Selective Empowerment Annual ReportANNUAL REPORT 2017/2018 SELECTIVE EMPOWERMENT INVESTMENTS 1...

ANNUAL REPORT2017/2018

SELECTIVE EMPOWERMENT INVESTMENTS 1 LIMITEDRegistration Number 2007/033697/06

Suite 401 Lougardia Building, 1262 Embankment Road, Centurion, 0157Tel: 012 942 0038 | Fax: 086 416 8457 | Email: [email protected] |Web: www.seinvest.co.za

Selective Empowerment Investments 1 Limited Annual Report 2017/18

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

the shareholders:

Directorate

Foreword

3 - 5

2

Report Of The Chairperson

Report Of The Managing Director

General Information

Directors' Responsibilities and Approval

6

8

9

7

Directors' Report

10 - 11

Report on

Corporate

Governance

12 - 18

Report of the Audit and

Risk

Committee

19 - 20

Report of the Social and

Ethics

Committee

21 - 23

Company Secretary's Certification

23

Independent Auditor's

Report

23 - 27

Statement of Financial Position

28

Statement of Comprehensive Income

29

Statement of Changes in Equity

30

Statement of Cash Flows 31

Accounting Policies

32 - 41

Notes to the Annual

Financial

Statements

42 - 62

Detailed Income Statement 63

65

-

-

64

77

78 - 126

Notice Of Seventh Annual General Meeting

Memorandum of Incoporation

INDEX

FOREWORD

Selective Empowerment Investments 1 Limited (“SEI1”) has over the past few years faced with challenges which needed to be corrected with urgency. The Board of Directors (“Board”) and management over the 2017/18 financial period wasted no time in resolving these organisational challenges. To give perspective, the organisation was faced with compliance and performance challenges, with the Companies and Intellectual Property Commission (“CIPC”) having historically issued various compliance notices mostly emanating from the auditors reported Reportable Irregularities. The current audit opinion offers a glimpse of the positive work done to date.

The Board on its 2nd August 2018 sitting, approved a strategy aimed at turning around the fortunes of the company with a primary focus on building governance and achieving the following with the investment portfolio:

While the strengthening of governance is a continuing process, stakeholder management primarily Shareholder engagements through roadshows is planned and should see progressive discussions aimed at growing the organisation between the Shareholders, Board and Management.

The Board and Management of SEI1 look forward to the completion of the 2019 financial period where outcomes such as the listing of SEI1 shares, full compliance and positive performance are targeted.

Best WishesSEI1 - Board and Management of SEI1

Capital Preservation research indicates that the company mandate was not dynamic enough to address the JSE's downturn experience over the past few years, with company funds having been invested only in equities targeted at achieving high returns by taking high risk. This approach and mandate were revised and included for approval by shareholders as part of this annual report.

Asset Growth in challenging economic times, every investor seeks marginal asset growth and/or alpha. SEI1 is no different, with management resolute on containing costs to achieve marginal gains, it is hoped that the revised investment strategy will yield targeted performance.

Liquidity is aimed at providing the organisation with working capital necessary to fulfil its short-term commitments

Annual Report 2017/18Selective Empowerment Investments 1 Limited 2


TOP ROW:

MIDDLE ROW:

1 / M MAJA

4 / DR SS SIBIYA

2 / MM TSHISHONGA

3 / NT SINDANE

BOTTOM ROW:

5 / MS TSIE

6 / T MOTLOGELOA

7 / Z NCEMANE

7 /7 /

DIRECTORATE


DIRECTORATE

M MAJAExecutive director (marketing)BSc (Eng) Wits, PPM (SBL), STDipl (MCE)

Mos holds an industrial engineering degree in addition to a teaching diploma (technical) in mechanical engineering from the University of the Witwatersrand. He has previously worked as a maths and science teacher for the Department of Education and Training, as an operations engineer professional officer, a planning and control manager and depot manager for rolling stock. He has consulted extensively for a number of businesses in the real estate, investments and health sectors. Currently, Mos is a director of Math-Plus Proprietary Limited which provides mathematics tutoring and offers consulting services via his business BestMark Solutions.

MM TSHISHONGAActing CEO;Chairman of the boardBluris

Mike holds diplomas in business management and human rights and was previously employed by the Department of Justice as a clerk of the court and later promoted to public prosecutor, magistrate, law advisor and directorgeneral in the former Venda Department of Justice. He was also previously appointed as the deputy director-general of the Department of Justice in Pretoria and held the position until 2005. Currently, Mike is the chairperson of BBBEE company, Amber Peek Proprietary Limited and of OK Bazaars Venda Limited. He is the author of a book entitled Whistleblower, which encourages people to take a stand against fraud and corruption. Mike is also a consultant and public speaker.

NT SINDANENon-executive directorLLB (University of Natal),BProc (University of Natal)

Nonkululeko is a qualified attorney having served her articles with a firm of attorneys, Shepstone &

Wylie, Durban until she was admitted as an attorney and later conveyancer. She previously served as director-general of the Department of Justice and Constitutional Development, discharging responsibilities of the accounting officer. She also held the positions of deputy director-general in the Depar tment o f Transpor t and Publ ic Enterprises responsible for policy and regulatory development and implementation. Nonkululeko worked as a legal and risk manager for Umgeni Water. Her other appointments have been in governance positions as company secretary forArmscor and Eskom. She also served as the chairperson of International Air Licensing Council and chairperson of the Search and Rescue Entity. She is currently the chairperson and CEO of UWP Consulting, a majority blackowned South African engineering company. She is also responsible for the governance of UWP group of companies locally and internationally, which she chairs or is a member of their boards.

DR SS SIBIYANon-executive directorPhD (IT) – DUT;MSc (Computer Science),BSc (Hons) (Computer Science),BSc (Computer Science)

Sihle previously worked for both the private and public sectors where he held positions such as: candidate technologist, engineer, knowledge applicator, database developer, systems developer, ICT manager, chief eng ineer, sen ior manager : bus iness development and executive: systems integration. He has a solid track record of using advanced research, analysis, strategic planning, leadership, conflict management and negotiation skills to successfully develop business initiatives while maximising profit, minimising cost and driving continuous change. He is a professional strategist and is a founder of a company called Top-Up SolutionsTrading and Projects (TUSTP).


DIRECTORATE

MS TSIENon-executive directorBSc (Actuarial Science andMathematical Statistics),BSc (Hons) (Actuarial Science)University of Witwatersrand.

Solly has previous experience in investments, including investment management, investment consulting, investment operations and client services. He has worked for large, medium and small financial services firms where he assumed various roles spanning from technical investment to client and business management roles. He also has experience in providing actuarial services to retirement funds and long-term insurance companies.

T MOTLOGELOANon-executive directorBCom (Statistics) University of Pretoria

Tiro was previously employed at Absa as an economist in the group economic research division. He then spent time at Investec Private Bank, followed by a move to Standard Bank, where he joined the card division working as an

analyst. Tiro rose through the credit ranks and was instrumental in building a provisioning model for the card credit division, which also included Diners Club. He was executive assistant to both the chief executive and head of credit for personal markets at Standard Bank. He has an entrepreneurial nature having started various businesses.

Z NCEMANEManaging DirectorMBA and Bcom – NMUImpact Investing – UCT GSBPGDip Accounting - UNISA

Zuko is a registered professional accountant with the South African Institute of Professional Accountants (SAIPA), over the years he diversified his career and experience within the finance, business management, investment and strategy environment. In so doing, he has been executing various leadership roles enabling him to gain insight in driving successful strategies in his areas of interest. He has founded Folex AS and holds directorship roles a in various other entities.

REPORT OF THE CHAIRPERSON

It has been about a year since we were invited to join the Selective Empowerment Investments 1 Limited (“SEI1”) and along with fellow Board of Directors, were formally appointed by shareholders on the 30th April 2018. Between the acceptance of our invitation and this report, it has indeed felt like a roller coaster ride. Our rude awakening was on realisation that as a Board, we have a bigger task than we anticipated.

The Companies and Intellectual Property Commission (“CIPC”) issued notices of non-compliance with the prescripts of the Companies Act to SEI1. The company external auditor issued to the Independent Regulatory Board for Auditors (“IRBA”) reportable irregularities which are subsequently sent to the CIPC, which supported certain non-compliance to the Companies Act. These all related to legacy issues and the most serious can be summarised as:

Ÿ Company not holding AGMs within the prescribed timeframes per Companies Act;Ÿ Audit and Risk Committee not constituted, holding and retaining meeting minutes as required by

the Companies Act; Ÿ Marketability of company shares; andŸ Liquidity and solvency.

In providing oversight and collaborating with management, the Board can report that the irregularities reported by the auditor have been reported to IRBA and CIPC as no longer continuing and the company has an approved budget used as a tool to monitor liquidity and solvency. This indicates the commitment and work that the Board has executed towards achieving full compliance with the Act.

The AGM was held on the 30th April 2018. Management is currently overseeing a listing project which will ensure that company shares are traded in a stock exchange.

The Board continues to support and monitor management in the quest to turn the company around towards growth and sustainability. The role of the Board is to ensure that good corporate governance principles are in place by guiding management toward the design and implementation of a control and risk management environment.

Although not yet finalised and confirmed, the Board anticipate that the company will have a Special Shareholders meeting soon to propose certain approval to necessitate good governance and compliance with the prescripts of the law.

On behalf of the Board of Directors of SEI1, we are pleased with the direction and progress made to date and are focused on achieving good governance, growth and sustainability for the company.

Report of the chairpersonCorporate governance as a foundation for success

Yours in LeadershipNonkululeko Sindane

CORPORATE GOVERNANCE AS A FOUNDATION FOR SUCCESS


REPORT OF THE MANAGING DIRECTOR

My appointment by the Selective Empowerment Investments 1 Ltd (“SEI1”) coincided with the period of the Annual General Meeting (“AGM”), which offered a perspective of what the shareholders expect from the company. The shareholder expectations are understood to be the need for:

1. Positive company performance supported by a dividend pay-out;2. Tradability of shares; and3. Cohesion and knowledge sharing between SEI1 and its shareholders.

Since the AGM on 30 April 2018, management have worked towards a plan that can deliver on the expectations of shareholders, while building the company from within to enable organic growth and sustainability. As a result, management presented to the Board of Directors (“Board”) of SEI1 with a corporate strategy integrating company and shareholder needs. The strategy identified the turnaround period as most critical in the immediate to position the company for growth and sustainability and in implementing it with the blessing of the Board, there were some low hanging fruits to be targeted through a structured approach. The following is in motion:

Ÿ The implementation of a stakeholder management plan aimed at creating the necessary cohesion and knowledge sharing between the company and its shareholders;

Ÿ Listing the company shares on a stock exchange to enable shareholders to realise value from trading their shares;

Ÿ Revision of the key primary inputs necessary for revenue generation and costs management; and

Ÿ Capacitating the organisation with desired skills to grow and sustain the organisation, through the implementation of the approved strategy, laying the foundation for good governance and the performance management as a basis for monitoring progress.

As management we're proud to say that we're making progress towards the fulfilment of the strategy. We however remain challenged by multiple unexpected distractions in our approach to streamline the business along with our Board resulting from legacy issues, through legal challenges from stakeholders who among others require full compliance from the company with applicable South African regulations, others claiming to have rights to company assets and various labour matters. Ours it to resolve these as promptly as possible, by laying the right foundation for achieving good governance and not repeat the mistakes of the past.

As the Confucius Chinese proverb says “The best time to plant trees is 10 years ago, the second-best time is now. Our journey is still long together, a working relationship is of primary importance as we look forward to engaging with the SEI1 shareholders through the planned road shows across the country. We are intent on building strong relations and sharing details of company activities with all shareholders.

Best WishesZuko Ncemane

FOCUSING ON ORGANIC GROWTH AND SUSTAINABILITY OF SELECTIVE EMPOWERMENT INVESTMENTS 1 LIMITED


GENERAL INFORMATION

Country Of Incorporation And Domicile South Africa

Nature Of Business And Principal Activities Investment

Directors M Maja (Appointed 17 August 2017) T Motlogeloa (Appointed 17 August 2017) SS Sibiya (Appointed 17 August 2017) TN Sindane (Appointed 17 August 2017) MS Tsie (Appointed 17 August 2017) MM Tshishonga (Resigned 30 April 2018)

Business Address Suite 401 Lougardia Building 1262 Embankment Road Centurion, 0157

Registered Office PO Box 11379 Die Hoewes 1 Centurion 0163

Bankers Absa Bank Limited

Auditors MKIVA Incorporated 299 Pendoring Street 1 Pendoring Office Park Blackheath 2195

Company Secretary Imbokodvo Bethany Governance & Statutory Compliance

Company Registration Number 2007/033697/06

Tax Reference Number 9593154165

Level Of Assurance These annual financial statements have been audited in compliance with the applicable requirements of the Companies Act 71 of 2008.

Preparer Eduard Stander, B Com Law, B Compt, Professional Accountant (SA)

Selective Empowerment Investments 1 Limited Annual Report 2017/18Selective Empowerment Investments 1 Limited 8

DIRECTORS' RESPONSIBILITIES AND APPROVAL

The directors are required by the South African Companies Act to maintain adequate accounting records and are responsible for the content and integrity of the annual financial statements and related financial information included in this report. It is their responsibility to ensure that the annual financial statements satisfy the financial reporting standards as to form and content and present fairly the statement of financial position, results of operations and business of the company, and explain the transactions and financial position of the business of the company at the end of the financial year. The annual financial statements are based upon appropriate accounting policies consistently applied throughout the company and supported by reasonable and prudent judgements and estimates.

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

The focus of risk management in the company is on identifying, assessing, managing and monitoring all known forms of risk across the company. While operating risk cannot be fully eliminated, the company endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.

The directors are of the opinion, based on the information and explanations given by management and the external auditors, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss. The going-concern basis has been adopted in preparing the financial statements. Based on forecasts and available cash resources the directors have no reason to believe that the company will not be a going concern in the foreseeable future. The annual financial statements support the viability of the company.

The annual financial statements have been audited by the independent auditing firm, MKIVA Incorporated, who have been given unrestricted access to all financial records and related data, including minutes of all meetings of the shareholders the board of directors and committees of the board. The directors believe that all representations made to the independent auditor during the audit were valid and appropriate. The external auditors' reports are presented on pages 21 to 25.

The annual financial statements as set out on pages 26 to 60 were approved by the board on 30 October 2018 and were signed on their behalf by:

Selective Empowerment Investments 1 Limited Annual Report 2017/18Annual Report 2017/18Selective Empowerment Investments 1 Limited 9

DIRECTORS' REPORT

The directors present their report for the year ended 30 June 2018.

1. Review of activities

Main business and operationsThe principal activity of the company is investment and there were no major changes herein during the year.

The operating results and statement of financial position of the company are fully set out in the attached financial statements and do not in our opinion require any further comment.

2. Going concern

The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

The company's Net Asset Value at the reporting date was R145 056 597 and the Net Current Asset Value was R1.07.

3. Events after reporting date

All events subsequent to the date of the annual financial statements and for which the applicable financial reporting framework require adjustment or disclosure have been adjusted or disclosed.

The Directors became aware of various claims against the company; Further details regarding the case are presented in note 12 of the Directors report.

4. Directors' interest in contracts

To our knowledge none of the directors had any interest in contracts entered into during the year under review.

5. Authorised and issued share capital

No changes were approved or made to the authorised or issued share capital of the company during the year under review.

6. Borrowing limitations

In terms of the Memorandum of Incorporation of the company, the directors may exercise all the powers of the company to borrow money, as they consider appropriate.

7. Dividends

No dividends were declared or paid to shareholders during the year.

8. Directors

The directors of the company during the year and to the date of this report are as follows:

M. MajaT. Motlogeloa (Appointed 17 August 2017) SS. Sibiya (Appointed 17 August 2017) TN Sindane (Appointed 17 August 2017) M S Tsie (Appointed 17 August 2017)MM. Tshishonga (Resigned 30 April 2018)

9. Secretary

The company's designated secretary is Imbokodvo Bethany Governance & Statutory Compliance. Company secretaries address:501 Rooihuiskraal Road Kosmodal Ext13 Centurion, 0157

10. Independent Auditors

MKIVA Incorporated were reappointed as i n d e p e n d e n t a u d i t o r s o f S e l e c t i v e Empowerment Investments 1 Limited.


DIRECTORS' REPORT

On the 4th of September 2018, the Company became aware of the filing of a purported class action complaint in the High Court of South Africa by the Companies and Intellectual Property Commission (CIPC) against the Company and certain of the Company's current and former directors for alleged violations of Companies Act Of South Africa laws. The complaint alleged that the Company's financial statements and certain disclosures and corporate governance between 16 March 2016 and 28 August 2018 were not complied with, as a result of the Company's alleged failure to report on a timely basis. The complaint seeks declare the board delinquent. The Company believes that the allegations are without merit and in the process of filing a motion to oppose the complaint.

11. Preparation of consolidated annual financial statements

The directors resolved during the year under review to utilise the exception allowed under IFRS 10:4(a) not to present consolidated annual financial statements.

12. Contingent liabilities

On the 4th of June 2018 a claim in the amount of R500,000.00 for defamation was instituted by the former Chief Executive Officer Mr Goosen. Summons have not been issued and as such the outcome is unclear. In addition; a claim in the amount of R4,090,909.00 for potential loss of income was instituted by the former Chief Executive Officer Mr Goosen. Summons have not been issued and as such the outcome is unclear.


CORPORATE GOVERNANCE REPORT

Selective Empowerment Investments 1 Limited (“SEI1”) complies with applicable statutes, regulatory requirements and other authoritative directives regulating its conduct. The principal applicable frameworks including the Companies Act 71 of 2008, as amended, by the Companies Amendment Act 3 of 2011 (the Companies Act), and the Regulations promulgated thereunder (the Companies Regulations) came into effect on 1 May 2011.

GOVERNANCE FRAMEWORK

SEI1 through its Board of Directors established the following committees during the year under review in line with Good Governance and requirements of the Companies Act.Ÿ Audit & Risk CommitteeŸ Investment CommitteeŸ Social & Ethics CommitteeŸ Remuneration & Nominations Committee

BOARD COMPOSITION

The board comprises of the appropriate balance of knowledge, ski l ls , exper ience, and independence to discharge its governance role and responsibilities objectively and collectively. The Board comprises of 5 Directors, majority of whom are Independent Non-Executive Directors and 1 Executive director.

Board of DirectorsŸ Mr MM Tshishonga – Executive Chairman

(retired at the AGM 30 April 2018)Ÿ Mr M Maja – Executive Director (appointed –

28 November 2013)Ÿ Mrs TN Sindane – Independent Non-

Executive Directors (appointed - 17 August 2017)

Ÿ Mr MS Tsie - Independent Non-Executive Directors (appointed – 17 August 2017)

Ÿ Mr T Motlogeloa - Independent Non-Executive Directors (appointed – 17 August 2017)

Ÿ Dr SS Sibiya - Independent Non-Executive Directors (appointed – 17 August 2017)

INDEPENDENCE

The Independent Non-Executive Directors are highly experienced and have the skills, background and knowledge to fulfil their responsibilities. The Board believes that the Independent Non-executive Directors of SEI1 are of the appropriate calibre and the members of the committees of the board are Non-executive Directors.

The classification of Independent Non-executive Directors is determined by the Board on the recommendation of the Remuneration and Nomination Committee in accordance with the guidelines set out in King IV. In accordance with the independence requirements of King IV, none of the Independent Non-executive Directors participate in any share incentive scheme of SEI1.

KING IV COMPLIANCE

SEI1 recognises and supports the principles and practices set out in King IV. SEI1 will continue to implement compliance to ensure that it applies the principles set out in King IV, monitoring and reporting to the appropriate governance structures. Ongoing progress reports in this regard will be presented to the Audit and Risk Committee.

Adhering to the highest standards of corporate governance is fundamental to the sustainability of SEI1's business. SEI1's business practices are conducted in good faith, in the interests of SEI1 and all its stakeholders, with due observance of the principles of good corporate governance. The Board is the foundation of SEI1's corporate governance system and is accountable and responsible for SEI1's performance. The Board retains effective control of the business of SEI1 through a clear governance structure and has established sub-committees to assist it in accordance with the provisions of SEI1's Board Charter. The Board recognises that delegating authority does not



reduce the responsibility of Directors to discharge their statutory and common law fiduciary duties. The Board continues to review its governance structures to ensure that they support effective decision-making, provide robust controls and are aligned to evolving local and global best practice.

BOARD CHARTER

The Board Charter was adopted by the Board on 28 September 2017 to ensure compliance with King IV and the Companies Act. The Board Charter sets forth the Board's role and responsibilities as well as the requirements for its composition and meeting procedures, noting that SEI1 is subject to the corporate governance and the requirements of the Companies Act.The roles and responsibilities of the Board as set out in the Board Charter include the following:Ÿ act as the focal point for, and custodian of,

corporate governance by managing its re lat ionship wi th management , the shareholders and other stakeholders of SEI1 to build and maintain stakeholders' trust and confidence in SEI1 aligned to sound corporate governance principles. In this regard, the Board will be expected to:

Ÿ acqu i re a work ing knowledge and understanding of SEI1's business and the laws, regulations and processes that govern its activities;

Ÿ be able to make sound business decisions and recommendations;

Ÿ exercise judgement independently; and exercise stewardship at all times and uphold the highest degree of ethics in all forms of conduct;

Ÿ appreciate that strategy, risk, performance and sustainability are inseparable and to give effect to this by:Ÿ contributing to and approving the

strategy;Ÿ satisfying itself that the strategy and

business plans do not give rise to risks that have not been thoroughly assessed by management;

Ÿ identifying key performance and risk areas, which includes the responsibility of setting SEI1's level of risk tolerance and limits for its risk appetite on an annual bas is and mon i to r ing the same accordingly;

Ÿ ensuring that the strategy will result in sustainable outcomes; and

Ÿ considering sustainability as a business opportuni ty that guides strategy formulation;

Ÿ provide effective leadership on an ethical foundation;

Ÿ ensure that SEI1 is and is seen to be a responsible corporate citizen by having regard to not only the financial aspects of the business of SEI1 but also the impact that b u s i n e s s o p e r a t i o n s h a v e o n t h e environment and the society within which it operates;

Ÿ ensure that SEI1's ethics are managed effectively;

Ÿ ensure that SEI1 has an effective and independent audit and risk committee;

Ÿ be responsible for the governance of risk;Ÿ be responsible for IT governance, which

includes ensuring that information assets are identified, managed and treated as important business assets;

Ÿ ensure that SEI1 complies with applicable laws and considers adherence to non- binding rules and standards;

Ÿ ensure that there is an effective risk-based internal audit for approaching the control environment which must be aligned with the risk assessment process;

Ÿ appreciate that stakeholder's perceptions affect SEI1's reputation;

Ÿ ensure the integrity of SEI1's integrated report;

Ÿ act in the best interests of SEI1 by ensuring that individual directors:Ÿ adhere to legal standards of conduct;Ÿ are permitted to take outside or other

independent advice as i t deems necessary in connection with their duties following an agreed procedure;



Directors appointed by the Board between annual general meetings, either to fill a casual vacancy or as an addition to the existing Board, hold office only until the next annual general meeting and are eligible for election (but are not included in determining the number of Directors who are to retire by rotation). When appointing Directors upon the recommendation of the Remuneration and Nomination Committee, the Board considers, inter alia, whether the candidates have the necessary skills and experience.

With effect from 17 August 2017, Mrs TN Sindane, Mr MS Tsie, Mr T Motlogeloa, Dr SS Sibiya were affected as directors. The directors' appointment was confirmed by the shareholders at the Annual General Meeting held on 30 April 2018.

Mr MM Tshishonga retired at the Annual General Meeting as a Non-executive Director of SEI1 with effect from 30 April 2018.

Induction and continuing educationAll newly-appointed Directors received a comprehensive information pack, including the Memorandum of Incorporation, the Board Charter, Terms of Reference of the Committees of the Board, Board policies and other documents relating to SEI1; key legislation and regulations; as well as corporate governance, financial and reporting documents, including minutes and documents of an administrative nature.

Directors are encouraged to attend courses providing information and training relating to their duties, responsibilities, powers and potential liabilities. Regulatory and legislative updates are provided regularly.

SuccessionThe Board is committed to put a succession plan in place for Executive Directors and senior management , wh ich prov ides fo r the sustainability of the business of SEI1.

AssessmentThe Board is committed to transparency in assessing the performance of the Board, its Committees and individual Directors as well as the governance processes that support Board activities. The effectiveness of the Board and its Committees will be assessed annually.

Independent external advisers will assist the Remuneration and Nomination Committee with the evaluation of the Board as a whole and individually together with its Committees.

The Board is of the view that the involvement of independent external advisors assists to ensure a rigorous and impartial evaluation process.

Matters to be considered in the assessments will focus on the effectiveness of the Board, including:Ÿ Board compositionŸ Board meetings and contentŸ Roles of the ChairmanŸ Board accountabilityŸ Appointment, induction and training and

succession planningŸ Performance evaluation and remunerationŸ Board CommitteesŸ Interaction: communication andŸ relationshipsŸ Board dynamics and leadershipŸ Board focus and function: strategy and

complianceŸ Risk management and internal controlsŸ Information Technology governanceŸ Accounting and auditŸ Non-financial (sustainability) performanceŸ Balance of power and authorityŸ Ethics

BOARD MEETINGS

The Board meets to consider the business and strategy of SEI1. The Board reviews reports from the committees and independent advisors.

Agendas for Board meetings are prepared by SEI1 Secretary in consultation with the


BOARD

MEETING

AUDIT AND

RISK

COMMITTEE

INVESTMENT

COMMITTEE

REMUNERATION

AND

NOMINATIONCOMMITTEE

SOCIAL AND

ETHICS

COMMITTEE

NUMBER OF MEETINGS

PER YEAR

6

3

1

2 1

MM

Tshishonga

(Chairperson)*

3

2

1

- 1

M

Maja

(Executive director)

6

3

1

- 1

SS Sibiya 6 3 1 2 1

MS Tsie 6 3 1 2 -

TN Sindane** 5 2 - - 1

T Motlogeloa 6 3 1 2 -


the Managing Director and Chairpersons of the Committees. Meeting materials are delivered to every Director prior to each meeting.

ADVICE AND INFORMATION

No restriction is placed on the Directors' access to Company information, records, documents and property. Non-executive Directors have access to management and regular interaction

is encouraged. The Board is entitled to seek independent professional advice concerning the affairs of SEI1 at its expense. The Managing Director and Marketing Director attend the Board sub-committee meetings by invitation.

Meeting attendanceThe 2017/2018 meeting attendance summary is shown below:

BOARD COMMITTEES

The Board has established sub-committees to assist it with fulfilling its responsibilities in accordance with the provisions of SEI1's Board Charter. The Board acknowledges that the delegation of authority to its Committees does not detract from the Board's responsibility to discharge its fiduciary duties to SEI1.

The Committees have Terms of Reference, which will be reviewed annually. They set out the Committees' roles and responsibil i t ies, functions, scope of authority and composition. The annual review will take into account amendments to applicable legislation and developments in international best practices. Committees report to the Board at each Board meeting and make recommendations in accordance with their Terms of Reference.

The membership of the Board Committees currently consists solely of Non-executive Directors. Each Committee is chaired by an Independent Non-execu t i ve D i rec to r. Attendance schedules for Committee meetings held in the financial year 2017/2018 are included in the meeting attendance summary above.The Committee Chairpersons will attend annual general meetings of shareholders to answer any questions.

The Board has established the following Committees: Audit and Risk Committee, Investment Committee, Remuneration and Nomination Committee, and Social and Ethics Committee.

* Retired as a Non-Executive Chairman on 30 April 2018. | ** Appointed Interim Chair after 30 April 2018.



THE AUDIT AND RISK COMMITTEE

Members:Mr MS Tsie – ChairpersonMr T MotlogeloaDr SS Sibiya

The Audit and Risk Committee is constituted as a statutory committee of the Board in terms of Section 94 of the Companies Act and its composition complies with the provisions of that section.

The Audit and Risk Committee comprises four Independent Non-executive Directors, each of whom has extensive relevant experience. In accordance with the guidelines in King IV, the Audit and Risk Committee Chairperson is an Independent Non-executive Director and the Executive Officers attends Audit and Risk Committee meetings at the Committee's request. Following the retirement of Mr MM Tshishonga, Mrs TN Sindane was nominated an acting chairperson of the board and the committee was left with three Independent Non-Executive Directors.

The Audit and Risk Committee Terms of Reference were adopted by the Board on 19 January 2018. No amendments were made.

Based on the Terms of Reference, acomprehensive agenda framework workplan will be prepared to ensure that all tasks assigned to the Audit and Risk Committee are considered at least once a year.

The primary objective of the Audit and Risk Committee is to assist the Board in discharging its duties relating to the operation of adequate systems, internal controls and control processes; and the preparation of accurate financial reports and statements in compliance with all applicable legal requirements, corporate governance and accounting standards, as well as enhancing the reliability, integrity, objectivity and fair presentation of the affairs of SEI1. It also oversees financial and other risks in conjunction

with the Social and Ethics Committee. In fulfilling its oversight responsibilities, the Audit and Risk Committee reviews and discusses the audited financial statements with management and the external auditors of SEI1.

The Audit and Risk Committee has oversight of SEI1's financial reporting process on behalf of the Board . Management has p r imary responsibility for the financial statements and for maintaining effective internal control over financial reporting and for assessing the effectiveness of internal control of such reporting.

The Audit and Risk Committee, after due considerat ion, is of the v iew that the independent registered audit firm, which is responsible for expressing an opinion on the conformity of the audited financial statements wi th Internat ional Financial Report ing Standards (IFRS) and the requirements of the Companies Act, is independent of SEI1 and its management.

Upon the recommendation of the Audit and Risk Committee at the Annual General Meeting, shareholders were requested to appoint Mkiva Incorporated as external auditors of SEI1. Mr Unathi Mkiva is the audit partner. He is an experienced assurance partner with significant experience in auditing.

The Audit and Risk Committee meets with the external auditors on a regular basis to discuss the results of their examinations, their evaluation of SEI1's internal controls and the overall quality of SEI1's financial reporting. The Committee also discusses the overall scope and plans for the respective audits of SEI1's internal and external auditors. The external auditors are invited to attend Audit and Risk Committee meetings.

The Audit and Risk Committee acts as a forum for communication between the Board, management and the external auditors.



INVESTMENT COMMITTEE

Members:Mr T Motlogeloa – Chairperson Dr SS SibiyaMr MS Tsie

The Investment Committee comprises three Independent Non-executive Directors. The role of the Committee is to assist the Board to:Ÿ review SEI1's investment policy annually;Ÿ consider all transactions for the acquisition

or disposal of assets in accordance with SEI1's investment policy;

Ÿ assess al l investment opportunit ies presented to SEI1 by its management company and other advisors; and

Ÿ review the performance of individual assets within the Companies portfolio of assets and make recommendations in respect of such assets.

Ÿ The Committee in carrying out its duties under these terms of reference

Ÿ The Committee does not assume the functions of management, which remain the responsibility of the executive directors, officers and other members of senior management.

The Terms of Reference of the Investment Committee were adopted on 23 March 2018. No changes were made during the year.

REMUNERATION AND NOMINATION COMMITTEE

Members:Dr SS Sibiya – Chairperson Mr MS TsieMr T Motlogeloa

The Board of SEI1 acknowledged the need for a Remuneration and Nomination Committee as recommended in the King IV Report on Corporate Governance.

The role of the Committee is to assist the Board by:Ÿ making recommendations regarding the

appointment of new executive, non-executive and independent non-executive directors, for its consideration and final approval;

Ÿ nominating successors to key positions in SEI1 as part of ensuring that a formal management succession plan is in place;

Ÿ ensuring that the Board has the appropriate composition for it to execute its duties effectively and to comply with the Code, the Companies Act, the Listings Requirements and other applicable legislation;

Ÿ ensuring that directors are appointed through a formal and transparent process;

Ÿ determining whether the services of any director should be terminated;

Ÿ ensuring that induction and ongoing training and development of directors take place; and

Ÿ carrying out such other functions as the Board may request from time to time.

The Remuneration and Nomination Committee terms of reference were adopted by the Board on 19 January 2018.

In terms of the Terms of Reference of the Nomination Committee at least one meeting must be held per year.

THE SOCIAL AND ETHICS COMMITTEE

Members:Mrs TN Sindane – Chairperson Dr SS Sibiya

The purpose of the Social and Ethics Committee is to monitor SEI1's sustainability philosophy which is underpinned by the realisation that there is a need to turn wealth into sustainable economic growth and development. Through its business endeavours, SEI1 seeks to make a lasting and important social, economic and environmental contribution to the regions in which SEI1 operates.The Social and Ethics Committee's Terms of Reference were adopted by the committee on 9 December 2017 in compliance with King IV.



The Social and Ethics Committee performs all the functions as are necessary to fulfil its role as stated above and including the following:Ÿ Drawing matters within its scope to the

attention of the Board as occasion requires;Ÿ Reporting, through one of its members, to the

shareholders of SEI1 at SEI1's annual general meeting on the matters within its scope;

Ÿ Monitoring the activities of SEI1, having regard to any relevant legislation, other legal requirements or prevailing codes of best practice, with regard to matters relating to social and economic development, including SEI1's standing in terms of the goals and purposes of:(i) support and respect the protection of internationally proclaimed human rights;(ii) ensure that SEI1 is not complicit in human rights abuses;(iii) uphold the freedom of association and the effective recognition of the rights to collective bargaining;(iv) the elimination of all forms of forced and compulsory labour;(v) the effective abolition of child labour;(vi) the elimination of discrimination in respect of employment and occupation;(vii) support a precautionary approach to environmental challenges;(viii) undertake initiatives to promote environmental responsibility;(ix) encourage the development anddiffusion of environmentally friendlytechnologies; and(x) work against corruption in all its forms, including extortion and bribery;

Ÿ The Organisation of Economic Co-operation and Development (OECD)recommendations regarding corruption;

Ÿ Good corporate citizenship, including SEI1's:

Ÿ Promotion of equality, prevention of unfair discrimination, and reduction of corruption;

Ÿ Contr ibut ion to development of the communities in which its activities are predominantly conducted or within which its

products or services are predominantly marketed; and

Ÿ Record of sponsorship, donations and charitable giving; and

Ÿ The environment, health and public safety, including the impact of SEI1's activities and of its products or services;

The Social and Ethics Committee's Terms of Reference provide that the Committee must have a minimum of three members, the majority of whom must be Independent Non-executive Directors. Currently, the Social and Ethics Committee comprises two Non-executive Directors, all of whom are independent. 1 Executive director attends the committee meetings on invitation.

AD HOC BOARD COMMITTEESThe Board has the right to appoint and authorise special ad hoc Board Committees, comprising the appropriate Board members, to perform specific tasks as required.

EXECUTIVE COMMITTEESEI1 has the Executive Committee and is chaired by the Managing Director (Mr Zuko Ncemane). Standard items on the agenda include investment projects reports. The Executive Committee comprises of senior management.

INVESTOR RELATIONS ANDCOMMUNICATION WITH STAKEHOLDERSSEI1 is committed to transparent,comprehensive and objective communication with its stakeholders. SEI1 maintains a website, which provides information regarding its operations, financial performance and other information. Shareholders are encouraged to attend the Annual General Meeting and to use it as an opportunity to engage with the Board and senior management. Summaries of the results of decisions taken at shareholders' meetings are disclosed on SEI1's website following the meetings.The development of a stakeholder engagement plan is in progress


AUDIT & RISK COMMITTEE REPORT

1. Audit and Risk Committee ("the Committee) Report

The Committee is constituted as a statutory committee in respect of its statutory duties in terms of section 94(7) of the Companies Act, 2008 and a sub-committee of the board of directors (“board�) in respect of all other duties

assigned to it by the board. The committee assists the board in carrying out its functions relating to the safeguarding of assets, the operation of adequate risk management and control processes and the preparation of

financial statements in compliance with all applicable legislation and regulations, and the oversight of the audit appointments and function.

Committee members and meetings held

During the period under review, the committee consisted of four independent non-executive directors who are all suitably skilled and experienced. The table below shows members of the committee and committee meetings held during the period under review.

3. Annual Financial Statements

The committee has evaluated the financial statements of the company for the year ended 30 June 2018 and, to the best of its knowledge and belief, considers that the company complies, in all material respects, with the requirements of the Companies Act and International Financial Reporting Standards. The Committee accordingly recommended the financial statements to the board for approval.

4. Accounting practices and internal control

The committee:Ÿ Reviewed the effectiveness of the

2. External auditors

During the period under review, the committee re-appointed MKIVA Incorporated as external auditors of the Company. The committee has satisfied itself through enquiry that the external auditors are independent as defined by the Companies Act 71 of 2008 and as per the standards stipulated by the auditing profession. The committee agreed to the terms of engagement. The audit fee paid to the external auditors has been considered and approved taking into consideration factors such as timing of the audit, the extent of the work required and the scope. The committee is satisfied that MKIVA Incorporated is independent of the Company.


Member Name Role Attendance

9-Dec-17 18-Jan-18 6-Mar-18 M Maja* Member By invitation By invitation By invitation

S Tsie**

Chairperson

Yes

Yes

Yes

M Motlogeloa**

Member

Yes

Yes

Yes N Sindane** Member Yes Yes Apology received

S Sibiya**

Member

Yes

Yes

Yes

*Effective 1 July 2017, M Maja has been included in the committee meetings by invitation to ensure smooth transition.

** S Tsie, T Motlogeloa, N Sindane and S Sibiya were co-opted as independent non-executive directors of the company effective 17 August 2017 and appointed as members of the committee on 6 October 2017. These members have since had their appointments as independent non-executive directors and committee members ratified by shareholders during the Shareholders' Annual General Meeting held on 30 April 2018.

The Acting Chief Executive Officer, Marketing Director, Accountant and representatives of the external auditors attend the meeting by invitation.


AUDIT & RISK COMMITTEE REPORT

Ÿ company's system of internal financial controls, including receiving assurance from the management company and the external auditors.

Ÿ Reviewed policies and procedures for detecting and preventing fraud.

Ÿ Considered regulatory and accounting standard compliance by the company.

To the best of its knowledge and based on the information and explanations provided by the management company, as well as discussions with the independent external auditors on the results of their audit, the audit committee is satisfied that there was no material breakdown

in internal accounting controls during the financial year under review.

On behalf of the Audit & Risk Committee;

S TsieChairman Audit & Risk Committee Centurion30 October 2018



SOCIAL AND ETHICS COMMITTEE REPORT

issues impacting the company, some of which are dealt with below.The Commit tee is conscious that our stakeholders especially the shareholders, regulatory authorities and employees have had issues which needed to be addressed as a matter of urgency. The Committee mainly focused on improving human relations to prepare ground for better engagements with ourstakeholders in future.

On regulatory compliance some of the issues raised by the CIPC were as follows:Ÿ F ina l i s ing financ ia l s ta tements fo r

2015/2016 financial year,Ÿ holding Annual General Meetings,Ÿ ensuring that the company had a tradability

system in place to enable shareholders to sell their shares amongst themselves should they wish to so.

The Shareholder concerns included the fact that:Ÿ they are not receiving dividends,Ÿ they are not able to sell their shares,Ÿ the Company is not communicating

adequately with them.

The auditors had raised the fo l lowing governance issues:Ÿ the absence of the statutory committees,Ÿ failure to hold committee meetings,Ÿ failure to sign the minutes for statutory

committees.

The employee issues included:Ÿ stability at the leadership level,Ÿ appointment of the Managing DirectorŸ employee salaries and other conditions of

service.

I am happy to indicate that most of these issues have been addressed while others are work in progress and therefore our future reports will focus on progress with the implementation of the strategies towards a sustainable company.

1. Social and Ethics Committee Report

We are pleased to present the inaugural report of the Social and Ethics Committee (the Committee) which is a committee established in terms of Regulation 43 promulgated in terms of Section 72 of the Companies Act. The Committee was established by the Board to fulfil the requirements of legislation as well as drive the company towards socially responsible performance. The company is expected to and has identified key stakeholders for which specific strategies are being developed and implemented to meet the needs of our stakeholders. These strategies are reported more specifically under the Directors report.

2. Members of the Committee

The Board is very small therefore each committee has a minimum number of directors. Consequently, the Board appointed Dr Sihle Sibiya as a member and Ms Nonkululeko Sindane to chair the Committee. Other directors are encouraged to attend the meetings of the Committee from time to time as will appear from the minutes.

3. Governance of the Committee

The Committee's Terms of Reference were approved by the Board. The Committee approved its work plan which is not limited to the first year of establishment. The Committee had 2 (two) meetings during the year under review. In addition, the Chairperson, as mandated by the Board, had working sessions with the two Executive Directors to calm the tensions between them. The Executive Directors were the Acting CEO (MM Tshishonga) and the Marketing Director (M Maja), who were both members of the Board and the only two directors who had been in the Company prior to the current Board. These tensions affected the governance of the Company, and it became necessary to calm them down in order for the Board and its Committees to focus on urgent



4. Code of Good Conduct

The Board, employees and stakeholders are expected to conduct themselves ethically and guard against fraud and corruption as defined in the legislation as well as ensuring that the rights of everyone are observed and respected. The Company has a Code of Conduct in place. Management will populate the Code of Conduct in the Company so that everyone understands and abides by it.

The Committee's first responsibility was to address the tensions between the two Executive Directors. The tensions arose from issues that had gone on for years without resolution. These tensions negatively impacted on the members of staff.

The two Executive Directors made allegations and counter allegation of fraud, corruption against each other and for acting contrary to the values of the Company. The Committee resolved that the affected directors provide the new Board space to attend to the most pressing compliance issues as set out above.

5. Legal and governance compliance

The Company has dealt with legal compliance issues whether it is holding AGM, appointing Board Committees as reported above and under the Chairperson's report.

6. Social and Economic Development

The Company was established by investors with the purpose of giving investors opportunities to invest in listed assets. Individually these investors felt that they would not have had the exposure to invest in listed companies. While the Company has not paid dividends to the shareholders, it is anticipated that after addressing the legacy issues, the Company will start performing in line with the recently approved strategy which will enable the Board to put realistic targets on when it expects to pay dividends to the shareholders. This is important

because the investors must realise the economic impact of being investors and shareholders. The Company is a Broad-Based Economic Empowerment Scheme with the majority of its investors being black South African people.

The Board continues to challenge committees to look for opportunities of a developmental nature for our shareholders. The investment modelscurrently under consideration, take into account the developmental aspect of the shareholders. More work is being done in this regard.

7. Investigations of Fraud and Corruption

The Committee recommended to the Board and the board resolved that given that most of the urgent compl iance issues have been addressed, the investigations of the allegations and counter-allegations of fraud and corruption between the two Executive Directors be referred to the Remunerations and Nominations Committee for investigation. The details of this work will be reported to the Board at appropriate intervals.

8. Employment Equity

The Company has put in place strategies to ensure that it is gender and disability sensitive. Some progress is being noted with the recent appointment of female employees, however more focus will be put on employment equity in the company

9. Environment, Health and Safety

Work still needs to be done in this area and the Committee will be monitoring whether policies are put in place to address these areas of work.



10. Stakeholders Relationships

The stakeholder's engagement strategy is being developed, and Board has resolved that m a n a g e m e n t s h o u l d e n s u r e t h a t communication to our shareholders must be done at least in two languages to ensure that our investors understand the reports being presented to them. Management continues to engage with the shareholders and a specific plan will be put in place for structured stakeholders' engagements. The Board and management have been engaging with the Compan ies and In te l lec tua l Proper ty Commission to ensure that the Company is compliant with the regulatory requirements. This is work in progress and is being monitored closely.

11. Labour Relations

The Company handles employee issues on an ongoing basis. With the appointment of the Managing Director, the Company has started developing policies to address employee career incidences including employee development in the company.

12. Reporting

The Committee has been providing reports to the Board on progress on the issues being handled. Equally, the Committee has informed the shareholders on the above issues the Annual General Meeting for 2016/2017 financial year end in 30 April 2018.

Company Secretary's Certification

Declaration by the Group secretary in respect of Section 88(2)(e) of the Companies Act

In terms of Section 88(2)(e) of the Companies Act 71 of 2008, as amended, I certify that the group has lodged with the Commissioner all such returns as are required of a public company in terms of the Companies Act and that all such returns are true, correct and up to date.

Imbokodvo Bethany Governance & Statutory Compliance Company SecretaryPretoria30 October 2018

Selective Empowerment Investments 1 Limited Annual Report 2017/18Selective Empowerment Investments 1 Limited Annual Report 2017/18Annual Report 2017/18Selective Empowerment Investments 1 Limited 23

Report to the shareholders of Selective Empowerment Investments 1

Opinion

We have audited the financial statements of Selective Empowerment Investments 1 Limited (the Company), which comprise the statement of financial position as at June 30, 2018, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at June 30, 2018, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) and the requirements of the Companies Act, No.71 of 2008 of South Africa.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are f u r t h e r d e s c r i b e d i n t h e A u d i t o r ' s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in South Africa, and we have fulfilled our other ethical responsibilities in accordance with these

requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.In accordance with our responsibilities in terms of sections 44(2) and 44(3) of the Auditing Profession Act, responsibilities beyond those required under the International Standards on Auditing, we have not identified the matters to report as a reportable irregularity in terms of the Auditing Profession Act.

Key Audit Matters

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

1. Bank Balances

The rights and existence of the balance of R131 000 could not be verified, this amount relates to a deposit made into a lawyers trust account.

Other Information

The directors are responsible for the other information. The other information comprises information included in the Annual Report which includes the Directors Report, the Audit Commi t tee Repor t and the Company Secretary's Certificate as required by the Companies Act of South Africa. The other information does not include the company financial statements and our auditor's report thereon.

299 Pendoring Road 1 Pendoring Office

Park

Blackheath

Telephone:+27(0)114776843Facsimile:+27(0)862625283

Email: [email protected]: www.mkiva.co.za

MKIVA Incorporated Registration number: 2014/110005/21

Practise number: 933244

The company’s registered address is 23 Koelenhof Road, Northcliff, Johannesburg where a list of directors’ names is available for inspection. MKIVA

African company.

Incorporated is a South

INDEPENDENT AUDITOR'S REPORT

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

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

Responsibilities of the directors for the company financial statements

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

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

Auditor's Responsibilities for the Audit of the company financial statements

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

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

misstatement of the company financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, f o r g e r y , i n t e n t i o n a l o m i s s i o n s , misrepresentations, or the override of internal control.

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

Ÿ Evaluate the appropriateness of accounting policies used and the reasonableness of accoun t i ng es t ima tes and re la ted


Park

Blackheath






African company.


disclosures made by the directors.Ÿ Conclude on the appropriateness of the

directors' use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the company financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the group to cease to continue as a going concern.

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

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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

Other reports required by the Companies Act

As part of our audit of the annual financial statements for the year ended June 30, 2018, we have read the Directors' Report for the purpose of identifying whether there are material inconsistencies between this report and the audited annual financial statements. The Directors' Report is the responsibility of the directors. Based on reading the Directors' Report we have not identified material inconsistencies between this report and the audited annual financial statements. However, we have not audited the Directors' Report and accordingly do not express an opinion thereon.

Report on Other Legal and Regulatory Requirements

In accordance with our responsibilities in terms of sections 44(2) and 44(3) of the Auditing Profession Act, we report that we have not identified unlawful acts or omissions committed by persons responsible for the management of the Company which constitute reportable irregularities in terms of the Auditing Profession Act, and have not reported any matter to the Independent Regulatory Board for Auditors.

Non-compliance with the Companies Act of South Africa

As required by the Companies Act, 2008 of South Africa, we have nothing to report on material instances of non-compliance with the requirements of the Companies Act of South Africa as amended as nothing has come to our attention during the course of our audit

Audit tenure

In terms of the IRBA Rule published in Government Gazette Number 39475 dated 4 December 2015, we report that MKIVA


Park

Blackheath






African company.


Incorporated has been the auditor of Selective Empowerment Investments 1 Ltd for 1 years.The engagement partner on the audit resulting in this independent auditors report is Unathi Mkiva.

MKIVA Incorporated Registered Auditors Chartered Accountants (SA) Per: Unathi Mkiva

30 October 2018


Park

Blackheath






African company.


STATEMENT OF FINANCIAL POSITION

Figures in R

Note(s)

2018 2017

Assets

Non-Current Assets

Property, plant and equipment

6

403 352 441 068

Interest in unconsolidated structured entities

7

100 100

Investments

8

152 475 205 144 967 119

Deferred taxation assets

14

326 455 -

153 205 112 145 408 287

Current Assets

Current taxation asset

16

1 010 844 1 248 437

Loan to group company

9

- -

Trade and other receivables

10

202 564 250 913

Cash and cash equivalents

11

1 893 503 7 427 132

3 106 911 8 926 482

Total Assets

156 312 023 154 334 769

Equity and

Liabilities Equity

Stated capital

12

112 123 493 112 123 493

Fair value adjustment assets-available-for-sale reserve

13 28 606 363 25 281 071

Retained earnings

4 326 741 9 737 182

145 056 597 147 141 746

Non-Current Liabilities

Deferred taxation

14

8 341 388 5 795 082

Current Liabilities

Trade and other payables 15 1 378 337 152 290

Other financial liabilities 17 1 535 701 1 245 651

2 914 038 1 397 941

Total Equity and Liabilities 156 312 023 154 334 769


STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME Figures in R

Note(s)

2018 2017

Revenue

18

4 820 279 6 047 812

Other income

19

1 493 623 13 336 276

Operating costs

(11 977 669) (8 993 527)

Operating (loss)/profit

21

(5 663 767) 10 390 561

Finance costs

22

(73 129) (59 317)

(Loss)/profit before taxation

(5 736 896) 10 331 244

Taxation expense

23

326 455 (2 409 758)(Loss)/profit for the year

(5 410 441) 7 921 486

Gross amount of Available-for-sale financial assets adjustments

5 871 598 (12 657 544)

Tax amount of Available-for-sale financial assets

adjustments

(2 546 306) 2 360 378

Total other comprehensive income

3 325 292 (10 297 166)

Total comprehensive loss for the year

__(2 085 149) (2 375 680)

Earnings per share

Basic (cents)

(3.90) 5.33

Selective Empowerment Investments 1 Limited Annual Report 2017/18Selective Empowerment Investments 1 Limited Annual Report 2017/18Annual Report 2017/18Selective Empowerment Investments 1 Limited 29

STATEMENT

OF CHANGES IN EQUITY

Fair value

adjustment

assets-

available-for-

Retained

Figures in R

Share capital

sale reserve

earnings

Total

Balance at 1 July 2016

112 123 493

35 578 237

1 815 696 149 517 426

income for

the year

Profit for the year

-

-

7 921 486 7 921 486

Total other comprehensive income

-

(10 297 166)

-

(10 297 166)Total comprehensive income for

the year

-

(10 297 166)

7 921 486 (2 375 680)

Balance at 30 June 2017

112 123 493

25 281 071

9 737 182 147 141 746

Balance at 1 July 2017

112 123 493

25 281 071

9 737 182 147 141 746

Total comprehensive income for

the year

Loss for the year

-

-

(5 410 441) (5 410 441)

Total other

comprehensive income

-

3 325 292

-

3 325 292Total comprehensive income for

the year

-

3 325 292

(5 410 441) (2 085 149)

Balance at 30 June 2018

112 123 493

28 606

363

4 326

741 145 056 597

Notes

12

13


STATEMENT OF CASH FLOWS

Figures in R

Note(s)

2018

2017

Cash flows from operating activities

(Loss)/profit for the year

(5 410 441) 7 921 486

Adjustments for:

Finance costs

73 129 59 317

Income tax

(326 455) 2 409 758

Depreciation of Property, plant and equipment

199 786 175 577

Profit on disposal of investments

(1 181 422) (12 747 095)Operating cash flow before working capital

changes

(6 645 403) (2 180 957)

Working capital changes

Decrease/(increase) in trade and other receivables

48 348 (28 694)

Decrease short-term loans

1 -

Increase/(decrease) in trade and other payables

1 516 097 (184 940)

Decrease in operating lease liabilities

- (1 004)

Cash utilised in operating activities

(5 080 957) (2 395 595)

Finance costs

(73 129) (59 317)

Income tax paid

237 593 (4 995 711)Net cash from operating activities

(4 916 493) (7 450 623)

Cash flows from investing activities

Property, plant and equipment acquired

6

(188 134) (51 684)Investment acquired

8

(30 017 215) (4 113 787)

Proceeds on disposals of property, plant and

equipment6

26 064 1

Proceeds on disposals of investments 29 562 149 7 337 568

Proceeds from settlements of loan to subsidiary - 6 186 245

Net cash (utilised in) / generated by investing (617 136) 9 358 343activities

(Decrease)/increase in cash and cash equivalents (5 533 629) 1 907 720

Cash and cash equivalents at beginning of the year

7 427 132 5 519 412

Cash and cash equivalents at end of the year 11 1 893 503 7 427 132


1. General information

The annual financial statements have been prepared in accordance with all applicable International Financial Reporting Standards (IFRS), which includes all applicable IFRSs, International Accounting Standards (IASs) and I n t e r p r e t a t i o n s i s s u e d b y t h e I F R S I n t e r p r e t a t i o n s C o m m i t t e e a n d t h e requirements of the Companies Act of South Africa. A summary of significant accounting policies is set out in note 3.

2. Basis of preparation

The annual financial statements of the company have been prepared in accordance with all applicable International Financial Reporting Standards (IFRSs) and the requirements of the Companies Act of South Africa. The annual financial statements have been prepared under the historical cost convention, as modified by the revaluation of land and buildings, available-for-sale financial assets, and financial assets and financial l iabil i t ies (including derivative instruments) at fair value through profit or loss.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the annual financial statements are disclosed in note 4.

3. Summary of significant accounting policies

The principal accounting policies applied in the preparation of these annual financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

3.1 Business combinations

Subsidiaries are all entities (including structured entities) over which the company has control. The company controls an entity when the company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully from the date on which control is transferred to the company. They are de from the date that control ceases.

The company applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the company. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired, and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

3.1.1 Acquisition-related costs are expensed as incurred

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer's previously held equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognised in profit or loss.

Any contingent consideration to be transferred by the company is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 either in profit or loss

ACCOUNTING POLICIES


or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.

3.1.2 Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is, as transactions with the owners in their capacity as owners.

The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non- controlling interests are also recorded in equity.

3.1.3 Disposal of subsidiaries

When the company ceases to have control any retained interest in the entity is re- measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the company had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

3.2 Property, Plant and Equipment

Land and buildings comprise owner occupied property. Land and buildings are shown at fair value, based on valuations by external independent valuers, less subsequent depreciation for buildings. Valuations are

performed with sufficient regularity to ensure that the fair value of a revalued asset does not differ materially from its carrying amount. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset, and the net amount is restated to the revalued amount of the asset. All other property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Cost may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only 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. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred.

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within 'Other income' in the statement of comprehensive income. When revalued assets are sold, the amounts included in other reserves are transferred to retained earnings.

ACCOUNTING POLICIES


The assets' residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at each financial year end.

Depreciation is provided on the straight-line basis which, it is estimated, will reduce the carrying amount of the property, plant and equipment to their residual values at the end of their useful lives. Items of property, plant and equipment are depreciated from the date that they are installed and available for use. Land is not depreciated as it is deemed to have an indefinite life. Where an item of property, plant and equipment comprises major components with different useful lives, the components are accounted for as separate items of property, plant and equipment.

The major categories of property, plant and equipment are depreciated at the following rates:

Motor vehicles 25% per annumOffice furniture 7,5% to 20% per annumComputer equipment 33,3% per annumLeasehold property 20% per annumFurniture and fittings 10% to 33,3% per annum

3.3 Leases

A lease is an agreement whereby the lessor conveys to the lessee in return for a payment or series of payments the right to use an asset for an agreed period of time. Determining whether an arrangement is, or contains, a lease is based on the substance of the arrangement and requires an assessment of whether fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

Leases of assets are classified as finance leases when the leases transfer substantially all

risks and rewards incidental to ownership of the assets to the company. All other leases are classified as operating leases.

3.3.1 Operating leases as lessee

Lease payments under an operating lease are recognised as an expense on a straight-line basis over the lease term. The payments made on acquiring land held under an operating lease are recognised in the statement of financial position as lease premium for land.

Contingent rents are charged as an expense in the periods in which they are incurred.

3.4 Investments

Investments are recognised and derecognised on the trade date when the company commits itself to purchase or sell an asset and are initially measured at fair value plus, in the case of investments other than trading securities, transaction costs. At each statement of financial position date, the company assesses whether there is any objective evidence that an investment or company of investments is impaired. Investments are further categorised into the following classifications for the measurement after initial recognition.

3.4.1 Available-for-sale financial assets

Investments other than those held for trading and held to maturity are classified as available-for-sale financial assets and are stated in the statement of financial position at fair value. Gain or loss on the fair value changes of available-for-sale financial assets is recognised directly in equity in the fair value reserves, except for impairment losses and, in the case of monetary items such as debt securities, foreign exchange gains and losses which are recognised directly in profit or loss.

ACCOUNTING POLICIES


When the available-for-sale financial assets are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in profit or loss. Where the available-for-sale financial assets are interest-bearing, interest calculated using the effective interest rate method is recognised in profit or loss.

When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is objective evidence that the asset is impaired, the cumulative loss that had been recognised directly in equity is removed from equity and recognised in profit or loss even though the financial asset has not been derecognised.

The amount of the cumulative loss that is removed from equity and recognised in profit or loss is the difference between the acquisition cost (net of any principal repayment and amortisation) and current fair value, less any impairment loss on that financial asset previously recognised in profit or loss.

Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available-for-sale are not reversed through profit or loss. If, in a subsequent period, the fair value of a debt instrument classified as available for sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, with the amount of the reversal recognised in profit or loss.

3.4.2 Fair value

Fair value of an investment on initial recognition is normally the transaction price, unless it is estimated by using a valuation technique when part of the consideration given or received is for something other than the investments.

After initial recognition, the fair value of an investment quoted in an active market is based on the current bid price and, for investments not quoted in an active market; the company establishes the fair value of such investment by using a valuation technique.

Valuation techniques include using recent arm's l eng th marke t t r ansac t i ons be tween knowledgeable, willing parties, if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models.

3.5 Derivative financial instruments

Derivative financial instruments are initially recognised at fair value and the fair value is re-measured at each statement of financial position date. Gain or loss on the fair value changes are recognised in surplus or loss.

3.6 Financial assets

3.6.1 Classification

The company classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, and available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

3.6.2 Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term.

Derivatives are also categorised as held for

ACCOUNTING POLICIES


trading unless they are designated as hedges.

Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise they are classified as non-current.

3.6.3 Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. The company's loans and receivables comprise 'trade and other receivables' and 'cash and cash equivalents' in the statement of financial position.


Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of it within 12 months of the end of the reporting period.3.6.5 Recognition and measurement

Regular purchases and sales of financial assets are recognised on the trade-date – the date on which the company commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss.

Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the statement of comprehensive income. Financial assets are derecognised when the rights to receive cash flows from the investments have

expired or have been transferred and the company has transferred substantially all risks and rewards of ownership. Available- for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using the effective interest rate method.

Gains or losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category is presented in the statement of comprehensive income within 'Other (losses)/gains – net' in the period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in the statement of comprehensive income as part of other income when the company's right to receive payments is established.

Changes in the fair value of monetary and non-monetary securities classified as available for sale are recognised in other comprehensive income.

When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments recognised in equity are included in the statement of comprehensive income as 'Gains and losses from investment securities'.

Interest on available-for-sale securities calculated using the effective interest rate method is recognised in the statement of comprehensive income as part of other income. Dividends on avai lable-for-sale equity instruments are recognised in the statement of comprehensive income as part of other income when the company's right to receive payments is established.

3.6.6 Offsetting financial instruments

Financial assets and liabilities are offset, and the

ACCOUNTING POLICIES


net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

3.6.7 Impairment of financial assets

a. Assets carried at amortised cost

The company assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired.

A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a 'loss event') and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

For loans and receivables category, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the

statement of comprehensive income. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the company may measure impairment on the basis of an instrument's fair value using an observable market price.

If, in a subsequent period, the amount of the impairment loss decreases, and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor's credit rating), the reversal of the previously recognised impairment loss is recognised in the statement of comprehensive income.

b. Assets classified as available for sale

The company assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. For debt securities, the company uses the criteria referred to in (a) above. In the case of equity investments classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is also evidence that the assets are impaired. If any such evidence exists for avai lable-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from equity and recognised in profit or loss. Impairment losses recognised in the statement of comprehensive income on equity instruments are not reversed through the statement of comprehensive income.

If, in a subsequent period, the fair value of a debt instrument classified as available for sale increases and the increase can be objectively related to an event occurring after the

ACCOUNTING POLICIES


impairment loss was recognised in profit or loss, the impairment loss is reversed through the statement of comprehensive income.

3.6.8 Trade and other receivables

Trade and other receivables are initially measured at fair value and, after initial recognition, at amortised cost less impairment losses for bad and doubtful debts, if any, except for the following receivables:

Ÿ Interest-free loans made to related parties without any fixed repayment terms or the effect of discounting being immaterial, that are measured at cost less impairment losses for bad and doubtful debt, if any; and

Ÿ Short-term receivables with no stated interest rate and the effect of discounting being immaterial, that are measured at their original invoice amount less impairment losses for bad and doubtful debt, if any.

At each reporting date, the company assesses whether there is any objective evidence that a receivable or company of receivables is impaired. Impairment losses on trade and other receivables are recognised in profit or loss when there is objective evidence that an impairment loss has been incurred and are measured as the difference between the receivable's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at its original effective interest rate, i.e. the effective interest rate computed at initial recognition. The impairment loss is reversed if, in a subsequent period, the amount of the impairment loss decreases, and the decrease can be related objectively to an event occurring after the impairment was recognised.

3.6.9 Cash and cash equivalents

Cash comprises cash on hand and at bank and

demand deposits with bank. Cash equivalents are short- term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

For the purpose of statement of cash flows, bank overdrafts which are repayable on demand form an integral part of the company's cash management are included as a component of cash and cash equivalents.


Available-for-sale financial assets are non-derivative financial assets that are designated as available for sale or are not classified in any of the above categories of financial assets. Avai lable-for-sale financial assets are recognised initially at fair value plus any directly attributable transaction costs.

Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses and foreign currency differences on available-for-sale debt ins t ruments , a re recogn ised in o ther comprehensive income and presented in the fair value reserve in reserves. When an investment is derecognised, the gain or loss accumulated in equity is reclassified to profit or loss.

Impairment losses on available-for-sale financial assets are recognised by reclassifying the losses accumulated in the fair value reserve to profit or loss. The cumulative loss that is reclassified from equity to profit or loss is the difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss recognised previously in profit or loss. Changes in the cumulative impairment losses attributable to the application of the effective interest rate method are reflected as a component of interest income. If, in a subsequent period, the fair value

ACCOUNTING POLICIES


of an impaired available-for-sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognised, then the impairment loss is reversed, with the amount of the reversal recognised in profit or loss. However, any subsequent recovery in the fair value of the impaired available-for-sale equity security is recognised in other comprehensive income.

3.6.11 Impairment of financial assets

A financial asset not classified as at fair value through profit or loss is assessed at each reporting date to determine whether there us objective evidence that it is impaired. A financial asset is impaired if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset, and that loss event(s) had an impact on the estimated future cash flows of that asset that can be estimated reliably.

Objective evidence that financial assets are impaired includes default or delinquency by a debtor, restructuring of an amount due to the company on terms that the company would consider otherwise, indications that a debtor or issuer will enter into bankruptcy, adverse changes in the payment status of borrowers or issuers, economic conditions that correlate with defaults or the disappearance of an active market for security.

The company considers evidence of impairment for financial assets measured at amortised cost (loans and receivables and held-to-maturity investment securities) at both a specific asset and collective level. All individually significant assets are assessed for any impairment that has been incurred but not yet identified. Assets that are not individually significant are collectively assessed for impairment by companying together assets with similar risk characteristics.

In assessing collective impairment, the company uses historical trends if the probability

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

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated cash flows discounted at the assets original effective interest rate. Deficits are recognised in profit or loss and reflected in an allowance account against loans and receivables or held-to-maturity investment securities. Interest on the impaired asset continues to be recognised. when an event occurring after the impairment was recognised causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

3.7 Financial liabilities

3.7.1 Trade and other payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method.

3.7.2 Share capital

a. Ordinary shares

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

ACCOUNTING POLICIES


3.8 Post-employment benefits and short-term employee benefits

3.8.1 Short-term employee benefits

The cost of all short-term employee benefits is recognised during the period in which the employee renders the related service on an undiscounted basis.

Accruals for employee entitlement to annual leave represents the present obligation, which the company has to pay as a result of employees' services, provided to the reporting date. The accruals have been calculated at undiscounted amounts based on current salary rates.

A liability is recognised for the amount expected to be paid under short term bonuses in the company as the company has a present legal constructive obligation to pay the amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

3.9 Income tax

Income tax for the year includes current tax and deferred tax. Current tax and deferred tax are recognised in profit or loss, except to the extent that the tax arises from a transaction or event which is recognised directly in equity. In the case if the tax relates to items that are recognised directly to equity, current tax and deferred tax are also recognised directly to equity.

Current tax liabilities and assets are measured at the amount expected to be paid to or recovered from the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the statement of financial position date. Current tax is the amount of income taxes payable or recoverable in respect of the taxable profit or loss for a period.

Deferred tax assets and liabilities arise from deductible and taxable temporary differences

respectively. Temporary differences are the differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. Deferred tax assets also arise from unused tax losses and unused tax credits.

A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which is not a business combination; and 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 is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

At each statement of financial position date, the company reviews and assesses the recognised and unrecognised deferred tax assets and the future taxable profit to determine whether any recognised deferred tax assets should be derecognised and any unrecognised deferred tax assets should be recognised.

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 statement of financial position date. Deferred tax assets and liabilities are not discounted.

3.10 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably

ACCOUNTING POLICIES


measured. Revenue is measured at fair value of the consideration received or receivable and represents amounts receivable or received for services provided and goods delivered, net of discounts and Value Added Tax (VAT) and where there is reasonable expectation that the income will be received, and all attaching conditions will be complied with.

3.11 Dividends

Dividend income is recognised when the shareholder's right to receive payment is established.

3.12 Interest income

Interest income is recognised using the effective interest rate method. When a loan and receivable is impaired, the company reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument and continues unwinding the discount as interest income. Interest income on impaired loan and receivables is recognised using the original effective interest rate.

3.13 Related parties

For the purposes of these financial statements, a party is considered to be related to the company if:

4. Critical accounting judgements and key sources of estimation uncertainty

T h e c o m p a n y ' s m a n a g e m e n t m a k e s assumptions, estimates and judgements in the process of applying the company's accounting policies that affect the assets, liabilities, income and expenses in the annual financial statements prepared in accordance with IFRSs. The assumptions, estimates and judgements are based on historical experience and other factors that are believed to be reasonable under the circumstances. While the management reviews their judgements, estimates and assumptions

continuously, the actual results will seldom equal to the estimates.

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

4.1 Key assumption and other key sources of estimation uncertainty

Certain key assumptions and risk factors in respect of the financial risk management are set out in note 29. Other key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are set out as follows:

5. Changes in accounting policies and disclosures

5 . 1 A d o p t i o n o f n e w a n d r e v i s e d pronouncements

There were no changes in accounting policies and disclosures, and no adoption of new and revised pronouncements adopted in the current year nor selected for adoption in the future.

ACCOUNTING POLICIES


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Fig

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s in

R2018

2017

24.

Dir

ecto

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olu

men

ts

2018

Nam

e

Fees

paid

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for

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20

17

Na

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Fe

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Annual R

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Fig

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25

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Annual R

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2017/1

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Fig

ure

s in

R2

01

82

01

7

2

7.

Lis

t o

f su

bsid

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Inte

rest held

Inte

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Share

cost

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cost

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e

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2017

2018

2017

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Annual R

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Fig

ure

s in

R

2018

2017

29.

Fin

an

cia

l in

str

um

en

ts

Th

e c

om

pa

ny h

as

cla

ss

ifie

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ts fi

na

nc

ial

as

sets

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ote

7)

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Ann

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l Re

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01

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8

Annual R

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2017/1

8

Fig

ure

s in

R

2018

2017

Cu

rren

t fi

nan

cia

l assets

T

rade a

nd o

ther

rece

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s (r

efe

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10)

-

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25

0

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note

11)

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27

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2

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2

Th

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om

pan

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as c

lassifi

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its

fin

an

cia

l liab

ilit

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th

e f

ollo

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g

cate

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Fair v

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pro

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Am

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T

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refe

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15)

-

1 3

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33

7

1 3

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37

Oth

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bili

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17)

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1 5

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01

2017

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refe

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29

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51

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om

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quid

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isk

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nancia

l instr

um

ents

. The c

om

pany'

s

risk

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ent

obje

ctiv

es,

polic

ies

and p

roce

sses

main

ly f

ocus o

n m

inim

izin

g t

he p

ote

ntia

l adve

rse e

ffect

s o

f th

ese r

isks o

nits fi

nanci

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perf

orm

ance a

nd p

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on b

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ose

ly m

onitoring

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div

idua

l exp

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re.

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TE

S T

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01

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8

Annual R

eport

2017/1

8

Fig

ure

s in

R

20

18

20

17

29.1

Cre

dit

ris

k

Cre

dit r

isk d

eri

ve

s m

ain

ly f

rom

ca

sh

de

po

sits

an

d

ca

sh e

qu

iva

len

ts.

Th

e c

om

pa

ny

on

ly d

ep

osits c

ash

w

ith

ma

jor

ba

nks w

ith

hig

h

qu

alit

y

cre

dit

sta

nd

ing

an

d

limits

exp

osu

re

to

an

y

on

e

co

un

ter-

pa

rty.

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mm

ary

qu

an

tita

tive

da

ta

AB

SA

Ba

nk L

imite

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32

9 2

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4 4

81

97

0

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db

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0 2

82

611

16

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nk

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1 3

53

34

41

55

8 7

73

At

3

0 J

un

e

20

18

, th

e c

om

pa

ny

ha

s n

o c

on

ce

ntr

atio

n o

f ri

sk

an

d t

he

ma

xim

um

exp

osu

re t

o c

red

it r

isk is r

ep

rese

nte

d b

y t

he

ca

rryin

g

am

ou

nt

of

e

ach

fin

an

cia

l

asse

t.

29.2

Liq

uid

ity r

isk

Th

e c

om

pa

ny

is e

xp

ose

d t

o li

qu

idity

risk o

n fi

na

ncia

l lia

bili

tie

s.

It m

an

ag

es its

fu

nd

s c

on

se

rva

tive

ly b

y m

ain

tain

ing

a c

om

fort

ab

le le

ve

l

of

ca

sh

an

d c

ash

eq

uiv

ale

nts

in

ord

er

to

me

et

co

nti

nu

ou

s

op

era

tio

na

l

ne

ed

.

29.3

Fa

ir v

alu

e o

f fi

na

nc

ial

ins

tru

me

nt

Th

e e

stim

ate

d f

air v

alu

es o

f fin

an

cia

l a

ssets

and

fin

an

cia

l lia

bili

ties a

s a

t 3

0 J

un

e 2

01

8 h

ave

be

en

de

term

ine

d u

sin

g a

vaila

ble

ma

rket

info

rmatio

n a

nd a

ppro

pria

te v

alu

atio

n m

eth

od

olo

gie

s.

Th

e f

air v

alu

e o

f a

lmo

st a

ll fin

an

cia

l in

str

um

en

ts e

qu

als

th

eir c

arr

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g v

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e,

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er

be

cau

se o

f th

e s

hort

-term

natu

re a

nd

norm

al t

rad

e t

erm

s th

ere

of, o

r th

e m

ark

et-

rela

ted in

tere

st r

ate

s a

ttach

ed

to

it.

29.4

Inte

rest

rate

ris

k

Th

e c

om

pa

ny

exp

osu

re o

n f

air

va

lue

in

tere

st

rate

ris

k m

ain

ly a

rise

s fr

om

its

fixe

d d

ep

osit

s w

ith

ba

nks a

nd

in

ve

stm

en

ts i

n fi

xe

d r

ate

de

bt

se

cu

ritie

s, w

hic

h a

re c

lassifi

ed

as

he

ld-t

o-m

atu

rity

in

ve

stm

en

ts a

nd

ava

ilab

le-f

or-

sa

le fi

na

ncia

l a

sse

ts.

It a

lso

ha

s e

xp

osu

re o

n

ca

sh

flo

w i

nte

rest

rate

ris

k

w

hic

h i

s m

ain

ly a

risin

g f

rom

its

de

po

sits

with

ba

nks a

nd in

tere

st-

be

ari

ng

bo

rro

win

gs

with

th

e b

an

ks.

It

is a

co

mm

on

pra

ctice

in

So

uth

Afr

ica

to

ha

ve

flo

atin

g r

ate

bo

rro

win

gs

with

th

e

ba

nks.

NO

TE

S T

O T

HE

AN

NU

AL

FIN

AN

CIA

L S

TA

TE

ME

NT

S

Sele

ctiv

e E

mpow

erm

ent In

vest

ments

1 L

imite

d

58

S

ele

ctiv

e E

mpow

erm

ent In

vest

ments

1 L

imite

d

Ann

ua

l Re

po

rt 2

01

7/1

8

Annual R

eport

2017/1

8

Fig

ure

s in

R

2018

Th

e c

om

pa

ny

ma

inly

ho

lds

fixe

d d

ep

osit

s w

ith b

an

ks w

ith m

atu

rity

with

in 1

mo

nth

an

d t

he e

xp

osu

re i

s co

nsid

ere

d

als

o i

nve

sts

su

rplu

s f

un

ds

in fi

xe

d r

ate

de

bt

se

cu

riti

es

on

ly a

nd s

uch i

nve

stm

en

ts a

re n

ot

no

rma

lly

ma

teri

al.

ma

teri

al e

xp

osu

re o

n f

air

va

lue i

nte

rest

rate

ris

k is

exp

ecte

d.

Eve

n t

ha

t, t

he

co

mp

an

y clo

se

ly m

on

ito

rs t

he f

air

inve

stm

en

ts a

nd d

isp

ose

s of

the

m in c

ase o

f sig

nifi

ca

nt

incre

ase

in in

tere

st

rate

is

fore

se

en

.

In o

rder

to m

anag

e t

he c

ash fl

ow

inte

rest

rate

ris

k, t

he c

om

pany

will

repay

the c

orr

esp

ondin

g b

orr

ow

ing

s w

hen it

has

surp

lus f

unds.

Su

mm

ary

qu

an

tita

tive d

ata

Cash

at bank (

note

11)

408 1

16

Deposi

ts w

ith b

anks

(note

11)

1 3

54 3

19

Sen

sit

ivit

y a

naly

sis

At

30 J

un

e 2

01

8,

if i

nte

rest

rate

s a

t th

at

da

te h

ad b

ee

n [1

00

] b

asis

po

ints

lo

we

r w

ith

all

oth

er

va

ria

ble

s h

eld

co

nsta

nt,

loss

for

the y

ea

r a

nd

reta

ine

d

ea

rnin

gs

wo

uld

ha

ve

be

en

R1

7,6

24

(201

7:

R7

4,2

71

)

hig

he

r.

At

30 J

un

e 2

01

8,

if

inte

rest

rate

s a

t th

at

da

te h

ad b

ee

n

[10

0]

ba

sis

po

ints

hig

he

r w

ith a

ll o

the

r va

ria

ble

s h

eld

pro

fit

for

the

ye

ar

an

d

reta

ine

d

ea

rnin

gs

wo

uld

ha

ve

be

en

R1

7,6

24

(20

17

:

R7

4,2

71

)

low

er.

Th

e s

en

sitiv

ity

an

aly

sis

ha

s b

ee

n p

rep

are

d w

ith t

he a

ssu

mp

tio

n t

ha

t th

e c

ha

ng

e i

n in

tere

st

rate

s h

ad o

ccu

rre

d

da

te a

nd h

ad

b

ee

n

a

pp

lie

d t

o t

he e

xp

osu

re t

o i

nte

rest

rate

ris

k fo

r th

e r

ele

va

nt fin

an

cia

l in

str

um

en

ts

in e

xis

ten

ce

ch

an

ge

s

in in

tere

st ra

te

rep

rese

nt

ma

na

ge

me

nt’

s a

sse

ssm

en

t of

a r

ea

so

na

bly

po

ssib

le c

ha

ng

e i

n in

tere

st

rate

s

pe

rio

d u

ntil th

e n

ext

an

nu

al b

ala

nce

sh

ee

t

da

te.

The a

naly

sis is

pre

pare

d o

n t

he s

am

e b

asis

for

2017.

2017

no

t sig

nifi

ca

nt.

It

In c

on

se

qu

en

ce

, n

o

va

lue fl

uctu

atio

n o

f th

e

5 8

24 8

89

1 5

72 2

43

the c

om

pa

ny

co

nsta

nt,

th

e c

om

pa

ny

at

the b

ala

nce s

he

et

at

tha

t d

ate

. T

he

at th

at d

ate

ove

r th

e

NO

TE

S T

O T

HE

AN

NU

AL

FIN

AN

CIA

L S

TA

TE

ME

NT

S

Sele

ctiv

e E

mpow

erm

ent In

vest

ments

1 L

imite

d

59

S

ele

ctiv

e E

mpow

erm

ent In

vest

ments

1 L

imite

d

Ann

ua

l Re

po

rt 2

01

7/1

8

Annual R

eport

2017/1

8

Fig

ure

s in

R

20

18

20

17

29

.5

Eq

uit

y p

ric

e r

isk

Th

e in

vest

me

nts

in e

qu

ity s

ecu

ritie

s c

lass

ifie

d a

s a

vaila

ble

-for-

sale

fin

an

cia

l ass

ets

exp

ose

th

e c

om

pa

ny

to p

rice

ris

k.

Su

mm

ary

qu

an

tita

tive

da

ta

Ava

ilab

le-f

or-

sale

fin

an

cia

l ass

ets

, at

fair v

alu

e

-

Un

liste

d e

qu

ity s

ecu

ritie

s

20

79

7 6

90

27

54

3 0

41

-

Un

it tr

usts

29

66

4 4

112

9 9

93

53

0-

Lis

ted e

qu

ity s

ecu

ritie

s in

So

uth

Afr

ica

10

2 0

13

10

48

7 4

30

54

8

Se

ns

itiv

ity a

na

lys

is

A 1

0%

in

cre

ase

in

sto

ck p

rice

s a

t 3

0 J

un

e 2

01

8 w

ith

all

oth

er

va

ria

ble

s h

eld

co

nsta

nt

wo

uld

ha

ve

in

cre

ase

d u

nre

alis

ed p

rofit fo

r th

e

ye

ar

by

R1

0.2

mill

ion

(2

01

7:

R8

.7 m

illio

n).

Co

nve

rse

ly, i

f a

10

% d

ecre

ase

in

sto

ck

pri

ce

s a

t 3

0 J

un

e 2

01

8 w

ith

all

oth

er

va

ria

ble

s h

eld

co

nsta

nt w

ou

ld h

ave

de

cre

ase

d

pro

fit

for

the

ye

ar

by

R1

0.2

mill

ion

(20

17

:

R8

.7

mill

ion

).

Th

e s

en

sitiv

ity

an

aly

sis

ha

s b

ee

n p

rep

are

d w

ith

th

e a

ssu

mp

tio

n t

ha

t th

e c

ha

ng

e i

n

eq

uity

pri

ce

ha

d o

ccu

rre

da

t th

e b

ala

nce s

he

et

da

te a

nd

ha

d

be

en

ap

plie

d t

o t

he

exp

osu

re t

o e

qu

ity

pri

ce

ris

k f

or th

e r

ele

va

nt fin

an

cia

l in

str

um

en

ts

in e

xis

ten

ce

at

tha

t d

ate

. T

he

ch

an

ge

s

in

eq

uity

p

rice

re

pre

se

nt

ma

na

ge

me

nt’s

asse

ssm

en

t o

f a

re

aso

na

bly

p

ossib

le c

ha

ng

e i

n e

qu

ity

p

rice

at

tha

t d

ate

ove

r th

e

pe

rio

d u

ntil th

e n

ext

an

nu

al b

ala

nce

sh

ee

t

da

te.

T

he a

na

lysi

s is

pre

pa

red o

n t

he

sam

e b

asi

s fo

r 20

17

.

NO

TE

S T

O T

HE

AN

NU

AL

FIN

AN

CIA

L S

TA

TE

ME

NT

S

Sele

ctiv

e E

mpow

erm

ent In

vest

ments

1 L

imite

d

60

S

ele

ctiv

e E

mpow

erm

ent In

vest

ments

1 L

imite

d

Ann

ua

l Re

po

rt 2

01

7/1

8

Annual R

eport

2017/1

8

Fig

ure

s in

R

20

18

20

17

30.

Fa

ir v

alu

e h

iera

rch

y o

f fi

na

ncia

l in

str

um

en

ts

Fin

an

cia

l asse

ts a

nd lia

bili

tie

s

me

asu

red

at

fair

va

lue

in

th

e

ba

lan

ce

sh

ee

t a

re c

ate

go

rise

d in

its

en

tire

ty in

to t

he

fo

llow

ing

th

ree

leve

ls o

f th

e f

air

v

alu

e

hie

rarc

hy

ba

se

d

on

the

ba

sis

of

the

low

est

leve

l

inp

ut

tha

t

is

sig

nifi

ca

nt

to

the

fair

va

lue

me

asu

rem

en

tin

its

en

tire

ty:

Le

vel 1

: L

iste

d in

vest

men

ts;

Le

vel 2

: L

iste

d B

EE

In

vest

me

nts

; a

nd

Le

vel 3

: U

nlis

ted

BE

E in

vest

me

nts

.

Fin

an

cia

l asse

ts m

ea

sure

d a

t fa

ir v

alu

e

Ava

ilab

le-f

or-

sale

fin

an

cia

l ass

ets

-

Un

liste

d s

ecu

ritie

s

20

79

76

90

27

54

3 0

41

-

Un

it tr

ust

s

29

66

4 4

112

9 9

93

53

0

-

Lis

ted e

qu

ity s

ecuri

ties

in S

ou

th A

fric

a

10

2 0

13

10

48

7 4

30

54

8

Du

rin

g t

he y

ea

r, th

e c

om

pa

ny

ha

d n

o s

ign

ifica

nt

tra

nsf

ers

be

twe

en

instr

um

en

ts in

Le

vel 1

an

d L

eve

l 2

.

Du

rin

g t

he y

ea

r, t

he

co

mp

an

y h

ad

no

sig

nifi

can

t tr

an

sfe

rs o

f in

stru

me

nts

into

or

out

of

Le

vel 3

.

Th

ere

are

no

fin

an

cia

l a

sse

ts t

ha

t ch

an

gin

g o

ne

or

mo

re o

f th

e in

pu

ts t

o r

ea

so

na

bly

po

ssib

le a

lte

rna

tive

me

asu

rem

en

ts w

ou

ld c

ha

ng

e t

he

ir f

air

va

lue

sig

nifi

ca

ntl

y.

a

ssu

mptio

ns in

the

ir f

air v

alu

e

31.

G

oin

g C

on

ce

rn

T

he d

ire

cto

rs b

elie

ve t

ha

t th

e c

om

pa

ny

will

be

a g

oin

g c

once

rn in

th

e y

ea

r a

he

ad

. F

or

this

rea

so

n,

w

e c

on

tinu

e t

o a

do

pt th

e g

oin

g c

on

cern

ba

sis

in p

rep

ari

ng

th

e a

nn

ua

l fin

an

cia

l sta

tem

ents

.

NO

TE

S T

O T

HE

AN

NU

AL

FIN

AN

CIA

L S

TA

TE

ME

NT

S

Sele

ctiv

e E

mpow

erm

ent In

vest

ments

1 L

imite

d

61

S

ele

ctiv

e E

mpow

erm

ent In

vest

ments

1 L

imite

d

Ann

ua

l Re

po

rt 2

01

7/1

8

Annual R

eport

2017/1

8

32.

Ap

pro

val

of

an

nu

al

fin

an

cia

l sta

tem

en

ts

These

financi

al s

tate

ments

were

appro

ved b

y th

e b

oard

of

direct

ors

and a

uth

orised for

issu

e o

n 3

0 O

cto

ber

2018.

Sele

ctiv

e E

mpow

erm

ent In

vest

ments

1 L

imite

d

62

S

ele

ctiv

e E

mpow

erm

ent In

vest

ments

1 L

imite

d

Ann

ua

l Re

po

rt 2

01

7/1

8

Annual R

eport

2017/1

8

Fig

ure

s in

R

20

18

20

17

NO

TE

S T

O T

HE

AN

NU

AL

FIN

AN

CIA

L S

TA

TE

ME

NT

S

Figures in R

Note(s)

2018

2017

Gross Revenue

Dividends received

3 725 151 4 609 767

Interest received

1

095 128 1 438 045

4 820 279 6 047 812

Other Income

Admin / management fees received

312 201 262 893

Bad debts recovered

- 326 288

Profit on sale of investments

1 181 422 12 747 095

1 493 623 13 336 276

6 313 902 19 384 088

Expenditure

Accounting fees

457 105 508 955

Auditors' remuneration

196 126 72 263

Bank charges

14 451 9 784

Computer expenses

79 913 113 977

Consulting fees

848 206 459 703

Depreciation -

Tangible assets

199 786 175 577

Emoluments -

Directors

24

139 333 -

Finance costs

73 129 59 317

Fines and penalties

62 033 -

Other impairments

282 657 82 526

Insurance

23 055 20 338

Lease rental on operating lease

730 795 439 590

Legal expense

685 268 2 657 719

Motor vehicle expense

65 950 23 114

Portfolio management fees 985 982 870 683

Shareholder communication 1 497 481 322 368

Courier and Postage 276 928 1 091

Printing and stationery 109 411 62 431

Repairs and maintenance

- 2 557

Salaries 3 415 584 1 917 836

Secretarial fees 315 959 953 713

Staff welfare 58 762 16 667

Subscriptions 15 012


DETAILED INCOME STATEMENT

(Loss)/profit before taxation

(5 736 896) 10 331 244

Taxation

326 455 (2 409 758)

(Loss)/profit for the year

(5 410 441) 7 921 486

-

Telephone and fax 277 497 166 987

Training 365 361 -

Travel - local 875 014 115 64812 050 798 9 052 844


The supplementary information presented does not form part of the annual financial statements and is unaudited:

Date post:	22-Mar-2020
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