society or future generations.

K IV™ P1 Prac 1.e.ii


TransparencyCommentary: Deliberations, decisions and actions of Board are based on fairness, accountability, responsibility and transparency.

K IV™ P1 Prac 1.f


Effective leadership by ethical characteristicsCommentary: The Board sets the tone for the organisation by epitomising the ethical characteristics required to offer effective leadership that results in achieving strategic objectives and positive outcomes over time.

K IV™ P1 Prac 2


Arrangements for ethical and effective leadershipCommentary: The Board and its members are evaluated on a regular basis which includes consideration of ethical behaviors and the effectiveness of its leadership. The Board is currently reviewing the Group code of conduct to ensure relevance taking into account the impact on the Group of the major related party transactions concluded at the end of March 2017.

K IV™ P1 Prac 3

Not Applied


Principle 2 The governing body should govern the ethics of the organisation in a way that supports the establishment of an ethical culture.Responsibility for ethicsCommentary: The Board's has ensured ethical behavior is entrenched throughout the organisation with the executive directors and senior management expected to provide the example of the Group's expected ethical standards. These ethical standards will be formally documented in a Group ethics related policy, thereby further articulating the Board's expectation of the organisation's ethical behavior.

K IV™ P2 Prac 4


Approval of ethics policy and code of conductCommentary: The board has not formally approved a code of conduct or ethical standards. The board has however demonstrated values such as integrity, honesty and dedication that are replicated throughout the businesses.

K IV™ P2 Prac 5

Not Applied

Ensure interaction with stakeholdersCommentary: The ethical organisational culture is reflected in the Company's strategies and operations, decisions and conduct, and how it treats its internal and external stakeholders. The Board has however not formally approved a code of conduct and is therefore unable to consider compliance to the code through the company strategy and its operations.

K IV™ P2 Prac 6.a

Not Applied

Ensure key ethical risks are addressedCommentary: The Board has ensured that ethical risks and opportunities are considered through the Group risk management process for its diverse businesses. A formal ethics risk and opportunity profile has not been established as yet.

K IV™ P2 Prac 6.b

Not Applied

Arrangements: PublishingCommentary: The organisation has not formally documented its code of conduct and as a result is not able to publish it.

K IV™ P2 Prac 7.a

Not Applied

Arrangements: Supplier and employee contractsCommentary: The organisation has not formally documented its code of conduct. Reference to the Company's policies is made in supplier contracts and employee contracts as well as the employees responsibility to familiarise themselves with these policies and updates.

K IV™ P2 Prac 7.b

Not Applied

Arrangements: Induction and trainingCommentary: The organisation has not formally documented its code of conduct and as a result they cannot be included in employee induction and training. Employee induction and training does however include reference to the required ethical standards and conduct expected from employees.

K IV™ P2 Prac 7.c

Not Applied

Management implementation and execution of codes of conduct and ethics policiesCommentary: The Board delegated the responsibility for implementation and execution of the codes of conduct and ethics policies to executive directors and other senior management.

K IV™ P2 Prac 8


Oversight: Application to employees and suppliersCommentary: Executive management ensure that the Group's ethical standards are applied to the processes for the recruitment, evaluation of performance and reward of employees, as well as the sourcing of suppliers.

K IV™ P2 Prac 9.a


Oversight: Sanctions and remedies when ethical standards breachedCommentary: The Board ultimately has oversight over the management and implementation of ethics throughout the Group and will implement appropriate sanctions and remedies should the ethical standards be breached by senior management. The Board exercises its powers in this regard at lower staff levels through senior management who remains responsible for the process throughout the organisation.

K IV™ P2 Prac 9.b



Principle 2 Oversight: Whistle-blowingCommentary:The group has not implemented mechanisms to facilitate protected disclosure or whistle-blowing to detect breaches of ethical standards.

K IV™ P2 Prac 9.c

Not Applied

Oversight: Independent assessment / employees and stakeholdersCommentary:Formal monitoring of adherence to the organisation’s ethical standards by employees and other stakeholders has not been implemented.

K IV™ P2 Prac 9.d

Not Applied

Disclosure: Arrangements in placeCommentary:An overview of the arrangements for governing and managing ethics throughout the Group is not expressly disclosed.

K IV™ P2 Prac 10.a

Not Applied

Disclosure: Key focus areasCommentary:Key ethical focus areas are not expressly disclosed during reporting periods.

K IV™ P2 Prac 10.b

Not Applied

Disclosure: Measures of monitoring / outcomes addressedCommentary:Measures taken to monitor organisational ethics and how the outcomes were addressed are not disclosed.

K IV™ P2 Prac 10.c

Not Applied

Disclosure: Planned future focusCommentary:Planned areas of future focus regarding ethics and conduct are not expressly disclosed.

K IV™ P2 Prac 10.d

Not Applied

Principle 3 The governing body should ensure that the organisation is and is seen to be a responsible corporate citizen.Responsibility of setting the direction for corporate citizenshipCommentary:The Board assumes responsibility and provides direction guiding the Company's operations and its impact on the economy, society and the environment.

K IV™ P3 Prac 11


Ensure compliance with Constitution, laws, standards and owns codes and policiesCommentary:The Board drives adherence and compliance to applicable laws, regulations and standards in each of the jurisdictions the Company and its subsidiaries operate.

K IV™ P3 Prac 12


Oversight of congruency of purpose, values, strategy and conductCommentary:The Board oversees that the organisation’s core purpose and values, strategy and conduct are congruent with it being a responsible corporate citizen.

K IV™ P3 Prac 13


Oversight and Monitoring: WorkplaceCommentary:The scale of Group’s operations and its relative compact staff compliment restrict the ability to implement formal monitoring policies and controls in relation to the Company’s status as a responsible corporate citizen. The Board relies on senior management to implement and manage responsible workplace policies and report or revert to the Board on material matters.


Not Applied

Oversight and Monitoring: EconomyCommentary:The scale of Group’s operations and its relative compact staff compliment restrict the ability to implement formal monitoring policies and controls in relation to the Company’s status as a responsible corporate citizen. The Board relies on senior management to implement and manage responsible policies and report or revert to the Board on material matters relating to economic environment in which the Company operates.


Not Applied


Principle 3 Oversight and Monitoring: SocietyCommentary:The scale of Group’s operations and its relative compact staff compliment restrict the ability to implement formal monitoring policies and controls in relation to the Company’s status as a responsible corporate citizen. The Board relies on senior management to implement and manage responsible policies and report or revert to the Board on material matters within the societies in which the Company operates.


Not Applied

Oversight and Monitoring: EnvironmentCommentary:The scale of Group’s operations and its relative compact staff compliment restrict the ability to implement formal monitoring policies and controls in relation to the Company’s status as a responsible corporate citizen. The Board relies on senior management to implement and manage responsible environmental policies and report or revert to the Board on material matters.


Not Applied

Disclosure: Arrangements in placeCommentary:An overview of the arrangements for governing and managing responsible corporate citizenship within the Group is not expressly reported.


Not Applied

Disclosure: Key focus areasCommentary:Key areas of focus in relation to corporate citizenship in relation to the Group's activities is not expressly reported.


Not Applied

Disclosure: Measures of monitoring / outcomes addressedCommentary:Measures taken to monitor corporate citizenship and how the outcomes were addressed are not disclosed.


Not Applied

Principle 4 The governing body should appreciate that the organisation’s core purpose, its risks and opportunities, strategy, business model, performance and sustainable development are all inseparable elements of the value creation process.Responsibility of setting the direction for realisation of core purpose and valuesCommentary:The Board assumes responsibility for organisational performance by steering and setting the direction for the realisation of the organisation’s core purpose, and the development of its short, medium and long-term strategy. The board informs and approves strategy, as opposed to being a passive recipient of strategy as proposed by management.

K IV™ P4 Prac 1


Management's formulation and development of strategyCommentary:The Board has supported the proposed strategy by management focusing on short and long term objectives to ensure sustainable profitability and continued expansion through future revenue and earnings growth.

K IV™ P4 Prac 2


Approval of strategy: Timelines and parametersCommentary:The organisation’s strategy as formulated and developed by management is approved by the Board after it has challenged the strategy constructively with reference the proposed timelines.

K IV™ P4 Prac 3.a


Approval of strategy: ResourcesCommentary:The organisation’s strategy as formulated and developed by management is approved by the Board after it has challenge the strategy constructively with reference to the extent to which the proposed strategy depends on the resources and relationships connected to the various forms of capital.

K IV™ P4 Prac 3.c



Principle 4 Approval of strategy: StakeholdersCommentary: The organisation’s strategy as formulated and developed by management is approved by the Board after it has challenge the strategy constructively with reference to the legitimate and reasonable needs, interests and expectations of material stakeholders.

K IV™ P4 Prac 3.d


Approval of strategy: Consequence to various forms of capitalsCommentary: The organisation’s strategy as formulated and developed by management is approved by the Board after it has challenge the strategy constructively with reference to the increase, decrease or transformation of the various forms of capitals that may result from the execution of the proposed strategy.

K IV™ P4 Prac 3.e


Approval of strategy: Interconnectivity and inter-dependence of the aboveCommentary: The organisation’s strategy as formulated and developed by management is approved by the Board after it has challenge the strategy constructively with reference to the inter-connectivity and inter-dependence thereof.

K IV™ P4 Prac 3.f


Approval of operational plans and key performance measuresCommentary: The Board does not approve the policies and operational plans developed by management to give effect to the approved strategy. The Board further does not review or approve the key performance measures and targets for assessing the achievement of strategic objectives and positive outcomes over the short, medium and long term.

K IV™ P4 Prac 4

Not Applied

Management's implementation and execution of operational plansCommentary: The Board delegates to management the responsibility to implement and execute approved policies and operational plans.

K IV™ P4 Prac 5


Oversight of strategy and operational plans implementation against key performance measuresCommentary: The Board exercises ongoing oversight of the implementation of strategy and operational plans by management against the agreed performance measures and targets.

K IV™ P4 Prac 6


Oversight of continual assessments and responses to negative consequences of activities and outputsCommentary: The Board ensures that the Company continually assesses, and responsibly responds to, the negative consequences of its activities and outputs on the triple context in which it operates, and the capitals which it uses and affects.

K IV™ P4 Prac 7


Financial oversight (specifically going concern; solvency and liquidity)Commentary: The adequacy of the Group's working capital is assessed on a ongoing basis by executive management. In addition, the board reviews the financial results of the group on a quarterly basis during the set board meetings.

K IV™ P4 Prac 8


Principle 5 The governing body should ensure that reports issued by the organisation enable stakeholders to make informed assessments of the organisation’s performance, and its short, medium and long term prospects.Responsibility of setting the direction for approach and conduct of the organisation's reportingCommentary: The Board assume responsibility for the organisation’s reporting by setting the direction for how it should be approached and conducted.

K IV™ P5 Prac 9


Approval of the reporting frameworkCommentary: The Board approves management’s determination of the reporting frameworks to be used, taking into account legal requirements and the intended audience and purpose of each report.

K IV™ P5 Prac 10



Principle 5 Oversight that all reporting requirements metCommentary: The Board oversees that reports such as the annual financial statements, sustainability reports, social and ethics committee reports, or other online or printed information or reports are issued as is necessary, to comply with legal requirements, and/or to meet the legitimate and reasonable information needs of material stakeholders.

K IV™ P5 Prac 11


Oversight of integrated reportCommentary: The Board ensures the Company issues an integrated report annually a distinguishable, prominent and accessible part of another report which also includes the annual financial statements and other reports that must be issued in compliance with legal provision.

K IV™ P5 Prac 12


Approval of management's basis of determining materialityCommentary: The Board approves management’s bases for determining materiality for the purpose of deciding which information should be included in reports.

K IV™ P5 Prac 13


Ensure integrity of reportsCommentary: The company has controls to enable it to verify and safeguard the integrity, i.e. accuracy and reliability, of its integrated report.

K IV™ P5 Prac 14


Oversight of publishing’s accessible by stakeholders: Governance ReportCommentary: The Board ensures that the corporate governance disclosures required by King IV are published on the organisation’s website, or on other platforms or through other media as is appropriate for access by stakeholders.



Oversight of publishing's accessible by stakeholders: Integrated ReportCommentary: The Board ensures that the Integrated Report is published on the organisation’s website, or on other platforms or through other media as is appropriate for access by stakeholders.



Oversight of publishing's accessible by stakeholders: Annual Financial Statements and other external reportsCommentary: The Board ensures that the annual financial statements and other external reports are published on the organisation’s website, or on other platforms or through other media as is appropriate for access by stakeholders.



Principle 6 The governing body should serve as the focal point and custodian of corporate governance in the organisation.Leadership role: Steering organisation and setting the strategic directionCommentary: The Board leads the Company by reviewing and approving management's proposed strategic direction for the Company.

K IV™ P6 Prac 1.a


Leadership role: Approval of policy and plan Commentary: The Board leads the Company by reviewing and approving management's proposed Group policies and planning aimed at progressing towards the strategic direction set for the Company.

K IV™ P6 Prac 1.b


Leadership role: Oversight and monitoring of implementation and executionCommentary: The Board leads the Company by overseeing and monitoring management's implementation and execution of approved policies and planning aimed at progressing towards the strategic direction set for the Company.

K IV™ P6 Prac 1.c


Leadership role: Accountability / reporting and disclosureCommentary: The Board leads the Company by ensuring accountability for the Company’s performance.

K IV™ P6 Prac 1.d



Principle 6 Governing body charterCommentary: The Board charter lists the Board’s role, responsibilities, membership requirements and procedural conduct. The charter is reviewed regularly (at least annually) to ensure its continued relevance.

K IV™ P6 Prac 2


Approval of protocol for independent, external professional adviceCommentary: The Board charter, audit and risk committee charter and nominations committee charters provide that Directors are permitted to take independent advice related to their duties. The charters further indicate that the company will pay for such advice if the Board approved procedure has been followed. The Board will determine the protocol to be followed in such an event at the next meeting.

K IV™ P6 Prac 3

Not Applied

Approval of protocol of engagement with managementCommentary: The board has unrestricted access to all company information, records, documents and property subject to requesting information from the executive directors.

K IV™ P6 Prac 4


Disclosure: Number of meetings and attendanceCommentary: The board charter dictates that the Board should meet at least once a quarter and that all members should attend.

K IV™ P6 Prac 5.a


Disclosure: Fulfilment of responsibilities in accordance with charterCommentary: The Board does not disclose whether it is satisfied that it has fulfilled its primary role and responsibility in accordance with the charter.

K IV™ P6 Prac 5.b

Not Applied

Principle 7 The governing body should comprise the appropriate balance of knowledge, skills, experience, diversity and independence for it to discharge its governance role and responsibilities objectively and effectively.Responsibility for its compositionCommentary: The Board assume responsibility for its composition by assessing whether it contains the appropriate diversity, independence, skills and experience on a regular basis. In the event the Board identifies a weakness it directs the process to attain the appropriate balance of knowledge, skills, experience, diversity and independence to objectively and effectively discharge its governance role and responsibilities.

K IV™ P7 Prac 6


Member number: Appropriate mix of knowledge, skill and experienceCommentary: When assessing the appropriateness of the Board's composition the mix of knowledge, skills and experience (business, commercial and industry experience), regulatory requirements needed to govern the Company is considered subject to the responsible utilisation of the resources available to the business.

K IV™ P7 Prac 7.a


Member number: Appropriate mix of executive, non-executive and independent non-executiveCommentary: When assessing the appropriateness of the Board's composition the mix of executive, non-executive and independent non-executive directors are considered to ensure appropriate governance of the company. The Board charter requires that the majority of the Board comprise of non-executive directors of which the majority must be independent.

K IV™ P7 Prac 7.b


Member number: Sufficient numberCommentary: When assessing the appropriateness of the Board's composition the requirements to fill Board subcommittee positions with Directors holding the appropriately qualifications and/or skills and experience is considered.

K IV™ P7 Prac 7.c



Principle 7 Member number: Securing a quorumCommentary: When assessing the appropriateness of the Board's composition the requirements of the MOI is considered as well as the need to achieve a quorum at Directors meetings.

K IV™ P7 Prac 7.d


Member number: Regulatory requirementsCommentary: When assessing the appropriateness of the Board's composition consideration is given to relevant regulatory requirements.

K IV™ P7 Prac 7.e


Member number: DiversityCommentary: The board regularly considers the appropriateness of the board’s size, diversity and demographics in relation to the business environment and the Group’s operations.

K IV™ P7 Prac 7.f


Majority of non-executive membersCommentary: The board comprises a majority of non-executive directors of which the majority are independent non-executive directors. The board currently comprises of eight directors of which: four are independent non-executive; two are non-executive; a chief executive officer and a financial director.

K IV™ P7 Prac 8


Minimum of two executive membersCommentary: The board incorporates two full time executive directors filling the Chief Executive Officer and Financial Director roles.

K IV™ P7 Prac 9


Member diversityCommentary: The Board has established a diversity policy which aims to promote diversity throughout the Group promoting better decision-making and effective governance, including field of knowledge, skills and experience as well as age, culture, race and gender.

K IV™ P7 Prac 10


Setting race and gender targetsCommentary: The Board has set gender diversity targets within its membership. The Board is currently developing a race diversity policy which will include targets for race representation in its membership.

K IV™ P7 Prac 11

Not Applied

Periodic and staggered rotation of membersCommentary: One third of the company's non-executive directors retire at the date of the AGM in terms of the rotation clause incorporated in the company's MOI. Retiring directors may stand for re-election at the same AGM subject to making themselves available and support of the nominations committee.

K IV™ P7 Prac 12


Succession planningNo Commentary

K IV™ P7 Prac 13

Not Applicable

Approval of candidates for election as membersCommentary: The nominations committee propose approved candidates to the Board for approval. Directors' appointments into a vacancy or to bolster the Board are confirmed by shareholders at the next AGM.

K IV™ P7 Prac 14


Formal and transparent process of nomination, election and appointmentCommentary: All board appointments are considered by the nominations committee and recommendations made to the board for final consideration and approval. The procedures for board appointments are set out formally in a nomination committee charter.

K IV™ P7 Prac 15


Nomination consideration: DiversityCommentary: The Board through the nominations committee review candidate suitability and considers the diversity of the Board prior to the appointment.




Principle 7 Nomination consideration: Fit and properCommentary: The Board through the nominations committee review candidate suitability and performs appropriate procedures to confirm the candidates background. All legislative and regulatory requirements applicable to the appointment is considered.



Consideration of the nomination for re-election Commentary: The company MOI allows for the re-election of retiring non-executive directors. The nominations committee input is considered when determining the appropriateness and eligibility of retiring non-executive directors’ nomination for re-election.

K IV™ P7 Prac 17


Declaration of professional commitments and sufficiency of timeCommentary: Candidate for election as a non-executive directors confirm prior to acceptance of the appointment that they have sufficient time available to fulfill the responsibilities of a non-executive director.

K IV™ P7 Prac 18


Independent background and qualification checksCommentary: The Board through the nominations committee review candidate suitability and performs appropriate procedures to confirm the candidates background. All legislative and regulatory requirements applicable to the appointment is considered.

K IV™ P7 Prac 19


AGM disclosure of election candidatesCommentary: A brief professional profile of each candidate standing for election at the AGM accompanies the notice of the AGM, together with a statement from the Board confirming that it supports the candidate’s election or re-election.

K IV™ P7 Prac 20


Formal letter of appointmentNo Commentary

K IV™ P7 Prac 21

Not Applied

Member inductionCommentary: The induction programme for new directors presented by the executive directors is tailored to the specific skills, background and needs of the new directors. New directors knowledge of the JSE listing requirements is assessed and if required appropriate training is provided.

K IV™ P7 Prac 22


Mentorship and governance trainingCommentary: The Board assesses the need for mentorship on an individual director basis and recommends appropriate training or programmes.

K IV™ P7 Prac 23


Programme of professional development and regular briefingsCommentary: The board performed a 360 degree review assessing the performance of the board. The organisation has limited resources to fund continuing professional development. Changes in laws, risks and the business environment are standard agenda items at every board meeting and are dealt with as and when required.

K IV™ P7 Prac 24


Declaration of all financial, economic and other interestsCommentary: The Board agenda requires declaration of all interests prior to the start of each Board meeting.

K IV™ P7 Prac 25


Conflict of interest declaration at start of every meetingCommentary: The board agenda contains a standing agenda item whereby the declaration of potential conflicts are called for and these real or perceived conflicts are discussed and resolved.

K IV™ P7 Prac 26


Review of independence of non-executive membersCommentary: The evaluation of independence is performed by the chairman and confirmed to the board. The chairman considers whether there is a real or perceived interest, position, association or relationship which, when judged from the perspective of a reasonable and informed third party, is likely to influence unduly or cause bias in decision-making in the best interest of the organisation.

K IV™ P7 Prac 27



Principle 7 Member independence: Provider of financial capitalCommentary: In considering the independence of a non-executive director consideration is given whether the director is a significant provider of financial capital, or ongoing funding to the organisation; or is an officer, employee or a representative of such provider of financial capital or funding that may impede independence.



Member independence: Participates in share-based incentive schemeCommentary: In considering the independence of a non-executive director consideration is given whether the director participates in the Company’s share based incentive or any other incentive programme offered by the Company that may impede independence.



Member independence: Material personal investorCommentary: In considering the independence of a non-executive Director consideration is given whether the Director owns shares in the Company. If the Director holds shares in the Company further consideration is given to whether the shares are material to the Director’s personal wealth thereby impacting on independence.



Member independence: Executive (or related) in preceding three yearsCommentary: In considering the independence of a non-executive director consideration is given whether the director has been in the employ of the Company or a major subsidiary during the preceding three financial years, or is a related party to an executive manager of the Company or a major subsidiary.



Member independence: External auditor (key member) in preceding three yearsCommentary: In considering the independence of a non-executive director consideration is given whether the director has been the designated external auditor or a key member of the audit team of the external audit firm during the preceding three financial years of the Company or a major subsidiary.

K IV™ P7 Prac 28.e


Member independence: Ongoing professional adviserCommentary: In considering the independence of a non-executive director consideration is given whether the director has been a significant or ongoing professional adviser to the Company or a major subsidiary, other than in the director’s role as part of the Board.

K IV™ P7 Prac 28.f


Member independence: Member of governing body and/or executive of a significant customer or supplierCommentary: In considering the independence of a non-executive director consideration is given whether the director is a Director or an executive manager of a significant customer or supplier.

K IV™ P7 Prac 28.g


Member independence: Member of governing body and/or executive of a related partyCommentary: In considering the independence of a non-executive director consideration is given whether the director is a Director or an executive manager of a related party to the Company.

K IV™ P7 Prac 28.h


Member independence: Remuneration contingent on organisation performanceCommentary: In considering the independence of a non-executive Director consideration is given whether the Director is entitled to remuneration contingent on the performance of the Company.

K IV™ P7 Prac 28.i


Condition of independent non-executive member serving for longer than nine yearsCommentary: Independent non-executive directors serving for longer than nine years will be subjected to a rigorous review of their independence and performance by the board. None of the current non-executive directors on the board have been in office for nine or more years.

K IV™ P7 Prac 29



Principle 7 Disclosure: Appropriate mix of knowledge, skill, experience, diversity and independenceNo Commentary


Not Applied

Disclosure: Gender and race targetsNo Commentary


Not Applied

Disclosure: Categorisation of executive and non-executiveCommentary: The integrated report classifies directors as executive, non-executive or independent and provides information about individual directors that shareholders may need to make their own assessments in regard to all of the following: independence; education, qualification and experience; length of service and age.



Disclosure: Categorisation of independence (and on members serving longer than nine years)No Commentary


Not Applicable

Disclosure: Qualification and experienceCommentary: The integrated report classifies directors as executive, non-executive or independent and provides information about individual directors that shareholders may need to make their own assessments in regard to all of the following: independence; education, qualification and experience; length of service and age.



Disclosure: Length of serviceCommentary: The integrated report classifies directors as executive, non-executive or independent and provides the date of appointment allowing stakeholders to determine the period of service.



Disclosure:AgeCommentary: The integrated report classifies directors as executive, non-executive or independent and provides information about individual directors that shareholders may need to make their own assessments in regard to all of the following: independence; education, qualification and experience; length of service and age.



Disclosure: Other governing body and professional positionsNo Commentary


Not Applied

Disclosure: Reasons for removal, resignation or retirementCommentary: These reasons are set out adequately when necessary.



Independent non-executive chairCommentary: The chairman is an independent non-executive director as required by the Board Charter.

K IV™ P7 Prac 31


Lead independent: Leads in absence of the chairCommentary: A lead independent non-executive director has not been appointed. A non-executive vice chairman has been appointed.


Not Applied

Lead independent: Sounding board for the chairCommentary: Although a lead independent non-executive director has not been appointed the other independent non-executive Directors act as a sounding board for the Chairman.


Not Applied

Lead independent: Intermediary between chair and members, if necessaryCommentary: A lead independent non-executive director has not been appointed. A non-executive vice chairman has been appointed.


Not Applied

Lead independent: Intermediary between chair and members, if necessaryCommentary: A lead independent non-executive director has not been appointed. A non-executive vice chairman has been appointed.


Not Applied

Lead independent: Strengthens independence in absence of non-independent chairNo Commentary


Not Applicable


Principle 7 Lead independent: Leads where chair has a conflict of interestCommentary: A lead independent non-executive director has not been appointed. A non-executive vice chairman has been appointed.


Not Applied

Lead independent: Leads performance appraisal of chairCommentary: A lead independent non-executive director has not been appointed. A non-executive vice chairman has been appointed.


Not Applied

Chair's and lead independent's role, responsibilities and term in charterCommentary: Although not formally documented the chairman’s role and responsibilities are clearly defined. No set term has been defined for the chairman who retires as part of the Company's rotation clause as one of the third of non-executive who retire at each AGM. The chairman is eligible for re-election at the same AGM should the chairman be part of the rotating third.

K IV™ P7 Prac 33

Not Applied

Chair not to be CEO, and also not of CEO of preceding three yearsCommentary: The chairman is totally independent, not being previously employed by the company.

K IV™ P7 Prac 34


Review of chair's ability to effectively perform dutiesNo Commentary

K IV™ P7 Prac 35

Not Applied

Chair: Audit committeeCommentary: The chairman is not a member of the audit and risk committee.



Chair: Remuneration committeeCommentary: The chairman of the Board is a member of the remuneration committee which is chaired by another independent non-executive Director.



Chair: Nomination committeeCommentary: The chairman of the Board is also the chairman of the nominations committee.



Chair: Risk committeeCommentary: The chairman is not a member of the audit and risk committee.



Chair: Social and ethics committeeCommentary: The chairman of the Board is also the chairman of the social and ethics committee.


Not Applied

Chair's succession planCommentary: Should the current chairman no longer be available the board constitution will be re-considered. The appropriate number of non-executive directors appointed and a new chairman will be elected from the appointed independent non-executive directors.

K IV™ P7 Prac 37


Disclosure: Chair's independenceCommentary: The company discloses that the chairman is an independent non-executive director.



Disclosure: Lead independentNo Commentary


Not Applied

Principle 8 The governing body should ensure that its arrangements for delegation within its own structures promote independent judgement, and assist with balance of power and the effective discharge of its duties.Determine need for delegation to committeesCommentary: The Board applies due care in delegating roles and responsibilities to individual board members, subcommittees or other structures within the organisation.

K IV™ P8 Prac 39


Responsibility defaults to governing bodyCommentary: Aspects that are not delegated remain within the Board's functions and is dealt with appropriately.

K IV™ P8 Prac 40



Principle 8 Delegation to an individual governing body memberCommentary: Delegation of roles and responsibilities are formally minuted and where required written instruction is provided.

K IV™ P8 Prac 41


Delegation by formal terms of referenceCommentary: All Board subcommittees have charters defining the relevant committees terms of reference. The charters are reviewed and approved annually by the Board.

K IV™ P8 Prac 42


Terms of reference: Composition Commentary: The committee charters include requirements for the composition of the subcommittees in terms of number of committee members, skills, qualifications and experience required.



Terms of reference: Roles, responsibilities and functionsCommentary: The subcommittee's terms of reference deals with: composition; objectives, purpose and activities; delegated authorities - including the extent of power to make decisions; tenure; and reporting mechanism to the board.



Terms of reference: Delegated authorityCommentary: The subcommittee's terms of reference deals with: composition; objectives, purpose and activities; delegated authorities - including the extent of power to make decisions; tenure; and reporting mechanism to the board.



Terms of reference: TenureCommentary: The subcommittee's terms of reference deals with: composition; objectives, purpose and activities; delegated authorities - including the extent of power to make decisions; tenure; and reporting mechanism to the board.



Terms of reference: Reporting Commentary: The subcommittee's terms of reference deals with: composition; objectives, purpose and activities; delegated authorities - including the extent of power to make decisions; tenure; and reporting mechanism to the board.



Terms of reference: Access to resources and informationCommentary: The subcommittee's terms of reference deals with: composition; objectives, purpose and activities; delegated authorities - including the extent of power to make decisions; tenure; and reporting mechanism to the board.



Terms of reference: Meeting proceduresCommentary: The subcommittee's terms of reference deals with: composition; objectives, purpose and activities; delegated authorities - including the extent of power to make decisions; tenure; and reporting mechanism to the board.



Terms of reference: Performance appraisalCommentary: The performance of the Board and its subcommittees is reviewed in terms of the annual Board review process.



Committee roles and responsibilities: CollaborationCommentary: The Board considered effective collaboration through cross-membership; coordinated timing of meetings; and avoidance of duplication or fragmented functioning in so far as possible.



Committee roles and responsibilities: Complementary approachCommentary: Where more than one committee has jurisdiction to deal with a similar matter, the specific role and positioning of each committee in relation to such matter are defined to ensure complementary rather than competing approaches.




Principle 8 Committee roles and responsibilities: Balanced member power distributionCommentary: The Board ensured balanced distribution of power in respect of membership across committees, so that no individual has the ability to dominate decision-making, and no undue reliance is placed on any individual.



Ensure necessary knowledge, skills and experience on committeesCommentary: The Board ensures that each committee has the necessary knowledge, skills, experience and capacity to execute its duties effectively. These requirements are incorporated in the committee charters.

K IV™ P8 Prac 45


Minimum of three members per committeeCommentary: All subcommittees have a minimum of three members.

K IV™ P8 Prac 46


Executive and senior management representation at committee meetingsCommentary: The executive directors attend all subcommittee meetings in terms of a standing invitation. Where appropriate other members of management may be invited on an ad-hoc basis when appropriate.

K IV™ P8 Prac 47


Governing body member attendance at committee meetingsCommentary: Directors are entitled to attend any committee meeting in terms of a standing invitation should they not be a member of the subcommittee. The directors who are not members of these committees are invited to participate in terms of standing consent of the respective chairs. they are however not entitled to vote and are not entitled to fees for such attendance, unless payment of fees is agreed to by the governing body and shareholders.

K IV™ P8 Prac 48


No discharge of governing body accountability by delegation of responsibilityCommentary: Any delegation by the Board of its responsibilities to a committee or a Director does not by or of itself constitute a discharge of the Board’s accountability. The Board applies its collective mind to the information, opinions, recommendations, reports and statements presented by the committee or the Director.

K IV™ P8 Prac 49


Disclosure: Roles, responsibilities and functionsCommentary: The Integrated Report contains disclosure regarding all subcommittee's role and associated responsibilities and functions.



Disclosure: CompositionCommentary: The names and qualifications of all members of the subcommittee during the period under review, and the period for which they served on the committee are disclosed in the integrated report.



Disclosure: Regular external advisers or invitees to attend meetingsCommentary:


Not Applicable

Disclosure: Key focus areasNo Commentary


Not Applied

Disclosure: Number of meetings and attendanceCommentary: The company discloses: the number of meetings held each year by the board and each board committee; and which meetings each director attended.



Disclosure: Fulfilment of responsibilities in accordance with terms of referenceCommentary: The audit and risk committee provides disclosure in terms of whether it has fulfilled its responsibilities in terms of the terms of reference. Other subcommittees to include disclosure in the Integrated Report.


Not Applied


Principle 8 Independent oversight: Effectiveness of assurance functions and servicesCommentary: The Company has established an audit committee which provides independent oversight of the financial reporting function and considers among others the effectiveness of the organisation’s assurance functions and services, with focus on external assurance service providers and the finance function.



Independent oversight: Integrity of annual financial statements and other external reportsCommentary: The Company has established an audit committee which provides independent oversight of the financial reporting function and considers among others the integrity of the annual financial statements and were appropriate other external reports issued.



Audit committee accountability regarding statutory dutiesCommentary: The audit committee reports internally to the board on its statutory duties and duties assigned to it by the Board.

K IV™ P8 Prac 52


Delegation of risk governance to audit committeeCommentary: The terms of reference contained in the audit committee charter set out the committee's responsibilities for risk management.

K IV™ P8 Prac 53


Oversight by audit committee of financial and other risks affecting integrity of external reportsCommentary: The audit committee oversees the risk management process which includes the management of financial and other risks.

K IV™ P8 Prac 54


Audit committee member's financial literacy, skills and experienceCommentary: The nominations committee evaluates whether audit committee members collectively have the required level of qualifications and experience.

K IV™ P8 Prac 55


Audit committee composed of independent and non-executive governing body membersCommentary: All four members of the audit committee are non-executive directors with 3 of the four being independent.

K IV™ P8 Prac 56


Governing body appoints audit committee chairCommentary: The chairman of the audit and risk committee is an independent non executive director and not the board chairman.

K IV™ P8 Prac 57


Annual meeting of audit committee with internal and external auditorsCommentary: The audit committee meets the external auditors at least annually. If deemed appropriate any management present at such a meeting in terms of an invitation from the audit committee may be asked to leave the meeting.

K IV™ P8 Prac 58


Audit committee disclosure: External auditor independence; Non-audit servicesCommentary: The audit committee provides a statement that it is satisfied that the external auditor is independent of the organisation. The statement however does not specifically address the policy and controls that address the provision of non-audit services by the external auditor, and the nature and extent of such services rendered during the financial year.


Not Applied

Audit committee disclosure: External auditor independence; TenureCommentary: The audit committee provides a statement that it is satisfied that the external auditor is independent of the organisation. The statement however does not specifically address the tenure of the audit firm.


Not Applied


Principle 8 Audit committee disclosure: External auditor independence; Partner rotationCommentary: The audit committee provides a statement that it is satisfied that the external auditor is independent of the organisation. The statement however does not specifically address the rotation of the designated external audit partner/director.



Audit committee disclosure: External auditor independence; Familiarity riskCommentary: The audit committee provides a statement that it is satisfied that the external auditor is independent of the organisation. The statement however does not specifically address significant changes in the management of the organisation during the external audit firm’s tenure which may mitigate the attendant risk of familiarity between the external auditor and management.

K IV™ P8 Prac 59.a.iv

Not Applied

Audit committee disclosure: Significant mattersCommentary: The audit committee statement does not address significant matters that the audit committee has considered in relation to the annual financial statements, and how these were addressed by the committee.


Not Applied

Audit committee disclosure: External audit qualityCommentary: The audit committee statement does not address the audit committee’s views on the quality of the external audit, with reference to audit quality indicators such as those that may be included in inspection reports issued by external audit regulators.


Not Applied

Audit committee disclosure: Effectiveness of chief audit executive and internal audit arrangementsNo Commentary


Not Applicable

Audit committee disclosure: Financial controlsCommentary: The audit committee does not provide its view on the effectiveness of the design and implementation of internal financial controls, and on the nature and extent of any significant weaknesses if applicable in the design, implementation or execution of internal financial controls that resulted in material financial loss, fraud, corruption or error.


Not Applied

Audit committee disclosure: Effectiveness of CFO and finance functionCommentary: The audit committee’s considers and satisfies itself of the suitability of the expertise and experience of the financial director every year and the finance function and provides disclosure in the integrated report.



Audit committee disclosure: Combined assuranceCommentary: The audit committee's does not disclose the arrangements in place for combined assurance and the committee’s views on its effectiveness.


Not Applied

Oversight committee of governing body: Nomination, election and appointmentCommentary: A nominations committee is constituted and it considers the appropriateness of candidate directors and provides nominations to the Board and shareholders for approval.



Oversight committee of governing body: Succession planningCommentary: The Company's relative size and operations do not make it practical to implement formal succession planning in respect of Board members. The Company would have to source appropriate candidates from outside the Company when the need arises to fill a vacancy.


Not Applied


Principle 8 Oversight committee of governing body: Performance evaluationCommentary: The nominations committee oversees the process and reviews the results of the evaluation of the performance and independence of individual Directors, the Board and Board committees.



Oversight committee of governing body: Composition Commentary: The majority of members of the nominations committee consists of non-executive directors and a majority of the non-executive directors is independent. The executive directors form part of the nominations committee.

K IV™ P8 Prac 61

Not Applied

Risk governance committeeCommentary: The Board has allocated the oversight of risk governance to the audit and risk committee.

K IV™ P8 Prac 62


Joint membership where risk committee separate to audit committeeNo Commentary

K IV™ P8 Prac 63

Not Applicable

risk governance committee: CompositionCommentary: The audit and risk committee comprises entirely from independent non-executive directors who may elect to invite executive directors and/or key management to the committee meetings. Should risk management experts be required the committee is mandated to invite such experts.

K IV™ P8 Prac 64


Remuneration committeeCommentary: The Company's remuneration committee is properly constituted.

K IV™ P8 Prac 65


remuneration committee: CompositionCommentary: All members of the remuneration committee non-executive directors and the majority is independent.

K IV™ P8 Prac 66


remuneration committee: Independent non-executive member as chairCommentary: The remuneration committee is chaired by an independent non-executive Director.

K IV™ P8 Prac 67


Social and ethics committeeCommentary: The Company has a Social and Ethics Committee.

K IV™ P8 Prac 68


Social and ethics committee: Statutory and delegated dutiesCommentary: The responsibilities of the social and ethics committee include its statutory duties and duties delegated to it by the Board.

K IV™ P8 Prac 69


Social and ethics committee: CompositionCommentary: The social and ethics committee should have executive and non-executive Directors, with a majority being non-executive.

K IV™ P8 Prac 70


Principle 9 The governing body should ensure that the evaluation of its own performance and that of its committees, its chair and its individual members, support continued improvement in its performance and effectiveness.Responsibility for performance evaluationsCommentary: The Board assumes responsibility for the evaluation of its own performance and that of its committees, its chair and its individual members and has determined how it should be approached and conducted.

K IV™ P9 Prac 71


Responsibility of chair's performance evaluationCommentary: The board follows a process of evaluating the performance of each director including the allocation of an independent non-executive director to evaluate the chairman.

K IV™ P9 Prac 72



Principle 9 Formal process of performance evaluation at least every two yearsCommentary: A formal process has been implemented in accordance with methodology approved by the Board to evaluate the performance of the Board, its committees, its chair and its individual Directors annually.

K IV™ P9 Prac 73


Every alternate year a consideration, reflection and discussion of performanceCommentary: A formal process has been implemented in accordance with methodology approved by the Board to evaluate the performance of the Board, its committees, its chair and its individual Directors annually.

K IV™ P9 Prac 74


Disclosure: Description of evaluations undertakenCommentary: General commentary regarding the board evaluation process is included. The board will expand on the commentary in the Integrated Report in instances where it is deemed appropriate.


Not Applied

Disclosure: ResultsCommentary: General commentary regarding the board evaluation process is included. The board will expand on the commentary in the Integrated Report in instances where it is deemed appropriate.


Not Applied

Disclosure: Satisfaction of performance and effectiveness improvementCommentary: General commentary regarding the board evaluation process is included. The board will expand on the commentary in the Integrated Report in instances where it is deemed appropriate.


Not Applied

Principle 10 The governing body should ensure that the appointment of, and delegation to, management contribute to role clarity and the effective exercise of authority and responsibilities.Appointment of CEOCommentary: The Board appoints the Company CEO.

K IV™ P10 Prac 76


CEO not a member of remuneration, audit or nomination committeesCommentary: The CEO is a member of the nominations committee but not of the audit and risk or remuneration committees. The CEO attends the audit and risk and remuneration committee meetings on invitation by the committee chairman.

K IV™ P10 Prac 79

Not Applied

CEO's additional professional positionsCommentary: The CEO and the Board agree on whether the CEO may take up additional professional positions, including membership of other governing bodies outside the organisation. Time constraints and potential conflicts of interests are considered and balanced against the opportunity for professional development.

K IV™ P10 Prac 80


CEO succession planCommentary: Due to the small size of the organisational senior management team a formal succession plan is not practical.

K IV™ P10 Prac 81

Not Applied

CEO performance evaluationCommentary: The CEO's performance is reviewed annually against agreed performance measures and targets.

K IV™ P10 Prac 82


Disclosure: Notice period and contractual terminationCommentary: The notice period stipulated in the CEO’s employment contract and the contractual conditions related to termination is not disclosed.


Not Applied

Disclosure: Other professional commitmentsCommentary: Other professional commitments of the CEO, including membership of governing bodies outside the organisation is not disclosed.


Not Applied


Principle 10 Disclosure: Existence of CEO succession planCommentary: Disclosure of whether succession planning is in place for if the CEO position is not performed.


Not Applied

Reservation and delegation of powersCommentary: The Board has set the direction and parameters for the powers which are reserved for itself, and those that are delegated to management via the CEO.

K IV™ P10 Prac 84


Authority frameworkCommentary: The Board approve a delegation of authority framework that articulates its set direction on reservation and delegation of power.

K IV™ P10 Prac 85


Delegation of appointment of executivesCommentary: The Board ensured that the delegation of authority framework addresses the authority to appoint executives who will serve as ex officio-executive members of the governing body and to make other executive appointments.

K IV™ P10 Prac 86


Key management: Competence and authorityCommentary: The Board oversees that key management functions are headed by individuals with the necessary competence and authority.



Key management: Adequately resourcedCommentary: The Board oversees that key management functions are appropriately resourced within the Company's resource constraints.



Executive / key personnel succession planCommentary: Due to the relative small size of the organisation's senior management team a formal succession plan is not practical for senior management in key positions.

K IV™ P10 Prac 88

Not Applied

Disclosure: Satisfaction of delegated authorityNo Commentary

K IV™ P10 Prac 89

Not Applied

Professional and independent guidance on corporate governanceCommentary: The Board contains significant knowledge and experience relating to corporate governance matters and its legal duties. The Board is further supported by the independent company secretary and its JSE appointed sponsors.

K IV™ P10 Prac 90


Appointment of a company secretaryCommentary: An independent company secretary has been appointed.

K IV™ P10 Prac 91


Approval of corporate governance arrangementsCommentary: The Board approves the arrangements for the provision of professional corporate governance service.

K IV™ P10 Prac 92


Necessary authority of company secretaryCommentary:The Board ensures that the office of the company secretary is empowered and that the position carries the necessary authority.

K IV™ P10 Prac 93


Approval and oversight of company secretaryCommentary:The Board oversees that the person appointed as the Company Secretory has the necessary competence, gravitas and objectivity to provide independent guidance and support at the highest level of decision-making in the organisation.

K IV™ P10 Prac 94


Responsibility for removal of company secretaryCommentary:The Board has primary responsibility for the removal of the company secretary or other professional providing corporate governance services.

K IV™ P10 Prac 95


Unfettered access to governing body / not a memberCommentary: The company secretary is not a member of the Board and maintains an arms-length relationship with the Directors.

K IV™ P10 Prac 96



Principle 10 Company secretary reporting linesCommentary: The company secretary reports to the CEO

K IV™ P10 Prac 97


Company secretary: Annual performance evaluationCommentary: The Board annually reviews the performance and independence of the company secretary.

K IV™ P10 Prac 98


Disclosure: Effectiveness of arrangementsCommentary: Corporate governance services are accessed via the company secretary.

K IV™ P10 Prac 99


Principle 11 The governing body should govern risk in a way that supports the organisation in setting and achieving strategic objectives.Responsibility of setting the direction for risk governance as it pertains to strategyCommentary: The board's responsibility for risk governance is expressed in the board charter and risk policy and plan. This risk management process incorporates risks and opportunities arising from the Company’s strategy.



Responsibility of setting the direction for risk governance as it pertains to achievement of organisational objectivesCommentary: The board's responsibility for risk governance is expressed in the board charter and risk policy and plan. This risk management process incorporates positive and negative effects of risks on the achievement of the organisational objectives. Focus is however on identifying the negative impact and management thereof.



Treat risk as integral to decisions and dutiesCommentary: The Board treats risk as integral to its decision making process and execution of duties.

K IV™ P11 Prac 2


Approval of risk policiesCommentary: A policy and plan for a system and process of risk management has been approved and adopted.

K IV™ P11 Prac 3


Risk appetiteCommentary: The risk appetite and tolerance levels are set and reviewed by the Board.



Loss limitCommentary: The risk appetite and tolerance levels are set and reviewed by the Board.



Delegation of implementation and execution of risk managementCommentary: The Board delegates responsibility to implement and execute effective risk management to the executive directors and senior management.

K IV™ P11 Prac 5


Oversight of risk management: Assessment - triple context and capitalsCommentary: The risk committee adequately reviews all of the following: the risk management progress and maturity of the company; the effectiveness of risk management activities; the key risks facing the company; and the responses to address these key risks. This includes considering the risk emanating from the triple context in which it operates and the capitals it uses.



Oversight of risk management: Assessment - potential upsides and opportunitiesCommentary: The risk committee adequately reviews all of the following: the risk management progress and maturity of the company; the effectiveness of risk management activities; the key risks facing the company; and the responses to address these key risks. This includes considering the potential opportunities and benefits.




Principle 11 Oversight of risk management: Assessment - dependence on resources and relationshipsCommentary: The risk committee adequately reviews all of the following: the risk management progress and maturity of the company; the effectiveness of risk management activities; the key risks facing the company; and the responses to address these key risks. This includes considering the organisation’s dependence on resources and relationships as represented by the various forms of capital.



Oversight of risk management: Risk responsesCommentary: The risk committee adequately reviews all of the following: the risk management progress and maturity of the company; the effectiveness of risk management activities; the key risks facing the company; and the responses to address these key risks.



Oversight of risk management: Continuity arrangementsCommentary: The risk committee adequately reviews all of the following: the risk management progress and maturity of the company; the effectiveness of risk management activities; the key risks facing the company; and the responses to address these key risks. This includes considering business continuity controls.



Oversight of risk management: IntegrationCommentary: Management of risks is integrated / embedded in the business activities and culture of the organisation.

K IV™ P11 Satisfactorily Applied

Periodic independent assurance on effectivenessNo Commentary

K IV™ P11 Prac 7

Not Applied

Disclosure: Nature and extent of risks and opportunitiesNo Commentary

K IV™ P11 Prac 8

Not Applied

Disclosure: Arrangements in placeCommentary: The integrated report discloses details of how the board has satisfied itself that risk assessments, responses and interventions are effective.





Not Applied

Disclosure: Actions to monitor effectivenessCommentary: The Board discloses in the integrated report its views on the effectiveness of the company's risk management processes.



Disclosure: Planned future focusNo Commentary


Not Applied

Principle 12 The governing body should govern technology and information in a way that supports the organisation setting and achieving its strategic objectives.Responsibility of setting the direction for approach to technology and information Commentary: The Board assumes responsibility for the governance of technology and information by setting the direction for how technology and information should be approached and addressed in the organisation.

K IV™ P12 Prac 10


Approval of technology and information policiesCommentary: An IT Charter and policies have been developed and approved by the Board.

K IV™ P12 Prac 11


Delegation of implementation and execution of technology and informationCommentary: Management deals with the implementation of the IT governance framework

K IV™ P12 Prac 12


Technology and information oversight: IntegrationCommentary: The organisation is in the process of implementing principles of the COBIT framework which incorporates the strategic alignment of business and IT objectives. Operational and business strategy drives the current IT strategy. Operational reporting structures ensure that IT management are accountable to business management.


Not Applied


Principle 12 Technology and information oversight: Risk managementCommentary: IT risk is part of the risk management process and were relevant IT risks are incorporated in the Company's risk register.



Technology and information oversight: Arrangements for business resilienceCommentary: Management regularly demonstrates to the board that the company has adequate business resilience arrangements in place for disaster recovery.



Technology and information oversight: Proactive monitoring to identify and respondCommentary: The Board has delegated to senior management the responsibility to proactively monitor intelligence to identify and respond to incidents, including cyber-attacks and adverse social media events when appropriate.



Technology and information oversight: Performance management of third-party and outsourced servicesCommentary: The Board has delegated to senior management the responsibility to manage the performance of, and the risks pertaining to, third-party and outsourced service providers.



Technology and information oversight: Value assessmentNo Commentary


Not Applicable

Technology and information oversight: Disposal of obsolete technology and informationCommentary: The Board has delegated to senior management the responsibility of disposal of obsolete technology and information in a way that has regard to environmental impact and information security.



Technology and information oversight: EthicsCommentary: The Board has delegated to senior management the responsibility of ensuring ethical and responsible use of technology and information.



Technology and information oversight: Legislative complianceCommentary: The Board ensures that the company complies with IT laws and that IT related rules, codes and standards are considered.



Oversight of information management: Sustain and enhance intellectual capitalCommentary: The Board exercises ongoing oversight of the management of information and, in particular, the leveraging of information to sustain and enhance the organisation’s intellectual capital.



Oversight of information management: Confidentiality, integrity and availabilityCommentary: The Board exercises ongoing oversight of the management of information and, in particular, an information architecture that supports confidentiality, integrity and availability of information.



Oversight of information management: Privacy of personal informationCommentary: The Board exercises ongoing oversight of the management of information and, in particular, the protection of privacy of personal information.



Oversight of information management: SecurityCommentary: The Board exercises ongoing oversight of the management of information and, in particular, the continual monitoring of security of information.



Oversight of technology management: Achievement of strategic and operational objectivesCommentary: The Board exercises ongoing oversight of the management of technology and, in particular, the technology architecture that enables the achievement of strategic and operational objectives.




Principle 12 Oversight of technology management: Sourcing riskCommentary: The Board exercises ongoing oversight of the management of technology and, in particular, the management of the risks pertaining to the sourcing of technology.



Oversight of technology management: Monitoring and responses to technology developmentsCommentary: The Board exercises ongoing oversight of the management of technology and, in particular, the monitoring and appropriate responses to developments in technology, including the capture of potential opportunities and the management of disruptive effects on the organisation and its business model.



Periodic independent assurance on effectivenessCommentary: The board is currently of the view that external assurance on the effectiveness of the IT internal control does not add significant value to the integrated report but will review this position going forward.

K IV™ P12 Prac 16


Disclosure: Arrangements in placeNo Commentary


Not Applied



Not Applied

Disclosure: Actions to monitor effectivenessNo Commentary


Not Applied



Not Applied

Principle 13 The governing body should govern compliance with applicable laws and adopted, non-binding rules, codes and standards in a way that supports the organisation being ethical and a good corporate citizen.Responsibility of setting the direction for approach to compliance governance Commentary: The Board oversees compliance at all levels.

K IV™ P13 Prac 18


Approval of compliance policiesCommentary: Due to limited resources, a legal compliance policy has not been implemented. Legal compliance is however under the direct control of the Group's head of legal affairs.

K IV™ P13 Prac 19

Not Applied

Delegation of implementation and execution of compliance managementCommentary: The Board delegates responsibility for implementation and execution of effective compliance to management.

K IV™ P13 Prac 20


Oversight of compliance: UnderstandingCommentary: The Board has oversight of the compliance processes ensuring that the compliance requirements are understood as well as the protection and rights is affords to the Company.



Oversight of compliance: InterrelationCommentary: The Board has oversight of the compliance processes ensuring that management takes a holistic view of how the various requirements and regulation interact.



Oversight of compliance: Continual monitoringCommentary: The Board has oversight of the compliance processes ensuring that it incorporates continual monitoring of the regulatory environment and ensuring appropriate responses to the changes and developments.



Periodic independent assurance on effectivenessCommentary:Report back to the Board on the effectiveness of the controls around compliance with laws, rules, codes and standards is performed on an informal basis by the executive Directors.

K IV™ P13 Prac 22

Not Applied


Principle 13 Disclosure: Arrangements in placeNo Commentary


Not Applied



Not Applied



Not Applied

Disclosure: Material or repeated regulatory penaltiesNo Commentary

K IV™ P13 Prac 24

Not Applicable

Disclosure: Environmental complianceNo Commentary

K IV™ P13 Prac 25

Not Applicable

Principle 14 The governing body should ensure that the organisation remunerates fairly, responsibly and transparently so as to promote the achievement of strategic objectives and positive outcomes in the short, medium and long term.Responsibility of setting the direction for approach to remuneration governanceCommentary: The remuneration committee assists the board in setting and administering remuneration policies for all levels in the company, but focuses on the remuneration of executive directors and other senior executives, and non-executive directors.

K IV™ P14 Prac 26


Approval of remuneration policiesCommentary: The Board approved the remuneration policy that articulates and gives effect to its direction on fair, responsible and transparent remuneration.

K IV™ P14 Prac 27


Policy objectives: Attract, motivate, reward and retainCommentary: The remuneration policy addresses organisation-wide remuneration and includes provision for to attract, motivate, reward and retain human capital.



Policy objectives: Achieve strategic objectives within risk appetiteCommentary: The remuneration policy addresses organisation-wide remuneration and includes provision for to promote the achievement of strategic objectives within the organisation's risk appetite.



Policy objectives: Positive outcomesCommentary: The remuneration policy addresses organisation-wide remuneration and includes provision for to promotepositive outcomes.



Policy objectives: Ethical culture and responsible corporate citizenshipCommentary: The remuneration policy addresses organisation-wide remuneration and includes provision for to promote an ethical culture and responsible corporate citizenship.



Policy provision: Fair executive remunerationCommentary: The remuneration policy addresses organisation-wide remuneration and includes consideration as to whether remuneration of executive management is fair and responsible in the context of overall employee remuneration in the organisation.



Policy provision: Performance measuresCommentary: The Group's remuneration policy provides for a system of performance incentives, subject to affordability, based on excellent, world-class performance. Management have developed an performance incentive matrix for various levels of staff determining key performance indicators that are linked to the group's strategy and contribute the Goup's financial performance.



Policy provision: Voting by shareholdersCommentary: Non binding advisory resolutions are included in the annual notice of AGM to shareholders. The notice contains the steps management will take should 25% or more of the shareholders vote against the non binding advisory resolutions.




Principle 14 Policy elements: Base salary including benefitsCommentary: The Group governance structures contains HR policies and procedures which include basic remuneration and bonuses, termination of employee contacts, severance benefits and other long-term incentive schemes. The policies are guided by the Group remuneration policy and the remuneration committee.



Policy elements: Variable remunerationCommentary: The Group governance structures contains HR policies and procedures which include basic remuneration and bonuses, termination of employee contacts, severance benefits and other long-term incentive schemes. The policies are guided by the Group remuneration policy and the remuneration committee.



Policy elements: Termination paymentsCommentary: The Group governance structures contains HR policies and procedures which include basic remuneration and bonuses, termination of employee contacts, severance benefits and other long-term incentive schemes. The policies are guided by the Group remuneration policy and the remuneration committee.



Policy elements: Sign-on, retention and restraint paymentsNo Commentary


Not Applicable

Policy elements: Pre-vesting and post-vesting forfeiture of remunerationNo Commentary


Not Applicable

Policy elements: Commissions and allowancesCommentary: The Group governance structures contains HR policies and procedures which include basic remuneration and bonuses, termination of employee contacts, severance benefits and other long-term incentive schemes. The policies are guided by the Group remuneration policy and the remuneration committee.



Policy elements: Non-executive members feesCommentary: The Group governance structures contains HR policies and procedures which include basic remuneration and bonuses, termination of employee contacts, severance benefits and other long-term incentive schemes. The policies are guided by the Group remuneration policy and the remuneration committee.



Oversight of implementation and execution of remuneration policyCommentary: The Board through the remuneration committee oversee the implementation of the remuneration policy.

K IV™ P14 Prac 31


remuneration report: Background statementCommentary: No remuneration report is disclosed.


Not Applied

remuneration report: Overview of remuneration policyCommentary: No remuneration report is disclosed.


Not Applied

remuneration report: ImplementationCommentary: No remuneration report is disclosed.


Not Applied

Background Statement: Internal and external factorsCommentary: No remuneration report is disclosed.


Not Applied

Background Statement: Voting resultsCommentary: No remuneration report is disclosed.


Not Applied

Background Statement: Key focus areasNo Commentary


Not Applied

Background Statement: ConsultantsNo Commentary


Not Applied

Background Statement: Remuneration committee viewNo Commentary


Not Applied


Principle 14 Background Statement: Planned future focusNo Commentary


Not Applied

Overview: Remuneration elements No Commentary


Not Applied

Overview: Contractual obligation of termination paymentsNo Commentary


Not Applied

Overview: Performance measurementNo Commentary


Not Applied

Overview: Executive remuneration scenario analysisNo Commentary


Not Applied

Overview: Fair and responsible executive remunerationNo Commentary


Not Applied

Overview: Remuneration benchmarkingNo Commentary


Not Applied

Overview: Basis of non-executive member feesNo Commentary


Not Applied

Overview: Public access to remuneration policyNo Commentary


Not Applied

Implementation: Table of total executive remuneration elementsCommentary:A remuneration report is not included in the IR.


Not Applied

Implementation: Table of executive variable remuneration incentive schemesNo Commentary


Not Applied

Implementation: Table of executive variable remuneration realisedNo Commentary


Not Applied

Implementation: Performance measures and realisationNo Commentary


Not Applied

Implementation: Termination paymentsNo Commentary


Not Applied

Implementation: Remuneration policy deviationsNo Commentary


Not Applied

Shareholder approval by special resolution of non-executive directors feesCommentary:Non-executive fees are approved by shareholders in advance by special resolution during each AGM.

K IV™ P14 Prac 36


Non-binding advisory votes by shareholders at AGMCommentary:Shareholders pass a non-binding advisory vote on the company's remuneration policy every year.

K IV™ P14 Prac 37


25% or more dissenting vote: Engagement processCommentary:The remuneration policy does not record the measures the Board undertakes to implement but these measures are included in the non binding advisory note "resolution" contained in the AGM notice. The measures include engagement with the dissenting shareholders to understand the reasons for the vote against.



25% or more dissenting vote: Appropriate corrective responseCommentary:The remuneration policy does not record the measures the Board undertakes to implement but these measures are included in the non binding advisory note "resolution" contained in the AGM notice. The measures include addressing legitimate objections and concerns raised.



Disclosure where 25% or more dissenting vote: EngagementNo Commentary


Not Applicable

Disclosure where 25% or more dissenting vote: Corrective steps takenNo Commentary


Not Applicable


Principle 15 The governing body should ensure that assurance services and functions enable an effective control environment, and that these support the integrity of information for internal decision-making and of the organisation’s external reports.Audit committee oversight responsibility: Effective internal control environmentCommentary: The Board ultimately remains responsible for an effective internal control environment and has delegated oversight of the internal audit function to the audit and risk committee.



Audit committee oversight responsibility: Integrity of informationNo Commentary


Not Applied

Audit committee oversight responsibility: Integrity of external reportsCommentary: The audit and risk committee is responsible for oversight of the external reporting process and considers the integrity of external reports.



Satisfactory application of combined assurance modelCommentary: The Company has not implemented an internal audit function with the Board placing reliance on management and management controls. The results of the external audit further supports the objectives for assurance. The Board re-assesses the need for Internal Audit on an annual basis.

K IV™ P15 Prac 41


Oversight of combined assurance model in regard significant risks and material matters: Organisation's line functionsCommentary: The Company’s line management own and manage the organisational risks as part if their function.



Oversight of combined assurance model in regard significant risks and material matters: Organisation's specialist functionsCommentary: The Company has implemented a risk management process aimed at providing further measures within the organisation aimed at identifying and implementing sufficient measures to manage and mitigate risks.



Oversight of combined assurance model in regard significant risks and material matters: Internal assurance service providersCommentary: The audit and risk committee is satisfied that the current involvement of external / independent service providers is sufficient and appropriate for the organisation. The audit and risk committee considers the level of external assurance annually.



Oversight of combined assurance model in regard significant risks and material matters: Independent external assurance service providersCommentary: The audit and risk committee is satisfied that the current involvement of external / independent service providers is sufficient and appropriate for the organisation. The audit and risk committee considers the level of external assurance annually.



Oversight of combined assurance model in regard significant risks and material matters: Other external assurance service providersCommentary: The audit and risk committee is satisfied that the current involvement of external / independent service providers is sufficient and appropriate for the organisation. The audit and risk committee considers the level of external assurance annually.



Oversight of combined assurance model in regard significant risks and material matters: Regulatory inspectorsCommentary:The audit and risk committee is satisfied that the current involvement of external / independent service providers is sufficient and appropriate for the organisation. The audit and risk committee considers the level of external assurance annually.




Principle 15 Assessment of effectivenessCommentary:The Board and Audit and Risk Committee assess the assurance results and its impact on an effective control environment.

K IV™ P15 Prac 43


Responsibility of setting the direction for approach to assurance of integrity of external reportsCommentary:The Board assumes responsibility for the integrity of external reports issued by setting the direction for how assurance of these should be approached and addressed.

K IV™ P15 Prac 44


Assurance requirement: Underlying data and processesCommentary:The audit and risk committee does consider the appropriateness of the assurance providers approach to detailed transnational testing or system on internal control assurance.



Assurance requirement: Suited for intended audienceCommentary:The Board and audit and risk committee consider whether the nature, scope and extent of assurance are suited to the intended audience of a report.



Assurance requirement: Measurement or evaluation criteriaCommentary:The Board and audit and risk committee consider the specification of applicable criteria for the measurement or evaluation of the underlying subject matter of the report.



Satisfaction of integrity of external reportsCommentary:The Board satisfies itself that the assurance model is sufficiently robust for the governing body to be able to place reliance on the underlying statements that the Board makes concerning the integrity of the organisation’s external reports.

K IV™ P15 Prac 46


Disclosure: Nature, scope and extent of assurance provisionCommentary:External reports disclose a brief description of the nature, scope and extent of the assurance functions, services and processes underlying the preparation and presentation of the report.



Disclosure: Integrity statementCommentary:External reports disclose a statement by the Board on the integrity of the report and the basis of the statement, with reference to the assurance applied.



Responsibility of setting the direction for internal audit arrangementsNo Commentary

K IV™ P15 Prac 48

Not Applicable

Approval of internal audit charterNo Commentary

K IV™ P15 Prac 49

Not Applicable

Internal audit: Ensure necessary skills and resourcesNo Commentary

K IV™ P15 Prac 50

Not Applicable

CAE: Ensure independence of functionNo Commentary

K IV™ P15 Prac 51

Not Applicable

CAE: Approval of appointmentNo Commentary

K IV™ P15 Prac 52

Not Applicable

CAE: Access to the chair of audit committeeNo Commentary

K IV™ P15 Prac 53

Not Applicable

CAE: Not a member of executive committee (independence)No Commentary

K IV™ P15 Prac 54

Not Applicable

CAE: Clarity of role when co-sources or outsourced K IV™ P15 Prac 55

Not ApplicableNo CommentaryCAE: Lines of reporting, chair of audit committee and executive managementNo Commentary

K IV™ P15 Prac 56

Not Applicable

CAE: Responsibility for removalNo Commentary

K IV™ P15 Prac 57

Not Applicable

Ongoing monitoring: Risk-based internal audit planNo Commentary


Not Applicable


Principle 15 Ongoing monitoring: Organisational risk profileNo Commentary


Not Applicable

Internal audit: Statement of effectiveness, risk management and control processesNo Commentary

K IV™ P15 Prac 59

Not Applicable

Internal audit: External, independent quality reviewNo Commentary

K IV™ P15 Prac 60

Not Applicable

Internal audit: Conformance with a recognised industry code of ethicsNo Commentary

K IV™ P15 Prac 61

Not Applicable

Principle 16 In the execution of its governance role and responsibilities, the governing body should adopt a stakeholder-inclusive approach that balances the needs, interests and expectations of material stakeholders in the best interests of the organisation over time.Responsibility of setting the direction for approach to stakeholder relationshipsCommentary:The Board assumes responsibility for the governance of stakeholder relationships by setting the direction for how stakeholder relationships should be approached and conducted in the organisation.

K IV™ P16 Prac 1


Approval of stakeholder relationship policiesCommentary:The Board approves policy articulating and gives effect to its direction on stakeholder relationships.

K IV™ P16 Prac 2


Delegation of implementation and execution of stakeholder relationship managementCommentary:Management is responsible for the implementation and execution of effective stakeholder relationship management.

K IV™ P16 Prac 3


Oversight of stakeholder relationship management: Identification methodologiesNo Commentary


Not Applied

Oversight of stakeholder relationship management: Material stakeholdersNo Commentary


Not Applied

Oversight of stakeholder relationship management: Stakeholder risksNo Commentary


Not Applied

Oversight of stakeholder relationship management: Engagement and communication mechanismsNo Commentary


Not Applied

Oversight of stakeholder relationship management:No Commentary


Not Applied

Disclosure: Arrangements in placeNo Commentary


Not Applied



Not Applied

Disclosure: Effectiveness of arrangementsNo Commentary


Not Applied



Not Applied

Oversight of stakeholder relationship management: ShareholdersCommentary:The board encourages shareholders to attend the company's AGMs and notices are sent to all shareholders informing them of AGM and inviting them to attend.

K IV™ P16 Prac 6


AGM: Directors availability for shareholders' queriesCommentary: The executive directors are all present at the AGM while the non executive directors attend if possible with at least the chairman of the audit and risk committee and the Board chairman present.

K IV™ P16 Prac 7


AGM: Attendance of external audit partnerCommentary: The Board requests that the designated partner of the external audit firm attends the AGM.

K IV™ P16 Prac 8



Principle 16 The board must ensure equitable treatment of shareholdersCommentary: There are practices in place to ensure equal treatment of shareholders within the group.

K IV™ P16 Prac 9


AGM: Minutes of listed companies available to publicCommentary: The results of the AGM is announced via SENS shortly after the AGM included in the announcement is reference to the AGM minutes available on the Company's website.

K IV™ P16 Prac 10


Responsibility of setting the direction for approach to relationships and exercise of powerCommentary: The Board of the holding company assumes responsibility for governance across the group. The executive directors are appointed to all the subsidiary boards to ensure consistent governance throughout the group.

K IV™ P16 Prac 11


Approval of group relational and authority frameworkCommentary: The Board of the holding company assumes responsibility for governance across the group. The executive directors are appointed to all the subsidiary boards to ensure consistent governance throughout the group.

K IV™ P16 Prac 12


Subsidiary board approval of adoption and implementation of relational and authority frameworkCommentary: The executive directors of the Group Board is appointed to all the subsidiary boards to ensure consistent governance throughout the group enabling the implementation of a Group governance framework.

K IV™ P16 Prac 13


Group governance framework: Ensure non-conflict with legislative requirements, standards, codes or policesCommentary: The memoranda of incorporation, delegations of authority, shareholder agreements, board charters, board committee terms of reference, and related policies and agreements of the subsidiary companies are harmonised with the Group's governance frameworks and the Listed Holding Company's requirement to comply with the JSE Listing Requirements.

K IV™ P16 Prac 14


Group governance framework: Recognition of subsidiaries as separate and independent juristic personCommentary: The holding company respects the fiduciary duty of the directors who represents the holding company on the board of the subsidiary to that subsidiary.

K IV™ P16 Prac 15


Group governance framework: Rights and roles of holding companyCommentary: The Board ensures that the Group's governance framework is understood and applied throughout the Group by appointing the Group's executive directors to all the underlying subsidiary companies.



Group governance framework: Delegation by subsidiary board to holding company board committeeCommentary: The Board ensures that the Group's governance framework is understood and applied throughout the Group by appointing the Group's executive directors to all the underlying subsidiary companies.



Group governance framework: Extent of adoption of holding company policiesCommentary: The Board ensures that the Group's governance framework is understood and applied throughout the Group by appointing the Group's executive directors to all the underlying subsidiary companies.




Principle 16 Group governance framework: Holding company election of directors to subsidiary boardsCommentary: The executive directors are appointed to all the subsidiary boards to ensure consistent governance throughout the group. Once the group operations expand sufficiently to have separate subsidiary boards an appropriate control will be implemented to nominate shareholder representation.



Group governance framework: Breach of legal duty by directors on multiple group boardsNo Commentary


Not Applicable

Group governance framework: Ensure group wide implementationCommentary: The executive directors are appointed to all the subsidiary boards to ensure consistent governance throughout the group. Once the group operations expand sufficiently to have separate subsidiary boards an appropriate control will be implemented to nominate shareholder representation.

K IV™ P16 Prac 17


Holding company disclosure: Overview of group governance frameworkCommentary: The integrated report provides details of the implementation and adoption of policies, processes or procedures of the holding company by subsidiary company(ies).

K IV™ P16 Prac 18


Subsidiary disclosure: Responsibilities delegated to holding company board committees and extent of adopted policies and proceduresCommentary: The integrated report provides details of the implementation and adoption of policies, processes or procedures of the holding company by subsidiary company(ies).

K IV™ P16 Prac 19


Principle 17 The governing body of an institutional investor organisation should ensure that responsible investment is practiced by the organisation to promote the good governance and the creation of value by the companies in which it invests.Responsibility of setting the direction for approach for responsible investingNo Commentary

K IV™ P17 Prac 20

Not Applicable

Approval of responsible investment policyNo Commentary

K IV™ P17 Prac 21

Not Applicable

Delegation of implementation and execution of responsible investmentNo Commentary

K IV™ P17 Prac 22

Not Applicable

Oversight of outsourced investment decisions: Formal mandateNo Commentary

K IV™ P17 Prac 23

Not Applicable

Oversight of outsourced investment decisions: Accountability of service providerNo Commentary

K IV™ P17 Prac 24

Not Applicable

Disclosure: Responsible investment code and its applicationNo Commentary

K IV™ P17 Prac 25

Not Applicable


Historic financial information of the group for the three financial years ended 31 March 2017, 31 December 2015 and 31 December 2014

Annexure 8

The information is extracted from the audited consolidated annual financial statements of Ecsponent which were prepared in the manner required by the Companies Act and in accordance with IFRS.

Nexia SAB&T reported on the financial statements for the year ended 31 March 2017, 31 December 2015, and 31 December 2014 and did not issue a modified audit opinion.

There are no facts or circumstances that are material to an appreciation of the state of affairs, financial position, changes in equity, results of operations and cash flows other than as disclosed in this Prospectus.

1. Review of latest financial results and activities

The Group showed sustained improvement in performance and generated greatly increased returns for the 15 months ended 31 March 2017.

As a result of the rationalisation the statement of profit and loss is presented in two categories being Continued and Discontinued Operations. The comparative period has also been 're-presented' to reflect the two categories and does not represent a restatement. Furthermore, the current period assets and liabilities related to the operations subject to the rationalisation (disposal groups) have been classified as 'Held for sale' in these financial statements, as required by IFRS 5.

Certain highlights of the Group's audited results for the 2017 financial period compared to the 2015 financial period are set out below. It should be noted that the comparison is a period of 15 months versus the previous 12-month period:

▪ revenue from continuing operations increased by 122% to R321.8 million compared to R144.7 million;

▪ operating profits from continuing operations increased by 416% to R229.2 million compared to R44.4 million;

▪ total assets increased by 161% to R1 214.8 million compared to R466.2 million;

▪ after tax profit, before other comprehensive income, increased by 239% to R67.6 million compared to R19.9 million;

▪ basic earnings increased by 234% to R78 million compared to R23.4 million; and

▪ resultant earnings per share ("EPS") increased by 223% to 8.38 cents per share compared to 2.59 cents per share.

External revenue generated by the Group's financial services operations increased by 237.8% to R217.9 million compared to R64.5 million for the comparative period, comprising 59.4% of total revenue for the 2017

financial period. Funding for the expansion strategy was secured through the registration and listing of Ecsponent's Preference Share programme enabling, the Company to raise capital to fund investments on an ongoing basis.

Continued market subscriptions of the Preference Shares have been very encouraging.

2. Going concernThe Directors believe that the Group has adequate financial resources to continue in operation for the foreseeable future and accordingly the consolidated financial statements have been prepared on a going concern basis. The Directors have satisfied themselves that the Group is in a sound financial position and that it has access to sufficient borrowing facilities to meet its foreseeable cash requirements.

The Directors are not aware of any new material changes that may adversely impact the Group. The Directors are also not aware of any material non-compliance with statutory or regulatory requirements or of any pending changes to legislation which may affect the Group.

3. Accounting policiesThe financial statements have been prepared in accordance with IFRS and in the manner required by the Companies Act, the SAICA Financial Reporting Guidelines and the Listing Requirements. The principal accounting policies adopted in preparation of these financial statements are consistent with those of the prior year, except for the changes set out in note 2.

4. Litigation statementThe Group may become involved from time to time in various claims and lawsuits incidental to the ordinary course of business. The Group is not currently involved in any such claims or lawsuits, which individually or in the aggregate, are expected to have a material adverse effect on the business or its assets.


Consolidated Statements of Financial Position as at 31 March 2017, 31 December 2015 and 31 December 2014:

Figures in randNote(s) 31 Mar

201731 Dec2015

31 Dec2014

AssetsNon Current AssetsProperty, plant and equipment 3 6 810 370 8 474 552 6 133 717Intangible assets and Goodwill 4 6 011 221 8 557 217 1 131 833Other financial assets 6 667 088 829 98 065 585 54 406 394Deferred tax asset 7 28 457 583 12 191 111 12 737 194Trade and other receivables 10 4 655 684 3 127 532 2 041 950

713 023 688 130 415 997 76 451 089Current AssetsInventories 8 1 222 370 1 819 206 2 099 401Other financial assets 6 314 541 898 278 450 140 51 894 032Trade and other receivables 10 36 150 363 40 378 568 12 751 603Current tax receivable 185 618Cash and cash equivalents 11 25 379 829 15 114 825 6 986 924

377 480 077 335 762 738 73 731 960

Non-current assets held for sale 28 124 313 331 - -

Total Assets 1214 817 096 466 178 735 150 183 049Equity and LiabilitiesShare capital 12 145 169 140 118 071 505 118 071 505Reserve 13 (398 375) (37 170 357) (32 899 858)Accumulated loss (37 785 228) (2 710 615) (28 504 715)

106 985 537 78 190 532 56 666932Non-controlling interest 14 (11 428 696) (4 653 294) -3 795 325Total equity 95 556 840 73 537 238 52 871 607LiabilitiesNon-current LiabilitiesPreference shares 15 921 924 764 312 073 556 48 521 561Other financial liabilities 16 871 443 12 766 740 507 487Deferred revenue 17 2 537 629 5 939 300 1 168 532Deferred tax liability 7 13 453 706 5 939 300 -

938 787 543 340 331 331 54 547 968Current LiabilitiesPreference shares 15 6 048 079 1 765 411 -Other financial liabilities 16 10 475 921 15 495 239 10 984 144Current tax payable 11863 947 3 142 208 53 594Deferred revenue 17 147 886 4 144 225 4 744 089Trade and other payables 18 20 778 454 22 391 113 13 045 438Bank overdraft 11 468 900 5 373 970 13 936 209

49 783 187 52 310 166 42 763 474

Liabilities of disposal groups 28 130 689 526 - -

Total Liabilities 1 119 260 255 392 641 497 97 311 442Total Equity and Liabilities 1 214 817 096 466 178 735 150 183 049


Consolidated Statement of profit and loss for the years ended 31 March 2017, 31 December 2014 and 31 December 2013


201731 Dec2015

31 Dec2014

Continuing operationsRevenue 19 321 794 638 144 705 445 57 395 751Cost of sales (43 781 558) (23 818 054) (9 046 120)Gross profit 278 013 080 120 887 391 48 349 631

Other income 20 88 542 877 21 862 300 478 342Operating expenses (137 370 074) (98 330 847) (37 728 774)

Operating profit 21 229 185 884 44 418 844 11 099 199

Fair value adjustments 22 (11 017 229) 5 639 051 597 947Investment Revenue 20 2 784 636 144 180 8 209Bargain purchase - - 166 459Income from equity accounted investment - 1 741 813 -Finance costs 24 (130 350 574) (26 929 121) (5 222 263)Profit before taxation 87 818 081 25 014 767 6 649 551Taxation 26 (23 094 223) (7 786 489) (2 600 865)Profit from continuing operations for the period 64 723 858 17 228 278 4 048 686

Discontinued operationsProfit from discontinued operations 27 2 852 433 2 705 934 1 182 225

Profit for the period 64 723 858 19 934 212 5 230 911Attributable toOwners of the parentProfit from continuing operations 75 160 187 20 653 023 5 894 219Profit from discontinuing operations 2 852 433 2 705 934 896 954

78 012 620 23 358 957 6 791 173Non-controlling interestLoss from continuing operations (5 303 047) (2 223 869) (1 845 533)Profit from discontinuing operations (5 133 282) (1 200 876) 285 271

(10 436 329) (3 424 745) -1 560 262Total profit attributable toOwners of the parents 78 012 620 23 358 957 6 791 173Non-controlling interest 14 (10 436 329) (3 424 745) (1 560 262)

67 576 291 19 934 212 5 230 911Basic and fully diluted earnings per share (cents) attributable to equity holders of the parentFrom continuing operations 8,074 2,291 0,983From discontinued operations 0,306 0,300 0,207From continued and discontinued operations 40 8,380 2,591 1,190


Consolidated statement of comprehensive income for the years ended 31 March 2017, 31 December 2015 and 31 December 2014.


201731 Dec2015

31 Dec2014

Profit for the period 67 576 291 19 934 212 5 230 911

Other comprehensive incomeItems that may be reclassified to profit or lossExchange differences on translating foreign operations (391 505) (418 308) (96 574)Taxation related to components of other comprehensive income 109 516 117 126 27 041Other comprehensive loss for the period (281 989) (301 182) (69 533)Total comprehensive income for the period 67 585 280 19 633 030 5 161 378

Attributable toTotal comprehensive income attributable toOwners of the parent 778 097 211 23 358 957 6 736 657Non-controlling interest 14 (10 238 931) (3 725 927) (1 575 279)

67 858 280 19 633 030 5 161 378


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Consolidated Statement of Cash Flows for the year ended 31 March 2017, 31 December 2014 and 31 December 2013


201731 Dec2015

31 Dec2014

Cash flows from operating activitiesCash generated from operations 30 177 263 029 20 340 388 7 958 638Interest revenue - 388 128 8 209Finance cost (106 731 684) (18 504 199) (5 222 263)Dividends received - - -Taxation Paid 31 (25 234 074) (1 221 914) -Net cash from operating activities 45 297 271 1 002 403 2 744 584

Cash flows from investing activitiesPurchase of property, plant and equipment 3 (5 513 162) (2 618 577) (1 481 597)Sale of property, plant and equipment 1 261 212 285 363 319 763Investment in intangible assets 4 (187 312) (4 290 146) (150 000)Investment in subsidiaries - - -Loans advanced to group companies - - -Investment in associates - (1 033 500) -Proceeds on sale of investment in subsidiary - 450 000 -Cash and cash equivalents disposed of (24 994 040) 2 039 606 -Proceeds on sale of associate - 5 250 000 -Other special assets – advances (797 841 554) (443 637 567) (38 602 315)Proceeds from other financial assets (business finance advances)

133 063 547 191 109 881 6 717 311

Business combination 10 233 335 600 148 (36 541 401)Discontinued operations - - 6 200 000Net cash from investing activities (683 977 975) (251 844 792) (63 538 239)

Cash flows from financing activitiesProceeds on preference share issue 579 442 268 247 511 197 62 844 527Other financial liabilities raised 77 154 459 25 632 736 -Repayment of other financial liabilities (18 899 037) (4 495 586) -Proceeds on rights offer 12 19 465 302 - -Odd lot offer on rights offer 12 (111 537) - -Acquisition of non-controlling interest 14 (1) (404 730) -

Net cash from financing activities 657 051 454 268 243 617 53 090 446

Total cash movement for the period 18 370 750 17 401 228 (7 703 209)Effect of exchange rate movement on cash balances (1 631 200) (711 089) (131 457)Cash at the beginning of the period 9 740 855 (6 949 284) 885 382Total cash at the end of the period 11 26 480 405 9 740 855 (6 949 284)


Notes to the Consolidated Financial Statements

1. Presentation of Annual Financial Statements – year ended 31 March 2017

The annual financial statements have been prepared in accordance with IFRS, the Companies Act, SAICA Financial Reporting Guides and the Listings Requirements.

The annual financial statements have been prepared on the historical cost basis, except for the measurement of certain financial instruments at fair value, and incorporate the principal accounting policies set out below. They are presented in South African Rand.

These accounting policies are consistent with the previous period, except for the changes set out in note 2, new standards and interpretations.

ConsolidationBasis of consolidationThe consolidated annual financial statements incorporate the annual financial statements of the Company and all investees, which are controlled by the Company.

The Company has control of an investee when it has power over the investee; it is exposed to or has rights to variable returns from involvement with the investee; and it has the ability to use its power over the investee to affect the amount of the investor’s returns.

The results of subsidiaries are included in the consolidated annual financial statements from the effective date of acquisition to the effective date of disposal.

Adjustments are made when necessary to the annual financial statement of subsidiaries to bring their accounting policies in line with those of the Group. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

Non-controlling interests in the net assets of consolidated subsidiaries are identified and recognised separately from the Group’s interest therein, and are recognised within equity. Losses of subsidiaries attributable to non-controlling interests are allocated to the non-controlling interest even if this results in a debit balance being recognised for non-controlling interest.

Transactions which result in changes in ownership levels, where the Group has control of the subsidiary both before and after the transaction are regarded as equity transactions and are recognised directly in the statement of changes in equity. The difference between the fair value of consideration paid or received and the movement in non-controlling interest for such transactions is recognised in equity attributable to the owners of the parent.

When a change in the Company’s ownership interest in a subsidiary results in a loss of control over the subsidiary,

the assets and liabilities of the subsidiary, including any goodwill, are derecognised. Amounts recognised in other comprehensive income in respect of that entity are also reclassified to profit or loss or transferred directly to retained earnings if required by a specific standard.Any retained interest in the entity is re-measured at fair value. The difference between the carrying amount of the retained investment at the date when control is lost and its fair value is recognised in profit or loss.

Business combinations involving entities under common controlBusiness combinations involving entities under common control comprise business combinations where both entities remain under the ultimate control of the holding company before and after the combination, and that control is not transitory.

The Group applies merger accounting for all its common control transactions which requires that the assets and liabilities of the purchased business be incorporated at the consolidated book value (by the ultimate parent) and the difference between the purchase consideration and the book value of the assets and liabilities be recorded in equity as a common control reserve. The financial statements of the purchaser incorporate the combined companies’ results and cash flows.

Investment in equity-accounting investeesThe Group’s investments in associates are accounted for using the equity method of accounting. Investments in associates are those entities in which the Group has significant influence, but no control or joint control, over the financial and operating policies.

Investments in associates are recognised initially at cost. The cost of the investment includes transaction costs.

The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income, after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence or joint control ceases.

When the Group’s share of losses exceeds the carrying amount of the associate, including any long-term investments, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has an obligation or has made a payment on behalf of the associate.

Property, plant and equipmentProperty, plant and equipment are tangible assets which the Group holds for its own use or for rental to other and which are expected to be used for more than one year.

The cost of an item of property, plant and equipment is recognised as an asset when: ▪ it is probable that future economic benefits

associated with the item will flow to the company; and

▪ the cost of the item can be measured reliably.


Property, plant and equipment is initially measured at cost.

Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.

Property, plant and equipment are depreciated on the straight line basis over their expected useful lives to their estimated residual value.Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses.

The useful lives of items of property, plant and equipment have been assessed as follows:

Item Depreciation method

Average useful life

Plant and machinery

Straight line 3 – 8 years

Furniture and fixtures

Straight line 5 - 7 years

Motor vehicles Straight line 5 yearsOffice equipment Straight line 5 yearsIT equipment Straight line 3 - 4 yearsLeasehold improvements

Straight line 1 - 5 years

The residual value, useful life and depreciation method of each asset is reviewed at the end of each reporting period. If the expectations differ from previous estimates, the change is accounted for as a change in accounting estimate.

The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another asset.

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

Intangible assetsAn intangible asset is recognised when: ▪ it is probable that the expected future economic

benefits that are attributable to the asset will flow to the entity; and

▪ the cost of the asset can be measured reliably.

Intangible assets are initially recognised at cost.

Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred.

An intangible asset arising from development (or from the development phase of an internal project) is recognised when: ▪ it is technically feasible to complete the asset so that

it will be available for use or sale; ▪ there is an intention to complete and use or sell it; ▪ there is an ability to use or sell it;

▪ it will generate probable future economic benefits; ▪ there are available technical, financial and other

resources to complete the development and to use or sell the asset; and

▪ the expenditure attributable to the asset during its development can be measured reliably.

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

An intangible asset is regarded as having an indefinite useful life when, based on all relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows. Amortisation is not provided for these intangible assets, but they are tested for impairment annually and whenever there is an indication that the asset may be impaired. For all other intangible assets amortisation is provided on a straight line basis over their useful lives.

The amortisation period and the amortisation method for intangible assets are reviewed every period-end.

Reassessing the useful life of an intangible asset with a finite useful life after it was classified as indefinite is an indicator that the asset may be impaired. As a result the asset is tested for impairment and the remaining carrying amount is amortised over its useful life.

Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance are not recognised as intangible assets.

Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:

Item Average useful life

Internally generated software development costs

3 years

Capitalised development expenditure

20 years

Development costs 4 -6 yearsComputer software 5 – 6 yearsPayroll deduction code IndefiniteBanking license IndefiniteAsset management license IndefiniteGoodwill Indefinite

The residual values and useful life of each intangible asset is reviewed at the end of each reporting period and considered appropriate. If the expectations differ from previous estimations, the change is accounted for as a change in accounting estimate.

GoodwillGoodwill arising in a business combination is recognised as an asset at the date that control is acquired (the acquisition date). Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquire and the fair value of the acquirer’s previously held equity interest (if any), in the entity over net of the acquisition date amounts of the identifiable assets acquired and the liabilities assumed.

If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum of the consideration transferred, the amount of any


non-controlling interest in the acquire and the fair value of the acquirer’s previously held equity interest in the acquire (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.

Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of cash generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not revered in a subsequent period.

On disposal of a subsidiary or the relevant cash generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Investment in subsidiariesCompany annual financial statementsIn the Company’s separate annual financial statements, investments in subsidiaries are carried at cost less any accumulated impairment.

The cost of an investment in a subsidiary is the aggregate of: ▪ the fair value, at the date of exchange, of assets

given, liabilities incurred or assumed, and equity instruments issued by the Company; plus

▪ any costs directly attributable to the purchase of the subsidiary.

An adjustment to the cost of a business combination contingent on future events is included in the cost of the combination if the adjustment is probable and can be measured reliably.

Financial instrumentsClassificationThe Group classifies financial assets and financial liabilities into the following categories: ▪ financial assets at fair value through profit or loss

(designated); ▪ loans and receivables; ▪ financial liabilities measured at amortised cost; and ▪ financial liabilities measured at fair value through

profit and loss.

Classification depends on the purpose for which the financial instruments were obtained / incurred and takes place at initial recognition. Classification is re-assessed on an annual basis, except for derivatives and financial assets designated as at fair value through profit or loss, which shall not be classified out of the fair value through profit or loss category.

Financial assets classified as at fair value through profit or loss which are no longer held for the purposes of selling or repurchasing in the near term may be reclassified out of that category if the asset met the definition of loans and receivables and the entity has the intention and ability to hold the asset for the foreseeable future or until maturity.

No other reclassifications may be made into or out of the fair value through profit or loss category.

Initial recognition and measurementFinancial instruments are recognised initially when the Group becomes a party to the contractual provisions of the instruments.

The Group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

Financial instruments are measured initially at fair value. For financial instruments which are not at fair value through profit or loss, transaction costs are included in the initial measurement of the instrument.

Transaction costs on financial instruments at fair value through profit or loss are recognised in profit or loss.

Subsequent measurementFinancial instruments at fair value through profit or loss are subsequently measured at fair value, with gains and losses arising from changes in fair value being included in profit or loss for the period.

Net gains or losses on the financial instruments at fair value through profit or loss include dividends and interest.

Dividend income is recognised in profit or loss as part of other income when the group’s right to receive payment is established.

Loans and receivables are subsequently measured at amortised cost, using the effective interest method, less accumulated impairment losses.

Financial liabilities are subsequently measured at amortised cost, using the effective interest method.

Preference shares, which are mandatorily redeemable on a specific date, are classified as liabilities. Directly attributable transaction costs are capitalised on initial recognition and amortised over the period of the product using the effective interest method.

The dividends on these preference shares are recognised in profit or loss as interest expense.

DerecognitionFinancial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.

Financial liabilities are derecognised when the obligation is discharged or cancelled or expires.

Fair value determinationThe fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models making maximum use of market inputs and relying as little as possible on entity-specific inputs.


Fair value estimationThe fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at the end of each reporting period. Quoted market prices or dealer quotes for similar instruments are used for long-term debt. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments.

The carrying value, less impairment provision of trade receivables and payable are assumed to approximate their fair values where the amounts are receivable within twelve months. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments.

Impairment of financial assetsAt each reporting date the Group assesses all financial assets, other than those at fair value through profit or loss, to determine whether there is objective evidence that a financial asset or Group of financial assets has been impaired.

For amounts due to the Group, significant financial difficulties of the debtor, probability that the debtor will enter insolvency and default of payments are all considered indicators of impairment.

Impairment losses are recognised in profit or loss.

Impairment losses are reversed when an increase in the financial asset’s recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to the restriction that the carrying amount of the financial asset at the date that the impairment is reversed shall not exceed what the carrying amount would have been had the impairment not been recognised. Reversals of impairment losses are recognised in profit or loss except for equity investments classified as available-for-sale.

Where financial assets are impaired through use of an allowance account, the amount of the loss is recognised in profit or loss within operating expenses. When such assets are written off, the write off is made against the relevant allowance account. Subsequent recoveries of amounts previously written off are credited against operating expenses.

Financial assets classified as loans and receivables: ▪ Other financial assets (excluding those designated as

at fair value) ▪ Trade and other receivables ▪ Cash and cash equivalents ▪ Loans to Group companies

Financial instruments designated at fair value through profit or loss: ▪ Acquired debt collection books are classified as

financial instruments as it comprises a contractual right to receive cash or another financial asset.

▪ The collection guarantee was classified as financial instruments as it comprises a contractual obligation to deliver cash or similar to another entity or a potential unfavourable exchange of financial assets or liabilities with another entity.


Upon initial recognition the financial asset and liability is designated at fair value through profit and loss. The designation enhances the relevance of the financial information of the acquired debt collection financial asset and collection guarantee which is managed and its performance evaluated on a fair value basis, in accordance with the risk management processes and investment strategy of the Group.

Gains or losses on assets and liabilities designated at fair value through profit or loss are recognised in the consolidated statement of income.

The fair value is determined with reference to the present value of its future cash flows.

Financial liabilities classified as at amortised cost: ▪ Preference shares ▪ Other financial liabilities ▪ Trade and other payable ▪ Loans from group companies ▪ Bank overdraft

Loans to (from) Group companies (Company annual financial statements)These include loans to and from holding companies, fellow subsidiaries, subsidiaries, joint ventures and associates and are recognised initially at fair value plus direct transaction costs;

▪ Loans to Group companies are classified as loans and receivables.

▪ Loans from Group companies are classified as financial liabilities measured at amortised cost.

Trade and other receivablesTrade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter insolvency or financial reorganisation, and default or delinquency in payments are considered indicators that the trade receivable is impaired.

The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in profit or loss within operating expenses. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables.

Subsequent recoveries of amounts previously written off are credited against operating expenses in profit or loss.

Trade and other receivables are classified as loans and receivables.

The Group assesses its trade receivables and loans and receivables for impairment at the end of each reporting period. In determining whether an impairment loss should be recorded in profit or loss, the Group makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset.

The impairment for trade receivables and loans and receivables is calculated on a portfolio basis, based on historical loss ratios, adjusted for national and industry-specific economic conditions and other indicators present at the reporting date that correlate with defaults on the portfolio. These annual loss ratios are applied to loan balances in the portfolio and scaled to the estimated loss emergence period.

Trade and other payablesTrade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

Cash and cash equivalentsCash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. Cash and cash equivalents are initially measured at fair value and subsequently at amortised cost.

Bank overdrafts form an integral part of the Group’s cash management and is therefore included as a component of cash and cash equivalents.

Bank overdraft and borrowingsBank overdrafts and borrowings are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the group’s accounting policy for borrowing costs.

TaxCurrent tax assets and liabilitiesCurrent tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilitiesA deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised, unless the deferred tax asset arises from the initial recognition of an asset or liability in a transaction that at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based


on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Judgement is required in determining the provision for income taxes due to the complexity of legislation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due.Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

The Group recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future.

Assessing the recoverability of deferred income tax assets requires the Group to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Group to realise the net deferred tax assets recorded at the end of the reporting period could be impacted.

Tax expensesCurrent and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from: ▪ a transaction or event which is recognised, in the

same or a different period, to other comprehensive income, or

▪ a business combination.

Current tax and deferred taxes are charged or credited to other comprehensive income if the tax relates to items that are credited or charged, in the same or a different period, to other comprehensive income.

Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly in equity.

1.1. LeasesA lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Finance leases – lesseeFinance leases are recognised as assets and liabilities in the consolidated statement of financial position at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding liability to the lessor is included in the consolidated statement of financial position as a finance lease obligation.

The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease.

The lease payments are apportioned between the finance charge and reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Operating leases – lesseeOperating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset or liability. Such asset or liability is not discounted.

Any contingent rents are expensed in the period they are incurred.

1.2. InventoriesInventories are measured at the lower of cost and net realisable value.

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 of all costs of purchase, costs of conversion and other costs incurredin bringing the inventories to their present location and condition.

The cost of inventories of items that are not ordinarily interchangeable and goods or services produced and segregated for specific projects is assigned using specific identification of the individual costs.

The cost of inventories is assigned using the first-in, firstout (FIFO) formula. The same cost formula is used for all inventories having a similar nature and use to the entity.

When inventories are sold, the carrying amounts 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.

1.3. Impairment of assetsThe Group assesses at the end of each reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the Group estimates the recoverable amount of the asset.

Irrespective of whether there is any indication of impairment, the Group also: ▪ tests intangible assets with an indefinite useful life

or intangible assets not yet available for use for impairment; and

▪ tests goodwill acquired in a business combination for impairment annually.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset.


If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined. The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use.

If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss.

An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in profit or loss.

An impairment loss is recognised for cash-generating units if the recoverable amount of the unit is less than the carrying amount of the units. The impairment loss is allocated to reduce the carrying amount of the assets of the unit in the following order: ▪ first, to reduce the carrying amount of any goodwill

allocated to the cash-generating unit; and ▪ then, to the other assets of the unit, pro-rata on

the basis of the carrying amount of each asset in the unit.

An entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amounts of those assets are estimated.

The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods.

A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is recognised immediately in profit or loss.

1.4. Non-current assets held for sale and disposal groups

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use.

Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal Group is allocated first to goodwill, and then to the remaining assets and liabilities on a pro-rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets, investment property or biological assets, which continue to be measured in accordance with the Group’s other accounting policies. Impairment losses on initial classification as held-for-sale or held-for-distribution and subsequent gains or losses on re-measurement are recognised in profit or loss.

Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortised or depreciated, and any equity-accounted investee is no longer equity accounted.

Interest and other expenses attributable to the liabilities of the disposal Group classified as held-for-sale are recognised in profit or loss.

1.5. Share capital and equityAn equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

If the Group reacquires its own equity instruments, the consideration paid, including any directly attributable incremental costs (net of income taxes) on those instruments are deducted from equity until the shares are cancelled or reissued. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the group’s own equity instruments. Consideration paid or received shall be recognised directly in equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

1.6. Share based paymentsGoods or services received or acquired in a share-based payment transaction are recognised when the goods or as the services are received. A corresponding increase in equity is recognised if the goods or services were received in an equity-settled share-based payment transaction or a liability if the goods or services were acquired in a cash-settled share-based payment transaction.

When the goods or services received or acquired in a share-based payment transaction do not qualify for recognition as assets, they are recognised as expenses.

For equity-settled share-based payment transactions the goods or services received and the corresponding increase in equity are measured at the fair value of the goods or services received provided that the fair value of the shares can be estimated reliably.

If the fair value of the goods or services received cannot be estimated reliably, their value and the corresponding increase in equity, indirectly, are measured by reference to the fair value of the equity instruments granted.

For cash-settled share-based payment transactions, the goods or services acquired and the liability incurred are measured at the fair value of the liability. Until the liability is settled, the fair value of the liability is re-measured at each reporting date and at the date of settlement, with any changes in fair value recognised in profit or loss for the period.

Share based payments vest on grant date and settlement is at fair value, with the service received recognised in full.

For share-based payment transactions in which the terms of the arrangement provide either the entity or the counterparty with the choice of whether the entity settles the transaction in cash (or other assets) or by issuing equity instruments, the components of that transaction are recorded, as a cash-settled share-based payment transaction if, and to the extent that, a liability to settle in cash or other assets has been incurred, or as an equity settled share-based payment transaction if, and to the extent that, no such liability has been incurred.

1.7. Employee benefitsShort-term employee benefitsThe cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as paid vacation leave and sick leave, bonuses, and non-


monetary benefits such as medical care), are recognised in the period in which the service is rendered and are not discounted.

The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non- accumulating absences, when the absence occurs.

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

1.8. Provisions and contingenciesProvisions are recognised when: ▪ the Group has a present obligation as a result of a

past event; ▪ it is probable that an outflow of resources embodying

economic benefits will be required to settle the obligation; and

▪ a reliable estimate can be made of the obligation.

The amount of a provision is the present value of the expenditure expected to be required to settle the obligation.

Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement shall be recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement shall be treated as a separate asset. The amount recognised for the reimbursement shall not exceed the amount of the provision.

Provisions are not recognised for future operating losses.

If an entity has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision.

Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in the notes to the financial results.

1.9. revenueRevenue from the sale of goods is recognised when all the following conditions have been satisfied: ▪ the Group has transferred to the buyer the

significant risks and rewards of ownership of the goods;

▪ the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

▪ the amount of revenue can be measured reliably; ▪ it is probable that the economic benefits associated

with the transaction will flow to the Group; and ▪ the costs incurred or to be incurred in respect of the

transaction can be measured reliably.

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the end of the reporting period. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:

▪ the amount of revenue can be measured reliably; ▪ it is probable that the economic benefits associated

with the transaction will flow to the Group;

▪ the stage of completion of the transaction at the end of the reporting period can be measured reliably; and

▪ the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue shall be recognised only to the extent of the expenses recognised that are recoverable.

Administration fees charged consist of two components:

1. Origination fees on loans measured at amortised cost

These fees are charged upfront, are capitalised into the loan, and are primarily based on the cost of granting the loan to the individual. In accordance with IAS 18 Revenue, these origination fees are considered an integral part of the loan agreement and therefore recognised as an integral par t of the effective interest rate and are accounted for over the shorter of the original contractual term and the actual term of the loan using the effective interest rate method. The deferred portion of the fees is recorded in the statement of financial position as a provision for deferred administration fees.

2. Monthly servicing feesThese are fees which form an integral part of the effective interest rate and are charged to customers on a monthly basis. These fees are recognised as part of the effective interest rate over the shorter of the original contractual term and the actual term of the loans and receivables. Beyond the original contractual term of the loan, the fee is recognised in profit or loss as it is charged to the customer on a monthly basis.While both these components are regarded as integral parts of the effective interest rate, they are not accounted for as interest income, but as non-interest income.

Other Group service fee income such as the stem cell storage fees, are recognised with reference to the stage of completion at the end of the reporting date.

Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of business, net of trade discounts and volume rebates, and value added tax.

Interest income earned on advances is recognised as revenue, on a time apportioned method taking into account the effective yield on assets. Other interest is recognised, in profit or loss, using the effective interest rate method.

Dividends are recognised, in profit or loss, when the company’s right to receive payment has been established.

Service fees included in the price of the product are recognised as revenue over the period during which the service is performed.

1.10. Translation of foreign currenciesForeign currency transactionsA foreign currency transaction is recorded, on initial recognition in Rands, by applying to the foreign currency


amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.

At the end of the reporting period: ▪ foreign currency monetary items are translated using

the closing rate; ▪ non-monetary items that are measured in terms of

historical cost in a foreign currency are translated using the exchange rate at the date of the transaction; and

▪ non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous annual financial statements are recognised in profit or loss in the period in which they arise.

When a gain or loss on a non-monetary item is recognised in other comprehensive income and accumulated in equity, any exchange component of that gain or loss is recognised in other comprehensive income and accumulated in equity. When a gain or loss on a non-monetary item is recognised in profit or loss, any exchange component of that gain or loss is recognised in profit or loss.

1.11. Translation of foreign currenciesForeign currency transactionsA foreign currency transaction is recorded, on initial recognition in Rands, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.

At the end of the reporting period: ▪ foreign currency monetary items are translated using

the closing rate; ▪ non-monetary items that are measured in terms of

historical cost in a foreign currency are translated using the exchange rate at the date of the transaction; and

▪ non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous annual financial statements are recognised in profit or loss in the period in which they arise.

When a gain or loss on a non-monetary item is recognised in other comprehensive income and accumulated in equity, any exchange component of that gain or loss is recognised in other comprehensive income and accumulated in equity. When a gain or loss on a non-monetary item is recognised in profit or loss, any exchange component of that gain or loss is recognised in profit or loss.

Cash flows arising from transactions in a foreign currency are recorded in Rands by applying to the foreign currency amount the exchange rate between the Rand and the foreign currency at the date of the cash flow.

1.12. Borrowing costsBorrowing costs are recognised as an expense in the period in which they are incurred. No borrowing costs have been capitalised because the group does not have any qualifying asset

2. New Standards and Interpretations2.1. Standards and interpretations

effective and adopted in the current year

In the year, the Group has adopted the following standards and interpretations that are effective for the current financial year and that are relevant to its operations:

IFrS 7 Financial Instruments: DisclosuresAmendments require entities to disclose gross amounts subject to rights of set-off, amounts set off in accordance with the accounting standards followed, and the related net credit exposure. This information will help investors understand the extent to which an entity has set off in its balance sheet and the effects of rights of set-off on the entity’s rights and obligations.

The effective date of the standard is for years beginning on or after 01 January 2013. The Group has adopted the standard for the first time in the 2013 annual financial statements. The impact of the amendment is not material.

IFrS 10 Consolidated Financial StatementsReplaces the consolidation requirements in SIC 12 Consolidation – Special Purpose Entities and IAS 27 Separate Financial Statements. The standard builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within consolidated financial statements of the parent company and provides additional guidance to assist in the determination of control where this is difficult to assess.

Amendments to the transition guidance on IFRS 10 Consolidated Financial Statements limiting the requirements to provide adjusted comparative information.


IFrS 11 Joint ArrangementsNew standard that deals with the accounting for joint arrangements and focuses on the rights and obligations of the arrangement, rather than its legal form. Standard requires a single method for accounting for interests in jointly controlled entities. Amendments to the transition guidance of IFRS 11 Joint Arrangements limiting the requirements to provide adjusted comparative information.



IFrS 12 Disclosure of Interests in other EntitiesNew and comprehensive standard on disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off-balance sheet structures.

Amendments to the transition guidance of IFRS 12 Disclosure of Interests in Other Entities limiting the requirements to provide adjusted comparative information. New disclosures required for Investment Entities (as defined in IFRS 10).


IFrS 13 Fair value measurementNew guidance on fair value measurement and disclosure requirements.


IAS 1 Presentation of Financial StatementsNew requirements to Group together items within OCI that may be reclassified to the profit or loss section of the income statement in order to facilitate the assessment of their impact on the overall performance of an entity. Amendments clarifying the requirements for comparative information including minimum and additional comparative information required.


IAS 27 Separate financial statementsConsequential amendments resulting from the issue of IFRS 10, 11, and 12.


IAS 16 Property, Plant and EquipmentAmendments to the recognition and classification of servicing equipment.


IAS 32 Financial Instruments: PresentationAmendments require entities to disclose gross amounts subject to rights of set-off, amounts set off in accordance with the accounting standards followed, and the related net credit exposure. This information will help investors understand the extent to which an entity has applied set off in its statement of financial position and the effects of rights of set-off on the entity’s rights and obligations.


IAS 34 Interim Financial reportingAmendments to improve the disclosures for interim financial reporting and segment information for total assets and liabilities.

The effective date of the standard is for years beginning on or after 01 January 2013. The Group has adopted the standard for the first time in the 2013 annual financial statements. The impact of the amendment is not material. The impact of the amendment is not material.

2.2. Standards and interpretations not yet effective

The Group has chosen not to early adopt the following standards and interpretations, which have been published and are mandatory for the group’s accounting periods beginning on or after 01 January 2014 or later periods:

IFrS 9 Financial InstrumentsThis new standard is the first phase of a three phase project to replace IAS 39 Financial Instruments: Recognition and Measurement. Phase one deals with the classification and measurement of financial assets. The following are changes from the classification and measurement rules of IAS 39:

▪ Financial assets will be categorised as those subsequently measured at fair value or at amortised cost.

▪ Financial assets at amortised cost are those financial assets where the business model for managing the assets is to hold the assets to collect contractual cash flows (where the contractual cash flows represent payments of principal and interest only). All other financial assets are to be subsequently measured at fair value.

▪ Under certain circumstances, financial assets may be designated as at fair value

▪ For hybrid contracts, where the host contract is within the scope of IFRS 9, then the whole instrument is classified in accordance with IFRS 9, without separation of the embedded derivative. In other circumstances, the provisions of IAS 39 still apply.

▪ Voluntary reclassification of financial assets is prohibited. Financial assets shall be reclassified if the entity changes its business model for the management of financial assets. In such circumstances, reclassification takes place prospectively from the beginning of the first reporting period after the date of change of the business model.

▪ Investments in equity instruments may be measured at fair value through profit and loss. When such an election is made, it may not subsequently be revoked, and gains or losses accumulated in equity are not recycled to profit or loss on derecognition of the investment. The election may be made per individual investment.

▪ IFRS 9 does not allow for investments in equity instruments to be measured at cost under any circumstances.


The effective date of the statement will be announced when the IASB has completed all outstanding parts of IFRS 9. However, entities may still choose to apply IFRS 9 immediately. The Group will evaluate the benefits of early adoption of IFRS 9. It is unlikely that the standard will have a material impact on the Group’s annual financial statements.

IFrS 10 Consolidated Financial StatementsIFRS 10 exception to the principle that all subsidiaries must be consolidated. Entities meeting the definition of‘Investment Entities’ must be accounted for at fair value under IFRS 9, Financial Instruments, or IAS 39, Financial Instruments: Recognition and Measurement.

The effective date of the standard is for years beginning on or after 01 January 2014. The Group expects to adopt the standard for the first time in the 2014 annual financial statements. It is unlikely that the standard will have a material impact on the company’s annual financial statements.

IAS 27 Separate financial statementsRequirement to account for interests in ‘Investment Entities’ at fair value under IFRS 9, Financial Instruments, or IAS 39, Financial Instruments: Recognition and Measurement, in the separate financial statements of a parent.

The effective date of the standard is for years beginning on or after 01 January 2014. The Group expects to adopt the standard for the first time in the 2014 annual financial statements. It is unlikely that the standard will have a material impact on the Group’s annual financial statements.

IFrS 2 Share based paymentsAmendments added the definitions of performance conditions and service conditions and amended the definitions of vesting conditions and market conditions.

The effective date of the standard is for years beginning on or after 01 July 2014. The Group expects to adopt the standard for the first time in the 2015 annual financial statements. It is unlikely that the standard will have a material impact on the Group’s annual financial statements.

IFrS 3 Business combinationsAmendments to the measurement requirements for all contingent consideration assets and liabilities including those accounted for under IFRS 9. Amendments to the scope paragraph for the formation of a joint arrangement.


IFrS 8 Operating segmentsAmendments to disclosure requirements regarding the judgements made by management in applying the aggregation criteria, as well as those to certain reconciliations.

The effective date of the standard is for years beginning on or after 01 July 2014. The Group expects to adopt the standard for the first time in the 2015 annual financial statements. It is unlikely that the standard

will have a material impact on the Group’s annual financial statements.

IFrS 13 Fair value measurementsAmendments to clarify the measurement requirements for those short-term receivables and payables.Amendments to clarify that the portfolio exception applies to all contracts within the scope of, and accounted for in accordance with, IAS 39 or IFRS 9.


IAS 16 Property, plant and equipmentAmendments to the Revaluation method – proportionate restatement of accumulated depreciation.


IAS 24 related party disclosureAmendments to the definitions and disclosure requirements for key management personnel.


IAS 38 Intangible AssetsAmendments to the Revaluation method – proportionate restatement of accumulated depreciation.



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21


4. Intangible Assets (continued)

Group – 2015: reconciliation of Intangible Assets

Opening balance

Business combination

Additions Impairments Total

Development costs 706 512 - - -706 512 -Payroll deduction code 275 321 - - - 275 321Computer software 150 000 - - -150 000 -Banking license - - 4 290 146 - 4 290 146Goodwill - 3 991 750 - - 3 991 750Total 1 131 833 3 991 750 4 290 146 -856 512 8 557 217Notes 37 21

Group – 2014: reconciliation of Intangible Assets

Opening balance

Business combination

Additions Total

Development costs 706 512 - - 706 512Payroll deduction code - 275 321 - 275 321Computer software - - 150 000 150 000Total 706 512 275 321 150 000 1 131 833

Annual impairment testsThe group assesses all intangible assets with an indefinite useful life on an annual basis. The recoverable amounts of the CGUs related to intangible assets are determined from value in use calculations. The key assumptions for the value used in calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. Management estimates discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs. The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market.

Development costsThe Group acquired a controlling interest in Return on Innovation (Pty) Ltd effective on 1 March 2016, holds development costs, which consists of the integration, printing, and broadcasting of software, in order to accommodate the South African market. Development costs are amortised over a period ranging from 52 to 65 months. During the 2017 financial period the Group assessed the recoverable amount of the development costs for indicators of impairment. The assessment determined that the development cost allocated to the cash generating unit was not impaired and consequently no impairment was recognised. The recoverable amount was tested by applying the value in use method. The calculation uses cash flow projections based on financial budgets approved by management covering a two-year period, at a discount rate of 10.5%. Cash flows beyond that two-year period have been extrapolated using a steady 6% growth rate per annum for a 20 year forecast period. This growth rate does not exceed the long-term average growth rate for the market in which the cash generating unit operates. Management believes that any reasonably possible change in the key assumptions on which the recoverable amount is based would not cause the carrying amount to exceed its recoverable amount.

The following key assumptions were included in the financial budgets to determine the future cash flows:

▪ Budgeted client base and turnover; ▪ Budgeted gross margin; and ▪ Operating cost inflation.

Payroll deduction codeEcsponent’s employee benefit operations acquired Ligagu Investments (Pty) Ltd a company incorporated in Swaziland. The company holds a deduction code, i.e. approval from the Swaziland government to deduct loan repayments from governmental employees’ salaries. This allows the employee benefit operations to secure loan repayments to Swaziland governmental employees payroll. The deduction code is not amortised as is deemed to have an indefinite useful life. The useful life was reviewed at the end of the reporting period and management are confident that the deduction code will remain available on an indefinite basis to the business. During the financial period the group assessed the recoverable amount through the annual impairment assessment. The assessment determined that the deduction code allocated to the cash generating unit was not impaired and consequently no impairment was recognised. The recoverable amount was tested by applying the value in use method. The calculation uses cash flow projections based on financial budgets approved by management covering a five-year period, and a discount rate of 10.5%. Cash flows beyond that two-year period have been extrapolated using a steady 6% growth rate per annum for a 20 year forecast period. This growth rate does not exceed the long-term average growth rate for the market in which the cash generating unit operates. Management believes that any reasonably possible change in the key assumptions on which the recoverable amount is based would not cause the carrying amount to exceed its recoverable amount.



▪ Budgeted market share; ▪ Budgeted gross margin; and ▪ Cost of funding the loan book growth.

Computer softwareEcsponent’s employee benefit operations acquired loan origination software as well as the software code. The software development costs are not amortised as the system has not been brought into use. During the financial period the group assessed the recoverable amount through the annual impairment assessment. The assessment determined that the computer software allocated to the Financial Services cash generating unit was impaired and consequently an impairment amounting to R150 000 was recognised (2014: R0). Management assessed the available software and deemed it not to be fit for use in generating future cash flows. The system development was resultantly cancelled.

The group acquired a controlling interest in Return on Innovation (Pty) Ltd on 1 March 2016. ROi has intangible assets (development costs), which consists of the integration, printing, and broadcasting software, in order to accommodate the South African market. Computer software are amortised over a period ranging from 52 to 65 months

Banking licenseEcsponent’s financial service operations acquired a deposit taking banking license in Zambia through its operation Ecsponent Financial Services (Pty) Ltd (Zambia). This allows the financial services operation to raise capital in the local market through competitive products in sustaining future growth in micro finance lending and enterprise development. The banking license is not amortised as is deemed to have an indefinite useful life. The useful life was reviewed at the end of the reporting period and management are confident that the license will remain available on an indefinite basis to the business. During the financial period the group assessed the recoverable amount through the annual impairment assessment. The assessment determined that the banking license cost allocated to the financial services cash generating unit was not impaired and consequently no impairment was recognised. The recoverable amount was tested by applying the value in use method. The calculation uses cash flow projections based on financial budgets approved by management covering a two-year period, at a pre-tax discount rate of 12%. Cash flows beyond that two-year period have been extrapolated using a steady 5% growth rate per annum for a 20 year forecast period. This growth rate does not exceed the long-term average growth rate for the market in which the cash generating unit operates. Management believes that any reasonably possible change in the key assumptions on which the recoverable amount is based would not cause the carrying amount to exceed its recoverable amount.


▪ Budgeted market share; ▪ Budgeted cost of funding and related gross margin;

and ▪ Growth of the deposit taking, micro financing and

enterprise development loan book.

GoodwillEcsponent Ltd acquired a 100% interest in Quilibet Trading (Pty) Ltd, a supplier of engineering goods and services, effectively from 1 March 2015. The transaction was a strategic purchase to unlock opportunities for secured funding to select financial service companies and credit to small, medium and micro enterprises and providing specific goods and services required by relevant vendors. The transaction yielded a goodwill element of R4 million, for further details please refer to note 35. Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs) that are expected to benefit from that business combination.

The goodwill is not amortised as is deemed to have an indefinite useful life. The useful life was reviewed at the end of the reporting period and management are confident that the value is recoverable through the continued growth of the business. The group prepares cash flow forecasts derived from the most recent financial budgets approved by management for the next five years and extrapolates cash flows for the following five years based on an estimated growth rate of 7%. This rate does not exceed the average long-term growth rate for the relevant markets. A pre-tax discount rate of 11% was used for the value in use calculation after the impact of the industry related risk. During the financial period the group assessed the recoverable amount through the annual impairment assessment. The assessment determined that the goodwill allocated to the cash generating unit was not impaired and consequently no impairment was recognised.


▪ budgeted sales volumes and services; ▪ budgeted gross margins; ▪ budgeted overheads; and ▪ growth of the deposit taking, micro financing and

enterprise development loan book.

GoodwillEcsponent acquired 51% of the ordinary share capital of Clade, which wholly own the shares of Exchange Trade Fund Ltd, effective 30 June 2016. It has category 2 and 2A investment licences with the Financial Services Board, allowing the entity to offer a comprehensive range of hybrid investment solutions for investors. For further details please refer to note 35. The asset management license is not amortised as is deemed to have an indefinite useful life and therefore no amortisation was raised during the period since acquisition. During the current financial period the group disposed of its interest in the asset management license through the disposal of its investment in Clade Investment Management (Pty) Ltd.



Ecsponent Ltd acquired a 100% interest in Ecsponent Procurement Services (Pty) Ltd (formerly Quilibet Trading (Pty) Ltd), a supplier of engineering goods and services, effective 1 March 2015. The transaction was astrategic purchase to unlock opportunities for secured funding to select financial service companies and credit to small, medium and micro enterprises and providing specific goods and services required by relevant vendors. The transaction yielded a goodwill element of R4 million. For further details please refer to note 35.

Asset management licenseEcsponent acquired 51% of the ordinary share capital of Clade, which wholly owns the shares of Exchange Trade Fund Ltd, effective 30 June 2016. It has category 2 and 2A investment licenses with the Financial Services Board, allowing the entity to offer a comprehensive range of

hybrid investment solutions for investors. For further details please refer to note 35.The asset management license is not amortised as it is deemed to have an indefinite useful life and therefore no amortisation was raised during the period since acquisition. During the current financial period the group disposed of its interest in the asset management license through the disposal of its investment in Clade Investment Management (Pty) Ltd on 31 March 2017. Refer to note 38 for more detail. The group had no outstanding contractual commitments to acquire additional items of intangible assets at the end of the respective reporting periods. The group had no assets that were encumbered by other financial liabilities, as described in note 16.



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Name of company Country of incorporation Principal place of business

Ecsponent Holdings Swaziland (Pty) Ltd Swaziland MbabaneEcsponent Limited (Swaziland) Swaziland MbabaneGetBucks Swaziland (Pty) Ltd Swaziland MbabaneSanceda Collections Swaziland (Pty) Ltd Swaziland MbabaneEcsponent Holdings Botswana (Pty) Ltd Botswana GaboroneEcsponent Asset Management Ltd Botswana GaboroneEcsponent Limited (Botswana) Botswana GaboroneSure Choice (Pty) Ltd Botswana Gaborone Sanceda Collections Botswana (Pty) Ltd Botswana Gaborone Cryo-Save Namibia (Pty) Ltd Namibia WindhoekEcsponent Financial Services Zambia (Pty) Ltd Zambia Lusaka

Acquisitions and disposalsThe Group concluded an agreement to acquire 51% of the issued share capital in a media monitoring operation, Return on Innovation (Pty) Ltd as part of its private equity investment portfolio, effective 1 March 2016.

Ecsponent Development Fund (Pty) Ltd (EDF), a subsidiary of the Company, agreed to acquire the assets and liabilities constituting the 'business' conducted by Ecsponent Investment Holdings (Pty) Ltd as a going concern. The Group concluded an agreement to acquire the business of the company, effective 30 June 2016.

Ecsponent acquired 51% of the ordinary share capital of Clade Investment Management (Pty) Ltd and its wholly owned subsidiary Exchange Traded Fund (Pty) Ltd, effective 30 June 2016. The Group however concluded an agreement to dispose of its 51% interest in Clade as part of the group re-restructuring through a plan to exit the asset management operations. The agreement became effective on 31 March 2017.

During the current financial period the group registered two new companies which houses the biotechnology operations of Ecsponent Biotech and Vita Save respectively.

Ecsponent entered into an agreement to dispose of its 51% shareholding in Ligagu Investments, its subsidiary in Swaziland providing retail credit loans to individuals. The investment was effectively sold on 30 June 2016.

The Group entered into an agreement to dispose of its 70% interest in Ecsponent Holdings Botswana (Pty) Ltd, which holds a 70% interest in Ecsponent Asset Management (Pty) Ltd Botswana. The transaction was concluded through a shareholders vote effective on 31 March 2017.

Subsidiaries where 50% or less than 50% voting powers are heldCryo-Save SA (Pty) Limited and its wholly owned Subsidiary Cryo-Save Namibia (Pty) LimitedThe company holds 50% of the voting powers in Cryo-Save SA (Pty) Limited (“Cryo-Save SA”) which in turn holds 100% of the voting powers in Cryo-Save Namibia (Pty) Limited. The investment in Cryo-Save SA

is considered a Subsidiary because the company is exposed, or has rights, to variable returns from its involvement with Cryo-Save SA and has the ability to affect those returns through its power over Cryo-Save SA. The management team reports directly into the Ecsponent Group Executive structure for strategic guidance and assistance.

Salveo Swiss Technologies LtdThe company holds 50% of the voting powers in Salveo Swiss Technologies Ltd (“Salveo”). The investment in Salveo is considered a subsidiary because the company is exposed, or has rights, to variable returns from its involvement with Salveo and has the ability to affect those returns through its power over Salveo. The management team reports directly into the Ecsponent group executive structure for strategic guidance and assistance and the group has provided disproportionate financing to this subsidiary.

Sure Choice (Pty) LtdThe company holds 50% of the voting powers inSure Choice (Pty) Ltd (“SC”). The investment in SC is considered a subsidiary because the company is exposed, or has rights, to variable returns from its involvement with SC and has the ability to affect those returns through its power over SC. The management team reports directly into the Ecsponent group executive structure for strategic guidance and assistance and the group has provided.

Subsidiaries pledged as securityAt 31 March 2017 and up to the date of the report none of the subsidiaries have been pledged as security.

There are no significant restrictions to the Group in respect of the ability to access assets and liabilities of the subsidiaries

5. Interest in subsidiaries (continued)


6. Other financial assets

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

At fair value through profit and lossAcquired debt - 8 873 568 3 240 630In prior years the group acquired loan books at a significant discount from large corporates and collected on the debt. The acquired debt portfolio at 31 December 2015, comprised a gross collectable of R98.6 million (2014: R34.2 million). At 31December 2015 the fair value of the acquired debt was R8.9 million (2014: R3.2 million). The acquired debt portfolio was sold for R9 million during the current financial period on 28 February 2016. Listed Shares 232 979 597 - -On 30 March 2017, the group acquired 1 100 000 foreign denominated listed equities, representing 10% of the issued share capital of the MyBucks group, as part of its private equity portfolio. The shares are listed on the Frankfurt Stock Exchange.

232 979 597 8 873 568 3 240 630Loans and receivables at amortised costEmployee benefit advances - Unsecured advances - 77 644 679 64 320 967The group provides financial services and products to the unbanked and marginalised sectors of the economy. The advances are granted at various interest rates. The advances are limited to a maximum capital loan of R250 000 and the repayment terms vary from short term, one month loans, to a maximum repayment period of 60 months.Business Funding - Advances 748 651 130 271 798 842 38 738 829The business funding advances are secured, via a cession of the underlying equity and/or assets, ranging between 100 - 200%. The advances bear interest at fixed interest rates based on the entity risk profile, ranging between 24 - 30% (2015: 24 - 30%) and repayment terms are facility specific, ranging between 2 - 5 years.GetBucks (Pty) Ltd - Purchase price repayment facility - 18 198 635 -The repayment facility is secured over the loan book sold and bearsinterest at 11% per annum. The facility is repayable over 12 monthscommencing on 30 June 2015.

Total other financial assets 748 651 130 367 642 157 103 059 796981 630 727 376 515 725 106 300 426

Non-current assetsAt fair value through profit or loss- designated 2 834 127Loans and receivables 667 088 829 98 065 585 51 572 267

667 630 727 98 065 585 54 406 394

Current assetsAt fair value through profit or loss- designated 232 979 597 8 873 568 406 503Loans and receivables 81 562 301 269 576 572 51 487 529

314 541 898 278 450 140 51 894 032Total other financial assets 981 630 727 376 515 725 106 300 426

Credit quality of other financial assetsRefer to note 39, Financial instruments - Fair value and Risk management, credit risk sub-section for further detail.

Fair value of other financial assetsFinancial assets at fair value through profit or loss are recognised at fair value, which is equal to their carrying amounts. Loans and receivables are measured at amortised cost, which is also equal to their carrying amounts.


7. Deferred tax

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Accelerated capital allowances for tax purposes -43 256 324 816 -868 344Provisions and accrued expenses 199 793 224 699 989 834Tax losses available for set off against future taxable income 14 376 034 5 440 862 9 538 275Fair value adjustments and impairments 2 351 805 904 732 -300 189Capital growth accruals 9 162 079 682 255Trade receivable impairments 1 001 999 1 365 302Deferred revenue 1 365 873 3 131 309Foreign currency translation reserve -14 819 117 136Income received in advance 1 351 054 3 248 445 2 209 085Prepayments Deferred transaction costs -13 395 631 -5 939 300 -Total 15 003 877 6 251 811 11 568 661The deferred tax asset disclosed in the Group statement of financial position as non-current asset comprises:Accelerated capital allowances for tax purposes - 324 816 Accruals 199 793 224 699 989 83Fair value adjustments 2 351 805 904 732 Tax losses available for set-off against future taxable income 14 376 034 4 047 562 9 538 275Capital growth rituals 9 162 079 682 255 Trade receivable impairment 1 001 999 2 758 602 Deferred revenue 1 365 873 3 131 309 2 209 085Accelerated capital allowances for tax purposesForeign currency translation reserve - 117 136Total 28 457 583 12 191 111 12 737 194The deferred tax liability disclosed in the Group statement of financial position as a non-current liability comprises:Accelerated capital allowances for tax purposes -43 256 - 868 344Fair value adjustments - - -Deferred transaction costs -13 395 631 -5 939 300 300 188Foreign currency translation reserve -14 819 - -Total -13 453 706 5 939 300 1 168 532

reconciliation of the deferred tax asset / (liability):

Deferred tax asset at the beginning of the period 6 251 811 11 568 661 10 369 335(Decrease) / increase in tax losses available for set off against future taxable income

16 679 272 -2 930 893 -1 052 355

Originating temporary differences on capital growth accruals 7 331 535 54 498 -19 893Originating temporary differences on trade receivable impairments 611 109 795 351 -380 245Originating temporary differences on intangible and tangible fixed asset -165 387 -124 183 689 423Originating temporary differences on accruals -21 391 -190 743 -Originating temporary differences on deferred transaction cost -9 408 539 -4 799 789 -Originating temporary on income received in advance -431 424 691 194 1 962 496Originating temporary differences on impairments -688 726 1 410 151 -Originating temporary differences on fair value adjustments 2 686 287 1 270 440Derecognition due to disposal of investment -7 492 063 -2 281 570 -Recognition on acquisition of investment 5 281 656 - -Derecognition due to transfer to disposal group held for sale -5 211 364 - -Effect of foreign currency translation -418 900 293 693 -


Tax losses available for set off against future taxable incomeThe Group recognises the net tax benefit relating to deferred income tax assets arising from future deductible temporary differences and past income tax losses. The deferred income tax asset is recognised to the extent it is probable that taxable income will be available from forecast profits to realise the future tax saving. (Refer

note 25 Taxation for additional information regarding the estimated tax losses). The expectation of future profits is based on the continued improvement in the Group’s operating results arising from the restructure initiatives already implemented and the continuation of the Group’s restructure and recapitalisation project. The main objective of the project is to ensure the Group’s profitability and sustainability.

8. Inventories

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Finished goods 544 718 1 023 441 871 700Merchandise 677 651 795 765 1 227 701Total 1 222 370 1 819 206 2 099 401

No inventory was written off during the current or comparative financial period, neither has any reversal of previous write-down inventory amounts been recognised in the 2017 or comparative period presented above.

There are no inventories pledged as security.

9. Loans to and from Group companies

Ecsponent Management Services Ltd (formerly Vinguard Ltd) - 290 625 430 39 168 702The loan is unsecured, bears interest at 17.35% per annum and is repayable on demand.Ecsponent Treasury Services (Pty) Ltd 866 593 813 - -The loan is unsecured, bears interest at 14% per annum and is repayable on demand.Ecsponent Management Services Ltd (formerly Vinguard Ltd) - 10 936 939 10 936 939The loan is unsecured, interest free and is repayable on demand. The loan was ceded to Ecsponent Treasury Services during the current financial period in a process of consolidating the loan facilities of the group through its treasury vehicle.Ecsponent Treasury Services (Pty) Ltd 13 436 939 - -The loan is unsecured, interest free and is repayable on demand. The loan has been subordinated to the benefit of Ecsponent Management Services’ other creditors to the extent that its liabilities exceed the company’s assets fairly valued.Ecsponent Financial (Pty) Ltd -100 -100 20 281 686The loan is unsecured, interest free and is repayable on demand.Ligagu Investments (Pty) Ltd trading as GetBucks Swaziland - -100 -The loan is unsecured, interest free and is repayable on demand.Ecsponent Holdings (Pty) Ltd (Swaziland) - -700 12 331 500The loan is unsecured, interest free and is repayable on demand.Ecsponent Limited (Botswana) 12 731 730 13 662 000 3 650 573The loan is unsecured, interest free and is repayable on demand.Cryo-Save South Africa (Pty) Ltd 5 040 111 5 040 111 -The loan is unsecured, interest free and is repayable on demand.Ecsponent Financial Services Ltd (Zambia) - 1 038 683 -The loan is unsecured, interest free and is repayable on demand.Komo Finance (Pty) Ltd - - 21 248 879The loan is unsecured, bears interest at the prime overdraft rate plus 11% per annum and is repayable on demand.


9. Loans to and from Group companies (continued)

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Sanceda Collection Services (Pty) Ltd - - 12 098 672The loan is unsecured, bears interest at 24% per annum and is repayable on demandEcsponent Limited (Botswana) - - 3 371 355The loan is unsecured, bears interest at the prime overdraft rate plus 12.35% per annum and is repayable on demand.Cryo-Save South Africa (Pty) Ltd - - -815 000The loan is unsecured, interest free and is repayable on demand.Ecsponent Financial Services (Pty) Ltd - - -4 970 845The loan is unsecured, interest free and is repayable on demand

897 801 793 321 302 263 117 302 461Impairment of loans to subsidiaries - -10 883 964 -10 883 964

897 801 793 310 418 299 106 418 497Current assets 897 802 593 310 419 199 112 204 342Current liabilities -800 -900 -5 785 845

897 801 793 310 418 299 106 418 497

The maximum exposure to credit risk at the reporting date is the carrying value of each class of loanmentioned above.

The impairment provision related to the Ecsponent Management Services Ltd interest free loan, as detailed above. The company does not hold any collateral as security. The company has released the provision against the above loan accounts amounting to R10 883 964 (2015: R10 883 964).

10. Trade and other receivables

Trade receivables 27 622 489 27 578 815 6 223 372Prepayments 5 431 592 5 573 745 5 669 962Other receivables 257 387 2 739 748 808 873Deposits 266 613 423 077 174 088VAT 7 227 967 7 190 715 1 917 258Total 40 806 047 43 506 100 14 793 553

Non-current 4 655 684 3 127 532 2 041 950 Current 36 150 363 40 378 568 12 751 603 Total 40 806 047 43 506 100 14 793 553

Credit quality of trade and other receivablesRefer note 39, Financial Instruments - Fair value and risk management.

Trade receivablesAge analysis of trade and other receivables.

2017 Impairment provision



Current 7 403 059 - 12 201 837 - 5 226 602 -30 days 2 496 905 - 2 895 652 - 519 707 -60 days 1 173 959 - 1 580 657 - 57 520 -90 days 1 264 973 - 1 518 506 - 488 933 -Over 90 days 20 386 733 -5 103 139 12 157 702 -2 775 541 876 309 -945 699Total 32 725 628 -5 103 139 30 354 355 -2 775 541 7 169 071 -945 699


10. Trade and other receivables (continued)

Trade and other receivables which are less than three months past due are not considered to be impaired. The group assesses the recoverability of individual trade receivable balances on a continuous basis to identify any possible impairments based on the underlying circumstances.

It is the policy of the group to allow varying credit terms of up to 60 months for payment plan debtors.

Fair value of trade and other receivablesThere is no material difference between the fair value of trade and other receivables and their book value.

Trade and other receivables impairedDuring the period ending 31 March 2017, trade and other receivables of R1 942 079 were impaired and provided for (2015: R1 857 999), and R1 682 430 of the provisions were released during the 2017 financial period. The total amount of the provision was R5 103 139as at 31 March 2017 (2015: R2 775 541).

The ageing of these debtors is as follows:

31 Mar2017

31 Dec2015

31 Dec2014

3 to 6 months - - 244 060Over 6 months 5 103 139 2 775 541 701 639

reconciliation of provision for impairment of trade and other receivables Don’t have provision utilised for write offs 2014 – (51 439)

Opening balance 2 775 541 945 699 303 706Provision for impairment 1 942 079 1 857 999 699 068Provision of impairment released -1 682 430 -28 156 -5 636Provisions acquired through business combinations 2 067 949 - -Total 5 103 139 2 775 541 945 699

The creation and release of provision for impaired receivables have been included in operating expenses in profit or loss.

11. Cash and cash equivalents

Bank balance 31 546 169 15 411 825 6 986 924Bank overdraft -5 065 764 -5 373 970 -13 936 209Total 26 480 405 9 740 855 -6 949 285The deferred tax asset disclosed in the Group statement of financial position as non-current asset comprises:Bank balance 25 379 829 15 114 825 15 114 825 Bank overdraft -468 900 -5 373 970 -5 373 970

24 910 929 9 740 855 Cash and cash equivalents from discontinued operationsBank balance 6 166 340 - -Bank overdraft -4 596 864 - -

1 569 476 - -

Total cash and cash equivalents 26 480 405 9 740 855 9 740 855

Current assets 25 379 829 15 114 825 6 986 924Current liabilities -468 900 -5 373 970 -13 936 209

24 910 929 9 740 855 -6 949 285

Cash and cash equivalents included in assets held for sale 6 166 340 - -Bank overdraft included in liabilities of disposal group held for sale -4 596 864 - -

1 569 476 - -


11. Cash and cash equivalents (continued)

Secured bank overdraft facilitiesThe Group’s secured overdraft facilities amount to R1 million at 31 March 2017 (2015: R500 000). The facility is secured via a cession of the debtors book of R12.6 million (2015: R3.9 million) and surety in the name of Ecsponent Limited. The overdraft facility bears interest at the prime overdraft rate (10,5%), (2015: 10.25%)

Cash and cash equivalents reclassified to discontinued operationsThe investment in Sure Choice (Pty) Ltd was classified as a disposal group held for sale at period end resulting in the reclassification of cash and cash equivalents. For more detail refer to note 28. The group has secured a P4 million overdraft facilities available in Botswana, amounting to R5.1 million at 31 March 2017 (2015: R5.4 million), over a pledge of R65.9 million of the employee benefit advances. In addition, fixed deposits amounting to R5.6 million (BWP 4 million) have been pledged as further security for the facility.

12. Share Capital

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Authorised ordinary shares Number of authorised ordinary shares of no par value 1 000 000 000 000 1 000 000 000 000 1 500 000 000Issued ordinary shares Number of issued ordinary shares of no par value 1 079 550 795 901 588 049 901 588 049

Shareholders approved a resolution at the Annual General Meeting held on 25 July 2014 to increase the authorised share capital from 1 500 000 000 (one billion five hundred million) to 2 000 000 000 (two billion) ordinary shares of no par value.

Shareholders subsequently approved a resolution at the General Meeting held on 25 October 2014 to increase the authorised share capital from 2 000 000 000 (two billion) to 1 000 000 000 000 (one trillion) ordinary shares of no par value.

Ordinary sharesHolders of these shares are entitled to dividends as declared from time to time and are entitled to one vote per share at the general meetings of the company.

Reconciliation of the number of ordinary shares issued:

Reported at the beginning of the period 901 588 049 901 588 049 444 131 678 Issue of ordinary shares 177 962 746 - 457 456 371

1 079 550 795 901 588 049 901 588 049

The following share issues took place during the 2017 financial period:

Issue date Issue price (cents per

share)

Number of shares issued

Issue of shares for the Clade Investment Management acquisition 30-Jun-16 20.95 19 095 617 Directors' share issue - May 2016 10-Jun-16 18.58 9 847 769 Directors' share issue - June 2016 05-Jul-16 17.87 221 908 Directors' share issue - July 2016 08-Aug-16 18.62 244 744 Odd lot Offer - repurchase and cancellation - 19 August 2016 25-Aug-16 20.55 -51 476 Specific repurchase and cancellation - 19 August 2016 25-Aug-16 20.55 -491 282 Directors' share issue - August 2016 06-Sep-16 17.51 260 125 Directors' share issue - September 2016 04-Oct-16 15.54 293 146 Directors' share issue - October 2016 07-Nov-16 15.37 219 644 Directors' share issue - November 2016 05-Dec-16 13.54 249 359 Directors' share issue - December 2016 06-Jan-17 13.56 292 393 Rights offer 2017 22-Feb-17 15.00 135 758 403 Directors' share issue - Mar 2017 31-Mar-17 13.56 12 022 396

177 962 746


12. Share Capital (continued)

No share issue took place during the 2015 financial period.


Issue date Issue price (cents per

share)

Number of shares issued

Issue of shares for the Clade Investment Management acquisition 30-Jun-14 100.00 3 000 000 Directors' share issue - May 2016 22-Sep-14 14.00 454 456 371

457 456 371

The rights offer to take up additional Ecsponent shares at 15 cents a share was available to all existing Ecsponent Limited shareholders as recorded in the share register on the record date of February 2017. The rights offer circular distributed to shareholders was approved by the JSE Securities Exchange.

The rights offer was furthermore underwritten by Alexander Mason (Pty) Ltd, the new majority shareholder of Ecsponent Ltd to the amount of R20 million.

The rights offer to take up additional Ecsponent shares at 14 cents a share was available to all existing Ecsponent Limited shareholders as recorded in the share register on the record date of 2014. The rights offer circular distributed to shareholders was approved by the JSE Securities Exchange.

The proceeds from the share issue for cash was used to replace an interest-bearing loan account within Komo Finance.

Unissued ordinary sharesThe unissued ordinary shares are under the control of the directors in terms of a resolution of members passed at the last annual general meeting.

Issued capital

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Ordinary shares 145 169 140 118 071 505 118 071 505145 169 140 118 071 505 118 071 505


13. Non-distributable reserves

2017 Group

Common control reserve

Foreign currency

translation reserve

Other non-distributable

reserves

Total reserves

Opening balance -36 687 391 -482 966 - -37 170 357 Business combinations -56 824 377 - - -56 824 377 Foreign operations – foreign currency translation differences

- 84 591 - 84 591

Realisation of common control reserve due to the loss of control#

93 511 768 - - 93 511 768

- -398 375 - -398 375

# During the current financial period, the previous majority shareholder (ultimate parent – Ecsponent Capital (RF) Limited (“Capital”)) disposed of 34.9% of its interest in Ecsponent Ltd, resulting in the loss of control. The entities as described above therefore are no longer controlled by the same ultimate holding entity. On the effective date, the common control reserve was therefore realised to retained earnings, as per the accounting policies applied.

2015 Group


Foreign currency

translation reserve


reserves

Total reserves

Opening balance -36 687 391 -54 516 3 842 049 -32 899 858 Foreign operations – foreign currency translation differences

- -428 450 - -428 450

Realisation of equity adjustment in the trading of shares in subsidiary where control has not been lost (refer to note 14)

- - -3 842 049 -3 842 049

-36 687 391 -482 966 - -37 170 357

2014 Group


Foreign currency

translation reserve


reserves

Total reserves

Opening balance -36 687 391 - - -36 687 391 Foreign operations – foreign currency translation differences

- -54 516 - -54 516

Equity adjustment in the trading of shares in subsidiary where control has not been lost

- - 3 842 049 3 842 049

-36 687 391 -54 516 - -32 899 858

Common control reserveIn terms of the Group’s accounting policies, Business combinations involving entities under common control comprise business combinations where both entities remain under the ultimate control of the holding company before and after the combination, and that control is not transitory. The group applies merger accounting for all its common control transactions which requires that the assets and liabilities of the purchased business be incorporated at the consolidated book value (by the ultimate parent) and the difference between the purchase consideration and the book value of the assets and liabilities be recorded in equity as a common control reserve.

The common control reserve arose as a result of the following transactions with the majority shareholder (or related subsidiary) of Ecsponent Ltd.

The acquisitions of the following growth businesses from Ecsponent Capital (RF) Limited (Capital) and other related parties, entered into by the group on 5 March 2014, were approved by shareholders in a general meeting held on 25 July 2014. The effective date of the acquisitions was determined as 31 July 2014:

Ecsponent Limited (company incorporated in Botswana) and its subsidiary 12 553 474 Ecsponent Financial Services (Pty) Ltd 10 619 479 Sanceda Collection Services 13 514 438 Common control reserve arising from the 2014 business combinations 36 687 391


13. Non-distributable reserves (continued)

The Group concluded an agreement to acquire 51% of a media monitoring entity, Return on Innovation (ROi) from Capital, effective 1 March 2016.

Ecsponent Development Fund (Pty) Ltd, a 74% subsidiary of Ecsponent Ltd agreed to acquire the business conducted by Ecsponent Investment Holdings (Pty) Ltd (EIH) as a going concern. The business provides high yielding financing opportunities which offer an attractive proposition for the Company. The Group concluded an agreement to acquire the business of the company, effective 30 June 2016.

Return on Innovation (Pty) Ltd 2,145,296 Business of EIH 54,679,081 Common control reserve arising from the 2016/2017 business combinations 56,824,377

Note: During the current financial period, the previous majority shareholder (ultimate parent – Ecsponent Capital (RF) Limited {“Capital”}) disposed of 34.9% of its interest in Ecsponent Ltd, resulting in the loss of control. On the effective date, the common control reserve was therefore realised to retained earnings, as per the accounting policies applied.

Foreign currency translation reserve (FCTr)The FCTR comprises all foreign currency differences arising from the translation of the financial statementsof foreign operations into the Group’s reporting currency, South African Rand.

Other non-distributable reserveEquity adjustment in the trading of shares in a subsidiary where control has not been lost.

14. Non-controlling interest

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Balance at the beginning of the period -4 653 294 -3 795 325 -1 240 366Non-controlling interest in current period income -10 436 329 -3 424 745 -1 560 262Foreign currency translation on non-controlling interest 197 398 127 269 -15 017Acquisition of non-controlling interest 19 575 465 256 937 -979 680Business combinations -18 154 834 - -Disposal of investments 2 042 898 2182 570 -Total non-controlling interest at end of the period -11 428 696 -4 653 294 -3 795 325


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14. Non-controlling interest (continued)

Notes ▪ No dividends were declared or paid from subsidiaries with non-controlling interest. ▪ Ecsponent Limited incorporated the following entities during the period under review:

- Ecsponent Biotech (Pty) Ltd (incorporated in South Africa) as a wholly owned subsidiary;- Ecsponent Development Fund (Pty) Ltd (incorporated in South Africa);

▪ Ecsponent Biotech (Pty) Ltd incorporated the following entities during the period under review:- Vita Save (Pty) Ltd (incorporated in South Africa). A 49% non-controlling interest was issued to an external

party at incorporation; ▪ Ecsponent Holdings Botswana (Pty) Ltd incorporated the following entities during the period under review:

- Ecsponent Asset Management (Pty) Ltd (incorporated in Botswana). A 30% non-controlling interest was issued to an external party effectively on 1 January 2016;

▪ The following changes to non-controlling interests were effected during the period under review:- The Ecsponent Ltd (Botswana) non-controlling interest was purchased effective on 1 January 2016 from

Ecsponent Holdings Botswana (Pty) Ltd, taking the controlling interest from 70% to 100%;

Non-controlling interest at 1 January 2016 65 329 Consideration paid -Total realisation directly to equity 65 329

- The Sanceda Collection (Pty) Ltd (Botswana) non-controlling interest was purchased effective on 1 July 2016 from Ecsponent Holdings Botswana (Pty) Ltd, by Ecsponent Ltd (Botswana), taking the controlling interest from 70% to 100%;

Non-controlling interest at 1 July 2016 455 368 Consideration paid - Total realisation directly to equity 455 368

- Ecsponent Ltd made the following acquisitions during the current financial period (as detailed below);

Return on Innovation (Pty) Ltd 619 991 Clade Asset Management (Pty) Ltd and subsidiary -1 676 345

- Ecsponent Development Fund (Pty) Ltd made the following acquisitions during the current financial period (as detailed below);

Business of Ecsponent Investment Holdings (Pty) Ltd 19 211 309

- The Ecsponent Ltd (Botswana) non-controlling interest was purchased effective on 1 January 2016 from Ecsponent Holdings Botswana (Pty) Ltd, taking the controlling interest from 70% to 100%;

Non-controlling interest at 30 September 2016 -19 054 771 Consideration paid 1 Total realisation directly to equity -19 054 770

- Ecsponent Ltd made the following disposals during the current financial period (as detailed below);

Ligagu Investments (Pty) Ltd 1 245 645 Clade Asset Management (Pty) Ltd and subsidiary 774 555 Ecsponent Holdings Botswana (Pty) Ltd and subsidiary -4 063 096


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and

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-

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1

20

02

6



Notes ▪ No dividends were declared or paid from subsidiaries with non-controlling interest. ▪ Ecsponent Limited incorporated the following entities during the period under review:

- Sanceda Collections (Pty) Ltd (incorporated in Swaziland);- Ecsponent Holdings (Pty) Ltd (incorporated in Botswana), this entity was incorporated as the holding company

for both Ecsponent Ltd (Botswana) and Sanceda Collections (Pty) Ltd (Botswana);- Sanceda Collections (Pty) Ltd (incorporated in Botswana);

▪ The following changes to non-controlling interests were effected during the period under review:- The Ecsponent Management Services Ltd (formerly Vinguard) non-controlling interest was purchased effective

on 24 June 2015 taking the controlling interest from 75.87% to 100%; ▪ Ecsponent Holdings Botswana (Pty) Ltd incorporated the following entities during the period under review:

- Ecsponent Asset Management (Pty) Ltd (incorporated in Botswana). A 30% non-controlling interest was issued to an external party effectively on 1 January 2016;

Non-controlling interest at 24 June 2015 627 183 Consideration paid (R375 000 was settled through the issue of Class A preference shares) 779 730 Goodwill recognised directly in equity 1 406 913 Realisation of Non-Distributable Reserve recognised on sale to non-controlling interest -3 842 049 Total realisation directly to equity -2 435 136

- Ecsponent Credit Services (Pty) Ltd disposed of its 51% controlling interest in Komo Finance (Pty) Ltd effective on 31 July 2015

Proceeds on sale of investment 450 000 Less cost of investment (including loan account sold) -6 574 343 Less since acquisition reserves 2 788 174 Realisation of initial gain on bargain purchase -166 519 Loss on disposal of investment -3 502 687

- Ecsponent Holdings (Pty) Ltd (Botswana) was incorporated as the holding company of Ecsponent Ltd (Botswana) and Sanceda Collections (Pty) Ltd (Botswana) during the 2015 financial period. A 30% non-controlling interest was issued to an external party effectively on 1 July 2015

Proceeds on sale of investment - Less at acquisition reserves 370 737 Gain on disposal of investment 370 737

- Sanceda Collections (Pty) Ltd was incorporated in Swaziland during the latter part of the 2015 financial period and a non-controlling interest was issued to an external party effective during October 2015;

The following summarises the changes in the Company’s ownership interest as a result of the acquisitions and disposal during the period:

2015


(formerly Vinguard Ltd)

Komo Finance (Pty) Ltd

Sanceda Collections Swaziland (Pty) Ltd

Ecsponent Holdings Botswana (Pty) Ltd

Total

Non-controlling ownership interest at beginning of the year

-986 819 -73 822 - - -1 060 641

Share of comprehensive profit / (loss) for the year

359 636 -2 108 748 -155 559 109 394 -1 795 277

At acquisition equity and reserves - - 490 -370 737 -370 247 Purchase of minority interest 627 183 - - 627 183Disposal of investment 2 182 570 2182 570Non-controlling ownership interest at 31 December 2015

- - -155 069 -261 343 -416 411


14.

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for

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per

iod

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d 31

Dec

embe

r 20

14 t

hat

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341

189

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100

Net

(d

ecre

ase)

/in

crea

se in

cas

h a

nd

cas

h e

qu

ival

ents

-4

97

4

-6

67

75

2

57

91

3

18

7 4

78

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6 7

46

64

1

1 3

62

66

9

14

3 5

56



Notes ▪ No dividends were declared or paid from subsidiaries with non-controlling interest. ▪ Ecsponent Limited disposed of 50% of its stake in Salveo Swiss Technologies Limited during the period

under review. ▪ Ecsponent Limited acquired a controlling stake in the following entities during the period under review:

- Ecsponent Limited (incorporated in Swaziland);- Sure Choice (Pty) Ltd (incorporated in Botswana);- Komo Finance (Pty) Ltd (incorporated in South Africa); and- Ligagu Investments (Pty) Ltd trading as GetBucks Swaziland (incorporated in Swaziland);

The following summarises the changes in the Company’s ownership interest as a result of the acquisitions and disposal during the period:

2015

Salveo Swiss

Technology Limited

Ecsponent Limited

(Pty) Ltd (Swaziland)

Sure Choice (Pty) Ltd

Komo Finance

(Pty) Ltd

Ligagu Investments

(Pty) Ltd trading as GetBucks Swaziland

Total

Non-controlling ownership interest at beginning of the year

- - - - - -

Share of comprehensive profit / (loss) for the year

-552 497 511 232 -1 188 752 -593 293 -121 255 -1 944 565

At acquisition equity and reserves

- 593 -1 510 102 516 457 35 503 -957 549

Non-controlling ownership interest at 31 December 2014

-552 497 511 825 -2 698 854 -76 836 -86 052 -2 902 414

15. Preference shares

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Authorised Preference SharesEcsponent Limited (incorporated in South Africa)Class A preference shares of no par value 1 000 000 000 1 000 000 000 1 000 000 000Class B preference shares of no par value 1 000 000 000 1 000 000 000 1 000 000 000Class C preference shares of no par value 1 000 000 000 1 000 000 000 1 000 000 000Class D preference shares of no par value 1 000 000 000 1 000 000 000 1 000 000 000Class E preference shares of no par value 1 000 000 000 1 000 000 000 1 000 000 000Class F preference shares of no par value 1 000 000 000 1 000 000 000 1 000 000 000

Ecsponent Limited (incorporated in Swaziland)Class A preference shares of E1.00 100 000 000 100 000 000 100 000 000Class B preference shares of E1.00 100 000 000 100 000 000 100 000 000Class C preference shares of E1.00 100 000 000 100 000 000 100 000 000Class D preference shares of E1.00 100 000 000 100 000 000 100 000 000Class E preference shares of E1.00 100 000 000 100 000 000 100 000 000Class F preference shares of E1.00 100 000 000 100 000 000 100 000 000Class G preference shares of E1.00 100 000 000 100 000 000 100 000 000Class H preference shares of E1.00 100 000 000 100 000 000 100 000 000


15. Preference shares (continued)

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Authorised Preference SharesEcsponent Limited (incorporated in Botswana) Class A preference shares of no par value 100 000 000 100 000 000 100 000 000Class B preference shares of no par value 100 000 000 100 000 000 100 000 000

7 000 000 000 7 000 000 000 7 000 000 000

Shareholders approved the following resolutions relating to the Ecsponent Limited (South Africa) preference shares at the Annual General Meeting held on 25 July 2014:

▪ Adoption of amendments to the Memorandum of Incorporation (“MOI”) in order to comply with the Companies Act and the JSE listing requirements. Through the adoption of the amendments to the MOI the following preference shares were created:- 1 000 000 000 (one billion) class D, cumulative non-participating, variable rate, perpetual Preference Shares

of no par value, at an initial issue price of R100.00 per Preference Share in the share capital of the Company;- 1 000 000 000 (one billion) class E, cumulative non-participating, perpetual Preference Shares of no par

value, at an initial issue price of R100.00 per Preference Share in the share capital of the Company; and- 1 000 000 000 (one billion) class F, cumulative non-participating, fixed rate, perpetual Preference Shares of

no par value, at an initial issue price of R100.00 per Preference Share in the share capital of the Company.

The preference share program used to raise local funding in Botswana through the prospectus issued was withdrawn during the 2015 financial period with the application for alternative sources of funding.

reconciliation of the number of preference shares in issue:

Ecsponent Limited (South Africa)

Class A Class B Class C

Reported at the beginning of the period 326 798 688 485 1 641 290 Issue of preference shares during the year 88 797 969 216 4 383 149

415 595 1 657 701 6 024 439

Weighted average issue price per share (rands) 95.26 100.00 100.00

Ecsponent Limited (Swaziland)

Class A Class E

Reported at the beginning of the period 18 058 000 18 174 000 Issue of preference shares during the year 35 137 000 35 553 700

53 195 000 53 727 700

Weighted average issue price per share (Emalangeni) 1.00 1.00 Weighted average issue price per share (converted to rand) 1.00 1.00

Ecsponent Limited (Botswana)

Class A Class B Class C

Reported at the beginning of the period 14 764 000 2 067 000 1 641 290 Redemption of preference shares during the year -3 014 000 - 4 383 149

11 750 000 2 067 000 6 024 439

Weighted average issue price per share (Pula) 1.00 1.00 Weighted average issue price per share (rand) 1.27 1.27


15. Preference shares (continued)

The preference shares are issued on an on-going basis to investors under a general authority provided to the directors’ to issue shares for cash.

Unissued preference sharesThe unissued preference shares in all regions are under the control of the directors.

Classification of redeemable preference sharesHolders of the preference shares receive a cumulative dividend subject to the terms of the preference share class issued. The preference shares do not have the right to participate in any additional dividends declared to ordinary shareholders. These shares do not have voting rights at general meetings of the company.

The preference shares are redeemable after 60 months from the initial issue date and as a result are classified as debt and disclosed as such in the statement of financial position. The dividends declared to preference shareholders is classified as finance costs and disclosed on this basis in the statement of profit and loss.

Preference share liabilityThe preference share liability at the end of the year comprises of the following:

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Held at amortised costPreference shares issued by Ecsponent Limited (South Africa): Preference share - class A 39 209 899 29 929 569 4 761 995 Initial issue price redeemable after 5 years. Monthly dividend paid at a rate of 10% per annum. Preference share - class B 178 736 347 68 791 650 5 722 149 Preference share redeems at 170% of the initial issue after 5 years. No monthly dividends are paid. Preference share - class C 582 006 219 156 403 051 19 660 755Initial issue price redeemable after 5 years. Monthly dividend paid at a rate of prime plus 4% per annum.

Preference shares issued by Ecsponent Limited (Swaziland):Preference share - class A 50 484 240 16 938 630 5 766 359 5 year income provider with a variable rate redeemable, convertible units of E1 000 comprising E1 preference share and E999 claim. 15% rate at present paid monthly.Preference share - class E 59 130 239 19 146 486 5 893 618

Preference shares issued by Ecsponent Limited (Botswana):Preference share - class A 14 861 346 19 450 071 5 948 495 5 year income provider with a variable rate redeemable, convertible units of P1 000 comprising P1 preference share and P999 claim. 15% rate at present paid monthly.Preference share - class B 3 544 554 3 177 509 768 1905 year capital growth provider with a zero rate redeemable, convertible units of P1 000 comprising P1 preference share and P999 claim. Redeemed at end of 5 years at P2 000.

Total preference shares 927 972 844 313 836 967 48 521 561

Non-current liabilitiesAt amortised cost 921 924 764 312 073 556 312 073 556

Current liabilitiesAt amortised cost 6 048 079 1 763 411 1 763 411

The current portion of the preference shares as listed above relates to the accrued dividends payable monthly for Class A and Class C preference shares.


16. Other financial liabilities

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

At fair value through profit and lossCollection Guarantee - - 1 308 118Sanceda Collection Services (Pty) Ltd provided a third party client with a minimum collection value per month. Provided for the fair value of the expected cash outflows in terms of the collection guarantee provided. The guarantee was fully settled during the 2015 financial period.Held at amortised costVital Select Services (Pty) Ltd - - 4 270 660The term loan bears interest at prime plus 6% per annum repayable in equal monthly repayments with the last payment due at 30 April 2015.Benco Finance (Pty) Ltd - - 104 064The loan is unsecured, interest free and is repayable on demand.SO2 Generators - - 100 000The loan is unsecured, interest free and is repayable on demand.K Evans - 562 243 507 487 Loan is unsecured and repayable on 31 May 2019 at the end of the 5-year term. Interest is ▪ payable monthly at an interest rate of 30% per ▪ annum (2015: 30%). The group has entered into ▪ an agreement to dispose of this line of business ▪ during December 2016. Refer to notes 28 and 33 ▪ for more detail in this regard (Sure Choice - Other ▪ financial liabilities).

Experite AG (formerly Cryo-Save AG) 3 912 232 3 917 070 2 961 694 The loan is unsecured, interest free and is repayable on demand.Cryo-Save Labs 1 670 620 1 974 257 1 640 035 The loan is unsecured, interest free and is repayable on demand.Esperite NV (formerly Cryo-Save NV) 494 358 486 401 479 573 The loan is unsecured and repayable on demand. The loan bears interest at the 1-year EURIBOR (European Interbank Offered Rate) plus 1%.Esperite NV (formerly Cryo-Save NV) 120 000 120 000 120 000 The loan is unsecured, interest free and is repayable on demand.GetBucks (Pty) Ltd (Swaziland) - 4 053 898 - The term loan is unsecured, bears interest at 25% per annum and capital and interest is repayable on 27 March 2018.The investment in Ligagu Investment (Pty) Ltd was disposed of effective on 30 June 2016. For more detail refer to note 38.GetBucks (Pty) Ltd (Botswana) 4 240 787 - - The loan is unsecured, bears interest at 24% and is repayable on demand.Capital bank - Term loan facility - 8 977 266 - The term loan bears interest at Botswana Prime + 6% (currently 13.5%) per annum and capital and interest is repayable over 60 months from 25 August 2015. The loan is secured over the following: ▪ Lien over Fixed deposit of P4 million ▪ Cession of loanbook for P14 million in favour of Capital Bank Ltd

Botswana ▪ Corporate gaurantee for P11.3 million from Ecsponent Ltd

Botswana ▪ The investment in Sure Choice (Pty) Ltd was classified as a disposal

group held for sale at period end resulting in the reclassification of the financial liability. For more detail refer to note 27,28 and 33.

Capital bank - Asset financing facility - 329 936 - The term loan bears interest at Botswana Prime + 3% (currently 10.5%) per annum and capital and interest is repayable over 48 months from 25 August 2015. The loan is secured over the asset financed.

The investment in Sure Choice (Pty) Ltd was classified as a disposal group held for sale at period end resulting in the reclassification of the financial liability. For more detail refer to note 27, 28 and 33.


16. Other financial liabilities (continued)

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Held at amortised costStandard Bank - Property bond 909 367 949 069 - The term loan bears interest at South African Prime + 0.55% (10.8% at year end) per annum and capital and interest is repayable over 180 months from 1 December 2014. The loan is secured over the property purchased.WesBank - Asset financing facility - 12 004 - The term loan bears interest at South African Prime (10.25% at year end) per annum and capital and interest is repayable over 37 months from 15 March 2013. The loan is secured over the vehicle purchased. The loan was settled in full during the current period.Ecsponent Projects (Pty) Ltd (incorporated in Botswana) - 4 873 059 -The loan is unsecured, bears interest at 24% per annum and capital and interest is repayable on demand. The group has entered into an agreement to dispose of this line of business. Refer to notes 28 and 33 for more detail in this regard (Ecsponent Holdings (Pty) Ltd Botswana - Other financial liabilities).Fixed term deposits - 2 006 776 - The fixed term deposits are unsecured, bears interest at fixed annual rates and are repayable after 6 or 12 months, depending on the product.

The investment in Ecsponent Financial Services Ltd (Zambia) was classified as a disposal group held for sale at period end resulting in the reclassification of the financial liability. For more detail refer to notes 27, 28 and 33.

11 347 364 28 261 980 10 183 513 Total other financial assets 11 347 364 28 261 980 11 491 631 Non-current liabilitiesAt amortised cost 871 443 12 766 740 507 487 Current liabilitiesAt fair value through profit and loss - - 1 308 118At amortised cost 10 475 921 15 495 239 9 676 026

10 475 921 15 495 239 10 984 144

Total other financial liabilities 11 347 364 28 261 979 11 491 631

See Annexure 5 of the prospectus to which these financial results are attached for a further breakdown of other financial liabilities.


17. Deferred revenue

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Deferred administration fees 2 685 515 13 695 960 9 094 477Current liabilities 2 537 629 9 551 735 4 350 388

147 886 4 144 225 4 744 089Total 2 685 515 13 695 960 9 094 477

Administration fees are charged upfront to recover the administration cost of originating employee benefit loans and stem cell storage repayment facilities. In accordance with the Group’s accounting policy for revenue, these origination fees are recognised as an integral part of the effective interest rate and are accounted for over the shorter of the original contractual term and the actual term of the loan using the effective interest method. The portion of the administration fees that relate to future periods is disclosed as deferred revenue in the statement of financial position. The employee benefit loan book operations have been classified as a discontinued operation and all assets and liabilities related to this disposal group have been classified as held for sale at period end. For more detail refer to note 27, 28 and 33.

18. Trade and other payables

Trade payables 8 417 070 9 157 644 3 786 062Amounts received in advance 3 050 278 2 072 680 1 882 385VAT 1 715 990 3 694 541 1 861 453Payroll liabilities 3 317 482 2 688 797 1 263 151Accrued leave pay 1 007 114 727 045 563 813Accrued bonus - - 146 471Accrued audit fees 841 764 720 034 409 901Other accrued expenses 1 694 585 1 205 306 1 724 708Other payables 724 407 1 620 182 306 724Withholding tax - 389 158 67 685Operating lease payables 9 762 115 726 918 506Total 20 778 453 22 391 113 13 045 438

Accrued liabilities represent contractual liabilities that relate to expenses that were incurred, but not paid at statement of financial position date.

The book value of trade payables, accrued liabilities and other payables are considered to be in line with their fair value at 31 March 2017.


19. Revenue

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Interest revenue 232 285 771 62 593 746 15 948 720 Origination and administration fees 8 855 878 11 089 588 6 495 122 Insurance 743 818 63 154 1 038 896 Management fees 2 331 000 8 625 133 5 502 632 Stem cell processing and storage 32 233 857 25 041 240 14 753 919 Sale of goods 30 891 703 15 332 433 4 793 430 Rendering of services 10 281 524 - - Collection commissions 890 752 21 471 239 6 693 180 Collections of acquired debt 3 280 336 488 913 2 169 852 Total 321 794 638 144 705 445 57 395 751 Investment revenueOther miscellaneous - 144 180 -Total revenue 321 794 638 144 849 625 57 395 751

During the current financial period group revenue amounting to 64 633 858 was transferred to discontinued operations (2015: R24 740 090). Refer to note 27 for more detail in this regard.

No group investment revenue was transferred to discontinued operations for the 31 March 2017 financial period(2015: R243 947).

20. Other income

Expense recoveries 11 002 784 1 191 891 60 845Realisation of lease straight lining liability - 896 609 -Profit on foreign currency exchange differences 508 371 1 810 243 -Profit on sale of other financial asset - 17 229 960 -Profit on sale of business 66 726 081 - --Profit on sale of property, plant and equipment 64 964 - -Profit on sale of investment in associate - - -Fee income 3 744 526 - -Reversal of impairment provisions 3 318 366 - -Other miscellaneous 1 647 853 733 597 391 534Total 88 542 877 21 862 300 478 342

Group other income amounting to R70 709 were transferred to discontinued operations for the 31 March 2017 financial year (2015: R90 732).


21. Operating profit/(loss)Operating profit / (loss) for the period is stated after accounting for the following:

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Operating lease charges Premises 3 744 437 4 378 927 2 195 702 Equipment 428 299 448 767 57 172

Loss on foreign currency exchange differences 23 066 186 522 314Loss on sale of property, plant and equipment - 3 997 Loss on sale of equity accounted investment - 775 313 - (Loss on sale of business 3 502 689 - Impairment of other financial assets 2 136 579 3 303 605 1 Impairment of property, plant and equipment - - 12 005Impairment of intangible assets - 856 512 - Impairment of trade and other receivables 1 942 079 1 857 999 - (Reversal) / impairment of loans to group companies - - - Depreciation on property, plant and equipment 3 252 557 1 369 688 736 001 Amortisation of intangible assets 738 831 - - Employee costs – settled in shares 3 743 870 -Employee costs 51 017 027 36 609 444 23 229 899

Group operating expenses amounting to R26 454 278 were transferred to discontinued operations for the 31 March 2017 financial year (2015: R8 830 228).

22. Fair value adjustments

Preference shares - - 597 947Listed equities -11 017 229 - -Acquired debt books - 5 639 051 -Total -11 017 229 5 639 051 597 947

The fair value of the 60-month redeemable preference share liability for both the income provider and capital growth products issued by the group in South Africa, Swaziland and Botswana is determined at initial recognition and accounted for at amortised cost.

The carrying value of the acquired debt books at 31 December 2015 was adjusted to the fair value of the assets for the reporting period, representing the recoverable amount as at the reporting date.

The group acquired shares in an entity listed on the Frankfurt stock exchange. The fair value adjustment represents the movement in the share price as per the acquisition agreement and the market value of the listed equities on the exchange on 31 March 2017.


23. Investment in associateThe Group acquired a 25% interest in an investment property entity, Living 4 U (Pty) Ltd early during 2015, for a total purchase consideration of R4 283 500 of which R3 250 00 was settled through the issue of Class A preferential shares. The property development of the associate was sold during the current financial period and the 25% interest held by the Group was repurchased from the proceeds at R5.25 million. Detail pertaining to the equity accounted results for the period is disclosed below:

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Cost of investment in associate - 4 283 500 - Equity accounted post acquisition profit - 1 741 813 -

- 6 025 313 - Disposal of investment in associate - -6 025 313 - Investment in equity accounted investment - - -

Acquisition date fair value of consideration paid Cash consideration paid - -1 033 500 - Other consideration (*) - -3 250 000 -

- -4 283 500 -

(*) - The remaining purchase consideration was settled through the issue of listed Ecsponent Class A preference shares

Details of the Group’s associate for the 2015 financial period were as follows:

Name of associate

Place of incorporation

and operations

Proportion of ownership interest (%)

Proportion of voting power (%)

Principle activity

2017 2015 2014 2017 2015 2014

Living 4 U (Pty) Ltd

South Africa 0% 25% 0% 0% 25% 0% Investment property

The above associate is accounted for using the equity method in these consolidated financial statements

The financial year end date of Living 4 U (Pty) Ltd is October 31. This was the reporting date established when that company was incorporated, and a change of reporting date was not required due to the significance of the operational transactions. For the purposes of applying the equity method of accounting, the financial statements of Living 4 U (Pty) Ltd for the year ended October 31, 2015 have been used, and appropriate adjustments have been made for the effects of significant transactions between that date and the date of disposal of the investment.

The group had significant influence over Living 4 U (Pty) Ltd by virtue of its contractual right to appoint one out of four directors to the board of that company.

Summarised financial information in respect of the group’s associate is set out below. The summarised financial information below represents amounts shown in the associate’s financial statements prepared in accordance with IFRSs [adjusted by the group for equity accounting purposes]. Due to the sale of the asset of the associate, no significant assets or liabilities existed at period end.

Revenue - 54 000 - Profit for the year - 6 967 254 - Other comprehensive income for the year - - - Total comprehensive income for the year - 6 967 254 - Dividends received from the associate during the year - - -


23. Investment in associate (continued)

Reconciliation of the above summarised financial information to the carrying amount of the interest in Living 4 U (Pty) Ltd recognised in the consolidated financial statements:

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Total comprehensive income for the year - 6 967 254 - Proportion of the group’s ownership interest in associate 0% 25% 0%Equity accounted profit for the period - 1 741 813 -

During December 2015, the group disposed of the 25% interest in Living 4 U (Pty) Ltd for proceeds of R5.25 million (received in December 2015). This transaction has resulted in the recognition of a gain in profit or loss, calculated as follows.

The investment was acquired as part of the groups private equity strategy with the idea to realise a return through the development of the investment property, and hence not to dispose of within a short term. This investment was furthermore also not considered to be a major line of business for the group.

Proceeds of disposal - 5 250 000 - Less: Carrying amount of investment on the date of loss of significant influence

- -6 025 313 -

(Loss) / Profit recognised - -775 313 -

The loss recognised in the 2015 year comprises a realised loss of R775 313 (being the proceeds of R5.25 million less R6.025 million carrying amount of the interest disposed of). A deferred tax credit of R144 798 arose on the loss realised in the 2015 year.

24. Finance costs

Other financial liabilities 2 920 325 2 157 062 2 649 986 Preference share dividends 127 306 479 24 733 005 1 466 642 Bank 32 151 1 288 1 020 305 Late payment of tax 91 286 148 885 83 294 Trade and other payables 333 810 2 036 Group companies - - -

130 350 574 26 929 121 5 222 263

Group finance cost amounting to R27 241 932 were transferred to discontinued operations for the 31 March 2017 financial year (2015: R1 729 851).

25. Auditors remuneration

Fees 841 640 1 109 283 294 998Adjustment from previous year 106 766 11 400 11 851Expenses 485 000 - 4 420

1 433 406 1 120 683 311 269


26. Taxation

Major components of the taxable income

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

CurrentIncome tax - current period 33 379 879 - 3 594 912 53 594DeferredOriginating and reversing temporary differences -10 702 105 3 643 421 -815 963Arising from previously unrecognised tax losses and temporary difference

416 449 548 155 3 493 830

-10 187 106 4191 576 2 677 867

Total 23 094 223 7 786 489 2 731 461

Discontinuing operations

Income tax - current period 2 119 975 715 616 -Deferred tax on originating and reversing temporary differences -6 307 081 -869 371 -Discontinued operations - tax expense for the period -4 187 106 -153 756 -

reconciliation of the tax expenseReconciliation between applicable tax rate and average effective tax rate:

Applicable tax rate 28.00 28.00 28.00Different tax rates applied in foreign subsidiaries 0.05 -1,14 -2,26Previously unrecognised deferred tax asset -0.48 -2,35Disallowable charges -22,30 14,74 1,81Exempt income - -Tax effect of share of results of associate - -1,77 -Effect of unused tax losses and tax offsets not recognised as deferred tax asset

-4,00 -2,28 -

Capital gains tax -24,88 -5,47 6,7221,53 30,51 34,27

Taxation credits amounting to R6 307 081 and taxation payable of R2 119 975 (resulting in a net taxation credit of R4 187 106) (2015: R153 756) was transferred to discontinued operations for the 31 March 2017 financial year. The group’s estimated tax loss available for set-off against future taxable income, is R33 095 027 (2015:

R16 399 185). The deferred tax asset arising on the group’s tax loss has been recognised in full as at 31 March 2017.The group’s estimated tax loss available for set off against future taxable income comprises of the following:


26. Taxation (continued)

Major components of the taxable income

Group company

31 Mar2017

31 Dec2015

31 Dec2014

Salveo Swiss Technology Limited (formerly Lazaron Biotechnologies (SA) (Pty) Ltd)

9 184 825 6 860 981 27 620 611

Ecsponent Management Services (formerly Vinguard Limited) - - 1 477 578Cryo-Save South Africa (Pty) Ltd 10 186 001 5 216 705 3 051 073 Cryo-Save Namibia (Pty) Ltd 7 142 122 734 490 Komo Finance (Pty) Ltd - - 198 592Ecsponent Biotech (Pty) Ltd 125 749 - - VitaSave (Pty) Ltd 9 849 - - Lazaron Biotechnologies (SA) (Pty) Ltd 65 106 - 4 034 Return on Innovation (Pty) Ltd 9 685 332 - - Ecsponent Limited (South Africa) - 15 148 152 490 Ecsponent Credit Services (Pty) Ltd - 123 424 78 531 Ecsponent Limited (Swaziland) - - 470 295 Sanceda Collection Services (Pty) Ltd (Swaziland) 3 786 355 433 645 - Sanceda Collection Services (Pty) Ltd 11 594 - 180 426 Ecsponent Financial Services (Pty) Ltd - 652 410 25 209 Ecsponent Limited (Botswana) - 443 740 1 178 895 Ecsponent Holdings (Pty) Ltd (Swaziland) 8 051 - - Ecsponent Holdings (Pty) Ltd (Botswana)$ - 2 892 - Sanceda Collection Services (Pty) Ltd (Botswana) 25 023 836 027 - Sure Choice (Pty) Ltd# - - 162 942 Ecsponent Financial Services (Pty) Ltd (Zambia)# - 1 691 481 -

33 095 027 16 399 185 34 601 166

$ These operations were disposed of during the current financial period.# These operations were transferred to disposal groups held for sale and are subject to disposal in term of the sale agreements.

27. Discontinued operationsThe Group has undertaken a process of rationalising the Group’s operations and investments including a series of financial transactions designed to streamline operations and re-align the Group for increased strategic growth. The relevant recognition and disclosure requirements of IFRS 5 therefore resulted in the ‘re-presentation’ of the financial results to disclose two categories being Continued and Discontinued operations (disposal groups). The comparative period Statement of Profit / Loss has therefore been ‘re-presented’ and does not represent a restatement of the results.

The group entered into an agreement on 20 December 2013 to dispose of its SO2 gas sheet manufacturing business and related assets of Vinguard Limited, as a going concern. The manufacturing operations were regarded as being non-strategic to the future growth plans of the group.

The Vinguard Limited shareholders approved the going concern disposal in terms of Section 112 of the Companies Act in a general meeting on 24 January 2014 and the effective date of the transaction was determined as 31 January 2014. The purchase price comprised R6.3 million.

The results have also been presented to disclose the impact of the proposed transactions on the Group’s financial results, resulting in the disclosure of Loan receivables and Loan payables between the affected subsidiaries and the continuing group financial services entities, disclosed in the two different categories. The continued revenue from loan funding have been included in the continued financial services operations’ results for the period, as determined by the terms signed funding and/or sale agreements.

With reference to the above-mentioned rationalisation, the Board announced in the latter part of Dec 2016 that the Group has agreed terms for the following:


1. the disposal of the Company’s 51% interest in, and loan accounts against, Clade Investment Management Proprietary Limited (“Clade”) to Ecsponent Capital (RF) Limited (“Capital”) for a total consideration of R16 500 000 (“the Clade Disposal”). The operations of both ECS Holdings and Clade require a more diversified business portfolio, requiring extended management infrastructure and further capitalisation. The Board was of the opinion that a more focused operational structure and the deployment of funds into core assets would be more beneficial to the Group’s profitability. The decision to dispose of these non-core assets is therefore beneficial to the Group;

2. the disposal of the Company’s 70% interest in, and loan accounts against Ecsponent Holdings (Pty) Ltd, incorporated in Botswana (“ECS Holdings”), to Ecsponent Projects (Pty) Ltd (“Projects”), for a consideration of P30 300 000 (“the ECS Holdings Disposal”);

3. the disposal of a portion of the business of Ecsponent Development Fund (Pty) Ltd (“EDF”), as a going concern, to Ecsponent Investment Holdings (Pty) Ltd (“EIH”), for a consideration of R70 166 641 (“the EDF Disposal”). EDF’s client base includes retail clients, local government/municipal business as well as large corporate businesses. In order to penetrate this market effectively the Board has decided to focus on the corporate sector. As a result, EDF will dispose of its primarily municipal and retail clients. As at 31 December 2016 the view was to completely exit these sectors, however it became evident that specific retail and municipality clients would still be services when the same acceptable risk profile could be achieved. The EDF business was therefore initially recognised as a discontinued operation, however due to the continued ad hoc business in this sector the assets and liabilities were treated as a disposal group held for sale;

4. the issue of 1 500 000 new shares by Ecsponent Financial Services Ltd (“EFS Zambia”), equating to 75% of the total issued share capital in EFS Zambia after the issue, to GetBucks Limited (“GetBucks MU”), for a subscription price equal to ZMW 7 500 000, payable in cash (“the EFS Zambia Subscription”), resulting in a dilution of Ecsponent’s interest from 100% to 25%, resulting in the loss of control. This was part of the strategic decision to exit the retail credit provision throughout the group. The Group however still retained a non-controlling interest in the entity through the partnering with the expertise and infrastructure of the MyBucks group which should contribute positively to the new private equity division of the group. Ecsponent will remain a funder to these operations through the provision of SME credit. Once again, this reduces the cost base of credit provision for Ecsponent and improves the securitisation of the credit facilities. The retail operations are viewed as non-core to Ecsponent’s strategy. The relevant regulatory approvals were not yet effective on 31 March 2017 and therefore these assets and liabilities of the disposal group was classified as a discontinued operation, held for sale.; and

5. the disposal of the Company’s 50% interest in Sure Choice (Pty) Ltd (“Sure Choice”) to GetBucks Limited (“GetBucks BW”), for a consideration of P10 000 000 (“the Sure Choice Disposal”). As a consequence of the decision to exit retail credit provision in the South African market, the Board has entered into agreements with GetBucks in Botswana to dispose of Ecsponent’s 50% share in Sure Choice, a provider of retail credit. The relevant regulatory approvals were not yet effective on 31 March 2017 and therefore these assets and liabilities of the disposal group was classified as a discontinued operation, held for sale.

6. The proceeds of the described sales above substantially exceed the carrying amount of the related net assets and accordingly no impairment losses were recognised on the reclassification of these operations as held for sale.

Analysis of profit / (loss) for the year from discontinued operationsThe combined results of the discontinued operations included in the profit for the year are set out below. The comparative profit and cash flows from discontinued operations have been re-presented to include those operations classified as discontinued during the current year.

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Revenue -64 633 858 24 740 090 576 046 Cost of sales -28 763 642 -11 962 512 -475 566 Gross profit 35 870 216 12 777 578 100 480 Other income 70 709 90 732 2 155 042 Operating expenses -26 454 278 -8 830 228 -8 830 228 Operating (loss) / profit 9 486 648 4 038 082 4 038 082 Investment revenue - 243 947 243 947 Finance costs -27 241 932 -1 729 851 -1 729 851 (Loss) / Profit before taxation -17 755 284 2 552 178 2 552 178 Taxation 6 307 080 153 756 153 756 (Loss) / Profit for the year from discontinuing operations -11 448 204 2 705 934 2 705 934 Gain (loss) on disposal of discontinued operation 16 420 613 - - Tax thereon -2 119 975 - - Profit / for the year from discontinuing operations 2 852 434 2 705 934 2 705 934


27. Discontinued operations (continued)

Impairment provisions amounting to R896 036 are included in the operating expenses of profit or loss for the current financial period (2015: R1 852 498). These provisions relate to the general provision of the employee benefits loan book based on actual collectivity of repayments.

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Net cash used in operations -31 934 745 2 373 138 - Net cash used in investing activities -34 086 936 -4 286 696 - Net cash used in financing activities 76 501 586 11 218 391 -

10 479 905 9 304 833 -

The Sure Choice and EFS Zambia operations have been classified and accounted for as disposal groups held for sale as at 31 March 2017. See note 28 for more detail.

The identified operations are included in the group’s financial services operating segment. These divisions within the financial services reporting segment are separately identifiable based on the nature of the operations and are managed separately by the group, being asset management and retail lending.

28. Assets and liabilities classified as held for sale

Assets held for sale 124 313 331 - - - Sure Choice (Pty) Ltd 111 707 722 - - - Ecsponent Financial Services Zambia (Pty) Ltd 12 605 609 - -

Liabilities associated with assets held for sale -130 689 526 - - - Sure Choice (Pty) Ltd -115 569 707 - - - Ecsponent Financial Services Zambia (Pty) Ltd -15 119 819 - -

The group has undertaken a process of rationalising the operations and investments including a series of financial transactions designed to streamline operations and re-align the group for increased strategic growth. Details of these agreements are outlined in note 27. Refer below for the analysis of the underlying assets and liabilities classified as disposal groups held for sale during December 2016.

Classifiedas disposalgroup held

for sale

Disposal ofinvestment

31 March2017

Combined aggregate of disposal groups held for sale 124 313 331 Assets of disposal groupsProperty, plant and equipment 3 029 908 -1 435 539 1 594 369Intangible assets and goodwill 13 466 032 -9 255 232 4 210 800Other financial assets 116 934 584 -20 054 609 96 879 975Deferred tax asset 11 944 208 -6 732 844 5 211 365Trade and other receivables 58 434 399 -48 183 917 10 250 482Cash and cash equivalents 28 544 690 -22 378 350 6 166 340

232 353 822 -108 040 491 124 313 331Liabilities of disposal groupsOther financial liabilities -197 289 142 78 350 392 -118 938 750Deferred income -6 193 372 - -6 193 372Trade and other payables -3 358 484 -2 397 944 -960 540Bank overdraft -4 596 864 - -4 596 864

-211 437 862 80 748 336 -130 689 526


28. Assets and liabilities classified as held for sale (continued)

During December 2016, the group classified a number of its operations as disposal groups / discontinued operations.Subsequently (but prior to the period end), Clade, Ecsponent Holdings Botswana and the business of EDF was disposed of, resulting in only Sure Choice and EFS Zambia being classified as disposal groups held for sale at the end of the reporting period. Refer below for an analysis of the disposal groups classified as held for sale during the current financial period:

Clade Investment Management (Pty) Ltd and subsidiary

Classifiedas disposalgroup held

for sale

Disposal ofinvestment

31 March2017

Assets of disposal groupsProperty, plant and equipment 5 738 -5 738 -Intangible assets and goodwill 9 255 232 -9 255 232 -Deferred tax asset 4 116 614 -4 116 614 -Trade and other receivables 1 274 983 -1 274 983 -Cash and cash equivalents 3 117 714 -3 117 714 -

17 770 281 -17 770 281 -Liabilities of disposal groupsOther financial liabilities -6 805 853 6 805 853 -Trade and other payables -127 037 127 037 -

-6 932 890 6 932 890 -

Ecsponent Holdings (Pty) Ltd (Botswana) and its subsidiaryAssets of disposal groupsProperty, plant and equipment 1 073 884 -1 073 884 -Deferred tax asset 2 616 230 -2 616 230 -Other financial assets 20 054 609 -20 054 609 -Trade and other receivables 20 659 494 -20 659 494 -Cash and cash equivalents 19 260 636 --19 260 636 -

63 664 853 -63 664 853 -Liabilities of disposal groupsOther financial liabilities -71 544 539 71 544 539 -Trade and other payables -2 074 375 2 074 375 -

-73 618 914 73 618 914 -

The business of Ecsponent Development Fund (Pty) LtdAssets of disposal groupsProperty, plant and equipment 355 916 -355 916 -Trade and other receivables 31 396 740 -31 396 740 -

31 752 656 -31 752 656 -Liabilities of disposal groupsTrade and other payables -196 532 196 532 -

-196 532 196 532 -


28. Assets and liabilities classified as held for sale (continued)

Sure Choice (Pty) Ltd

Balance31 March

2017

Assets of disposal groupsProperty, plant and equipment 936 114 Other financial assets 92 797 532 Deferred tax 1 971 656 Trade receivables 10 250 482 Cash and cash equivalents 5 751 938 Investment in subsidiary -

111 707 722 Liabilities of disposal groupsOther financial liabilities -103 818 931 Deferred income -6 193 372 Trade payables -960 541 Bank overdraft -4 596 864

-115 569 707

Ecsponent Financial Services Limited ZambiaAssets of disposal groupsProperty, plant and equipment 658 256 Intangible assets 4 210 800 Other financial assets 4 082 442 Deferred tax 3 239 709 Cash and cash equivalents 414 402

12 605 609 Liabilities of disposal groupsOther financial liabilities -15 119 819

-15 119 819

29. Events after the reporting dateThe directors are not aware of any material event, other than the disclosure related to matters listed below, which occurred after the reporting date and up to date of this report. The following events initiated during the period, were concluded subsequent to the year end:

The board has undertaken a process of rationalising the group’s operations and investments and has announced a series of financial transactions designed to streamline operations and re-align the group for increased strategic growth. These transactions ensure uncompromising focus on its core business of SME and enterprise finance and private equity, with the group disposing of all other assets not aligned to these activities. The transactions are conditional upon obtaining the requisite shareholder approvals during the general meeting of shareholders, held on 30 March 2017, which included the following:

▪ the issue of 1 500 000 new shares by Ecsponent Financial Services Limited (“EFS Zambia”), equating to 75% of the total issued share capital in EFS Zambia after the issue, to GetBucks Limited (“GetBucks MU”), for a subscription price equal to ZMW 7 500 000, payable in cash (“the EFS Zambia Subscription”), resulting in a dilution of Ecsponent’s interest from 100% to 25%; and

▪ the disposal of the company’s 50% interest in Sure Choice Proprietary Limited (“Sure Choice”) to GetBucks Limited (“GetBucks BW”), for a sale consideration of P10 000 000 (“the Sure Choice Disposal”).

During the general meeting all proposed transactions were approved by the required number of shareholders, howeverthe above two transactions were not concluded due to the following conditions:


29. Events after the reporting date (continued)

Regulatory approval by the Competitions Commission Authority of Botswana, approving the Sure Choice disposal. ▪ In terms of the regulations the submission to the authority can only be submitted once final approval of the

transaction has been obtained. The application was therefore filed with the authority and formal final approval was not yet granted at the date of issuing the consolidated financial statements. Communications with the regulatory authority have not indicated any concerns relating to obtaining approval and management believes it will receive final confirmation during July 2017.

▪ Regulatory approval by the Bank of Zambia, approving the EFS Zambia subscription and change in shareholder. ▪ The application for the change in shareholders to EFS Zambia was submitted to the Bank of Zambia, however

formal approval was not yet granted as at 31 March 2017. The supporting documentation was therefore filed with the authority and final approval was not yet granted at the date of issuing the consolidated financial statements. Communications with the regulatory authority have not indicated any concerns relating to obtaining approval and management believes it will receive final confirmation during July 2017.

30. Cash generated from/(used in) operations

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Profit/(loss) before taxation 86 483 410 27 566 945 6 649 551Adjusted forDividends received - - -Interest received - -388 127 -8 209Finance costs 151 109 788 18 504 199 5 222 263Adjusted for non-cash flow movementsProfit/Loss from operations classified as disposal groups -52 338 366 - -842 236Depreciation and amortisations 3 991 388 1 548 051 736 001Profit/loss on sale of assets 376 313 27 374 -3 997Fair value adjustment 11 017 229 -5 639 051 -597 947Impairment loss/(reversal) 3 032 615 - 12 006Impairment loss and reversal 1 942 079 7 842 458 -Reversal of impairment provision -trade receivables -5 000 796 - -Accrued interest revenue -14 842 251 - -Realisation of deferred cost 6 463 042 - -Bargain purchase - - -166 459(Profit) on sale of other financial assets - -16 191 937 -Loss/(profit) on sale of equity accounted investment - 775 313 -Loss on sale of investment in subsidiary 30 808 328 3 132 442 -Income from equity accounted investments - -1 741 813 -Unrealised forex gain 22 353 474 -870 041 -Movement in provisions - - -166 573Employee costs - settled in shares 3 743 870 - -Changes in working capitalInventories 596 836 806 980 -378 602Deferred revenue - 3 059 101 4 601 483 7 789 094Trade and other receivables -14 092 815 -29 790 481 -5 713 435Trade and other payables 6 294 644 10 156 593 -4 572 820

177 263 029 20 340 388 7 958 638


31. Taxation paidImpairment provisions amounting to R896 036 are included in the operating expenses of profit or loss for the current financial period (2015: R1 852 498). These provisions relate to the general provision of the employee benefits loan book based on actual collectivity of repayments.

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Balance at the beginning of the period -3 142 208 -53 594 -Current tax for the year recognised in profit and loss -35 499 815 -4 310 528 53 594Balance at the end of the period -11 678 329 3 142 208 -53 594

-25 234 074 -1 221 914 -

32. ContingenciesThe directors are not aware of any matter or circumstances of material significance that require disclosure as a contingent liability.

33. Related partiesrelationship

Subsidiaries Refer to note 5Shareholders with significant influence Alexander Mason (Pty) Ltd

Ecsponent Capital (RF) Limited TP Gregory DP van der Merwe

Subsidiaries of shareholder Ecsponent Investment Holdings (Pty) LtdEcsponent Projects (Pty) Ltd (incorporated in Botswana)Ecsponent Business Finance (Pty) Ltd

Members of key management TP Gregory B Shanahan

related party balances

Loan accounts - Owing (to) by related partiesEcsponent Capital (RF) LimitedThe loan is secured over equity and assets of the company, bears interest at 28% per annum (2015: 24%) and is repayable over 60 months effective from 1 April 2017.

278 334 488 134 916 945 3 817 448

Ecsponent Investment Holdings (Pty) LtdThe loan is secured over the debtor book, bears interest at 3% per month on the capital amount deployed and is repayable on demand. The loan was settled through a loan consolidation with EcsponentCapital (RF) Ltd, concluded during the current financial period.

- 81 939 569 -

Ecsponent Treasury Services (Pty) Ltd - - - Ecsponent Management Services (formerly Vinguard Limited) - - - Ecsponent Financial (formerly Restibyte (Pty) Ltd) - - - Ligagu Investments (Pty) Ltd trading as GetBucks Swaziland - - - Ecsponent Holdings Swaziland (Pty) Ltd - - - Komo - - - Sanceda Botswana - - - Ecsponent Limited (Botswana) - - - Cryo-Save SA (Pty) Limited - - -


33. Related parties (continued)

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Ecsponent Financial Services Limited (Zambia)The group entered into a subscription agreement resulting in the loss of control over Ecsponent Financial Services Ltd - Zambia, which was not yet concluded at period end. The loan is unsecured, bears interest at 24% per annum and repayable on demand. Refer to notes 27, 28 and 33 for more detail in this regard.

14 735 739 - -

Sure Choice (Pty) LtdThe group entered into an agreement to dispose of its subsidiary Sure Choice (Pty) Ltd, which was not yet concluded at period end. The loan is secured over the employee benefit advances loan book, bears interest at 28% per month and is repayable in 36 equal monthly instalments, commencing in the month following the effective date of the transaction. Refer to notes 27, 28 and 33 for more detail in this regard.

68 917 510 - -

Experite AG (formerly Cryo-Save AG) -5 582 852 -5 891 327 - Esperite NV (formerly Cryo-Save NV) -614 358 -606 401 - Ecsponent Projects (Pty) Ltd (incorporated in Botswana)The loan is unsecured, bears interest at 24% per annum and capital and interest are repayable on demand. The loan was settled during the current financial period.

- -4 873 059 -

related party transactions Interest (received from) / paid to related partiesEcsponent Capital (RF) Limited -76 075 134 -14 109 972 2 130 449 Ecsponent Investment Holdings (Pty) Ltd -22 707 709 -18 643 562 - Ecsponent Business Finance (Pty) Ltd -675 741 - - Ecsponent Projects (Pty) Ltd -6 044 636 - - Cryo-Save SA (Pty) Limited - - - Ecsponent Management Services (formerly Vinguard Limited) - - - Ecsponent Financial Services (Pty) Ltd - - - Ecsponent Treasury Services (Pty) Ltd - - - Ecsponent Limited (Botswana) - - - Komo Finance (Pty) Ltd - - - Sanceda Collection Services (Pty) Ltd - - - Ecsponent Financial Services (Pty) Ltd (Zambia) - - - Experite AG (formerly Cryo-Save AG) - 44 327 - Administration fees paid to (received from) related partiesEcsponent Capital (RF) Limited -6 439 526 -5 961 780 - Ecsponent Investment Holdings (Pty) Ltd -1 120 000 -3 240 000 - Ecsponent Business Finance (Pty) Ltd - -1 500 000 - Ecsponent Financial Services (Pty) Ltd - - - Return on Innovation (Pty) Ltd -216 000 - - Ecsponent Management Services (formerly Vinguard Limited) - - - Cryo-Save SA (Pty) Limited - - - Dividends received from related partiesEcsponent Management Services (formerly Vinguard Limited) - - - Commission paid to (received from) related partiesEcsponent Investment Holdings (Pty) Ltd -500 000 - - recoveries paid to (received from) related partiesEcsponent Capital (RF) Limited 563 931 - - Ecsponent Investment Holdings (Pty) Ltd -37 262 - - Ecsponent Business Finance (Pty) Ltd -40 020 - - Return on Innovation (Pty) Ltd 117 300 - - Ecsponent Treasury Services (Pty) Ltd - - - Ecsponent Ltd Botswana - - - reversal of loan impairment on related party loanEcsponent Management Services (formerly Vinguard Limited) - - -


34. Business Combinations

Aggregated business combinations

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Property, plant and equipment 1 027 790 1 600 081 993 311Intangible assets 11 826 222 - 275 321Other financial assets - - 45 514 845Deferred tax 5 281 656 - 3 819 992Inventory - 526 785 -Trade and other receivables 47 800 334 1 540 818 494 888Cash and cash equivalents 11 735 695 600 148 5 333 318Other financial liabilities -17 511 894 -2 417 794 -46 531 534Trade and other payables -3 679 793 -741 788 -5 526 746Bank overdraft - - -14 283 509Common control reserve - - 36 687 391Total identifiable net assets/(liabilities) 56 480 010 1 108 250 -9 910 114Non-controlling interest 18 154 954 - 980 391Surplus on acquisition - - -166 458Common control reserve 56 824 377 - -Goodwill - 3 991 750 -

-131 459 341 5 100 000 27 591 210

35. Net cash outflow on acquisitionPurchase consideration$ -1 500 000 - -27 591 210Net cash balance/(overdraft) assumed 11 733 335 600 148 -8 950 191

10 233 335 600 148 -36 541 401

Business acquisition during the 2017 financial periodClade Investment Management (Pty) Ltd (“Clade”) and its subsidiaryEcsponent acquired 51% of the ordinary share capital of Clade, which wholly own the shares of Exchange Trade Fund Ltd, effective 30 June 2016. It has category 2 and 2A investment licences with the Financial Services Board, allowing the entity to offer a comprehensive range of hybrid investment solutions for investors.

Fair value of assets acquired and liabilities assumed

Property, plant and equipment 8 606 - 653 778 Intangible assets 9 255 232 - 20 190 676 Deferred tax asset 3 400 896 - 2 556 602 Trade and other receivables 1 621 142 - -66 946 Cash and cash equivalents 11 453 166 - 5 128 888 Other financial liabilities -11 452 166 - 22 592 196 Trade and other payables -1 608 171 - - 3 841 155 Bank overdraft -2 360 - 11 093 827 Total identifiable net assets 12 676 345 - -9 064 180 Non-controlling interest -1 676 345 - 1 510 706 Common control reserve - - 12 553 474 Purchase consideration 11 000 000 - 5 000 000


35. Net cash outflow on acquisition (continued)

Non-controlling interestNon-controlling interest is measured at the non-controlling interests proportionate share of the acquiree’s identifiable net assets.

The intangible assets was recognised in terms of the Group’s accounting policies, which represented the premium paid for the Category 2 and 2A, asset management license and therefore a new channel for capital raising. Included in the Trade and other receivables at the effective date was gross contractual trade receivables of R1 608 581 with no provision for doubtful debt.

The fair value of the net assets assumed were assessed at acquisition date and equated the carrying amounts disclosed. The recoverability of the trade and other receivables were also assessed to be accurate and no concentration risk was evident relating to these trade receivables.

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Purchase consideration paid (*) - 5000 000Net cash balance assumed 11 450 806 - -5 964 939

11 450 806 - 10 964

(*) - As part of the purchase consideration, 19 095 617 ordinary shares of the Company were issued at the 30 day VWAP (volume weighted average price) at the date of the Letter of Intent, equal to R4 million. The purchase consideration was payable on deferred payment terms and no balance was payable at the effective date. All cash flow movements are therefore recognised through the other financial asset and/or liabilities movements.

The Company also entered a sale agreement to dispose of its interest in Clade. Please refer to note 27 for more detail in this regard.

Revenue and profit or loss of Clade Management Services (Pty) LtdRevenue of R16 391 for the 9 months ended 31 March 2017 and a loss of R1 840 388 of Clade Investment Management (Pty) Ltd has been included in the Group’s results since the date of acquisition.

The company reported revenue and losses for the 6 months prior to acquisition amounting to R40 684 and R441 331 respectively, which was not included in the consolidated results.

Related party acquisitions during the 2017 financial period.

return on Innovation (Pty) LtdROi provides strategic management inputs across all media platforms from the rumblings on social media, through the wide variety of print media to radio and TV – all managed through one intelligence platform. The business provides a strategic high ground for its corporate clients. For Ecsponent, this acquisition is in line with its growth strategy in that ROi is an opportunity that is high tech, offers high margins, high barriers to entry and can effectively be applied in both a South African as well as in an international context. The Group concluded an agreement to acquire 51% of the company from Capital, effective 1 March 2016.

Carrying value of assets acquired and liabilities assumed

Property, plant and equipment 650 313 - - Intangible assets 2 570 990 - - Deferred tax asset 1 434 674 - - Trade and other receivables 1 570 226 - - Cash and cash equivalents 282 529 - - Other financial liabilities -6 059 728 - - Trade and other payables -1 714 290 - - Total identifiable net assets -1 265 287 - - Non-controlling interest 619 991 - - Common control reserve 2 145 296 - - Purchase consideration 1 500 000 - -



Non-controlling interestNon-controlling interest is measured at the non-controlling interest proportionate share of the acquiree’s identifiable net assets.

The goodwill was recognised directly to the Common control reserve in terms of the Group’s accounting policies, which is anticipated to be recovered through the future operating profits of the business. Included in the Trade and other receivables at the effective date was gross contractual trade receivables of R1 325 373 with a provision for doubtful debt of R2 280.

Consideration paid at acquisition

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Purchase consideration paid (*) -1 500 000 - -Net cash balance assumed 282 529 - -

-1 217 471 - -

(*) - The purchase considerations are payable on deferred payment terms and no balance was payable at the effective date. All cash flow movements are therefore recognised through the Other Financial Asset and/or Liabilities movements.

Revenue and profit and loss of ROiRevenue of R10 692 824 for the 13 months ended 31 March 2017 and a loss of R3 271 556 of Return on Innovation (Pty) Ltd has been included in the Group’s results since the date of acquisition.

The company reported revenue and losses for the 2 months prior to acquisition amounting to R1 616 127 and R455 679 respectively, which was not included in the consolidated results.

Acquisition of the business of Ecsponent Investment Holdings (Pty) Ltd, by Ecsponent Development Fund (Pty) Ltd

EDF, a 74% owned subsidiary of the Company at the date of acquisition, agreed to acquire the business conducted by Ecsponent Investment Holdings (Pty) Ltd as a going concern. The business provides high yielding financing opportunities which offer an attractive proposition for the Company. The Group concluded an agreement to acquire the business of the company, effective 30 June 2016.

Consideration paid at acquisition

Property, plant and equipment 368 871 - - Deferred tax asset 446 087 - - Trade and other receivables 44 608 966 - - Trade and other payables -357 332 - - Total identifiable net assets 45 066 592 - - Non-controlling interest 19 211 309 - - Common control reserve 54 679 081 - - Purchase consideration 118 956 982 - -


The goodwill was recognised directly to the Common control reserve in terms of the Group’s accounting policies, which is anticipated to be recovered through the future operating profits of the business. Included in the Trade and other receivables at the effective date was gross contractual trade receivables of R46 675 943 with a provision for doubtful debt of R2 066 977.




Acquisition date fair value of consideration paid

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Purchase consideration paid (*) - - -Net cash balance assumed - - -

- - -

(*) - The purchase considerations are payable on deferred payment terms and no balance was payable at the effective date. All cash flow movements are therefore recognised through the Other Financial Asset and/or Liabilities movements.

The Company acquired the 26% non-controlling interest in EDF effective on 30 September 2016 for R1. Profit after tax amounting to R156 538 was recognised as non-controlling interest profits up to the effective date. Refer below to note 14 for more detail in this regard.

The Company also entered a proposed sale agreement to dispose of a portion of the business. Please refer to note 27 for more detail in this regard.

Revenue and profit and loss of EDFRevenue of R33 744 265 for the 9 months ended 31 March 2017 and a profit of R4 989 324 of Ecsponent Development Fund (Pty) Ltd has been included in the Group’s results since the date of acquisition.

Business acquisition during the 2015 financial periodQuilibet Trading (Pty) LtdEcsponent Ltd acquired a 100% interest in Quilibet Trading (Pty) Ltd, a supplier of engineering goods and services, effective on 1 March 2015. The transaction was a strategic purchase to unlock opportunities for secured funding to select financial service companies and credit to small, medium and micro enterprises and providing specific goods and services required by relevant vendors.


Property, plant and equipment - 1 600 081 - Inventory - 526 785 - Trade and other receivables - 1 540 818 - Cash and cash equivalents - 600 148 - Other financial liabilities - -2 417 794 - Trade and other payables - -741 788 - Total identifiable net assets - 1 108 250 - Non-controlling interest - - - Goodwill - 3 991 750 - Purchase consideration - 5 100 000 -


Goodwill arose on the acquisition of Quilibet because the cost of the combination included a control premium. In addition, the consideration paid for the combination effectively included amounts in relation to the benefit of expected synergies, revenue growth, future market development and growth in the Enterprise Development Funding sector. These benefits are not recognised separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets.





Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Purchase consideration paid (*) - - -Net cash balance assumed - 600 148 -

- 600 148 -

(*) - The purchase consideration was settled through the issue of listed Ecsponent Class A preference shares

Revenue and profit and loss of Quilibet Trading (Pty) Ltd Revenue of R13 759 211 for the 10 months ended 31 December 2015 and a profit of R976 271 of Quilibet Trading (Pty) Ltd has been included in the Group’s results since the date of acquisition.

The company reported revenue and profits for the 2 months prior to acquisition amounting to R1 923 653 and R262 043 respectively, which was not included in the consolidated results.

related Party Acquisitions 2014The acquisitions of the following growth businesses from Ecsponent Capital (RF) Limited and other related parties, entered into by the Group on 5 March 2014, were approved by shareholders in a general meeting held on 25 July 2014.

The effective date of the acquisitions was determined as 31 July 2014: ▪ Ecsponent Limited (company incorporated in Botswana) and its subsidiary; ▪ Ecsponent Financial Services (Pty) Ltd; and ▪ Sanceda Collection Services.

Ecsponent Limited (Botswana) (company incorporated in Botswana) and its subsidiary Ecsponent Limited incorporated in Botswana (“Ecsponent Botswana”) provides secured funding to select financial service companies and credit to small, medium and micro enterprises. To fund its operations Ecsponent Botswana raises capital through the issuance of various classes of preference shares via a prospectus offer to qualifying members of the public and institutions. Ecsponent Botswana holds a 50% stake and management control in Sure Choice (Pty) Ltd a company which operates within the financial services industry.

On 31 July 2014, the Group acquired 100% of the voting equity interest of Ecsponent Botswana which resulted in the Group obtaining control over the company.


Property, plant and equipment - - 653 778 Other financial assets - - 20 190 676 Deferred tax asset - - 2 556 602 Trade and other receivables - - -66 946 Cash and cash equivalents - - 5 128 888 Other financial liabilities - - -22 592 196 Trade and other payables - - -3 841 155 Bank overdraft - - -11 093 827 Total identifiable net assets - - -9 064 180 Non-controlling interest - - 1 510 706 Common control reserve - - 12 553 474 Purchase consideration - - 5 000 000





Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Cash consideration paid - - -5 000 000Net cash overdraft assumed - - -5 964 939

- - -10 964 939

Revenue and profit and loss of Ecsponent Limited (Botswana) (company incorporated in Botswana) and its subsidiary Revenue of R4 779 364 or the period ended 31 December 2014 and a profit of R7 133 159 of Ecsponent Botswana and its subsidiary has been included in the Group’s results since the date of acquisition.

Had the acquisition taken place at the start of the financial period ended 31 December 2014 revenue of R10 295 552 and a loss of R5 260 497 would have been included in the Group’s results.

Ecsponent Financial Services (Pty) Ltd On 31 July 2014, the Group acquired 100% of the voting equity interest of Ecsponent Financial Services (Pty) Ltd (“EFS”) which resulted in the Group obtaining control over the company. EFS is registered with the regulator as a licensed service provider. EFS provides intermediary services between financial services product providers and the general public.


Property, plant and equipment - - 228 499 Other financial assets - - 3 316 938 Deferred tax asset - - 1 104 605 Trade and other receivables - - 4 935 Cash and cash equivalents - - 203 400 Trade and other payables - - -477 856 Total identifiable net assets - - 4 380 521 Common control reserve - - 10 619 479 Purchase consideration - - 15 000 000


Cash consideration paid - - -15 000 000Net cash balance acquired - - 203 400

- - -14 796 600

Revenue and profit and loss of Ecsponent Financial Services (Pty) LtdRevenue of R4 037 632 for the period ended 31 December 2014 and a loss of R1 167 629 of EFS has been included in the Group’s results since the date of acquisition.

Had the acquisition taken place at the start of the financial period ended 31 December 2014 revenue of R13 320 147 and a profit of R1 606 453 would have been included in the Group’s results.



Sanceda Collection ServicesThe Group registered a new wholly owned subsidiary, Sanceda Collection Services (Pty) Ltd (“Sanceda”), and on 31 July 2014 this company acquired the Sanceda Collections going concern, including the assets and liabilities related to the going concern.

Sanceda, registered with the Council of Debt Collectors, is a collection agency which provides specialised collection services to corporates. Collections are call centre based and Sanceda has established the management and infrastructure to simultaneously collect on a large volume of current or delinquent debtor files.


Figures in rand31 Mar2017

31 Dec2015

31 Dec2014

Other financial assets - - 145 015 Trade and other receivables - - 519 564 Cash and cash equivalents - - 688 Other financial liabilities - - -6 208 118 Trade and other payables - - -971 587 Total identifiable net assets - - -6 514 438 Common control reserve - - 13 514 438 Purchase consideration - - 7 000 000


Cash consideration paid - - -7 000 000Net cash balance acquired - - 688

- - -6 999 312

Revenue and profit and loss of Sanceda Collection Services (Pty) LtdRevenue of R7 165 591 for the period ended 31 December 2014 and a profit of R2 494 416 of Sanceda has been included in the Group’s results since the date of acquisition, for the 2014 financial period.

Komo Finance (Pty) LtdThe Group acquired a 51% stake in Komo Finance (Pty) Ltd (“Komo”) effective on 30 June 2014 for R350 000. Komo, a registered credit provider, is a specialist financier providing employee benefit funding managed by payroll facilities through a network of select employers.


Property, plant and equipment - - 111 034 Other financial assets - - 21 862 216 Deferred tax asset - - 158 785 Trade and other receivables - - 37 335 Cash and cash equivalents - - 342 Other financial liabilities - - -17 731 220 Trade and other payables - - -236 148 Bank overdraft - - -3 189 682 Total identifiable net assets - - 1 012 662 Non-controlling interest - - -496 204 Surplus on acquisition - - -166 458 Purchase consideration - - 350 000

Non-controlling interest

Non-controlling interest is measured at the non-controlling interest proportionate share of the acquiree’s identifiable net assets.


Cash consideration paid - - -350 000Net overdraft assumed - - -3 189 340

- - -3 539 340



Revenue and profit and loss of Komo Finance (Pty) LtdRevenue of R5 569 518 or the period ended 31 December 2014 and a profit of R1 590 636 of Komo has been included in the Group’s results since the date of acquisition, for the 2014 financial period.

Ligagu Investments (Pty) Ltd trading as GetBucks SwazilandThe Group acquired a 51% stake in Ligagu Investments (Pty) Ltd trading as GetBucks Swaziland (“GetBucks Swaziland”) effective on 1 April 2014 for R241 210. GetBucks Swaziland is a specialist financier providing employee benefit funding to Swaziland’s governmental employees. Repayment of loan instalments are managed by the centralised Swaziland governmental payroll function via an approved deduction code.


Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Intangible assets - - 275 321 Total identifiable net assets - - 275 321 Non-controlling interest - - -34 111 Purchase consideration - - 241 210


Cash consideration paid - - -241 210

Revenue and profit and loss of Ligagu Investments (Pty) Ltd trading as GetBucks SwazilandRevenue of R881 951 for the period ended 31 December 2014 and a profit of R227 941 of GetBucks Swaziland has been included in the Group’s results since the date of acquisition, for the 2014 financial period.

Disposal of investment in subsidiary

Aggregated business disposals for the period

Property, plant and equipment 1 634 761 125 277 - Intangible assets 9 530 553 - - Deferred taxation 7 492 063 2 281 570 - Other financial assets 49 684 057 3 131 654 - Trade and other receivables 54 083 071 384 180 - Cash and cash equivalents 24 994 040 - - Foreign currency translation reserve -128 312 - - Loans from group companies -19 897 090 - - Other financial liabilities -78 350 392 -6 784 596 - Deferred income -1 757 975 - - Trade and other payables -10 386 082 -1 552 705 - Tax payable -1 729 620 - - Bank overdraft - -2 039 606 - Total identifiable net assets / (liabilities) 35 297 386 -4 454 224 - Non-controlling interest 2 042 895 2 182 571 - Loans from group companies settled through loan implementation 34 612 969 - - Other financial asset disposed of with investment - 6 224 343 - Net assets / (liabilities) derecognised 71 824 939 3 952 689 - Profit / (loss) on disposal 83 146 695 -3 502 689 - Consideration receivable 154 971 634 450 000 -

- Gain on disposal of discontinued operations 16 420 613 - - Gain on disposal included in continuing operations profit and loss 66 726 082 -3 502 689 - Gain/ (loss) on disposal of investment in subsidiary 14 387 715 -3 502 689Gain / (loss) on disposal of disposal group held for sale 52 338 366 - - Total profit / (loss) on disposal 83 146 695 -3 502 689



Net cash flow on disposal

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Purchase consideration$ - 450 000 - Net cash (balance)/overdraft disposed off -24 994 040 2 039 606 -

-24 994 040 2 489 606 -

$ - The purchase considerations are payable on deferred payment terms and no balance was payable at the effective date. All cash flow movements are therefore recognised through the Other Financial Asset and/or Liabilities movements

Business disposals during the 2017 financial periodDisposal of 51% of Ligagu Investments (Pty) Ltd Swaziland (“Ligagu Investments”)Ecsponent entered into an agreement to dispose of its 51% shareholding in Ligagu Investments, its subsidiary in Swaziland providing retail credit loans to individuals. The investment was effectively sold on 30 June 2016 for a total consideration of R16 million, payable in twelve equal instalments from 31 July 2016. Interest at 11.5% per annum accrued on the deferred consideration.

Fair value of the assets and liabilities disposed of are as follows:

Property, plant and equipment 199 222 - - Intangible assets 275 321 - - Deferred tax asset 759 219 - - Other financial assets 29 629 448 - -Trade and other receivables 751 854 - - Cash and cash equivalents 2 615 690 - - Loans from group company -19 897 090 - -Deferred income -1 757 975 - - Trade and other payables -7 988 139 - - Current tax payable -1 729 620 - - Total identifiable net assets 2 857 930 - - Non-controlling interest -1 245 645 - - Net assets derecognised 1 612 285 - - Profit on disposal 14 387 715 - - Consideration receivable 16 000 000 - -


Purchase consideration (*) - - - Net cash balance disposed of -2 615 690 - -

-2 615 690 - -

(*) - The disposal proceeds are receivable on deferred payment terms and no balance was received at the effective date. All cash flow movements are therefore recognised through the Other Financial Asset movements.

Disposal of 51% of Clade Investment Management (Pty) Ltd (“Clade”)Ecsponent entered into an agreement to dispose of its 51% shareholding and loan accounts in Clade Investment Management (Pty) Ltd and its subsidiary (“Clade”), as part of a process of rationalising the Group’s operations and investments designed to streamline operations and re-align the Group for increased strategic growth. The investment was effectively sold on 31 March 2017 for a total consideration of R16.5 million, payable through a loan implementation agreement describing the terms of consolidation various loan accounts. The first part of the purchase consideration receivable was applied to the settlement of the existing inter group funding facility and the balance towards payment for the equity interest. Interest accrues at 28% per annum on the loan account.




Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Property, plant and equipment 5 738 - - Intangible assets 9 255 232 - - Deferred tax asset 4 116 614 - - Trade and other receivables 1 274 983 - - Cash and cash equivalents 3 117 714 - - Other financial liabilities -6 805 853 - - Trade and other payables -127 037 - - Total identifiable net assets 10 837 391 - - Non-controlling interest -774 555 - - Loans from group companies settled through loan implementation 3 144 180 - -Net assets derecognised 13 207 016 - - Profit on disposal 3 292 984 - - Consideration receivable 16 500 000 - -



-3 117 714 - -

(*) - The various parties to the Disposal, and/or their group companies, have agreed to undertake a process to consolidate various loan accounts due to and from the various parties and/or their group companies, resulting in one single loan account (“the Loan Account”) between Ecsponent Treasury Services Limited (“ECS Treasury”) and Capital (“the Loan Consolidation”). The balance remaining on the Loan Account will attract interest at a rate of 28% per annum, nominal annual compound monthly (“nacm”), and be repayable by Capital over 60 months. All cash flow movements are therefore recognised through the Other Financial Asset movements.

Disposal of 70% of Ecsponent Holdings (Pty) Ltd (Botswana) and its subsidiary (“ECS Holdings”)Ecsponent entered into an agreement to dispose of its 70% interest in, and loan accounts against Ecsponent Holdings (Pty) Ltd, incorporated in Botswana (“ECS Holdings”), to Ecsponent Projects (Pty) Ltd (“Projects”), as part of a process of rationalising the Group’s operations and investments designed to streamline operations and re-align the Group for increased strategic growth. Ecsponent Holdings also has a 70% interest in Ecsponent Asset Management (Pty) Ltd (Botswana). The investment was effectively sold on 31 March 2017 for a total consideration of P30.3 million, payable through a loan implementation agreement describing the terms of consolidation various loan accounts. Interest accrues at 28% per annum on the loan account.


Property, plant and equipment 1 073 884 - - Deferred tax asset 2 616 230 - - Other financial assets 20 054 609 - -Trade and other receivables 20 659 494 - - Cash and cash equivalents 19 260 636 - - Foreign currency translation reserve -128 311 - -Other financial liabilities -71 544 539 - - Trade and other payables -2 074 375 - - Total identifiable net assets -9 954 061 - - Non-controlling interest 4 063 096 - - Loans from group companies settled through loan implementation 31 468 789 - -Net assets derecognised 25 449 513 - - Profit on disposal 13 127 629 - - Consideration receivable 38 577 142 - -

The purchase price and loan settlement was converted on the transaction date at a spot rate of P1,273173 per R1.




Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014


- -

(*) - The disposal proceeds are subject to the loan consolidation (as described above). All cash flow movements are therefore recognised through the Other Financial Asset movements.

Disposal of a portion of the business of Ecsponent Development Fund (Pty) Ltd (“EDF”)Ecsponent entered into an agreement to dispose of its 70% interest in, and loan accounts against Ecsponent Holdings (Pty) Ltd, incorporated in Botswana (“ECS Holdings”), to Ecsponent Projects (Pty) Ltd (“Projects”), as part of a process of rationalising the Group’s operations and investments designed to streamline operations and re-align the Group for increased strategic growth. Ecsponent Holdings also has a 70% interest in Ecsponent Asset Management (Pty) Ltd (Botswana). The investment was effectively sold on 31 March 2017 for a total consideration of P30.3 million, payable through a loan implementation agreement describing the terms of consolidation various loan accounts. Interest accrues at 28% per annum on the loan account.


Property, plant and equipment 355 916 - - Trade and other receivables 31 396 740 - - Trade and other payables -196 532 - - Net assets derecognised 31 556 124 - - Profit on disposal 52 338 367 - - Consideration receivable 83 894 491 - -


Purchase consideration (*) - - - Net cash balance disposed of - - -

- - -

(*) - The disposal proceeds are subject to the loan consolidation (as described above). All cash flow movements are therefore recognised through the Other Financial Asset movements.

Disposal of acquired debt collection booksEcsponent decided, as part of its new focus on financial services, to dispose of its acquired debt books to Ecsponent Business Finance (Pty) Ltd (“EBF”), effective on 28 February 2016. The disposal consideration of R9 million was paid in cash to Ecsponent Credit Services (Pty) Ltd in 12 equal instalments. The acquired debt books had a carrying value of R8.9 million on the effective date.

Disposal of investments during the 2015 financial periodKomo Finance (Pty) LtdThe group disposed of its investment in Komo Finance (Pty) Ltd, effective on 31 July 2015, as part of the strategic decision of existing the South African payroll lending market.

Property, plant and equipment 125 277 Other financial assets 3 131 654 Deferred taxation 2 281 570 Trade and other receivables 384 180 Other financial liabilities -6 784 596 Trade and other payables -1 552 705 Bank overdraft -2 039 606 Net liabilities derecognised -4 454 224 Non-controlling interest 2 182 571 Net liabilities derecognised -2 271 653



Consideration received

31 Dec2015

Cash 450 000 450 000

Gain on disposal of investment

Consideration received 450 000 Net liabilities derecognised 2 271 654 Other financial asset disposed of with investment -6 224 343 Loss on disposal of investment in subsidiary -3 502 689

The loss on disposal of the subsidiary is recorded as part of operating expenses in the statement of profit or loss and other comprehensive income.


Consideration received 450 000 Net cash balance disposed of 2 039 606

2 489 606

36. CommitmentsOperating lease commitments

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Minimum lease payments due- Within one year 1 437 132 5 481 675 3 563 167 - In second to fifth year 4 286 595 13 523 703 16 473 382 - In sixth to tenth year 194 761 2 442 179 5 103 115

5 918 488 21 447 557 25 139 664

Operating lease payments represent rentals payable by the Group for office properties. Lease agreements include escalation clauses and options to renew contracts.

Lease details Ecsponent Management Cryo-Save SA return on Innovation

Building Celtis House Acacia House 22 Reedbuck CrescentStart date 1/04/2016 01/10/2012 1/12/2014End date 30/09/2017 31/05/2022 30/11/2017Lease duration 18 months 116 months 36 monthsEscalation 8.5% per annum Inflation rate at date of

renewal9% per annum


37. Directors’ emoluments

Executive

15 month ended 31 March 2017 Emoluments Total

TP Gregory 6 544 594 6 544 594 B Shanahan 2 633 175 2 633 175 E Engebrecht 1 757 038 1 757 038

10 934 807 10 934 807

Director emoluments amounting to R3 389 870 was settled through the issue of Ordinary Shares in the Company during the 2017 financial period. Refer to note 36 for more detail.

12 month ended 31 December 2015 Emoluments Total

TP Gregory 1 525 000 1 525 000 DP van der Merwe 1 476 426 1 476 426 E Engebrecht 175 000 175 000 B Shanahan 100 000 100 000

3 276 426 3 276 426

12 month ended 31 December 2014 Emoluments Total

TP Gregory 1 500 000 1 500 000 DP van der Merwe 1 500 000 1 500 000

3 000 000 3 000 000

Executive salaries are paid by the Group’s management services division housed in Ecsponent Management Services Ltd.

Non-executive

15 month ended 31 March 2017 Fees Bonus Total

RJ Connellan (chairman) 255 000 200 000 255 000 BR Topham 225 000 200 000 225 000 KA Rayner 225 000 200 000 225 000 E Engebrecht 90 000 - 90 000 P Matute 90 000 - 90 000 G Manyere 5 000 - 5 000 W Oberholzer 5 000 - 5 000

895 000 600 000 895 000

Non-Executive Director emoluments amounting to R354 000 was settled through the issue of Ordinary Shares in the Company during the 2017 financial period. Refer to note 36 for more detail.

12 month ended 31 December 2015 Fees Bonus Total

RJ Connellan (chairman) 207 000 - 207 000 BR Topham 183 000 - 183 000 KA Rayner 183 000 - 183 000

573 000 - 573 000

12 month ended 31 December 2014 Fees Bonus Total

RJ Connellan (chairman) 204 000 166 666 370 666 BR Topham 180 000 166 667 346 667 KA Rayner 180 000 166 667 183 000

564 000 500 000 1 064 000


37. Directors’ emoluments (continued)

E Engelbrecht (previous CEO) resigned as Director effective from 1 October 2016, retaining a position as Non-executive director to the Group Board, from which date TP Gregory (former COO) was re-appointed as the Group CEO. On the same date Mr P Matute was appointed as Non-executive director on the Board.

E Engelbrecht (previously non-executive) received no director’s emoluments directly form the company but was remunerated by the group’s major shareholder Ecsponent Capital (RF) Limited. He was appointed as CEO effective from 1 December 2015, from which date he received executive director emoluments from the group.

The following changes in the directorate took place effective on 20 March 2017: ▪ Mr G Manyere was appointed as a non-executive Vice Chairman to the Ecsponent Board; ▪ Mr W Oberholzer was appointed as independent non-executive director to the Ecsponent Board as well as a

member of the Audit Committee.

B Shanahan was appointed as the Group Financial Director effective from 1 December 2015, at which date DP van der Merwe resigned as executive director. TP Gregory took up the role as COO for the group (previously CEO of Ecsponent Limited and its subsidiaries).

Directors of subsidiaries and key management

15 month ended 31

March 2017

Group Company Basic Salary

Incen-tives

Commis-sions

Other Total

A Hay Ecsponent Financial Services (Pty) Ltd 155 711 - 2 506 710 62 338 2 724 758 F Slabbert$ Ecsponent Financial Services (Pty) Ltd 105 000 - 789 799 40 556 935 355 P Malanga Sanceda Swaziland (Pty) Ltd 220 000 - - 61 230 281 230 E Soonius Ecsponent Ltd Swaziland 427 331 - 723 500 105 356 1 256 187 T Khoury Return on Innovation (Pty) Ltd 921 412 - - 10 942 932 354 C van Niekerk Ecsponent Procurement Services

(Pty) Ltd871 456 102 965 - 11 714 986 135

E Dalton Ecsponent Procurement Services (Pty) Ltd

871 456 102 965 - 11 714 986 135

J Mosemane@ Ecsponent Asset Management Ltd 1 574 520 - - - 1 574 520 B Kruger@ Clade Investment Management (Pty) Ltd 900 000 - - 10 138 910 138 A Heunis@ Sure Choice (Pty) Ltd 926 743 - 65 605 - 992 348 M Nkhoma@ Ecsponent Financial Services

(Pty) Ltd Zambia1 027 572 - - - 1 027 572

L Rehrl* Cryo-Save South Africa (Pty) Ltd 812 075 135 593 - 103 589 1 051 257 J van Abo# Sanceda Collection Services (Pty) Ltd 258 837 - - 61 043 319 880

9 072 112 341 522 4 085 614 478 619 13 977 868

* Mr L Rehrl resigned as executive director of Cryo-Save South Africa (Pty) Ltd with effect from 28 October 2016# Mr J van Abo resigned as executive director of Sanceda Collection Services (Pty) Ltd with effect from 30 June 2016$ Mr F Slabbert was appointed as executive director for Ecsponent Financial Services (Pty) Ltd with effect from 1 Jan 2017@ The entities represented by these directors were either disposed of effective 31 March 2017 or are in the process of being disposed of.

Refer to note 27 for more detail in this regard.

12 month ended 31 Dec

2015

Group Company Basic Salary

Incen-tives

Commis-sions

Other Total

A Hay Ecsponent Financial Services (Pty) Ltd 12 000 - 1 618 704 33 605 1 664 309 L Rehrl Cryo-Save South Africa (Pty) Ltd 940 000 120 000 - 22 273 1 082 273 B Cronje Komo Finance (Pty) Ltd 180 307 135 231 3 696 319 234 J van Abo Sanceda Collection Services (Pty) Ltd 600 000 20 706 - 6 763 627 469

1 732 307 275 936 1 618 704 66 337 3 693 284


37. Directors’ emoluments (continued)

12 month ended 31 Dec

2014

Group Company Basic Salary Commissions Allowances Total

A Hay Ecsponent Financial Services (Pty) Ltd 50 000 803 732 - 853 732 L Rehrl Cryo-Save South Africa (Pty) Ltd 691 500 - 78 273 769 773 B Cronje Komo Finance (Pty) Ltd 240 000 - - 240 000 R Csernus Sanceda Collection Services (Pty) Ltd 300 000 - - 300 000W Opperman Vinguard Limited 90 000 - - 90 000

1 371 500 803 732 78 273 2 253 505

Employee benefitsAll employee benefits including the director’s remuneration are of a short-term nature.

No post-employment benefits, other long-term benefits or termination benefits payments are paid or accrue to any employee or director of the Group.

38. Equity settled share based paymentsEmployee benefits equity settled share based paymentsThe Company’s Remuneration Committee and shareholders approved a decision to partially settle Directors’ fees for the non-executive Directors and Directors’ salaries for executive Directors for the 2016 calendar year through the issue of Ordinary Shares to the directors in lieu of a cash settlement of the fees / remuneration. The number of Shares to be issued to Directors was calculated with reference to the 30 day VWAP per Share as at the vesting dates of the Shares.

Shareholders also approved the decision to settle the 2016 Executive director incentives through the issue of Ordinary Shares to the directors in lieu of a cash settlement. The number of Shares to be issued to Directors was calculated with reference to the 30 day VWAP per Share as at the vesting dates of the Shares.

Details of the Ordinary Shares issued for the financial period ending 31 March 2017 are set out below:

Director Vesting date Number of shares issued


Fees/ remuneration

settled

Executive DirectorsT Gregory 31-May 7 100 515 18.58 1 319 299

30-Jun 155 884 17.87 27 86031-Jul 149 661 18.62 27 86031-Aug 159 066 17.51 27 86030-Sep 179 259 15.54 27 86031-Oct 181 257 15.37 27 86030-Nov 205 779 13.54 27 86031-Dec 205 397 13.56 27 86031-Dec 7 672 602 13.56 1 040 701

E Engelbrecht

31-May 841 481 18.58 156 35030-Jun 66 024 17.87 11 80031-Jul 63 389 18.62 11 80031-Aug 67 373 17.51 11 80030-Sep 75 925 15.54 11 800

Bryan Shanahan

31-Jul 31 694 18.62 5 90031-Aug 33 686 17.51 5 90030-Sep 37 962 15.54 5 90031-Oct 38 386 15.37 5 90030-Nov 43 579 13.54 5 90031-Dec 86 996 13.56 11 80031-Dec 4 349 794 13.56 590 000


38. Equity settled share based payments (continued)

Director Vesting date Number of shares issued


Fees/ remuneration

settled

Non-executive DirectorsRJ Connellan 31-May 635 080 18.58 118 000KA Rayner 31-May 635 080 18.58 118 000BR Topham 31-May 635 080 18.58 118 000Total operating expense settled through SBP 3 743 870

Executive directors 3 389 870Non-executive directors 354 000

The May 2016 director share issues include both the accrued salaries for the period January - May 2016 as well as an incentive approved by shareholders during May 2016.

The December 2016 directors’ share issues include both the accrued salaries for December 2016 (approved in May2016), as well as executive directors’ incentives as approved by shareholders on 30 March 2017.

No share-based payments transactions occurred during the 2015 financial period.

Shareholders approved the establishment of an employee share incentive scheme during a general meeting held on4 December 2014. No share allocation had been made and neither was any shares issued to the share incentive scheme by the reporting date.

No share based payments were made during the 2015 and 2014 financial period.

39. Comparative figuresThe current financial year, ended 31 March 2017, is not comparable to the 31 December 2015 period as the Company changed its year end from 31 December to 31 March during the comparative period, resulting in a 15-month financial period ended 31 March 2017.

Sure Choice (Pty) Ltd and Ecsponent Financial Services Zambia were disposed of on 31 March 2017 and classified as a discontinued operation in the 31 March 2017 financial statements and the comparative consolidated statement of profit or loss and other comprehensive income has been restated to show the discontinued operation separately from continuing operations.

The SO2 gas sheet manufacturing division disposed of on 31 January 2014 is classified as a discontinued operation in the 31 December 2013 financial statements and the comparative consolidated statement of profit or loss and other comprehensive income has been restated to show the discontinued operation separately from continuing operations.

40. Financial instruments – Fair values and risk managementFair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of FRS 102 Share-based Payments, leasing transactions that are within the scope of FRS 17 Leases, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in FRS 2 Inventories or value in use in FRS 36 Impairment of Assets.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows: ▪ Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can

access at the measurement date; ▪ Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or

liability, either directly or indirectly; and ▪ Level 3 inputs are unobservable inputs for the asset or liability.


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40. Financial instruments – Fair values and risk management (continued)

Fair value of other financial assets and liabilitiesFinancial assets at fair value through profit or loss are recognised at fair value, which is equal to their carrying amounts.

The fair value of all other financial assets and liabilities are considered to equal their carrying values. Directors consider the carrying value of financial instruments of a short-term nature, that mature in 12 months or less, to approximate the fair value of such assets or liability classes. The carrying value of longer term assets are considered to approximate their fair value as these instruments bear interest at interest rates appropriate to the risk profile of the asset or liability class.

Measurements of fair value – reconciliation of Level 1 fair valuesBelow a reconciliation of the movement in level 1 fair values during the period.

Figures in rand

2017Listed

equities

2015Listed

equities

2014Listed

equities

Other financial asset designated as at fair value through profit and lossCarrying amount of loans and receivables designated as at FVTPL 232 979 597 - - Cumulative changes in fair value attributable to changes in market value period

-11 017 229 - -

-11 017 229 - -

At the end of the reporting period, there are no significant concentrations of credit risk.

Other financial asset designated as at fair value through profit and lossOpening balance at the start of the period - - - Purchases 262 570 000 - - Foreign currency loss recognised in profit and loss -18 573 174 - -Fair value loss recognised in profit and loss -11 017 229 - - Balance at the end of the period 232 979 597 - -

The following table sets out the amount of total gains or losses for the period included in profit and loss that is attributable to those assets and liabilities held at the reporting date.

Losses recognised in profit and loss -29 590 403 - -

Measurements of fair value – reconciliation of Level 3 fair valuesBelow a reconciliation of the movement in level 3 fair values during the period.

Figures in rand

2017Acquired

debt

2015Acquired

debt

2014Acquired

debt

Loans and receivables designated as at fair value through profit and lossCarrying amount of loans and receivables designated as at FVTPL - 8 873 568 3 240 630 Cumulative changes in fair value attributable to changes in market value period

8 873 568 7 949 258 2 310 207

- 5 639 051 1 697 441

At the end of the reporting period, there are no significant concentrations of credit risk.

Other financial asset designated as at fair value through profit and lossOpening balance at the start of the period 8 873 568 3 240 630 2 543 058 Purchases and valuations 126 432 5 853 683 1 984 804 Transfer of realised gains recognised in profit and loss - -220 745 -1 287 232Disposal of acquired debt books -8 873 568 - - Balance at the end of the period - 8 873 568 3 240 630

The following table sets out the amount of total gains or losses for the period included in profit and loss that is attributable to those assets and liabilities held at the reporting date.

Gains recognised in profit and loss 126 432 5 639 051 1 697 441


41. Capital risk managementThe group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The capital structure of the Group consists of debt, which includes the borrowings disclosed in notes 6 and 17. Cash and cash equivalents disclosed in note twelve and equity as disclosed in the statement of financial position. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

There are no externally imposed capital requirements.

The group does not have a significant concentrations of credit risk in respect of cash balances as all major banks are used for the group’s treasury services.

42. Financial risk managementThe group has documented financial risk management policies. These policies set out the group’s overall business strategies and its risk management philosophy. The group’s overall financial risk management programme seeks to minimise potential adverse effects of financial performance of the group. The Board of Directors provides written principles for overall financial risk management and written policies covering specific areas, such as market risk (including foreign exchange risk, interest rate risk, equity price risk), credit risk, liquidity risk, cash flow interest rate risk, use of derivative financial instruments and investing excess cash. Such written policies are reviewed annually by the Board of Directors and periodic reviews are undertaken to ensure that the group’s policy guidelines are complied with. Risk management is carried out by the Treasury Department under the policies approved by the Board of Directors.

The group does not use derivative financial instruments to manage its exposure to interest rate and foreign currency risk.

There has been no change to the group’s exposure to these financial risks or the manner in which it manages and measures the risk. Market risk exposures are measured using sensitivity analysis indicated below.

Liquidity riskLiquidity risk is the risk that the Group will not be able to meet is current and future obligations, both expected and unexpected, without materially affecting its daily operations or overall financial position.

The Group manages liquidity risk through an on-going review of future commitments and credit facilities. Cash flow forecasts are prepared and adequate utilised borrowing facilities are monitored.

The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

Cash flow forecasts are prepared and adequate utilised borrowing facilities are monitored. The table below analyses the group’s financial liabilities and into relevant maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.


42. Financial risk management (continued)

Less than 1 year

Between 1 and 2 years

Between 2 and 5 years

Over 5 years

At 31 March 2017Trade and other payables 16 346 917 - - - Preference shares 107 487 602 103 706 294 1 920 048 330 - Other financial liabilities 10 464 401 129 493 517 971 852 495 Bank overdraft 468 900 - - - At 31 December 2015

Trade and other payables 22 391 113 - - - Preference shares 33 951 980 32 188 569 512 762 031 - Other financial liabilities 15 495 239 4 421 092 11 918 160 707 596 Bank overdraft 5 373 970 - - - At 31 December 2014

Trade and other payables 8 200 830 - - - Preference shares 48 521 561 - Other financial liabilities 10 984 144 - 507 487 - Bank overdraft 13 936 209 - - -

The carrying value of the financial liabilities is considered to be in line with the fair value at the statement of financial position date.

At present the Group expects to pay all liabilities at their contractual maturity. In order to meet such cash commitments, the Group requires continued funding from Ecsponent Capital. To this effect, Ecsponent Capital has provided the Board with a letter of continued financial support until 31 December 2014 in terms of the finance restructure agreement signed on 8 September 2010.

Interest rate riskInterest rate risk is the risk that the fair value of future cash flows of a financial instrument fluctuates because of changes in the market interest rate.

The Group’s significant interest-bearing assets comprise unsecured micro loans, the acquired debt books and the SME funding. The SME funding, accounted for at amortised cost, is granted at fixed interest rates and as a result the interest rate risk is mitigated. The micro funding rate is determined with reference to interest rate calculation defined by the National Credit Act 34 of 2005, while the interest earned on the loan book is governed by the Prescribed Rate of Interest Act 55 of 1975, in terms of which interest rates are fixed from time to time.

At 31 March 2017, the Group’s major borrowings remained at fixed rates except for the new sources of funding comprising of the issue of Class C preference shares, certain loans and the bank overdrafts secured during the period. These borrowings issued at variable rates exposed the Group to cash flow interest rate risk in the South African and Botswana markets.

Management’s expectation for the 2018 financial period is that interest rates will increase by 150 basis points. An increase of 150 basis points in interest rates at the reporting date, with reference to the period end exposures, would have increased/(decreased) equity and profit or loss by the annualised amounts shown below. The analysis assumes that all other variables remain constant.

relationship

31 Mar2017

31 Dec2015

31 Dec2014

Other financial assets - 748 651 130 1 013 424Cash and cash equivalents 25 379 829 - -323 550Preference shares -582 006 219 -345 966 625 -71 254Other financial liabilities -1 403 725 -9 943 639 618 620Bank overdraft -468 900 - -

-558 499 015 392 740 866 -



Credit riskThe credit risk management policy is determined and approved on a Group basis for each operating segment.

The Group limits its exposure to credit risk relating to cash deposits and cash equivalents by depositing cash only with major banks with high quality credit standing.

The Group’s Financial Services operations focus on the provision of financial services to the unbanked and marginalised sectors of society, which by its nature involves assuming higher levels of credit risk. Consequently credit risk features as a dominant financial risk.

Appropriate credit risk premiums are priced into the unsecured financial products to ensure that acceptable returns are generated taking into account expected probability of defaults and estimated recoveries.

SME loansManagement has developed SME loan policies incorporating credit risk scoring and other guidelines to ensure sound loan decisions. The policy further contains guidelines ensuring that sufficient and sound security is obtained.

Trade receivables and Enterprise development fundingThe Group’s private equity operations are exposed to credit risk in terms of its trade receivable balance.

Trade receivables comprise a widespread customer base. Management evaluated credit risk relating to customers on an on-going basis. If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors.

Enterprise development credit were extended to individuals, start-up entities and existing businesses mainly operating in the SMME sector. The assessment for issuing of credit lines was based on company developed scoring methodologies. The methodologies incorporate risk profiling of customers.

Security held depended on the nature of each individual deal and may vary between cash, fixed assets and movable assets.

The company has implemented the procedures below for avoiding excessive concentration of credit risk included in the trade and other receivables: ▪ Maintaining a wider vendor customer base; ▪ Continually looking for opportunities to expand the vendor base and product offering base; ▪ Subjecting all customers to a credit verification procedure before agreements are entered into; ▪ Reviewing the vendor funding debtor book regularly with the intention of minimising the company’s exposure

to bad debts; ▪ Ensuring vendor funding agreements entered into are on a short turnaround basis.

The group does not provide for impairment losses on trade and other receivables based on a general basis. Debts that are past due are impaired based on evidence of the factors cited.

The carrying values of the other financial assets comprise the Group’s maximum exposure to credit risk. Financial assets exposed to credit risk at the period end date were as follows:

Financial Instrument

31 Mar2017

31 Dec2015

31 Dec2014

Other financial assets - 367 642 157 106 300 426Trade and other receivables 24 879 875 - 7 032 245Cash and cash equivalents 15 114 825 15 114 825 6 986 924Preference shares -156 403 051 -157 433 915 -Other financial liabilities -10 754 676 -17 507 303 -

-157 416 873 192 700 938 -



Foreign exchange riskForeign exchange risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group is exposed to, and actively manages, currency risk through its operations in Botswana, Zambia, biotechnology sales throughout Africa and foreign borrowings.

Management reviews its foreign currency exposure, including commitments on an on-going basis. The Group considers the need to hedge against foreign currency fluctuations on a regular basis where the controls and / or structures implemented to mitigate the foreign currency risk is deemed insufficient. The Group did not hedge its foreign exchange fluctuations during the 2017 financial year.

The Group strategy is to establish sources of funding within the various regions in which it operates to fund the in-country operations thereby mitigating the currency risk.

The Group’s biotechnology operations has been active in various African regions since 2012 and to manage the foreign currency risk arising from these cross border transactions all sales transactions remained Rand denominated. The Group maintains Euro denominated working capital facilities within its biotechnology operations.

At the end of the reporting period, the carrying amounts of monetary assets and monetary liabilities denominated in currencies other than the respective group entities’ functional currencies are as follows:

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Other financial assets 232 979 597 - -232 979 597 - -

Market risk sensitivityOther financial assets 46 596 007 - -2 961 694

Management’s expectation for the 2018 financial period is that short term fluctuations in exchange rates will be experienced and that the expectation for exchange rates over the 12 months to March 2018 is that the Rand will continue its slow strengthening. A 10% strengthening of the Rand against the currencies below at the period end date, with reference to the period end exposures, would have increased equity by the amounts shown below. The analysis assumes that all other variables remain constant.

Euro 22 690 239 -391 707 -118 083 Pula 5 535 574 -3 712 591 -Zambian Kwacha 1 474 925 -688 288 -

Exchange rates used for conversion of foreign items at the period end date were:

Euro 14.3173 17.019 17.019Pula 1.27317 1.3662 1.3662Zambian Kwacha 1.31214 1.4139 1.4139


43. Earnings and fully diluted earnings per share

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

EarningsTotal profit for the period (excluding other comprehensive income) 67 576 291 19 934 212 6 791 173Loss attributable to non-controlling interest 10 436 329 3 424 745 -

78 012 620 23 358 957 6 791 173


Date of issue Number of shares issued

Issue of shares for the Clade Investment Management acquisition 30-Jun-16 19 095 617 Directors' share issue - May 2016 10-Jun-16 9 847 769 Directors' share issue - June 2016 05-Jul-16 221 908 Directors' share issue - July 2016 08-Aug-16 244 744 Odd lot Offer - repurchase and cancellation - 19 August 2016 25-Aug-16 -51 476 Specific repurchase and cancellation - 19 August 2016 25-Aug-16 -491 282 Directors' share issue - August 2016 06-Sep-16 260 125 Directors' share issue - September 2016 04-Oct-16 293 146 Directors' share issue - October 2016 07-Nov-16 219 644 Directors' share issue - November 2016 05-Dec-16 249 359 Directors' share issue - December 2016 06-Jan-17 292 393 Rights offer 2017 22-Feb-17 135 758 403 Directors' share issue - March 2017 31-Mar-17 12 022 396

177 962 746

2017 2015

Number of shares in issue at start of period 901 588 049 901 588 049Weighted average number of shares issued during the period 29 319 279 -Total weighted number of shares in issue at end of period 930 907 328 901 588 049

There were no shares issued during the 31 December 2015 financial period.

The weighted average number of shares for the period 31 December 2014 was calculated after taking into account the effect of the issue of the following shares during the 12 month period:

Date of issue Number of shares issued

Issue of shares for the Clade Investment Management acquisition 30-Jun-14 3 000 000 Directors' share issue - March 2017 22-Sep-14 454 456 371

457 456 371


44. Earnings and fully diluted profit per shareProfit and fully diluted profit per share has been calculated using the following:

Figures in rand

31 Mar2017

31 Dec2015

31 Dec2014

Net profit for the period attributable to ordinary shareholders 78 012 620 23 358 957 6 791 173 from continuing operations 75 160 187 20 653 023 5 608 948 from discontinuing operations 2 852 433 2 705 934 1 182 225

Weighted average number of shares in issue for the period 930 907 328 901 588 049 570 498 913 Basic profit and fully diluted profit per share (cents) 8.380 2.591 1.190

from continuing operations 8.074 2.291 0.983 from discontinuing operations 0.306 0.300 0.207

45. Headline earnings and fully diluted headline earnings per shareHeadline earnings and fully diluted headline earnings per share has been calculated using the following:

EarningsBasic profit 78 012 620 23 358 957 6 791 173Impairment of intangible assets - 493 942 -Bargain purchase - - -135 371Gain or loss on disposal of subsidiary, JV or associate -11 494 649 2,670,739 - (Profit) / Loss on disposal of property, plant and equipment 253 518 10 016 -2 878Gain on disposal of disposal group held for sale -52 338 366 -1 326 369

Total headline earnings 132 485 22 453 208 5 333 928Headline earnings / (loss) attributable to ordinary shareholders 132 485 22 453 208 5 333 928

from continuing operations 11 292 304 19 735 818 5 478 072from discontinuing operations -11 159 819- 2 717 390 -144 144

Weighted average number of shares in issue for the period 930 907 328 901 588 049 570 498 813Headline and fully diluted headline earnings / (loss) per share (cents) 0.014 2.490 0.935

from continuing operations 1.213 2.189 0.960from discontinuing operations -1.199 0.301 -0.025

46. Segment reportThe Group has the following strategic divisions, which are its reportable segments. These divisions offer different products and services, and are managed separately because they require different technology and marketing strategies.

The following summary describes the operations of each reportable segment.

Operational segmentFinancial Services The segment provides finance to select niche markets such as employee benefits and SME

funding. It also houses the Group’s investment products offered to the retail markets.

Private Equity Private equity segment houses investment opportunities which contain high margins and high barriers to entry. Below the two main investments within the segment.

Biotechnology Provides private umbilical cord stem cell storage services, for both cord blood and cord tissue storage to the public.

Other Investment opportunities which included the investment property minority share in Living 4 U (disposed of during 2015) and the Media monitoring business investment of Return on Innovation (Pty) Ltd acquired during the 2017 financial period.

Collections Collections agency with expertise in tracing defaulters, repayment and contract agreement, debit order and related collection management and legal pursuance.

Corporate Corporate represents the group management services and group holding structures.

The Group’s Executive Committee regularly reviews the financial information of the operational segments to assess performance and resource allocation.


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47. Director’s interests in the companyAt 31 March 2017, the directors’ beneficial interests in the company held direct and indirectly amounted to 4.7%, and 58.9% including the non-beneficial interest held. Total directors’ interest was as follows:

Director Total shares held

Holding Direct Indirect Non-beneficial indirect

RJ Connellan 2 495 080 0.2% 2 495 080 - - KA Rayner 3 349 366 0.3% 3 349 366 - - BR Topham 2 492 222 0.2% - 2 492 222 - E Engelbrecht 176 601 616 16.4% 1 239 192 - 175 362 424P Matute - 0.0% - - - G Manyere 458 062 243 42.4% - 458 062 243 - W Oberholzer - 0.0% - - - TP Gregory 38 634 423 3.6% 38 634 423 - - B Shanahan 4 622 096 0.4% 4 622 096 - -

There were no other changes in directors’ interest since this issue and up to the date of approval of the 31 March 2017 annual financial statements.

At 31 December 2015, the directors’ beneficial interests in the company held direct and indirectly amounted to 4.8%, and 60% including the non-beneficial interest held. Total directors’ interest were as follows:



RJ Connellan 1 860 000 0.2% 1 860 000 - - KA Rayner 2 714 286 0.3% 2 714 286 - - BR Topham 1 857 142 0.2% - 1 857 142 - TP Gregory 22 625 000 2.5% 22 625 000 - - E Engelbrecht 512 216 334 56.8% 125 000 - 512 091 334

There were no other changes in directors’ interest since this issue and up to the date of approval of the 31 December 2015, annual financial statements.

At 31 December 2014, the directors’ beneficial interest in the company held direct and indirectly amounted to 6.6%, total directors’ interest was as follows:



RJ Connellan 1 860 000 0.2% 1 860 000 - - KA Rayner 2 714 286 0.3% 2 714 286 - - BR Topham 1 857 142 0.2% - 1 857 142 - TP Gregory 22 000 000 2.% 22 000 000 - - DP van der Merwe 14 500 000 1.6% 14 500 000 - -E Engelbrecht 16 504 174 1.8% 1 031 511 - 15 472 663

The directors took up a total of 12 040 612 ordinary share as a result of exercising their rights under the Rights Offer.


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

1. Discontinued operationsThe Group has undertaken a process of rationalising the Group’s operations and investments including a series of financial transactions designed to streamline operations and re-align the Group for increased strategic growth. The relevant recognition and disclosure requirements of IFRS 5 therefore resulted in the ‘re-presentation’ of the financial results to disclose two categories being Continued and Discontinued operations (disposal groups). The comparative period Statement of Profit / Loss has therefore been ‘re-presented’ and does not represent a restatement of the results.

The results have also been presented to disclose the impact of the proposed transactions on the Group’s financial results, resulting in the disclosure of Loan receivables and Loan payables between the affected subsidiaries and the continuing group financial services entities, disclosed in the two different categories. The continued revenue from loan funding have been included in the continued financial services operations’ results for the period, as determined by the terms signed funding and/or sale agreements.

With reference to the above-mentioned rationalisation, the Board announced in the latter part of Dec 2016 hat the Group has agreed terms for the following:1. the disposal of the Company’s 51% interest in, and loan accounts against, Clade Investment Management

Proprietary Limited (“Clade”) to Ecsponent Capital (RF) Limited (“Capital”) for a total consideration of R16 500 000 (“the Clade Disposal”). The operations of both ECS Holdings and Clade require a more diversified business portfolio, requiring extended management infrastructure and further capitalisation. The Board was of the opinion that a more focused operational structure and the deployment of funds into core assets would be more beneficial to the Group’s profitability. The decision to dispose of these non-core assets is therefore beneficial to the Group;

2. the disposal of the Company’s 70% interest in, and loan accounts against Ecsponent Holdings (Pty) Ltd, incorporated in Botswana (“ECS Holdings”), to Ecsponent Projects (Pty) Ltd (“Projects”), for a consideration of P30 300 000 (“the ECS Holdings Disposal”);

3. the disposal of a portion of the business of Ecsponent Development Fund (Pty) Ltd (“EDF”), as a going concern, to Ecsponent Investment Holdings (Pty) Ltd (“EIH”), for a consideration of R70 166 641 (“the EDF Disposal”). EDF’s client base includes retail clients, local government/municipal business as well as large corporate businesses. In order to penetrate this market effectively the Board has decided to focus on the corporate sector. As a result, EDF will dispose of its primarily municipal and retail clients. As at 31 December 2016 the view was to completely exit these sectors, however it became evident that specific retail and municipality clients would still be services when the same acceptable risk profile could be achieved. The EDF business was therefore initially recognised as a discontinued operation, however due to the continued ad hoc business in this sector the assets and liabilities were treated as a disposal group held for sale;

4. the issue of 1 500 000 new shares by Ecsponent Financial Services Ltd (“EFS Zambia”), equating to 75% of the total issued share capital in EFS Zambia after the issue, to GetBucks Limited (“GetBucks MU”), for a subscription price equal to ZMW 7 500 000, payable in cash (“the EFS Zambia Subscription”), resulting in a dilution of Ecsponent’s interest from 100% to 25%, resulting in the loss of control. This was part of the strategic decision to exit the retail credit provision throughout the group. The Group however still retained a non-controlling interest in the entity through the partnering with the expertise and infrastructure of the MyBucks group which should contribute positively to the new private equity division of the group. Ecsponent will remain a funder to these operations through the provision of SME credit. Once again, this reduces the cost base of credit provision for Ecsponent and improves the securitisation of the credit facilities. The retail operations are viewed as non-core to Ecsponent’s strategy. The relevant regulatory approvals were not yet effective on 31 March 2017 and therefore these assets and liabilities of the disposal group was classified as a discontinued operation, held for sale.; and

5. the disposal of the Company’s 50% interest in Sure Choice (Pty) Ltd (“Sure Choice”) to GetBucks Limited (“GetBucks BW”), for a consideration of P10 000 000 (“the Sure Choice Disposal”). As a consequence of the decision to exit retail credit provision in the South African market, the Board has entered into agreements with GetBucks in Botswana to dispose of Ecsponent’s 50% share in Sure Choice, a provider of retail credit. The relevant regulatory approvals were not yet effective on 31 March 2017 and therefore these assets and liabilities of the disposal group was classified as a discontinued operation, held for sale.

The proceeds of the described sales above substantially exceeds the carrying amount of the related net assets and accordingly no impairment losses were recognised on the reclassification of these operations as held for sale.


Exchange Control

Annexure 9

Non-South African resident Preference Shareholders and Emigrants from the Common Monetary Area Dealings in the Class D, E and G Preference Shares and the performance by the Company of its obligations under the Preference Shares may be subject to the Regulations.

Blocked rand Blocked Rand may be used for the subscription for or purchase of Class D, E and G Preference Shares. Any amounts payable by the Company in respect of the Class D, E and G Preference Shares subscribed for or purchased with Blocked Rand may not, in terms of the Regulations, be remitted out of South Africa or paid into any non-South African bank account.

Emigrants from the Common Monetary Area Any individual certificates issued to Class D, E and G Preference Shareholders who are emigrants from the Common Monetary Area will be endorsed “non-resident”. Such restrictively endorsed individual Certificates will be deposited with the authorised dealer controlling such emigrant’s blocked assets. In the event that a Beneficial Interest in Class D, E and G Preference Shares is held by an emigrant from the Common Monetary Area through Strate and its relevant Participants, the Class D, E and G Preference Shares account of such emigrant will be designated as “non-resident” account. The CSDP or broker through which the Class G Preference Shares have been dematerialised is responsible for ensuring adherence to the Exchange Control Regulations.

Any payments of dividends and/or Redemption Amounts due to an emigrant Class G Preference Shareholder will be deposited into such emigrant’s Blocked Rand account, as maintained by the authorised dealer controlling such emigrant’s blocked assets. The amounts are not freely transferable from the Common Monetary Area and may only be dealt with in terms of the Exchange Control Regulations.

Non-residents of the Common Monetary Area Any individual Certificates issued to Preference Shareholders who are not resident in the Common Monetary Area will be endorsed “non-resident”. In the event that a Beneficial Interest in Preference Shares is held by a non-resident of the Common Monetary Area through Strate and its relevant Participants, the Preference Shares account of such Preference Shareholder will be designated as a “non-resident” account.

It will be incumbent on any such non-resident to instruct the non-resident’s nominated authorised dealer in foreign exchange as to how any funds due to such non-resident in respect of Preference Shares are to be dealt with. Such funds may, in terms of the Exchange Control Regulations, be remitted abroad only if the relevant Preference Shares are acquired with foreign currency introduced into South Africa and provided that the relevant Certificate or Preference Shares account is designated “non-resident”.

Blocked Rand means funds which may not be remitted out of South Africa or paid into a non-South African resident’s bank account. The relevant legislation relating to Blocked Rand is the regulations promulgated under the Currency and Exchanges Act, 1933.

Exchange Control approval Approval in terms of the Exchange Control Regulations is not required for the subscription or purchase by investors of Class D, E and G Preference Shares.

Words used in this section headed “Exchange Control” shall bear the same meanings as used in the section headed “Definitions and Interpretations” and as defined elsewhere in this Prospectus, except to the extent that they are separately defined in this section or the context otherwise requires.


Subscription and Sale

Annexure 10

Selling restrictionsrepublic of South AfricaEach subscriber for Class D, E and G Preference Shares issued under the Prospectus will be deemed to have represented and agreed that it will not be subscribing for Class D, E and G Preference Shares in contravention of the Companies Act, the Banks Act, 1990, the Exchange Control Regulations and/or any other applicable laws or regulations of South Africa in force from time to time. This document constitutes a Prospectus and Class D, E and G Preference Shares will be offered for subscription to the public.

The Class D, E and G Preference Shares and the distribution of this Prospectus in jurisdictions other than South Africa may be restricted by law, and a failure to comply with any of those restrictions may constitute a violation of the securities laws of any such jurisdiction. In particular, this Prospectus and the Preference Shares do not constitute an offer to issue or sell, or a solicitation of an offer to subscribe for or purchase, any securities in or from any jurisdiction in which such offer or solicitation would be unlawful, including, without limitation, in or from any Affected Jurisdiction. To the extent that this Prospectus may be sent to any Affected Jurisdiction, it is provided for information purposes only. Persons in Affected Jurisdictions may not accept the offer to subscribe for Preference Shares. No person accepting the offer to subscribe for Preference Shares should use the mail of any such Affected Jurisdiction nor any other means, instrumentality or facility in such Affected Jurisdiction for any purpose, directly or indirectly, relating to the offer. Persons into whose possession this Prospectus comes must inform themselves about and observe any such restrictions. Save as specifically set out herein, no actions have been taken that would permit a public offering of Preference Shares to occur outside South Africa.

Prospective investors should not treat the contents of this Prospectus as advice relating to legal, taxation, investment or any other matters and should consult their own professional advisers concerning the consequences of their acquiring, holding or disposing of Preference Shares. Prospective investors should inform themselves as to:

▪ the legal requirements within their own countries for the purchase, holding, transfer or disposal of Preference Shares;

▪ any foreign exchange restrictions applicable to the purchase, holding, transfer or disposal of Preference Shares which they might encounter; and

▪ the income and other tax consequences which may apply to them as a result of the purchase, holding, transfer or disposal of Preference Shares. Prospective investors must rely upon their own representatives, including their own legal advisers and accountants, and not those of the Company, as to legal, tax, investment or any other related matters concerning the Company and an investment therein.

The information contained in this Prospectus constitutes factual information as contemplated in section 1(3)(a) of the South African Financial Advisory and Intermediary Services Act No. 37 of 2002 and should not be construed as an express or implied recommendation, guidance or proposal that any particular transaction in respect of the Preference Shares is appropriate to the particular investment objectives, financial situations or needs of a prospective investor.

United States of America (“USA”, “U.S” or “United States”)The Preference Shares have not been and will not be registered under the United States Securities Act, 1933, as amended (the “US Securities Act”), or any other securities laws of any state of, or other jurisdiction in, the USA and may not be offered or sold within the United States or to, or for the account of, or benefit of, U.S. persons except in certain transactions exempt from the registration requirements of the US Securities Act. This Programme may not be distributed or forwarded in or into the USA. Terms used in this paragraph have the meanings given to them by Regulation S under the US Securities Act.

Each subscriber for Preference Shares under this Prospectus will be deemed to have represented and agreed that:

i) the Preference Shares have not been and will not be registered under the US Securities Act and may not be offered or sold within the United States or to, or for the account of or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act;

ii) the Preference Shares have not been recommended, approved or disapproved by the

Words used in this section headed “Subscription and Sale” shall bear the same meanings as used in the section headed “Definitions and Interpretations” and as defined elsewhere in this Prospectus, except to the extent that they are separately defined in this section or the context otherwise requires.


U.S. Securities and Exchange Commission, any other federal or any state securities commission in the USA or any other USA regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the Preference Shares nor the accuracy or adequacy of this Programme Prospectus. Any representation to the contrary is a criminal offence in the USA; it has not offered or sold or delivered any Preference Shares, and will not offer or sell or deliver any Preference Shares: a. as part of their distribution at any time; or b. otherwise until 40 days after completion of

the distribution, as determined and certified by the Dealer or, in the case of an issue of such Preference Shares on a syndicated basis, the relevant Lead Manager, of all Preference Shares of the Tranche of which such Preference Shares are a part, within the United States or to, or for the account or benefit of, U.S. persons;

iii) it will send to each dealer to which it sells any Preference Shares in that Tranche during the distribution compliance period a confirmation or other notice setting forth the restrictions on offers and sales of such Preference Shares within the United States or to, or for the account or benefit of, U.S. persons; and

iv) it, and its Affiliates and any persons acting on its or any of its Affiliates behalf have not engaged and will not engage in any directed selling efforts with respect to the Preference Shares in that Tranche and it, its Affiliates and any persons acting on its or any of its Affiliates’ behalf have complied and will comply with the offering restrictions requirements of Regulation S.

In addition, until 40 days after the commencement of the offering of a Series of Preference Shares, an offer or sale of such Preference Shares within the United States by

any dealer (whether or not participating in the offering) may violate the registration requirements of the US Securities Act if such offer or sale is made otherwise than in accordance with an exemption from registration under the US Securities Act.

United Kingdom Prior to the issue of any Tranche of Preference Shares under the Prospectus by the Company, each Dealer for that Tranche of Preference Shares will be required to represent and agree that: (i) it has not offered or sold, and prior to the expiry

of a period six months from the Issue Date in respect of each Tranche of Preference Shares will not offer or sell, any Preference Shares in that Tranche to persons in the United Kingdom, except to Relevant Persons or in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Preference Shares Regulations, 1995 of the United Kingdom;

(ii) it has complied with and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Preference Shares in that Tranche in, from or otherwise involving the United Kingdom; and

(iii) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) received by it in connection with the issue or sale of any Preference Shares in that Tranche in circumstances in which section 21(1) of the FSMA does not apply to the Company.

European Economic Area In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), each


of the Company and Dealer(s) has represented and agreed that, with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”), it has not made, and will not make an offer of Preference Shares to the public in that Relevant Member State except that it may, with effect from and including the Relevant Implementation Date, make an offer of Preference Shares to the public in that Relevant Member State:a) in the period beginning on the date of publication

of a prospectus in relation to those Preference Shares which prospectus has been approved by the competent authority in that Relevant Member State in accordance with the Prospectus Directive and/or, where appropriate, published in another Relevant Member State and notified to the competent authority in that Relevant Member State in accordance with Article 18 of the Prospectus Directive and ending on the date which is 12 months after the date of such publication;

b) at any time to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in Preference Shares;

c) at any time to any legal entity which has two or more of (i) an average of at least 250 employees during the last financial year; (ii) a total balance sheet of more than €43,000,000; and (iii) an annual net turnover of more than €50,000,000 as shown in its last annual or consolidated accounts; or

d) at any time in any other circumstances which do not require the publication by the Company of a Prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of Preference Shares to the public” in relation to any Preference Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Preference Shares to be offered so as to

enable an investor to decide to purchase or subscribe for the Preference Shares, as the same may be varied in that Member State by any measure implementing the prospectus directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implementation in the Relevant Member State) and includes any relevant implementing measure in each Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

General Prior to the issue of any Preference Shares under the Prospectus, each Dealer for that Tranche of Preference Shares will be required to represent and agree that it will (to the best of its knowledge and belief) comply with all applicable laws and regulations in force in each jurisdiction in which it purchases, subscribes or procures subscriptions for, offers or sells Preference Shares in that Tranche or has in its possession or distributes the Prospectus and will obtain any consent, approval or permission required by it for the purchase, subscription, offer or sale by it of Preference Shares in that Tranche under the laws and regulations in force in any jurisdiction to which it is subject or in which it makes such purchases, subscriptions, offers or sales.

Each dealer for a Tranche of Preference Shares will be required to represent and agree that it will comply with such other or additional restrictions in relation to that Tranche of Preference Shares as the Company and such dealer agree and as are set out in the Applicable Pricing Supplement.

Neither the Company nor any of the Dealers represent that Preference Shares may at any time lawfully be subscribed for or sold in compliance with any applicable registration or other requirements in any jurisdiction or pursuant to any exemption available thereunder or assumes any responsibility for facilitating such subscription or sale.


Application form in respect of the offer by Ecsponent of Class E, Class R and Class G Preference Shares

Ecsponent Limited Incorporated in the Republic of South Africa

Registration number 1998/013215/06JSE Code: ECS

ISIN: ZAE000179594(the “Company” or “Ecsponent”)

Important notes concerning this application form: ▪ This application form is only for use in respect of the offer by the Company of:

- 10 000 Class D Preference Shares at R100 each; - 10 000 Class E Preference Shares at R100 each; and/or - 10 000 Class G Preference Shares at R100 each.

(the "Offer")

▪ Full details of the Offer are contained in a prospectus to shareholders of the Company dated 22 September 2017, to which this application form is attached and forms part ("Prospectus"). Accordingly, all definitions and terms used in this application form shall, unless otherwise defined in this application form, have the corresponding meaning and interpretation attributed to them in such Prospectus.

This application form, when completed, should be forwarded by hand or posted to the following address:

ECSPONENT LIMITEDAcacia House Green Hill Village Office Park Corner of Nentabos and Botterklapper StreetThe Willows Pretoria East, 0181(PO Box 39660, Garsfontein East, 0060)

TO BE rECEIVED BY 12:00 ON FrIDAY, 29 SEPTEMBEr 2017.

Application forms can also be sent in the form of an e-mail attachment to one of the following e-mail addresses: ▪ [email protected]; and ▪ [email protected]

Note: All blocks must be completed. Applications are subject to the terms set out below and those set out in the Prospectus to which this application form is attached.

Block A: Applicant’s details

Surname/name of applicant:

First names of applicant:

Identity number of applicant:

Postal address (preferably a PO Box):

Postal code:

Contact name:

+Telephone number :

+Cellphone number:

+Facsimile number:

E-mail address:


Former resident or non-resident of:

Name of bank account holder:

Name of bank:

Branch name:

Branch code: Acc number:

Dividend withholding tax status:

Block B: Application for Ecsponent Preference Shares

Column 1Number of Class D Preference Shares applied for (must be a whole number with a minimum of 100 Shares)

Column 2Aggregate price for total number of Class D Preference Shares applied for(Column 1 x R100)

Amount applied for

Column 1Number of Class E Preference Shares applied for (must be a whole number with a minimum of 100 Shares)

Column 2Aggregate price for total number of Class E Preference Shares applied for(Column 1 x R100)

Amount applied for

Column 1Number of Class G Preference Shares applied for (must be a whole number with a minimum of 100 Shares)

Column 2Aggregate price for total number of Class G Preference Shares applied for(Column 1 x R100)

Amount applied for

Ecsponent Offer Shares allotted to applicants will be registered in the name and at the address listed below. Should these registration details not be completed then the Offer Shares will be registered in the name of the applicant listed in BLOCK A above.

Postal address (preferably a PO Box):

Postal code:

Block C: Application for Ecsponent Class D, Class E and Class G Preference Shares at a price of R100 each (credited as fully paid) (“Preference Shares”)

To: The directors of Ecsponent Ltd

I, the undersigned, warrant that I have full legal capacity to contract on behalf of the applicant stated in Block A above (“the applicant”), and on behalf of the applicant hereby irrevocably to subscribe for the number of Class D, E and/or G Preference Shares stated in column 1 of Block B above at the aggregate price stated in column 2 of Block B above, or any lesser number of Class D, E and/or G Preference Shares that may be allocated to the applicant in the manner set out in this Prospectus dated 22 September 2017 to which this application form is attached. Where a lesser number of Class G Preference Shares are allocated to the applicant, I hereby agree that the relevant amount payable by the applicant in terms of column 3 of Block B above will be reduced pro-rata to the lesser number of Class D, E and/or G Preference Shares allocated respectively. I acknowledge that, on acceptance by Ecsponent of the above offer, a binding subscription for Class D, E and/or G Preference Shares allocated to the applicant will result based on the terms of the application set out below:


Full name:

Capacity:

Date: Y Y Y Y M M D DSignature:

Block D: Details of CSDP or Broker (To be completed and stamped by the CSDP or broker).Name of CSDP or broker:

CSDP or broker contact person:

+CSDP or broker contact telephone:

SCA or Bank CSD account number:

Scrip account number:

Settlement bank account number

Name of account holder:

Account number:

Stamp and signature of CSDP or Broker

If Block D is not completed, applicants will be issued an electronic share allocation advice on or by 3 October 2017 which will be posted to the address set out in Block A above. In accordance with the FMA, share certificates may not be issued and applications are accordingly for Class D, E and/or G Preference Shares in dematerialised form.


Terms of the application1. Applications under this application form are irrevocable and may not be withdrawn once submitted.2. Applicants should consult their professional advisers in case of doubt as to the correct completion of this application form.3. In terms of section 95(1)(h) of the Companies Act, the Offer constitutes an offer to the public, and a prospectus is

required to be registered in terms of section 99(3)(a)(ii) of the Companies Act. The Prospectus was registered by the CIPC on 29 August 2017. Pursuant to section 108(1) of the Companies Act, a company that has offered securities to the public must not allot such securities or accept any subscription for any of those securities unless (a) the subscription has been made on an application form that has been attached to or accompanied by a prospectus, or (b) it is shown that the applicant, at the time of the application, was in fact in possession of a copy of the prospectus or was aware of its contents. This application form constitutes the application form contemplated in section 108(1)(a) of the Companies Act.

4. Persons who have acquired Ecsponent Class D, E and/or G Preference Shares after the date of the issue of the prospectus can obtain copies of the application form and the Prospectus from the Company

5. All alterations on this application form must be authenticated by a full signature. All applications must be made without any conditions stated by applicants.

6. The name of the applicant may be changed to a nominee holder acceptable to Ecsponent, provided that the applicant remains responsible for the obligations of its nominee.

7. Ecsponent reserves the right to refuse any application in whole or in part, or to accept some applications in full and others in part, or to reduce all or any application on the basis determined by it.

8. Payment of the total monetary value of the Class D, E and/or G Preference Shares applied for in Rand will be made in terms of the existing agreement with the appointed CSDP or broker

9. If the offer to subscribe for the Ecsponent Class D, E and/or G Preference Shares is accepted in whole or in part then the resultant subscription is subject to the conditions referred to in Annexure 1 of this Prospectus.

10. The subscription and allotment of the Ecsponent Class D, E and/or G Preference Shares will be subject to the terms and conditions stated in the Prospectus.

11. If the instructions set out in this application form and the Prospectus are not fully complied with, the Company reserves the right to accept such applications in whole or in part at its discretion.

12. No receipts will be issued for documents lodged unless specifically requested. In compliance with the requirements of the JSE, lodging agents are requested to prepare special transaction receipts, if required.

13. Signatories may be called upon for evidence of their authority or capacity to sign this application form.14. If this application form is signed under a power of attorney, then such power of attorney or a notarially certified copy

thereof must be sent with this application form for noting. This does not apply in the event of this application form bearing a JSE broker’s stamp.

15. This application will constitute a legal contract between Ecsponent and the applicant.16. CSDP’s and brokers will be required to retain a copy of this application form for presentation to the directors if required.17. Applicants need to have appointed a CSDP or Broker and must advise their CSDP or broker in terms of the custody

agreement entered into between them and their CSDP or Broker.18. Delivery will be affected through an allotment of Class D, E and/or G Preference Shares subscribed for, and not on a

delivery versus payment basis.19. If payment is dishonoured or not made for any reason, Ecsponent, in its sole discretion, may regard the relevant

application as invalid or take any such steps in regard thereto as it may deem fit.


Dividends Tax – Declaration and ExemptionInstructions1. This form relates to exemptions from Dividends Tax referred to in section 64F read with sections 64FA(2), 64G(2) or

64H(2)(a) of the Income Tax Act, 1962 (Act No 58 of 1962) (the Act).2. This form should be completed by the beneficial owner in order for the exemptions to apply.3. Please email this form to [email protected], or fax it to 086 690 63864. In order to qualify for exemption this declaration and written undertaking should be submitted to Ecsponent before the

payment of an affected dividend.

Failure to do so will result in the full amount of Dividends Tax, currently 15%, being withheld / payable.

A) Beneficial owner details

Investor number:

Full names and surname / registered name:

Nature of person / entity:

Individual Listed Company Unlisted Company Trust (any type)

RSA Government, provincial administration, municipalities Retirement fund (pension, provident, benefit, RA etc.)

Other (please provide a description/explanation of nature of the entity/person):

South African resident Non-resident

Country of residence:

Country where tax is payable:

Identity / registration number:

South African income tax reference number:

Passport number:

Country of issue:

A) Exemption reason

(a) a company which is resident in South Africa

Please indicate the reason why the beneficial owner is exempt from the dividends tax:

(b) the Government, provincial government or municipality (of the Republic of South Africa)

(c) a public benefit organisation (approved by SARS to section 30(3) of the Act)

(d) a trust contemplated in section 37A of the Act (mining rehabilitation trusts)

(e) an institution, body, or board contemplated in section 10(1)(cA) of the Act

(f) a fund contemplated in section 10(1)(d)(i) or (ii) of the Act (pension fund, pension preservation fund, provident fund, provident preservation fund, retirement annuity fund, beneficiary fund or benefit fund)

(g) a person contemplated in section 10(1)(t) of the Act (CSIR, SANRAL etc.)

(h) a person who is not a resident and the dividend is a dividend contemplated in paragraph (b) of the definition of “dividend” in section 64D (i.e. a dividend on a foreign company’s shares listed in SA, such as dual-listed shares)


Declaration and Undertaking

Declaration in terms of sections 64FA(1)(a)(i), 64G(2)(a)(aa) or 64H(2)(a)(aa)of the Act:

(full names in print please), the undersigned hereby declare that dividends paid to the investor is exempt, or would have been exempt had it not been a distribution of an asset in specie, from the dividends tax in terms of the paragraph of section 64F of the Act indicated above.

Undertaking in terms of sections 64FA(1)(a)(ii), 64G(2)(a)(bb) or 64H(2)(a)(bb) of the Act:

(full names in print please), the undersigned undertake to forthwith inform Ecsponent Ltd in writing should the circumstances of the investor referred to in the declaration above change.

Date: Y Y Y Y M M D DSignature:

Capacity of signatory (if not the investor):

Ecsponent Limited Head OfficeAcacia House, Green Hill Village Office Park,

Corner of Nentabos and Botterklapper Street, The Willows, Pretoria East

+27 87 808 0100+27 86 432 3459

[email protected] no. 1998/013215/06

BotswanaSixth Floor, Exponential Building

Plot 54351New CBDGaborone

+267 391 8754+267 391 8758

[email protected]

Swaziland7 The Gables

EzulwiniSwaziland

H106+268 241 71615+27 86 432 0684

[email protected]

ZambiaShop Number 6

First FloorBuilding 2 Central Park

Cairo RoadLusaka, Zambia

[email protected]

Ecsponent Financial Services (EFS)South Africa

First Floor, Acacia HouseGreen Hill Village Office Park

Cnr Botterklapper & Nentabos StreetsThe Willows, Pretoria, Gauteng

+27 87 808 0100+27 86 432 3459

[email protected] no. 2006/012668/07

FSP no. 32968

EFS Area Office: Eastern Cape195 Cape Road, Millpark

Port Elizabeth, 6001+27 41 110 0094+27 82 741 3888

[email protected]

EFS Area Office: KwaZulu-NatalSeadoone Office Park34 Seadoone Road

Doonside, KwaZulu-Natal+27 31 020 0181+27 31 020 0177

[email protected]

ecsponent.com

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