Capricorn : GROUP ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

GROUP

ANNUAL FINANCIAL STATEMENTS

for the year ended 30 June 2021

Index

STATEMENT OF RESPONSIBILITY BY THE BOARD OF
DIRECTORS	2
INDEPENDENT AUDITOR'S REPORT	3
DIRECTORS' REPORT	10
CONSOLIDATED AND SEPARATE STATEMENTS OF
COMPREHENSIVE INCOME	14
CONSOLIDATED AND SEPARATE STATEMENTS OF
FINANCIAL POSITION	16
CONSOLIDATED AND SEPARATE STATEMENTS OF
CHANGES IN EQUITY	17
CONSOLIDATED AND SEPARATE STATEMENTS OF CASH
FLOWS	19
NOTES TO THE CONSOLIDATED AND SEPARATE ANNUAL
FINANCIAL STATEMENTS	20

1

DIRECTORS OF BOARD THE BY RESPONSIBILITY OF STATEMENT

Statement of responsibility by the board of directors

for the year ended 30 June 2021

The directors are responsible for the preparation, integrity and objectivity of the financial statements that fairly present the state of affairs of the company and the Group at the end of the financial year, the profit and cash flow for the year and other information contained in this report.

To enable the directors to meet these responsibilities:

• The board and management set standards and management implements systems of internal control, accounting and information systems aimed at providing reasonable assurance that assets are safeguarded and the risk of error, fraud or loss is reduced in a cost-effective manner. These controls, contained in established policies and procedures, include the proper delegation of responsibilities and authorities within a clearly defined framework, effective accounting procedures and adequate segregation of duties.
• The Group's internal audit function, which operates unimpeded and independently from operational management, and has unrestricted access to the various Group board audit, risk and compliance committees, appraises, evaluates and, when necessary, recommends improvements in the systems of internal control and accounting practices, based on audit plans that take cognisance of the relative degrees of risk of each function or aspect of the business.
• The board audit, risk and compliance committees of the company and its subsidiaries, together with the external and internal auditors, play an integral role in matters relating to financial and internal control, accounting policies, reporting and disclosure.

To the best of their knowledge and belief, based on the above, the directors are satisfied that no material breakdown in the operation of the systems of internal control and procedures has occurred during the year under review.

The Group consistently adopts appropriate and recognised accounting policies and these are supported by reasonable and prudent judgements and estimates on a consistent basis.

The financial statements presented on pages 14 to 143 have been prepared in accordance with the provisions of the Companies Act of Namibia, 28 of 2004 ("Companies Act of Namibia") and comply with International Financial Reporting Standards ("IFRS").

The directors have no reason to believe that the company and the Group as a whole will not be going concerns in the year ahead, based on forecasts and available cash resources. These financial statements have accordingly been prepared on a going concern basis.

Comprehensive insurance cover is in place as required by the Bank of Namibia BID 14 - 'Determinations on minimum insurance for banking institutions'.

The financial statements have been audited by the independent auditing firm, PricewaterhouseCoopers, who was given unrestricted access to all financial records and related data, including minutes of all meetings of 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 independent auditor's report is presented on page 3 to 9.

The directors of the company are responsible for the controls over, and the security of the website and, where applicable, for establishing and controlling the process for electronically distributing annual reports and other financial information to shareholders.

The financial statements, set out on pages 14 to 143, were authorised and approved for issue by the board of directors on 14 September 2021 and are signed on their behalf:

J J Swanepoel	M J Prinsloo
Chairperson	Group chief executive officer

2 GROUP ANNUAL FINANCIAL STATEMENTS

Independent auditor's report

to the members of Capricorn Group Limited

Our opinion

In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of Capricorn Group Limited (the Company) and its subsidiaries (together the Group) as at 30 June 2021, and its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards ("IFRS") and the requirements of the Companies Act of Namibia.

What we have audited

Capricorn Group Limited's consolidated and separate financial statements set out on pages 10 to 143 comprise:

• the directors' report for the year ended 30 June 2021;
• the consolidated and separate statements of financial position as at 30 June 2021;
• the consolidated and separate statements of comprehensive income for the year then ended;
• the consolidated and separate statements of changes in equity for the year then ended;
• the consolidated and separate statements of cash flows for the year then ended; and
• the notes to the financial statements, which include a summary of significant accounting policies.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the consolidated and separate financial statements section of our report.

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

Independence

We are independent of the Group in accordance with the International Ethics Standards Board for Accountants International Code of Ethics for Professional Accountants (including International Independence Standard) (Code of Conduct) and other independence requirements applicable to performing audits of financial statements in Namibia. We have fulfilled our other ethical responsibilities in accordance with the Code of Conduct and in accordance with other ethical requirements applicable to performing audits in Namibia.

Our audit approach

Overview

REPORT AUDITOR'S INDEPENDENT

Materiality

Group

scoping

Key

audit

matters

Overall Group materiality

• Overall group materiality: N$ 69,707,200, which represents 5% of consolidated profit before income tax from continuing operations.

Group audit scope

• The group audit scope included a full scope audit of the Company, due to its financial significance to the Group, and full scope audits of three components in the Group based on their financially significant contribution to the group profit before tax.

Key audit matters

• Expected credit losses ("ECL") on loans and advances and financial assets at amortised cost; and
• Sale of investment in a subsidiary.

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

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