2021 integrated annual report

2021 INTEGRATEDANNUAL REPORT

Overview

CONTENTS

Page

Glossary of terms 2

Glossary of icons 4

Overview 5

Profile 6

About our Integrated Annual Report 7

2021 at a glance 10

5-year financial review and statistics 11

Geographic footprint 15

Group structure 16

Alviva as an investment 18

Alviva business model 19

Strategic focus areas 26

Report to shareholders 28

Governance 34

Board of Directors 35

Governance and Compliance Structure 37

Corporate Governance Report 38

Combined Assurance 56

Risk Management 58

Stakeholder Engagement 65

Remuneration Committee Report 70

Social and Ethics Committee Report 96

Sustainability 102

Sustainability highlights 103

Sustainability Report 104

Page

Annual financial statements 147

Certificate by Company Secretary 148

Statement by CEO and CFO 149

Directors’ responsibility statement and approval

150

Audit and Risk Committee Report 151

Directors’ Report 160

Report of the independent auditor 169

Statements of financial position 173

Statements of profit or loss and other comprehensive income

174

Statements of changes in equity 175

Statements of cash flows 176

Notes to the financial statements 177

Shareholders’ information 290

Shareholders’ diary 291

Notice of AGM 292

Form of proxy 305

Annexure A: Participation in the AGM via electronic communication

307

Annexure B: Online shareholders’ meeting guide 2021

309

Corporate information 311

ALVIVA HOLDINGS LIMITED • Integrated Annual Report 2021 1

2 ALVIVA HOLDINGS LIMITED • Integrated Annual Report 2021

Overview

GLOSSARY OF TERMSAGM Annual General Meeting

AI Artificial Intelligence

Alviva Alviva Holdings Limited

B-BBEE Broad-Based Black Economic Empowerment

BESS Battery Energy Storage Solutions

CAE Chief Audit Executive

CEO Chief Executive Officer

CCO Chief Commercial Officer

CFO Chief Financial Officer

CIO Chief Information Officer

COVID-19 Coronavirus Disease 2019 or the Pandemic

CRO Chief Risk Officer

CSI Corporate Social Investment

DTI Department of Trade and Industry

EIM Enterprise Information Management

EME Exempted Micro Enterprise

EPC Engineering, Procurement and Construction

ERP Enterprise Resource Planning

ESG Environmental, Social and Governance

EV Electric Vehicle

FSP Forfeitable Share Plan

GRI Global Reporting Standards 2020 – GRI references in [red]

HR Human Resources

ICAS ICAS Southern Africa (Pty) Ltd – Independent Counselling and Advisory Services

ICT Information Communication Technology

IFRS International Financial Reporting Standards

IIA Institute of Internal Auditors

IoDSA Institute of Directors in South Africa

IP Intellectual Property

ISO International Standards Organisation

IT Information Technology

JSE Johannesburg Stock Exchange

JSE Listings Requirements

JSE Listings Requirements – service issue 27

King IV™ King IV Report on Corporate Governance for South Africa™ 2016

KPA Key Performance Areas

KPI Key Performance Indicators

KWp Kilowatt Peak

LTIFR Lost Time Injury Frequency Rate

MDP Management Development Programme

MERSETA Manufacturing, Engineering and Related Services Sector Education and Training Authority

MICT SETA Media, Information and Communications Technologies Sector Education and Training Authority

MOI Memorandum of Incorporation

MSR Minimum Shareholding Requirement

MWp Megawatt Peak

NICD National Institute for Communicable Diseases

NSFAS National Student Financial Aid Scheme

OCPP Open Charge Point Protocol

OECD Organisation for Economic Co-operation and Development

OEM Original Equipment Manufacturer

OHS Occupational Health and Safety

OHS Act Occupational Health and Safety Act, No 85 of 1993

POPIA Protection of Personal Information Act, No 4 of 2013

PV Photovoltaic

PwC PricewaterhouseCoopers Incorporated

QSE Qualifying Small Enterprise

SABS South African Bureau of Standards

SARS South African Revenue Service

SENS Stock Exchange News Service

SDG Sustainable Development Goals

SDL Skills Development Levies

SHE Safety, Health and Environment

SLA Service Level Agreement

SNG Grant Thornton

SizweNtsalubaGobodo Grant Thornton Incorporated

SMME Small Medium Micro Enterprise

the Board The Board of Directors of Alviva Holdings Limited

the Committee The specific committee being covered under the preceding heading

the Company Alviva Holdings Limited

the Companies Act

Companies Act, No 71 of 2008 of South Africa (as amended)

the OHS Act Occupational Health and Safety Act, No 85 of 1993 of South Africa

the Group Alviva Holdings Limited and its Subsidiaries

TRIFR Total Recordable Injury Frequency Rate

WHO World Health Organisation

3ALVIVA HOLDINGS LIMITED • Integrated Annual Report 2021

Icons used throughout this report

OUR CAPITALSOur capitals, as shown by the icons below, demonstrate how utilisation and trade-offs in the capitals lead to the creation, retention and prevention of erosion of value.

Financial capitalManufactured

capitalIntellectual capital Human capital

Social and relationship capital

Natural capital

Financial capital is the traditional yardstick

of performance, including funds

obtained through financing or

generated by means of productivity. Access

to cost-effective financial capital –

such as equity, debt and reinvestment

– is an essential basis for sustaining and

creating value across all capitals.

Manufactured capital encompasses

physical infrastructure or technology

pertaining to this, such as equipment

and tools. The Group’s investment

in the purchase, development and

maintenance of property, plant and

equipment has given Alviva the capacity to generate longer-term

results.

Intellectual capital accounts for the

intangibles associated with brand and

reputation, in addition to patents, copyrights,

organisational systems and related

procedures. Delivering on Alviva’s strategy and business model

requires a strong performance-based

culture, effective management systems

and continuing innovation in processes and

technology to produce the most efficient and

effective outcomes.

Human capital relates to the skills and

know-how of Alviva’s employees, in addition to their commitment

and motivation, which affect their

ability to fulfil their roles. Everything the Group does depends

on the well-being, skills, knowledge,

experience, expertise, productivity,

motivation and behaviour of the

Group’s employees and the leadership

team.

Social and relationship capital encompasses

the relationships – and attendant resources

– between Alviva and all its stakeholders,

including communities, governments, suppliers and

customers. Trusted relationships with

stakeholders is essential to securing

Alviva’s reputation and licence to operate, and enabling the Group to deliver on its strategy.

Natural capital includes resources such as water, fossil

fuels, solar energy and carbon sinks, which cannot be replaced and are essential to

the functioning of the economy as a whole. As Alviva is primarily a holding company

with business entities mainly operating in the trading and logistics sectors,

and not in the manufacturing sector,

its impact on the environment is not

significant or material.

STRATEGIC OBJECTIVES

To grow and sustain Alviva

Subscribe to the highest standards of good corporate governance

Grow and develop the Group’s human capital

Digitisation of the business processes

MATERIAL MATTERSMatters that could substantially affect the Group’s ability to create, preserve and prevent the erosion of value

Reputation – Alviva’s position in the market is such that it has the requirement to display the highest standard of good corporate governance and corporate citizenship.

Transformation – Transformation is critical for Alviva’s legitimacy as a key supplier to government, corporates and the IT reseller channel.

Digitisation – Advances in technology demand that Alviva identifies and implements the latest solutions in order to drive efficiencies.

Key talent – It is critical to have the right calibre of employees that can drive the strategy and add value.

COVID-19 – The pandemic had a significant impact on how Alviva conducts business and the effects of the pandemic need to be carefully assessed and managed as the Group moves forward.

Financial – Financial sustainability during times of uncertainty.

SO1

SO2

SO3

SO4

MM1

MM2

MM3

MM4

MM5

MM6

GLOSSARY OF ICONS


Overview

SUSTAINABLE DEVELOPMENT GOALSAlviva has identified ten SDGs where it believes the Group has the most meaningful impact.

Good corporate

citizen

Thriving communities

Hea

lthy

envi

ronm

ent

Climate change

Policy advocacy

Accountability

Ethical value chains

Education

Health and well-being

Livelihoods

Sustainable development goals

Sustainable development goals adopted by Alviva

Alviva sustainability policies

Sustainable development goals

Glossary of icons continued

Sust

aina

ble

deve

lopm

ent g

oals


Overview

OVERVIEW


Overview

The Group operates through three distinct business segments: [GRI 102-2] [GRI 102-6]

� ICT Distribution – imports and, in some cases, assembles ICT hardware and software and sells these products into the sub-Saharan African markets via reseller channels and national retail chains;

� Solutions and Services – systems integration and ICT solutions, including cyber security, application development, artificial intelligence solutions, renewable energy projects in South Africa, the rest of Africa and beyond; and

� Financial Services – finance solutions to business entities in the SMME and commercial sector, principally for office automation and technology-based equipment.

Group Central Services provides strategic direction and shared services to the Group.

Alviva has significant proprietary brands and agency agreements with prominent suppliers and also sources branded products from a well-established vendor network, both locally and internationally.

Alviva Holdings Limited is listed in the Technology sector of the JSE, and its head office is based in Midrand at The Summit, 269 16th Road, Randjespark, Midrand, South Africa. [GRI 102-3] [GRI 102-5]

from to by

ACTIVE PRODUCTS

Over 50 000

OEM SUPPLIERS

Over 500

CUSTOMERS

Over 15 000

EMPLOYEES

Approx 3 200

Alviva is one of Africa’s largest providers of information and communication technology products and services. The Group comprises focused operating subsidiaries who specialise in their unique product and service offerings.

[GRI 102-1]

PROFILE


Overview

This is our seventh Integrated Annual Report. We continuously strive to improve our reporting elements, alignment to relevant reporting frameworks and best practice. [GRI 102-52]

Over time, the process evolved from publishing three separate reports, being the Annual Report, Corporate Governance Report and Sustainability Report as an Integrated Report, to publishing one Integrated Annual Report incorporating governance and sustainability in an integrated manner.

We seek to provide relevant and material information for investors and other stakeholders through a report that is accessible to the reader.

Our objective is to strengthen our application of the Integrated Reporting Framework’s guiding principles and content elements, focusing on:

� streamlining financial reporting; � enhancing the transparency of the remuneration chapter; � benchmarking performance according to achievements; and � improving connectivity of information.

It has therefore adopted the following approach:

REPORTING FRAMEWORKSAlviva’s Integrated Annual Report was developed considering and applying frameworks including:

� the International Integrated Reporting Council’s (IIRC) International <IR> Framework 2021;

� the International Financial Reporting Standards;

� the JSE Listings Requirements (service issue 27);

� the Global Reporting Standards 2020 [GRI 102-54];

� the United Nations Sustainable Development Goals; and

� the Companies Act, no 71 of 2008 of South Africa, as amended.

The Company has adopted the value-adding principles enshrined in the King IV™ Report on Corporate Governance South Africa 2016 and views integration, together with Board and executive education, as a phase of the process.

The Board realises the importance of an Integrated Annual Report that fully promotes transparency and accountability to reinforce its role as a responsible corporate citizen.

THESE FRAMEWORKS INFORM OUR

THE REPORTING PHILOSOPHY LED TO OUR

INTEGRATED ANNUAL REPORT

ABOUT OUR

REPORTING PHILOSOPHY


Overview

SCOPE AND BOUNDARY [GRI 102-46]

The scope of this report covers Alviva’s process through which value is created, preserved or eroded over time which takes into account all six capitals. It covers the financial reporting entity as well as the risks, opportunities and outcomes that stem from external stakeholders and entities.

The primary objective of this Integrated Annual Report, therefore, is to demonstrate the ability of Alviva to create and sustain value. The Integrated Annual Report will provide a greater understanding of the Group’s strategy, its business model and its major impacts across economic, social and environmental aspects as well as give the reader an insight into how the Group is managed.

The 2021 Integrated Annual Report addresses all businesses, which comprise the South African and the African operations, including subsidiary companies, in the financial reporting elements as well as on sustainability matters, unless specifically indicated otherwise. The cross-border operations complement the local volumes generated by Alviva, enhance the economies of scale, expand the geographic footprint and contribute to competitiveness, while providing an entrance to the African market.

A complete Sustainability Report has not been prepared for the 2021 reporting period and a synopsis of core economic, environmental and social indicators is presented on pages 102 to 146, as the Group progresses on its path to adopt a more integrated approach in its reporting. The adoption of integrated reporting principles is a developmental and evolutionary process and it may take several years to fully implement these principles and achieve the desired level of reporting. This report, nevertheless, offers stakeholders a more holistic view of Alviva’s operations and provides insight on both financial and non-financial matters for the year ended 30 June 2021. [GRI 102-50]

As the concepts and practices of integrated reporting develop, management will aim to improve disclosures and application, as deemed appropriate.

The Integrated Annual Report is also available online at www.alvivaholdings.com.

MATERIALITYAlviva applies materiality in assessing what information should be included in the Integrated Annual Report. This report, therefore, focuses primarily on those matters that could substantively impact the Group’s ability to create, preserve or erode value in the short-, medium- and long-term. Alviva’s material matters, which were determined through management input and Board review, are shown throughout the Integrated Annual Report, as indicated by the material matters icons described on page 3. In determining these matters, Alviva considered the six capitals, the various elements of the Group’s value creation process, and the needs, interests and expectations of stakeholders over the short-, medium- and long-term.

Report structure

CAPITALS CAPITALS

EXTERNAL ENVIRONMENT

Purpose, mission and vision

Financial

Natural

Intellectual

Manufactured

Human

Social and relationship

Businessactivities

Outputs

Value creation, preservation or erosion over time

GOVERNANCEStrategy and resource

allocationRisks and opportunities

Performance Outlook

Outcomes (positive and negative over

the short-, medium- and long-term)

Inputs

Financial

Intellectual

Manufactured

Natural

Human

Social and relationship

Business model


Overview

ASSURANCE, COMPARABILITY AND RESTATEMENTSAlviva adopted a combined assurance model with the aim of integrating the assurance provided by internal and external assurance providers on high-risk areas facing the Group. Alviva uses the three lines of defence model to co-ordinate and optimise its assurance efforts. This model includes management, internal oversight functions (compliance, human resources, internal audit, health and safety, and risk management) and external assurance functions such as external audit and other ad hoc specialists.

The combined assurance model is applied to provide a coordinated approach to all assurance activities.

An internal assurance process, which included risk-based assurance from Internal Audit, was followed in respect of the data disclosed in the sustainability synopsis.

Most of the performance measures included in this report have comparative figures and, unless specifically stated otherwise, cover the financial year of the Group.

There were no restatements during the reporting period. [GRI 102-48]

FEEDBACK REQUESTThe Board welcomes feedback on Alviva’s Integrated Annual Report 2021 from stakeholders. Please contact Ms SL Grobler, Company Secretary, on [email protected] with any questions or queries on this report. [GRI 102-53]

FORWARD-LOOKING STATEMENTSCertain statements in this report are forward-looking statements, which Alviva believes are reasonable, and take into account information available up to the date of the report. Results could, however, differ materially from those set out in the forward-looking statements as a result of, amongst other factors, changes in economic and market conditions, changes in the regulatory environment and fluctuations in commodity prices and exchange rates. As a result, these forward-looking statements are not guarantees of future performance and are based on numerous assumptions regarding Alviva’s present and future business models, strategy and the environments in which it operates.

All subsequent oral or written forward-looking statements attributable to the Group or any member thereof or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statements above and below. Alviva expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein or to reflect any change in their expectations with regard thereto or any change in events, conditions or circumstances on which any such forward-looking statement is based. The forward-looking statements have neither been reviewed nor audited by the Group’s external auditors, SNG Grant Thornton.

BOARD RESPONSIBILITY STATEMENTThe Board acknowledges its responsibility to ensure the integrity of the Integrated Annual Report. The Board has accordingly applied its mind to the Integrated Annual Report and in the opinion of the Board the Integrated Annual Report addresses all material issues, and presents fairly the integrated performance of the organisation and its impacts. The Integrated Annual Report has been prepared in line with best practice and in accordance with the International <IR> Framework 2021, to the extent possible, for the reporting period. On 21 September 2021, the Board authorised the Integrated Annual Report for release on 27 September 2021.

For and on behalf of the Board

A Tugendhaft P Spies RD LyonChairperson CEO CFO


Overview

Fiscal Year FY 2021 FY 2020 FY 2019 FY 2018 FY 2017

Rm (unless otherwise stated)

Revenue 14 893 14 804 15 923 13 629 12 811

Gross profit 2 532 2 434 2 608 2 409 2 273

Gross profit (%) 17,0 16,4 16,4 17,7 17,7

EBITDA * 887 708 860 820 824

Operating profit before interest and tax 569 389 670 690 734

Operating income (%) 3,8 2,6 4,2 5,1 5,7

Attributable profit 326 149 395 422 405

Basic earnings per share (cents) 267,3 112,7 275,3 273,5 244,2

Headline earnings per share (cents) 285,0 149,4 297,1 273,2 243,9

Core earnings per share (cents) 356,0 225,9 352,9 302,2 256,3

Weighted average shares outstanding (millions)

122 132 143 154 166

Inventory excluding goods in transit ** 950 1 080 920 661 694

Total stockholders equity 2 432 2 278 2 265 2 138 1 998

Debt to equity ratio (%) 51,9 61,8 39,1 37,0 25,8

Return on net equity (%) 13,8 6,5 17,8 20,4 19,9

* Earnings before interest, tax, depreciation and amortisation.

** Excluding allowance for obsolete inventory.

EBITDA PER SEGMENT

ICT Distribution Services and Solutions Financial Services Group Central Services

2021 2020

7%

49%

25%

19%

1%

54%

31%

14%

2021 AT A GLANCE[GRI 201-1]


Overview

REVENUE (Rm)

0

5 000

10 000

15 000

20 000

2017 2018 2019 2020 2021

2017 2018 2019 2020 2021 2017 2018 2019 2020 2021

2017 2018 2019 2020 2021 2017 2018 2019 2020 2021

12 81113 629

15 923

TOTAL ASSETS (Rm)

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

4 749

5 826

6 494

NET ASSET VALUE PER SHARE (cents)

0

500

1 000

1 500

2 000

2 500

1 251,2

1 453,6

1 658,2

EBITDA (Rm)

0

200

400

600

800

1 000

824 820860

HEADLINE EARNINGS PER SHARE (cents)

0

50

100

150

200

250

300

350

243,9

273,2

297,1

14 804 14 893

2017 2018 2019 2020 2021

ATTRIBUTABLE PROFIT (Rm)

0

100

200

300

400

500

405422

395

149

326

708

887

149,4

285,0

7 792

6 9971 763,9

2 120,2


Overview

Group2021

R’0002020

R’0002019

R’0002018*R’000

2017*R’000

EXTRACT FROM STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Revenue 14 893 135 14 804 155 15 922 641 13 628 916 12 811 498

Cost of sales (12 361 365) (12 370 493) (13 314 503) (11 219 810) (10 538 710)

Gross profit 2 531 770 2 433 662 2 608 138 2 409 106 2 272 788

Operating expenses and other income (1 962 289) (2 045 125) (1 938 365) (1 718 977) (1 539 264)

Operating profit before interest 569 481 388 537 669 773 690 129 733 524

Finance income 23 904 50 666 52 059 39 909 39 453

Finance costs (159 717) (227 640) (185 108) (161 166) (146 490)

Share of profit of equity-accounted investee 1 924 – – – –

Profit before tax 435 592 211 563 536 724 568 872 626 487

Income tax expense (135 095) (74 688) (145 866) (151 548) (182 494)

Profit for the period 300 497 136 875 390 858 417 324 443 993

Attributable to owners of the Company 325 846 148 724 394 500 421 707 405 277

Attributable to non-controlling interests (25 349) (11 849) (3 642) (4 383) 38 716

EXTRACT FROM STATEMENTS OF CASH FLOWS

Cash generated from operations 373 402 1 801 043 275 076 1 049 100 1 259 803

Finance income received 23 904 50 666 52 059 39 909 39 453

Finance costs paid (159 717) (227 640) (185 108) (161 166) (146 490)

Tax paid (185 285) (115 736) (172 331) (186 364) (202 484)

52 304 1 508 333 (30 304) 741 479 950 282

Cash flows from investing activities (205 665) (165 848) (429 010) (383 338) (89 294)

Cash flows from financing activities (399 098) (93 220) (266 844) (58 127) (694 894)

(Decrease)/increase in cash and cash equivalents (552 459) 1 249 265 (726 158) 300 014 166 094

Effects of exchange rate changes on the balance of cash held in foreign currencies

(7 549) 4 609 447 1 684 758

Net cash and cash equivalents/(overdraft) at 1 July 1 219 621 (34 253) 691 458 389 760 222 908

Net cash and cash equivalents/(overdraft) at 30 June 659 613 1 219 621 (34 253) 691 458 389 760

Non-IFRS information

Earnings before interest, tax, depreciation and amortisation 886 983 707 619 859 784 820 483 824 118

* Restated

5-YEAR FINANCIAL REVIEW AND STATISTICSfor the year ended 30 June

[GRI 201-1]


Overview

Group2021

R’0002020

R’0002019

R’0002018

R’0002017

R’000

EXTRACT FROM STATEMENTS OF FINANCIAL POSITION

ASSETS

Non-current assets 2 013 763 2 080 544 1 784 247 1 554 618 1 079 064

Property, plant and equipment 456 638 457 218 122 312 120 697 104 661

Intangible assets 139 425 320 127 287 895 282 918 114 857

Goodwill 603 392 614 454 631 526 564 235 347 846

Equity-accounted investees 66 421 41 773 88 119 62 077 –

Deferred tax assets 99 094 90 834 78 206 74 761 77 119

Finance lease receivables 648 793 556 138 576 189 449 930 434 581

Current assets 4 982 969 5 711 445 4 710 221 4 271 704 3 670 358

Inventory 1 153 743 1 228 187 1 036 748 774 111 751 702

Derivative financial asset – – – – 3 287

Finance lease receivables 324 970 298 383 269 975 230 508 210 972

Trade and other receivables 2 593 594 2 946 836 3 264 856 2 537 275 2 304 629

Current tax assets 31 049 18 418 14 096 38 352 10 008 Cash and cash equivalents 879 613 1 219 621 124 546 691 458 389 760

Total assets 6 996 732 7 791 989 6 494 468 5 826 322 4 749 422

EQUITY AND LIABILITIES

Capital and reserves 2 489 460 2 377 779 2 335 027 2 227 404 2 020 223

Stated capital 1 225 1 363 1 434 1 584 43 359

Treasury shares (121 195) (115 328) (125 819) (129 090) (98 492)

Other equity reserves 25 010 46 289 33 568 54 268 41 436

Cash flow hedge reserve – – – – 548

Retained earnings 2 526 920 2 345 484 2 355 661 2 211 329 2 010 921

Non-controlling interests 57 500 99 971 70 183 89 313 22 451

Non-current liabilities and deferred tax liabilities 1 042 868 1 244 584 915 171 943 016 585 642

Current liabilities 3 464 404 4 169 626 3 244 270 2 655 902 2 143 557

Trade and other payables 2 706 354 3 626 394 2 806 046 2 364 929 1 974 752

Bank overdrafts 220 000 – 158 799 – –

Non-interest-bearing liabilities 12 664 7 584 44 130 68 850 –

Interest-bearing liabilities 294 196 332 194 106 285 42 019 5 572

Contract liabilities 195 777 183 929 114 847 157 235 148 818

Current tax liabilities 35 413 19 525 14 163 22 869 14 415

Total equity and liabilities 6 996 732 7 791 989 6 494 468 5 826 322 4 749 422

for the year ended 30 June

5-year financial review and statistics continued


Overview

Group 2021 2020 2019 2018 2017

Total number of ordinary shares, excluding treasury shares (’000)

114 705 129 137 136 587 147 087 159 673

Weighted average number of ordinary shares (’000)

121 895 131 987 143 281 154 192 165 944

Weighted average number of shares in issue for purposes of dilution (‘000)

125 852 134 351 147 141 156 536 166 417

Performance per ordinary share (cents)

Basic earnings per ordinary share 267,3 112,7 275,3 273,5 244,2

Diluted earnings per ordinary share 258,9 110,7 268,1 269,4 243,5

Headline earnings per ordinary share 285,0 149,4 297,1 273,2 243,9

Diluted headline earnings per ordinary share 276,1 146,7 289,3 269,1 243,2

Dividend declared per ordinary share 29,0 15,0 30,0 27,0 25,0

Dividend cover (declared) 9,2 7,5 9,2 10,1 9,8

Dividend cover (paid) 15,9 3,6 9,7 10,6 12,2

Net asset value 2 120,2 1 763,9 1 658,2 1 453,6 1 251,2

Net tangible asset value 1 472,6 1 040,2 985,0 877,7 961,4

Return on net equity (%) 13,8 6,5 17,8 20,4 19,9

Working capital management

Investment in working capital (R’000) 845 206 364 700 1 380 711 789 222 932 761

Liquidity and solvency

Debt to equity (%) 51,9 61,8 39,1 37,0 25,8

Current ratio (excluding inventory in transit and work in progress)

1,47 1,48 1,46 1,64 1,74

Acid test ratio (excluding inventory in transit) 1,17 1,08 1,17 1,39 1,42

Returns (%)

Gross profit 17,0 16,4 16,4 17,7 17,7

EBITDA * 6,0 4,8 5,4 6,0 6,4

Effective tax rate 31,0 35,3 27,2 26,6 29,1

Net profit 2,0 0,9 2,5 3,1 3,5

* Earnings before interest, tax, depreciation and amortisation.

for the year ended 30 June

5-year financial review and statistics continued


Overview

Axiz

Centrafin

Centravoice

Datacentrix

Digital Generation

GridCars

Intdev

Merlynn

Obscure

Pinnacle

Sintrex

Solareff

SynergERP

Tarsus *

VH Fibre Optics

Legend:

Branches with sales and technical support presence

Sales presence

Technical support presence

Axiz

Centrafin

Centravoice

Datacentrix

Digital Generation

GridCars

Intdev

Merlynn

Obscure

Pinnacle

Sintrex

Solareff

SynergERP

Tarsus *

VH Fibre Optics

Legend:

Branches with sales and technical support presence

Sales presence

Technical support presence BURKINAFASO

DEMOCRATICREPUBLIC

OF THE CONGO

ESWATINI

MAURITIUS

CÔTED’IVOIRE

SIERRA LEONE

SENEGAL

ALGERIA

EGYPT

MOROCCOTUNISIA

NIGERIA

NIGER

CHAD

UNITEDARAB

EMIRATES

UGANDA

ETHIOPIA

SEYCHELLES

RWANDA

KENYA

TANZANIA

CAMEROON

CONGO

GABON

ANGOLA

BOTSWANA

ZIMBABWE

MOZAMBIQUE

MADAGASCARNAMIBIA

SOUTH AFRICA

ZAMBIA

GHANA

MALAWI

QATAR

LESOTHO

GEOGRAPHIC FOOTPRINT[GRI 102-4] [GRI 102-6]

Businesses in:

– USA

– UK

– Australia

* Acquired after the reporting date


Overview

GROUP STRUCTURE[GRI 102-2] [GRI 102-7] [GRI 102-9] [GRI 102-45]

GROUP ADMINISTRATION

GROUP TREASURY

GROUP IT

Axiz – a leading IT infrastructure and software distributor that provides technology intelligence to its business partners through the supply of world-class products. Its comprehensive product portfolio, combined with broad- and value-based distribution, aligns well with new market dynamics such as cloud computing and data centre expansion, thereby enabling its partner base to architect and provide best-of-breed solutions with which to address the business requirements of their customers. IT hardware and software services and support, specialising in IT hardware and infrastructure installations and implementation of services, which services include hardware maintenance support, efficient and effective parts logistics, warranty fulfilment and end-user support, are offered across the African continent.

Obscure – specialises in brokering best-of-breed security solutions to the market, creating a channel for vendors and customers through its offering of information security products and concepts.

VH Fibre – a value-add distribution and installation services company specialising in the supply of fibre-to-the-home and fibre-to-the-building passive network solutions.

Pinnacle – focuses on the assembly and distribution of ICT hardware and software distributed via the reseller channel into small to medium corporate and government markets and into the retail markets through the national retail chains. The continually expanding product range, which includes most of the top international tier one brands, as well as its own mainstay brand, Proline, spans the entire breadth of ICT hardware and related peripherals. Datanet is a division in the Pinnacle business entity.

Centrafin – provides asset-based finance by providing turnkey solutions, insurance and financial products to customers, principally for the acquisition of office automation and technology equipment.

centrafinRAPID | RELIABLE | RESPONSIVE

Tarsus – Tarsus was acquired with effect from 1 July 2021. It is focused on making the world’s leading IT hardware brands available to the southern African reseller channel. It is the longest-established IT distributor in South Africa and uniquely positioned to meet the channel’s needs for credit funding, stock availability and efficient logistics so that resellers can deliver the best possible service, support and overall solutions to the small and mid-sized end-user customer at the lowest possible cost. Tarsus on Demand offers comprehensive cloud-based hybrid service offerings and complementary applications.

The ICT Distribution segment imports and, in some cases, assembles ICT hardware and software and distributes it into the sub-Saharan African markets via

reseller channels and national retail chains.

ICT DISTRIBUTION

The Financial Services segment offers finance solutions to business entities in the SMME and

commercial sector, principally for office automation and technology-based equipment.

FINANCIAL SERVICES

Group Central Services provides strategic direction and shared services to the Group.

CENTRAL SERVICES

* Acquired after the reporting date.

*


Overview

Datacentrix – one of the largest systems integrator and ICT solutions providers in South Africa, operating through three divisions with a national footprint, namely Managed Services, Technology Solutions and Business Applications. Managed Services is a progressive centre of excellence that delivers end-to-end ICT services, which are pertinent to customers’ needs and supports their relevance into the future. Technology Solutions is a technology solutions integrator delivering business value from traditional compute, storage and networking to software-defined, data-driven and cyber security solutions. Business Applications enables organisations to take advantage of the information that is created and stored in their ICT infrastructures by applying EIM, ERP solutions and professional services.

Solareff – a leading specialist in Solar Photovoltaic solutions in South Africa, for medium- to large-scale rooftop and ground-mounted installations.

Sintrex – a solution-based company specialising in IT infrastructure management, providing end-to-end solutions and services across all IT silos, thereby ensuring visibility and performance insight into IT infrastructure management, network management and monitoring solutions.

Merlynn – an AI technology business that focuses on solutions within risk management, by removing uncertainty within processes through leveraging the power of AI to reduce risks. Merlynn assists organisations in the development of AI-related strategies and their practical translation into operational environments. Strategies include AI impact (risk and opportunity definition), IP capture (knowledge retention and deployment) and proactive risk management strategies and methodologies, underpinned by a strict policy of ‘technology with a conscience’.

SynergERP – offers end-to-end ERP software solutions to medium and large companies involved in manufacturing, distribution and business services. SynergERP’s solutions allow businesses to streamline processes, align information across companies, sites, departments and make better-informed strategic decisions by breaking down silos and empowering stakeholders with the right data at the right time.

GridCars – a developer of electric vehicle charge-point software management systems and supplier of charge points.

Digital Generation (DG) – is a leading consulting and services business providing custom-made ICT business solutions, designed to unlock and maximise the full lifecycle value of ICT products, services and infrastructure for businesses in both the public and private sectors.

Intdev – a preferred IT partner, focusing on connectivity, communications and managed services.

SOLUTIONS AND INTEGRATORS

RENEWABLE ENERGY

APPLICATIONS AND IP

CentraVoice – provides information and communications technology products and services, specialising in total communications solutions.

The Services and Solutions segment offers systems integration and ICT solutions, including cyber security,

application development, AI solutions and renewable energy projects in South Africa, the rest of Africa and beyond.

SERVICES AND SOLUTIONS


Overview

Provider of a choice of world-leading information, communication and technology products and services – A leading provider of information, communication, technology and related services and products in South Africa with an expanding footprint in selected African countries and Mauritius.

People skills – Experienced, long-serving employees with an industry-leading track record supported by skills development programmes.

Leading brands – Proprietary products and distribution agreements with world-class brands for the supply of information, communication, technology and related products and services.

Strong cash flow – Proven record with the ability to generate strong cash flows.

Regional and national footprint – Well positioned relative to major growth areas of the country and aligned to market demand for our services and products.

The result – Integrated provider of information, communication, technology and ancillary products and services with assets and HR to support a sustainable business.

CORE COMPETENCIES Alviva’s core competencies are the combination of knowledge and technical capacities that allow the Group to be competitive in the marketplace. The core competencies in the Group allow it to expand into new markets as well as provide a significant benefit to customers. Alviva’s core competencies are defined as follows:

Core competencies Adoption in Alviva

Alignment with technological developments through product and technology knowledge

Ensuring the ongoing identification of growth opportunities and maximising revenue growth on those areas to the benefit of all of the Group’s stakeholders.

Value-added supplier Alviva boasts a well-rounded end-to-end service thanks to a number of important value-added services.

Agility Alviva has a proven ability to rapidly adjust to market and environmental changes in productive and cost-effective ways.

Ability to execute Alviva has an exceptional ability to execute and deliver on projects, generally exceeding expectations.

Supply-chain excellence Alviva understands the supply-chain and is continuously looking to innovate and improve on the status quo.

Best people in the industry Alviva’s ‘cherry-picked’ employees are the best in the industry, are continually trained, developed and empowered to achieve success.

Technical expertise, local assembly and customised manufacturing

Alviva has unbeatable technical expertise, which includes its ability to locally assemble and manufacture superior customised products, as well as its extensive range.

Focused product breadth Alviva’s continually expanding product range spans the end-to-end breadth of ICT software, hardware equipment and services.

ALVIVA AS AN INVESTMENT


Overview

ALVIVA BUSINESS MODEL[GRI 102-16]

VISION [GRI 102-14]

Our people are our biggest asset and, with the drive for constant improvement and a service-driven culture, we are building a company for generations to come.

OUR PURPOSE

Alviva’s purpose is to ‘Make a Difference’. The Group aims to make a difference to each of its stakeholders as follows :

Shareholders: By delivering growing and sustainable returns, Alviva aims to make a difference to their portfolios.

Suppliers: By delivering an efficient channel, Alviva aims to make a difference in their market penetration.

Customers: By improving their access to products and solutions, Alviva seeks to make a difference to their businesses.

Employees: By improving their knowledge and experience through training and development, thereby enabling growth and development, resulting in making a difference in their lives and those of their families.

Communities: To assist with access to education and development, making a difference to broader society.

Environment: To responsibly manage the Group’s carbon emissions and waste disposal, making a difference to our planet.

Alviva’s process of transforming inputs, through its business activities, into outputs and outcomes that fulfil its strategic objectives to create value over time.

MISSION

Alviva’s mission is to maximise the returns of all its stakeholders through the execution of its vision, which will be achieved by focusing on:

� being an equal opportunity company and developing staff to their full potential through the implementation of training and development programmes;

� continuous innovation and improvement in supply-chain management, services and solutions;

� growth opportunities;

� being a preferred provider of superior products;

� continued expansion of product and service offerings to promote growth, penetrate new sectors and contribute to the development of infrastructure;

� expansion of its geographical footprint into markets which offer growth opportunities;

� delivering above average returns to all stakeholders;

� proactive participation in B-BBEE; and

� subscribing to the principles of sustainable development through identification, management and measurement of integrated economic, social, environmental and business performance.


Overview

VALUES [GRI 102-16]

The Group’s values, as contained in the Code of Conduct, are:

STRATEGY [GRI 102-14]

Alviva strategy – Continued growth of current revenue streams coupled with business through diversification and expansion in world-leading technology products and services

Strategic objective 1: To grow and sustain Alviva

Strategic objective 2: To subscribe to the highest standards of corporate governance

Strategic objective 3: Grow and develop the Group’s human capital

Strategic objective 4: Digitisation of business processes

Integrity

Honesty

Fairness

Accountability

Responsibility

Serviceexcellence

Enthusiasm

Professionalism

Creativity

Trust

Respect

Honour

SO1

SO2

SO3

SO4

Alviva business model continued


Overview

Inputs (what we have/used)

Financial capital � Strong financial position

� Revenue: R15 billion (2020: R15 billion)

Manufactured capital � Geographic representation

� Leased premises – maintenance cost of R8 million (2020: R8,3 million)

� Capital expenditure of R66 million (2020: R144 million)

Intellectual capital � Products, services and methodologies

� Best-of-breed brands

� Technical skills

� Alviva and its subsidiary companies’ reputation

Human capital � Best-in-class people

� 3 120 (2020: 3 257) employees at a salaried cost of R1 330 million (2020: R1 324 million)

� Training spend of R15 million (2020: R17 million) on 1 992 (2020: 1 915) employees trained

Social and relationship capital � Stakeholders (refer to page 65)

� Communities (refer to pages 140 to 142)

Natural capital � Environmentally-friendly technologies

� Carbon emissions: 6 854 CO₂e tonnes (2020: 8 754 CO₂e tonnes)

� Electricity: 6 110 MWh (2020: 7 907)

� Fuel: 141 271 litres (2020: 139 898)

� Waste recycled: 105 592 kg (2020: 120 040 kg)

� Waste to landfill: 145 924 kg (2020: 183 660 kg)



Overview

Business activities (what we do)

Alviva is one of Africa’s largest providers of information and communication technology products and services.

Alviva has significant proprietary brands and agency agreements with prominent suppliers and also sources branded products from a well-established vendor network, both locally and internationally.

Group Central Services provides strategic direction and shared services to the Group. The Group operates through three distinct business segments, being:

ICT Distribution – imports and, in some cases, assembles ICT hardware and software and sells these products into the sub-Saharan African markets via reseller channels and national retail chains;

Solutions and Services – systems integration and ICT solutions, including cyber security, application development, artificial intelligence solutions, renewable energy projects in South Africa, the rest of Africa and beyond; and

Financial Services – finance solutions to business entities in the SMME and commercial sector, principally for office automation and technology-based equipment.

Outputs (what we deliver)

Shareholder value

Service excellence

Quality products

Sustainable development



Overview

Outcomes (positive and negative effects over the short-, medium- and long-term)

Financial capital � EBITDA: R887 million (2020: R708 million)

� Core EPS: 356,0 cents (2020: 225,9 cents)

� HEPS: 285,0 cents (2020: 149,4 cents)

� Net asset value per share: 2 120,2 cents (2020: 1 763,9 cents)

� Net tangible asset value per share: 1 472,6 cents (2020: 1 040,2 cents)

� Cash generated: R373 million (2020: R1 801 million)

Manufactured capital � Allowed employees to take office equipment home to enable and improve work-from-home productivity

� Inability to use office space due to lockdown restrictions

� Fixed assets decreased by R1 million largely due to depreciation (2020: increase of R335 million)

Intellectual capital ICT Distribution

Access to key brands for distribution has been retained and continues to evolve as technology changes. ICT Distribution continues to grow, contributing 54% of EBITDA

Services and Solutions

The Services and Solutions segment has grown, making up 31% of EBITDA

Development of own brands has continued, with revenue growth in Sintrex of 18% and Merlynn in the process of establishing its route to market to incorporate large multi-national systems integrators

Financial Services

Financial Services, through Centrafin, continues to grow with the book exceeding R1 billion rand for the first time.

Human capital � Staff turnover down to 15% (2020: 19%)

� Retention of key, high-performing employees

� Work/life balance impacted by work from home

� Five (2020: Nil) fatalities due to COVID-19

Social and relationship capital � Quality of stakeholder relationships (see pages 65 to 69)

� Enterprise and Supplier Development to the value of R20 million (2020: R23 million) and R33 million (2020: R15 million), respectively

� CSI spend of R6 million (2020: R4 million)

Natural capital � Decrease in electricity consumption of 23% (2020: 17%) due to the effect of the national COVID-19 lockdowns, which resulted in employees working remotely

� Fuel consumption increased by 1% (2020: 9% decrease) as a result of increased business activity



Overview

KEY DRIVERS THAT BRING OUR BUSINESS MODEL TO LIFE [GRI 102-14]

(what we measure)

We invest in our people – Through competitive remuneration structures, targeted transformation programmes, broad-based skills development programmes, visible succession plans and a culture of promoting from within, Alviva ensures that staff development and retention embed strong support for the Group’s long-term goals.

We invest in high-quality complementary operations – Alviva ensures that there is a continuous investment into the replacing of assets and the introduction of new technology, and this is enhanced by an effective workplace improvement programme, a best-cost culture and a value-added offering to constantly promote greater productivity and efficiency.

We focus on performance, reliability and sustainability – The existence of key best practices underpinning good corporate citizenship and the identification of the main business risks and procedures for ongoing risk control and management, documented targets for strategic growth plans and strategic objectives as well as systems to manage and protect key assets, Alviva strives to ensure that a long-term sustainable results driven performance will be delivered.

We are passionate about our external relationships – Alviva is passionate about its engagement with external stakeholders, and a committed orientation towards this ideal is supported by a culture of open and transparent communication, product responsibility, quality management systems, statutory and regulatory compliance, coupled with a strong sense of self-regulation and high ethical standards.



Overview

STRATEGY AND PERFORMANCE SUMMARY

Strategic objective 1: To grow and sustain Alviva 2021R’million

2020R’million

Revenue 14 893 14 804

Gross profit 2 532 2 434

Net profit after tax 300 136

Cents CentsCore earnings per share (cents) * 356,0 225,9

Headline earnings per share (cents) ** 285,0 149,4

Return on equity * 13,8% 6,5%

B-BBEE Level ** 1 1

* Included in the long-term incentive targets of executive management.** Included in the short-term incentive targets of executive management.

Strategic objective 2: To subscribe to the highest standards of corporate governance 2021 2020

JSE mandatory governance practicesFully

compliant Fully

compliant

King IVTM practices

Applied practices 391 391

Not applied voluntary practices 5 5

Explained practices 3 3

Not applicable practices 6 6

Strategic objective 3: Grow and develop the Group’s human capital 2021 2020

Number of employees 3 120 3 257

Staff retention ratio 15% 19%

Training spend R15 million R17 million

Number of employees trained 1 992 1 915

Strategic objective 4: Digitisation of business processes

Major ERP implementations or upgrades have been concluded at the following major subsidiaries : Axiz, Datacentrix and Pinnacle. Other Group subsidiaries that have implemented new ERP systems include Alviva Shared Management Services and Centrafin. This will allow for further integration and digitisation of other systems.

A project as regards an integrated human resources and payroll system has commenced within various Group subsidiaries. Based on the successes achieved with the human resources roll-out, payroll systems will follow during 2022.

SO1

SO2

SO3

SO4



Overview

ALVIVA’S APPROACH TO SUSTAINABLE VALUE CREATION

Material focus areas Operational/strategic response

ECONOMIC (FINANCIAL CAPITAL)

Operational efficiencies � Vertical integration

� Performance optimisation

� Information management

Income and growth � Capacity increase

� Market segment participation

� Product innovation

� Integrated planning

� International expansion

� Building a company for generations to come

Cost and cash management � Best-cost approach

� Administered cost increases reduction

� Sound working capital management

� Strong statement of financial position maintenance

Business risk � Regulatory compliance

� Internal control environment

� Internal and external audits

� Policies and procedures

SOCIAL (SOCIAL AND RELATIONSHIP CAPITAL)

Human rights � Compliance policies

� Code of Conduct

� Occupational health and safety

Employees � Skills development

� Staff retention

� Leadership and senior management succession planning

Equality, empowerment and transformation

� Preferential procurement

� Overall B-BBEE rating

� Employment equity

STRATEGIC FOCUS AREAS


Overview

Material focus areas Operational/strategic response

ENVIRONMENT (NATURAL CAPITAL)

Regulatory compliance � Environmental risk and impact assessments

� Responsibility to monitor emissions

Alternative energy sources � Sustainability reporting

Resource optimisation � Waste management

� Electricity management

EXTERNAL RELATIONSHIPS (SOCIAL AND RELATIONSHIP CAPITAL)

Strategic alliances � Membership of industry bodies

� Strategic local and international partners

� Preferred suppliers

Customers � Brand awareness

� Product responsibility

� New products

CSI � Wellness programme

� Community investment

Stakeholder engagement � Integrated reporting

� Continuous, open and transparent communication

� Investor roadshows

� SENS reporting

PRODUCTS (INTELLECTUAL CAPITAL)

Quality standards � ISO certifications

Consumer Protection Act � Standard operating procedures

� Group Compliance Policy

Strategic focus areas continued


Overview

We are pleased to present the report to shareholders for the 2021 reporting period.

OVERVIEWAlviva has shown great resilience in recovering from the effects of the lock-down experienced in the prior reporting period and operating in a constrained economic environment throughout the 2021 reporting period due to the impact of COVID-19.

Revenue for the reporting period was approximately 1% above 2020 although the increase could have been substantially more if there had been an availability of product to fulfil the orders placed by the Group’s customers. As mentioned in Alviva’s interim results announcement, as well as being well publicised in the media, the world-wide shortage of processors and components significantly restricted the Group’s ability to satisfy its customers’ demands for products. Alviva had initially believed that this would be of a short-term nature, but it is now anticipated that the product availability will only return to historical norms by the next reporting date.

The Group managed its foreign exchange exposures exceedingly well, resulting in a gain on foreign exchange for the reporting period of R31 million. The gain on remeasurement of contingent consideration is largely due to the actions taken on SynergERP Limited (“Synerg UK”), which is explained in detail below, and the impairment losses on goodwill and intangible assets all relates to the same event. The impairment loss on the loan to an equity-accounted investee was reduced to R8 million but is still disappointing.

As reported at the interim stage, cash flow management has been excellent throughout the reporting period and net finance costs showed a significant decrease of R41 million compared to the prior reporting period. The Group redeemed R200 million of its preference shares to Absa Bank Limited (“Absa”) in the reporting period, with R100 million redeemed in August 2020, as was previously announced, and then early redeemed a further R100 million in February 2021, thereby reducing the total amount of preference share funding to R200 million at 30 June 2021. On 1 July 2021, the Group issued 10 (ten) preference shares to Absa.

The share repurchase programme’s suspension was lifted during the reporting period and 13,8 million shares were repurchased at a total cost of R115 million. Headline earnings per share increased by 91% to 285,0 cents per share (cps) (2020: 149,4 cps).

FINANCIAL RESULTS

Segment performance The ICT Distribution segment recovered well with revenue, prior to the exclusion of inter-segmental revenue, up by 3% and EBITDA by 37%.

The ICT Distribution segment is made up of Axiz, Obscure, Pinnacle and VH Fibre. Axiz is the most significant of the businesses in this segment.

Axiz delivered solid profits in an environment where product shortages and a substantial decrease in demand for enterprise products were the key features. Management of working capital was exemplary throughout and significant cash was generated.

Obscure enjoyed a much improved performance compared to the prior reporting period with revenue increasing by 50% and profit before tax increasing to R18 million, compared to R10 million in the prior reporting period. Their cyber security product portfolio is market leading and the Group remains confident that this business will continue to yield good returns.

Pinnacle had an excellent operating performance on the back of a few large enterprise deals and demand in the first quarter of the reporting period for work-from-home products. Their performance has been the stand-out feature of the ICT Distribution segment. In addition, Pinnacle has successfully implemented a new ERP system, allowing it to take advantage of enhanced digital efficiencies and reporting.

VH Fibre (“VHF”): Much work has been done to restructure VHF’s business to its available market and the turnaround has been pleasing. VHF produced R10 million profit before tax for the reporting period compared to a breakeven in the prior reporting period.

REPORT TO SHAREHOLDERS


Overview

Report to shareholders continued

The Services and Solutions segment is made up of three sub-segments:

� Solutions and Integrators: Datacentrix, DG, and Centravoice/IntDev.

� Renewable Energy: Solareff and GridCars

� Applications and IP: Merlynn, Sintrex and Synerg

Solutions and Integrators

Datacentrix has had a challenging trading period, although they performed to expectations. The Digital Business Solutions and Managed Services divisions exceeded their targets, but customers reduced considerably on their infrastructure spend, investing in work-from-home products. Tender activity, though, is at an all-time high and hopefully some of these will convert into sizeable commercial opportunities in the future.

DG was unable to repeat the stellar trading it had in the prior reporting period, which had included a number of large one-off deals. Revenue decreased by 28% and profit before tax by 37%.

Centravoice and IntDev, the connectivity and managed solutions unit, had plenty of challenges throughout the reporting period and managed to remain profitable, albeit marginally down on the prior reporting period.

Renewable Energy

Solareff grew revenue by 14% over the prior reporting period, although this was largely on the back of product sales rather than projects. Profitability recovered and the business is well-positioned with a good order book. GridCars has completed its roll-out of charging stations on the major highways between Johannesburg, Cape Town and Durban. It remains loss-making but the amounts are insignificant.

Applications and IP

Sintrex showed a significant performance improvement with revenue up 14% and profit before tax up 95% compared to the previous reporting period. Annuity revenue also increased by 16%, underpinned by long term contracts with customers across various industries.

The company’s investment in locally developed products and services continues to satisfy the market demand for visibility products that focus on application performance, user experience, software defined wide area networks, working-from-home and cloud-based technologies.

Merlynn has encountered delays in getting their TOM technology and solutions implemented in first world countries. Proof-of-concept trials have largely been successful within North America, Europe and Asia Pacific. A number of these projects have been, or are in the process of being, converted into long-term software licence agreements. Processes surrounding contracting and supplier onboarding within the large multinationals along with COVID-19 challenges have seen some delays. Merlynn has adapted its route to market to incorporate large multi-national system integrators. This has increased the business pipeline as well as created more implementation capacity.

Synerg: With effect July 1, 2019, Alviva acquired 70% of the issued share capital of SynergERP Proprietary Limited (“Synerg SA”) through its subsidiary DCT Holdings (RF) Proprietary Limited (“DCT”) for a purchase consideration of R69 million. This was the existing and developed South African business in the ERP solutions and implementation arena. During the reporting period, Synerg SA executed a successful implementation of Pinnacle onto Sage X3, but profitability has been affected by a change in the go-to-market model of its main vendor whereby revenue is now based on annuity income generated and over a period of time. Revenue was down 17% and profit before tax decreased by 68%. The change in model means that income is not lost but instead has been deferred.

Shortly after the initial acquisition, Alviva acquired 51% of the issued share capital of SynergERP Limited – DWC LLC (“Synerg UAE”) and SynergERP Limited (“Synerg UK”) through its subsidiary Alviva International Investments Proprietary Limited (“Alviva International”) for a maximum purchase consideration of AED13 million and GBP3 million, respectively. Both of these ventures were in their nascent stage and much had to be done to bring them to the level of Synerg SA. To that end, one of the founding


Overview

executives relocated to the UAE in January 2021 to drive various opportunities in that region. Towards the end of the reporting period, a key individual, who was intricately involved in the overall business development of Synerg UK, resigned from his position. Management consequently decided to halt all business development in Synerg UK and focus on Synerg UAE, where prospects were looking promising. The mothballing of the Synerg UK operations resulted in the release of the related contingent consideration of R28 million to other income, the impairment of goodwill (R11 million) and the accelerated attributable amortisation of the remaining intangible assets less the tax thereon of R11 million. The effect on Alviva’s headline earnings per share has been more pronounced as the latter two amounts are excluded from headline earnings, which then results in an increase of 23 cents to headline earnings per share.

The Financial Services segment has recovered from the serious uncertainty that was created due to the national lockdown in April 2020. During the reporting period, all the metrics that are tracked on a monthly basis returned to be in line with or better than those that were tracked in February 2020, prior to any COVID-19 impact. The book has grown by R142 million, of which R119 million relates to finance lease receivables, during the reporting period and, in June 2021, it exceeded R1 billion for the first time. Credit management was exemplary throughout the reporting period and estimated credit losses have been maintained at acceptable levels. The securitisation structure has been reset back to normal conditions and continues to provide sufficient funding for Centrafin’s needs.

Investment activities and financial position Intangible assets have decreased largely as a result of the amortisation and impairment loss recognised during the reporting period.

The value of inventory held at the end of June is higher than the levels held during the reporting period due to a significant holding and inventory in transit required to meet commitments on the NSFAS contract. Working capital has been well-managed throughout the reporting period, aided by the product shortages, as noted previously.

The cash and cash equivalents at the prior reporting date was exceptionally high and this has returned to normal levels throughout the reporting period and at the reporting date.

The share repurchase programme recommenced during the reporting period and R115 million was spent on repurchasing approximately 13,8 million shares and a further R19 million was spent on acquiring additional shares for the Forfeitable Share Plan. R20 million has been returned to shareholders in the form of dividends paid.

CORPORATE ACTIONS [GRI 102-10]

Acquisition of Tarsus Technology Group Proprietary Limited (“Tarsus”)As detailed in the announcement on SENS, dated 12 November 2020, Alviva entered into a share purchase agreement (“SPA”) with Mamzen Proprietary Limited (“the Seller”) to acquire the entire issued share capital of Tarsus, for a maximum purchase consideration of R185 million (the “Acquisition”). The Acquisition became effective on 1 July 2021 and the consideration was finalised at R178 million (the “Final Consideration”).

Tarsus has two main operating subsidiaries: Tarsus Distribution Proprietary Limited, the company that owns the South African, Botswana and Namibian IT distribution operations, and Tarsus on Demand Proprietary Limited, a company which operates a cloud solutions business.

The Final Consideration of R178 million is payable in cash as follows:

� R100 million on 1 July 2021 (settled on payment date);

� R20 million on 1 January 2022;

� R33 million on 1 January 2023; and

� R25 million on 1 January 2024.

The Acquisition is subject to warranties and indemnities normal to transactions of this nature.



Overview


Settlement of contingent consideration

Obscure Enterprises Proprietary Limited (“Obscure”)

In terms of the agreement of purchase, the amount due in respect of the year ended June 2020 of R6 million was settled during the reporting period. There remains a contingent consideration for the final amount due, in respect of the reporting period ended 30 June 2021, of R13 million which should be settled in September 2021.

Acquisition of an additional 7,4% in Sintrex Integration Services Proprietary Limited (“Sintrex”)Effective 1 November 2020, Alviva, through its subsidiary company DCT Holdings (RF) Proprietary Limited (“DCT”), acquired an additional 7,4% of the issued share capital of Sintrex for an amount of R11 million. In addition, in January 2021 Sintrex repurchased 14 of its shares for a consideration of R9 million. The effect of these two transactions increased DCT’s shareholding in Sintrex to 88%.

Effect of new acquisitions Over the last few years, Alviva has paid approximately R648 million to acquire businesses to add to the Group’s offering, to improve its growth prospects and to diversify its revenue streams from ICT distribution.

The returns in attributable profit to the Group, based on the reporting period to 30 June 2021, have been R64 million.

Within the next two years, once the intangible assets have been fully amortised, it is expected that these new acquisitions will contribute meaningfully to the Group.

Share repurchasesOver the last five years, Alviva has repurchased 61 million shares from its 183 million shares in issue on 30 June 2016, at a total cost of R742 million. During the reporting period alone, the Group repurchased 13,8 million shares at a cost of R115 million. The share repurchase programme, as approved by shareholders at its AGM, will continue along prudent lines and with due consideration to the Group’s resources.

ENVIRONMENT, SOCIAL AND GOVERNANCE

EnvironmentAlviva collates and analyses carbon footprint data as well as data on other specific topics of environmental indicators annually. The data, together with management’s approach, is included in the Sustainability Report on pages 118 to 123. Management continually strives to minimise the Group’s environmental impact to protect our planet for future generations. Total carbon emissions for the reporting period were 6 854 CO₂e tonnes (2020: 8 754 CO₂e tonnes), a reduction of 22%, mainly attributable to the reduction in electricity consumption as a result of employees working remotely during the national lockdowns.

SocialAlviva’s employees are at the heart of its business and the Group invests in opportunities for the development of its employees and in leadership programmes to enable current and future leaders of the Group. A diverse and inclusive workforce is essential to the Group’s ability to be an innovative organisation that is able to adapt and prosper in a fast-changing world. In 2021, Alviva maintained its B-BBEE contributor status of Level 1, as verified by EmpowerLogic (Pty) Ltd on 17 September 2021.

Upliftment of the communities in which the Group operates, through CSI initiatives which carry a strong education focus, is prioritised on a continuous basis.


Overview

COVID-19Alviva’s policy is to provide a safe and, as far as is possible, risk-free work environment to all its stakeholders, especially its employees. Therefore, in terms of government and WHO guidance, COVID-19 procedures were formulated, as contained in the Group COVID-19 OHS Policy and Framework, and COVID-19 Compliance Officers have been appointed in the various operating entities.

As various lockdown levels were announced during the second and third waves of the pandemic, the various operating entities were able to adapt their business models whilst enabling employees to work remotely, when required. Where a physical presence at the offices or warehouses was required, it was done in terms of the required protocols.

Condolences go out to the families of the five employees that sadly passed away as a result of COVID-19. Where applicable, the Company offers affected employees support through counselling. ICAS is also available to all employees in terms of accessing emotional support to assist with the ongoing need for emotional well-being.

For further disclosure, please refer to the Sustainability Report on page 132.

GovernanceSound corporate governance is inherent in Alviva’s values, culture, processes, functions and organisational structure. The Board is fully committed to the highest standard of governance and accountability, as recommended by King IV™, and delivery of the outcomes of an ethical culture, good performance, effective control and legitimacy. The Group’s corporate governance disclosure is shown on pages 38 to 55 and the Board is satisfied that the Group applies the principles and recommended practices of King IV™, as applicable to Alviva, and the mandatory corporate governance requirements of the JSE.

The Board plays a pivotal role in strategy planning and establishing benchmarks to measure the Group’s strategic objectives.

Changes to the Board and Committees

There have been no changes to the Board during the reporting period. The Board comprises seven directors, two executive directors and five non-executive directors. The executive directors are the Chief Executive Officer and the Chief Financial Officer. Four of the five non-executive directors are independent. The Chairperson, a non-executive director, is not considered to be independent but the independence of the Board is strengthened by the inclusion of a Lead Independent Director as recommended by King IV™.

STAKEHOLDER ENGAGEMENT [GRI102-44]

Stakeholder relationships are built on the basis of open dialogue and mutual trust as sustainable value creation depends on successful engagement with stakeholders. These engagements assist Alviva to understand and respond to the interests and expectations of key stakeholders. The Group strives to ensure the completeness, timeliness, objectivity, reliability and consistency of information. As a result of the uncertainty created by the COVID-19 pandemic, stakeholder engagement has been enhanced in order to facilitate feedback from the different stakeholder groups and in support of the Board’s intentional stakeholder-inclusive approach. Alviva’s stakeholder engagement framework will be further developed for the new jurisdictions that it is entering as those operations are established.

Stakeholder relationships are actively managed by the executive directors and senior management and the nature of engagements during the reporting period is outlined on pages 65 to 69.



Overview


DIVIDENDSThe Company’s policy is to declare a dividend of 10% of HEPS (and since the introduction of Dividends Tax, a gross dividend of 10% of HEPS before deducting Dividends Tax). To this end, the Board has declared a final dividend of 29 cents (2020: 15 cents) per ordinary share for the reporting period ended 30 June 2021.

PROSPECTS AND STRATEGIC INITIATIVESThe outlook for the year to 30 June 2022 remains uncertain. The shortage of components and products, the increase in shipping costs and delays, together with an economy that has been ravaged over the last 18 months, are all features that will remain for some time to come. Yet, on the positive side, the demand for the Group’s products and services remains strong. The new acquisitions that have recently been brought into the Group offer exciting prospects, although much effort is required to bring them to produce to their full potential. The Board remains cautiously optimistic.

APPRECIATIONWe extend our appreciation to all employees across the Group for their contribution amid unprecedented times. The relationships with our external stakeholders, including our customers, shareholders and funders, advisors, suppliers and business associates, are critical to the sustainability of the business and we thank them for their continued support and engagement. Thank you to the Board of Directors for their active participation in Board and Committee meetings, and for providing valuable insight and oversight.

A Tugendhaft P Spies RD LyonChairperson CEO CFO

34

Governance

ALVIVA HOLDINGS LIMITED • Integrated Annual Report 2021

GOVERNANCE

35

Governance


Chairperson Non-Executive Director

BA (Wits); LLB (Wits)

Appointed to the Board: 24 November 1998

Appointed as Chairperson: 3 October 2017

Member of the Remuneration Committee.

Mr Tugendhaft is the senior partner of attorneys Tugendhaft, Wapnick, Banchetti and Partners. He is an accomplished practitioner in commercial and corporate law and has more than 47 years’ experience in practice.

External membership and appointments: Non-Executive Director and Deputy Chairperson of Motus Holdings Ltd.

NON-EXECUTIVE DIRECTOR

INDEPENDENT NON-EXECUTIVE DIRECTORS

BOARD OF DIRECTORS[GRI 102-22] [GRI 405-1]

Mr A Tugendhaft (73)

Ms P Natesan (42)

Ms SH Chaba (63)

Independent Non-Executive Director

BA (Economics and Industrial Psychology); Post-Graduate Diploma in Human Resources Management (Wits); Senior Executive Programme (Wits and Harvard Business School)

Appointed to the Board: 31 August 2012

Chairperson of the Social and Ethics Committee and the Remuneration Committee as well as a member of the Audit and Risk Committee.

Ms Chaba is an HR expert and business strategist who sits on a number of boards in the private and public sectors. She works as a consultant and in an advisory capacity as a board member. She runs businesses in the areas of horticulture and construction sectors. She has extensive public and private sector experience at both executive and board levels. In the public sector, she has served in all three spheres of government and in state-owned enterprises such as Gauteng Provincial Government, City of Johannesburg and the Central Energy Fund. She has significant experience in the ICT sector, having served on the boards of SITA and USAASA for nine years. In the private sector, she has experience in the petrochemical, retail, construction and financial industries such as Sasol Limited, AECI Limited, Edgars and Creditworx (a Thebe Investment Corporation (Pty) Ltd subsidiary). She also has significant experience in the insurance sector having served as a non-executive director for Safrican Insurance Company (a Sanlam subsidiary) and a Specialist HR Consultant for both the Legal Practitioners’ Fidelity and Indemnity Insurance Funds’ remuneration committees.

External membership and appointments: Director of Safrican Insurance Company Limited, Dijalo Mbung (Pty) Ltd, Amispan, Azonex (Pty) Ltd, Africa Cornices (Pty) Ltd and Kgosi Neighbourhood Foundation, a non-profit organisation.

Lead Independent DirectorIndependent Non-Executive Director

BCom (Cum Laude) (Nelson Mandela University); BCom (Honours) (Nelson Mandela University); CA(SA); CD(SA)

Appointed to the Board: 6 December 2017

Appointed as Lead Independent Director: 6 December 2017

Chairperson of the Audit and Risk Committee.

Ms Natesan is the CEO at the Institute of Directors in South Africa, serving as an executive director on their board and overseeing the business growth and performance on a day-to-day basis. Her areas of expertise include governance, finance, risk and compliance as well as strategy development.

She is a corporate governance specialist and a thought leader in corporate governance in South Africa, having penned many articles and papers on the topic. She also holds the prestigious Chartered Director (SA) designation.

External membership and appointments: Member of the South African Institute of Chartered Accountants, King Committee on Corporate Governance, 30% Club, Integrated Reporting Committee of South Africa and Institute of Directors in South Africa (IoDSA).

36

Governance


Ms MG Mokoka (47)

Mr PN Masemola (58)

Mr P Spies (57)

Mr RD Lyon (63)

INDEPENDENT NON-EXECUTIVE DIRECTORS (continued)

EXECUTIVE DIRECTORS

Board of directors continued


BScEng (Mech) (University of Cape Town)

Appointed to the Board: 29 July 2019

Member of the Social and Ethics Committee.

Mr Masemola is a past director of Cisco South Africa (Pty) Ltd and Cisco Technical Services (Pty) Ltd. He led Cisco’s Smart & Connected Communities strategy in South Africa and assisted the Gauteng Provincial Government with its Broadband strategy. He also led the Internet Business Solutions Group within Cisco Systems South Africa, and was part of a wider group of consultants that collaborated across the world on ICT solutions. Prior to that, he led government sales at Hewlett Packard South Africa where he developed the sales strategy. He has held various senior management and board positions and is currently an investor in start-ups in the ICT, mining and energy sectors.

External membership and appointments: Investor in and director of Datacyte (Pty) Ltd and Mokwatla Industrial Solutions (Pty) Ltd. Director at Bona Lesedi Disability Centre.

CEOExecutive Director

BCom (UJ)

Appointed to the Board: 27 January 2016

Mr Spies has extensive experience in the ICT industry having served in various roles, including that of CFO and CEO at Tarsus Technology Group. His experience includes the successful national and international expansion of various companies, various mergers and acquisitions and the establishment of a channel finance business. With over 30 years’ experience, he is a stalwart of the ICT industry, and is well respected by the Group’s customers, vendors and staff.

CFOExecutive Director

BA (Economics and Business Law)(University of Stirling); CA

Appointed to the Board: 1 January 2013

Mr Lyon qualified as a Chartered Accountant in Scotland in 1983 and then joined Fisher Hoffman Stride in South Africa shortly thereafter. He served as a Financial Manager in Metro Cash and Carry (Pty) Ltd for three years before taking on the Finance Director role in Cashbuild Ltd for seven years. He has been with Alviva and Axiz for over 20 years and in general commerce for over 30 years.


BCom (Accounting) (University of Limpopo); Postgraduate Diploma in Management (Financial Accounting) (University of Cape Town); BCom Honours (Accounting) (University of Natal); Postgraduate Diploma in Auditing (University of Cape Town); CA(SA)

Appointed to the Board: 29 July 2019

Member of the Audit and Risk Committee and the Remuneration Committee.

Ms Mokoka is a qualified Chartered Accountant (SA) with diverse work experience in strategic and financial management. She has sound public and private sector experience on boards, and currently holds a number of non-executive board positions for leading South African companies.

External membership and appointments: Director of Sanlam Ltd, Palabora Mining (Pty) Ltd, CSG Holdings Ltd and Stadio Holdings Ltd. Member of the South African Institute of Chartered Accountants (SAICA), the Institute of Directors in South Africa (IoDSA) and African Women Chartered Accountants (AWCA).

Ages as at 21 September 2021.

37

Governance


The Board and individual directors are committed to the principles of transparency, integrity and accountability and accept their duty and responsibility to ensure that the principles and underlying recommended practices, outlined in King IV™, are observed with the resultant governance outcomes of an ethical culture, good performance, effective control and legitimacy.

GOVERNANCE AND COMPLIANCE STRUCTURE

BOARD OF DIRECTORSRisk tolerance/appetite Reporting

Company Secretary

AUDIT AND RISK COMMITTEE REMUNERATION COMMITTEE

SOCIAL AND ETHICS COMMITTEE

Combined assurance framework

AUDIT RISK

CEO EXECUTIVES

Risk management and

governanceInternal Audit Ethics

IT Governance

Risk management Sustainability

Compliance

Assurance Consulting

Environmental/ health and safety

Compliance framework

IT business systems• Risks• Standards• Disaster recovery

• Achievement of company strategy and goals

• Safeguarding of assets• Compliance with laws,

regulations and policies• Reliability of information• Effective and efficient

operations

• Operational risk/opportunity• Tactical risk/opportunity• Strategic risk/opportunity• Project risk/opportunity

• Third party assurance• Group safety, health and

environment function

• Competition Act• Companies Act• Consumer Protection Act• Occupational Health and Safety Act• National Credit Act• JSE• King IVTM

• Income Tax Act• B-BBEE• Anti-bribery legislation• Protection of Personal Information Act

• Legal• Policies and procedures• Ethics and Code of Conduct• Delegation of authority• Declaration of interest

• Fraud and irregularities• Ethics hotline• Training and awareness• Code of Conduct

Reporting Global Reporting Initiative/ Socially Responsible Investment Index (JSE) Combined assurance planProjects• Procurement practices• Carbon reduction• Waste reduction• B-BBEE• Training and education• Diversity• Non-discrimination• Local communities

Func

tiona

l

Adm

inis

trat

ive

Risk-based audit plan

Assurance

• Risk-based • IIA standards

[GRI 102-16] [GRI 102-17] [GRI 102-18]

38

Governance


The Board is satisfied that the Group complies with the principles and recommended practices of King IV™, applicable to Alviva, and the mandatory corporate governance disclosure requirements of the JSE.

LEADERSHIP

Principle 1: The governing body should lead ethically and effectively. [GRI 102-16]

The Board exercises effective leadership, with directors adhering to their ethical and fiduciary duties. The directors discharge their responsibilities in the following manner:

� Integrity: acting in good faith and in the best interest of Alviva. Declarations pertaining to conflicts of interest are tabled at each Board meeting and untenable conflicts are identified and acted on.

� Competence: ensuring the necessary experience, expertise and competency to lead effectively.

� Responsibility: considering risks and overseeing and monitoring management’s implementation and execution of the mitigating strategies ensuring accountability for the Group’s performance.

� Accountability: accepting responsibility for the execution of their duties, even when these were delegated.

� Fairness: adopting a stakeholder-inclusive approach and ensuring the equitable treatment of all stakeholders, while remaining cognisant of the Group’s short-, medium- and long-term impact on the economy, environment, society and its stakeholders.

� Transparency: exercising governance roles and responsibilities in a transparent manner.

Members of the Board are expected to attend Board and Committee meetings and devote sufficient time and effort to prepare for those meetings. Attendance records are kept and disclosed in the Integrated Annual Report. Arrangements by which Board members are being held to account for ethical and effective leadership include, but are not limited to, the Code of Conduct and annual performance evaluations of individual directors as well as of the Board as a whole. The result of these evaluations is monitored to ensure that directors’ performance levels meet expectations.

Directors disclose their interests at each Board meeting and, in cases where a conflict cannot be avoided, these matters of conflict are proactively managed, as determined by the Board, and subject to legal provisions. Members of the Board are expected to avoid conflicts of interest. [GRI 102-25]

Planned areas of future focus:

Alviva’s Code of Conduct will be reviewed on a continuous basis to ensure that it remains aligned with best practice.

ORGANISATIONAL ETHICS

Principle 2: The governing body should govern the ethics of the organisation in a way that supports the establishment of an ethical culture. [GRI 102-16] [GRI 102-17]

The Board determines and sets the tone of Alviva values, including principles of ethical business practice and human rights considerations, and, supported by the Social and Ethics Committee, approves Alviva’s Code of Conduct and considers the requirements for the Group to be a responsible corporate citizen, based on integrity, competence, responsibility, accountability, fairness and transparency.

The implementation and execution of the Code of Conduct has been delegated to management with the Board, assisted by the Social and Ethics Committee, providing ongoing oversight of the management of ethics to ensure that the Company’s ethics performance is assessed, monitored, reported and disclosed, as well as ensuring that it is integrated into the operations of the Group. An overview of the arrangement for governing and managing organisational ethics is disclosed in the Integrated Annual Report.

CORPORATE GOVERNANCE REPORT[GRI 102-12] [GRI 102-18]

39

Governance


The ethics programme includes the whistle-blowing mechanism and management of the independent and anonymous disclosure of information gathered from whistle-blowers to detect breaches of ethical standards. Ongoing effort to create awareness, detect and resolve ethical violations, together with the provision of training on anti-corruption, bribery and anti-competitive behaviour, contribute to a strong ethical foundation.

Internal Audit performs regular ethics assessments. The scope of these assessments includes an assessment of both the adequacy and effectiveness of ethics governance processes and policies set by the Board in line with corporate governance requirements.

Anonymous surveys are issued to all employees to measure their perceptions of the Company’s ethics culture and the effectiveness of ethics programmes. The Company participates in the Ethics Institute’s ethics surveys. The results of the assessments are submitted to the Audit and Risk Committee as well as the Social and Ethics Committee for consideration and appropriate action plans are put in place, with oversight by the Board. Anonymous ethics line reports are monitored by the Social and Ethics Committee and the results of the ethics line reports and ethics surveys are reviewed, and the outcomes assessed to ensure adequate resolution.

The Code of Conduct has been updated with the objective of aligning both employee and director conduct to the achievement of the governance outcomes, as recommended by King IV™, being:

� an ethical culture;

� performance and value creation;

� adequate and effective control; and

� trust, good reputation and legitimacy.


The Board, through the Social and Ethics Committee, will provide oversight of the management of ethics throughout the organisation to ensure that the Group’s ethical standards are applied to the processes for the recruitment, evaluation of performance and reward of employees, as well as the sourcing of suppliers.

A process for the monitoring of adherence to the Group’s ethical standards by all stakeholders through, amongst others, periodic independent assessments, will continue to be performed.

New employees, as well as those new employees arising from acquisitions, will continue to be inducted into Alviva’s ethical culture and the Board’s commitment to ethical behaviour will be re-communicated.

RESPONSIBLE CORPORATE CITIZENSHIP

Principle 3: The governing body should ensure that the organisation is and is seen to be a responsible corporate citizen. [GRI 102-16] [GRI 102-17] [GRI 102-31]

The Board, assisted by the Social and Ethics Committee and supported by the executives, oversees and monitors how the operations and activities of the Group affect its status as a responsible corporate citizen and ensures that its arrangements for governing and managing responsible corporate citizenship is aligned to the requirements of King IV™. This is achieved by identifying any gaps on the Group’s governance processes and aligning those through the adoption of appropriate policies and procedures.

Through stakeholder engagement and collaboration, Alviva has committed to understanding and being responsive to the interests and expectations of stakeholders and to partnering with them in finding solutions to sustainability challenges.

The Board reviews compliance with King IV™ and periodically reviews processes and procedures to ensure the Group remains within the requirements expected of a responsible corporate citizen.

Oversight and monitoring of activities and outputs that affect Alviva’s status as a responsible corporate citizen include:

� workplace (employment equity; fair remuneration; health, safety and the environment; training and development of employees);

� economy (economic transformation; prevention, detection and response to fraud and corruption);

� society (consumer protection; community development; protection of human rights); and

� environment (carbon footprint).

Corporate governance report continued

40

Governance


During the reporting period, the key focus areas were the implementation of the Protection of Personal Information Policy, aligning socio-economic development to the Corporate Social Investment Policy, aligning the training and development of employees with the objectives of the business, and ensuring the accuracy of reportable injuries on duty. The Group’s status as a corporate citizen is further disclosed in the Sustainability Report (workplace, economy, society and environment) and the Social and Ethics Committee Report (transformation) contained in this Integrated Annual Report.


The Board, through the Social and Ethics Committee, will continue to consider measures to ensure that responsible corporate citizenship is embraced across the Group and, in particular, when new businesses are acquired.

STRATEGY AND PERFORMANCE

Principle 4: The governing body should appreciate that the organisation’s core purposes, its risks and opportunities, strategy, business model, performance and sustainable development are all inseparable elements of the value creation process. [GRI 102-14] [GRI 102-26]

The Board informs and approves Alviva’s strategy, which is aligned with the purpose of the Group, the value capitals and value drivers of the business, and the expectations of its stakeholders, aimed at ensuring sustainability and which takes into account the top risks facing the Group. With the support of the Board Committees, the Board oversees and monitors the implementation and execution by management of the policies, procedures and priorities and ensures that Alviva accounts for its performance by, amongst others, reporting and disclosure.

Alviva as an investment, its core competencies, its business model and strategic focus areas are disclosed on pages 18 to 27 of the Integrated Annual Report and Risk Management appears on pages 58 to 64.

Sustainability issues are particularly considered by the Board when strategies or new business opportunities are evaluated. These include the effect on all stakeholders, including shareholders, suppliers, customers, employees and communities.

The Stakeholder Engagement Policy includes a framework for stakeholder engagement, and disclosure on stakeholder engagements is shown on pages 65 to 69.


To ensure that the Group’s strategy remains aligned with stakeholder expectations, mechanisms for two-way communications with stakeholder groups, including the management of the effects of actions, will be further explored.

REPORTING

Principle 5: The governing body should ensure that reports issued by the organisation enable stakeholders to make informed assessments of the organisation’s performance, and its short-, medium- and long-term prospects.The Board, through the Audit and Risk Committee, ensures that the necessary controls are in place to verify and safeguard the integrity of the Integrated Annual Report and any other disclosures.

Reporting frameworks and materiality are approved by the Audit and Risk Committee to ensure compliance with legal requirements and relevance to stakeholders. The Board ensures that reports issued by Alviva enable stakeholders to make informed assessments of the Group’s performance and its short-, medium- and long-term prospects.

The Audit and Risk Committee and the Social and Ethics Committee performed an evaluation of the material topics on which Alviva should report in the sustainability section of its 2021 Integrated Annual Report. Taking cognisance of Alviva’s stakeholders and the environment in which it operates, the topics have overall been prioritised and are disclosed in the Sustainability Report on pages 104 to 146.

The Audit and Risk Committee oversees the integrated reporting process and reviews the financial statements. Alviva ensures that the Integrated Annual Report, including the Sustainability Report, the annual financial statements and corporate governance disclosures, are published on the website, www.alvivaholdings.com under ‘Reports and Presentations’.


41

Governance



An ongoing focus area will be the continued streamlining of reporting to enhance disclosure in a concise manner and aligned to the Integrated Reporting Framework.

PRIMARY ROLE AND RESPONSIBILITIES OF THE GOVERNING BODY

Principle 6: The governing body should serve as the focal point and custodian of corporate governance in the organisation.The Board has an approved Charter, that is reviewed annually, which sets out its governance responsibilities, including the role, responsibilities, membership requirements and procedural conduct. Through its sub-Committees, the Board implements and monitors the governance practices within the Group.

The number of meetings of the Board held during the reporting period and the attendance at those meetings are disclosed on page 42.

The Board, as well as any director or Committee, may obtain independent, external professional advice at Alviva’s expense concerning matters within the scope of their duties and the directors may request documentation from, and set up meetings with, management, as and when required.

An appropriate governance and compliance structure is in place to ensure all entities within Alviva adhere to Group requirements and governance and compliance standards.

The Board is satisfied that it has fulfilled its responsibilities in accordance with its Charter for the reporting period.


The process of alignment of Alviva’s policies and procedures to King IV™ is ongoing and will continue in the year ahead.

COMPOSITION OF THE GOVERNING BODY

Principle 7: The governing body should comprise the appropriate balance of knowledge, skills, experience, diversity and independence for it to discharge its governance role and responsibilities objectively and effectively.JSE Listings Requirements (paragraph 3.84, service issue 27) – mandatory disclosure requirements: Categorisation of directors; Balance of power and authority on the Board; Appointment of the CEO and Chairperson; Policy on the promotion of broader diversity on the Board, specifically focusing on the promotion of the diversity attributes of gender, race, culture, age, field of knowledge, skills and experience; CV of each director standing for election or re-election.

The capacity of each director is categorised as defined in the JSE Listings Requirements, also taking into consideration King IV™ and other factors as outlined in the Board Charter.

Board composition [GRI 102-27] [GRI 405-1]

The Board comprises a majority of independent non-executive directors with four of the five non-executive directors being independent, according to the Companies Act definition, and two executive directors, the CEO and the CFO. The categorisation and details of individual members of the Board are outlined on pages 35 and 36. The Board is satisfied that its composition reflects the appropriate mix of knowledge, skills, experience, diversity and independence.

Mr A Tugendhaft is not considered independent in terms of the definition as his law firm provides legal services and advice to Alviva, albeit that the fees for these services are not significant to either of the parties. Mr Tugendhaft is also the Chairperson of the Board and, consequently, as recommended by King IV™, when the Chairperson is considered not to be independent, Ms P Natesan, an independent non-executive director, has been appointed as Lead Independent Director to deal with any perceived issues flowing from the limited area of potential non-independence or conflict of interest. [GRI 102-23]


42

Governance


Two of the non-executive directors on the Board have served a term exceeding nine years. The Board reviewed the impartiality of Mr A Tugendhaft and Ms SH Chaba and, after due consideration, concluded that their long associations with the Group have not impaired their integrity and objectivity and that they have retained their ability to act impartially.

Due to the size of the Board, a separate Nomination Committee has not been appointed and the Board assumes this responsibility.

When considering appointment or re-election of directors, the Board gives consideration to the knowledge, skills and resources required for conducting the business as well as considering the size, diversity and demographics to ensure the Board’s effectiveness.

A candidate, nominated for election as a non-executive member of the Board, is requested to provide the Board with details of professional commitments and a statement that confirms that the candidate has sufficient time available to fulfil the responsibilities as a member of the Board.

The Board reviewed Alviva’s succession plan for management and considers it to be appropriate.

There is a clear distinction between the roles of the CEO and the Chairperson, and these positions are occupied by separate individuals.

A brief CV for each director standing for election and re-election at the AGM is included in the Integrated Annual Report, of which the notice of AGM forms part. Ms MG Mokoka and Ms SH Chaba retire by rotation and, being eligible, offer themselves for re-election.

The Board has confirmed that it supports the re-election of Ms MG Mokoka and Ms SH Chaba.

Board meeting attendance [GRI 405-1]

The Board meets at least four times a year. Additional meetings can be convened to consider specific business issues which may arise between scheduled meetings. The attendance of meetings held during the period 1 July 2020 and 30 June 2021 was as follows:

22 Sep 2020

18 Nov 2020

16 Feb2021

15 Jun2021

Members

Mr A Tugendhaft (Non-Executive Chairperson) √ √ √ √

Ms P Natesan (Independent Non-Executive Director; Lead Independent Director)

√ √ √ √

Ms SH Chaba (Independent Non-Executive Director) √ √ √ √

Mr PN Masemola (Independent Non-Executive Director) √ √ √ √

Ms MG Mokoka (Independent Non-Executive Director) √ √ √ √

Mr P Spies (CEO) √ √ √ √

Mr RD Lyon (CFO) √ √ √ √

Invitees

Mr JV Parkin (CCO) √ √ √ √

Company Secretary

Ms SL Grobler √ √ √ √


43

Governance


Board diversity

The Board adopted a policy on diversity on 12 June 2018. The Policy addresses gender and race diversity at Board level. As outlined in the Policy, the Board specifically:

� supports the principles and aims of gender and race diversity at Board level;

� promotes equitable gender and race representation at Board level through a structured approach adopted by the Board pertaining to new appointments to the Board;

� recognises and embraces the benefits of having a diverse Board which will include and make use of differences in the skills, regional and industry experience, background, race, gender and other distinctions between directors;

� endorses that all Board appointments will be made on merit, in the context of the skills, experience, independence and knowledge, which the Board as a whole requires to be effective;

� discusses and agrees all measurable objectives for achieving diversity on the Board;

� reports annually, in the corporate governance section of the Integrated Annual Report, on the process applied in relation to Board appointments; and

� reviews this Policy annually, including an assessment of the effectiveness of this Policy, any revisions that may be required and any such revisions to the Board.

The gender and race diversity targets for the Board were reviewed in 2020 when new Board appointments were made. The Board annually reviews its progress against its voluntary targets.

The voluntary targets set by the Board are as follows:

� At least 50% of the Board should comprise historically disadvantaged individuals (black individuals, which include african, coloured and indian persons); and

� At least 50% of the Board should comprise women. [GRI 405-1]

The achievement of the voluntary targets is as follows:

� 57% of the Board comprises historically disadvantaged individuals (black individuals, which include african, coloured and indian persons); and

� 43% of the Board comprises women. [GRI 405-1]

Female Male

43% 57%

Black White

57% 43%

Independent Non-Executive ExecutiveNon-Executive

57% 14% 29%

More than 9 years 0 to 3 years3 to 8 years

29% 42% 29%

Between 40 and 50 Over 65Between 50 and 60

29% 57% 14%

TENURE

AGE

INDEPENDENCE

RACE

GENDER

Board diversity as at 30 June 2021


44

Governance


Board skills and expertise [GRI 102-27]

Board skills and expertise percentages have been determined by evaluating the number of Board members with the particular skills and expertise in a specific category.


The Board Diversity Policy will be broadened in alignment with paragraph 3.84(i) of the JSE Listings Requirements. The Board will review, at least annually, its composition and diversity targets, as well as the appropriateness of the skills, experience and expertise of individual directors and the effectiveness of the Board as a whole.

COMMITTEES OF THE GOVERNING BODY

Principle 8: The governing body should ensure that its arrangements for delegation within its own structures promote independent judgement and assist with balance of power and the effective discharge of its duties. [GRI 102-18] [GRI 102-19]

JSE Listings Requirements (paragraph 3.84, service issue 27) – mandatory disclosure requirements: Audit Committee, Remuneration Committee and Social and Ethics Committee; Expertise and experience of the Financial Director. JSE Listings Requirements (paragraph 7.F.5, service issue 27) – Social and Ethics Committee compliance with Companies Act requirements.

Committees have been established to assist the Board in discharging its responsibilities. The Committees of the Board are shown below.

BOARD COMMITTEES

Audit and Risk Committee Remuneration Committee Social and Ethics Committee Nomination Committee

The Audit and Risk Committee assists the Board by providing oversight of financial and internal controls as stipulated in the Companies Act and outlined in its Charter as well as the enterprise-wide risk management framework.

The Remuneration Committee assists the Board with the policy and oversight of fair and responsible remuneration practices and the accurate and transparent disclosure thereof.

The Social and Ethics Committee assists the Board by overseeing and reporting on social, ethics, transformation and sustainability matters as well as executing on its statutory duties set out in the Companies Act.

Alviva does not have a Nomination Committee and the Board assumes the role, function and responsibilities of a Nomination Committee.

Finan

ce an

d as

sura

nce

71% 29%

Lega

l and

com

plia

nce

71%

Ethi

cs

100%

71% Rem

uner

atio

n

71%

Stak

ehol

der r

elat

ions

57% 100%

29% 86%

Corp

orat

e go

vern

ance

71%Sust

aina

bilit

y

71%

IT an

d di

gita

l

Repo

rting

Mar

ketin

g

Stra

tegy

Risk


45

Governance


The Committees are appropriately constituted and members are appointed by the Board, except for the Audit and Risk Committee (which is a statutory committee in terms of the Companies Act – from an audit perspective), whose members are nominated by the Board and elected by shareholders.

External advisors and executive directors attend Committee meetings by invitation. Formal charters have been established and approved for each Committee, which charters are reviewed annually.

The Board considers the allocation of roles and associated responsibilities and the composition of membership across committees holistically, so as to achieve the following:

� Effective collaboration through cross-membership between committees, where required; coordinated timing of meetings; and avoidance or duplication or fragmented functioning as far as possible.

� Where more than one committee has jurisdiction to deal with a similar matter, the specific role and positioning of each committee in relation to such matter is defined to ensure complementary rather than competing approaches.

� There is a balanced distribution of power in respect of membership across committees, so that no individual has the ability to dominate decision making, and no undue reliance is placed on any individual.

� A delegation by the Board of its responsibilities to a committee does not by or of itself constitute a discharge of the Board’s accountability.

Audit and Risk CommitteeThe Audit and Risk Committee is constituted as a statutory committee in respect of its statutory duties in terms of section 94(7) of the Companies Act and a committee of the Board in terms of all other duties assigned to it by the Board, which include the monitoring and evaluation of committee risk functions.

The Committee performs the functions as set out in the Companies Act. Adequate processes and structures have been implemented to assist the Committee in providing oversight and ensuring the integrity of financial reporting, internal control and other governance matters relating to subsidiaries.

Membership [GRI 405-1]

The Committee comprised three independent non-executive directors who were appointed by the shareholders, as determined by the Companies Act, at the AGM held on 18 November 2020. The Committee members were:

� Ms P Natesan (BComm (Cum Laude) (Nelson Mandela University), BComm (Hons) (Nelson Mandela University), CA(SA), CD(SA));

� Ms SH Chaba (BA (Economics and Industrial Psychology), Post-Graduate Diploma in Human Resources Management (Wits), Senior Executive Programme (Wits and Harvard Business School)); and

� Ms MG Mokoka (BCom (Accounting) (University of Limpopo); Post-Graduate Diploma in Management (Financial Accounting) (University of Cape Town); BCom Honours (Accounting) (University of Natal), Post-Graduate Diploma in Auditing (University of Cape Town); CA(SA)).

Shareholders will be requested to ratify the appointments and resolutions to appoint the Chairperson and Committee members above for the ensuing year. This will be presented at the AGM to be held on Friday, 19 November 2021.

The Chairperson of the Board is not eligible to chair the Committee. He does, however, have a standing invitation to attend all Committee meetings. The CFO, CRO, CAE and the external audit partner attend all meetings by permanent invitation. Other attendees comprise the CEO and certain Alviva employees (including the CIO) and consultants who are invited to attend meetings, as and when required.


46

Governance


Meetings of the Committee [GRI 405-1]

Four scheduled meetings per annum, as required by the Audit and Risk Committee Charter, were held. Attendance of meetings held during the period 1 July 2020 to 30 June 2021 is outlined below.

22 Sep 2020

18 Nov 2020

16 Feb 2021

15 Jun 2021

Members

Ms P Natesan (Independent Non-Executive Director; Chairperson of the Committee)

√ √ √ √

Ms SH Chaba (Independent Non-Executive Director) √ √ √ √

Ms MG Mokoka (Independent Non-Executive Director) √ √ √ √

Invitees

Mr A Tugendhaft (Non-Executive Chairperson) √ √ √ √

Mr PN Masemola (Independent Non-Executive Director) √ √ √ √

Mr P Spies (CEO) √ √ √ √

Mr RD Lyon (CFO) √ √ √ √

Mr A Gerber (CAE) √ √ √ √

Mr A Govender (External auditor’s representative) √ √ √ √

Mr R Anand (External auditor’s representative) √ n/a n/a n/a

Mr M van Heerden (CIO) n/a √ n/a √

Mr JV Parkin (CCO, who acts as the Chief Risk and Compliance Officer) √ √ √ √

Company Secretary

Ms SL Grobler √ √ √ √

Mr JV Parkin, the CCO, who acts as the Chief Risk and Compliance Officer, attends all meetings by invitation. Ms SL Grobler, the Company Secretary, attends all meetings and presents any IRBA and JSE-related matters.

The performance of the Audit and Risk Committee and significant issues dealt with during the reporting period are set out in the Audit and Risk Committee Report included in the annual financial statements from pages 151 to 159.

Remuneration CommitteeThe Remuneration Committee is responsible for overseeing remuneration.


The Committee comprises at least three non-executive directors, of whom the majority is independent. The Chairperson of the Board is a member of the Committee. The Board nominates members of the Committee and its Chairperson.

The Committee comprised Ms SH Chaba (Independent Non-Executive Director – Chairperson of the Committee), Ms MG Mokoka (Independent Non-Executive Director) and Mr A Tugendhaft (Non-Executive Chairperson of the Board) during the reporting period.


47

Governance



Three scheduled meetings, one more than required by the Remuneration Committee Charter, were held during the period. The attendance of the meetings held during the period 1 July 2020 to 30 June 2021 is outlined below:

22 Sep 2020

16 Feb 2021

15 Jun 2021

Members

Ms SH Chaba (Independent Non-Executive Director; Chairperson of the Committee)

√ √ √

Ms MG Mokoka (Independent Non-Executive Director) √ √ √

Mr A Tugendhaft (Non-Executive Director) √ √ √

Invitees

Mr P Spies (CEO) √ √ √

Mr RD Lyon (CFO) √ √ √

Company Secretary

Ms SL Grobler √ √ √

Meetings of the Committee are held as frequently as the Committee considers appropriate, but it will normally meet not less than twice a year. The Board, or any member thereof including members of the Committee, may call additional meetings.

� The Chairperson, at his or her discretion, may invite other employees to attend and to be heard at the meetings of the Committee.

� The CEO and the CFO attend meetings by invitation only.

� The Chairperson of the Committee may meet with the CEO and/or Company Secretary prior to a Committee meeting to discuss important issues and/or agree on the agenda.

� All and any attendees by invitation may take part in discussions but do not have any voting rights and may not vote on any issues raised.

� Committee members must attend all scheduled meetings including ad hoc meetings for special matters, unless a prior apology with reasons has been submitted to the Chairperson or Company Secretary.

The Remuneration Committee Report appears on pages 70 to 95.

Nomination Committee [GRI 102-24]

The Board assumes the role, function and responsibilities of a Nomination Committee as a decision was taken to not constitute a separate sub-committee to perform these duties and, in this capacity, it ensures that the composition of the Board Committees, including the appointment of the Chairperson of each Committee, takes into account factors such as diversity and skills as well as the need to create an even spread of power and authority.

The Board is further responsible for:

� the process for nominating, electing and appointing members of the Board;

� the succession planning of directors; and

� the evaluation of the performance of the Board and its Committees.


48

Governance


Social and Ethics CommitteeThe Social and Ethics Committee is responsible for overseeing and reporting on social, ethics, transformation and sustainability matters. It is also responsible to execute on the statutory duties set out in the Companies Act.


Considerations for appointments to the Committee are based on the independence, business acumen and experience of the independent non-executive directors in order to assist the Committee in achieving its role and responsibilities.

As required by Regulation 43 of the Companies Act, the Committee comprises two independent non-executive directors and a prescribed officer of the Company. The majority of the members of the Committee are therefore independent non-executive directors.

Ms SH Chaba, an independent non-executive director, is the Chairperson of the Committee and the other two members are Mr PN Masemola, an independent non-executive director, and Mr JV Parkin, the CCO, a prescribed officer. [GRI 102-23]

As Alviva’s CAE, Mr A Gerber attends the meetings by invitation. He is not a member, to avoid compromising his independence as an assurance officer of the Group, and reports to the Committee on information which falls within his mandate.


The three scheduled meetings per annum, as required by the Social and Ethics Committee Charter, were held. The attendance of the meetings held during the period 1 July 2020 to 30 June 2021 is outlined below:

21 Sep 2020

15 Feb 2021

14 Jun 2021

Members

Ms SH Chaba (Independent Non-Executive Director; Chairperson of the Committee)

√ √ √

Mr PN Masemola (Independent Non-Executive Director) √ √ √

Mr JV Parkin (CCO, Prescribed Officer) √ √ √

Invitees

Mr A Gerber (CAE) √ √ √

Mr R Nkuna (Group HR Lead) √ √ √

Ms S Dube (HR Executive) √ √ √

The Social and Ethics Committee Report appears on pages 96 to 101.


The Board and its Committees have approved their respective annual workplans for the year ahead, which plans will be actioned and reported on in the next Integrated Annual Report.


49

Governance


EVALUATION OF THE PERFORMANCE OF THE GOVERNING BODY [GRI 102-28]

Principle 9: The governing body should ensure that the evaluation of its own performance and that of its committees, its chair and its individual members, support continued improvement in its performance and effectiveness.The Board evaluation process does not only satisfy compliance commitments but has as an objective improved governance and overall performance in the interests of all stakeholders. An evaluation of the Board, its Committees and the individual directors is conducted annually and consists of a questionnaire being completed by all Board members. This annual evaluation is comprehensive, encompassing all aspects of the Board’s responsibilities. It covers the effectiveness of the Board as a whole. A director’s contribution is measured against his or her duties. Evaluation questions also evaluate the performance of the Chairperson and the Lead Independent Director. The Chairperson annually appraises the CEO and the results of this appraisal are considered by the Remuneration Committee to guide it in its evaluation of the performance and remuneration of the CEO. Evaluations are performed in line with both the Company’s own objectives and the guidance that is given in King IV™ and by the IoDSA. The results are collated by the Company Secretary and passed on to the Board, who assesses the results.

The Board discusses the evaluation results to formulate improvement plans. Following the evaluation of the performance of the Board and its members in 2021, the Board concluded that the evaluation process improves its performance and effectiveness and no gaps in the skills, experience, expertise and qualifications of individual directors were identified in the evaluation process.

Nomination for re-appointment of a director only occurs after evaluation of performance and the satisfactory attendance at meetings by the director.


The Board will annually consider other commitments of directors and whether the director has sufficient time to fulfil the responsibilities as a director to ensure they can still execute their job effectively and are free from conflicts that cannot be managed satisfactorily. Should the Board be of the view that a director is overcommitted or has an unmanageable conflict, the Chairperson will meet with that director to discuss the resolution of the matter to the satisfaction of the Board.

APPOINTMENT AND DELEGATION TO MANAGEMENT

Principle 10: The governing body should ensure that the appointment of, and delegation to, management contributes to role clarity and the effective exercise of authority and responsibilities.JSE Listings Requirements (paragraph 3.84, service issue 27) – mandatory disclosure requirements: The Company Secretary.

CEO and executive managementThe role and function of the CEO are specified in the Board Charter and the performance of the CEO is evaluated by the Board against the criteria specified.

The Board approves and regularly reviews the delegation of authority. The CEO, CFO and executive management are jointly and severally the highest executive decision-making authority of the Group and are jointly and severally delegated with authority from, and are jointly and severally accountable to, the Board for the successful implementation of the Group strategy and the overall management and performance of the Group, consistent with the primary aim of enhancing long-term shareholder value.

In terms of the delegation of authority framework, executive management supports the CEO and CFO in the implementation of the Group strategy and the overall management and performance of Alviva. The CEO and CFO may sub-delegate all matters not specifically reserved for decision-making by the Board or shareholders.

The CEO and CFO are not members of the Audit and Risk, Remuneration and Social and Ethics Committees, but attend any meeting, or part thereof, by invitation, if needed, to contribute pertinent insights and information.

The Board evaluates the performance of the CEO and CFO annually against agreed performance measures and targets.


50

Governance


Delegation of authority [GRI 102-19]

The Board delegates certain of its powers and authority, outside of the reserved powers, to management and/or such committees/ forums, as they may deem appropriate. The directors appreciate that, despite such delegation occurring, they still remain ultimately responsible for the powers and authority so delegated and have, therefore, to monitor the effective execution of the same. However, it is understood that any person or committee/forum to whom power or authority has been delegated shall not, unless stated expressly to the contrary, be required to obtain consent to act in accordance with his/her/its delegated authority, but shall report regularly for monitoring purposes.

In the event of there being any dispute over the interpretation of the powers delegated by the Board to management, any committee or forum, the matter will be referred to the Board for a ruling and the decision of the Board in this regard shall be final and binding.

The Board is satisfied that the Delegated Authorities Framework contributes to role clarity and the effective exercise of authority.

The Framework specifically addresses:

� budget, strategy and action plans;

� appointments, dismissals and remuneration;

� risks, contracts and accounting;

� acquisitions and disposals; and

� administrative issues.

Succession planningThe Board has satisfied itself that there is succession planning in place for executive management and other key positions to provide continuity of leadership. Succession planning was reviewed during the reporting period, including succession plans for the CEO and CFO. The succession plans provide for the event of a temporary, unplanned absence (short-term and long-term) and the event of a permanent unplanned absence.

GovernanceThe Board has appointed an Internal Governance Officer and the Internal Governance Officer provides corporate governance services reports to the Board via the Chairperson on all statutory duties and functions performed in connection with the Board.

Regarding other duties and administrative matters, the Company Secretary reports to the executives, as appropriate. The Board considers these arrangements satisfactory as professional corporate governance services are underpinned by the expertise of the Lead Independent Director, Ms P Natesan, who is an expert in the field of governance.

Company SecretaryThe Company’s appointed secretary, Ms SL Grobler CA(SA), plays a pivotal role in the continuing effectiveness of the Board. The Company Secretary is not a director of the Company and was appointed by the Board in line with requirements of the Companies Act. The Company Secretary is considered independent and competent in the role as Company Secretary but remains accountable to the Board. The Board has empowered the Company Secretary to properly fulfil the duties expected of the position.

Based on the evaluation of performance throughout the year, professional qualifications and experience in the current position and positions prior to appointment, the Board has assessed the competence, qualifications and experience of the Company Secretary as required in terms of section 3.84(h) of JSE Listings Requirements. It was confirmed that the Company Secretary is suitably qualified, competent and experienced to hold the position of Company Secretary. The Board has further resolved that, based on the manner in which the Company Secretary conducts herself with respect to matters related to the Board, the Company Secretary maintains an arm’s length relationship with the Board.


51

Governance


The Company Secretary is sufficiently knowledgeable in relevant laws as required by the role. Key functions are formally documented and vetted by the Board and include the following:

� providing guidance to the Board as a whole and to individual directors with regard to how their responsibilities should properly be discharged in the best interests of the Group;

� overseeing the induction and orientation of new directors and the ongoing training and education of all directors;

� providing a central source of guidance and advice to the Board, and within the Company, on matters of good governance and of changes in legislation;

� assisting the Chairperson and the CEO in determining the annual Board plan and Board agendas;

� formulating governance and Board-related issues;

� ensuring that the Board and Board Committee Charters are kept up to date;

� ensuring that minutes of all shareholders meetings, Board meetings and the meetings of any committees of the directors, including those of the Audit and Risk Committee, are properly recorded in accordance with the Companies Act;

� being responsible for ensuring the proper compilation and timely circulation of Board papers;

� certifying the Company’s financial statements;

� ensuring that the Company has filed the required returns and notices in terms of the Companies Act, and confirming that all such returns and notices appear to be true, correct and up to date; and

� assisting with the yearly evaluation of the Board, its individual directors and senior management.


Effective corporate governance is embedded in the values of the Group and is, therefore, not merely seen as a set of recommendations that have to be ticked off but it is considered a way of life. The effective exercise of authority and responsibilities is, therefore, a regular agenda item on Board and Committee meeting agendas to ensure that time constraints and potential conflicts of interests are considered and balanced against the opportunity for professional development.

RISK GOVERNANCE

Principle 11: The governing body should govern risk in a way that supports the organisation in setting and achieving its strategic objectives.JSE Listings Requirements (paragraph 7.F.7, service issue 27) – mandatory disclosure requirements: Material risks.

The Board has direct responsibility for the governance of risk and approves Alviva’s risk policy that gives effect to its set direction on risk. Alviva is committed to effective risk management in pursuit of its strategic objectives, with the ultimate aim to grow value sustainably for all stakeholders by embedding risk management into key decision-making processes. The Board also approves Alviva’s top risk profile and financial risk appetite and tolerance levels, ensuring that risks are managed within these levels, and considers the risk environment from time to time, as deemed appropriate and based on materiality and changes in the external and internal environments.

To support the Board in ensuring effective risk management oversight, the Board Committees are responsible for ensuring the effective monitoring of the relevant top risks in the Group within the ambit of each Committee’s scope. In monitoring and providing oversight on Alviva’s risks, each Committee will consider potential risks and/or opportunities, as appropriate.

The Board, through the Social and Ethics Committee and Audit and Risk Committee, provided specific oversight in response to the regulations and the implementation of business continuity arrangements during the COVID-19 lockdown period and thereafter.


52

Governance


Key risks and mitigation strategies, specific to Alviva, the ICT industry and/or Alviva’s securities, are disclosed under Risk Management on pages 58 to 64 in the Integrated Annual Report. Proper consideration has been given to the material risks that face Alviva. Material risks were grouped together in a coherent manner, with material risks considered to be of the most immediate significance disclosed prominently at the beginning of the material risks disclosure. The Audit and Risk Committee reviews the effectiveness of risk management and has satisfied itself of the outcomes.


The identification and monitoring of key risk indicators, together with mitigating strategies, are ongoing.

A Business Continuity Policy has been approved, which Policy includes the establishment and implementation of arrangements that allow the Group to operate under conditions of volatility, and to withstand and recover from acute shocks. The Business Continuity Plan is constantly under review and development.

TECHNOLOGY AND INFORMATION GOVERNANCE

Principle 12: The governing body should govern technology and information in a way that supports the organisation setting and achieving its strategic objectives.The Board is ultimately accountable for the governance of technology and information management.

The Board, through the Audit and Risk Committee, oversees and monitors the governance of technology and information in the Group. Information management risks are addressed and the return on major IT investments, aligned to Alviva’s strategy, is monitored by the Board. The technology and information strategy is aligned to Alviva’s business needs and sustainability objectives.

The IT Steering Committee assists the Board in its responsibility for technology and information governance and facilitates the integration of the IT strategy into Group companies’ strategic and business processes. The Committee is chaired by the CEO and the CIO and Managing Directors of subsidiary companies are members of the Committee. The CIO is the cyber security appointee.

Obsolete technology and information are disposed of responsibly, with due regard to its environmental impact and information security. External specialist waste disposal companies are used for the disposal of obsolete hardware.

The ethical and responsible use of technology and information includes an acceptable use policy which appears when a computer is switched on with access to the computer being dependent on acceptance of the policy.

To improve redundancy and continuity, the single datacentre was replicated across three physical sites. Compliance with laws, rules, codes and standards is mandated by the Code of Conduct. The IT risk register considers key exposures to non-compliances.

The leveraging of information to sustain and enhance Alviva’s intellectual capital includes improvements to the ERP system to gain quicker access to information to the benefit of stakeholders, including customers and suppliers, sustaining the Group’s data and turning it into a better repository, combined with extensive staff training.

The security of information is monitored continually and is documented in a policy that applies across the Group.

The Board is not aware of any major incidents during the reporting period which could have a negative impact on the Group.

Acquisitions continue to be integrated into the systems and procedures, as appropriate.

The effectiveness of technology and information management is monitored through internal surveys in Alviva’s subsidiary companies and managed by the IT Manager in the relevant subsidiary company, addressing outcomes and reporting thereon to the subsidiary’s Executive Committee.


53

Governance



Certain aspects of the Technology and Information Governance Policy, which address governance, business continuity and security of information, continue to be deployed, improved and documented to formalise alignment between King IV™ practices and the IT strategy of the Group.

Business continuity procedures will be further enhanced through updated procedures and periodic validated system testing of disaster recovery procedures of the major subsidiaries.

Continued review of software applications, which are available through various Group subsidiaries and strategic partners, should ensure access to the latest technologies and improve collaboration, security and productivity. Ongoing reviews and improvements of the security posture will be undertaken in order to further reduce cyber security risk. It is further intended to review the current processes around the disposal of equipment.

COMPLIANCE GOVERNANCE

Principle 13: The governing body should govern compliance with applicable laws and adopt, non-binding rules, codes and standards in a way that supports the organisation being ethical and a good corporate citizen.The Board requires all Group companies and their directors and employees to comply with all applicable laws and adopt non-binding rules, codes and standards in a way that supports Alviva’s ethical corporate citizenship. Legal compliance systems and processes are in place and are continuously improved to mitigate the risk of non-compliance with the laws and also to ensure appropriate responses to changes and developments in the regulatory environment.

The Alviva compliance structure has been designed to:

� provide the directors with regular information in respect of the level of compliance with applicable laws and adopted non-binding rules, codes and standards;

� report non-compliance to the Group Compliance Officer, CEO and the Board in a timely manner;

� provide for structured monitoring of compliance and appropriate responses to changes and developments;

� enhance a culture of compliance;

� promote communication through effective co-ordination by the Group Compliance Officer; and

� develop an effective risk management approach that includes legal compliance.

The Social and Ethics Committee and Audit and Risk Committee receive regular reports on compliance matters, relevant to their Charters. The Group Compliance Officer is supported by Compliance Officers in the major subsidiary companies.

To the extent that legal and regulatory matters have an impact on the financial statements, reports are presented to the Audit and Risk Committee.

In line with the regulations issued as regards COVID-19, the Social and Ethics Committee and Audit and Risk Committee continue to provide oversight in terms of compliance procedures implemented across the Group.

The Board adopted a Compliance Policy which applies to Alviva and its subsidiary companies. The Group Compliance Policy also informs Group Internal Audit’s mission and activities.

There has been no regulatory penalties, sanction or fines for contraventions of, or non-compliance with, statutory obligations, whether imposed on Alviva or members of the Board or officers during the reporting period.


54

Governance



In line with their risk-based audit approach, Internal Audit conducts a due diligence at each new acquisition to evaluate the compliance universe in each respective entity with a view to aligning these businesses’ compliance levels with those of Alviva, and as applicable.

Group compliance management will be further enhanced in the future through the recent appointment of a Group Risk and Compliance Manager.

REMUNERATION GOVERNANCE

Principle 14: The governing body should ensure that the organisation remunerates fairly, responsibly and transparently so as to promote the achievement of strategic objectives and positive outcomes in the short-, medium- and long-term. [GRI 102-35]

JSE Listings Requirements (paragraph 3.84, service issue 27) – mandatory disclosure requirements: The remuneration policy and the implementation report.

Alviva has an embedded rewards strategy and policy which translates into competitive and appropriate reward outcomes. The background information, Remuneration Policy and Implementation Report are reported on in detail on pages 70 to 95 in the Remuneration Committee Report contained in the Integrated Annual Report.

Alviva’s Remuneration Committee is tasked by the Board to independently approve and oversee the implementation of a remuneration policy that will encourage the achievement of Alviva’s strategy and grow stakeholder value sustainably. Alviva discloses the remuneration of each executive director and prescribed officer individually in its financial statements and in the Implementation Report on pages 88 and 89. The fees of non-executive directors are disclosed in the financial statements and on page 95 of the Implementation Report.

In line with the recommended practices in King IV™ and the JSE Listings Requirements, both the Remuneration Policy and the Implementation Report will be tabled for separate non-binding advisory votes by the shareholders at the AGM to be held on 19 November 2021.

From time to time, the Committee performs benchmarking exercises against suitable comparator groups to ensure that executive remuneration and non-executive fees remain externally competitive.


Planned areas of future focus are disclosed in the Remuneration Committee report on page 74.

ASSURANCE

Principle 15: The governing body should ensure that assurance services and functions enable an effective control environment, and that these support the integrity of information for internal decision-making and of the organisation’s external reports. [GRI 102-56]

The Audit and Risk Committee is responsible for the quality and integrity of Alviva’s integrated reporting. The Board, with the support of the Audit and Risk Committee, satisfies itself that the combined assurance model is effective and sufficiently robust for the Board to be able to place reliance on the combined assurance underlying the statements that the Board makes concerning the integrity of information for internal decision-making and of the Company’s external reports. Internal Audit annually provides an overall statement as to the effectiveness of Alviva’s governance, risk management and control processes to the Audit and Risk Committee, for presentation to the Board.

A Combined Assurance Framework, based on a three-lines of defence model and aligned to the six value capitals (financial, manufactured, intellectual, human, social and relationship, natural), has been implemented, which approach assists in addressing control over the key risks facing the Group.

Ongoing collaboration between the external auditors and Internal Audit aims to avoid duplication of work.


55

Governance


During 2021, it was confirmed that Internal Audit conforms to the International Standards for the Professional Practice of Internal Auditing and guidance by King IV™. This is supported by the results of an independent Quality Assurance Review which was performed with external assurance providers during November/December 2017. An external assurance review is performed every five years.

Further disclosure is contained in the Combined Assurance section on pages 56 and 57 of the Integrated Annual Report.


The combined assurance approach will be reviewed on a continuous basis to identify opportunities for the improvement of assurance levels. Integrated assurance and effective risk management processes will be further enhanced in the year ahead.

STAKEHOLDERS

Principle 16: In the execution of its governance role and responsibilities, the governing body should adopt a stakeholder-inclusive approach that balances the needs, interests and expectations of material stakeholders in the best interests of the organisation over time. [GRI 102-15]

Alviva strives to ensure a systematic and integrated approach to stakeholder engagement across the Group, facilitated through engagement programmes to enable increased assurance to the Board that all stakeholder issues have been identified, prioritised and appropriately addressed.

It is a business imperative that Alviva understands and is responsive to the needs and interests of its key stakeholder groups.

The Board has a Stakeholder Engagement Policy, which Policy includes a Stakeholder Engagement Framework.

The subsidiary companies have delegated responsibilities, as required, to Board Committees of the holding company and have adopted the policies and procedures of the holding company.

Stakeholder engagement disclosures appear on pages 65 to 69 of the Integrated Annual Report.


Stakeholder engagement, which has been enhanced during the period of uncertainty created by COVID-19, will continue in order to facilitate feedback from the different stakeholder groups and in support of the Board’s intentional stakeholder-inclusive approach.

A comprehensive Group Governance Framework, which articulates and gives direction on relationships and the exercise of authority across the Group, will be further developed.


56

Governance


Alviva has adopted the Three-lines of Defence Model. The following lines of assurance have been identified:

Alviva continues to refine its combined assurance efforts. Combined assurance has the objective of coordinating work performed by the various internal and external assurance providers, preventing duplication of effort, to increase collaboration and developing a holistic view of Alviva’s risks and control environment. The Audit and Risk Committee, aligned to King IV™ recommended practice, has been tasked with the responsibility of monitoring the appropriateness of Alviva’s Combined Assurance Framework and ensuring that all significant risks facing the Group are appropriately assured and identified control deficiencies are addressed. The Framework assists with the achievement of governance outcomes through the effective application of the six capitals, being financial, manufactured, intellectual, human, social and relationship, and natural. It also assists with the governance outcomes, as recommended by King IVTM, mainly relating to good performance and effective control.

The Audit and Risk Committee has reviewed the combined assurance results for the Group and has satisfied itself that appropriate assurance activities are in place in relation to the controls operating over key risks and controls identified in the management of risk.

ASSURANCE PROVIDERS

Management-based assuranceManagement-based assurance, included in the first line of defence, includes the implementation of strategy, key performance indicators, performance measurement and continuous monitoring of mechanisms and systems.

Internal assuranceRisk management, compliance, health and safety, and quality assurance processes are included in this second line of defence. These functions are responsible for maintaining policies, minimum standards, risk management performance, monitoring and reporting.

Independent assuranceThe third line of defence is constituted by various independent assurance providers. Key providers are detailed below:

Internal Audit

Internal Audit is an independent appraisal function, which examines and evaluates the activities and the appropriateness of the systems of internal control, risk management and governance processes. The Audit and Risk Committee is satisfied that Internal Audit’s functions align with the Internal Audit Charter, its mandate and specifically that it is independent. The external and internal auditors collaborate to complement each other’s work in support of combined assurance efforts.

COMBINED ASSURANCE[GRI 102-56]

Lines of defence Lines of assurance

Oversight• Board of Directors

• Audit and Risk Committee

• Remuneration Committee

• Social and Ethics Committee

2ndline of defence

Functions that oversee

or specialise in risk

management

• Group Risk Management

• Group Health and Safety

• Control self-assessment

• Group Legal

• Group Secretarial

• Group Sustainability

• IT Steering Committee

• HR Steering Committee

3rdline of defence

Functions that provide

independent assurance

• Internal Audit

• Consultants and Regulators

• External Audit

• External Regulators

• Vendors

1stline of defence

Functions that own

and manage risk

• Executive Management

• Business Unit Management

57

Governance


External audit

The Audit and Risk Committee is responsible for recommending the external auditor for appointment by shareholders. The Committee has been mandated by the Board to ensure that the external auditor carries out an annual audit of Alviva and its subsidiaries in accordance with international auditing standards. The Committee is also mandated to ensure that the external auditors report in detail, both to the management of Alviva’s subsidiaries and to the Audit and Risk Committee, on the results of the audit. The external auditor is the main external assurance provider for the Board in relation to the Group’s financial results for each reporting period.

Vendors

Vendors from time to time perform independent reviews to ensure that Alviva and its subsidiaries continue to comply with both the vendors’ internal as well as legal requirements.

Board and oversight committees

In addition to the Board, the following committees provide oversight as stated below:

� Audit and Risk Committee – with regard to financial and internal controls outlined in its Charter and the enterprise-wide risk management framework.

� Remuneration Committee – with regard to controls in the remuneration sphere.

� Social and Ethics Committee – with regard to oversight of the Group’s controls in the sphere of ethics, corporate social responsibility, sustainability and transformation.

Alviva does not have a Nomination Committee. The Board provides assurance in relation to Board diversity, succession planning and corporate governance structures.

BOARD ASSESSMENT OF THE GROUP’S SYSTEMS OF INTERNAL CONTROLS AND RISK MANAGEMENTThe Board has confirmed that nothing has come to their attention or arose out of the internal control self-assessment process, internal audit or year-end external audits that causes the Board to believe that the Group’s systems of internal controls and risk management are not effective or that the internal financial controls do not form a sound basis for the preparation of reliable financial statements. The Board’s opinion is based on the combined assurance received from all parties forming part of the Combined Assurance Model, including external and internal auditors, management and the Audit and Risk Committee.

ASSURANCEThe information contained in the Alviva Integrated Annual Report 2021 has been assured to the extent set out below.

Alviva’s management and directors are responsible for the preparation and presentation of the identified sustainability information, as incorporated in the 2021 sustainability data and information, and for the information contained in the Integrated Annual Report, in accordance with their internally defined procedures. Alviva’s management and directors are also responsible for maintaining adequate records and internal controls that are designed to support the reporting process.

The financial statements have been audited by the independent auditors, SNG Grant Thornton. A summary of their audit report appears on pages 169 to 172 of the Integrated Annual Report.

The B-BBEE rating, contained in the Social and Ethics Committee Report, has been independently verified by EmpowerLogic (Pty) Ltd.

The Audit and Risk Committee has reviewed the sustainability matters in the sustainability data and in the Integrated Annual Report to ensure that they are reliable and that there is no conflict with the financial information. Group Internal Audit provided independent assurance on sampled material sustainability data.

Combined assurance continued

58

Governance


RISK MANAGEMENT

The assumption of risk is inherent in all businesses. Alviva recognises this in its mission of creating ongoing and sustainable value for all its stakeholders. Cognisance is therefore taken of risks, both strategic and operational, which are commensurate with the returns that are expected. The Company has a responsibility to evaluate and manage risk in such a way that the interests of all its stakeholders are effectively considered. This will promote the underlying quality and sustainability of the business for the benefit of all.

The Group’s risk management framework aims to:

� align strategy with risk appetite and tolerance;

� improve decision-making which improves the Group’s risk profile;

� ensure equitable commercial terms and conditions are contracted;

� promote continuous improvement through the application of key lessons learnt;

� improve predictability and build shareholder confidence;

� build robust organisational risk structures and facilitate timeous interventions to promote long-term sustainability; and

� promote the efficient and proactive utilisation of opportunities.

The Board has direct responsibility for the governance of risk and approves Alviva’s risk policy that gives effect to its set direction on risk. Alviva is committed to effective risk management in pursuit of its strategic objectives, with the ultimate aim to grow value sustainably for all stakeholders by embedding risk management into key decision-making processes. The Board also approves Alviva’s top risk profile and financial risk appetite and tolerance levels, ensuring that risks are managed within these levels, and considers the risk environment from time to time, as deemed appropriate and based on materiality and changes in the external and internal environments.

This Risk Appetite Statement seeks to articulate Alviva’s risk policies, tolerances, parameters, models and governance.

METRICSRisk appetiteAs Alviva has a number of subsidiaries operating in different markets, each subsidiary sets its own Risk Appetite when performing its individual risk assessment according to the Group Risk Management Policy.

In terms of the Risk Management Policy, risk appetite is calculated by taking into account revenue and net profit before tax. The resultant risk appetite value is the lower of 1% of revenue and 20% of net profit before tax.

Tolerance levelsAlviva’s key strategic initiatives and risk tolerance levels are as follows:

To grow and sustain the organisation � Acquisition strategy – Focusing on scalable IP-based IT companies – Medium tolerance

� Expansion into international markets – Africa, based in Mauritius, and Delaware in the USA – Medium tolerance

Subscribe to the highest standards of good corporate governance – Low tolerance

Grow and develop Alviva’s human capital – Medium tolerance

Digitisation of processes – Low tolerance

SO1

SO2

SO3

SO4

[GRI 101-11] [GRI 102-15] [GRI 205-1]

59

Governance


Alviva’s risk tolerance levels as regards to its stakeholders are set out below:

Stakeholder Tolerance level

Customers Medium

Suppliers Medium

Communities Medium

Media Medium

Shareholders Medium

Government Low

Employees Low

Bankers Low

Regulators Low

Tolerance, as it relates to ethical business conduct, in relation to all of the above stakeholders Low

The top eleven risks are included in the table below:

Capi

tals

Mat

eria

l m

atte

rs

Stra

tegi

c ob

ject

ives

Risk category Risk description Risk consequence Risk mitigating strategies Inherent risk

Residual

risk

1.

Network – cybersecurity

Inadequate network security allowing for unauthorised access to Company networks.

� Unauthorised access resulting in theft of data.

� Corporate sabotage leading to downtime and, consequently, loss of earnings.

� The network is monitored on a continuous basis.

� Selected technologies are deployed to proactively manage, monitor and reduce the risk.

� Ongoing proactive processes and procedures are constantly followed to identify possible threats.

High Medium

2.

Economy and competition

� The macro-economic downturn could result in a reduced demand for products and services, and delayed and/or reduced investment in IT products and services.

� Competition related to shifts in the commercial market (e.g., cloud computing), the operating presence of vendors in South Africa, direct imports by resellers and increased competition from non-traditional channel businesses.

� Volume reduction, impacting financial results and cash flow.

� A business diversification strategy has been implemented through acquisitions in order to expand on product and service offerings.

� Senior management’s involvement in the market and in operations gives the business and the management team the ability to adapt quickly to market conditions.

� Aggressive cost control measures are in place.

� Ongoing facility and covenant management.

High MediumSO1MM6

Risk management continued

SO4MM3

60

Governance


Capi

tals

Mat

eria

l m

atte

rs

Stra

tegi

c ob

ject

ives


Residual

risk

3.

Sovereign risk

� Further credit rating downgrade and/or a junk status credit rating for the country could affect the ability to maintain international credit limits.

� Reduced foreign investment in South Africa carries the real risk of further economic deterioration.

� Impaired economic performance impacting on the financial results.

� Liquidity of the Group and the Company is monitored on an ongoing basis and regular solvency and liquidity tests are performed.

� Ongoing liaison with suppliers, as regards credit lines.

� Access to local bank finance is supported by strong local banking relationships and the Group’s responsible management of facilities and cash flows.

� Exposure to foreign lenders has been reduced.

� Diversification would be supported by offshore acquisitions and the Board would consider these opportunities as and when they arise.

High Medium

4.

Reputation and communication

� An inability to protect the Company’s reputation or to adequately manage potential reputational damage or events that undermine public trust in the Company and the brands that it represents.

� Non-compliance with regulatory and legal obligations.

� Inability to deliver minimum standards of service and product quality.

� Unethical practices.

� Unmanaged social media access.

� A tarnished image with investors, shareholders, customers, suppliers, government and other stakeholders could result in reduced revenues, higher input costs, reduced profit margins and less investment and capital available for growth opportunities as well as an inability to secure facilities to fund operations.

� Vendors cancelling vendor contracts could result in the inability to distribute certain brands.

� Unauthorised social media comments could affect the reputation of the Company.

� The Code of Conduct is understood and implemented across the Group and compliance rates are high, combined with strong central management oversight.

� Close management oversight in the day-to-day activities to monitor ongoing legal compliance and any reputational concerns.

� Continuing Board oversight of policies and procedures and monitoring of all reputational matters.

� Ongoing and timeous responsible communication with all stakeholders.

� Continued zero-tolerance to unethical behaviour.

� Maintaining controls which monitor unethical behaviour.

High Medium

SO1MM6


SO1MM3

SO2MM1

61

Governance



Capi

tals

Mat

eria

l m

atte

rs

Stra

tegi

c ob

ject

ives


Residual

risk

5.

Liquidity

� The inability to attract facilities from bankers and suppliers could affect solvency and liquidity, thereby impacting the sustainability of the Group.

� Failing to attract facilities could affect the financing of operations and could lead to an inability to meet financial obligations, resulting in reduced performance and shareholder returns.

� The current performance of the Group is such that adequate facilities are in place.

� Daily cash flows are done, and covenants are measured and reviewed regularly to retain a holistic view of the Group’s exposure.

� Monthly subsidiary Board meetings are attended by the executive directors to ensure continued financial oversight.

� Solvency and liquidity tests are performed at the quarterly Board meetings and the going concern status is reviewed and confirmed.

High Medium

6.

Data protection

� Non-compliance with data protection laws.

� Fines and penalties.

� Reputational damage.

� A data protection programme has been rolled out to Group subsidiaries.

� Information Officers have been appointed in Group subsidiaries.

� Ongoing monitoring of compliance levels.

High Medium

7.

Talent management

� Inadequate talent management and poor succession planning could lead to a loss of intellectual capital and high employee turnover.

� The loss of talent could result in reduced or inferior levels of customer service and operational excellence, impacting on the financial performance.

� An inability to grow.

� Focus on retaining talented people in correct positions with linked performance measures.

� Employee recognition, including the recognition of back-office employees, and employee feedback sessions are held.

� Employee incentives have been implemented.

� Employees are inducted to orientate them in Company culture and performance expectations.

� Formalised training plans have been implemented in all divisions of the business.

� Workplace forums, representing all employees, are held regularly.

� Succession planning programmes have been launched.

High MediumSO3MM4

SO1MM6

SO2MM1

SO4

62

Governance


Capi

tals

Mat

eria

l m

atte

rs

Stra

tegi

c ob

ject

ives


Residual

risk

8.

Legal compliance

Legal compliance risks relate to:

� non-adherence to legal and regulatory requirements, including the Basic Conditions of Employment Act, Occupational Health and Safety Act, Companies Act, Income Tax Act, King IV™ and POPIA; and

� an inability to ensure compliance with all applicable laws.

� Non-compliance could result in penalties, fines and criminal sanctions which may lead to civil litigation.

� Reputational damage and, in some cases, industrial action and injury or death of employees could be the outcome of non-compliance.

� Assurance on Companies Act adherence is monitored by management, the Audit and Risk Committee and Internal Audit, with legal compliance being a standing Audit and Risk Committee agenda item.

� A dedicated legal representative is contracted in with referral to other legal experts and legal resources, as and when required.

� A SHE Committee is in place to govern SHE processes and to ensure that SHE governance is fully rolled out across all branches.

� Close adherence to the Basic Conditions of Employment Act is monitored by HR.

� There is an ongoing focus on tax compliance in all the territories where the Group operates.

� A King IV™ gap analysis was performed during the reporting period and processes, policies and procedures, applicable to Alviva, are aligned to the principles and recommended practices contained in King IV™.

High MediumSO2MM1


63

Governance


Capi

tals

Mat

eria

l m

atte

rs

Stra

tegi

c ob

ject

ives


Residual

risk

9.

Public health risk or pandemic, e.g., COVID-19

� Business continuity risk.

� Risks arising from interruptions to the IT supply chain.

� Risks as regards key employees who may become infected and general employee shortages due to mass infections, self-isolation and quarantine measures.

� Risks as regards the proper implementation of protocols to ensure the safety and protection of its employees.

� Sustainability risks due to the impact on revenue and cash flow.

� Loss of revenue due to the inability to secure stock for resale.

� Loss of revenue due to a general downturn in economic activity.

� Cash flow pressure due to customers’ inability to pay or requirement for increased credit terms.

� Business continuity and sustainability challenges.

� The current performance of the Group is such that adequate facilities are in place with bankers.

� Daily cash flows are done, and covenants are measured and reviewed regularly to retain a holistic view of the Group’s exposure.

� Monthly subsidiary Board meetings are attended by the executive directors to ensure continued financial oversight.

� Solvency and liquidity tests are performed at the quarterly Board meetings and the going concern status is reviewed and confirmed.

� Remote working utilising IT systems is in place.

� COVID-19 procedures and protocols are implemented based on the latest guidance from government and the WHO.

� Employees are encouraged to get vaccinated.

High Medium


SO1MM5

64

Governance


Capi

tals

Mat

eria

l m

atte

rs

Stra

tegi

c ob

ject

ives


Residual

risk

10.

Key IT system failure/business continuity

� Key IT system failure could cause an interruption of business operations, resulting in an inability to trade with subsequent financial loss.

� Loss of data, customers, vendors or employees could result in financial losses, affecting the sustainability of the Company and the Group.

� Inability to grow.

� Reduced customer service levels resulting in lower revenue or loss of key customers.

� Inability to report accurately and timeously to vendors, thereby placing distribution agencies at risk.

� Loss of financial data resulting in an inability to collect payments from customers and pay vendors and employees.

� Systems are monitored through proactive alerts and acted upon.

� Hardware and software systems are periodically replaced and upgraded.

� Appropriate disaster recovery procedures are in place.

� Appropriate business continuity insurance is in place.

High Medium

11.

B-BBEE rating

� Not keeping pace with the transformation objectives, as set out in the ICT Sector Code on B-BBEE, could result in the B-BBEE rating not being maintained or reducing.

This could result in:

� customers seeking alternative sources of supply, affecting the financial performance of the Group;

� suppliers considering alternative distributors for their products; and

� an inability to attract top talent.

� Regular reviews of the B-BBEE scorecard are performed with continued focus on projected B-BBEE scores and transformation performance.

High MediumSO1MM2

SO3


SO1MM3

SO4

65

Governance


The Alviva Board, in the execution of its governance role and responsibilities, approved a Stakeholder Engagement Policy. Stakeholder engagement is undertaken with a far broader aim than merely communication to various stakeholder groups. Rather, Alviva considers its various stakeholders as key partners in its endeavours and has adopted a stakeholder-inclusive approach in determining material challenges and opportunities within the Group.

The Board has identified the following key stakeholder groups with whom the Group engages in a structured and inclusive manner aimed at establishing and maintaining open and transparent, mutually beneficial relationships:

[GRI102-40]

STAKEHOLDER ENGAGEMENT[GRI 102-15] [GRI 102-42] [GRI 102-43]

Customers

Suppliers

Employees

SPECIFIC CONTRACTS

Media

Communities

RESPONSIBILITIES TO SOCIETY

Government – national, provincial and

local

CO-OPERATIVE ENGAGEMENT

Shareholders and the investment community

Banks, funders and insurance companies

Regulators

REGULATORY

66

Governance


Capi

tals

Mat

eria

l m

atte

rs

Stra

tegi

c ob

ject

ives

Stakeholder grouping

Who our stakeholders are

What matters to them – needs, interests and expectations

How we engage with them Outcomes

REGULATORY

Shareholders and the investment community

Providers of share capital and the principal risk takers within the business.

The generation of sustainable, market-related returns on their investment, together with timely, relevant, open and ongoing communication on Alviva’s activities and performance as well as the creation of an informed perception of Alviva, whereby more accurate expectations are ensured, and a positive investment environment is created.

Our approach: Inform

Investors are kept abreast of developments through formal engagements such as the Stock Exchange News Service, results presentations and investor updates, and specific meetings in accordance with the JSE Listings Requirements and as required by Alviva and its investors.

Alviva’s Integrated Annual Report seeks to provide shareholders (and other stakeholders) with an in-depth understanding of Group strategy, sustainability, value drivers, governance, reward systems as well as actual performance on various aspects, including financial performance.

Shareholders are given the opportunity to put questions to the Board at the AGM and all other shareholder meetings and presentations.

� Reported consistently on Group and Company performance.

� Maintained a gross dividend of 10% of headline earnings.

� Improved transparency of ESG performance.

� Continued direct engagement with shareholders, analysts and media.

� Reported regularly on protocols and systems and closely managed and monitored the effects of COVID-19.

� Maintained financial discipline and delivered on Alviva’s strategy.

� Concluded significant work aimed at improving remuneration practices and disclosures.

� Maintained relationships with investors with no points of contention raised during the reporting period.

SO1MM1

SO2MM6

Stakeholder engagement continued

67

Governance


Capi

tals

Mat

eria

l m

atte

rs

Stra

tegi

c ob

ject

ives





REGULATORY (continued)

Banks, funders and insurance companies

Primary bankers who provide working capital and general transactional banking facilities, and credit underwriters who provide insurance on trade and other receivables to manage credit risk in accordance with Group policy.

Stable and sound financial management of the business and the management of funding within the parameters set by the agreements entered into between Alviva and its funders, supported by regular updates and communication on developments in the Group’s financial sphere.

Our approach: Involve

Various financial services are provided to the Group, including credit insurance. The Group CFO engages with the financial service providers and attends to their ongoing requirements, including Group and ad hoc funding requirements, as the need arises, as well as interactions with the Group’s bankers regarding cash flow forecasts and performance against covenants.

Annual, or more often as required, interactions entail the updating of insurance policies, which include short-term insurance, professional indemnity and directors’ liability.

� Maintained relationships with banks, funders and insurers with sufficient facilities and insurance cover negotiated during the reporting period.

Regulators Industry associations and various regulatory bodies who ensure that Alviva adheres to all applicable laws, regulations, codes and corporate governance.

Compliance with laws and regulations that are designed to protect stakeholders, primarily through the submission of regular statutory returns and the timely collection and payment of duties and taxes.

Our approach: Engage

Relationships of trust and transparency are maintained with all regulators. This is an ongoing process, which escalates when new requirements and legislation are introduced. Alviva is regulated by several stakeholders including the JSE Limited, South African Revenue Service, South African Reserve Bank, the Department of Trade and Industry, the Department of Labour, the B-BBEE Commission and the Information Regulator (South Africa).

� Continued to align internal systems and activities to meet the requirements of regulatory changes.

� Continued to meet its regulatory obligations during the reporting period, a period during which the effects of the COVID-19 pandemic had severely impacted business and the economy.

� Maintained relationships with regulators with no issues reported during the reporting period.

SO2MM1


SO1MM1

SO2MM6

68

Governance


Capi

tals

Mat

eria

l m

atte

rs

Stra

tegi

c ob

ject

ives





SPECIFIC CONTRACTS

Customers In the distribution business, customers comprise small resellers, solution providers, retailers and large corporate resellers. The services and solutions businesses address the needs of a cross-section of end-user customers, from corporates to small and medium enterprises.

To gain access to Alviva’s quality product and service offerings and obtain solutions that will achieve the desired outcomes for customers’ respective projects.

Our approach: Partner

Engagements with customers are segmented and range from accounts that are managed through the Group’s various call centres to accounts that are managed on a face-to-face basis. Customer surveys are conducted within the various operating entities, and the results are evaluated, and appropriate action taken.

� Relationships with customers remain sound.

Suppliers Providers of products and services, in accordance with Alviva’s Procurement Policy.

To render an ongoing and commercially viable supply of products and services.


Face-to-face or virtual meetings between the senior management teams of both parties are held regularly. Presentations, reviews and marketing plans are attended to on a continuous basis.

� Supplier relationships remain sound.

Employees A diverse range of individuals of varying skills, expertise, qualifications, experience and nationalities (including race and gender diversity) are employed across the Group to add value to all stakeholders.

Career and personal development in a work environment that ensures job security and appropriate reward for performance.

Our approach: Empower

On the appointment of new employees, a formal induction programme is conducted by the relevant human resources department.

Employees are engaged through the Workplace Forums during Community Hours, where regular feedback is provided on Company matters. Employees also have access to Company information on the intranet. Company newsletters are distributed by the various operating entities.

� Implemented COVID-19 protocols tailored to address circumstances at each operation – accompanied by a focused communications plan and ongoing feedback by COVID-19 Compliance Officers in the various operating entities.

� Pursued remote working, wherever possible.

� Engagements as regards staff welfare have continued throughout the reporting period, with a specific emphasis on health and well-being related to the pandemic.

SO1MM1

SO2MM2

SO3MM3

MM4

MM5


SO1MM1

SO2MM2

SO4MM3

MM5

MM6

SO1MM1

SO2MM2

SO4MM3

MM5

MM6

MM6

SO4

69

Governance


SO2MM1

MM6

SO1MM1

SO2MM2

SO3MM4

MM5

MM6

Capi

tals

Mat

eria

l m

atte

rs

Stra

tegi

c ob

ject

ives





RESPONSIBILITIES TO SOCIETY

Media Media includes every broadcasting and narrowcasting medium such as newspapers, magazines, TV, radio, billboards (including signage on buildings), direct mail, social media, telephone and the internet.

To educate and inform the respective audiences of developments in the technology and information sectors, adding Alviva’s voice to the public debate, as well as to communicate the Group’s performance and contribution to the economy, including its product and service offerings.


Executive management conducts interviews and attends press briefings with members of the media. These take the form of one-on-one time with Alviva executives and key spokespeople across the Group to discuss pertinent issues relevant to the Group’s business activities.

The Group’s interim and annual results are published in the press and executive management attends to the media briefings surrounding the release of the results.

� Facilitated media engagements to aid the understanding of Alviva, among all stakeholders, including the investment community and general public.

� Promoted engagements and accurate reporting as well as supported constructive relationships with stakeholders.

� Aided media coverage to manage the Group’s reputation, which contributed to Alviva’s social licence to operate.

� Speculation and misinformation in the public domain are avoided through media interactions.

Communities The areas in which Alviva’s operations are located and the people participating in and related to the Group’s activities.

The creation of partnerships to best facilitate integrated sustainability initiatives and to collaborate in a way that furthers economic, environmental and social agendas for the greater good of the community.

Our approach: Empower

The Group adopts a consistent approach to community development and evaluates the socio-economic impact that the Group’s operations and activities have on the communities in which it operates.

Engagement is ongoing as partnerships dictate or stakeholder needs require.

� Continued the engagement with various communities, which resulted in specific requirements being provided through the Group’s ongoing CSI initiatives, with a focus on education needs.

CO-OPERATIVE ENGAGEMENT

Government – national, provincial and local

Members of local, provincial and national government with particular emphasis on those involved in technology and information development.

Alviva is, and is seen to be, an active participant in driving the economic, social and environmental upliftment of the country through its participation in technology and information development.


As a result of Alviva’s participation in information, communication and technology development, the Group interacts, either directly or indirectly, with local and provincial government on projects.

The primary method of engagement with government is through tender processes and formal meetings, as required.

� Alviva continued its ongoing engagement with government stakeholders at all levels, specifically relating to Alviva’s scope of activities in the technology and information management sphere and through tender processes.


SO1MM2

SO2MM4

SO3MM5

MM6

70

Governance


In line with King IV™ recommended practice, and in accordance with the JSE Listings Requirements, this report has been segregated into three parts, namely the Background Statement, the Remuneration Policy and the Implementation Report:

� Part 1: The Background Statement sets out the rationale of the remuneration decisions taken by the Remuneration Committee (“the Committee”) throughout the reporting period as well as the strategy moving forward.

� Part 2: The overview of the Remuneration Policy (“the Policy”) sets out the remuneration principles that will be in place for the coming financial year. It provides a brief overview of the Policy as it applies to all its employees, and an in-depth review of the Policy applicable to executive management and non-executive directors.

� Part 3: The Implementation Report sets out how the Policy was implemented during the 2021 financial year (“FY21”, “the reporting period” or “period under review”) and includes the King IV™ recommended single figure format of disclosure for the emoluments of Alviva’s executives during the period.

The following terms are frequently used in this report and have been defined for ease of reference below:

FSP the forfeitable share plan (the current long-term incentive)

KPIs key performance indicators

LTI long-term incentive

STI the annual short-term incentive

TGP total guaranteed pay

TR total remuneration

TSR total shareholder return

PART 1: BACKGROUND STATEMENT

Dear Shareholder

As in 2020, the 2021 reporting period continued to present many challenges, including those of an economic and social nature, both of which remained exacerbated by the ongoing effects of COVID-19. The Alviva leadership team has continued to work toward mitigating the effects of these challenges, while producing value for Alviva’s stakeholders. In line with this, it is with great pleasure that I present the Remuneration Report for the reporting period on behalf of the Committee.

REMUNERATION COMMITTEE REPORT[GRI 102-35] [GRI 102-36] [GRI 102-37] [GRI 102-38] [GRI 102-39]

71

Governance


FACTORS INFLUENCING REMUNERATION AND SUMMARY OF MAIN DECISIONS TAKENThe impact of the depressed economy, as aggravated by the COVID-19 pandemic, continued to have an impact on the remuneration decisions and outcomes, as reflected in Part 3 of this report.

Whilst the Remuneration Policy has remained mostly unchanged for another year, a number of internal and external factors influenced the decisions taken during FY21. These factors, and the main decisions taken, are summarised below.

1. Review of Remuneration At the conclusion of FY20, the Committee had approved that there should be no increase in Executive TGP nor in the fees

paid to the Non-Executive Directors for the FY21 year. In addition, the Committee resolved to review the targets set for the Executives, on both the STI and LTI schemes, at the conclusion of the first six months of trading of FY21. At the time of setting these targets, there was much uncertainty and it was considered prudent to review them. The Committee believed that it was better to give the Executives targets that may be amended rather than no targets at all. The results of the review are set out below:

1.1 STI:

The Committee reviewed the targets that had been set against those achieved by the interim stage. The HEPS achieved as at 31 December 2020 was R1,09 and, with the estimated impact of the product shortages on trading in the coming six months being deemed to be offset by the reduction in the value of the charges arising on the amortisation of intangibles, it was agreed to amend the targets from R2,00 to R2,20. The other targets were considered to still be relevant and were not amended.

Weighting Original targets Revised targets

HEPS 70% R2,00 R2,20

Transformation 15%Alviva Holdings Ltd, Level 4 DCT Holdings (RF) (Pty) Ltd, Level 3 Datacentrix (Pty) Ltd, Level 2

Alviva Holdings Ltd, Level 4 DCT Holdings (RF) (Pty) Ltd, Level 3 Datacentrix (Pty) Ltd, Level 2

Return on investments (“RoI”)

15%Net profit before tax of certain acquisitions: R110 million

Net profit before tax of certain acquisitions: R110 million

1.2 LTI:

The Committee reviewed the targets that had been set on the FSP 5 awards to align them better with shareholders’ expectations, as further detailed in the Shareholder Engagement section of this report, by comparing them against progress made toward them at the time of the meeting in February 2021. The Return on Equity (“RoE”) targets were left unchanged as it was felt that they remained challenging. The HEPS targets were amended upwards significantly, as may be seen in the tables below. Although the full impact of COVID-19 on the South African economy is still not clear, the Committee held the view that the performance over the three years would be materially better than anticipated at the time of making the awards. At the time of the meeting, the share price was trading in the region of R10,50 to R11,00. The TSR targets were, accordingly, amended upwards.

Remuneration Committee report continued

72

Governance



Original targets Weighting Threshold Target Stretch

30% vesting 70% vesting 100% vesting

RoE 40% 13% 17% 20%

HEPS (Average for the three years) 40% R1,91 R1,98 R2,04

Absolute TSR (Calculated as share price plus dividends)

20% R8,34 R9,32 R10,10

Revised targets Weighting Threshold Target Stretch


RoE 40% 13% 17% 20%

HEPS (Average for the three years) 40% R2,40 R2,80 R3,10

Absolute TSR (Calculated as share price plus dividends)

20% R13,00 R15,00 R17,00

2. Consideration of Economic Value Added (“EVA”) Institutional Shareholder Services (ISS), the largest proxy advisory firm in the US, has promoted the use of EVA as a

performance measurement in executive incentive compensation plans for some time. The Committee felt that this should be explored and requested that a model be prepared to evaluate its potential use in executive compensation. The following advantage and disadvantage was identified, respectively:

� EVA encourages management to optimise the use of the Company’s assets, both operating and financial, and also helps to measure how different entities within the Group are performing relative to one another;

� The EVA is a non-GAAP financial measure and there is a degree of subjectivity that is applied to its calculation.

The Committee felt that the RoE measure largely covered the advantage identified by the utilisation of EVA and, therefore, it was decided to retain it. However, the Committee will continue to review the results recorded in the EVA model with the consideration of possibly using it to identify measures that may be used in future compensation plans.

3. Shareholder and governance expectations around executive pay As reported in FY19, Alviva has adopted a malus and clawback policy and a policy on minimum shareholding requirements

for its executives. We are pleased with the traction we have made since implementing these policies. The Committee also approved amendments that allow a wider application of the minimum shareholding requirements and now include the elective deferral of cash STIs into shares to be held in terms of the minimum shareholding requirement policy. The Committee believes this will further strengthen ‘skin in the game’ on the part of executives.

4. COVID-19 The impact of the pandemic continued to be felt throughout the period under review. Initially, in July and August, the Group

settled the liabilities of its supportive vendors who had granted extended credit facilities due to the impact of lockdown, during the latter part of the prior reporting period. Thereafter, the Group had difficulty in obtaining the normal supply of products due to well-publicised global product shortages. Continuing throughout the reporting period, the economic effects of the national lockdown and then subsequent restrictions imposed in South Africa made commercial operations substantially more difficult than in prior reporting periods. We anticipate that this will be the norm for some time to come.

73

Governance



VOTING ON REMUNERATION AND SHAREHOLDER ENGAGEMENTI am pleased to report that shareholders representing 60,61% of exercisable votes were present at the last AGM and the results of their voting are tabled below:

For Against Abstained *

Endorsement of Remuneration Policy2020: 99,64% 2020: 0,36% 2020: 25,26%

2019: 98,83% 2019: 1,17% 2019: 0,02%

Endorsement of Implementation Report2020: 77,30% 2020: 22,70% 2020: 25,27%

2019: 98,97% 2019: 1,03% 2019: 0,02%

* Abstained, in relation to total shares in issue.

The increased abstention percentage in the table above, was due to the fact that a major shareholder, eligible to vote at the AGM, had disposed of their shares prior thereto and consequently elected to abstain from voting.

The critical feedback received after a shareholder engagement and through other channels, and the actions/responses from Alviva were as follows:

Feedback received Alviva action / response

Executive director increases were significant, without a compelling explanation from the Company.

The increases referred to were fully explained in the 2019 Remuneration Report and were as a result of a detailed benchmarking exercise. No executive director increases were granted for the current period due to COVID-19 uncertainties.

STI and LTI targets were set at low levels, based on the results of the 2020 reporting period, and were not in line with shareholder expectations.

The Committee had stated in its 2020 Report that it would review the targets after conclusion of the 2021 interim period. Targets were reviewed and increased accordingly.

Retention awards were made to the CEO during the year, though they were subject to performance.

In FY20, the Committee resolved not to proceed with any further tranches on the CEO retention plan.

The Committee used its discretion to adjust the FY20 LTI awards to exclude the impact of COVID-19 on performance.

The Committee had extensively researched this matter before making the decision to adjust the measurement of performance. The amendments, as well as the rationale behind the decisions eventually taken, were fully disclosed in the FY20 Remuneration Report, representing a once-off application of discretion in the context of the global pandemic.

It is Alviva’s policy to proactively engage with shareholders on any remuneration matter believed to be sensitive and, generally, following publication of the annual financial statements. It is as a result of proactive engagement that, having reviewed the FY21 incentive targets after the interim period, the revised targets were set, with the intention of being realistic but stretching.

As mentioned above, the Policy and Implementation Report will be tabled for separate non-binding advisory votes at the AGM, to be held on 19 November 2021. In the event that 25% or more of the voting rights exercised vote against either the Policy, the Implementation Report, or both, the Board will take steps, in good faith and with best reasonable effort, to do the following as a minimum:

� Implement an engagement process to ascertain the reasons for the dissenting votes; and

� Appropriately address legitimate and reasonable objections and concerns that have been raised. These may include amending the Policy or clarifying or adjusting remuneration governance and/or processes.

74

Governance


PLANNED INITIATIVES AND FUTURE AREAS OF FOCUSThe focus for the year ahead will be the continuous review of all aspects of our remuneration and employment offerings to ensure these remain agile in the extended COVID-19 environment, with the aim of retaining our critical talent and thereby ensuring business sustainability over the long-term. In addition, Alviva aims to align the remuneration structures between its core group of companies and any companies in the Group which have been newly acquired, with a particular focus on remuneration fairness with regards to gender and race. Alviva will continue to proactively engage with shareholders on any major or sensitive remuneration matters.

REMUNERATION CONSULTANTSDuring the reporting period, Alviva engaged the services of PwC to provide guidance and advice on aligning our remuneration disclosure ever closer to King IV™ and the JSE Listings Requirements. The Committee is satisfied that the remuneration consultants used were independent and remained objective in providing their services.

APPROVALAs a Committee, we are satisfied that the Policy, as detailed in the 2020 Remuneration Report, was complied with, and that there were no substantial deviations from the Policy during the reporting period. In addition, the Committee is satisfied that the Policy has achieved its stated objectives during the reporting period.

At the AGM in November 2021, you will be asked to endorse our Remuneration Policy and the implementation thereof. We encourage and pursue open and regular dialogues with all our stakeholders. Your constructive input is valued and appreciated as we continue to improve our remuneration practices. On behalf of the Committee, I thank you for your continued support and feedback regarding our remuneration framework.

Ms SH ChabaChairperson of the Remuneration Committee

21 September 2021


75

Governance



PART 2: REMUNERATION POLICY

REMUNERATION PHILOSOPHYThe Policy reflects the Group’s objectives of good corporate governance and is aimed at ensuring that Alviva can attract, motivate and retain appropriately skilled, qualified and experienced employees. Remuneration shall be based on conditions that are market competitive and, at the same time, aligned with shareholders’ interests.

Remuneration of the Group’s executives consists of fixed and variable components to ensure adequate pay for performance alignment. Variable pay comprises an annual STI as well as an LTI, namely the FSP. Participation in variable pay is not a condition of employment. These components are aimed at creating a well-balanced remuneration structure reflecting individual performance and responsibility, both short-term and long-term, as well as incorporating the overall performance of the Group and individual subsidiaries.

THE ROLE OF THE COMMITTEEThe Committee is tasked to ensure that the Company’s remuneration is fair and in line with good corporate governance and best market practice. The Committee ensures that the Policy supports the Company’s strategy in relation to fair and responsible remuneration and has full control over all matters relating to remuneration (including the accurate, complete and transparent disclosure of executive and non-executive remuneration). The Committee approves a remuneration strategy and policy, which is then confirmed by the Board.

The constituents of the Committee can be found on page 46, and the number of Committee meetings held during the reporting period, along with the level of attendance, can be found on page 47.

The Remuneration Committee Charter, which is aligned to King IV™, was reviewed in September 2021 and is available on the Company’s website at www.alvivaholdings.com under the “Reports and Presentations” link for FY21.

The Committee does not determine the remuneration of its members, but annually requests that executive management prepares proposals on the remuneration of the non-executive directors and these are in turn submitted to the Board for approval.

FAIR AND RESPONSIBLE REMUNERATIONThe Committee places great importance on the King IV™ recommendation that the remuneration of executive management should be fair and responsible in the context of the remuneration of the wider employee group and understands that it is their responsibility to ensure a fair and responsible approach to the remuneration of executive directors. In this regard, the Committee performs benchmarking exercises against suitable comparator groups from time to time to ensure that executive remuneration remains externally competitive. Comparisons are also made between the average increase levels for executives to those of middle management and general staff. Alviva remains committed to addressing its internal wage gap by keeping average executive increase levels relatively modest.

� Impartial and free from discrimination

� Free from self-interest, prejudice or favouritism

� Rational, i.e., not based on an irrational or emotional basis

� Approved by the appropriate authority and subject to independent oversight

� Linked to value creation, transparently reported and easy to understand

� Takes the impact over the longer term into account

� Sustainability

FAIR REMUNERATION PRINCIPLES RESPONSIBLE REMUNERATION PRINCIPLES

76

Governance



KEY ELEMENTS OF REMUNERATION

LINKING THE GROUP’S STRATEGY TO REMUNERATIONThroughout the organisation, detailed forecasts are prepared for every business and customer segment. These forecasts are converted into targets with consideration being applied for growth and the total available market. The individual targets are rolled up to become enterprise and group targets which become the budgets for each entity and, ultimately, the Group. The targets are set to be challenging, generally in excess of those achieved in prior periods and are assessed to ensure that they deliver the desired economic value.

It is also believed that remuneration is the optimum vehicle to drive the strategy of the business. Consequently, all employees have targets and objectives, with a mix of personal and company, that ensures that employees share in the successful execution of Group strategy.

The targets for both the STI and LTI plans are easy to measure, easy to understand and are relevant to all stakeholders. The Committee is confident that they represent a balanced approach for those involved and that, if met, deliver significant value to shareholders.

EXECUTIVE MANAGEMENT REMUNERATIONAs regards executives and senior management, the Group’s objectives are to:

� apply key short- and long-term performance indicators, including financial and non-financial measures of performance;

� demonstrate a clear relationship between individual performance and remuneration;

� apply an appropriate balance between fixed and variable remuneration, reflecting the short- and long-term performance objectives appropriate to the Group’s circumstances and goals;

� link reward to the creation of value to shareholders; and

� ensure their total remuneration is competitive by market standards.

Long-term incentive

(FSP)

Short-term incentive

BenefitsSalary

All employees

Fixed payFixed pay Variable pay

Executives and senior management

Total remuneration

77

Governance



BenchmarkingFrom time to time the Committee uses the services of external independent advisors to benchmark the TR of executives against a peer group of listed companies. The currently used peer group is selected based on size and industry and is disclosed below. The same peer group is used to benchmark non-executive director fees.

The following companies have been selected to form part of the comparator group based on their size and the industry: –

� Allied Electronics Corporation Ltd

� Caxton & CTP Publishers and Printers

� City Lodge Hotels Ltd

� Clover Industries Ltd

� Datatec Ltd

� ENX Group Ltd

� EOH Holdings Ltd

� Homechoice International Plc

� Hudaco Industries Ltd

� Invicta Holdings Ltd

� Reunert Ltd

Due to the scarcity of resources, the Committee has a sound working knowledge of the pay scales that are available within the market. Consequently, the Committee attempts to ensure that TR is aligned to or above the median of the market for executives in key roles, where they have sufficient experience. This assists in ensuring that dissatisfaction with TR is not the reason for a high-performing executive to leave the Group.

Package design and pay mix

FY21 Target pay mix for executive management over time

As disclosed during FY19, the target pay mix was adjusted in FY20 to place a higher weighting on variable pay, in particular on the LTI. The target pay mix of the TR is in line with Alviva’s risk management policies and motivates executive directors to deliver on Alviva’s short- and long-term strategic objectives.

Due to legacy issues in previously established remuneration packages (such as those of executives brought into the Group through acquisitions), this is a target to be achieved over time. The bulk of the TR package is weighted towards variable pay, in the form of STIs and LTIs, however, the TGP component should be sufficient to ensure that executives are not overly reliant on variable pay.

40%40%

20%

Fixed

STI

LTI

78

Governance



Scenario graphs

The table below illustrates the potential effects of threshold, target and maximum performance outcomes on the TR of the CEO, CFO and CCO in FY22, as a percentage of TGP.

CEO Below threshold Threshold Target Maximum

TGP 100% 100% 100% 100%

STI – 25% 50% 150%

LTI (FSP) – 42% 100% 143%

Total remuneration 100% 167% 250% 393%

CFO Below threshold Threshold Target Maximum

TGP 100% 100% 100% 100%

STI – 25% 50% 150%

LTI (FSP) – 42% 100% 143%


CCO Below threshold Threshold Target Maximum

TGP 100% 100% 100% 100%

STI – 17% 33% 66%

LTI (FSP) – 43% 100% 143%


79

Governance



The following charts illustrate the potential effects of below threshold, threshold, target and maximum performance outcomes on the TR in FY22 of the CEO, CFO and CCO, using the FY22 TGP.

CEO

CFO

CCO

TGP

STI

LTI

R’000

0 5 000 10 000 15 000 20 000 25 000 30 000

Maximum

Target

Threshold

Below threshold

6 468 9 702 9 249

6 468

6 468

6 468

3 234 6 468

1 617 2 781

TGP

STI

LTI

R’000

0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000

Maximum

Target

Threshold

Below threshold

3 762 5 643 5 380

3 762

3 762

3 762

1 881 3 762

990 1 618

TGP

STI

LTI

R’000

0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 10 000

Maximum

Target

Threshold

Below threshold

3 072 2 028 4 393

3 072

3 072

3 072

1 014 3 072

507 1 321

80

Governance



TOTAL GUARANTEED PAY

BenchmarkingThe executives’ TGP is competitive and based on the executive’s responsibilities and role, reflective of the Group and individual’s historic performance, together with their experience in the position. From time to time, Alviva conducts TR benchmarking exercises, as described above, and the results are taken into consideration when determining the increases in executive pay.

Procedures to set and review remuneration The Group’s remuneration determination and review procedures are as follows:

� the Group reviews remuneration packages annually at the start of the financial year;

� the Board, with the advice and assistance of the Committee, is responsible for making decisions in respect of the remuneration of directors and, in particular, the Group CEO. In determining the level and composition of the remuneration of the Group CEO and executives, the Committee is able to obtain independent advice on the appropriateness of remuneration packages by considering remuneration trends in other companies comparable in terms of size and market sector; and

� the annual review of remuneration packages for middle management and general staff considers performance evaluation results. Based on these results, the Committee is able to recommend changes to TGP which may include annual increases and changes in the composition of remuneration.

The Committee considers various factors when reviewing overall TGP increases, including the change in CPI, profitability ratios and individual performance against KPIs.

Benefits � All employees receive a limited range of prescribed and elective fringe benefits such as disability, life insurance and retirement

benefits. Employees have the option to structure their pensionable income and their monthly contributions to the provident fund. Membership is compulsory for all new employees at a minimum contribution of 5% of their pensionable remuneration.

� In addition, all employees that have a Gross Cost of Employment (“GCE”) in excess of R13 000 per month are required to belong to an approved medical aid scheme. Those employees with a GCE below R13 000 per month will have their individual premium to FlexiCare, a Discovery medical insurance product, paid as a benefit.

These benefits are, in the main, funded from the TGP component of each employee’s package.

Life and disability benefits, together with funeral insurance, are paid by Alviva as a direct benefit.

Certain employees at a senior level who, due to the nature of their job are required to travel, are afforded travel allowances as part of their TGP component.

81

Governance



VARIABLE PAY

Short-term incentives

Purpose The STI programme consists of a bonus which is linked to the achievement of predefined targets, depending on the level of the employee. The STI is subject to malus and clawback.

Participation The STI is extended to all employees, however, the participation terms are varied based on the level.

Operation All employees in the organisation have some form of STI as part of their TR package.

� Sales and marketing employees are given targets to achieve and their overall remuneration is, therefore, affected by their ability to achieve and surpass the targets set. Targets are based on annual budgets, which are approved by the respective Boards per company and by the Board.

� Employees in the administrative side of the business have an STI that is partly based on the performance of the company in which they work and partly on their individual performance.

� At an executive level, the STI is calculated as a percentage of TGP and an on-target percentage. HEPS is used to determine a pool that is available for each participant and three measures are applied to determine how much of the pool is distributed, namely HEPS (70% weighting), Transformation (15% weighting) and RoI (15% weighting).

� If HEPS exceeds 100% of the target, HEPS is used as a modifier in accordance with the following formula: TGP x On-target % x HEPS modifier. 70% of the pool is allocated to the achievement of HEPS while the outcome of the other two measures is tested to determine what portion of the remainder of the pool (30%) will be allocated to these two measures;

� If HEPS is below 100%, the formula is as follows: TGP x On-target % x [(HEPS achievement x 70%) + (Transformation achievement x 15%) and (RoI achievement x 15%)].

The STI for executives is calculated on an annual basis. The actual targets for FY22 are stated below and the targets reached, compared to those set, for FY21 are disclosed in Part 3.

HEPS measurement to determine the pool, on-target percentage and maximum STI

The targets below are based on achieving the HEPS targets set by the Board. Achievement in excess of the targets set will result in the stretch outcome.

HEPS % of target achieved STI outcome Maximum outcomes

Below threshold < 90% 0%

Threshold 90% 50%

Target 100% 100% 100%

Stretch 101% to 120%Additional 10% per

1% above target300%

The earning potential for the STI by role is set out below and capped as indicated:

Role On-target STI (as a % of TGP) Maximum STI outcome

CEO 50% 150%

CFO 50% 150%

CCO 33% 66%

82

Governance



Performanceconditions todistribute the pool

The configuration and weightings attached to the different elements of the STI formula differ to the extent that employees can influence the achievement of performance objectives directly or indirectly. The performance conditions were considered appropriate in the context of Alviva’s business model for growing business profitability and generating these profits in the form of cash. The rationale for non-financial performance bonuses is to reward executives for strategic and sustainability-orientated achievements. However, poor performance in non-financial performance measures could override the good performance in terms of financial criteria, i.e., unethical or non-compliant behaviour cannot be compensated by good financial performance.

Executive directors:

� Company Earnings Performance (HEPS): 70% weighting;

� Transformation: 15% weighting – measured on a binary basis and a score of either 0% or 100% is assigned; and

� RoI: 15% weighting – measured on a binary basis and a score of either 0% or 100% is assigned.

Prescribed officers:

� Company Earnings Performance (HEPS): 70% weighting; and

� Transformation: 30% weighting – measured on a binary basis and a score of either 0% or 100% is assigned.

The table below summarises the performance targets that will be used in FY22.

Weighting Target

HEPS 70% R3,13The level at which the target is met, will determine the pool that is available (as explained above)

Transformation 15%

Alviva Holdings Ltd, Level 3

DCT Holdings (RF) (Pty) Ltd, Level 2

Datacentrix (Pty) Ltd Level 1

Binary condition

Return on investments

15%Net profit before tax of certain acquisitions: R165 million

Binary condition

Settlement The STI is settled in cash, save in the case of executives, who may elect to have the cash (or a portion thereof ) converted to shares, on a pre-tax basis and toward the fulfilment of any obligations under the MSR Policy.

83

Governance



Long-term incentive

Purpose The FSP is primarily used as an incentive to participants to deliver the Group’s business strategy over the long-term. The intent of the FSP is to incentivise, motivate and retain executives and senior management through the award of performance shares.

Participation Eligible employees include executive directors, prescribed officers and senior management of any employer company within the Group. Participation in the FSP is not a condition of employment, and the Committee has the absolute discretion to make an award to any employee in terms of the FSP.

Operation Under the FSP, annual awards of performance shares are made to eligible employees. Ad hoc awards of retention shares can be considered should the Company face serious retention risks. The vesting of the award of performance shares is subject to the satisfaction of performance conditions, usually over a period of three years, in line with the Group’s business strategy.

Award quantum (allocation percentage)

The on-target award value is approximately 100% of TGP.

Performanceconditions and vesting percentages

The table below summarises the weighting and performance targets under which the FY22 FSP awards were granted.

Weighting Threshold Target Stretch


RoE 40% 12% 16% 19%

HEPS (averages for the three years)

40% R2,62 R3,30 R3,81

Absolute TSR (calculated as share price plus dividends)

20% R17,35 R19,40 R21,00

Performance conditions will not be re-tested.

Vesting period The FSP awards will vest on the later of:

� three years from the award date; or

� the date on which the Committee confirms that the performance conditions have been met.

Company limit For the duration of the FSP, the maximum number of shares which may be allocated under the FSP shall not exceed 9 164 802 shares, which represented approximately 5% of the Company’s total issued share capital as at the date of approval of the FSP by shareholders (currently approximately 7,5%). These limitations are in line with market best practice.

Alviva purchases shares in the market on the allocation date (which is also the settlement date), which means that these shares are not taken into account in considering the use of the limit (according to the JSE Listings Requirements, Schedule 14) and, therefore, Alviva will never exceed the dilution limit. The Committee is of the view that, as long as Alviva continues this practice for the FSP allocations, the scheme is effectively “limitless”. Accordingly, the Committee has adopted a principle whereby the total value of the awards in any one year will not exceed 5% of EBITDA.

In addition, the current maximum that may be allocated to any one participant is limited to 3 665 920 (2020: 3 665 920) shares. This equates to approximately 3% of the Company’s total issued share capital at the date of adoption of the FSP.

84

Governance



Minimum shareholding requirementThe Company has adopted the MSR Policy to encourage specific executives to retain vested FSP shares and to receive shares in lieu of cash STI, reinforcing the alignment between executive and shareholder interests. The adoption of such a policy is in line with global and local best practice. The MSR Policy provides that the executive must build up a target minimum shareholding within five years of appointment, or the approval date of the policy.

The following executives will be subject to the MSR Policy, with the associated target minimum shareholding:

� CEO: 200% of TGP;

� CFO: 150% of TGP; and

� Other executives designated by the Committee: 100% of TGP.

Executives can build up their minimum shareholding by holding or purchasing shares in their personal capacity or by committing shares:

� received in terms of a cash STI, which they have elected to defer into shares, to a holding period until the measurement date; and/or

� which would potentially vest from an LTI award to a further holding period until the measurement date.

Either avenue pursued would be on a pre-tax basis.

Malus and clawbackMalus and clawback provisions have been adopted in respect of STI and FSP awards under the malus and clawback policy (“Malus and Clawback Policy”). These provisions allow the Company to reduce or recoup either STI or LTI awards made in specified circumstances (“trigger events”) as set out in the Malus and Clawback Policy. Malus provisions apply before awards have vested or been paid to an employee, whilst clawback provisions apply to awards for a period of three years from the date the awards have vested or payment has been made to an employee.

Trigger events include:

� a material misstatement of the financial results resulting in an adjustment in the audited consolidated accounts of the Company or the audited accounts of any member of the Group; and/or

� in the case of awards which are subject to the achievement of performance conditions, the assessment of any performance metric or condition in respect of an award or payment which was based on error, or inaccurate or misleading information; and/or

� the fact that any information used to determine the quantum of an incentive remuneration amount was based on error, or inaccurate or misleading information; and/or

� action or conduct of a participant which, in the reasonable opinion of the Board/Remuneration Committee, amounts to serious misconduct or gross negligence; and/or

� events or behaviour of a participant or the existence of events attributable to a participant which led to the censure of the Company or a member of the Group, by a regulatory authority or have had a significant detrimental impact on the reputation of the Company.

CONDITIONS OF EMPLOYMENT

Terms of service � Alviva complies with relevant legislation when determining minimum terms and conditions for the appointment of executive

directors. Unless stated otherwise in the contract of employment, there are no fixed terms of employment although, where appropriate, Alviva does enter into minimum service term agreements of up to four years, particularly with executives of recent business acquisitions. The Group CEO has signed a service agreement for continued employment up to June 2022, but none of Alviva’s other current executive directors are subject to such agreements.

85

Governance



� Employment is terminated on the resignation or dismissal of the director upon notice of two months (other than during the first six months of employment), and the notice period may be waived at Alviva’s discretion.

� Employment contracts do not provide for any unusual or onerous commitments on the termination of any executive director’s employment.

� Alviva does not make provision for balloon payments on termination, as they are not aligned to good corporate governance principles.

� The Committee reviews, at least annually, the terms and conditions of executive directors’ service agreements, taking into account information from comparable companies, where relevant.

� All recently contracted employment agreements with executive directors, management and sales staff include a restriction clause to protect Alviva’s proprietary interests and to ensure that the business is not prejudiced in any way or form. The restriction undertaking means that no employee can join a competitor for a period of 12 months from the date on which employment terminates. The CEO has signed a restraint of trade agreement that prohibits him from being involved in the industry for two years after his last day of employment in the Group.

� Executive directors are expected to manage their leave in such a manner that leave is not accumulated. On leaving the Company, any unutilised leave is not paid out.

� Alviva does not have a policy on sign-on payments for executives or other employees and has not historically made payments of this nature.

Termination provisions

Termination Terms STI FSP

Good leavers Death, ill health, disability, retrenchment, retirement or any other event approved in the sole discretion of the Board

Entitled to a pro rata portion of awards, based on the period of employment, assuming performance criteria has been met

Entitled to a pro rata portion of awards, based on the period of employment, after adjustment for the performance conditions

Bad leavers Resignation, dismissal on grounds of misconduct, poor performance or fraudulent conduct or abscondment

No STI is payable Awards are forfeited

External appointments

Executive directors are not permitted to hold external directorships or office without the approval of the Board. The Board will only grant approval if such appointments will not create any conflict of interest and provided they will not impinge upon the executive director’s ability to maintain the level of performance expected by Alviva from him/her in the execution of his/her duties as an executive. If such approval is granted, directors may retain the fees payable from such appointments.

Any fees paid by any of the subsidiaries in the Group to any of the executive directors for their services as directors to those companies are paid to Alviva and not to the individual concerned.

86

Governance



NON-EXECUTIVE DIRECTORS

Terms of service

While shareholders appoint non-executive directors at AGMs, the MOI authorises interim Board appointments by the Board between AGMs. Such interim appointees may not serve beyond the next AGM, though they may make themselves available for election by shareholders.

Non-executive directors serve for a period of no more than three consecutive AGMs after the AGM in which they are elected or re-elected by shareholders. They are required to retire at the close of the third AGM, although they may offer themselves for re-election for a further three years at that meeting. Besides this, the MOI specifies that at least one-third (rounded to the nearest integer) of the non-executive directors must offer themselves for election or re-election at each AGM, as the case may be, and it may be possible that a director is required to offer himself/herself for re-election before the third AGM since his/her last election in order to comply with this rule. Executive directors are not required to comply with the election process and their position on the Board is governed by their employment agreements.

Fees � Each non-executive Board member receives a fixed fee per year. Ordinary Board members receive a fixed amount (the base fee)

and additional fees are paid for the additional portfolios of the Chairperson of the Board, the Chairperson of the Audit and Risk Committee, the Chairperson of the Remuneration Committee, the Chairperson of the Social and Ethics Committee, the Lead Independent Director, as well as for being members of Board Committees.

� No fees are paid for attendance per meeting as the base fee is an all-inclusive fee with the non-executive directors’ employment agreements stipulating attendance as a requirement.

� Service on other sub-committees of the Board may entitle members to an additional payment, subject to workload and at the discretion of the Board.

� Individual Board members may take on specific ad hoc tasks outside the normal duties assigned by the Board. In such cases, the Board determines a fixed fee for the work.

� Expenses, such as travel and accommodation in relation to specific Board-approved activities as well as relevant training, are reimbursed.

� Non-executive directors’ fees are calculated exclusive of Value-Added Tax.

� There are no short- or long-term incentive schemes for non-executive directors. Exceptions apply only where non-executive directors previously held executive office and qualify for unvested benefits resulting from their employment with Alviva.

� There are no post-retirement benefits for non-executive directors.

Non-executive directors’ fees are reviewed annually and determined by the Board, following consultation with the Committee and having regard to fees paid to non-executive directors of similar companies. The fees are benchmarked against the fees paid to non-executive directors of companies operating in the same industry as Alviva. The comparator group used is the same comparator group used for benchmarking of executive directors’ remuneration. Where considered necessary, the Board may seek external advice on the subject. Shareholders will be requested to consider a special resolution approving the non-executive directors’ fee structure and fee amounts at the AGM.

87

Governance



EMPLOYEE REMUNERATIONAs regards general staff, the Policy is as follows:

� Remuneration of general employees may be subject to regulatory requirements, such as bargaining council agreements and collective agreements with trade unions.

� In the absence of the above, remuneration will be based on individual and Company performance as well as market trends.

� Typically, remuneration may comprise elements of fixed remuneration and performance-based (at-risk) remuneration, comprising of STI and LTI. The at-risk element of remuneration corresponds with Alviva’s risk tolerance.

� Certain employees have an element of their remuneration at-risk. The proportion of an employee’s total remuneration that is at-risk increases with seniority and with the individual’s ability to impact the performance of the entity in which he/she works.

An annual performance review process assesses the degree to which each qualifying employee satisfies the requirements of his/ her role and the degree to which established performance objectives have been achieved.

PUBLIC ACCESS TO THE POLICYThe Policy is available on Alviva’s website at www.alvivaholdings.com under the “Reports and Presentations” link.

88

Governance



PART 3: IMPLEMENTATION REPORT

The Implementation Report, which is outlined below, will be presented to shareholders at the AGM to be held on 19 November 2021 and shareholders will be requested to cast a non-binding advisory vote thereon.

SINGLE FIGURE OF REMUNERATION [GRI 201-1]

Executive directorsThe remuneration paid to the executive directors and a prescribed officer of Alviva during the reporting period is detailed in note 35.2 of the financial statements. The detailed disclosure of executives’ total remuneration, per executive, aligned to performance criteria, appears below and follows the King IV™ recommended standards. The Board has previously determined that Mr JV Parkin is a prescribed officer.

Name YearTGP

R’000STI ¹

R’000LTI 2

R’000

Qualifying dividends 3

R’000

Total single figure of

remunerationR’000

Mr P Spies

2021 6 198 7 902 – 278 14 378

2020 6 198 – 905 573 7 676

2019 5 310 3 062 3 963 259 12 594

Name YearTGP

R’000STI ¹

R’000LTI 2

R’000


R’000


remunerationR’000

Mr RD Lyon

2021 3 600 4 590 – 165 8 355

2020 3 600 – 453 228 4 281

2019 2 820 1 606 2 313 138 6 876

89

Governance


Prescribed officer

Name YearTGP

R’000STI ¹

R’000LTI 2

R’000


R’000


remunerationR’000

Mr JV Parkin

2021 2 940 1 960 – 60 4 960

2020 2 940 – 151 68 3 159

2019 2 796 1 272 550 41 4 659

1 The STIs are reported to match the performance and quantum earned to the applicable financial period.

� FY21: The CEO and CFO have elected to convert a portion of their FY21 cash STI and receive approximately 100 000 shares in settlement each, which shares are committed to a holding period under the MSR Policy. The value of the shares converted will be determined at the conversion date and the remaining portion of the STI will be settled in cash.

� FY20: The following STIs were earned in FY20 but voluntarily forfeited by the respective executives:

– Mr P Spies – R464 850

– Mr RD Lyon – R270 000

– Mr JV Parkin – R294 000

2 Value of FSP awards:

� FY21: The value of the FSP awards (which is zero due to the non-fulfilment of the performance conditions) made on 18 June 2018 with a vesting period ending on 31 October 2021 is reflected in the 2021 single figure of remuneration as it relates to the performance period ending during FY21. The value of the award was determined as follows: 20-day VWAP at the reporting date (R13,66) x estimated vesting percentage (0%) x the number of awards.

� FY20: The value of the FSP awards made on 15 June 2017 with a vesting period ending on 31 October 2020 is reflected in the 2020 single figure of remuneration as it relates to the performance period ending during FY20. The value of the award was determined as follows: 20-day VWAP at the reporting date (R7,02) x estimated vesting percentage (43%) x the number of awards.

� FY19: The value of the FSP awards made on 14 December 2016 with a vesting period ending on 25 November 2019 is reflected in the 2019 single figure of remuneration. The value of the award was determined as follows: 20-day VWAP at the reporting date (R16,43) x estimated vesting percentage (67%) x the number of awards.

3 Dividends relating to each executive director and prescribed officer’s shares received during the 2019, 2020 and 2021 financial years were included in qualifying dividends for 2019, 2020 and 2021, respectively, to the extent that the underlying shares have not been reflected in the single figure table.

TGP INCREASES FOR FY21No TGP increases were granted to executive directors, the prescribed officer or other employees during FY21. Increases of between 4,0% – 4,5% were approved for executives for the forthcoming year (FY22).


90

Governance


STI OUTCOMES FOR FY21As disclosed in the table below, and even though the targets for HEPS had been increased at the interim stage (as noted in Part 1), the financial targets were comfortably exceeded. The Transformation target was met but the RoI target was not, mainly due to the disappointing performance of two of the entities within the Group.

Description Weighting Target Achieved% of target

achievedCorresponding

vesting %

HEPS

Headline earnings per share (“HEPS”), in cents per share (“cps”), for the year to 30 June 2021

70% 220 286 130% 210%

RoIMr P Spies/ Mr RD Lyon:

15% R110 million R91,3 million – –

Non-financial measure: Transformation

B-BBEE

Mr P Spies/ Mr RD Lyon:

15%

Mr JV Parkin: 30%

100% 45%

Alviva Holdings Ltd Level 4 Level 1

DCT Holdings (RF) (Pty) Ltd

Level 3 Level 1

Datacentrix (Pty) Ltd Level 2 Level 1

Total vesting % 255%

The final STI earned by the executive directors and prescribed officer was calculated as follows:

Position TGP (A) On-target STI (B) Vesting % (C) Final STI (A x B x C)

P Spies 1 6 198 50% 255% 7 902

RD Lyon 1 3 600 50% 255% 4 590

JV Parkin 2 2 940 50% 200% 1 960

1 As explained in Part 2 of this report, Mr Spies and Mr Lyon elected to receive a portion of their STI in shares towards satisfaction of the MSR Policy. The shares will be acquired after the year-end closing period and the remainder of the STI will be paid in cash.

2 Per the STI policy in Part 2 of this report, Mr Parkin’s STI opportunity is capped at 66% of TGP and, as a result, the formulaic outcome of his STI has been adjusted downward to meet the policy limit.


91

Governance


LTI AWARDS

FSP awards granted in FY21

Parameters and conditions

The table below summarises the weighting and performance targets applicable to the 2021 FSP awards granted, amended as detailed in Part 1:

Description Weighting Threshold Target Stretch

FSP Award vesting percentage

30% 70% 100%

Return on equity

Average Group return on equity for the years ending June 2021, 2022 and 2023

40% 13,0% 17,0% 20,0%

HEPS

Average of HEPS for financial years ending June 2021, 2022 and 2023

40% R2,40 R2,80 R3,10

Absolute TSR

20-day VWAP on 30 September 2023 plus any dividends paid during the performance period

20% R13,00 R15,00 R17,00

Award quantum

Details of the number of awards made can be found in the table of unvested FSP awards below.

FSP awards vesting during FY21It is estimated that 100% of the awards that were made in June 2018 for measurement in October 2021 will lapse. Therefore, there are no awards to be included in the single figure of remuneration tables on pages 88 and 89 of this report. The Committee is unable to finalise the measuring of all of the performance conditions, as the TSR component is based on the 20-day VWAP as at the end of September 2021, although it has been estimated that vesting will be 0% of the total award.

Performance condition Weighting Threshold Target Stretch Actual Vesting

Return on equity 30% 15,0% 17,5% 20,0% 14,4% 0%

Core EPS 40% R3,27 R3,33 R3,39 R3,23 0%

TSR 30% R26,45 R27,84 R29,26 Est R15,72 0%


92

Governance


FSP unvested awards and cash flow on settlement

2021

Name Grant date

Opening number

on 1 July 2020

Granted during

2021

Forfeited during

2021

Exercised during

2021

Closing number

on 30 June

2020

Value of receipts

2021 1

Estimated closing fair

value on 30 June

2021 2Grant price

Vesting date

Executive directors

Mr P Spies 15 Jun 2017 300 000 – (171 000) (129 000) – 890 100 – 16 ,75 31 Oct 2020

18 Jun 2018 300 000 – – – 300 000 45 000 – 18 ,68 31 Oct 2021

21 Jun 2019 450 000 – – – 450 000 67 500 4 302 396 16 ,59 31 Oct 2022

16 Sep 2019 500 000 – – – 500 000 75 000 4 780 440 16 ,46 31 Oct 2022

26 Jun 2020 600 000 – – – 600 000 90 000 5 736 528 6 ,85 31 Oct 2023

18 Jun 2021 – 600 000 – – 600 000 – 5 736 528 13 ,62 31 Oct 2024

1 167 600 20 555 892

Mr RD Lyon 15 Jun 2017 150 000 – (85 500) (64 500) – 445 050 – 16 ,75 31 Oct 2020

18 Jun 2018 150 000 – – – 150 000 22 500 – 18 ,68 31 Oct 2021

21 Jun 2019 250 000 – – – 250 000 37 500 2 390 220 16 ,59 31 Oct 2022

26 Jun 2020 250 000 – – – 250 000 37 500 2 390 220 6 ,85 31 Oct 2023

18 Jun 2021 – 250 000 – – 250 000 – 2 390 220 13 ,62 31 Oct 2024

542 550 7 170 660

Prescribed officer

Mr JV Parkin 15 Jun 2017 50 000 – (28 500) (21 500) – 148 350 – 16,75 31 Oct 2020

18 Jun 2018 50 000 – – – 50 000 7 500 – 18,68 31 Oct 2021

21 Jun 2019 100 000 – – – 100 000 15 000 956 088 16,59 31 Oct 2022

26 Jun 2020 100 000 – – – 100 000 15 000 956 088 6,85 31 Oct 2023

18 Jun 2021 – 100 000 – – 100 000 – 956 088 13,62 31 Oct 2024

185 850 2 868 264

1 The number of awards vested x the 20-day VWAP on the date of vesting plus the value of dividends received on the unvested awards during the reporting period.2 Estimated closing fair values were determined as follows: Number of awards granted x 20-day VWAP at the reporting date x estimated vesting percentage.


93

Governance


2020

Name Grant date

Opening number

on 1 July 2019

Granted during

2020

Forfeited during

2020

Exercised during

2020

Closing number

on 30 June

2019

Value of receipts

2020 1

Estimated closing fair

value on 30 June

2020 2Grant price

Vesting date

Executive directors

Mr P Spies 14 Dec 2016 360 000 – (118 800) (241 200) – 3 557 160 – 17,92 25 Nov 2019

15 Jun 2017 300 000 – – – 300 000 90 000 905 029 16,75 31 Oct 2020

18 Jun 2018 300 000 – – – 300 000 90 000 1 473 304 18,68 31 Oct 2021

21 Jun 2019 450 000 – – – 450 000 135 000 2 209 956 16,59 31 Oct 2022

16 Sep 2019 – 500 000 – – 500 000 150 000 2 455 506 16,46 31 Oct 2022

26 Jun 2020 – 600 000 – – 500 000 – 2 946 607 6,85 31 Oct 2023

4 022 160 9 990 402

Mr RD Lyon 14 Dec 2016 210 000 – (69 300) (140 700) – 2 075 010 – 17,92 25 Nov 2019

15 Jun 2017 150 000 – – – 150 000 45 000 452 515 16,75 31 Oct 2020

18 Jun 2018 150 000 – – – 150 000 45 000 736 652 18,68 31 Oct 2021

21 Jun 2019 250 000 – – – 250 000 75 000 1 227 753 16,59 31 Oct 2022

26 Jun 2020 – 250 000 – – 250 000 – 1 227 753 6,85 31 Oct 2023

2 240 010 3 644 673

Prescribed officer

Mr JV Parkin 14 Dec 2016 50 000 – (16 500) (33 500) – 494 050 – 17,92 25 Nov 2019

15 Jun 2017 50 000 – – – 50 000 15 000 150 838 16,75 31 Oct 2020

18 Jun 2018 50 000 – – – 50 000 15 000 245 551 18,68 31 Oct 2021

21 Jun 2019 100 000 – – – 100 000 30 000 491 101 16,59 31 Oct 2022

26 Jun 2020 – 100 000 – – 100 000 – 491 101 6,85 31 Oct 2023

554 050 1 378 591

1 The number of awards vested x the 20-day VWAP on the date of vesting plus the value of dividends received on the unvested awards during the reporting period.2 Estimated closing fair values were determined as follows: Number of awards granted x 20-day VWAP at the reporting date x estimated vesting percentage.


94

Governance


MINIMUM SHAREHOLDING OF EXECUTIVE DIRECTORSFollowing the implementation of the MSR Policy in FY20 as set out in Part 2 of this report, the executive directors had already locked in amounts for purposes of meeting the minimum shareholding targets. The table below represents the executive directors’ current standings in relation to their minimum shareholding requirements:

Executive

2021 shareholding Target share-

holding (% of TGP)

Commencement date Measurement date Shares Value (R) *

% of TGP

Mr P Spies 470 200 4 797 084 77% 200% 15 Nov 2019 15 Nov 2024

Mr RD Lyon 785 200 9 755 544 271% 150% 15 Nov 2019 15 Nov 2024

Mr JV Parkin 276 700 3 756 429 128% 100% 15 Nov 2019 15 Nov 2024

Executive

2020 shareholding Target share-

holding (% of TGP)

Commencement date Measurement date Shares Value (R) *

% of TGP

Mr P Spies 341 200 3 802 494 61% 200% 15 Nov 2019 15 Nov 2024

Mr RD Lyon 720 700 9 258 249 257% 150% 15 Nov 2019 15 Nov 2024

Mr JV Parkin 255 200 3 590 664 122% 100% 15 Nov 2019 15 Nov 2024

* The value of MSR shares, in accordance with the approved MSR Policy, is calculated as follows:

– when determining the value of Committed Shares, the VWAP on the date the Shares are Committed;

– when determining the value of Personal Investment Shares, excluding Personal Investment Shares which were already held at the Approval Date (see below): the Share Price actually paid or the VWAP on the day of settlement of the shares; and

– when determining the value of Personal Investment Shares which were already held at the Approval Date: the Share Price actually paid or the VWAP on the day of settlement of the Shares.

As noted above, the CEO and CFO have elected to convert a portion of their FY21 STI bonuses into shares and subject the shares received to a holding lock in terms of the MSR Policy. The transaction is anticipated to increase the CEO and CFO’s shares held under the MSR Policy, as a percentage of their TGP, by 25% and 43%, respectively.

NON-EXECUTIVE DIRECTORS’ REMUNERATIONIncreases in fees have been set at 4,5% and these have been proposed for the year ending June 2022.

Details of the proposed FY22 non-executive director fee structure are included in the Notice of AGM under special resolution number 3.


95

Governance


Fees paid to the non-executive directors of Alviva during the reporting period are detailed below:

Name Description2021

R’0002020

R’000

Mr A Tugendhaft 1 145 1 145

Chairperson– Board 850 850

Member

– Board 245 245

– Remuneration Committee 50 50

Ms P Natesan ¹ 605 600

Chairperson

– Audit Committee 100 92

Member

– Board 245 245


– Social and Ethics Committee – 4

Lead Independent 180 180

Ms SH Chaba 520 520

Chairperson


– Social and Ethics Committee 50 50

Member

– Board 245 245




Mr PN Masemola ² 290 266

Member

– Board 245 225


Ms MG Mokoka ³ 375 344

Member

– Board 245 225



2 935 2 875

¹ Appointed as Chairperson of the Audit and Risk Committee and resigned as member of the Social and Ethics Committee with effect from 29 July 2019.

² Appointed as Independent Non-Executive Director and member of the Social and Ethics Committee with effect from 29 July 2019.

³ Appointed as Independent Non-Executive Director and member of the Audit and Risk Committee and Remuneration Committee with effect from 29 July 2019.


96

Governance


The Social and Ethics Committee (“the Committee”) is constituted in terms of Section 72(4) of the Companies Act.

ROLE AND RESPONSIBILITIESThe Committee’s role and responsibilities are governed by its Charter as approved by the Board. The Charter is subject to an annual review and approval by the Board. In line with its mandate, the Committee assists the Board in monitoring and guiding Alviva’s performance as a responsible corporate citizen and to govern ethical conduct. This is achieved by monitoring the sustainable development practices of the Group as well as ethics processes.

In broader terms, the Committee focuses on corporate citizenship, corporate ethics, social and economic development, consumer relationships, environmental issues, occupational health and safety, as well as legal and other compliance obligations. The Committee’s key duties as contained in its Charter are:

1. Social and economic development, including the Group’s standing in terms of the goals and purposes of:

1.1 the 10 United Nations Global Compact Principles encompassing: [GRI 102-13]

Human rights

▷ support and respect the protection of internationally proclaimed human rights; and

▷ make sure that Alviva is not complicit in human rights abuses;

Labour standards

▷ uphold the freedom of association and the effective recognition of the right to collective bargaining;

▷ eliminate all forms of forced and compulsory labour;

▷ abolish child labour; and

▷ eliminate discrimination in respect of employment and occupation;

Environment

▷ support a precautionary approach to environmental challenges;

▷ undertake initiatives to promote greater environmental responsibility; and

▷ encourage the development and diffusion of environmentally-friendly technologies;

Anti-corruption

▷ work against corruption in all its forms, including extortion and bribery;

1.2 the OECD recommendations on corruption;

1.3 the Employment Equity Act; and

1.4 the Broad-Based Black Economic Empowerment Act;

SOCIAL AND ETHICS COMMITTEE REPORT

97

Governance


2. Good corporate citizenship, including the Group’s:

2.1 promotion of equality, prevention of unfair discrimination and reduction of corruption;

2.2 contributions made to the development of communities in which its products or services are predominately marketed; and

2.3 sponsorship, donations and charitable giving;

3. The environment, health and public safety, including the impact of the Group’s activities and of its products or services;

4. Consumer relationships, including the Group’s advertising, public relations and compliance with consumer protection laws;

5. Labour and employment, including:

5.1 monitoring the Group’s standing in terms of the International Labour Organisation Protocol on decent work and working conditions; and

5.2 the Group’s employment relationships and its contribution toward the educational development of its employees;

6. Drawing matters within its mandate to the attention of the Board as the situation requires; and

7. Reporting, through one of its members, to the Board at Board meetings and to the shareholders at the Company’s AGM on the matters within its mandate.

In addition, and complementary to its statutory duties in terms of the Companies Act, the Committee’s mandate is to assist the Group in discharging its business responsibility with respect to the implementation of practices that are consistent with good corporate citizenship with particular focus on:

� King IV™ principles and recommended practices;

� Alviva’s ethics and sustainability commitments; and

� B-BBEE requirements as described in the DTI combined generic scorecard and associated Codes of Good Practice.

BROAD-BASED BLACK ECONOMIC EMPOWERMENTAlviva acknowledges that for black economic empowerment to be sustainable, it must be broad-based. Alviva recognises the need to maintain and improve on its B-BBEE rating in order to continue transforming the Group and remaining relevant to doing business in South Africa. The Group adopts a holistic approach to empowerment, addressing skills development, employment equity, promotion in the workplace, procurement practices which support developing businesses and suppliers, enterprise creation and equity ownership in the Group.

In order for the Group to remain competitive, improve its market position and leverage new business opportunities, thereby enhancing profitability, it is imperative that it not only complies with the requirements of the Broad-Based Black Economic Empowerment Act and related Codes of Good Practice, but that transformation is accelerated to bring the majority of historically disadvantaged individuals into the mainstream economy by also providing meaningful economic participation and to share in wealth creation resulting from economic activities.

In September 2021, Alviva was rated under the ICT Sector Code and achieved a Level 1 Rating (2020: Level 1 Rating). In accordance with 13(G) 2 of the B-BBEE Act, Alviva has provided the B-BBEE Commission with a report on its compliance with B-BBEE.

Social and Ethics Committee report continued

98

Governance


A summary of the information provided, as verified by the Broad-Based Black Economic Empowerment Verification Professional as per the ICT Scorecard, is as follows:

B-BBEE elements

ICT target score Bonus points Actual score achieved

2021 2020 2021 2020 2021 2020

Ownership 25 25 25,00 25,00

Management control 23 23 15,16 15,24

Skills development 20 20 4,85 4,33 24,34 23,18

Enterprise and supplier development 50 50 5,00 5,00 45,70 44,63

Socio-economic development 12 12 12,00 12,00

Total score 130 130 9,85 9,33 122,20 120,05

Priority elements achieved:

Ownership YES YES

Skills development YES YES

Enterprise and supplier development YES YES

Empowering supplier status YES YES

Final B-BBEE status level 1 1

KEY ACTIVITIESThe Committee met periodically to consider and to act upon its statutory duties and functions. The Board confirms that the Committee has during the reporting period, performed the duties mandated to it by the Board. The following key activities have reference:

HUMAN RESOURCES

Learning and development

The Committee confirms that during the reporting period:

� training initiatives, learnerships, which included people with disabilities, and internships were conducted;

� a large percentage of unemployed learners and interns were absorbed across the Group, or found employment elsewhere, due to the skills gained from the training attended;

� combating youth unemployment remained a key focus of all training programmes; and

� training targets and initiatives were in line with the Economically Active Population of South Africa.

Employment equity � Employment equity targets were set for each major subsidiary of the Company and achievement of these targets were incorporated into the Managing Directors’ respective KPA indicators, thereby directly influencing the achievement of their short-term incentives.

� The race and diversity targets for the Board were reviewed in 2019 when new Board appointments were made. The Board annually evaluates its progress against its voluntary targets.

� The race and gender profiles of the Group improved from 67% to 68% and 36% to 37%, respectively.

� Periodic updates of the employment equity reports were presented to the Committee. These reports reflected the progress made against employment equity targets.

� All employment equity targets and initiatives were in line with the Economically Active Population of South Africa.

� The Committee concurred that the Group has achieved progress in terms of employment equity.


99

Governance


Labour relations � The number of employees belonging to trade unions remains low, mainly attributable to Alviva’s pro-active engagement and its benefit offerings, which include provident fund membership, an Employee Health and Wellness Programme and cost-effective medical aid options or medical insurance. These contributed to strong relationships between management and employees.

� Group benefits were aligned, where applicable, for recent acquisitions.

� The Committee is not aware of any significant unresolved labour dispute cases during the reporting period.

Employee Health and Wellness Programme

� Employee wellness goes beyond the absence of disease or a common cold. It is being mentally fit and enthusiastic about one’s work. It is within this context that ICAS has provided the Group with the tools and mechanisms to manage behavioural risks through the provision of wellness services to Alviva employees, thereby facilitating a workforce that functions optimally. Further disclosure appears in the Sustainability Report contained in the Integrated Annual Report.

HR Steering Committee

� The HR Steering Committee reported to the Committee that progress had been made as regards the implementation of a digital performance management system.

� Progress was made in aligning employment equity compliance requirements for annual reporting to the Department of Employment and Labour.

� Progress was made as regards the adoption of Group HR policies within the subsidiaries that had been acquired.

ETHICS

Ethics awareness and reporting

� Ethics training is provided at induction of new employees. In addition, regular ethics training of employees is in place across the Group.

� Independent ethics audits are conducted to assess and monitor the Group’s ethics performance.

� The Alviva Ethics Line has been operational and effective during the reporting period.

� There were no noteworthy ethics concerns reported during the reporting period.

ANTI-FRAUD MANAGEMENT AND CONTROLS

Defalcations � A defalcations report, which details losses associated with criminal activity in the Group, was submitted to the Committee. The report enables management and the Board to assess the effectiveness of the Company’s anti-fraud programmes. It also identifies possible actions required to mitigate or reduce fraud risks.

� The report reflected that, compared to the previous year, the Group has had a significant reduction in both potential financial exposure associated with criminal activity. Actual financial losses remained low, mainly as a result of insurance cover which reduces risk exposures. The decreasing trend might have been the result of both improved anti-fraud measures and the effect of lockdowns associated with the COVID-19 pandemic.

OCCUPATIONAL HEALTH, SAFETY AND ENVIRONMENT

COVID-19 � Following the outbreak of the COVID-19 pandemic, the Committee continued to review the Group’s response, as encapsulated in the COVID-19 Group Occupational Health and Safety Policy and Framework. It further reviewed the reports that were implemented to track and monitor compliance against both legal and best practice requirements.

� The Committee reviewed the stressful effects of COVID-19 on employees, especially in terms of general well-being, mental state, and on relationships.

� The Committee continues to monitor the situation in all territories where the Group operates. Group policy will be amended based on amendments to Government Regulations, the NICD or the WHO.

� The Group is confident that its efforts to manage risks around COVID-19 remain adequate.


100

Governance


Occupational health and safety

� The Committee periodically reviewed a summary of all COVID-19 infections amongst employees as well as injuries on duty across the Group. There were no fatalities from injuries on duty in the reporting period. All injuries on duty were followed up to ensure recovery and support of employees. It is sadly noted that at the date of this report, five employees had passed away due to COVID-19. The Committee conveys its condolences to the affected families.

Environment � The Group continues to track the volume of waste that it generates and attempts to reduce the volume of waste going to landfill.

SUSTAINABILITY

Determining materiality

� The Committee performed an evaluation of the Global Reporting Standards 2020 to establish the material topics on which Alviva should report in the sustainability section of its 2021 Integrated Annual Report. As a result of the evaluation, material topics appear in the Sustainability Report contained in the Integrated Annual Report.

10 United Nations Global Compact Principles

� In fulfilment of its statutory duties, the Committee is cognisant of the Principles, and the Group’s application of the Principles, which have been aligned to the material topics and disclosed in the Sustainability Report.

Corporate social initiatives

� Corporate social initiatives undertaken by Alviva and its subsidiaries are disclosed in the Sustainability Report.

TRANSFORMATION

B-BBEE � Alviva disclosed its B-BBEE rating and submitted its B-BBEE affidavit, in compliance with the JSE Listings Requirements and the B-BBEE Commission stipulations. The required SENS announcement was disseminated.

GOVERNANCE

King IV™ � A King IV™ gap analysis was presented to the Committee, the outcomes of which are addressed in the Corporate Governance Report contained in the Integrated Annual Report.

Charters, policies and frameworks

� The Social and Ethics Committee Charter, which is aligned to King IV™, was reviewed and approved by the Board.

� The policies and frameworks that have been aligned to King IV™ and the JSE Listings Requirements, where applicable, are subject to periodic review by the Committee for recommendation to the Board for approval.


101

Governance


COMPLIANCEIn terms of paragraph 7.F.5 of the JSE Listings Requirements, the Social and Ethics Committee confirms that it has fulfilled its mandate as prescribed by the Companies Regulations to the Companies Act and that there are no instances of material non-compliance to disclose.

FOCUS AREAS IN THE YEAR AHEADThe Committee will, in the future, continue to attend to the following:

� Monitor developments as regards COVID-19 and review adoption of recommended practices;

� Review adoption of Alviva’s policies throughout the Group;

� Review general compliance management throughout the Group;

� Review digitisation of HR systems; and

� Review requirements of the Employment Equity Amendment Bill.

PUBLIC REPORTINGThe Committee is required to report through one of its members to Alviva’s shareholders on the matters within its mandate. The Committee’s Chairperson will report on the Committee’s activities at Alviva’s AGM to be held on Friday, 19 November 2021.

APPROVALI wish to thank the members of the Committee for their contributions during the reporting period in ensuring that the Committee could fulfil its mandate assigned to it by the Board.

Ms SH Chaba Chairperson of the Social and Ethics Committee

21 September 2021


102

Sustainability


SUSTAINABILITY

103

Sustainability


SUSTAINABILITY HIGHLIGHTS

• Employed 3 120 people (2020: 3 257)

• Training and development spend as a percentage of employee costs was 2% (2020: 2%)

• Gender diversity – 37% female employees; 63% male employees (2020: 36% and 64%, respectively)

• Female top and senior management – 35% (2020: 34%)

• 68% of employees in the Group are black (2020: 67%)

PEOPLE

• Achieved 2% community spend as a percentage of operating profit (2020: 3%)

• Supplier and enterprise development spend increased by 39% (2020: decreased by 16%)COMMUNITIES

• Committed to carbon neutrality with a 21% reduction in the Group’s carbon footprint to 6 854 CO₂e tonnes (2020: 8 754 CO₂e tonnes)

• Recycled 106 tonnes of waste (2020: 120 tonnes)

• 42% of total waste recycled (2020: 39%)BUSINESS

IMPACT

• 43% of the Board members are female

• 57% of the Board members are black

• Improved ESG reporting through the first-time inclusion of the SDG in 2021GOVERNANCE, RISK AND

COMPLIANCE

104

Sustainability


The Audit and Risk Committee has reviewed the sustainability data to ensure that the data is reliable and that there is no conflict with the financial information. Group Internal Audit provided independent assurance on sampled material sustainability data.

Our people are our biggest asset and, with the drive for constant improvement and a service-driven culture, we are building a company for generations to come.

The Board acknowledges that in addition to being responsible for corporate performance, it holds a responsibility to the sustainability and betterment of the environment in which Alviva operates. The Group’s corporate culture is one of absolute undeniable integrity, transparency, competency, high performance and efficiency in decision-making and fair and equitable treatment of its human and natural capital. From a moral point of view, the directors of the Group are expected to apply sound and reasonable judgement, which can only be achieved through nurturing the social capital element, mutual respect for cultural, social or other differences and to foster transparent and inclusive communication which detracts from subjective viewpoints. [GRI 102-32]

The directors understand that transparency not only relates to a principle of freely, and without prejudice or subjective interests, disclosing information to stakeholders, but also to acknowledge the individual shortcomings which could jeopardise stakeholders.

This report, once again, emphasises the Group’s commitment to integrity and the benefit of the greater good of all the stakeholders.

The Sustainability Report has been prepared in alignment with the six capitals (financial, manufactured, intellectual, human, social and relationship, natural), the Global Reporting Standards 2020 core option [GRI 102-54] [GRI 102-55] [GRI 102-56] and incorporating disclosure on the United Nations Global Compact’s ten principles and the Sustainable Development Goals, as set out below and indicated throughout this report. [GRI 102-13]

UNITED NATIONS GLOBAL COMPACT’S TEN PRINCIPLES

The UN Global Compact’s ten principles in the areas of human rights, labour, the environment and anti-corruption enjoy universal consensus and are derived from:

� The Universal Declaration of Human Rights;

� The International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work;

� The Rio Declaration on Environment and Development; and

� The United Nations Convention against Corruption.

Human rights

Businesses should:

Principle 1: support and respect the protection of internationally proclaimed human rights; and

Principle 2: make sure that they are not complicit in human rights’ abuses.

Labour

Businesses should ensure:

Principle 3: the upholding of the freedom of association and the effective recognition of the right to collective bargaining;

Principle 4: the elimination of all forms of forced and compulsory labour;

Principle 5: the effective abolition of child labour; and

Principle 6: the elimination of discrimination in respect of employment and occupation.

Environment

Businesses should:

Principle 7: support a precautionary approach to environmental challenges;

Principle 8: undertake initiatives to promote greater environmental responsibility; and

Principle 9: encourage the development and diffusion of environmentally friendly technologies.

Anti-Corruption

Businesses should:

Principle 10: work against corruption in all its forms, including extortion and bribery.

SUSTAINABILITY REPORT

105

Sustainability


SUSTAINABLE DEVELOPMENT GOALSThe SDG outlined below are comprehensive and not all the goals fall within Alviva’s activities or reach.

Sustainability report continued

106

Sustainability


Alviva’s selected 10 SDG applicable to the Group

The Group supports the intent of the United Nations Sustainable Development Goals, with a specific focus on South Africa. Alviva has identified ten SDG where it believes the Group has the most meaningful impact and has indicated its application of these SDGs throughout the Sustainability Report. These ten SDG are outlined below.

Goal 1 – End povertyAccording to the World Bank, 55,5% of the South African population falls below the upper-bound poverty line, with challenges to fulfil their most basic needs related to health, education and access to water and sanitation.

Alviva’s contribution to ending poverty focuses on social investment initiatives that address education and learning opportunities. The Group’s tax contribution assists the government in its developmental plans for the country.

Initiatives related to ending poverty are disclosed in the Sustainability Report, as indicated by the SDG 1 icon.

Goal 3 – Ensure healthy lives and promote well-being for all at all agesEnsuring healthy lives and promoting well-being at all ages are essential to sustainable development. Currently, the world is facing a global health crisis unlike any other. COVID-19 is spreading human suffering, destabilising the economy and upending the lives of people in South Africa and around the globe.

Alviva is committed to provide a healthy and safe work environment for its employees and to support the well-being of both its employees and the communities in which the Group operates, while also remaining cognisant of the impact of the COVID-19 pandemic.

Initiatives related to health and safety and the COVID-19 pandemic, as well as the well-being of the Group’s employees and the communities in which Alviva operates, are disclosed in the Sustainability Report, as indicated by the SDG 3 icon.

Goal 4 – Ensure inclusive and equitable quality education and promote lifelong learning opportunities

Education enables upward socio-economic mobility and is a key to escaping poverty. As the COVID-19 pandemic spread across South Africa, the temporary closure of schools and tertiary education institutions, impacted learning. Training and education in the business sector were also hampered due to the implementation of various lockdown measures.

Alviva offers learning and development programmes to its employees. The Group also funds educational programmes in the communities as well as provides the ICT equipment to facilitate the training.

Training and development initiatives and investments in community education activities are disclosed in the Sustainability Report, as indicated by the SDG 4 icon.

Goal 5 – Achieve gender equality and empower all women and girlsSouth Africa is considered to be one of the most unequal societies in the world and has some of the highest levels of gender-based violence. Employment opportunities for poor women are historically limited, yet there are more female- than male-headed households in the country.

Alviva supports gender equality by promoting diversity and inclusivity in the workplace.

43% of Alviva’s Board members are female. Gender diversity is disclosed in the Sustainability Report, as indicated by the SDG 5 icon.


107

Sustainability


Goal 7 – Ensure access to affordable, reliable, sustainable and modern energy for allSouth Africa’s energy supply capacity has been heavily constrained for some time, leading to loadshedding schedules across the country, affecting both the business and residential sectors.

Climate change continues to exacerbate the frequency and severity of natural disasters. Climate change is affecting every country on every continent. The Carbon Tax Act came into effect in South Africa on 1 June 2019.

Alviva’s Renewable Energy Solutions division has implemented various initiatives to provide alternative energy products and solutions. As Alviva is primarily a holding company with business entities mainly operating in the trading and logistics sectors, and not in the manufacturing sector, its impact on the environment is not significant or material.

Energy-saving initiatives and the Group’s carbon footprint are disclosed in the Sustainability Report, as indicated by the SDG 7 icon.

Goal 8 – Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all

Sustainable economic growth will require societies to create the conditions that allow people to have quality jobs that stimulate the economy while not harming the environment. Job opportunities and decent working conditions are also required for the whole working age population. There needs to be increased access to ICT services, especially in view of the growing digital environment brought about by the COVID-19 pandemic, which led to more distance learning and business working from home, to assist in increasing productivity and reducing unemployment levels.

Alviva offers a safe and healthy work environment and has a culture that promotes diversity, inclusivity and personal growth. The Group remunerates fairly and invests in talent development.

Alviva’s occupational health and safety, training and related initiatives are disclosed in the Sustainability Report, as indicated by the SDG 8 icon.

Goal 9 – Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation

Inclusive and sustainable industrialisation, together with innovation and infrastructure, can unleash dynamic and competitive economic forces that generate employment and income. They play a key role in introducing and promoting new technologies, facilitating international trade and enabling the efficient use of resources. Innovation and technological progress are key to finding lasting solutions to both economic and environmental challenges, such as increased resource and energy efficiency. Information and communication technologies have been on the frontlines of the COVID-19 response. The pandemic has accelerated the digitalisation of many businesses and services, including teleworking and video conferencing systems in and out of the workplace, as well as access to healthcare, education and essential goods and services.

Alviva continuously focuses on innovation and improvement in supply-chain management, services and solutions. The product and services offerings are expanded on an ongoing basis to promote growth, penetrate new sectors and contribute to the development of infrastructure.

The Group’s initiatives relating to infrastructure, inclusive and sustainable industrialisation and the fostering of innovation have been disclosed throughout the Integrated Annual report, as indicated by the SDG 9 icon.


108

Sustainability



Goal 10 – Reduce inequality within and among countriesIn South Africa, the challenges of poverty, inequality and unemployment have remained the overriding concern of South Africa’s development policies and programmes.

Alviva contributes to social and economic empowerment through its commitment to B-BBEE as a corporate responsibility and a uniquely South African challenge.

Alviva’s B-BBEE scorecard is shown in the Social and Ethics Committee Report and its implementation initiatives are disclosed in the Sustainability Report, as indicated by the SDG 10 icon.

Goal 12 – Ensure sustainable consumption and production patternsSustainable consumption and production are about doing more and better with less. It is also about decoupling economic growth from environmental degradation, increasing resource efficiency and promoting sustainable lifestyles. Sustainable consumption and production can also contribute substantially to poverty alleviation and the transition towards low-carbon and green economies.

Alviva is committed to providing profitable, impactful and sustainable products and services through innovative sustainability-linked offerings.

Sustainability-linked offerings, the Group’s environmental impact and responsible waste disposal initiatives are disclosed in the Sustainability Report, as indicated by the SDG 12 icon.

Goal 17 – Partnerships for the goalsThis goal aims to strengthen the means of implementation and revitalise the global partnership for sustainable development. The world is more interconnected than ever. Improving access to technology and knowledge is an important way to share ideas and foster innovation.

Alviva believes in partnering and working collaboratively towards achievement of the SDG goals at the local, national and global levels and with all its stakeholders.

The Group’s stakeholder engagement is disclosed in the Integrated Annual Report and in the Sustainability Report, as indicated by the SDG 17 icon.

109

Sustainability



MATERIALITY [GRI 103-1] [GRI 102-29] [GRI 102-47] [GRI 102-49]

An evaluation of the Global Reporting Standards 2020 was performed to establish the material topics on which Alviva should report in the sustainability section of its 2021 Integrated Annual Report.

STEP 1: IDENTIFICATION

The process began with the identification of the relevant topics and their boundaries to be reported on.

STEP 2: PRIORITISATION

The next step in defining report content was the prioritisation of the relevant topics from Step 1, to identify those that are material and therefore to be reported on.

STEP 3: VALIDATION

Validation was where the principles of completeness and stakeholder inclusiveness were applied to finalise the identification of the report content.

The outcome of steps 1 to 3 was a list of material topics and their boundaries, which should be disclosed in the sustainability section.

STEP 4: REVIEW

After the publication of the 2021 Sustainability Report, Alviva will undertake a review of the report, in preparation for the next reporting cycle. The findings will inform and contribute to the identification step for the next reporting period.

Topics Disclosures on management approach and indicators

Sustainability context Materiality Completeness

Stakeholder inclusiveness

Sustainability context Stakeholder inclusiveness

REPORTSTEP 1Identification

STEP 2Prioritisation

STEP 4Review

STEP 3Validation

110

Sustainability


Step 1: Identification [GRI 103-1]

Determine boundary

The Alviva group of companies is based primarily in South Africa, with trading entities or branches in Angola, Botswana, Ethiopia, Ghana, Kenya, Mauritius, Mozambique, Namibia, Nigeria, Qatar, Tanzania, United Arab Emirates and Zambia. The economic, environmental and social context in South Africa has, therefore, been taken into account in determining the material topics in respect of economic, environmental and social indicators. The focus has primarily been on the topic’s impact within the Alviva Group and not outside the organisation, for example, suppliers located in different geographic areas.

Scope

The scope refers to the range of sustainability topics covered in the report with the sum of the topic and disclosures reported being sufficient to reflect significant economic, environmental and social impacts. It should also enable stakeholders to assess Alviva’s performance.

Taking cognisance of Alviva’s stakeholders and the environment in which it operates, the indicators have overall been prioritised as follows:

Economic

Alviva’s disclosure in respect of the topics pertaining to the economic indicator is material and, in certain instances, legislated.

Shareholders are material stakeholders and the Board is accountable to them to provide transparent, ethical and meaningful disclosure on both financial and non-financial matters that may impact on the well-being and profitability of the Alviva Group.

Social

One of Alviva’s primary stakeholder groups is its employees and, consequently, the communities in which its operations are based and where its employees reside. The Companies Act also regulates the impacts on society under the Regulations for Social and Ethics Committees. Legislation in terms of labour, employment equity and B-BBEE furthermore regulates activities that fall within the scope of this indicator. Disclosure in respect of topics under this indicator is, therefore, material.

Environment

As Alviva is primarily a holding company with business entities mainly operating in the trading and logistics sectors, and not in the manufacturing sector, its impact on the environment is not significant or material and the topics to be reported on have been selected accordingly.

Step 2: PrioritisationThe level of coverage of a particular topic, according to relative reporting priority, takes into account:

� topics that may be reported on to fulfil a regulatory or other reporting requirement, and not because they are material;

� topics with medium reporting priority, even if not material, to prepare for future disclosure requirements or focus areas; and

� topics with high reporting priority, identified as material, to be reported on in detail due to its impact (both from a positive and negative perspective) on the economy, environment and society.

Step 3: ValidationValidation was undertaken with the aim of ensuring the report provides a reasonable and balanced representation of Alviva’s sustainability performance, including both its positive and negative impacts. If a topic has been identified as material and the organisation lacks sufficient information to report on it, the report will in the future state what action will be taken to resolve the gap, and the timeframe for doing so.

Internal Audit independently reviewed the disclosure of material sustainability issues in the Sustainability Report to ensure that it is reliable and does not conflict with the financial information. [GRI 102-56]


111

Sustainability



The following topics have been identified as topics to be reported on in the 2021 sustainability section of the Integrated Annual Report: [GRI 102-47]

Topics that are reported on to fulfil a regulatory or other reporting requirement, and not because they are material:

Topics with medium reporting priority, even if not material, to prepare for future disclosure requirements or focus areas:

Topics with high reporting priority, identified as material, to be reported on in detail due to its impact (both from a positive and negative perspective) on the economy, environment and society:

Economic

GRI 204: Procurement practices

GRI 206: Anti-competitive behaviour

Environment

GRI 307: Environmental compliance

Social

GRI 103-2: Labour practices grievance mechanisms (management approach)

GRI 402: Labour/management relations

GRI 407: Freedom of association and collective bargaining

GRI 417: Marketing and labelling

GRI 418: Customer privacy

GRI 419: Socio-economic compliance

Environment

GRI 302: Energy

GRI 303: Water and effluents

Social

GRI 103-2: Grievance mechanisms for impacts on society (management approach)

GRI 412: Human rights assessment

GRI 414: Supplier social assessment

Economic

GRI 201: Economic performance

GRI 205: Anti-corruption

GRI 207: Tax

Environment

GRI 306: Waste

Social

GRI 401: Employment

GRI 403: Occupational health and safety

GRI 404: Training and education

GRI 405: Diversity and equal opportunity

GRI 406: Non-discrimination

GRI 410: Security practices

GRI 413: Local communities

GRI 415: Public policy

ConclusionThroughout the exercise of determining materiality, the significance of stakeholder engagement and a stakeholder-inclusive approach to factors that may determine the materiality of a topic became clearer. Alviva will commence the drafting of a framework to assist management in identifying a process for taking such views into account in determining materiality.

DATA COLLATIONSustainability performance information was gathered and data collated for publication in the Integrated Annual Report and on Alviva’s website. Every effort has been made to ensure data accuracy and completeness. There is, however, the possibility of small inconsistencies due to human error in recording and collating, and differences in interpretation of definitions.

Data has mainly been collated for Alviva’s major subsidiary companies, unless specifically indicated otherwise, for the economic, environmental and social indicators for the period 1 July 2020 to 30 June 2021, and sustainability data collation coincides with Alviva’s financial reporting cycle.

Financial data has been extracted from the consolidated annual financial statements. Intergroup transactions have been eliminated.

The basis for reporting on the financial elements is in accordance with the Group’s accounting policies, which are disclosed in the financial statements.

Data is only reported where considered to be of sufficient accuracy and is reported according to the Global Reporting Standards 2020 guidelines.

Ongoing efforts are being made to improve the data quality and to broaden the content in the range of material topics.

112

Sustainability


ECONOMIC

During the reporting period, Alviva generated revenue of R14,9 billion (2020: R14,8 billion) of which R13,3 billion (2020: R13,0 billion) was generated in South Africa and R1,6 billion (2020: R1,8 billion) was generated outside South Africa.

Revenue generated by the Group

2021R’million

2020R’million

Operating profit before interest 569 389

Operating margin (%) 3,8 2,6

Profit before tax 436 212

Tax 135 75

– South African tax 130 73

– Tax outside South Africa 5 2

Attributable profit 326 149

Operating profit before interest amounted to R569 million (2020: R389 million) with an operating margin of 3,8% (2020: 2,6%). Profit before tax was R436 million (2020: R212 million) with total tax of R135 million (2020: R75 million) of which R130 million (2020: R73 million) was in South Africa and R5 million (2020: R2 million) was outside South Africa. An attributable profit of R326 million (2020: R149 million) was generated for the reporting period.

2021R’million

2020R’million

Total fees to auditors 5 4

Total fees to auditors of R5 million (2020: R4 million) did not include any non-audit fees as non-audit services were either insignificant or nil in the current and prior reporting periods.

12%

88%

11%

89%

In South Africa

Outside South Africa

2021 2020


113

Sustainability


2021R’million

2020R’million

Finance lease commitments on properties 305 296

During 2021, finance lease commitments on properties amounted to R305 million (2020: R296 million).

DIRECT ECONOMIC VALUE GENERATED AND DISTRIBUTED

Value added statement [GRI 201-1]

Value-added is the measure of wealth created by the Group in its operations by ‘adding value’ to the cost of raw materials, products and services purchased. The statement below summarises the total wealth created and shows how it was shared by employees and other stakeholders that contributed to its creation.

Also set out below is the amount retained and reinvested in the Group for the replacement of assets and the further development of operations.

2021R’000

2021%

2020R’000

2020%

Revenue 14 893 135 14 804 155

Cost of materials and services (12 674 385) (12 772 754)

Value added by operations 2 218 750 99 2 031 401 98

Finance income 23 904 1 50 666 2

2 242 654 100 2 082 067 100

Applied as follows:

Employees’ salaries, wages and benefits 1 329 843 59 1 323 782 63

Government tax 135 095 6 74 688 4

Providers of capital and interest 159 717 7 227 640 11

Retained in the Group 617 999 28 455 957 22

– Retained earnings 325 846 15 148 724 7

– Non-controlling shareholders (25 349) (1) (11 849) (1)

– Depreciation and amortisation 317 502 14 319 082 16

2 242 654 100 2 082 067 100

Employees’ salaries, wages and benefits Government tax Providers of capital and interest Retained in the Group

63%

4%

2021 202011%

22%

59%

6%

7%

28%


114

Sustainability


PROCUREMENT PRACTICES [GRI 204-1]

Alviva’s strategy is based on the supply of world-class local and international information and technology products and services. Where applicable, these products and services are sourced through local suppliers, wherever possible. Alviva recognises that the procurement of local products and services creates job opportunities in local communities. Such job opportunities should then lead to further growth and development, rendering opportunities for those previously unemployed to become employed and eventually progress through the ranks.

2021R’million

2020R’million

Procurement in South Africa 5 350 5 611

Imports 8 000 7 160

Imports (%) 60 56

During the reporting period, products and services procured locally in South Africa amounted to R5 350 million (2020: R5 611 million), whereas due to the nature of the products distributed by the Group, imports amounted to R8 000 million (2020: R7 160 million), with imports constituting 60% (2020: 56%) of the Group’s procurement spend.

ANTI-CORRUPTION [GRI 205]

UNGC – Principle 10: Work against corruption in all its forms, including extortion and bribery.

Experience and integrity guide the Board to confidently acknowledge that, despite lucrative and/or tangible benefits, there is never a requirement or justification to accept a dealing or transaction where bribery or corruption is evident. Successful business is not only derived from the successful outcome of large decisions, but also from the ongoing successful small decisions which are made. The small decisions result in a snowball effect, the one good decision impacting positively on the next. Similarly, the inverse is true. An ongoing succession of poor decisions made, will conclude in ongoing, often untruthful, results which snowball into and impact worse on successive decisions. This principle carries forward into each aspect of the business and is particularly pertinent to decisions surrounding corrupt dealings.

The Board asserts, once again, their stance against partaking in any dealings of a corrupt nature or where undue payments are implied or required and further emphasises their commitment to absolute transparency.

Alviva is implacably opposed to bribery and corruption and has implemented anti-corruption policies.

Employees are discouraged from accepting any gifts or favours from suppliers that obligate them in any way to reciprocate. Alviva has implemented a system to encourage employees to report all incidences or suspicion of fraud, theft, corruption and similar unethical behaviour through a confidential and secure whistle-blowing line. The Group complies with all the requirements of the Anti-Fraud and Corruption Act and the Protected Disclosures Act.

The objectives of the policies are to ensure that fraud is addressed both pro-actively and reactively in a structured manner and the policy is founded on the following fundamental fraud prevention principles:

� the promotion of a set of values, complemented by sound ethical behaviour and a supporting code of ethics;

� the identification of fraud risks through structured fraud risk assessment;

� prevention strategies to limit the risk of fraud;

� strategies for early detection of fraud;

� investigation approaches when incidents of fraud do occur;

� comprehensive resolution and remediation after investigations; and

� programmes to create awareness of the policy.


115

Sustainability


A whistle-blowing mechanism is in place for the reporting of suspected irregularities and unethical behaviour. There is a strong focus on staff awareness of this facility through regular interventions. A copy of the Code of Conduct is available on the Company’s website.

All reports related to Alviva’s anonymous, toll-free hotline are submitted to the CAE who ensures that all incidents are logged, investigated, actioned (if necessary), reported to the Social and Ethics Committee and resolved. The cycle time for answering callers’ questions or closing an investigation on a case is recorded and feedback is provided continuously and within a short timeframe. No material cases were reported during the reporting period.

Communication on anti-corruption policies and procedures is incorporated in the policy pack, which is available at all Group businesses. Training in respect of these matters are included in the Alviva induction programme. No material incidents of corruption occurred during the reporting period. [GRI 205-3]

ANTI-COMPETITIVE BEHAVIOUR [GRI 206]

The Group supports and encourages free external and internal competition in all businesses.

No legal action was brought against Alviva or any of its subsidiary companies for anti-competitive behaviour, anti-trust and monopoly practices.

TAX [GRI 207]

Approach to tax [GRI 207-1]

In accordance with its overarching Group Code of Conduct, Alviva is committed to complying with all applicable tax laws in the Republic of South Africa and all countries in which it operates. It is recognised that tax matters are often significant in corporate transactions, and therefore a key objective of Alviva’s strategy is to ensure that the tax affairs of the Group are in good order and uncertainties are minimised.

Alviva does not enter artificial arrangements in order to avoid tax or to defeat the stated purpose of the tax legislation, nor will it undertake aggressive tax planning. When deemed necessary, external advice will be sought in relation to areas of complexity or uncertainty to support Alviva in understanding the tax consequences of its commercial and economic activities and complying with those effects.

The Group CFO has overall responsibility for tax matters and is specifically responsible for presenting the Group Tax Policy and informing the Audit and Risk Committee of material tax planning developments and substantial tax risks.

The Group Finance Function is responsible for day-to-day tax work and development and implementation of the Group Tax Policy as well as tax risk management.

Transactions between Alviva Group companies comply with the arm’s length principle as defined in the OECD Transfer Pricing Guidelines, which provide that associated enterprises transact with each other in accordance with the arm’s length principle and prepare documentation to support the application thereof. Alviva has adopted a Transfer Pricing Policy which is applicable to Group subsidiaries.

Where Alviva has subsidiaries in tax havens, the reason for their existence in these jurisdictions would always be based on sound business principles and not merely to obtain a tax benefit.

Alviva is committed to being characterised as a “good corporate fiscal citizen” aiming for sustainability in relation to tax.


116

Sustainability


Tax governance and control framework [GRI 207-2]

The Board is responsible for sponsoring and overseeing the overall Group Tax Strategy. Appropriate accounting and financial oversight are exercised through the Audit and Risk Committee with the Group CFO having overall oversight responsibility.

Alviva aims to minimise the administrative burden involved in tax compliance while fully and efficiently complying with the various tax laws, rules and regulations in the jurisdictions in which Alviva operates. Tax returns, claims, elections and payments should be made accurately and on time, while interest charges and penalties suffered should be avoided or minimised.

Alviva’s established ethical framework is such that deliberately failing to comply with tax law is unacceptable and Alviva, therefore, has a low tolerance to tax risk.

As tax legislation is often complex and its application may be unclear, it is impossible to ensure that Alviva’s interpretation of its obligations will always be accepted by tax authorities. Therefore, Alviva aims to ensure it is aware of all relevant tax risks, including in relation to compliance matters, financial reporting, tax planning, tax audits and legislative developments.

Alviva has established policies which govern its approach in order to identify, manage and mitigate tax risks. Identified tax risks are actively managed within an appropriate tax risk framework and with appropriate control procedures.

Significant risks are routinely reported to the Board and Audit and Risk Committee. Potential material risks are assessed for the likelihood of occurrence and any possible negative financial or reputational impact on Alviva and its objectives.

Any tax-related work is prepared by financial personnel with an adequate technical understanding of local tax legislation and then reviewed by an experienced tax specialist, where appropriate.

Where required, external tax advisors may be mandated on the condition that they understand and comply with all aspects of Alviva’s Tax Policy.

External Audit reviews the annual tax computations and notifies management of any contentious matters.

Context

• Effective transparency – easy to find and well communicated

• Value reporting

Tax strategy and risk management

• Tax strategy

• Tax as a business risk

• Tax risk management, tax governance, tax reporting and oversight

• Relationship with tax authorities

• Tax controversy

• Stakeholder engagement

Tax numbers and performance

• Key financial indicators

• Effective tax rate versus cash tax rate

• Tax incentives

• Clear and understandable tax rate reconciliation

Total tax contribution and

wider impact

• Jurisdictions, entities and primary activities

• Total economic contributions per tax type, jurisdiction, year

• Other economic contributions to government

• Tax and wider value creations

• Tax and SDGs/corporate citizenship


117

Sustainability


Stakeholder engagement [GRI 207-3]

Alviva recognises the important role of tax authorities in the various jurisdictions in which Alviva operates, confirming them as stakeholders in its business. It is Alviva’s policy to be transparent and proactive in all interactions with tax authorities. Therefore, all Alviva Group companies seek to maintain constructive, collaborative and professional relationships with local tax authorities based on transparency and trust.

The Group recognises that on occasion there will be areas in which its legal interpretation may differ from that of the tax authorities and where the tax treatment of activities and transactions is uncertain. In such cases, Alviva engages in proactive discussions with the relevant tax authority with a view to bringing matters to a reasonable conclusion as rapidly and equitably as possible.

Disclosure [GRI 207-4]

Noted below are the tax amounts contributed during the reporting period. As the tax contributions in other jurisdictions are not material, the below amounts are for South Africa only.

2021R’million

Company tax 182

Employees’ tax 316

Net Value-Added Tax 181


118

Sustainability


ENVIRONMENT

The Board assigned the responsibility for governance of environmental management and monitoring to the Social and Ethics Committee. An Environmental Policy is in force, which is reviewed and updated on a regular basis, to ensure ongoing relevance. In addition, standard operating procedures guide the Group’s adherence to the Environmental Policy.

Alviva’s commitment to sustainable development is contained in the Alviva Code of Conduct, with one of the Code’s pillars being “Protect the Environment”. Continuous and more effective methodologies are being implemented to lower the financial impact of liability and satisfy the duty of care responsibilities.

Accordingly, it is Alviva’s policy to:

� do all that is reasonably practicable to minimise the environmental impact of its operations using standards which are scientifically sustainable and commonly acceptable;

� review and continuously improve the performance of its products, services and operations, as measured by its environmental impact;

� work in co-operation with members of industry, government bodies, suppliers and customers to promote the achievement of high standards of environmental care;

� promote responsibly the real advantages it has achieved, whilst avoiding making false or misleading claims of environmental benefit;

� take an active part in protecting the environment by continuous improvement in the environmental impact of its operations;

� meet or exceed the requirements of legislation and responsible customer opinion;

� heighten employees’ environmental awareness through suitable training;

� encourage its suppliers to develop environmentally superior processes and ingredients and co-operate with other members of the chain to improve overall environmental performance; and

� set annual improvement objectives aimed at improving the overall environmental performance of the business.

Alviva is mainly a distributor of finished goods and services with finished and semi-finished goods being procured from a variety of vendors, both locally and internationally. No materials used in operations have a significant impact on the environment. As such, Alviva has been classified as having an overall low environmental impact and the only environmental topics considered to have a level of materiality, and which are being reported on in this Sustainability Report, are energy, water and effluents, waste and compliance.

ENERGY [GRI 302-1]

Carbon footprintUNGC – Principle 8: Undertake initiatives to promote greater environmental responsibility.

Being in the main a distribution and services company, Alviva acknowledges the environmental impacts of carbon emissions relating to the transportation and delivery of products. The delivery of product relies on internal as well as external transport providers, which have their own initiatives to limit impacts on the environment. Alviva does not currently measure specific criteria against performance targets, including impacts on climate change.

Alviva applies energy and resource-saving production processes and technology, which reduce negative impacts on the environment, as far as economically possible. The Board is committed to consistently improve production and business processes in order to reduce costs but also, more importantly, to reduce its carbon footprint. The table below portrays consumption by primary energy source year-on-year.


119

Sustainability


Consumption Gigajoules Consumption Gigajoules

1 July 2020 to 30 June 2021 1 July 2019 to 30 June 2020

CARBON FOOTPRINT

Total energy consumption by primary energy

– Electricity (MWh) 6 110 21 996 7 907 28 465

– Fuel consumption (litres) 141 271 5 470 139 898 5 400

Core energy consumption (gigajoules) 27 466 33 865

Total carbon emissions (CO₂e tonnes) 6 854 n/a 8 754 n/a

– Electricity 6 476 n/a 8 381 n/a

– Fuel 378 n/a 373 n/a

Total number of employees 3 120 3 257

Total carbon emissions per employee (CO₂e tonnes)

2,19 2,69

Total carbon emissions for the reporting period were 6 854 CO₂e tonnes (2020: 8 754 CO₂e tonnes), a reduction of 22% (2020: reduced by 16%).

The 23% (2020: 17%) reduction in electricity consumption is attributable to the effect of the national COVID-19 lockdowns which resulted in employees working remotely.

The 1% increase (2020: 9% decrease) in fuel consumption was as a result of increased business activity during the reporting period.

WATER AND EFFLUENTS

EffluentsIn order to minimise water pollution associated with storm water run-off, and in line with ISO standards, all electricity generators at the various locations are fitted with the required protection mechanisms to prevent oil and diesel from entering the storm-water drainage systems. [GRI 303-2]

WASTE [GRI 306]

Alviva’s main environmental impact relates to waste packaging materials, emanating from finished goods as well as semi-finished components, which are used during the assembly of its in-house computer brand, Proline. [GRI 306-1]

A detailed analysis of waste appears below.


[GRI 302-1]

120

Sustainability


2021kg

2020kg

Variancekg

Waste to landfill

General waste – commercial 145 924 183 660 (37 736)

Total waste to landfill [GRI 306-5] 145 924 183 660 (37 736)

Waste to recycling *

Cardboard K4 57 067 75 318 (18 252)

E-Waste 3 186 4 082 (896)

Glass 1 008 4 111 (3 103)

Metal/Cans 1 407 2 077 (670)

Paper – common mix 3 292 7 733 (4 441)

Paper – magazines – 1 556 (1 556)

Paper – newspapers 144 631 (487)

Paper – white 5 450 4 801 649

Plastic – PE-HD 820 1 683 (863)

Plastic – PE-LD 11 415 7 187 4 228

Plastic – PET 1 289 1 403 (114)

Coloured LD Plastic 458 457 1

Plastic – PP 68 748 (680)

Plastic – PS 10 47 (37)

Plastic – sticky 105 – 105

Tetrapak 1 122 1 147 (25)

Mixed recycables 977 – 977

Other 17 774 7 058 10 716

Total waste to recycling [GRI 306-4] 105 592 120 040 (14 447)

TOTAL WASTE 251 516 303 700 (52 184)


121

Sustainability


The Group’s objective is to control and manage any undesirable or superfluous by-products, emissions and/or residue caused by any process or activity. Alviva aims to provide adequate means for all waste types to be properly stored, contained and disposed of. It is a further objective to protect employees, visitors, contractors or the public from exposure to any hazardous waste that the Group may or could accumulate or handle. [GRI 306-2]

Non-hazardous waste

The total volume of waste generated and recorded from the Group’s major business sites amounted to 251 516 kg (2020: 303 700 kg), a decrease of 17% on the prior year. [GRI 306-2]

The total volume of waste sent for recycling reduced to 105 592 kg (2020: 120 040 kg). The percentage of waste disposed of that was sent for recycling increased by 1% to 41% (2020: 40%). [GRI 306-4]

During 2019, a major building project at Pinnacle contributed to the generation of additional general waste. Prior years’ reporting included Modrac, a manufacturing concern that was disposed of in 2019. Modrac was responsible for generating waste due to its manufacturing operations.

The total waste that was recorded and managed decreased by 52 184 kg (2020: 159 354 kg), resulting in the volume of recyclable waste generated also reducing.

Three of the main contributors to environmental waste in the Group were paper, cardboard and plastic. Recycling initiatives focused mainly on these three categories of waste and recycling. In addition, e-waste relates to discarded electronic appliances such as mobile phones, computers and televisions. All e-waste is disposed of in a controlled manner by a waste removal company, which disposes of the waste responsibly and with recycling as a key objective.

0

100 000

200 000

300 000

400 000

500 000

600 000TOTAL

RECYCLE

LANDFILL

20212020201920182017

kg

140

405

352

413

190

551

260

479

253

243

209

811

183

660

120

040

492

818

451

030

463

054

303

700

145

924

105

592

251

516

Total waste to landfill

Total waste to recycling

Total waste


122

Sustainability


Hazardous waste

Alviva’s operations in the main do not make use of or conduct activities that would result in the spillage of chemical substances.

The Group, however, acknowledges that chemical substances, whether toxic or non-toxic, do form part of general daily operations.

All such chemicals have been identified and evaluated as to their chemical properties, storage, compatibility, transportation and emergency preparedness.

Amongst various legal compliance appointments made in terms of the OHS Act, Alviva has appointed Hazardous Chemical Co-coordinators and Controllers at all operations. Detailed risk assessments in accordance with SABS0228 and SABS072 as well as ISO and the OHS Act are conducted at Alviva’s manufacturing concerns.

Chemical substances have been classified under the following categories:

� Flammable

� Poisonous

� Non-ionising

� Combustible

� Corrosive

� Toxic

� Biological

PRECAUTIONARY APPROACH [GRI 102-11]

UNGC – Principle 7: Support a precautionary approach to environmental challenges.

As Alviva is mainly a distribution and services organisation, its overall impact on the environment is considered to be largely immaterial. The Board has, however, adopted a precautionary approach to risk management, which facilitates the mitigation of risks in the context of uncertainty. As such, caution is practiced if the outcomes of actions, as they relate to the sustainability of the Group and stakeholders, are uncertain.

ENVIRONMENTAL INITIATIVESUNGC – Principle 9: Encourage the development and diffusion of environmentally friendly technologies.

Pinnacle has a rooftop solar installation to increase energy efficiency, thereby further reducing its impact on the environment and carbon footprint. Wherever possible, branches in the Group are consolidated into combined premises, resulting in both cost and energy savings.

Environmentally friendly technologies [GRI 302-5]

Solareff

Solareff, established in May 2010, has become renowned as one of the leading specialists in solar photovoltaic (PV) and battery energy storage solutions (BESS) in South Africa, for medium- to large-scale rooftop and ground-mounted installations, with the proven ability to deliver optimised PV and energy storage solutions to effectively meet customers’ consumption requirements.


123

Sustainability


“The planet is in a tailspin with global warming; we need to reduce the amount of carbon emissions that we’re putting out there and that’s Solareff’ s biggest drive” Jaco Botha, Solareff CEO.

Through the installation of engineered solar PV and BESS, Solareff is effectively enabling their customers to mitigate the impact of rising electricity costs, while reducing their carbon emissions. During the past year alone, Solareff’s solar PV plants produced enough electricity to power an electric vehicle for 380 million km, saved over 38 500 tonnes of coal (not being burnt) and avoided over 70 500 tonnes of CO₂ emissions being released into the atmosphere, whilst also saving 97 million litres of precious water.

Typically, the implementation of a solar PV solution represents a significant step towards achieving a customer’s sustainability goals. The electricity generated by the solar PV solution is for the customer’s own consumption, resulting in substantial reductions in the overall cost of operations, with a typical payback period of three to six years. The installation of a solar PV solution will produce clean green electricity for at least a 25-year period, providing long-term tangible environmental benefits for sustainable, responsible business. BESS are highly versatile, scalable, expandable and can be successfully coupled with solar PV solutions. Typically, BESS installations are part of a customer’s risk avoidance or cost reduction strategies.

Solareff is currently one of the South African engineering, procurement and construction (EPC) solar providers with the largest installed capacity within the embedded (rooftop) solar PV space through the provision of end-to-end services from engineering, designing, procuring the components, installation, monitoring and after-sales management. Post-installation online monitoring tools are utilised to pro-actively manage the solution, ensuring early fault detection and correction for ongoing optimal power generation.

Through a team of highly qualified engineers and project managers, Solareff has over 100MWp of commissioned and current projects across South Africa and neighbouring countries.

GridCarsGridCars is a South African developer of electric vehicle charging infrastructure, charge-point software management systems and supplier of charge points. In September 2017, Solareff expanded into green mobility through the acquisition of a 75% stake in GridCars, who has since grown from a start-up business to becoming the South African industry leader in electric vehicle (EV) charging.

At the end of 2018 GridCars, in partnership with Jaguar, set out to establish the foundation for the future of electric and plug-in hybrid vehicles in South Africa through the deployment of 82 new public charging stations nationwide. Part of this deployment was the establishment of the GridCars and Jaguar National Powerway, which now consists of 52 charging stations located at various convenient stopovers, including fuel service stations, shopping malls and hotels along the N1 from Cape Town to Polokwane, the N2 from Cape Town to East London, the N3 between Gauteng and Durban and the N4 from Rustenburg to Nelspruit. The establishment of the Powerway has been a game changer for EV drivers, as it makes long-distance travel possible within South Africa.

In addition to the national Powerway (the N1, N2, N3 and N4), public charging stations have been installed in customer parking areas at every Jaguar Land Rover retailer in South Africa. In September 2020, GridCars was appointed as the official Charge Point Operator for BMW Group South Africa. This appointment allows BMW and MINI electric vehicle drivers to benefit from a simplified charging process across the GridCars national charging network and the BMW or MINI-branded public charging stations.

As a leading electric vehicle charging authority, GridCars continues to work with various players in the industry, including OEMs, property managers and traditional fuel companies, in order to effectively grow the national charge-point network. GridCars has also started to expand its services into other African countries.

ENVIRONMENTAL COMPLIANCE [GRI 307-1]

There was no material, monetary or other, penalties brought against Alviva or any of its subsidiaries for non-compliance with environmental laws and regulations during the reporting period.


124

Sustainability


SOCIAL

EMPLOYMENT [GRI 401]

UNGC – Principle 6: The elimination of discrimination in respect of employment and occupation.

Alviva’s employment strategy focuses on employee initiatives, social conditions and sustaining jobs in the supply base as well as occupational health and safety. Alviva’s employees are the foundation of the business that enables the execution of the Group’s business strategy to deliver sustainable profit growth. The Group’s focus is on attracting, engaging and retaining the best talent to deliver on its strategic plan.

Alviva’s employment brand is built on a combination of its culture, its leadership, its products and its reputation.

The employment by nature, segment and region are graphically depicted below:

Employment profile by nature [GRI 102-8]

Fixed term employees comprise 13% (2020: 13%) of the Group’s workforce.

87%

13%

87%

13%

Fixed term

Full time

2021 2020


125

Sustainability


Segment [GRI 102-8]

Employment by segment, at the reporting date, was as follows:

2021 2021%

2020 2020%

ICT Distribution 1 213 39 1 263 39

Services and Solutions 1 804 58 1 901 58

Financial Services 60 2 58 2

Central Group Services 43 1 35 1

Total 3 120 100 3 257 100

ICT Distribution Services and Solutions Financial Services Central Group Services

39%

58%

1%2%

39%

58%

1%2%

2021 2020


126

Sustainability


Region [GRI 102-8]

At the reporting date, 97% (2020: 97%) of employees were employed in South Africa and 3% (2020: 3%) outside South Africa.

2021 2020

SOUTH AFRICAEastern Cape 33 35Free State 26 25

Gauteng 2 256 2 366

KwaZulu-Natal 129 147

Limpopo 4 –

Mpumalanga 14 13

Northern Cape 4 3

North West 1 –

Western Cape 552 574

Total – South Africa 3 019 3 163

REST OF AFRICA

Botswana 5 4

Egypt 7 7

Kenya 8 8

Mozambique 9 10

Namibia 32 35

Zambia 7 5

Other African countries 33 25

Total – Rest of Africa 101 94

TOTAL 3 120 3 257

The number of employees in the Group decreased from 3 257 in 2020 to 3 120 [GRI 102-8] at the reporting date, a decrease of 4%, mainly due to natural attrition. [GRI 401-1]

Historically disadvantaged employees

2021%

2020%

% Historically disadvantaged South Africans 64 64

Historically disadvantaged employees – Management

% Top and senior management 31 31

% Middle management 42 44

% Junior management 69 69

At the reporting date, the percentage of employees who are deemed historically disadvantaged South Africans was 64% (2020: 64%), with the percentage of management (top and senior) who are deemed historically disadvantaged South Africans being 31% (2020: 31%). Historically disadvantaged middle management was 42% (2020: 44%) and historically disadvantaged junior management 69% (2020: 69%).


127

Sustainability


Staff turnover rate [GRI 401-1]

2021%

2020%

Number of resignations 446 541

Number of dismissals 40 44

Total number of person hours worked 5,7 million 5,9 million

Total number of person days lost – absenteeism 9 557 days 11 394 days

% of person days lost – absenteeism 1,1% 1,4%

Person days lost due to industrial action nil nil

The staff turnover rate for the reporting period was 15% (2020: 19%). [GRI 401-1]

Staff turnover was calculated as follows: employees who resign, are retrenched, dismissed, retire, leave due to mutually agreed settlements, as a percentage of the average number employed during the period.

During the reporting period there were 446 (2020: 541) resignations and 40 (2020: 44) dismissals with the total number of person hours worked being 5,7 million (2020: 5,9 million) hours.

The total number of person days lost due to absenteeism was 9 557 days (2020: 11 934 days), equating to a percentage of total person days lost due to absenteeism of 1,1 % (2020: 1,4%). No person days were lost due to industrial action in either the current or the prior reporting period.

Employee benefits and remuneration

Employee benefits and remuneration increased by 0,4% to R1 330 million (2020: R1 324 million). [GRI 201-1]

The increase in employee benefits and remuneration is reflective of the reduced number of employees and increased level of business activity.

LABOUR/MANAGEMENT RELATIONS [GRI 402-1]

NNGC – Principle 3: Uphold the freedom of association and the effective recognition of the right to collective bargaining.

The number of unionised employees, per union, is listed below and constitutes 4% (2020: 5%) [GRI 102-41] of the Group’s workforce.

2021 2020

NUMSA 29 35

CWU 8 12

SACCAWU 12 12

ICTU 69 110

Total number of unionised employees 118 169

Non-unionised number of employees 3 002 3 088

Unionised employees as a percentage of the workforce 4% 5%

Non-unionised employees as a percentage of the workforce 96% 95%

NUMSA – National Union of Metalworkers of South Africa

CWU – Communication Workers Union

SACCAWU – South African Commercial, Catering and Allied Workers Union

ICTU – Information Communication Technology Union


128

Sustainability


In addition to union representation, the Group strives to ensure that the workforce is adequately represented at management level, through workplace forums in place at its major subsidiaries. These forums serve as two-way communication platforms to develop positive relationships between management and employees. The forums’ monthly meetings deal with matters of mutual interest, including operational efficiencies, employment equity, skills development and conditions of employment affecting all employees.

OCCUPATIONAL HEALTH AND SAFETYThe Group assigns high priority to employee health and safety through the application of best practice-based safety, health and the environment (SHE) policies, which continue to be reviewed and updated, where required. Health and safety consultants are appointed, when required, to evaluate and report on areas deemed to be high-risk areas and also to evaluate and report on risk areas not identified which need to be added and prioritised.

Each company in the Group has established a SHE Committee, which reports to the Group SHE Committee. 100% of the workforce is represented in formal joint management-worker SHE Committees.

Monthly inspections are conducted by the trained and appointed health and safety representatives. Contributing reports and surveys are presented to each of the SHE Committees by trained and appointed stacking inspectors, incident investigators, electrical equipment inspectors, hazardous substance controllers and hygiene coordinators. Alviva’s compliance levels to health and safety standards are monitored as a standing agenda item of the Audit and Risk Committee.

Over and above the fact that employees are an important asset in ensuring the sustainability of the Group, Alviva also has a statutory responsibility to ensure that occupational injuries, diseases and environmental incidents are formally recorded. Alviva is also committed to ensuring that investigations or enquiries are conducted, and that immediate action is implemented to prevent future incidents from recurring. The Group complies with the requirements of local, national and international laws, regulations and standards. Thus, various measures and safe work procedures have been implemented in order to measure and utilise incident data and associated trends. This serves as the basis for a pro-active and focused approach to reduce the severity and frequency of safety, health and environmental incidents. Incidents also impact negatively on productivity hours, staff motivation and internal efficiencies.

Occupational Health and Safety Management System [GRI 403-1]

An Occupational Health and Safety Management System, based on both OSHAS 45001 and the OHS Act, has been implemented throughout the Group and complies specifically with the relevant legislation and all the requirements, as listed in the OHS Act.

The Group’s workforce consists of a combination of warehouse and office workers and the Occupational Health and Safety Management System covers and accounts for all employees, activities and workplaces throughout the Group.

Hazard identification, risk assessment and incident investigation [GRI 403-2]

All tasks, operations and processes are identified and assessed through the systematic evaluation of the task, the process, legal responsibilities pertaining to a task or process and the impact of the risk on the organisation. Processes include baseline risk assessments, task-based risk assessments, hazard identification and health risk analysis studies.

Health and safety representative training is provided by reputable training service providers to ensure the competence of individuals performing risk assessments and hazard identification. The process is governed by Standard Operating Procedures, which clearly define the methodology around performing the required assessments.

The results of risk assessments and hazards identification are entered into a Health and Safety Risk Matrix for each site. This matrix is used as a tool for baseline topics in the monthly SHE Committee meetings and are then actioned, as appropriate.

Work-related incidents are investigated through various processes, based on any occurrence that may have an effect on the employee. The processes and injury criteria for defining work-related incidents include first aid administered, disabling injuries, property damage, near misses, section 24 incidents as well as fatal and environmental incidents. Work-related hazards are reported directly to the responsible health and safety representative, who conducts a hazard identification analysis as well as a task-based risk assessment to eliminate or control the hazard and establishes improvements required to implement corrective actions.


129

Sustainability


Occupational health services [GRI 403-3]

Health and safety representatives formally inspect their delegated areas during normal working hours. They note the location of the deviation, their findings and should this deviation pose a threat to the health or safety of employees, the threat is identified and immediately reported to the responsible Health and Safety Manager and appointed 16.2 assignee (a senior staff member in the business entity appointed by the CEO in terms of section 16.2 of the OHS Act).

Worker participation, consultation and communication on occupational health and safety [GRI 403-4]

All employees throughout the Group are represented by the various SHE Committees. The goal of the Committees is to ensure that legal requirements are met and that they are proactive in initiating, developing, promoting, maintaining and reviewing measures to ensure the health and safety of all employees. Committee members are appointed by the 16.2 assignee and collective decisions and approvals are conducted by the appointed Chairperson of the Committee and the 16.2 assignee.

Communication to employees is done via various platforms which include toolbox talks, audio-visual programmes, health and safety notice boards and the participation of employees in the various SHE Committees.

Worker training on occupational health and safety [GRI 403-5]

All newly appointed employees undergo compulsory induction training after commencing employment. In addition, health and safety representative training, basic first aid training, basic fire-fighting training, incident and accident investigation training and driven machinery training are provided to employees.

Health and safety programmes during the reporting period included:

� Safety induction training;

� Standing operating procedures; and

� HIV information and awareness.

Promotion of worker health [GRI 403-6]

HIV/AIDS

The planned annual wellness event in major subsidiaries did not take place, due to the global COVID-19 pandemic and lockdown protocols, therefore, no employees and contractors were tested for HIV/AIDS, during the reporting period. The Group continues to encourage employees to participate, on a voluntary basis, during future annual HIV screening events and at community level.

The Group’s healthcare provider offers a comprehensive HIV and AIDS programme for its members who have been diagnosed with HIV and AIDS. The programme assists employees, who have been diagnosed with HIV and AIDS, by providing the necessary information and care needed to treat them.

The Group also continues to make available to employees contact information at both governmental and non-governmental organisations which have facilities available in local communities, to ensure that affected employees get the required support and care, at an early stage.

Employees’ assistance programmeThe Group has rolled out an employees’ assistance programme for all employees and this programme covers employees and their families for any assistance, which includes, amongst others, financial, emotional and trauma support services, which are available 24/7. Regular information about the benefits of the programme were provided to employees through general staff meetings, posters, email leaflets, face-to-face meeting, telephonic discussions and live chats.


130

Sustainability


Prevention and mitigation of occupational health and safety impacts directly linked by business relationships [GRI 403-7]

The Group does not have significant occupational health and safety impacts linked to its operations, products or services.

Workers covered by an occupational health and safety management system [GRI 403-8]

The Group’s Occupational Health and Safety Management System covers all employees and no employees are excluded from such cover, including workers who are not employees of Alviva but whose work and/or workplace is controlled by the Group.

Work-related injuries [GRI 403-9]

The total number of recordable injuries, including first aid cases, medical treatment cases and lost time injuries was 15 (2020: 29), comprising 6 (2020: 12) first aid cases, 3 (2020: 4) medical treatment cases and 6 (2020: 13) lost time injuries.

Six incidents reported required on-site first aid. Typical injuries sustained reported over the period under review mainly involved slips, cuts, muscle strains and other minor injuries. The low levels of injuries on duty can be ascribed to high levels of health and safety standards and awareness, which are maintained throughout the Group as well as the fact that employees worked from home during lockdown periods due to COVID-19.

The Group is working towards zero incidents through training and awareness programmes, improved housekeeping practices and manager-employee relationships.


Medical treatment cases

First aid cases

Lost time Injuries

41%45%

14%

40%40%

20%

2021 2020

131

Sustainability


The Group recorded an LTIFR of 0,2109 (2020: 0,4377) and a TRIFR of 0,5272 (2020: 0,9763).

LTIFR and the TRIFR are calculated per 200 000 hours worked with the total number of hours worked during the reporting period being 5 690 880 hours (2020: 5 940 768 hours).

Section 37 Contractors Agreements, in terms of the OHS Act, are in place for all workers who are not employees of the Group but whose work and/or workplace is controlled by the organisation.

Work-related ill health [GRI 403-10]

Due to the nature of Alviva’s operations, employees are not exposed to any occupational activities which have a known high incidence or high risk of specific diseases.

COVID-19 pandemicAlviva’s policy is to provide a safe and, as far as is possible, risk-free work environment to all its stakeholders, especially its employees. Therefore, in terms of government and WHO guidance, COVID-19 procedures were formulated in 2020 as contained in the Group COVID-19 OHS Policy and Framework. The Policy includes guidance on workplace controls specific to COVID-19, periodic employee declarations, employee and visitor health screening and processes to follow for employees who have contracted the virus or been in contact with a person that tested positive as well as COVID-19 reporting. In order to oversee and implement the COVID-19 policies and procedures, COVID-19 Compliance Officers have been appointed in the various operating entities.

As various lockdown levels were announced during the second and third waves of the pandemic, the various operating entities were able to adapt their business models, whilst enabling employees to work remotely, when required. Where a physical presence at the offices or warehouses was required, it was done in terms of the required protocols.

Condolences go out to the families of the five employees that sadly passed away as a result of COVID-19. Where applicable, the Company offers affected employees support through counselling. ICAS is also available to all employees in terms of accessing emotional support to assist with the ongoing need for emotional well-being.

0,0

0,5

1,0

1,5

2,0

2,5

3,0

TRIFR

LTIFR

20212020201920182017

0,3707

2,7802

0,1829

1,4327

0,4359

2,2390

0,4377

0,9763

0,2109

0,5272

LTIFR

TRIFR


132

Sustainability


The impact of the coronavirus was as follows (figures exclude Tarsus who joined the Group on 1 July 2021):

31 August2021

30 June2021

30 June2020

Number of employees in the Group 3 098 3 120 3 257

Number of positive tests * 574 382 22

Number of recoveries * 556 268 22

Number of active cases at end of period 13 111 –

Number of employees in quarantine or isolation during the period * 292 265 85

Number of employees in quarantine or isolation at end of period 1 42 45

Number of fatalities * 5 3 –

* Cumulative

TRAINING AND EDUCATIONAlviva continues to focus on learning and development and the effective delivery thereof to its employees. Using a combination of internal and external resources, the Group continues to train its workforce in order to address both current and future skills gaps. Through the application of specific learnership, internship, vendor and other skills programmes employees are assisted to meet personal development and business goals.

Candidates attend vocational-specific formal training courses and receive practical guidance from mentors, who are assigned to impart specific job knowledge and skills in the workplace, across various specialised fields. The skills and qualifications attained enhance the candidates’ work experiences and increase their opportunities for employment within the Group and the broader ICT industry.

The internship or learnership programmes encourage and promote race and gender representation, and, in particular, open up opportunities for women in the traditionally male-dominated ICT industry. Training interventions form part of the Group’s sustainability initiatives and are aligned with those of MICT SETA and MERSETA in that they seek to identify scarce and critical skills and, through their application, address skills shortages and support job creation in South Africa, in line with the demands of the 4th Industrial Revolution. [GRI 404-2]

The Group Skills Development Facilitators, Workplace Forums and Employment Equity Managers of the different subsidiaries continue to be instrumental in the planning, implementation and monitoring of the overall training requirements and effective delivery thereof. [GRI 404-2] The training and development of employees is planned well in advance to ensure effective implementation and to ensure employees are given enough time to absorb and apply knowledge gained in the workplace in the short- and long-term.

Due to the ever-changing and fast pace of the ICT industry, a range of training interventions are required. These include product-specific, technical, administration and management development initiatives based on skills audits that are conducted as part of the annual planning process. Where applicable, training programmes are registered and managed in partnership with the MICT SETA and various approved training providers. Besides the registered training programmes, vendor training on new products, due to changes in technology, make up a large percentage of training reported to the MICT SETA on an annual basis. [GRI 404-2]

A key part of the overall training intervention is the Management Development Programme (MDP), which supports the selected employees’ growth aspirations and overall development of management talent at all organisational levels. As part of the retention strategy, identified individuals are earmarked for further training opportunities to embed the knowledge gained, through mentorship and other specialised interventions. [GRI 404-2] The majority of selected candidates are individuals from historically disadvantaged backgrounds. The MDP enhances the skills of these candidates and establishes the basis for further study and improved qualifications. The MDP seeks to broaden employees’ leadership skills and equip those in supervisory roles to assume future management leadership roles in the Group and the industry at large. [GRI 404-2]


133

Sustainability


Alviva’s training programmes are managed and conducted by selected accredited training providers with industry knowledge and the ability to fast-track the growth and development of learners. Relevant training records and other information are regularly submitted to the MICT SETA, the Department of Labour, the B-BBEE Commission and the Group’s B-BBEE ratings agency. The data is used by management for succession planning and sustainability planning. [GRI 404-2]

Succession planningEmployees are viewed as critical assets and key to meeting Alviva’s business objectives and delivering on its vision and implementing its strategy. Alviva, therefore, views succession planning as an ongoing process that identifies the necessary competencies and then works to assess, develop and retain a talent pool of employees in order to ensure continuity of leadership for all critical positions.

Key employees in the Group are identified in their respective business units as potential successors and focused training programmes and accelerated development initiatives are made available to them. They are then earmarked to take up key positions, when opportunities become available.

Skills development forumsGroup companies have established skills development forums which are combined with employment equity forums and work according to formal constitutions. The constitutions guide the forum members on the policies and procedures of the Group as well as on equity issues and objectives. Fairness regarding training and development is critical as regards the input and functioning of these forums. [GRI 404-1]

Training investment

2021 2020

Total training spend (R’million) 15 17

Number of employees trained 1 992 1 915

Spend per employee (R) 7 734 9 118

Payroll (R’million) 1 330 1 324

Training spend as a % of payroll (%) 2,0 2,0

SDL spend (R’million) 12 13

Total training spend amounted to R15 million (2020: R17 million), with 1 992 (2020: 1 915) [GRI 401-1] employees receiving training during the reporting period. All training and training spend occurred in South Africa and resulted in a training spend of R7 734 (2020: R9 118) per employee trained. [GRI 401-1]

Training spend was 2,0% (2020: 2,0%) of the total payroll of R1 330 million (2020: R1 324 million), with an SDL spend of R12 million (2020: R13 million).

Detailed below is a summary of training undertaken during the reporting period, categorised by employment category, gender and race. [GRI 404-1]


134

Sustainability


Number of employees trained by employment category [GRI 401-1]

Number of employees trained by gender

1%

6%

20%

46%

18%

9%

2%

8%

22%

44%

19%

5%

Top management

Skilled technical and academically qualified workers, junior management, supervisors, foremen and superintendents

Senior management

Professionally qualified and experienced specialists and mid-management

Unskilled and defined decision-making

Semi-skilled and discretionary decision-making

2021 2020

Male

Female

40%

60%

42%

58%

2021 2020


135

Sustainability


Number of employees trained by race

DIVERSITY AND EQUAL OPPORTUNITY [GRI 405-1]

Alviva’s vision of transformation is translated into strategies and specific targets and plans which are monitored and governed by the Board. Transformation plans and targets are reflected in the leadership and other relevant employees’ performance goals.

The Board adopted a policy on diversity on 12 June 2018. The policy addresses gender and race diversity at Board level. Board diversity is disclosed on page 43.

The Group’s employment diversity profile is disclosed below.

Employment equity profile by race [GRI 405-1]

During the reporting period, 64% (2020: 64%) of the staff complement was black (African, Indian and Coloured), excluding foreign nationals. The Group’s aim is to align the race composition of employees to the demographics of the country as well as to achieve its employment equity targets.

Alviva has consulted with the respective skills and employment equity forums in the subsidiary companies on the development of employment equity plans, as required by the Employment Equity Act and Skills Development Act. These plans, aimed at creating diversity in the workplace, are monitored on an ongoing basis.

African

White

Indian

Coloured

Foreign nationals

9%

49%

45%

30%

10%

2%2%

2021 2020

33%

9%

11%

African

White

Indian

Coloured

Foreign nationals

8%

44%

33%

12%

3%

8%

44%

32%

12%

4%

2021 2020


136

Sustainability


Gender diversity [GRI 102-8]

Female employment increased to 37% in 2021 (2020: 36%). [GRI 405-1]

Employment equity profile by race and genderAt the reporting date, black females constituted 27% (2020: 26%) and black males 41% (2020: 41%) of the workforce. [GRI 405-1]

64%

36%

63%

37%

2021 2020

Male

Female

2020

2021

0 100

200

300

400

500

600

700

800

900

1 000

0100

200

300

400

500

600

700

800

900

1 000

MALE FEMALE

African

White

Indian

Coloured

Foreign nationals

582

572

827

777

325

316

756

687

166

156

243

229

92

102

98

103

145

144

23

34

Total male: 1 951 (2020: 2 084) Total female: 1 169 (2020: 1 173)


137

Sustainability


Employment by age group [GRI 401-1] [GRI 405-1]

During the reporting period, the spread of employment by age group showed that 25% (2020: 34%) young employees, under the age of 30, are in a developmental phase, with 62% (2020: 57%) of employees between the ages of 30 and 50 on a career path where succession training and planning occurs, and 13% (2020: 9%) of employees over 50 with the experience and expertise to impart onto the younger generations.

Employment equityAlviva has consulted with the respective skills and employment equity forums in the subsidiary companies on the development of employment equity plans, as required by the Employment Equity Act and Skills Development Act. These plans, aimed at creating diversity in the workplace, are monitored on an ongoing basis.

Group employment equity profile (permanent employees, excluding foreign nationals) [GRI 405-1]

Between 30 and 50

Under 30

Over 50

34%

9%

57%

25%

13%

62%

2021 2020


0

150

300

450

600

750

900

1 050

1 2002021 ACI

2021 WHITE

2020 ACI

2020 WHITE

Unskilled WorkersSemi-SkilledJunior ManagementMiddle ManagementTop and Senior Management

%

162 148

7073

250 271

443

318

1 123

451

65

377

5014

72

339

419

7

91

995

2020 White

2020 ACI

2021 White

2021 ACI

138

Sustainability


Number of employees by occupational levels [GRI 405-1] [GRI 102-8]

The total number of employees in each of the following occupational levels are shown in the table below.

2021 Male Female Foreign nationals

Occupational levels A C I W A C I W Male Female TOTAL

Top management 1 – – 3 1 – – – – – 5

Senior management 6 11 19 99 11 8 13 46 7 2 222


72 43 52 223 47 27 30 116 18 7 635


492 129 74 319 303 74 51 132 27 14 1 615


174 34 8 36 163 31 9 14 12 5 486


30 11 1 3 46 3 – 4 1 2 101

Total permanent 775 228 154 683 571 143 103 312 65 30 3 064

Fixed term employees 2 1 2 4 1 1 – 4 37 4 56

GRAND TOTAL 777 229 156 687 572 144 103 316 102 34 3 120

2020 Male Female Foreign nationals

Occupational levels A C I W A C I W Male Female TOTAL

Top management 1 0 0 3 1 0 0 0 0 0 5

Senior management 11 10 19 110 14 7 10 49 4 1 235


61 47 51 216 44 21 26 102 18 4 590


413 116 73 310 269 73 51 133 16 7 1 461


156 40 10 50 125 36 10 15 7 1 450


33 4 1 8 33 1 0 6 1 1 88

Total permanent 675 217 154 697 486 138 97 305 46 14 2 829

Fixed term employees 152 26 12 59 96 7 1 20 46 9 428

GRAND TOTAL 827 243 166 756 582 145 98 325 92 23 3 257


139

Sustainability


NON-DISCRIMINATION [GRI 406-1]

UNGC – Principle 1: Support and respect the protection of internationally proclaimed human rights.

UNGC – Principle 2: Make sure that they are not complicit in human rights abuses.

Alviva and its Board strive to eliminate any forms of discrimination through leading by example.

Experience and psychology prove that discrimination tends to be driven by one of three elements being hatred, fear derived from the unknown or the threat of being inferior.

The Board supports a multicultural and multiracial work environment which respects people for who they are, where they come from and also the insights that each employee is able to offer to the Group. No opinion or point of departure is discriminated against or dismissed without due consideration being granted. The HR department is under a strict mandate from the Board to actively and diligently search across all levels of employment for suitable candidates as vacancies arise without any preconceived or mandated agendas other than to find the right person for the vacancy, with due regard to the employment equity targets for the Group.

The Alviva Board subscribes to a Human Rights Policy, which was adopted during 2018.

Management is not aware of any material incidents of discrimination reported during the reporting period.

FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING [GRI 407-1]

Employees have the right to belong to collective bargaining associations, which are recognised according to clearly defined criteria, and recognised when they are sufficiently representative or represent the majority of the workforce. Several workplace forums have been established within the Group to enhance communication and develop relationships between both management and labour representatives. Regular consultation and consultation with representatives take place on relevant issues that affect the majority of the workforce. [GRI 102-41]

No operations were identified in which the right to exercise freedom of association and collective bargaining may be a significant risk.

CHILD LABOUR [GRI 408-1]

FORCED OR COMPULSORY LABOUR [GRI 409-1]

UNGC – Principle 4: The elimination of all forms of forced and compulsory labour.

UNGC – Principle 5: The effective abolition of child labour

Alviva does not condone or tolerate any underaged or compulsory labour practices within the Group. The Board will summarily reject and refuse further business endeavours with any supplier or business partner if it were to be discovered that such labour practices are in place within their respective businesses.

The Group strictly supports labour practices which are aligned with all relevant legislation and best practices including the Labour Relations Act, the Employment Equity Act, the Skills Development Act and the Basic Conditions of Employment Act.


140

Sustainability


SECURITY PRACTICES [GRI 410-1]

Monthly security risk assessments are conducted on all security practices within the Group in order to ensure that employees, customers and service providers are able to conduct operations in an environment that is safe and without risk. All permanent security personnel as well as third-party security personnel undergo strict induction training where security policies and procedures, as well as occupational health and safety policies, are presented and explained in detail. Training is conducted in conjunction with the Group’s HR department where the aspects of Alviva’s human rights policies are explained.

Third-party security service providers are specifically trained on the requirements of the various posts which he or she will manage. Section 37 of the OHS Act is applicable to the third-party service provider management.

HUMAN RIGHTS ASSESSMENT [GRI 412-1] [GRI 414-2]

Alviva respects human rights and is committed to fair labour practices as enshrined in the Constitution of the Republic of South Africa, the Labour Relations Act of 1995 and the Employment Equity Act of 1998, as amended. All suppliers and contractors doing business with Alviva are expected to comply with guidelines of the International Labour Organisation and local legislations.

No operations have been subject to human rights reviews or impact assessments.

LOCAL COMMUNITIES [GRI 413-1]

Alviva sees its employees as key stakeholders and strives to create a safe, humane, ethical work environment. As employees are recruited from the local communities where Alviva’s operations are based, this approach extends to the communities in which the Group operates. The Group’s environmental and social responsibility principles guide its daily decision-making and govern how it enters, operates in and exits from a community.

With the dearth of skills in South Africa, Alviva’s initiatives focus on skills development with a view to enabling individuals to enter the workplace, particularly in the industry in which the Group operates. Data has not been compiled on the percentage of operations with implemented local community engagement, impact assessments and development programmes and may be addressed in the future.

None of the operations in the Alviva Group have a significant potential or actual negative impact on local communities.

Corporate social initiatives and investments [GRI 203-1]

Corporate social initiatives and investments are central to realising meaningful transformation in South Africa. Alviva’s strategy aligns its social investment programme with its core business objectives and imperatives. Alviva seeks to create partnerships with beneficiaries, government and non-governmental organisations to bring about long-term sustainable development.

Alviva views socio-economic development as an integral part of its commitment to sustainable development and a foundation for branding and enhancing the Company’s reputation as a responsible corporate citizen and valued partner amongst communities in which it operates.

In the selection of projects, the Company’s key focus area continues to be the investment in education in South Africa. The impact of this strategy is far-reaching, touching both individual beneficiaries and the larger community in which it functions.


141

Sustainability


During the reporting period, Alviva’s contribution to investments and services that benefit local communities included the following:

Athlone High School

ICT Equipment was provided to Athlone High School. Athlone High School is a public, co-educational high school based in Silvertown, Athlone, Cape Town in the Western Cape Province of South Africa.

Fundi

Funds were contributed to Fundi, a school based in the township of Meadowlands, Johannesburg, South Africa.

Maharishi Education for Invincibility Trust

IT equipment was contributed to the Maharishi Education for Invincibility Trust (“MEIT”).

MEIT is a non-profit private college and self-development organisation, which provides bursary loans and self-development programmes for bright, deserving youth to further their studies and assists them to find employment opportunities when they graduate. MEIT is based in the Gauteng and KwaZulu-Natal Provinces of South Africa.

Pearson Marang Education Trust

Contribution of printers to the Pearson Marang Education Trust. The Trust is focused on best practice as an approach to improving the quality of teaching, learning and school management in South Africa.

The purpose is to contribute to the education community through direct provisioning of professional development and support and bursaries for public benefit in partnership with the Department of Basic Education.

Protec

Contribution of ICT equipment to the Programme for Technological Careers (“Protec”). The contribution was applied to assist with the promotion of ICT in teaching and learning. Protec is a leading South African non-profit organisation, operating nationally in the field of STEM (Science, Technology, Engineering and Mathematics) education since 1982.

Sarel Cilliers Combined School

Contribution of ICT equipment to Sarel Cilliers Combined School. Sarel Cilliers is a no-fee school based in the Fezile Dabi District, Koppies, in the Free State Province of South Africa.

Silverglen Primary School

Contribution of ICT equipment to Silverglen Primary School. The equipment was used in after-school programmes and to assist with projects and research. Silverglen Primary School is based in Chatsworth in the KwaZulu-Natal Province of South Africa.

TEARS Foundation

Contribution of ICT equipment to TEARS. Founded in 2012, TEARS is a registered NPO and PBO that uses technology innovatively in the scourge against domestic violence, sexual assault and child abuse.

TEARS is responsible for the sourcing and collating of a database comprised of a fully comprehensive network of services: medical, medico-legal, legal and psychological. The database is currently available throughout South Africa, for the assistance and support of survivors of rape and sexual abuse.

The Father’s Heart Community Development

ICT equipment was contributed to Father’s Heart. The equipment was used in after-school programmes and to assist with projects and research. The Father’s Heart Community Development, based in the Western Cape Province of South Africa, is an orphan and vulnerable childcare organisation, started in 2019 to assist destitute orphans and vulnerable children. There are more than 5,2 million orphans and vulnerable children living inside the borders of South Africa today.


142

Sustainability


Tshimologong Precinct

Ongoing contributions as regards software professional services, installation and maintenance of IT infrastructure. . “Tshimologong Precinct”, from the seTswana word for “new beginnings”, Witwatersrand University, through its Johannesburg Centre for Software Engineering, has been driving an initiative to promote the creation of successful ICT start-ups. The “Digital Technology Innovation Zone” is established in a row of five buildings in Juta Street, Braamfontein, Johannesburg, South Africa, close to the university’s main campus. The Zone provides an exciting environment that attracts students and a broad spectrum of other residents of Johannesburg with an interest in digital technology innovation and entrepreneurship.

SUPPLIER SOCIAL ASSESSMENT [GRI 414-1] [GRI 414-2]

The Group has not conducted supplier assessments for impact on society and, therefore, the percentage of existing and/or new suppliers that were screened for impacts on society and potential significant negative impacts on society in the supply-chain are not available. In the future, Alviva may consider implementing a formal supplier assessment process to be in a position to effectively report on suppliers and contractors that have undergone screening on social assessments and actions taken.

PUBLIC POLICY [GRI 415-1]

During the reporting period, the Group did not participate in public policy development and lobbying. The Group does not contribute to any political parties and no such contributions were made in the reporting period.

MARKETING AND LABELLING [GRI 417-1]

The Consumer Protection Act promotes a fair, accessible and sustainable marketplace for consumer products and services. The Act entrenches national norms and standards on consumer protection and provides for improved standards of consumer information. The Act prohibits certain unfair marketing and business practices and promotes responsible consumer behaviour.

Warranty policies are in place for Alviva’s branded products, which are owned by the Company, and assurance is gained from external suppliers where products are purchased in, where any returns revert back to the external supplier. The terms of trading and the trading agreements are reviewed and aligned with the requirements of the Act. As far as imported products are concerned, the Group ensures that controls around quality exist at the source.

The businesses in the Group provide labelling and product information in compliance with local regulations.

Appropriate measures are introduced to ensure that the information or labelling is adequate from a marketing, safety or regulatory perspective.

CUSTOMER PRIVACY [GRI 418-1]

There were no substantiated complaints regarding breaches of customer privacy during the reporting period.

The POPIA Policy, applicable to all Group subsidiaries, was adopted by the Board on 12 June 2018.

SOCIO-ECONOMIC COMPLIANCE [GRI 419-1]

There were no significant fines or non-monetary sanction for non-compliance with laws and regulations brought against Alviva or any of its subsidiaries during the reporting period, including significant fines relating to non-compliance matters concerning the provision and use of products and services provided by the Group.


143

Sustainability


MANAGEMENT APPROACH: GRIEVANCES [GRI 103-2]

The Group’s subsidiaries have formal grievance mechanisms, consisting of procedures, roles and rules for receiving complaints and providing remedies. Newly acquired subsidiaries are in the process of adopting the Group’s policies.

Management is not aware of any grievances concerning the Group’s labour practices or any negative impacts on human rights and society that have been filed through formal grievance mechanisms.

BROAD-BASED BLACK ECONOMIC EMPOWERMENT (B-BBEE)

SCORECARDIn September 2021, Alviva was recognised as a Level 1 (2020: Level 1) contributor in accordance with the B-BBEE amended ICT Codes, gazetted on 7 November 2016, following an independent verification by EmpowerLogic Proprietary Limited. The Group scored 122,2 points (2020: 120,05 points) with a procurement recognition level of 135% and classification as an empowering supplier.

OwnershipBlack equity ownership in Alviva accumulated 25,00 (2020: 25,00) points, with exercisable voting rights by black people at 62,49% (2020: 51,00%); black women voting rights of 28,23% (2020: 41,93%); black economic interest of 62,37% (2020: 51,00%); and black women economic interest of 28,17% (2020: 41,93%).

Management controlManagement control comprises Board representation and other executive management as well as employment equity in senior, middle and junior management and people living with disabilities as a percentage of all employees. Alviva prioritises the advancement of historically disadvantaged groups and promotes the achievement of employment equity objectives in its recruitment and employee development policies. The status of employment equity targets is reported to the Department of Labour on an annual basis. Career advancement and skills development programmes are aligned with each business’ employment equity targets.

Alviva achieved a score of 15,16 points (2020: 15,24 points). Black female representation at Board level was maintained at 42,85% (2020: 42,85%).

Black employees in senior, middle and junior management constituted 48,13% (2020: 47,40%) of Alviva’s employee base with black female representation at those management levels constituting 19,34% (2020: 17,80%).

Skills developmentAll companies in the Group have established skills development forums which are combined with the employment equity forums and consultation regarding workplace skills plans and progress reports is channelled through the forums.

The Alviva Group conducts an MDP, and this programme is presented by an accredited training provider.

Several technical skills training initiatives are continuously being conducted within Alviva companies to ensure expertise levels are kept up to date. Individual development plans have also been developed for specific employees or employee groupings to assist and drive personal development as well as to drive the succession planning within the Group.

The Group’s latest skills development plan was submitted to the MICT SETA. Skills development spend amounted to R15 million (2020: R17,0 million), with 88,23% (2020: 86,19%) being in respect of black staff skills development spend. The number of points awarded in respect of skills development on the scorecard was 24,34 points (2020: 23,18 points).


144

Sustainability


Supplier and enterprise developmentDuring the reporting period Alviva’s preferential procurement spend amounted to R5,3 billion (2020: R5,6 billion). [GRI 201-1] [GRI

204-1]

Preferential procurement spend with suppliers classified in terms of their B-BBEE status

Supplier development seeks to promote the development, sustainability and financial and operational independence of EME and QSE beneficiaries. 97% of contributions were made in the form of standard loans and 3% were interest-free with no security requirements.

Enterprise development seeks to promote the development of black-owned EMEs and QSEs through contributions that add to the further development, sustainability and financial and operational independence of these beneficiaries. 91% of contributions were made in the form of standard loans and 9% were interest-free with no security requirements.

Alviva’s B-BBEE scorecard for 2021 reflected 45,7 points (2020: 44,63 points) in respect of enterprise and supplier development.

Socio-economic developmentThe socio-economic development initiatives are managed by each subsidiary business individually, under the umbrella of a Group framework of responsible investment. The Group’s approach to its socio-economic development initiatives has as its main objective the broadening of skills and education in the ICT industry, specifically targeting schools and educational facilities, professional and technical development, and learnerships.

Socio-economic development spend of R6 million (2020: R4 million) as a percentage of net profit after tax was at a verified level of 2% (2020: 3,2%), resulting in 12 points (2020: 12 points) on the scorecard. [GRI 201-1]

Level 1

Level 2

Level 3

Level 4

Level 5

Level 6

Level 7

Level 8

Non-compliant

No status

55%

58%

13%

14%

2%

7%

2%

1%

1%

2%

3%6%

2021 2020

9%

4%

6%

2%

1%

1%

13%


145

Sustainability


AWARDS AND CERTIFICATIONS

The following awards and certifications were received by companies within the Group during the reporting period.

AXIZ

Awards � Channelwise – Distributor of the Year

� Cisco – Small Business Distributor of the Year

� Veeam – Southern African Distributor of the Year

� McAfee – Southern African Distributor of the Year

� Lenovo – Consumer Distributor of the Year

Certifications � ISO 9001:2015 Quality Management System Certification

At Axiz, the technical division has been ISO 9001:2015 (Quality Management) certified.

DATACENTRIX

Awards � Lenovo Infrastructure Solutions Group (ISG) Platinum Partner of the Year

� HPE As-a-Service Partner of the Year 2020 for Middle East and South Africa (MESA)

� OpenText Emerging Market Value Added Reseller (VAR) of the Year 2020

� Veaam Software Best Subscription Reselling Partner of the Year 2020

� HPE Hybrid IT Partner of the Year; Hybrid Platinum Partner of the Year;

� Nimble Partner of the Year;

� Pointnext Services Partner of the Year and Delivery Partner of the Year 2020

� BeyondTrust Implementation Partner of the Year 2019 for EMEIA (Europe, Middle East, India and Africa)

� Veeam Subscription Reseller Partner of the Year 2019 in Africa

Certifications � ISO 9001:2015 – Quality Management System recertification

� ISO 14001:2015 – Environmental Management System recertification

� ISO 27001:2013 – Information Security Management Systems (ISMS) recertification

� ISO 27017:2015 – Code of practice for information security controls for cloud services certification

� ISO 27018:2019 – Code of practice for protection of personally identifiable information in public clouds acting as PII processors certification

� ISO 45001:2018 – Occupational Health and Safety (OHS) Management Systems recertification

� Payment Card Industry Data Security Standard (PCI DSS) certification (Managed Services division)

� Level 6 CIDB (Electrical Engineering Works and Mechanical Engineering); and Level 1 CIDB (General Building; and Civil Engineering) recertifications (Infrasol)

� Private Security Industry Regulatory Authority – PSiRA certified


146

Sustainability


DG STORE

Awards

� Dell – Excellence in Customer Experience Award – South African Development Community

PINNACLE

Certifications � ISO 9001:2015 – Quality Management System Certification

� ISO 14001:2015 – Environmental Management System Certification

At Pinnacle, all technical divisions have been ISO 9001:2015 (Quality Management) and ISO 14001:2015 (Environmental Management) certified. Everything from the production line all the way through to implementation, repairs and warranty as well as the call centre, have been ISO approved for quality and environmental care.

SOLAREFF

Certifications � ISO 9001: 2015 – Quality Management System Certification

� PV Green Card Certified (SAPVIA endorsed programme to ensure the quality and safety of PV)

� P4 Platform Quality Assurance Programme (independent system that scores contractors on performance, knowledge and best practice to promote good practice in the PV sector)



Annual financial statements

ANNUAL FINANCIAL STATEMENTS



LAWS OF INCORPORATION AND MOIAlviva Holdings Limited (“Alviva”) has been established and incorporated in compliance with the provisions of the Companies Act and operates in conformity with its MOI.

LEVEL OF ASSURANCEThese financial statements have been audited in compliance with the applicable requirements of the Companies Act.

AUDITORSSizweNtsalubaGobodo Grant Thornton Incorporated (“SNG Grant Thornton”)

PREPARERRD Lyon CA, CFO

PUBLISHED27 September 2021

The Company Secretary of Alviva Holdings Limited certifies that in terms of section 88(2) of the Companies Act, the Company has lodged with the Companies and Intellectual Property Commission of South Africa all such returns and notices as are required of a public company in terms of this Act and that all such returns are true, correct and up to date in respect of the reporting period ended 30 June 2021.

Ms SL Grobler CA(SA) Postal address: Physical address: Company Secretary PO Box 483 The Summit Halfway House 269, 16th Road 21 September 2021 1685 Randjespark Midrand 1685

ANNUAL FINANCIAL STATEMENTS

CERTIFICATE BY COMPANY SECRETARY



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

(a) the financial statements set out on pages 173 to 289, fairly present in all material respects the financial position, financial performance and cash flows of Alviva Holdings Limited in terms of IFRS;

(b) no facts have been omitted or untrue statements made that would make the financial statements false or misleading;

(c) internal financial controls have been put in place to ensure that material information relating to Alviva Holdings Limited and its consolidated subsidiaries have been provided to effectively prepare the financial statements of Alviva Holdings Limited; and

(d) the internal financial controls are adequate and effective and can be relied upon in compiling the financial statements, having fulfilled our role and function within the combined assurance model pursuant to principle 15 of the King Code. Where we are not satisfied, we have disclosed to the Audit and Risk Committee and the auditors the deficiencies in design and operational effectiveness of the internal financial controls and any fraud that involves directors, and have taken the necessary remedial action.

Signed by the CEO and the CFO

P Spies RD Lyon, CA

CEO CFO

STATEMENT BY THE CEO AND CFO

in compliance with paragraph 3.84(k) of the JSE Listings Requirements



The directors are required in terms of the Companies Act to maintain adequate accounting records and are responsible for the content and integrity of the financial statements and related financial information included in this report. It is their responsibility to ensure that the consolidated and separate financial statements fairly present the state of affairs of the Group and Company as at the reporting date and the results of its operations and cash flows for the period then ended, in conformity with IFRS.

The consolidated and separate financial statements have been prepared in accordance with IFRS, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the Listings Requirements of the JSE Limited and in the manner required by the Companies Act and are based on appropriate accounting policies consistently applied throughout the Group and supported by reasonable and prudent judgements and estimates.

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

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

The directors are of the opinion, based on the information and explanations given by management, that the system of internal financial control provides reasonable assurance that the financial records may be relied on for the preparation of the consolidated and separate financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss.

The directors have reviewed the Group and Company’s cash flow forecasts for the next 12 months from date of approval of the consolidated and separate financial statements and, in the light of this review, taking into account the impact of the COVID-19 pandemic in South Africa and the current financial position, they are satisfied that the Group and the Company have, or have access to, adequate resources to continue in operational existence for the foreseeable future.

The directors are not aware of any events after the reporting period that have a material impact on the Group and Company’s cash flow forecasts for the next 12 months that have not already been incorporated into these forecasts.

The external auditors are responsible for independently examining and reporting on the consolidated and separate financial statements and their report is presented on pages 169 to 172.

The consolidated and separate financial statements for the year ended 30 June 2021, as set out in pages 173 to 289, were approved by the Board on 21 September 2021 and are signed on their behalf by:

A Tugendhaft P Spies RD Lyon, CA

Chairperson CEO CFO

DIRECTORS’ RESPONSIBILITY STATEMENT AND APPROVAL



AUDIT AND RISK COMMITTEE REPORTfor the year ended 30 June 2021

The Alviva Audit and Risk Committee (“the Committee”) is constituted as a statutory sub-committee of the Board, in line with the JSE Listings Requirements, and reports in compliance with section 94(7)(f ) of the Companies Act.

Although not a statutory requirement, the Committee has also fulfilled its duties in terms of the requirements of King IV™. The Committee conducted its work in accordance with the Audit and Risk Committee Charter, which was reviewed and updated during the reporting period and approved by the Board.

The quality, integrity and reliability of audit and risk-related issues of the Group are delegated to the Committee to assist the Board in discharging its duties relating to the safeguarding of assets, the operation of adequate systems, control processes and the preparation of accurate financial reporting statements in compliance with all applicable legal requirements and accounting standards. Ensuring good corporate governance in the Group is also a mandate assigned to it by the Board.

DUTIES ASSIGNED BY THE BOARDIn addition to the statutory requirements of the Companies Act and King IV™, the Board assigned additional functions for the Committee to perform. Duties were mandated by the Board-approved Committee Charter and included the following key actions:

� Ensured that the appointment of the external auditors complied with the provisions of the Companies Act and any other relevant legislation, including auditor independence, fees payable and the nature and extent of any non-audit services;

� Examined the reliability and accuracy of the financial information presented to all users of such information, including the Company’s going concern assertion;

� Appointed the Chief Audit Executive, approved and monitored Internal Audit’s work plans and performance, the execution thereof and the results of work performed;

� Formed an integral component of the risk management process and, as such, reviewed the risk management process, resultant risk registers and action plans to mitigate all key risks. Key risks involved strategic risks, liquidity risks, financial reporting risks, fraud risks, operational risks, risks associated with information technology, legal and compliance risks and internal financial controls;

� Reported to the Board on the Committee’s activities and made recommendations to the Board concerning the adequacy and effectiveness of the risk policies, procedures, practices, controls or any other matters arising from the above responsibilities;

� Oversaw integrated reporting and reviewed all factors and risks that may impact on the integrity of the Integrated Annual Report;

� Ensured that a combined assurance model is applied to provide a coordinated approach to all assurance activities;

� Monitored relationships between all assurance providers and reviewed results and actions taken to address any deficiencies;

� Satisfied itself of the appropriateness, expertise, resources and experience of Alviva’s finance function, and specifically the CFO;

� Ensured that appropriate financial reporting procedures exist and are working;

� Assessed the information regarding the audit firm and designated audit partner provided by the external auditors, prior to recommending them for reappointment;

� Considered the most current information provided in respect of the JSE Proactive Monitoring Process;

� Monitored Alviva’s compliance with the recommendations of King IV™;

� Reviewed IT and fraud risks; and

� In addition to the above duties, the Committee reviewed the following:

� Integrated Annual Report;

� Interim Report; and

� Provisional financial results and final profit statements.



COMMITTEE ACTIVITIES AND DECISIONS TAKEN THROUGH THE REPORTING PERIODThe Committee has met periodically to consider and to act upon its statutory duties and functions and the Board confirms that the Committee has performed the duties mandated to it by the Board during the reporting period.

AUDIT

External audit � In terms of section 90(1) of the Companies Act, the Committee had nominated SNG Grant Thornton as the independent auditors and Mr A Govender, a registered independent auditor, as the designated partner, for appointment for the 2021 audit. This appointment was approved by shareholders at the AGM on 18 November 2020. The Committee has satisfied itself through enquiry that the auditor of Alviva is independent, as defined by the Companies Act, and as per the standards stipulated by the auditing profession. Requisite assurance was sought and provided by the auditor that the internal governance processes within the audit firm support and demonstrate the claim to independence.

� The Committee, in consultation with executive management, agreed to the engagement letter, terms, nature and scope of the audit function and audit plan for the 2021 reporting period. The budgeted fee was considered for appropriateness and then approved. The final adjusted fee will be agreed on completion of the audit. Audit fees are disclosed in note 26 of the financial statements.

� The Committee considered and approved the non-audit services rendered by the external auditor. [GRI 405-1] The non-audit services provided by the external auditors were immaterial but were, nonetheless, approved by the Committee.

� Meetings were held with the auditor where executive management was not present, and no matters of concern were raised. In terms of the Committee Charter, the external auditors have unrestricted access to the Chairperson of the Committee.

� SNG Grant Thornton has been Alviva’s auditors since 2015, with Mr A Govender being appointed as the designated auditor in 2019. [GRI 405-1] The attendant risk of familiarity between management and the external auditors was mitigated through various factors, which included but were not limited to:

� balancing the benefits of maximising the knowledge gained through the utilisation of the same audit and management teams and ensuring independence and avoidance where knowledge of processes and procedures create an environment where aspects are taken for granted;

� the rotation of management and partners, not only from a statutory perspective, but also on an ongoing basis;

� the rotation of Mr A Philippou, after serving as designated auditor for five years, and the appointment of Mr A Govender as the designated audit partner at the AGM held on 21 November 2019;

� ongoing independence evaluations; and

� rotation of the Engagement Quality Control Reviewer.

� As gazetted on 5 June 2017, mandatory audit firm rotation will be effective for reporting periods commencing on or after 1 April 2023. An audit firm shall not serve as the appointed auditor of a company for more than ten consecutive reporting periods. The audit firm will only be eligible for reappointment as the auditor after the expiry of at least five reporting periods.

Audit and Risk Committee report continued

for the year ended 30 June 2021





AUDIT (continued)

External audit (continued)

� The Committee resolved to reappoint, for approval at the AGM to be held on 19 November 2021, SNG Grant Thornton as the external auditor, and Mr A Govender as the designated auditor, for the 2022 reporting period. The Committee confirmed that the auditor and designated auditor were accredited by the JSE Limited, and was satisfied with the quality of the external audit. [GRI 405-1]

� Significant matters that the Committee considered included:

� impairment assessment of goodwill;

� revenue recognition;

� prepayments; and

� IFRS 16 – Leases.

The Committee relied on assurance obtained from the detailed audit procedures performed, specifically on the above matters, by the external auditors.

External IFRS consultants assisted management with the application of the above.

Internal audit � The Committee confirms that internal audit work assisted them in fulfilling their mandate.

� The Committee assessed the independence of the internal audit function, Group Internal Audit’s compliance with the audit standards of the Institute of Internal Auditors and the effectiveness of the internal audit function. Internal Audit’s independence was also assessed as part of an independent quality assurance review, which was performed during 2018. Both the Committee assessment and the independent review confirmed Internal Audit’s independence. This review is performed every five years.

� During 2021, it was confirmed that Internal Audit conforms to the International Standards for the Professional Practice of Internal Auditing and guidance by King IV™. [GRI 102-56]

� The Internal Audit Charter was reviewed, updated and approved by the Committee for recommendation to the Board. Internal Audit’s mandate is governed by the Internal Audit Charter, which was approved during 2021.

� Both Internal Audit’s mandate and activities were aligned to King IV™ and reviewed during 2021. Internal Audit’s execution of duties was guided by the three-year risk-based rolling audit plan as approved by the Committee.

� The Committee oversaw the cooperation between Internal Audit and other assurance providers, particularly the external auditors, as part of the Combined Assurance Model.

� In line with the Internal Audit Charter, to ensure independence, Internal Audit had direct access to the Committee, primarily through its Chairperson. The Committee met with the CAE at regular intervals throughout the reporting period without management being present, where audit results, challenges and possible concerns were discussed.

� During the reporting period there had been internal audit coverage in the key risk areas of the Group. The internal audit process did not highlight any breakdowns in internal control that are known to have a material impact on the Group’s performance and achievement of objectives during the reporting period.

� The Committee reviewed the Internal Audit rating methodology and dispute escalation process and deemed it to be satisfactory.

� The Committee confirmed its satisfaction with the effectiveness of the CAE and the implementation of the internal audit plan.



AUDIT (continued)

Internal control � The Group maintained systems of internal control, which included financial, operational and compliance controls.

� The Committee is responsible for reviewing the functioning of the internal control system, the reliability and accuracy of the financial information provided by management as well as that provided for dissemination to other users of financial information. In addition, it reviews whether the Group should continue to use the services of the current external auditors, any accounting or auditing concerns identified as a result of the external audit, the Group’s compliance with legal and regulatory provisions, its MOI, Code of Conduct and by-laws.

� The Board is accountable for establishing appropriate risk and control policies. Executive management is responsible for monitoring, reviewing and communicating these controls and policies through the organisation. Corrective actions are taken to address control deficiencies and other opportunities for improving the systems, as they are identified.

� All processes have been in place for the reporting period and up to the date of the approval of the financial statements and the directors are not aware of any known material breakdown in the functioning of the internal financial controls that has occurred during the reporting period to render the control environment ineffective.

� The Committee assured itself of the internal financial controls through the integrated reporting model and, specifically, reports from both the internal and external auditors. The independent assurance, which was received during the reporting period, formed the basis for reporting to the Board on the reliability thereof.

� The Group’s overall system of internal control remains adequate and no significant deficiencies in the design, implementation or execution of internal financial controls were identified.

REPORTING

Evaluation of the CFO, finance function and financial reporting

� The Committee confirmed that it had satisfied itself of the appropriateness of the expertise and experience of Mr RD Lyon CA, CFO of the Group.

� The Committee considered, and satisfied itself of, the appropriateness of the expertise and adequacy of resources of the finance function and experience of the senior members of management responsible for the finance function.

� The Committee established that the Group had appropriate financial reporting procedures in place and that those procedures are operating and operated satisfactorily during the reporting period.

� The Committee was satisfied that all entities in the Group were considered and included in the consolidated financial statements.

Financial statements and accounting policies

� The Committee reviewed the accounting policies and the financial statements of the Group and the Company. It was satisfied that they were appropriate and complied with International Financial Reporting Standards. There was no change in the accounting policies for the period under review.

� The Committee and the Board are confident that they have taken and continue to take all the necessary steps to execute their responsibilities in terms of the Companies Act and the principles of good governance as contemplated in King IV™.

� The Committee fulfilled its mandate and recommended the financial statements for the year ended 30 June 2021 for approval to the Board. The Board approved the financial statements on 21 September 2021 and the financial statements will be open for discussion at the AGM.







REPORTING (continued)

Going concern � Management presented the results of the Company’s and the Group’s solvency and liquidity tests at each of the Committee’s meetings. The Committee satisfied itself that the Company and the Group have sufficient assets to carry on with operations and that the Group was both solvent and liquid. These results were reported at each of the Board meetings.

� Details of the going concern assessment have been disclosed in note 41 of the financial statements.

Integrated reporting process

The Committee oversaw the integrated reporting process in accordance with its terms of reference and, in particular, the Committee:

� regarded all factors and risks that may impact on the integrity of the Integrated Annual Report, including factors that may predispose management to present a misleading picture, significant judgements and reporting decisions made, as well as any evidence that brings into question previously published information and forward-looking statements or information;

� reviewed the financial statements;

� reviewed the disclosure of material sustainability issues in the Sustainability Report and in the Integrated Annual Report to ensure that it is reliable and does not conflict with the financial information;

� recommended the Integrated Annual Report for approval by the Board; and

� reviewed the content of the summarised financial information to determine if it provides a balanced view.

JSE Proactive Monitoring Panel and JSE proposals

� Alviva’s Integrated Annual Report 2020 was selected for proactive monitoring of annual financial statements by the JSE. On 28 April 2021, the JSE confirmed that it was closing its review process with the understanding that disclosure on certain matters will be improved in Alviva’s 2021 annual financial statements, being:

� additional information relating to fair value disclosures for contingent consideration; and

� the inclusion of broadened COVID-19 financial analysis disclosures in respect of debt covenant information to enable users to assess the potential impact of COVID-19 on cash flow.

� The Committee has considered the 2020 JSE Report on Proactive Monitoring, issued on 19 February 2021, including Annexure 3, and has taken the appropriate action to ensure the findings were applied.





RISK

Risk management

� The Board assigned oversight of the Group’s risk management function to the Committee.

� In terms of King IV™, the Committee has satisfied itself of the effectiveness of the risk management function. [GRI 102-30]

� The total risk management process was reviewed.

� The Committee reviewed the annual risk maturity assessment presented by Internal Audit and was satisfied with the results during the reporting period.

� Standing Committee agenda items included risks associated with IT, financial reporting, liquidity risks, fraud, legal and regulatory compliance, litigation, insurance, reputation issues, ethics and health and safety compliance.

� Disclosure in respect of the risk management framework and key risks identified, together with mitigating strategies, are disclosed on pages 58 to 64 of the Integrated Annual Report.

Fraud prevention and whistle-blowing

� The Code of Conduct is intended to assist individuals, who believe they have discovered serious malpractice or impropriety, to take the appropriate action. The Committee is assured that these arrangements provide for proportionate and independent investigation of matters reported and for suitable follow-up action.

� All reports to the anonymous whistle-blowing hotline (Ethics Line) were reported to the Committee via the Internal Audit function.

� The Committee reviewed summary reports of all defalcations throughout the Group as well as management actions to mitigate any fraud risks.

� The Committee is satisfied that management had taken appropriate actions to address fraud risks, which became evident as a result of these reports, and deemed management’s anti-fraud management and controls to be sufficient.

� It is confirmed that the Ethics Line remained operational and no major concerns were raised during the reporting period. The Committee is satisfied that instances of whistle-blowing were appropriately dealt with during the period under review.





RISK (continued)

Technology and information

� The Board assigned oversight of technology and information governance, and the risks associated therewith, to the Committee.

� The Committee accepts that technology has a fundamental impact on the way in which business is conducted and businesses are measured and, to keep the Committee abreast of the technology and information governance and IT risk management throughout the Group, the CIO presented a report to the Committee in respect of the reporting period. A decision was taken by the Committee that the CIO will present a report to the Committee bi-annually.

� The Committee noted the following from the IT risk presentations during the reporting period:

� The IT strategy for the Group is in place with the main drivers of the strategy being business need, appropriateness, cyber security, data governance scaleability, support and commercial viability;

� A King IV™ gap analysis was completed for the Group and gaps pertaining to IT were identified. The CIO presented the IT governance areas and governance structures that had been established to ensure ongoing management of IT governance;

� A Security Remediation Report that was presented indicated that the Group was showing continued improvement and that various initiatives were in place to further improve and protect the Group’s information in the fast-changing cyber environment;

� The top priority IT risks and mitigating strategies were considered;

� A schedule of key audit findings and how these were being addressed, was presented and discussed;

� All strategic IT projects, the status of each and the expected date of completion, were presented;

� A report dealing with measures to safeguard the integrity of personal information was presented and implemented; and

� Reports detailing achievements to SLA for each major subsidiary were presented to the Committee.

The Committee confirms that:

� risks associated with the IT environment and projects are continuously evaluated and appropriate plans are in place and implemented to mitigate these risks to an acceptable level;

� IT expenditure is motivated by sound commercial principles to ensure that the business strategies and IT strategies are aligned;

� a long-term IT plan has been developed and the appropriateness thereof is reviewed on a continuous basis to ensure that it supports and does not inhibit the long-term strategy of the Group;

� developments in the IT industry are monitored on an ongoing basis and the potential impact thereof on the Group’s long-term strategy is evaluated regularly;

� the necessary skills are in place to ensure that the internal control systems are adequately applied across the Group’s entire IT environment;

� appropriate disaster recovery and business continuity plans are developed, maintained and tested; and

� business continuity plans allowed remote working to continue during and after the COVID-19 lockdown periods with minimal disruption to business processes.





ASSURANCE

Combined assurance

The Committee has fulfilled its mandate in terms of the custodianship of the combined assurance framework.

� A three-lines-of-assurance model was adopted, as detailed in the combined assurance section on pages 56 and 57 of the Integrated Annual Report.

� The Committee is satisfied that the Group has optimised the assurance coverage obtained from management and internal and external assurance providers in accordance with the combined assurance framework.

COMPLIANCE

Legal and regulatory compliance

� The Committee, together with the Social and Ethics Committee, has been assigned the responsibility for ensuring ongoing legal and regulatory compliance. This mandate has been fulfilled through regular reviews of exposure levels associated with any key non-compliances and legal disputes.

GOVERNANCE

Charter and policies

� The Charter of the Committee was reviewed and is aligned to King IV™ recommended practices. The Board ratified the Charter on 16 February 2021. The Charter is available for inspection at the registered office of the Company.

� The following charters and policies were subject to annual review and approved by the Committee:

� Internal Audit Charter;

� IT Charter;

� IT Steering Committee Charter;

� Business Continuity Policy; and

� Compliance Policy.

� New policies adopted by the Committee are:

� Data Protection Policy; and

� Tax Policy.





FINANCIAL STATEMENTSFollowing the review by the Committee of the consolidated and separate financial statements of Alviva for the reporting period ended 30 June 2021, the Committee is of the view that, in all material aspects, it complies with the relevant provisions of the Companies Act and International Financial Reporting Standards and fairly presents the financial position at that date and the results of its operations and cash flows for the reporting period.

In conjunction with the Social and Ethics Committee and the Board, the Committee has also satisfied itself as to the integrity of the remainder of the Integrated Annual Report.

Having achieved its objectives for the reporting period, the Committee recommended the financial statements and Integrated Annual Report for the reporting period ended 30 June 2021 for approval to the Board on 21 September 2021.

APPROVALThe Committee has fulfilled its responsibilities set out in paragraph 3.84 (g) of the JSE Listings Requirements, which includes a review of the information detailed in paragraph 22.15 (h).

The Committee has fulfilled its mandate during the reporting period and accordingly the financial statements have been approved for recommendation to the Board. The Board has subsequently approved the financial statements on 21 September 2021, which will be open for discussion at the AGM.

I wish to thank the members of the Committee and management for their contributions during the reporting period to ensure that the Committee could fulfil its mandate assigned to it by the Board.

Ms P Natesan Chairperson of the Audit and Risk Committee



DIRECTORS’ REPORTfor the year ended 30 June 2021

The directors take pleasure in presenting their report for the reporting period ended 30 June 2021.

DIRECTORS’ RESPONSIBILITYThe Company’s directors are responsible for the preparation and fair presentation of the financial statements in accordance with IFRS and the requirements of the Companies Act, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

ALVIVA’S BUSINESSA description of Alviva’s business profile appears on page 6 and the geographic footprint and Group structure are set out in the Integrated Annual Report on pages 15 to 17.

The Company does not have a controlling shareholder and the directors of Alviva manage the Company for its stakeholders. Alviva Holdings Limited has its primary and only listing in South Africa in the Technology sector of the JSE.

CORPORATE GOVERNANCEThe Corporate Governance Report appears on pages 38 to 55 of the Integrated Annual Report.

FINANCIAL RESULTSThe operating results and the state of affairs of the Company and the Group are discussed in the Report to Shareholders on pages 28 to 33 of the Integrated Annual Report.

The Group generated an attributable profit of R326 million (2020: R149 million). The financial statements on pages 173 to 289 detail the Group’s and the Company’s financial performance, position and cash flow for the reporting period.

Segment analysisA detailed segment analysis of the Group’s performance is disclosed in note 37 of the financial statements.

Trading statementsThe Company issues trading statements when it is satisfied that a reasonable degree of certainty exists that the financial results for the period to be reported on, will differ by at least 20% from the preceding corresponding period. The measure adopted by the Company, in determining the trading statement requirement, is applied only on headline earnings per ordinary share and/or earnings per ordinary share.

STATED CAPITALAt the AGM held on 21 November 2019, which authority was renewed at the AGM held on 18 November 2020, shareholders gave the Board general approval in terms of sections 46 and 48 of the Companies Act, by way of a special resolution, to acquire shares in the Company. The Board exercised this authority and mandated the repurchase of issued ordinary shares of the Company, to a maximum of 12 000 000 shares (6 150 000 shares were approved on 18 November 2020 and 5 850 000 were approved on 2 March 2021). Since the renewal of the mandate, the Company has repurchased, to the end of June 2021, 7 412 488 ordinary shares, totalling 6% of the total issued share capital (excluding FSP shares and treasury shares), at an average price of R10,95 per share.

Following the repurchases of the abovementioned shares, the issued share capital of the Company at 30 June 2021 amounted to 122 520 303 shares. Details of the authorised and issued share capital are provided in note 18 of the financial statements.



Forfeitable Share Plan (FSP)Details of the FSP are disclosed in the Remuneration Committee Report on pages 83 and 84, pages 91 to 94 and in note 35.3 of the financial statements.

FSP 6

FSP 6, along with its participants and share allocation, was approved by the Board on 15 June 2021 and became effective on 18 June 2021. A total of 2 840 000 shares were allocated to FSP 6. All participants accepted the shares granted to them before the reporting date.

RIGHTS ATTACHING TO SHARESEach ordinary Alviva share is entitled to identical rights in respect of voting, dividends, profits and a return of capital. The variation of rights attaching to Alviva shares requires the prior consent of at least 75% of the issued shares of that class or the sanction of a special resolution passed at a special general meeting of the holders of the Alviva shares of that class.

The issue of Alviva shares, whether in the initial or in any increased capital, is subject to shareholder approval.

DIRECTORS’ AND PRESCRIBED OFFICER’S INTERESTS AND SHAREHOLDING (INCLUDING DIRECTORS’ AND PRESCRIBED OFFICER’S ASSOCIATES) Directors’ and prescribed officer’s interests and shareholding, including directors’ and prescribed officer’s associates, as at 30 June 2021, are presented in the table below.

DirectorStatus of director/prescribed officer

Direct beneficial

Share register (own name)

FSP shares earned and held in MSR

share account

Indirect beneficial

Held by associates Total

% of issued

share capital

P Spies CEO 100 000 370 200 470 200 0,38

RD Lyon CFO 300 000 205 200 280 000 785 200 0,64

A TugendhaftNon-Executive Chairperson

318 600 – – 318 600 0,26

JV ParkinCCO – Prescribed Officer

193 000 55 000 28 700 276 700 0,23

Total 911 600 630 400 308 700 1 850 700 1,51

None of the directors’ shares are subject to security, guarantee, collateral or otherwise pursuant to paragraph 3.63(b)(1x) of the JSE Listings Requirements.

Directors’ report continued






Directors’ and prescribed officer’s interests and shareholding, including directors’ and prescribed officer’s associates, as at 30 June 2020, are presented in the table below.

DirectorStatus of director/prescribed officer

Direct beneficial

Share register

(own name)

FSP shares earned and held in MSR

share account

Indirect beneficial

Held by associates Total

% of issued

share capital

P Spies CEO 100 000 241 200 341 200 0,25

RD Lyon CFO 300 000 140 700 280 000 720 700 0,53

A Tugendhaft Non-Executive Chairperson 318 600 – – 318 600 0,23

JV Parkin CCO – Prescribed Officer 193 000 33 500 28 700 255 200 0,19

Total 911 600 415 400 308 700 1 635 700 1,20

There has been no change in directors’ interests from the reporting date until the approval of the Alviva Integrated Annual Report on 21 September 2021. The directors have no non-beneficial shareholdings.

Details of transactions in Alviva shares by directors and prescribed officers were disclosed on SENS during 2021 and are summarised in the table below. For the executive directors and the prescribed officer, any purchases in relation to the grant of shares under allocation of the long-term incentive scheme (FSP) were included in the various SENS announcements dealing with such allocations.

Name of director/prescribed officer Status Purchase

Earned on FSP and

held under MSR Sale

P Spies Direct beneficial – 129 000 –

RD Lyon Direct beneficial – 64 500 –

JV Parkin Direct beneficial – 21 500 –

For further details refer to the Remuneration Committee Report and note 35.3 of the financial statements.

SHAREHOLDERS OTHER THAN DIRECTORSAn analysis of shareholders is set out in the tables below and in note 42 of the financial statements.

Major shareholdersPursuant to section 56(7) of the Companies Act, the following beneficial interests, equal to or exceeding 5%, as at 30 June 2021, were disclosed or established through enquiry:

Name Number of shares held% of total issued

ordinary shares

Tham Investments (Pty) Ltd 22 000 000 17,96

Fidelity Investments * 11 081 582 9,04

Forfeitable Share Plan 7 815 000 6,38

Peresec Prime Brokers (Pty) Ltd * 7 300 931 5,96

Total 48 197 513 39,34

* Held on behalf of various funds for the ultimate benefit of various individual shareholders.

No individual shareholder’s beneficial shareholding in any Alviva employee incentive scheme is equal to or exceeds 5%.



DIVIDEND POLICYThe Company’s policy is to declare a gross dividend of approximately 10% of headline earnings.

DECLARATION OF ORDINARY DIVIDENDTo this end, the Board has declared a final dividend of 29 cents (2020: 15 cents) per ordinary share for the year ended 30 June 2021, as announced on SENS on 27 September 2021.

Notice is hereby given that a final dividend of 29 cents per ordinary share for the year ended 30 June 2021 has been declared by the Board of the Company.

The salient dates applicable to the final dividend are as follows:

Date

Last day of trade “cum” dividend Tuesday, 9 November 2021

First day to trade “ex” dividend Wednesday,10 November 2021

Record date Friday, 12 November 2021

Payment date Monday,15 November 2021

No share certificates may be dematerialised or rematerialised between Wednesday, 10 November 2021 and Friday, 12 November 2021, both days inclusive.

Dividends are to be paid out of distributable reserves. Dividends Tax of 20% will be withheld in terms of the Income Tax Act for those shareholders who are not exempt from dividend tax. In accordance with paragraphs 11.17(a)(i) to (ix) and 11.17(c) of the JSE Listings Requirements, the following additional information is disclosed:

� The gross local dividend amount is 29 cents per ordinary share for shareholders exempt from Dividends Tax;

� The net local dividend amount is 23,2 cents per ordinary share for shareholders liable to pay Dividends Tax;

� Alviva Holdings Limited currently has 122 520 303 ordinary shares in issue (which includes 7 815 000 FSP shares); and

� Alviva Holdings Limited’s income tax reference number is 9675/146/71/7.

Where applicable, payment in respect of certificated shareholders will be transferred electronically to shareholders’ bank accounts on the payment date. In the absence of specific mandates, payment cheques will be posted to certificated shareholders at their risk on the payment date. Shareholders who have dematerialised their shares will have their accounts at their Central Securities Depository Participant or broker credited on the payment date.

SERVICE CONTRACTS WITH DIRECTORSAlviva complies with relevant legislation when determining minimum terms and conditions for the appointment of executive directors. During the previous reporting period, the CEO signed an addendum to his contract of employment providing that his appointment will continue until 30 June 2022 with a restraint of trade period lasting up to 24 months following the termination date. The CFO’s employment agreement does not contain a minimum service term or restraint of trade clause.

Alviva is not exposed to any unusual or onerous commitments on the termination of any executive director’s employment, and balloon payments are not seen as fair remuneration policy. The Remuneration Committee reviews, at least annually, the terms and conditions of executive directors’ service agreements, taking into account information from comparable companies, where relevant. All recently contracted employment agreements with executive directors, management and sales staff include a restriction of trade clause to protect Alviva’s proprietary interests and to ensure that the business is not prejudiced in any way or form. The restriction of trade undertaking is applicable for a period of six months from the date that the employment terminates. Executive directors are expected to manage their leave in such a manner that leave is not accumulated. On leaving the Company, any leave not utilised is not paid out.







EXTERNAL AUDIT AND EXTERNAL AUDITOR INDEPENDENCESNG Grant Thornton acts as the external auditor of the Company and has indicated its willingness to continue in office for the ensuing reporting period. The Audit and Risk Committee has satisfied itself of the independence of SNG Grant Thornton and the designated auditor, Mr A Govender, as required by section 90 of the Companies Act. The Board concurs with the Audit and Risk Committee’s assessment.

The Board has endorsed the recommendation of the Audit and Risk Committee to shareholders that SNG Grant Thornton be appointed as the independent external auditor of the Company for the ensuing reporting period with effect from the date of the AGM to be held on 19 November 2021. A resolution to re-appoint SNG Grant Thornton as the auditor and Mr A Govender as designated auditor will be proposed at the AGM on 19 November 2021.

The proposed audit fee to be paid to SNG Grant Thornton for the independent audit of the Alviva Group entities for the reporting period ended 30 June 2021 amounts to R5 million (2020: R4 million).

SYSTEMS OF INTERNAL CONTROLThe Group maintains systems of internal control, which include financial, operational and compliance controls. The Audit and Risk Committee is responsible for reviewing the functioning of the internal control system, the reliability and accuracy of the financial information provided by management as well as that provided for dissemination to other users of financial information.

In addition, it reviews whether the Group should continue to use the services of the current external auditors, any accounting or auditing concerns identified as a result of the external audit, the Group’s compliance with legal and regulatory provisions, its MOI, Code of Conduct and by-laws.

The Board is accountable for establishing appropriate risk and control policies. Executive management is responsible for monitoring, reviewing and communicating these controls and policies throughout the organisation. Corrective actions are taken to address control deficiencies and other opportunities for improving the systems, as they are identified.

All processes have been in place for the reporting period and up to the date of the approval of the financial statements and the directors are not aware of any known material breakdown in the functioning of the internal financial controls that has occurred during the reporting period to render the control environment ineffective.

The Audit and Risk Committee assured itself of the internal financial controls through the integrated reporting model and, specifically, reports from both the internal and external auditors. The independent assurance, which was received during the reporting period, formed the basis for reporting to the Board on the reliability thereof.

Alviva’s overall system of internal control remains adequate and no significant deficiencies in the design, implementation or execution of internal financial controls were identified.

The reports of Internal Audit are also made available to Alviva’s external auditors to assist them in meeting their responsibilities.



RESOLUTIONS PASSED AT THE AGM IN 2020The following resolutions were adopted by shareholders at the AGM held on 18 November 2020:

Resolution no Description

% vote in favour

Special resolutions

1 Issue of a general authority for the Company to repurchase its own shares 99,95

2Issue of a general authority to provide financial assistance in terms of section 44 of the Companies Act

99,98

3Issue of a general authority to provide financial assistance for a period of two years in terms of section 45 of the Companies Act

99,98

4 Approval of the fee structure to be paid to non-executive directors 99,94

Ordinary resolutions

1 Reappointment of retiring director and ratification of appointment of directors

1.1 Reappointment of Mr A Tugendhaft as a Non-Executive Director 97,42

1.2 Ratification of appointment of Ms P Natesan as an Independent Non-executive Director 99,59

2 Appointment of the members of the Audit and Risk Committee

2.1 Ms P Natesan (Chairperson) 99,59

2.2 Ms SH Chaba 99,54

2.3 Ms MG Mokoka 99,64

3 Approval to reappoint SNG Grant Thornton and Mr A Govender as auditors 99,96

4 Endorsement of the Company’s Remuneration Policy and its Remuneration Implementation Report

4.1 Endorsement of the Company’s Remuneration Policy 99,64

4.2 Endorsement of the Company’s Remuneration Implementation Report 77,30

5 General authorisation to place unissued shares under the control of the directors 87,87

6 General authorisation to issue shares for cash 75,13

7 Authorisation of the directors to implement the special and ordinary resolutions 99,92







BOARD OF DIRECTORSThe Board comprises seven directors, two executive directors and five non-executive directors. The executive directors are the CEO and the CFO. Four of the five non-executive directors are independent. The Chairperson, who is a non-executive director, is not considered to be independent and thus a Lead Independent Director was appointed.

Name Designation Date appointed

Mr A TugendhaftNon-Executive Director 24 November 1998

Appointed as Chairperson 3 October 2017

Ms P NatesanIndependent Non-Executive Director 6 December 2017

Appointed as Lead Independent Director 6 December 2017

Ms SH Chaba Independent Non-Executive Director 31 August 2012

Ms MG Mokoka Independent Non-Executive Director 29 July 2019

Mr PN Masemola Independent Non-Executive Director 29 July 2019

Mr P Spies Executive Director – CEO 27 January 2016

Mr RD Lyon Executive Director – CFO 1 January 2013

A brief biography of each of the directors is disclosed on pages 35 and 36 of the Integrated Annual Report.

ROTATION OF DIRECTORSIn accordance with the Company’s MOI requirement that one-third or more of the non-executive directors must retire at each AGM, Ms MG Mokoka and Ms SH Chaba retire by rotation at the upcoming AGM to be held on 19 November 2021 and, being eligible, have offered themselves for re-election. Resolutions to re-elect Ms MG Mokoka and Ms SH Chaba as independent non-executive directors of the Company will be put to shareholders at the AGM to be held on 19 November 2021.

STATE OF AFFAIRS AT THE COMPANY – MATERIAL MATTERS

Borrowing powersThe MOI imposes no restrictions on the borrowing powers of the Company or its directors. The Company does, however, have in place a formal delegation of authority imposing limitations in terms of transaction value and nature, which is fully operational and reviewed on an ongoing basis by the Board.

Investment in subsidiariesDetails of interest in subsidiaries held are disclosed in note 11 of the financial statements.

Investments in equity-accounted investeesDetails of the investments in the equity-accounted investees are disclosed in note 12 of the financial statements.

Directors’ interest in contractsNo director of the Company had any interest in any contract of significance during the reporting period.



Contingent liabilitiesThe directors are not aware of any contingent liabilities that existed at 30 June 2021, or at the date of this report,. that may have a material effect on the Group’s financial position.

Litigation statementThe directors, whose names appear on pages 35 and 36 of the Integrated Annual Report, are not aware of any legal or arbitration proceedings, including proceedings that are pending or threatened, that may have a material effect on the Group’s financial position.

Related party transactionsThe related party transactions entered into in the ordinary course of business are disclosed in note 36 of the financial statements.

InsuranceThe Group has placed cover in the South African traditional insurance markets to ensure that all categories of risk are covered adequately. Additional cover on a per risk basis has been purchased, where appropriate

Impact of the COVID-19 pandemicThe COVID-19 pandemic continued to have a significant impact in South Africa and across the world. The overall impact of the pandemic continued to be evident within major markets during the reporting period. Based on the magnitude of the pandemic and its potential impact on the financial statements, management has continued to review all possible financial effects the virus could have on the measurement, presentation and disclosure provided. The results of this assessment are disclosed in note 5 of the financial statements.

GOING CONCERN STATEMENTFollowing due consideration of the operating budgets, an assessment of Group debt covenants and funding requirements, solvency and liquidity, the key risks, outstanding legal, insurance and tax issues, the impact of the COVID-19 pandemic and other pertinent matters presented by management, the directors have recorded that they have reasonable expectations that the Company and the Group have adequate resources and the ability to continue in operations for the foreseeable future. For these reasons, the financial statements have been prepared on the going concern basis.

EVENTS AFTER THE REPORTING DATE

Other than as disclosed below, there were no events material to the understanding of the financial statements that occurred after the reporting date and the authorisation date of the financial statements, except the continuation of the risk-adjusted approach implemented by the South African government in response to the COVID-19 pandemic.

General repurchase of sharesAfter the reporting date, the Company repurchased an additional 538 069 shares under the authority granted by shareholders at the AGM held on 18 November 2020. The repurchase was put in place pursuant to a repurchase programme prior to the commencement of the prohibited period in accordance with the JSE Listings Requirements.

Forfeitable Share Plan Sixth allocation (“FSP 6”) FSP 6, along with its participants and share allocation, was approved by the Board on 15 June 2021. A total of 2 840 000 shares were allocated to FSP 6. All participants accepted the shares granted to them and the scheme became effective after the reporting date.







Issue of preference shares On 1 July 2021, Alviva, through its subsidiary, DCT Holdings (RF) Proprietary Limited, issued an additional 10 (ten) redeemable preference shares of R10 million each to Absa Bank Limited (acting through its Corporate and Investment Banking Division).

Civil disorder Riots and protests took place in South Africa from 9 July 2021 in response to the arrest of former president Jacob Zuma in terms of a judgment issued by the Constitutional Court of South Africa. The riots escalated to looting that started in KwaZulu-Natal province on the evening of 9 July 2021 and spread to the Gauteng province on the evening of 11 July 2021. This was fuelled by job layoffs and economic inequality that had increased during the COVID-19 pandemic.

Road closures on two major national roads, namely the N3 and N2, affected the transportation of goods from the east coast into provinces in the north. This affected the transportation of goods to landlocked countries in Africa, including Botswana, Zimbabwe and Zambia. Multiple logistics and fuel companies in KwaZulu-Natal and Gauteng declared force majeure, citing fears of continued looting, hijackings, truck burnings, and social unrest increasing the costs sustained from the looting and damage to property.

Furthermore, the container ports of Richards Bay and Durban, located in KwaZulu-Natal, ceased operations. After several attacks on trucks, the N3, which links port Durban with Johannesburg, was closed on 10 July 2021.

The South African Rand weakened against major foreign currencies as a direct result of the temporary economic instability caused by the riots and protests.

Alviva was unable to avoid the effects of the riots and approximately R3,7 million of Alviva’s inventory, that was being held at a logistics service provider whilst en route to customers in the Durban area, was either destroyed or looted. A claim has already been submitted to SA Special Risk Insurance Assurance (SASRIA).

Thankfully no staff were physically injured but there was a degree of productivity lost over the period and certain additional costs were incurred to secure the Group’s operations.

Acquisition of the Tarsus GroupAlviva, through its subsidiary, DCT Holdings (RF) Proprietary Limited, has recently acquired 100% of the issued share capital of Tarsus Technology Group Proprietary Limited (“Tarsus”). The acquisition of Tarsus was effective 1 July 2021.

The purchase price for the 100% shareholding in Tarsus amounts to a total estimated cash consideration of R178 million. The consideration is payable as follows:

Tranche Date payable Amount

Tranche 1 1 July 2021 R100 million

Tranche 2 1 January 2022 R20 million



Tranche 1 was paid on the acquisition date.

The Tarsus Group has two main operating subsidiaries: Tarsus Distribution Proprietary Limited, the company that owns the South African, Botswana and Namibian IT distribution operations, and Tarsus on Demand Proprietary Limited, a company which operates a cloud solutions business.

Tarsus Distribution is a distributor that is focused on making leading IT hardware brands available to the southern African reseller channel similar to Alviva’s subsidiaries, Axiz Proprietary Limited and Pinnacle Micro Proprietary Limited. The company is well positioned to meet the channel’s needs for credit funding, stock availability and efficient logistics. Tarsus on Demand provides customers and partners with leading and advanced cloud solutions.

The transaction meets the definition of a business combination as set out in IFRS 3: Business Combinations. Management is in the process of finalising the acquisition method of recognition in terms of the business combination as the transaction still falls within the allowable measurable period as permitted by IFRS 3: Business Combinations. Therefore, the at acquisition fair values of the identified assets and liabilities acquired and assumed, as well as any possible goodwill that may arise from the transaction, have not been disclosed.



REPORT OF THE INDEPENDENT AUDITOR

To the Shareholders of Alviva Holdings Limited

Report on the Audit of the Consolidated and Separate Financial Statements

Opinion

We have audited the consolidated and separate financial statements of Alviva Holdings Limited (the group) set out on pages 173 to 287, which comprise the consolidated and separate statement of financial position as at 30 June 2021, and the consolidated and separate statement of profit or loss and other comprehensive income, the consolidated and separate statement of changes in equity and the consolidated and separate statement of cash flows for the year then ended, and notes to the consolidated and separate financial statements, including a summary of significant accounting policies.

In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of Alviva Holdings Limited as at 30 June 2021, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements section of our report. We are independent of the group and company in accordance with the Independent Regulatory Board for Auditors’ Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performing audits of financial statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent with the corresponding sections of the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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



Key audit matter How our audit addressed the key audit matter

Impairment assessment of goodwill

Due to the number of business combinations that the Group has historically entered into, the Group’s net assets include a significant amount of goodwill at the reporting date. There is a potential risk that these acquired businesses may not trade in line with expectations and forecasts, resulting in a potential impairment of the carrying amount of goodwill allocated to these businesses.

As required by International Accounting Standard (IAS) 36, Impairment of Assets (“IAS 36”), the Group performs an impairment assessment of goodwill on an annual basis and when impairment indicators are identified.

The goodwill impairment assessment was considered to be a matter of most significance in our audit of the consolidated financial statements due to the significant judgements and assumptions made by management when performing the impairment assessment, and in estimating the key assumptions applied, particularly:

� Weighted average cost of capital discount rates;

� Whether the impact of COVID-19 is appropriately considered in the cash-flow forecasts and whether the forecasts used in the impairment assessments are reasonable;

� Whether the other assumptions applied in the forecasts are reasonable.

This matter is disclosed in the following notes to the consolidated financial statements:

� Note 10: Goodwill; and

� Note 4: Significant estimates and judgements

We tested the mathematical accuracy of the valuation models used by management. We also assessed the appropriateness of the valuation model applied by management, with reference to market practice and the requirements of IAS 36. We reviewed the reasonableness of the underlying assumptions, inputs and discount rates used in the cash flow forecasts through the performance of sensitivity analysis calculations and through the verification and corroboration of market related inputs.

We assessed the reliability of the Group’s budgets included in the business plans (which form the basis of the cash flow forecasts), by comparing prior period budgets to actual results and corroborating budget inputs to supporting evidence such as contracts and revenue models. We also agreed revenue and EBITDA, used to calculate cash flow forecasts, to approved budgets.

Utilising our valuations expertise, we independently sourced data such as the long-term growth rates, cost of debt, risk-free rates in the applicable market, market risk premiums, debt/equity ratios, as well as the beta of comparable companies. We independently calculated a discount rate for each cash generating unit using our independently sourced data. We applied these independently sourced and calculated inputs to management’s forecasts in order to calculate the recoverable amounts. We noted that management’s recoverable amounts calculated through application of the “fair value less costs to disposal” model fell within a reasonable range of our independent calculations.

Report of the independent auditor continued




Other Information

The directors are responsible for the other information. The other information comprises the information included in the document titled “Alviva Holdings Limited Integrated Annual Report 2021”, and in the document titled “Alviva Holdings Limited Annual Financial Statements 2021”, which includes the Directors’ Report, the Audit and Risk Committee Report and the Certificate by the Company Secretary, as required by the Companies Act of South Africa and the Statement by the CEO and CFO. The other information further comprises the Analysis of Shareholding note on page 288 to 289. The other information does not include the consolidated and separate financial statements and our audit report thereon.

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

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

Responsibilities of the Directors for the Consolidated and Separate Financial Statements

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

In preparing the consolidated and separate financial statements, the directors are responsible for assessing the group’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 Consolidated and Separate Financial Statements

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

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

� Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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

� Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.



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

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

� Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated and separate financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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

Report on Other Legal and Regulatory Requirements

In terms of the IRBA Rule published in Government Gazette Number 39475 dated 4 December 2015, we report that SizweNtsalubaGobodo Grant Thornton Inc. has been the auditor of Alviva Holdings Limited for seven years.

Abendran Govender CA (SA)

SizweNtsalubaGobodo Grant Thornton Inc.Engagement DirectorRegistered Auditor

27 September 2021

20 Morris Street EastWoodmead2191




as at 30 June 2021

STATEMENTS OF FINANCIAL POSITION

GROUP COMPANY

Notes2021

R’0002020

R’0002021

R’0002020

R’000

ASSETS

Non-current assets 2 013 763 2 080 544 4 413 545 4 170 120

Property, plant and equipment 8 456 638 457 218 – –

Intangible assets 9 139 425 320 127 – –

Goodwill 10 603 392 614 454 – –

Interests in subsidiaries 11 – – 4 413 545 4 170 120

Equity-accounted investees 12 66 421 41 773 – –

Finance lease receivables 13 648 793 556 138 – –

Deferred tax assets 14 99 094 90 834 – –

Current assets 4 982 969 5 711 445 7 172

Inventory 15 1 153 743 1 228 187 – –

Trade and other receivables 16 2 593 594 2 946 836 – –

Finance lease receivables 13 324 970 298 383 – –

Current tax assets 31 049 18 418 – –

Cash and cash equivalents 17 879 613 1 219 621 7 172

Total assets 6 996 732 7 791 989 4 413 552 4 170 292

EQUITY AND LIABILITIES

Capital and reserves 2 489 460 2 377 779 4 411 709 4 168 541

Stated capital 18 1 225 1 363 1 225 1 363

Treasury shares 19 (121 195) (115 328) – –

Other equity reserves 20 25 010 46 289 – –

Retained earnings 2 526 920 2 345 484 4 410 484 4 167 178

Non-controlling interests 33 57 500 99 971 – –

Non-current liabilities 1 042 868 1 244 584 – –

Interest-bearing liabilities 21 968 153 1 075 406 – –

Non-interest-bearing liabilities 22 22 990 72 829 – –

Contract liabilities 24 16 627 16 064 – –

Deferred tax liabilities 14 35 098 80 285 – –

Current liabilities 3 464 404 4 169 626 1 843 1 751

Trade and other payables 23 2 706 354 3 626 394 1 842 1 744

Interest-bearing liabilities 21 294 196 332 194 – –

Non-interest-bearing liabilities 22 12 664 7 584 – –

Contract liabilities 24 195 777 183 929 – –

Bank overdrafts 17 220 000 – – –

Current tax liabilities 35 413 19 525 1 7

Total equity and liabilities 6 996 732 7 791 989 4 413 552 4 170 292

[GRI 201-1]




STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

GROUP COMPANY

Notes2021

R’0002020

R’0002021

R’0002020

R’000

Revenue 25 14 893 135 14 804 155 376 746 459 524

Cost of sales (12 361 365) (12 370 493) – –

Gross profit 2 531 770 2 433 662 376 746 459 524

Other income 61 050 27 382 1 741 19 155

Gain on discounting of finance lease agreements 767 1 272 – –

Gain on foreign exchange 30 931 630 – –

Profit on disposal of property, plant and equipment 76 1 611 – –

Share-based payment income – – 1 741 10 155

Gain on remeasurement of contingent consideration 22.1 29 276 23 869 – 9 000

Operating expenses (2 023 339) (2 072 507) – –

Selling expenses (52 054) (59 940) – –

Impairment losses and write-offs on trade and finance lease receivables

34.7 (30 284) (45 645) – –

Impairment loss on loan to equity-accounted investee 34.7 (7 646) (27 990) – –

Impairment loss on goodwill (11 062) (49 563) – –

Impairment loss on intangible assets (25 656) – – –

Employee benefit expenses (1 329 843) (1 323 782) – –

Administration expenses (249 292) (246 505) – –

Depreciation and amortisation (317 502) (319 082) – –

Operating profit 26 569 481 388 537 378 487 478 679

Finance income 27 23 904 50 666 7 42

Finance costs 27 (159 717) (227 640) – –

Share of profit of equity-accounted investee 1 924 – – –

Profit before tax 435 592 211 563 378 494 478 721

Income tax expense 28 (135 095) (74 688) (2) (12)

Profit for the period 300 497 136 875 378 492 478 709

Other comprehensive income:

Items that may be reclassified to profit or loss (7 549) 4 609 – – Exchange differences from translating foreign operations

(7 549) 4 609 – –

Total comprehensive income for the period 292 948 141 484 378 492 478 709

Net profit for the period attributable to: 300 497 136 875

Owners of the Company 325 846 148 724

Non-controlling interests 33 (25 349) (11 849)

Total comprehensive income attributable to: 292 948 141 484

Owners of the Company 318 297 153 333

Non-controlling interests 33 (25 349) (11 849)

Earnings per ordinary share (cents) 29.1

– Basic earnings per ordinary share 267,3 112,7

– Diluted earnings per ordinary share 258,9 110,7

Non-IFRS information*Earnings before interest, tax, depreciation and amortisation 886 983 707 619 378 487 478 679

* This information is not required by IFRS but is presented as additional information to the users of the financial statements.[GRI 201-1]




STATEMENTS OF CHANGES IN EQUITY

Attributable to owners of the Company

Notes

Statedcapital

R’000

TreasurysharesR’000

Otherequity

reservesR’000

Retainedearnings

R’000Total

R’000

Non-control-

ling interests

R’000

TotalequityR’000

GROUP

Balance at 30 June 2019 1 434 (125 819) 33 568 2 355 661 2 264 844 70 183 2 335 027

Repurchase of shares (71) – – (102 123) (102 194) – (102 194)

Treasury shares acquired – (10 378) – – (10 378) – (10 378)

Treasury shares vested with FSP participants

– 20 869 (12 346) (8 523) – – –

Total comprehensive income for the period – – 4 609 148 724 153 333 (11 849) 141 484

Profit for the period – – – 148 724 148 724 (11 849) 136 875

Other comprehensive income for the period – – 4 609 – 4 609 – 4 609

Transactions with non-controlling interests 33 – – – (6 763) (6 763) 52 102 45 339

Equity-settled share-based payment – – 20 458 – 20 458 – 20 458

Dividends paid 29.5; 33 – – – (41 492) (41 492) (10 465) (51 957)

Balance at 30 June 2020 1 363 (115 328) 46 289 2 345 484 2 277 808 99 971 2 377 779


Treasury shares acquired – (19 119) – – (19 119) – (19 119)

Treasury shares vested with FSP participants

– 11 273 (14 153) 2 880 – – –

Treasury shares sold – 1 979 – – 1 979 – 1 979

Total comprehensive income for the period – – (7 549) 325 846 318 297 (25 349) 292 948

Profit for the period – – – 325 846 325 846 (25 349) 300 497

Other comprehensive loss for the period – – (7 549) – (7 549) – (7 549)

Transactions with non-controlling interests 33 – – – (12 104) (12 104) (8 399) (20 503)

Equity-based compensation reserve – – 423 – 423 – 423

Dividends paid 29.5; 33 – – – (20 448) (20 448) (8 723) (29 171)

Balance at 30 June 2021 1 225 (121 195) 25 010 2 526 920 2 431 960 57 500 2 489 460

COMPANY

Balance at 30 June 2019 1 434 – – 3 832 085 3 833 519 – 3 833 519


Total comprehensive income for the period – – – 478 709 478 709 – 478 709

Profit for the period – – – 478 709 478 709 – 478 709

Dividends paid 29.5 – – – (41 492) (41 492) – (41 492)

Balance at 30 June 2020 1 363 – – 4 167 178 4 168 541 – 4 168 541


Total comprehensive income for the period – – – 378 492 378 492 – 378 492

Profit for the period – – – 378 492 378 492 – 378 492

Dividends paid 29.5 – – – (20 448) (20 448) – (20 448)

Balances at 30 June 2021 1 225 – – 4 410 484 4 411 709 – 4 411 709

[GRI 201-1]

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME




STATEMENTS OF CASH FLOWS

GROUP COMPANY

Notes2021

R’0002020

R’0002021

R’0002020

R’000

Cash generated from operations 30 373 402 1 801 043 98 139

Finance income received 27 23 904 50 666 7 42

Finance costs paid 27 (159 717) (227 640) – –

Income tax paid 32 (185 285) (115 736) (8) (5)

52 304 1 508 333 97 176

Cash flows from investing activities

Expenditure to maintain operating capacity

Acquisition of property, plant and equipment 8 (45 229) (96 578) – – Proceeds on disposal of property, plant and equipment

1 373 15 946 – –

Acquisition of intangible assets 9 (20 948) (47 188) – –

Proceeds on disposal of intangible assets 8 751 592 – – (Advance of )/receipt from loan to equity-accounted investee

12.3 (30 370) 18 356 – –

Acquisition of subsidiaries, net of cash acquired – (48 619) – – Subscription of preference shares in existing subsidiary

– – (220 000) (65 000)

Net investment in finance leases receivable (119 242) (8 357) – –

Dividends received – – 376 746 459 524

(205 665) (165 848) 156 746 394 524

Cash flows from financing activities 31

Interest-bearing liabilities raised 83 507 205 000 – –

Interest-bearing liabilities repaid (224 777) (4 697) – –

Payments of lease liabilities (68 117) (56 270) – –

Non-interest-bearing liabilities repaid (8 021) (57 724) – –

Repurchase of shares (114 876) (102 194) (114 876) (102 195)

Treasury shares acquired (19 119) (10 378) – –

Proceeds on disposal of treasury shares 755 – – –

Acquisition of non-controlling interests (19 279) (15 000) – –

Dividends paid to non-controlling interests (8 723) (10 465) – –

Group loan raised – – (21 684) (251 336)

Dividends paid to ordinary shareholders 29.5 (20 448) (41 492) (20 448) (41 492)

(399 098) (93 220) (157 008) (395 023)(Decrease)/increase in net cash, cash equivalents and overdrafts

(552 459) 1 249 265 (165) (323)

Effects of exchange rate changes on cash held in foreign currencies

(7 549) 4 609 – –

Net cash and cash equivalents at 1 July 1 219 621 (34 253) 172 495

Net cash and cash equivalents at 30 June 659 613 1 219 621 7 172

Cash and cash equivalents 17 879 613 1 219 621 7 172

Bank overdrafts 17 (220 000) – – –

[GRI 201-1]



1. REPORTING ENTITY Alviva Holdings Limited is incorporated and domiciled in South Africa. The address of the Company is The Summit, 269 16th

Road, Randjespark, Midrand, 1685. The consolidated financial statements of the Company as at and for the period ended 30 June 2021 comprise the Company and its subsidiaries (together referred to as the Group). The primary activities of the Group have been disclosed in the integrated annual report on pages 16 and 17.

2. STATEMENT OF COMPLIANCE The consolidated and separate financial statements (“the financial statements”) have been prepared in accordance with

IFRS, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the JSE Listings Requirements and the Companies Act of South Africa.

The financial statements were authorised for issue by the Board on 21 September 2021 and are subject to the approval of the shareholders at the AGM.

3. BASIS OF PREPARATION The financial statements are prepared as a going concern on a historical cost basis except for derivative financial instruments

and contingent consideration, which are stated at fair value, as applicable. The accounting policies, inclusive of reasonable judgements and assessments, have been consistently applied for all reporting periods presented and comply with IFRS.

The financial statements are presented in South African Rand, which is the functional currency of the Group. Amounts are rounded to the nearest thousand, except where another rounding measure has been indicated in the financial statements.

4. SIGNIFICANT ESTIMATES AND JUDGEMENTS In preparing these financial statements, management has made judgements and estimates that affect the application

of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

Judgements

Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the financial statements are included in the following notes:

Judgement description Related note

Consolidation: assessment of control of structured entities 11

Tax: judgements in terms of the complexity of legislation 14

Tax: judgements in terms of change in tax rate 14

COVID-19 impact: going concern assessment 5; 41


NOTES TO THE FINANCIAL STATEMENTS



Notes to the financial statements continued


Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties at 30 June 2021 that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities in the next reporting period is included in the following notes:

Assumptions and estimation uncertainty Related note

Deferred tax: availability of future taxable profits against which deductible temporary differences and tax losses carried forward can be utilised

14

Useful lives and residual values of tangible assets: key assumptions in relation to the useful life and residual values assessments

8

Impairment of non-financial assets: key assumptions underlying recoverable amounts 8; 9

Impairment of goodwill: key assumptions underlying recoverable amounts 10

Revenue recognition: estimate of expected returns 25

Measurement of expected credit losses (“ECLs”): key assumptions in determining the loss rates and credit ratings

34.7

Net realisable value (“NRV”) of inventory: key assumptions in determining the NRV 15

Business combinations: fair value estimation of contingent consideration 22.1; 34.2

Share-based payment arrangement: key inputs into the appropriate valuation model 35.3

COVID-19 impact on measurement of ECLs: assessment of forward-looking information 5; 34.7

COVID-19 impact on impairment of goodwill: input of forward-looking information into model 5; 10

5. COVID-19 PANDEMIC The widespread local and global uncertainty associated with the COVID-19 pandemic continued during the reporting

period. On 1 May 2020, a risk-adjusted phased-in approach of economic activity was implemented and promulgated in terms of the Disaster Management Act of South Africa, 2002 (Act 57 of 2002). This risk-adjusted phased-in approach continued albeit the levels of economic activity were adjusted according to the various levels instituted by the South African Government throughout the period.

It is important to note that the material operational entities within the Group were operational throughout the restrictions implemented by Government. The majority of staff members worked remotely contributing to the limited disruption in operational activity although the various entities operated at normalised activity levels.

The COVID-19 pandemic still has a significant impact across the world, negatively affecting the lives of the Group’s customers and its employees. Based on the magnitude of the pandemic and its potential impact on the financial statements, management has conducted a review of the financial effects the pandemic continues to have and could have on the measurement, presentation and disclosure provided.





COVID-19 consideration Assessment ImpactRelated

note

Impairment of goodwill The pandemic had an impact on the operational and valuation assumptions and inputs applied in the recoverability assessment in relation to the cash-generating units of the various investments in subsidiaries held within the Group. Management adopted a conservative approach in the assessment of the impairment models applied based on the long-term impact on the economy as a whole. It is important to note that overall the pandemic was not the sole contributing factor to the impairments recognised in the prior reporting period, but merely a contributing factor. The impairment recognised in the current reporting period is mainly attributable to business being halted and not as a result of the pandemic.

Low to moderate

10

Financial asset impairment

The financial impact of the pandemic has continued to put an increased level of pressure on customers throughout the economic landscape in South Africa and foreign countries in which the Group operates. The overall increased risk is mitigated by the Group in relation to the continuous enforcement of the strict credit approval process, historically applied, as well as the insurance cover in relation to customer balances. The overall recoverability of the customers did not deteriorate significantly although some isolated customers indicated a level of financial difficulty and requested short-term payment relief. The ECL ratings model continued to be adjusted for the impact of COVID-19 and other macro-economic factors and the Group remained conservative in the application of the model based on the default indicators as set out in the accounting policies.

Moderate 34.7

There was a potential impairment on cash balances due to the continued negative impact of the pandemic on financial institutions. The nature of the bank balances of the Group is largely short-term, comprising mainly current accounts. Given the significant actions implemented by central banks to improve liquidity through monetary and fiscal interventions, the Group’s ECLs on cash balances remained immaterial.

Insignificant 34.7

Non-financial asset impairment

The nature of the non-financial assets and the fact that the significant entities of the Group remained operational throughout the reporting period, resulted in the overall non-financial assets being recovered through use in the normal course of business. In addition to this, the Group’s revenue-generating processes are not directly dependent on the non-financial assets of the Group. Discretionary capital expenditure remained at a reduced level during the reporting period.

Future projections and underlying insured values continue to support the carrying amount of non-financial assets of the Group.

Insignificant 8; 9






note

Foreign currency exchange rates

Significant movements in currencies expose the Group to foreign currency gains and losses and also impact the Group’s translation of its results into its presentation currency i.e., South African Rand (ZAR). The ZAR strengthened against most of the currencies of the Group’s foreign entities during the reporting period, which resulted in a slight decrease in OCI of the Group. The Group manages the risk against foreign currency exposure by means of foreign exchange contracts which mitigated the Group’s continued exposure from the impact of the pandemic.

Low to moderate

34.4

Inventories The inventory levels remained stable during the reporting period. The significant operating entities within the Group continued to mitigate the risk associated with the type of inventories sold by the Group. This resulted in no significant impact in relation to inventories as the items will be sold during the normal course of operations of the Group in the foreseeable future.

Low 15

Leases There has been no major impact on the accounting treatment of leases as a result of COVID-19. Operations of the Group have continued during the reporting period and Group continued to provide services to customers. The Group did not receive any rent concessions from landlords during the reporting period.

Insignificant 22.1

Events after the reporting period

The pandemic did not result in any material or significant adjusting events after the reporting period.

Insignificant 40

Going concern The operations of the Group have remained stable and management anticipates negligible disruptions in the foreseeable future. The Group maintains a level of solvency and liquidity and effective management of the cash position of the Group, without the utilisation of any Government implemented debt relief schemes (except TERS funding in relation to leave days for employees), which are all indicators of a reduced impact of COVID-19 on the going concern of the Group. As part of the implemented pandemic responses by management, the Group continued to implement a liquidity management process whereby the Group obtained short-term repayment extensions from certain suppliers. Substantial repayments to suppliers and the redemption payments on the preference shares was successfully executed during the reporting period with a stable working capital cycle throughout the reporting period.

Low 41






note

Onerous contracts The nature of the Group’s contracts with customers is not indicative of any likely significant onerous contract provisions.

Insignificant 25

Recoverability of deferred tax assets

A deferred tax asset is only recognised to the extent that the Group will have adequate future taxable income in relation to the unutilised estimated assessed losses. The Group continued to be operational throughout the reporting period. The Group will have adequate future taxable income in relation to unutilised estimated assessed losses.

Low 14

Contingent consideration The pandemic resulted in pressure on the operational activities of certain Group entities, which contributed as a factor to the adjustment of the contingent consideration. It remains important to note that other business factors also contributed to the underperformance of these entities and that the pandemic was not the sole contributing factor.

Low 22.1





6. SIGNIFICANT ACCOUNTING POLICIES6.1 BASIS OF CONSOLIDATION

Business combinations

The Group accounts for business combinations using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group. In determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs.

The Group has an option to apply a ‘concentration test’ that permits a simplified assessment of whether an acquired set of activities and assets is not a business. The optional concentration test is met if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.

The consideration transferred in a business combination is measured as the aggregate of the fair values (at the date of exchange) of assets transferred, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Transaction costs are recognised as an expense as incurred.

When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments recognised in goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.

The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not measured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or liability is remeasured at subsequent reporting dates in accordance with IFRS 9: Financial Instruments or, IAS 37: Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss recognised in profit or loss.

Subsidiaries

The consolidated financial statements incorporate the financial statements of the Company and all investees controlled by the Company which are classified as subsidiaries, including the Ledibogo Group. The results of subsidiaries acquired or disposed of during the reporting period are included in the consolidated financial statements from or up to the effective date that control commences or is relinquished, as appropriate.

The Company, in its separate financial statements, measures its investments in subsidiaries at cost less impairment, if any.

Non-controlling interests (“NCI”)

NCI that represent present ownership interest and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation, are initially measured at fair value or at the non-controlling interests’ proportionate share of the recognised amounts of the acquiree’s identifiable net assets. The choice of measurement basis is made on a combination-by-combination basis.

Where there is a change in the interest in a subsidiary that does not result in a loss of control, the difference between the fair value of the consideration transferred or received and the amount by which the NCI is adjusted, is recognised as an equity transaction directly in equity.





Loss of control

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

Investments in equity-accounted investees

The Group’s investments in equity-accounted investees comprise interests in an associate and a joint venture.

An associate is an investee over which the Group has significant influence, but does not have control nor joint control over the financial and operating policies.

A joint venture is an arrangement whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.

Interests in the associate and joint venture are accounted for using the equity method from the date on which the investee becomes an equity-accounted investee.

Under the equity method, the investments in equity-accounted investees are initially recognised at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of profit or loss and OCI of equity-accounted investees, until the date on which significant influence or joint control ceases.

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses (except for foreign currency transaction gains or losses) arising from intra-group transactions, are eliminated. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Common control transactions

For transactions in which combining entities are controlled by the same party or parties before and after the transaction and where that control is not transitory are referred to as common control transactions. The Group’s accounting policy for the acquiring entity would be to account for the transaction at book values as reflected in the financial statements of the selling entity. The excess of the cost of the transaction over the acquirer’s proportionate share of the net assets value acquired in common control transactions, will be allocated to the common control reserve in equity.

An acquiring entity accounts for a common control transaction at the book values reflected in the financial statements of the selling entity and there is no restatement of comparative information. The difference between any purchase consideration and the net asset value of the acquiree is recognised in equity in the common control reserve of the acquirer.

Common control transactions are eliminated on consolidation.

6.2 PROPERTY, PLANT AND EQUIPMENT

All items of property, plant and equipment are initially measured at cost. Subsequently, all items of property plant and equipment, except for land, are measured at cost less accumulated depreciation and any accumulated impairment losses.

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

Land is not depreciated. Depreciation is calculated as to write-off the cost of all other items of property, plant and equipment over their estimated useful lives to their residual values, using the straight-line method. Depreciation is recognised in profit or loss.





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

Right-of-use assets: Properties * Remainder of lease term

Buildings 25 to 50 years

Motor vehicles including right-of-use assets * ^ 5 to 6 years

Office equipment ^ 6 years

Computer equipment including right-of-use assets * ^ 3 to 4 years

Plant and equipment ^ 5 years

Right-of-use assets: Equipment (sale-and-lease back transactions) * ^ Remainder of lease term

Furniture and fittings ^ 6 to 10 years

Leasehold improvements Remainder of lease term

Rental assets: Equipment 3 to 5 years

* For the accounting policy on right-of-use assets refer to 6.3.

^ These classes are included under “Plant, vehicles and equipment” in note 8.

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

Any gain or loss on disposal of an item of property and equipment is recognised in profit or loss.

6.3 LEASES

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Group as lessee

The Group leases various properties for administrative and warehouse storage purposes, IT equipment and motor vehicles.

At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. However, for the leases of property the Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is tested for impairment, when appropriate, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

The Group determines its incremental borrowing rate based on the external financing resources from a treasury function point of view, as this is the function which would be utilised to fund the purchase of assets similar to the leased assets of the Group.





Lease payments included in the measurement of the lease liability comprise the following:

� fixed payments, including in-substance fixed payments; and

� lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.

The leases entered into by the Group do not have variable lease payments that depend on an index rate, residual value guarantees or any purchase options except on specific IT equipment.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured if there is a change in assessment of whether the Group will exercise an extension or termination option or if there is a revised in-substance fixed lease payment. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recognised in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Group presents right-of-use assets in ‘property, plant and equipment’ and lease liabilities in ‘interest-bearing liabilities’ in the statement of financial position.

Short-term leases

The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases in relation to properties and equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Sale-and-leaseback transactions

The Group enters into sale-and-leaseback transactions with external financing sources in relation to equipment. The Group transfers the underlying asset to the seller at the fair value of the underlying asset.

Reference is made to the requirements of IFRS 15 to determine whether or not the transfer of the underlying asset is a sale or not in relation to sale-and-leaseback transactions. If the transfer of the asset is not a sale, the seller will continue to recognise the underlying asset and will recognise a financial liability under IFRS 9 equal to the transfer proceeds.

For the Group, the transfer of the equipment under sale-and-leaseback transactions does not meet the definition of a sale under IFRS 15 and, therefore, the Group continues to recognise the underlying assets as property, plant and equipment. A financial liability has been recognised at an amount equal to the proceeds received and is presented in “interest-bearing liabilities” in the statement of financial position.

The right-of-use asset in respect of equipment in terms of sale-and-leaseback transactions, is a result of agreements which existed at the date of transition to IFRS 16.

Group as lessor At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the

contract to each lease component on the basis of their relative standalone prices.

When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

The Group applies the derecognition and impairment requirements in IFRS 9 to the net investment in the lease.

The Group recognises lease payments received under operating leases as income on a straightline basis over the lease term as part of ‘other revenue’.





6.4 GOODWILL

Goodwill arising on acquisition represents the excess of the cost of a business combination plus NCI over the fair value of identifiable assets, liabilities and contingent liabilities acquired. Goodwill is recognised as an intangible asset with any impairment losses recognised in profit or loss. Cash-generating units (“CGUs”) to which goodwill has been allocated are tested for impairment annually, or more frequently, when there is an indication that the CGU may be impaired. If the recoverable amount of the CGU is less than the carrying amount of the CGU, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the CGU and then to the other assets of the CGU pro rata to the carrying amount of each asset in the CGU. An impairment loss recognised for goodwill is not reversed in a subsequent period.

On disposal of a subsidiary, the attributable amount of goodwill is included in the calculation of profit or loss on disposal.

6.5 INTANGIBLE ASSETS

Externally acquired intangible assets are recognised at cost less accumulated amortisation and any accumulated impairment losses.

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

These intangible assets are amortised on a straight–line basis over their finite useful lives. Amortisation is recognised in profit or loss.

Internally generated intangible assets, comprising software, are recognised initially at cost, being the sum of expenditure from the date the recognition criteria for an intangible asset are met, bearing in mind the following additional criteria:

� During the research phase, no intangible asset is recognised. Expenditure on research is recognised as an expense when it is incurred.

� During the development phase, an intangible asset will be recognised only if the following can be demonstrated:

� it is technically feasible to complete the intangible asset so that it will be available for use or sale;

� there is an intention to complete the intangible asset and use or sell it;

� there is an ability to use or sell the intangible asset;

� it is possible to demonstrate how the asset will generate probable future economic benefits;

� there are available financial, technical and other resources to complete the development of the intangible asset as well as to use or sell the intangible asset; and

� the expenditure attributable to the intangible asset during the development phase can be reliably measured.

Subsequent to initial recognition, internally generated intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. Expenditure on internally generated assets is recognised in profit or loss as incurred.

The intangible assets recognised by the Group and their useful lives for current and comparative periods are as follows:

Customer relationships 3 to 6 years

Mainframe software 5 to 10 years

Operating and desktop-based software 2 to 3 years

Trademarks 10 years

The estimated useful life, residual values and amortisation method are reviewed at each reporting date, and adjusted if appropriate.

Any gain or loss on disposal of an intangible asset is recognised in profit or loss.





6.6 INVENTORIES

Inventories consist of inventory on hand, goods in transit and work in progress and are initially recognised at cost. Inventories are subsequently measured at the lower of cost and net realisable value. The cost of inventories is assigned using the weighted average cost formula. The same cost formula is used for all inventories having a similar nature and use to the Group.

When inventories are sold, the carrying amount is recognised as an expense in the period in which the related revenue is recognised.

An allowance for obsolete or damaged inventory is maintained by the Group. The level of the allowance for obsolete inventory is equivalent to the value of the difference between the cost of the inventory and its net realisable value or current replacement cost at the reporting date. Movements in this allowance are recognised in profit or loss.

6.7 FINANCIAL INSTRUMENTS

Recognition and initial measurement

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

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

Financial assets

Classification

On initial recognition, a financial asset is classified as measured at:

� amortised cost;

� fair value through other comprehensive income (“FVOCI”) – debt investment;

� FVOCI – equity investment; or

� FVTPL.

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

The Group’s financial assets comprise only financial assets at amortised cost.

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

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

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





Business model assessment

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

� the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the sale of the assets;

� how the performance of the portfolio is evaluated and reported to the Group’s management;

� the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;

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

� the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

The Group assessed the various financial assets in relation to the various considerations of the business model and concluded that all the financial assets are held by the Group with the main objective of collecting the contractual cash flows and that the contractual terms give rise to cash flows that are solely payments of principal and interest (if applicable). Other factors considered by the Group that support the assessment include the fact that the portfolios of these financial instruments are assessed on the collectability of the portfolio, the fact that the Group does not have a history of selling these types of financial instruments and the fact that the remuneration of managers includes compensation based on the effective collectability of these financial instruments.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Group’s continuing recognition of the assets.

Assessment whether contractual cash flows are solely payments of principal and interest

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

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

� contingent events that would change the amount or timing of cash flows;

� terms that may adjust the contractual coupon rate, including variable-rate features;

� prepayment and extension features; and

� terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features).





Subsequent measurement and gains and losses

Financial assets at amortised cost

These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income and impairment losses are recognised in profit or loss.

Financial liabilities

Classification, subsequent measurement

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition.

The Group’s financial liabilities comprise financial liabilities at amortised cost and financial liabilities measured at FVTPL.

Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss.

Derecognition

Financial assets

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

Any gain or loss on derecognition is recognised in profit or loss.

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


The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value.

On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.

Offsetting Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when,

and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.





6.8 IMPAIRMENT OF FINANCIAL ASSETS AND FINANCE LEASE RECEIVABLES

Financial assets and finance lease receivables

The Group recognises loss allowances for ECLs on:

� financial assets measured at amortised cost; and

� finance lease receivables.

The Group measures loss allowances at an amount equal to lifetime ECLs, except for bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition, which are measured at 12-month ECLs.

Loss allowances for trade receivables and finance lease receivables are always measured at an amount equal to lifetime ECLs. The simplified approach is applied to the trade receivables.

When determining whether the credit risk of a financial asset or finance lease receivable has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment, which includes forward-looking information.

The Group assumes that the credit risk on a financial asset or finance lease receivable has increased significantly if it is more than 30 days past due.

The Group considers a financial asset or finance lease receivable to be in default when:

� the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held); or

� the financial asset is more than 90 days past due.

The Group considers any intergroup financial assets to have a low credit risk when the related Group company has the ability to settle the outstanding balance, has no default history, has no increased credit risk based on the review of financial performance, budgets and related forward-looking information of the Group company.

Furthermore, the Group considers any loan with an employee (included as part of ‘other receivables’) to have a low credit risk in based on the recovery of the loans by means of the payroll function as a salary deduction and the fact that the Group has no default history in respect of these types of loans.

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

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

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

Measurement of ECLs

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





Credit-impaired financial assets

At each reporting date, the Group assesses whether financial assets measured at amortised cost and finance lease receivables are credit-impaired. A financial asset or finance lease receivable is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset or finance lease receivable have occurred.

Evidence that a financial asset or finance lease receivable is credit-impaired includes the following observable data:

� significant financial difficulty of the borrower or issuer;

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

� the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;

� it is probable that the borrower will enter bankruptcy or other financial reorganisation.

Presentation of allowance for ECL in the statement of financial position

Loss allowances for financial assets measured at amortised cost and finance lease receivables are deducted from the gross carrying amount of the respective assets.

Write-off

The gross carrying amount of a financial asset or finance lease receivable is written off when the Group has no reasonable expectations of recovering such in its entirety or a portion thereof. For corporate customers, the Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets or finance lease

receivables that are written off are no longer subject to enforcement activities for recovery of amounts due.

6.9 IMPAIRMENT OF NON-FINANCIAL ASSETS

At each reporting date, the Group reviews the carrying amounts of its property, plant and equipment and intangible assets, other than goodwill, to determine whether there is any indication of impairment . If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the CGU to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual CGUs, or otherwise they are allocated to the smallest group of CGUs for which a reasonable and consistent allocation basis can be identified. Goodwill is tested annually for impairment.

The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. If the recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the carrying amount of the asset or CGU is reduced to its recoverable amount. An impairment loss is recognised in profit or loss.

Where an impairment loss subsequently reverses, other than goodwill which never reverses, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset or CGU in prior reporting periods. A reversal of an impairment loss is recognised in profit or loss.

6.10 STATED CAPITAL

Ordinary shares are classified as equity. Incremental external costs directly attributable to the issue of ordinary shares or share options are recognised in equity as a deduction, net of tax from the proceeds.





6.11 TREASURY SHARES

When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented in the treasury share reserve. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity and the resulting surplus or deficit on the transaction is presented in retained earnings.

6.12 FOREIGN CURRENCY

Foreign currency transactions

Transactions in foreign currencies are translated into ZAR at the exchange rates ruling when the transactions occur. Monetary assets and liabilities denominated in foreign currencies are translated into ZAR at the exchange rate at the reporting date. Foreign currency differences are recognised in profit or loss.

Non-monetary assets and liabilities measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction; and non-monetary assets and liabilities measured at fair value in a foreign currency are translated using the exchange rate at the date when the fair value was measured. When a gain or loss on a non-monetary item is recognised in OCI, any exchange difference component of that gain or loss is recognised in OCI. Conversely, when a gain or loss on a non-monetary item is recognised in profit or loss, any exchange difference component of that gain or loss is recognised in profit or loss.

Foreign operations

On consolidation, the results of foreign operations are translated into ZAR at exchange rates approximating those ruling at the transaction dates. All assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisitions, are translated into ZAR at the exchange rate at the reporting date. Foreign currency differences are recognised in OCI and accumulated in the foreign exchange translation reserve presented as part of other equity in the statement of changes in equity.

Foreign currency differences recognised in profit or loss of Group entities’ separate financial statements on the translation of long-term monetary items forming part of the Group’s net investment in the foreign operation concerned are reclassified to the foreign exchange translation reserve if the item is denominated in the functional currency of the Group or the foreign operation concerned.

When a foreign operation is disposed of in its entirety or partially such that control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. If the Group disposes of part of its interest in a subsidiary but retains control, then the relevant proportion of the cumulative amount is reattributed to NCI.

6.13 CONTRACT LIABILITIES

Warranty cover

The Group has a separate performance obligation in terms of its contracts with its customers to repair or replace goods sold with a 12 to 36-month carry-in or on-site warranty in the event that the product should fail to operate under normal operating conditions. The portion of the revenue earned on the transaction with the customer that relates to the warranty cover is deferred and recognised in profit or loss over the period of the warranty.

Service and maintenance contracts

Revenue that relates to service and maintenance contracts contracted for a 12 to 36-month period is deferred and recognised on a systematic basis over the remaining period of the contract in terms of services rendered.





6.14 INCOME TAX

Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in OCI.

Deferred tax Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the statement of

financial position differs to its tax base, except for differences arising on:

� the initial recognition of goodwill;

� 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 nor taxable profit; and

� investments in subsidiaries where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves. Unrecognised deferred tax assets are re-assessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date, and reflects uncertainty related to income taxes, if any.

Deferred tax assets and liabilities are offset only if certain criteria are met.

Current tax Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment

to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. Current tax is measured using tax rates enacted or substantively enacted at the reporting date.

Current tax assets and liabilities are offset only if certain criteria are met.

6.15 REVENUE

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts to be collected on behalf of third parties. The Group recognises revenue when it transfers control over a good or service to a customer.

Revenue from goods is recognised at a point in time, which is generally on delivery when no further performance obligations are required, unless the product is provided as part of the installation process at which time revenue is recognised. Goods include ICT-related products such as hardware, software and associated licences, fibre-related components and solar components.

Revenue relating to services is recognised over the period which the service is performed and when control is transferred. Services include installation, distribution and maintenance. Revenue from the sale of extended warranties is recognised over the period of the warranty.

Revenue from leases is recognised on a straight-line basis over the period of the leases. Interest income from financing activities directly related to the finance lease receivables is recognised using the effective interest method.

Refer to note 25 for details on the Group’s accounting policies relating to contracts with customers.





6.16 FINANCE INCOME AND FINANCE COSTS

Interest income on investments is accrued on a time basis, using the effective interest method, which is the rate that exactly discounts estimated future cash receipts over the expected life of the financial asset to that asset’s net carrying amount. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

Dividend income from investments is recognised when the shareholders’ rights to receive payment have been established. Interest and dividend income received in relation to investments held are classified as revenue in profit or loss for the Company, based on its primary activities.

All finance costs are recognised in profit or loss using the effective interest method in the period in which they are incurred.

6.17 EMPLOYEE BENEFITS

Short-term employee benefits The cost of all short-term employee benefits is recognised as an expense in profit or loss during the reporting period in

which the employee renders the related service.

Liabilities for employee entitlements to wages, salaries and annual leave represent the amount which the Group has a present obligation to pay as a result of employee services provided during the reporting period.

Defined contribution plan Contributions to defined contribution pension schemes are recognised as an expense in profit or loss as the related service

is provided.

Share-based payment arrangements The grant-date fair value of equity-settled share-based payment arrangements granted to employees is recognised as an

expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.

6.18 OPERATING PROFIT

Operating profit is the result generated from the continuing principal revenue-producing activities of the Group as well as other income and expenses related to operating activities. Operating profit excludes finance costs, finance income (except where recognised as revenue) and income taxes.





6.19 FAIR VALUE MEASUREMENT

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

A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities (refer to note 34.2).

When one is available, the Group measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

If there is no quoted price in an active market, then the Group uses valuation techniques that maximise the use of relevant observable inputs and minimise the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction.

If an asset or a liability measured at fair value has a bid price and an ask price, then the Group measures assets and long positions at a bid price and liabilities and short positions at an ask price.

The best evidence of the fair value of a financial instrument on initial recognition is normally the transaction price, i.e., the fair value of the consideration given or received. If the Group determined that the fair value on initial recognition differs from the transaction price and the fair value is evidenced neither by a quoted price in an active market for an identical asset or liability nor based on a valuation technique for which any unobservable inputs are judged to be insignificant in relation to the measurement, then the financial instrument is initially measured at fair value, on initial recognition at the transaction price. Consequently, that difference is recognised in profit or loss on an appropriate basis over the life of the instrument but no later than when the valuation is wholly supported by observable market data or the transaction is closed out.





7. NEW STANDARDS AND INTERPRETATIONS NEW AND REVISED STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE

A number of new standards are effective for annual periods beginning after 1 January 2021 and earlier application is permitted; however, the Group has not early adopted the new or amended standards in preparing these financial statements.

The following amended standards and interpretations are applicable to the Group and are not expected to have a significant impact on the financial statements:

Standards and Interpretations

Details of amendment Effective date

COVID-19-Related Rent Concessions (Amendment to IFRS 16)

The amendment provides lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification, which was extended by one year to 30 June 2022 in respect of lease payments due.

Annual reporting periods beginning on or after 1 April 2021

Reference to the Conceptual Framework (Amendments to IFRS 3)

The amendments update an outdated reference to the Conceptual Framework in IFRS 3 without significantly changing the requirements in the standard.

Annual reporting periods beginning on or after 1 January 2022

Annual Improvements to IFRS Standards 2018 – 2020

Makes amendments to the following standards:

� IFRS 9 – The amendment clarifies which fees an entity includes when it applies the ‘10 per cent’ test in assessing whether to derecognise a financial liability. An entity includes only fees paid or received between the entity (the borrower) and the lender, including fees paid or received by either the entity or the lender on the other’s behalf.

� IFRS 16 – The amendment to Illustrative Example 13 accompanying IFRS 16 removes the illustration of the reimbursement of leasehold improvements by the lessor in order to resolve any potential confusion regarding the treatment of lease incentives that might arise because of how lease incentives are illustrated in that example.


Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)

The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non- current.


Disclosure of Accounting Policies (Amendments to IAS 1)

The amendments require companies to disclose their material accounting policy information rather than their significant accounting policies, with additional guidance added to the Standard to explain how an entity can identify material accounting policy information with examples of when accounting policy information is likely to be material.






Standards and Interpretations

Details of amendment Effective date

Definition of Accounting Estimates (Amendments to IAS 8)

The amendments clarify how companies should distinguish changes in accounting policies from changes in accounting estimates, by replacing the definition of a change in accounting estimates with a new definition of accounting estimates.

Under the new definition, accounting estimates are “monetary amounts in financial statements that are subject to measurement uncertainty”. The requirements or recognising the effect of change in accounting prospectively remain unchanged.


Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)

The amendment clarifies how a company accounts for income tax, including deferred tax, which represents tax payable or recoverable in the future. In specified circumstances, companies are exempt from recognising deferred tax when they recognise assets or liabilities for the first time. The aim of the amendments is to reduce diversity in the reporting of deferred tax on leases and decommissioning obligations, by clarifying when the exemption from recognising deferred tax would apply to the initial recognition of such items.


All Standards and Interpretations will be adopted at the effective date as disclosed.




for the year ended 30 June 2021 GROUP

Land andbuildings *1

R’000

Leaseholdimprove-

mentsR’000

Plant,vehicles

andequip-

ment *2

R’000

RentalassetsR’000

TotalR’000

8. PROPERTY, PLANT AND EQUIPMENT

Balance at 1 July 2019 15 295 1 938 103 839 1 240 122 312

Cost 15 295 4 466 220 314 7 359 247 434

Accumulated depreciation – (2 528) (116 475) (6 119) (125 122)

Movement for the year – 2020

Recognition of right-of-use asset on initial application of IFRS 16

307 832 – 34 364 – 342 196

Additions 33 256 7 788 88 790 – 129 834

Transfer from inventory – sale-and-leaseback transactions – – 12 802 – 12 802

Lease modifications – decrease in right-of-use asset (773) – – – (773)

Acquisitions through business combinations – – 788 – 788

Cost – – 2 092 – 2 092

Accumulated depreciation – – (1 304) – (1 304)

Disposals *3 – (6 799) (9 700) (599) (17 098)

Cost – (8 213) (49 219) (599) (58 031)

Accumulated depreciation – 1 414 39 519 – 40 933

Depreciation *4 (64 668) (858) (66 833) (484) (132 843)

Balance at 30 June 2020 290 942 2 069 164 050 157 457 218

Cost 355 610 4 041 309 143 6 760 675 554

Accumulated depreciation (64 668) (1 972) (145 093) (6 603) (218 336)


Recognition of right-of-use asset – new leases 70 173 – 2 455 – 72 628

Additions – 104 45 125 – 45 229

Transfer from inventory – sale-and-leaseback transactions – – 40 927 – 40 927

Lease modifications – decrease in right-of-use asset (7 810) – – – (7 810)

Disposals – – (1 229) (68) (1 297)

Cost – – (34 841) (786) (35 627)

Accumulated depreciation – – 33 612 718 34 330

Depreciation *4 (70 736) (308) (79 124) (89) (150 257)

Balance at 30 June 2021 282 569 1 865 172 204 – 456 638

Cost 417 973 4 145 362 809 5 974 790 901

Accumulated depreciation (135 404) (2 280) (190 605) (5 974) (334 263)

*1 Land and buildings include the right-of-use assets in respect of the property leases.

*2 Equipment includes the right-of-use assets in relation to the sale-and-leaseback transactions and IT equipment leases.

*3 Disposals include derecognition of right-of-use assets as a result of entering into finance sub-leases over equipment amounting to Rnil (2020: R 3 million).

*4 The depreciation recognised in terms of the right-of-use assets is disclosed in note 22.1.





8. PROPERTY, PLANT AND EQUIPMENT (continued)

Property, plant and equipment includes right-of-use assets with a carrying amount of:

� R267 million (2020: R276 million) relating to leased property utilised for administrative and warehouse storage purposes. Refer to note 22.1;

� R2 million relating to IT equipment. Refer to note 22.1;

� R9 million (2020: R20 million) relating to sale-and-leaseback transactions which the Group entered into during the prior reporting periods. Refer to note 22.1;

� Rnil (2020: R267 151) relating to motor vehicles. Refer to note 22.1.

Rental assets with a net carrying amount of Rnil (2020: R156 699) serve as security for the Nedbank facility held (refer to note 22.2).

No changes to the useful lives or residual values of property and equipment were made based on the current period review.

No indicators of impairment were present based on the current period review and, therefore, no impairment loss was recognised.

No current contractual commitments exist to purchase items of property, plant and equipment.

GROUP

2021R’000

2020R’000

8.1 Details of land and buildings

Midrand property

Land comprises stand number 865 Kosmosdal, Extension 11, Gauteng with buildings and additions thereon

Land and buildings acquired through business combination in January 2016:

Land at cost 1 915 1 915

Buildings at cost 13 380 13 380

15 295 15 295

The residual value of the owned buildings exceeds the depreciable amount of the buildings and, therefore, no depreciation (2020: Rnil) has been recognised in profit or loss for the reporting period.




for the year ended 30 June 2021 GROUPCustomer

relation-shipsR’000

Software *R’000

Trade-marksR’000

TotalR’000

9. INTANGIBLE ASSETSBalance at 1 July 2019 258 502 29 101 291 287 894

Cost 507 019 57 534 3 500 568 053

Accumulated amortisation (248 517) (28 433) (3 209) (280 159)


Additions – 47 188 – 47 188

Acquisitions through business combinations 172 014 22 – 172 036

Cost 172 014 98 – 172 112

Accumulated amortisation – (76) – (76)

Disposals – (752) – (752)

Cost – (18 416) – (18 416)

Accumulated amortisation – 17 664 – 17 664

Amortisation (171 056) (14 892) (291) (186 239)

Balance at 30 June 2020 259 460 60 667 – 320 127

Cost 679 033 86 404 3 500 768 937

Accumulated amortisation (419 573) (25 737) (3 500) (448 810)


Additions – 20 948 – 20 948

Disposals – (8 749) – (8 749)

Cost – (23 020) (3 500) (26 520)

Accumulated amortisation – 14 271 3 500 17 771

Amortisation (146 888) (20 357) – (167 245)

Impairment loss (25 656) – – (25 656)

Balance at 30 June 2021 86 916 52 509 – 139 425

Cost 679 033 84 332 – 763 365

Accumulated amortisation and impairment losses (592 117) (31 823) – (623 940)

* Included in software is an amount of R6 million (2020: R2 million) attributable to internally generated software not yet ready for use. The Group expects the internally

generated software to be ready for use in the next reporting period.

No changes to the useful lives or residual values have been made in the current or prior reporting periods.

The customer relationship that was recognised upon the acquisition of SynergERP Limited – UK, was fully impaired at the reporting date. Refer to note 10. The impairment loss amounted to R26 million.

No impairment loss was recognised in the prior reporting period.





GROUP

2021R’000

2020R’000

10. GOODWILLBalance at 1 July 614 454 631 526

Cost 671 847 639 356

Accumulated impairment losses (57 393) (7 830)

Movement for the year

Business combinations – 32 491

Impairment losses (11 062) (49 563)

Balance at 30 June 603 392 614 454

Cost 671 847 671 847


Method of testing for impairment

In testing the impairment of goodwill allocated to CGUs, the following key assumptions were used:

GROUP

2021 2020

Discount rate 15,7% 15,7%

Growth rate 5% to 10% 4% to 6%

Terminal growth rate 5% to 8% 5% to 8%

The recoverable amounts have been calculated using the value-in-use method. Discounted cash flow forecasts for a five-year period with the application of terminal growth rates were used to determine the recoverability of the goodwill.

Due to the fact that the Group has a centralised treasury function which determines an average discount rate applicable to the Group as a whole, each recoverable amount calculation includes a specific adjustment in terms of CGU-related risk factors not considered by the treasury function in determining the average discount rate.





10. GOODWILL (continued)

GROUP

Segment

Reporting period

acquired2021

R’0002020

R’000

CGUs and goodwill allocation

Explix Technologies Proprietary Limited ICT Distribution 2008 24 591 24 591

Cost 28 210 28 210


Pinnacle Micro Proprietary Limited ICT Distribution 2009 15 801 15 801

Cost 20 012 20 012


Datanet Infrastructure Group Proprietary Limited ICT Distribution 2010 1 339 1 339

Centrafin Proprietary Limited Financial Services 2011 12 744 12 744

Devtrade Security Proprietary Limited ICT Distribution 2013 25 360 25 360

Pacific Cables Proprietary Limited ICT Distribution 2014 1 751 1 751

Datacentrix Limited Services and Solutions 2016 190 464 190 464

Solareff Proprietary Limited Services and Solutions 2016 45 222 45 222

Intdev Internet Technologies Proprietary Limited Services and Solutions 2016 3 993 3 993

Sintrex Integration Systems Proprietary Limited Services and Solutions 2018 61 426 61 426

VH Fibre Optics Proprietary Limited ICT Distribution 2018 9 336 9 336

Cost 48 841 48 841


DG Store SA Proprietary Limited Services and Solutions 2018 66 426 66 426

Obscure Enterprises Proprietary Limited ICT Distribution 2018 39 696 39 696

Tricon Services ICT Distribution 2019 38 266 38 266

Merlynn Intelligence Technologies Proprietary Limited Services and Solutions 2019 45 548 45 548

Cost 55 606 55 606


SynergERP Proprietary Limited Services and Solutions 2020 18 928 18 928

SynergERP Limited – DWC LCC Services and Solutions 2020 2 501 2 501

SynergERP Limited – UK Services and Solutions 2020 – 11 062

Cost 11 062 11 062

Accumulated impairment losses (11 062) –

Balance at 30 June 603 392 614 454






ICT Distribution

Explix Technologies Proprietary Limited, Pinnacle Micro Proprietary Limited, Datanet Infrastructure Group Proprietary Limited, Devtrade Security Proprietary Limited, Pacific Cables Proprietary Limited, VH Fibre Optics Proprietary Limited, Obscure Enterprises Proprietary Limited and Tricon Services were purchased in prior years and the respective goodwill formed part of the assets acquired in those periods.

Cash flows were determined using a combination of the current reporting period’s actual profits and the following reporting period’s financial budgeted profits, as approved by the directors.

The key assumptions used in the budgets are a reflection of management’s past experience in the market in which the CGU operates. Cash flows for the five following periods have been extrapolated using a steady 5% (2020: 4% to 6%) per annum (1% growth and 4% long-term forecasted inflation) growth rate and, thereafter, a terminal growth rate of 5% (2020: 5% to 8%).

These cash flows were discounted using a discount rate of 16% (2020: 16%) prior to CGU-related risk factors being taken into account. The various sensitivity analyses, performed by changing key variables by 1% in the calculation, resulted in the recoverable amount exceeding the carrying amount in all instances.


Datacentrix Holdings Proprietary Limited, Solareff Proprietary Limited, Intdev Internet Technologies Proprietary Limited, Sintrex Integration Systems Proprietary Limited, DG Store SA Proprietary Limited, SynergERP Proprietary Limited, SynergERP Limited – DWC and SynergERP Limited were acquired during prior reporting periods and the respective goodwill formed part of the assets acquired in those periods.

Cash flows were determined using the current reporting period’s actual profits and have been extrapolated in five future periods using a steady 5% to 10% (2020: 4% to 6%) per annum (1% to 6% growth and 4% long-term forecasted inflation) growth rate and, thereafter, a terminal growth rate of 5% to 10% (2020: 6%).


Financial Services

Centrafin Proprietary Limited was purchased in a prior reporting period and the goodwill formed part of the assets acquired in that period.

Cash flows were determined using the current reporting period’s actual profits and have been extrapolated in five future periods using a steady 5% (2020: 6%) per annum (1% growth and 4% long-term forecasted inflation) growth rate and, thereafter, a terminal growth rate of 5% (2020: 5%).







Sensitivity analysis

The following table summarises the outcome of the sensitivity analysis on the significant contributing CGUs of the Group based on the carrying amount of goodwill:

CGU

Goodwill carrying amount

R’000

Key assumptions:

Recoverable amount

R’000

Sensitivity analysis:

Recoverable amount *

R’000

Impairment loss

R’000

Datacentrix Proprietary Limited 190 464 849 131 789 559 –

DG Store SA Proprietary Limited 66 426 138 328 129 221 –

Merlynn Intelligence Technologies Proprietary Limited

45 548 125 944 97 933 –

Sintrex Integration Systems Proprietary Limited 61 426 132 291 120 762 –

Solareff Proprietary Limited 45 222 75 130 67 273 –

* The sensitivity is based on a simultaneous decrease in the growth rate and terminal growth rate resulting in a decrease in the recoverable amount.

COVID-19 stress testFor the reporting period, a further sensitivity analysis was performed by changing key variables by between 1% and 2% (2020: 3% and 5%) (stress test). This also resulted in the recoverable amount exceeding the carrying amount in all instances.

Impairment

Towards the end of the reporting period, a key individual, who was intricately involved in the overall business development of SynergERP Limited – UK, resigned from his position. Management consequently decided to halt all business development and operations of the company. These actions resulted in an impairment of the goodwill attributable to SynergERP Limited – UK in the current reporting period.

Impairment losses amounting to R11 million (2020: R50 million) were recognised in profit or loss for the period (refer to notes 9 and 22).





11. INTEREST IN SUBSIDIARIES [GRI 102-45]

The direct and indirect interests in subsidiaries at the reporting dates are set out below:

2021

Country of incorporation

Principal operating industry

Interestclassi-

fication

Issued share

capital2021

% of pro-portion of

owner-ship

interest2021

% ofvotingrights

held2021

Invest-mentheld2021

R’000

Investment in subsidiaries 3 946 837

Alviva International Investments Proprietary Limited

South Africa Intermediate Direct 120 100,0 100,0 151 202

Alviva International Co Limited MauritiusICT industry and

relatedIndirect 100 100,0 100,0 –

Alviva Shared Management Services Proprietary Limited

South Africa Group services Indirect 1 000 55,4 55,4 –

Alviva Treasury Services Proprietary Limited

South Africa Intermediate Direct 179 238 346 100,0 100,0 101 695

Appleby Solutions Limited ZambiaICT industry and

relatedIndirect 5 000 100,0 100,0 –

Arriba Technologies Proprietary Limited

South AfricaICT industry and


Axiz Botswana Proprietary Limited BotswanaICT industry and


Axiz Namibia Proprietary Limited NamibiaICT industry and


Axiz Proprietary Limited South AfricaICT industry and


Axiz Technology Proprietary Limited South AfricaICT industry and

relatedIndirect 8 825 000 100,0 100,0 –

Axizworkgroup Mozambique Limitada

MozambiqueICT industry and


Boditse Proprietary Limited BotswanaICT industry and


Centrafin Proprietary Limited South Africa Financial services Direct 1 000 100,0 100,0 23 801

Centravoice Proprietary Limited South AfricaICT industry and


Datacentrix Holdings Proprietary Limited **

South AfricaInvestment holding in

ICT industryIndirect 189 636 519 55,4 55,4 –

Datacentrix Properties Proprietary Limited

South Africa Property holding Indirect 100 55,4 55,4 –

Datacentrix Proprietary Limited South AfricaICT industry and


Datacentrix Solution DMCCUnited Arab

EmiratesICT industry and


Datacentrix Solution LCCUnited Arab



DCT Holdings (RF) Proprietary Limited ***

South AfricaInvestment Holding

CoDirect 892 55,4 55,4 3 545 146

DG Store SA Proprietary Limited South AfricaICT industry and


eNetworks Proprietary Limited South AfricaICT industry and


Froggy IT Solution Proprietary Limited



GridCars Proprietary Limited South Africa Operating Co Indirect 100 21,2 21,2 –

Imbewu IT Solutions Proprietary

LimitedSouth Africa

ICT industry and related

Indirect 100 44,3 44,3 –





2021



Interestclassi-

fication

Issued share

capital2021

% of pro-portion of

owner-ship

interest2021

% ofvotingrights

held2021

Invest-mentheld2021

R’000

Infrasol Proprietary Limited South AfricaICT industry and


Intdev Internet Technologies Proprietary Limited

South Africa Operating Co Indirect 2 500 55,4 55,4 –

Obscure Enterprises Proprietary Limited



Obscure Technology Proprietary Limited



Parcea Computing Proprietary Limited



Pinnacle Micro Namibia Proprietary Limited

NamibiaICT industry and


Pinnacle Micro Proprietary Limited South AfricaICT industry and


Sintrex Integration Systems Proprietary Limited



Solareff Proprietary Limited South Africa Operating Co Indirect 1 000 28,3 28,3 –

VH Fibre Optics Proprietary Limited South AfricaICT industry and



South Africa Operating Co Direct 100 65,0 65,0 94 000

SynergERP Proprietary Limited South Africa Operating Co Indirect 1 782 38,8 38,8 –

SynergERP Limited – DWC LCCUnited Arab

EmiratesOperating Co Indirect 300 000 51,0 51,0 –

SynergERP Limited – UK United Kingdom Operating Co Indirect 1 500 51,0 51,0 –

Dormant

Axiz Investment Trust * South Africa Employee Trust Direct – – – –

DG Education Proprietary Limited South AfricaICT industry and


Dirigible IT Proprietary Limited South Africa Dormant Indirect 100 55,4 55,4 –

Merqu Communications Proprietary Limited

South Africa Dormant Indirect 1 55,4 55,4 –

Precision ICT Proprietary Limited South Africa Dormant Direct 120 100,0 100,0 –

Synerg300 Proprietary Limited * South Africa Dormant Indirect – – – –

SynergIT Proprietary Limited South Africa Dormant Indirect 1 158 38,8 38,8 –

Workgroup IT Proprietary Limited South Africa Dormant Direct 1 000 100,0 100,0 30 993

Loan to subsidiaryAlviva Treasury Services Proprietary Limited

466 708

4 413 545

* Deregistered during the reporting period.

** The interest held in this company has been provided as security for the Class B preference shares (refer note 21.4).

*** The remaining direct interest is held by the Ledibogo Trust.

11. INTEREST IN SUBSIDIARIES (continued)






2020



Interestclassi-

fication

Issued share

capital2020

% of pro-portion of

owner-ship

interest2020

% ofvotingrights

held2020

Invest-mentheld2020

R’000

Investment in subsidiaries 3 725 096

Alviva International Investments Proprietary Limited

South Africa Intermediate Direct 120 100,0 100,0 151 202

Alviva International Co Limited MauritiusICT industry and


Alviva Shared Management Services Proprietary Limited

South Africa Group services Indirect 1 000 55,4 55,4 –


South Africa Intermediate Direct 179 238 346 100,0 100,0 101 695

Appleby Solutions Limited ZambiaICT industry and


Arriba Technologies Proprietary Limited



Axiz Botswana Proprietary Limited BotswanaICT industry and


Axiz Namibia Proprietary Limited NamibiaICT industry and


Axiz Proprietary Limited South AfricaICT industry and


Axiz Technology Proprietary Limited South AfricaICT industry and


Axizworkgroup Mozambique Limitada

MozambiqueICT industry and


Boditse Proprietary Limited BotswanaICT industry and


Centrafin Proprietary Limited South Africa Financial Services Direct 1 000 100,0 100,0 23 801

Centravoice Proprietary Limited South AfricaICT industry and


Datacentrix Holdings Proprietary Limited **

South AfricaInvestment holding

in ICT industryIndirect 189 636 519 55,4 55,4 –

Datacentrix Properties Proprietary Limited

South Africa Property holding Indirect 100 55,4 55,4 –

Datacentrix Proprietary Limited South AfricaICT industry and


Datacentrix Solution DMCCUnited Arab



Datacentrix Solution LCCUnited Arab



DCT Holdings (RF) Proprietary Limited ***

South AfricaInvestment Holding

CoDirect 892 55,4 55,4 3 323 405

DG Store SA Proprietary Limited South AfricaICT industry and


eNetworks Proprietary Limited South AfricaICT industry and


Froggy IT Solution Proprietary Limited



GridCars Proprietary Limited South Africa Operating Co Indirect 100 21,2 21,2 –

Imbewu IT Solutions Proprietary Limited (formerly known as Digital Generation Consulting Proprietary Limited)



Infrasol Proprietary Limited South AfricaICT industry and






2020



Interestclassi-

fication

Issued share

capital2020

% of pro-portion of

owner-ship

interest2020

% ofvotingrights

held2020

Invest-mentheld2020

R’000

Intdev Internet Technologies Proprietary Limited

South Africa Operating Co Indirect 2 500 55,4 55,4 –

Merqu Communications Proprietary Limited



Obscure Enterprises Proprietary Limited



Obscure Technology Proprietary Limited






Pinnacle Micro Namibia Proprietary Limited

NamibiaICT industry and


Pinnacle Micro Proprietary Limited South AfricaICT industry and





Solareff Proprietary Limited South Africa Operating Co Indirect 1 000 28,3 28,3 –

VH Fibre Optics Proprietary Limited South AfricaICT industry and



South Africa Operating Co Direct 100 65,0 65,0 94 000

SynergERP Proprietary Limited South Africa Operating Co Indirect 1 782 38,8 38,8 –

Synerg300 Proprietary Limited South Africa Operating Co Indirect 1 100 38,8 38,8 –

SynergIT Proprietary Limited South Africa Operating Co Indirect 1 158 38,8 38,8 –

SynergERP Limited – DWC LCCUnited Arab

EmiratesOperating Co Indirect 300 000 51,0 51,0 –

SynergERP Limited – UK United Kingdom Operating Co Indirect 1 500 51,0 51,0 –

Dormant

Axiz Investment Trust South Africa Employee Trust Direct – 100,0 100,0 –

DG Education Proprietary Limited South AfricaICT industry and


Dirigible IT Proprietary Limited South Africa Dormant Indirect 100 55,4 55,4 –

Precision ICT Proprietary Limited South Africa Dormant Direct 120 100,0 100,0 –

Tri Continental Distribution SA Proprietary Limited *

South Africa Dormant Direct – – – –

Workgroup IT Proprietary Limited South Africa Dormant Direct 1 000 100,0 100,0 30 993

Obscure Technology WC Proprietary Limited *


relatedIndirect – – – –

Loan to subsidiaryAlviva Treasury Services Proprietary Limited

445 024

4 170 120

* Deregistered during the reporting period.

** The interest held in this company has been provided as security for the Class B preference shares (refer note 21.4).

*** The remaining direct interest is held by the Ledibogo Trust.

The aggregate profit after tax of the subsidiaries for the reporting period attributable to the Company was R392 million (2020: R323 million). The aggregate loss after tax of the subsidiaries for the reporting period attributable to the Company was R16 million (2020: R125 million).

The aggregate profit or loss after tax referred to above is prior to any intergroup eliminations.







Loan to subsidiary

The loan is unsecured, has no fixed terms of repayment and and is interest free. There is no expectation of repayment within the next twelve months.

Information about the Group’s exposure to credit risk and impairment of financial assets is included in note 34.7.

Controlled structured entities

The Ledibogo Trust

The main purpose of the Trust is to act as a vehicle which ensures compliance with the formal B-BBEE codes by the Group through the promotion of B-BBEE initiatives. The Trust controls Ledibogo (RF) Proprietary Limited (“Ledibogo”). Based on the judgement applied by management, the Trust and Ledibogo are consolidated by the Group as the structured entity is controlled by Alviva.

The Centrafin Owner Trust

The Trust was registered by Centrafin Proprietary Limited (“Centrafin”), a subsidiary of Alviva, as founder. The main objective of the Trust is to control and ring-fence Centrafin Receivables (RF) Limited (“Centrafin Receivables”), as part of a specific securitisation agreement with Nedbank Limited. Based on the judgement applied by management, the Trust and Centrafin Receivables are consolidated by the Group as the structured entities are controlled by Alviva through the control exercised over Centrafin.

The Centrafin Security SPV Owner Trust and Centrafin Security SPV (RF) Proprietary Limited

The Trust and Centrafin Security SPV (RF) Proprietary Limited (“Centrafin Security SPV”) were established by Centrafin, a subsidiary of Alviva. The Trust controls Centrafin Security SPV as part of the securitisation structure (refer above). In turn, Centrafin Security SPV issued guarantees to secured creditors of and holds an indemnity from Centrafin Receivables in respect of claims arising as a result of an event of default.

Centrafin Security SPV is a special purpose vehicle to which Centrafin Receivables has ceded its assets in favour of the company in respect of the guarantee provided in favour of Centrafin Receivables’ secured creditors.

12. EQUITY-ACCOUNTED INVESTEESGROUP

Notes2021

R’0002020

R’000

Investment in joint venture 12.1 1 924 –

Investment in associate 12.2 – –

Loan to associate 12.2; 12.3 64 497 41 773

66 421 41 773

No dividends were received from equity-accounted investees in the current or prior reporting periods.





12. EQUITY-ACCOUNTED INVESTEES (continued)

GROUP

2021R’000

2020R’000

12.1 Investment in joint ventureEffective rate of indirect interest held in joint venture (%) 50,0 50,0

Reconciliation between proportionate investment and current investment value:

Investment at cost * 1 204 1 204

Equity-accounted proportionate share in profit/(losses) 720 (1 204)

Investment in joint venture 1 924 –

Unrecognised share of losses – brought forward 5 380

Unrecognised share of losses for the period – –

Utilisation of unrecognised share of losses for the period (5) (375)

Unrecognised share of losses – carried forward – 5

* The cost of the investment has been increased to its original amount owing to the share of profit of R 2 million in the current reporting period.

The Group has an indirect interest in Electronic-DNA Proprietary Limited (“EDNA”), a company incorporated in South Africa, through its subsidiary Datacentrix Proprietary Limited which holds a 50% interest in the company. The company supplies licences for security software developed. The joint venture is not a publicly listed entity and consequently does not have a published price.

EDNA

2021R’000

2020R’000

The financial information of the joint venture is as follows:

Non-current assets 1 211 299

Current assets 13 474 10 409

Total assets 14 685 10 708

Current liabilities (10 837) (10 720)

Total liabilities (10 837) (10 720)

Net asset value 3 848 (12)

Revenue 11 103 7 678

Cost of sales – –

Gross profit 11 103 7 678

Other expenses (7 583) (7 518)

Net finance income 413 380

Operating profit 3 933 540

Income tax (expense)/benefit (73) 210

Profit for the period 3 860 750






GROUP

2021R’000

2020R’000

12.2 Investment in associateEffective rate of indirect interest held in associate (%) 49,0 49,0

Reconciliation between proportionate investment and current investment value:

Investment at cost * – –

Equity-accounted proportionate share of losses – –

Loan to associate 64 497 41 773

Investment in associate 64 497 41 773

Unrecognised share of losses – brought forward 25 618 11 373

Unrecognised share of losses for the period 4 558 14 245

Unrecognised share of losses – carried forward 30 176 25 618

* Amount below R1 000.

The Group has an indirect interest in Apex Business Systems Proprietary Limited (“APEX”), a company incorporated in South Africa, through its subsidiary DCT Holdings (RF) Proprietary Limited which holds a 49% interest in the company. The company supplies SHARP-related IT solutions. The associate is not a publicly listed entity and consequently does not have a quoted published price.

APEX

2021R’000

2020R’000

The financial information of the associate is as follows:

Non-current assets 2 702 5 365


Total assets 89 245 101 804

Non-current liabilities – (703)


Total liabilities (150 829) (154 086)

Net asset value (61 584) (52 282)

Revenue 83 965 123 552

Cost of sales (63 622) (122 646)

Gross profit 20 343 906

Other expenses (29 394) (29 716)

Net finance costs (251) (262)

Operating loss (9 302) (29 072)

Income tax expense – –

Loss for the period (9 302) (29 072)






GROUP

2021R’000

2020R’000

12.3 Loan to associate Balance at 1 July 41 773 88 119

Loan advanced to/(repaid by) associate 30 370 (18 356)

Loss allowance (7 646) (27 990)

Balance at 30 June 64 497 41 773

Terms of the loan to associate The loan is secured, interest free and has no fixed terms of repayment. There is no expectation of repayment or intention to

call for repayment within the next 12 months. The loan is secured by the cession whereby the company cedes all of its right, title, and interest in and to its book debts and a notarial bond has been registered over the inventory held in favour of the lender.

Information about the Group’s exposure to credit risk and impairment of financial assets is included in note 34.7.

GROUP

2021R’000

2020R’000

13. FINANCE LEASE RECEIVABLESNet investment in finance leases 992 752 873 763

Loss allowance (18 989) (19 242)

Balance at 30 June 973 763 854 521



The leases are mainly for ICT and office equipment asset-financing to customers over the economic life of the underlying assets, subject to specified minimum periods varying between one and five years. The receivables bear interest at an average rate of 17% (2020: 18%) and are secured by retention ownership of the underlying assets.

These receivables have been provided as security for the Nedbank Senior loan and Nedbank overdraft facilities granted (refer notes 8 and 21.2).





13. FINANCE LEASE RECEIVABLES (continued)

GROUP

2021R’000

2020R’000

13.1 Finance service-related agreementsMaturity analysis

Less than one year 458 707 427 486

One to two years 74 808 65 008

Two to three years 180 630 172 451

Three to four years 188 058 175 065

Four to five years 324 581 251 914

More than five years 387 2 553

Total undiscounted lease receivables 1 227 171 1 094 477

Unearned finance income (234 419) (220 714)

Net investment in finance leases 992 752 873 763

Information about the Group’s exposure to credit risk and impairment of finance lease receivables is included in note 34.7.





GROUP

2021R’000

2020R’000

14. DEFERRED TAXBalance at 1 July 10 549 (890)

Deferred tax assets acquired through business combinations – 1 815

Previously unrecognised deferred tax asset – 3 092

Utilisation of assessed losses (2 645) (4 668)

Temporary differences 67 037 41 101

Tax rate differential on temporary differences from acquisitions through business combinations

– 1 641

Temporary differences from acquisitions through business combination – (32 258)

(Under)/over provisions relating to prior periods (10 945) 716


Comprising:

Assessed losses 793 3 438

Temporary differences 63 203 7 111

Loss allowances 27 474 32 166

Property, plant and equipment 2 756 3 199

Intangible assets (16 694) (60 158)

Accruals 66 877 57 256

Right-of-use assets (90 055) (83 590)

Lease liabilities 101 313 89 155

Finance lease receivables (28 468) (30 917)

Net balance at 30 June 63 996 10 549

Categorised as:

Deferred tax asset 99 094 90 834

Deferred tax liability (35 098) (80 285)

Medium-term forecasts are prepared and reviewed by the Board on a bi-annual basis which include estimate and assumptions regarding economic growth, interest rates, inflation and applicable factors. The Board exercises judgement in determining whether forecasts are likely to be achieved and in turn whether the deferred tax assets will be recoverable.

Management expects sufficient future taxable income in the relevant subsidiaries to enable these companies to utilise the unutilised tax losses at 30 June 2021.





14. DEFERRED TAX (continued)

Substantively enacted tax rate

The Minister of Finance announced the change in the corporate tax rate from 28% to 27% for years of assessment commencing on or after 1 April 2022 in the Budget Speech on 24 February 2021. As announced by the Minister of Finance, the changes to tax rates and tax laws are intended to be done in a tax revenue-neutral manner. Thus, any benefit derived from the reduction in the corporate tax rate is intended to be offset by limitations placed on interest deductions and the use of assessed income tax losses and other proposed changes.

The following was considered by the Board in determining whether the new tax rate has been substantively enacted at reporting date:

� the impact of the changes in these tax laws are not known and the effects on taxable income are unclear;

� the time between the announcement and application of the new rate is unusually long;

� a change in tax rate as well as the broadening of the tax base was mentioned in the 2020 Budget Speech, but not addressed further;

� the tax rate change was mentioned in the Budget Speech but not addressed in the Budget Review, whereas previous rate changes were addressed in both the Budget Speech and the Budget Review; and

� the Budget Speech referred to the changes as proposals, thereby inferring that these changes were not yet final and subject to an approval process or possibly further consideration.

Therefore, a significant degree of uncertainty exists as to whether the announcement of the change in tax rate from 28% to 27% can be considered substantively enacted.

Based on the above, the Board considers the change in tax rate to be inextricably linked to other tax law changes that have not been clarified by the Minister of Finance. Therefore, the new tax rate is not considered to be substantively enacted at the reporting date.





GROUP

2021R’000

2020R’000

15. INVENTORIESInventory on hand 990 642 1 107 948

Goods in transit 203 938 148 685

Work-in-progress 19 330 19 651

1 213 910 1 276 284

Allowance for obsolete inventory (60 167) (48 097)

Balance at 30 June 1 153 743 1 228 187

During the current period there was an increase in the allowance for obsolete inventory of R12 million (2020: decrease of R9 million) with a corresponding effect in cost of sales recognised in profit or loss.

The Group did not recognise a right to returned goods asset for the current or prior reporting periods. Refer to note 25.3 of the financial statements.

16. TRADE AND OTHER RECEIVABLES

Trade receivables 2 392 685 2 885 703

Loss allowance (155 042) (159 400)

2 237 643 2 726 303

Other receivables * 294 534 138 547

Value-Added Tax receivable 61 417 81 986

Balance at 30 June 2 593 594 2 946 836

* Other receivables includes prepayments, deposits and loans to employees.

Due to the COVID-19 pandemic the international ICT industry experienced, and continue to experience, shortages in relation to the availability of ICT-related equipment. For this reason, many international vendors have changed their terms to require an upfront order placement fee and/or payment on shipment. The increase in other receivables can be attributed to a significant increase in prepayments of open orders with vendors.

A portion of trade receivables of various entities within the Group has been provided as security for banking facilities (refer notes 17 and 21.3).

Information about the Group’s exposure to credit and market risks, and impairment of trade receivables is included in note 34.





GROUP COMPANY

2021R’000

2020R’000

2021R’000

2020R’000

17. CASH AND CASH EQUIVALENTS

Cash on hand 264 376 – –

Balances with banks 879 349 1 219 245 7 172

South African Rand 828 608 1 159 196 7 172

Namibian Dollar 5 583 7 271 – –

US Dollar 26 354 19 414 – –

Botswana Pula 2 479 4 042 – –

Mozambican Metical 2 082 18 438 – –

Kenyan Shilling 221 227 – –

United Arab Emirates Dirham 580 87 – –

Qatari Rial 13 120 1 626 – –

Mauritian Rupee 50 8 071 – –

Zambian Kwacha 272 873 – –

Bank overdraft (South African Rand) (220 000) – – –

Net balance at 30 June 659 613 1 219 621 7 172

The Group holds cash and cash equivalents with reputable financial institutions. These institutions have a national short- term and national long-term credit rating of zaAA or above and zaA-1+ or above, respectively. (Source: S&P Global rating agency).

Information about the Group’s exposure to credit and market risks, and impairment of cash and cash equivalents is included in note 34.

Banking facilities

The significant banking facilities available to the below companies were as follows at the reporting date:

Axiz Proprietary

LimitedR’000

Centrafin Proprietary

LimitedR’000

Datacentrix Proprietary

LimitedR’000

ObscureTechnologies

Proprietary Limited

R’000

Pinnacle Micro

Proprietary Limited

R’000

Solareff Proprietary

LimitedR’000

Sintrex Integration

Systems Proprietary

LimitedR’000

Direct facilities 400 000 70 000 37 250 15 000 321 000 – 5 000

Contingent facilities

– – 36 497 – 165 000 – –

Settlement facilities

110 000 – 330 000 12 000 4 102 12 000 –

510 000 70 000 403 747 27 000 490 102 12 000 5 000





17. CASH AND CASH EQUIVALENTS (continued)

Securities provided in terms of the banking facilities

Facility holder: Axiz Proprietary Limited (“Axiz”)

The following securities have been provided to Nedbank Limited:

� A deed of cession whereby the company cedes all of its right, title and interest in and to its book debts.

� A limited guarantee, including a pledge in security of intra-Group accounts, for an amount of R510 million between the company and Alviva Holdings Limited.

Cession by the company of its right, title and interest in Credit Guarantee Insurance Corporation of Africa insurance policies as set out below:

� Policy number SDC151755;

� Policy number 169459/ED; and

� Policy number 316228/ED.

The following imposed covenant is directly linked to the facility:

� Debt cover ratio in relation to utilised direct facilities not to be less than 1, based on a specific debtors book formula applied by the bank.

� The company must not make any intercompany loans in excess of R100 million.

� The retained earnings of the company must exceed R450 million.

Facility holder: Centrafin Proprietary Limited (“Centrafin”)



� A limited guarantee for an amount of R70 million between the company and Alviva Holdings Limited.



� At the end of the prior reporting date, rental assets with a net carrying amount of R156 699 served as security for one of the overdraft facilities (refer note 8).

Facility holder: Datacentrix Proprietary Limited (“Datacentrix”)

The following securities have been provided to Absa Bank Limited:


� A limited guarantee for an amount of R208 million between the company and Datacentrix Holdings Proprietary Limited, excluding cession of loan accounts.







17. CASH AND CASH EQUIVALENTS (continued)

Facility holder: Obscure Technologies Proprietary Limited (“Obscure”)



� A limited guarantee for an amount of R27 million between the company and Alviva Holdings Limited.

� A general condition contract for the purchase and sale of foreign currencies.


� Debt cover ratio in relation to utilised direct facilities not to be less than 1 based on a specific debtors book formula applied by the bank.

Facility holder: Pinnacle Micro Proprietary Limited (“Pinnacle”)

The following securities have been provided to First National Bank, a division of FirstRand Bank Limited:

� A deed of cession whereby the company cedes all of its rights, titles and interest in and to its Credit Insurance Policy and all foreign exchange contracts entered into.

� Continuing guarantee by Alviva Holdings Limited in favour of First National Bank in respect of all obligations provided under the Facility Agreement.


� The company shall not incur additional indebtedness unless this indebtedness is with the consent of the bank being obtained.

� The company shall not change its core business or merge or amalgamate with another party unless the consent of the bank is obtained.

� A collateral cover ratio of 167% is maintained.

� The company shall not dispose of material assets outside of the course of ordinary business unless the consent of the bank is obtained.

� The company shall insure at least 70% of the debtors’ book from time to time.

Shortly after the reporting period, the banking facilities above have been increased by R150 million, secured by a general notarial bond over its stock and a further parental guarantee.

Facility holder: Solareff Proprietary Limited (“Solareff”)


� A first ranking cession and pledge in an amount up to R16 million of its right, title and interest in and to all future moneys standing to the credit of certain of the company’s Nedbank accounts.

� A general condition of contract relating to the purchase or sale of foreign currencies.

� A limited guarantee for an amount of R28 million between Solareff and Alviva Holdings Limited.

Facility holder: Sintrex Integration Systems Proprietary Limited (“Sintrex”)

The following securities have been provided to Nedbank Limited.



� Debt cover ratio in relation to utilised direct facilities not to be less than 3, based on a specific debtors’ book formula applied by the bank.

� Dividend cover of at least 2 times by the company.

The Group’s bankers have issued guarantees to the value of R16 million (2020: R8 million) on behalf of the Group.





GROUP COMPANY

2021R’000

2020R’000

2021R’000

2020R’000

18. STATED CAPITALAuthorised share capital

300 000 000 ordinary shares of R0,01 each 3 000 3 000 3 000 3 000

Issued share capital

122 520 303 (2020: 136 317 746) ordinary shares 1 225 1 363 1 225 1 363

Balance at 30 June 1 225 1 363 1 225 1 363

2021Shares

2020Shares

2021Shares

2020Shares

Reconciliation of issued shares

Balance at 1 July 136 317 746 143 421 787 136 317 746 143 421 787

General share repurchase and cancellation (13 797 443) (7 104 041) (13 797 443) (7 104 041)

Balance at 30 June 122 520 303 136 317 746 122 520 303 136 317 746

During the current reporting period, Alviva repurchased a total of 13 797 443 (2020: 7 104 041) of its ordinary shares on the open market for a total consideration of R115 million (2020: R102 million).

The above repurchase transactions were executed in terms of the general authority granted by shareholders at its AGM.





GROUP

2021Number

2020Number

2021R’000

2020R’000

19. TREASURY SHARES

Balance at 1 July 7 180 750 6 835 000 115 328 125 819

Shares vested with FSP participants * (655 750) (1 058 600) (11 273) (20 869)

Disposal of forfeited shares * (110 000) (1 979)

Shares acquired and allocated to FSP participants * 1 400 000 1 404 350 19 119 10 378

Balance at 30 June 7 815 000 7 180 750 121 195 115 328

* Refer to note 35.3 .

20. OTHER EQUITY RESERVESGROUP

Foreigncurrency

translationreserve

R’000

Equity-settledshare-based

paymentreserve

R’000OtherR’000

TotalR’000

Balance at 1 July 2019 7 830 25 735 3 33 568

Increase in foreign currency translation reserve 4 609 – – 4 609

Equity-settled share-based payment (refer note 35.3) – 8 112 – 8 112

Transfer between reserves – – – –

Balance at 1 July 2020 12 439 33 847 3 46 289

Movement in foreign currency translation reserve (7 549) – – (7 549)

Equity-settled share-based payment (refer note 35.3) – (13 730) – (13 730)

Transfer between reserves 3 – (3) –

Balance at 30 June 2021 4 893 20 117 – 25 010





21. INTEREST-BEARING LIABILITIESGROUP

Notes

Totalbalance

R’000

Currentportion

R’000

Non-currentportion

R’000

2021

Secured

Lease liabilities – properties 21.1.1 304 246 67 458 236 788

Lease liabilities – sale-and-leaseback transactions 21.1.2 10 222 6 121 4 101

Lease liabilities – IT equipment 21.1.1 1 378 1 154 224

Financial liabilities – sale-and-leaseback transactions 21.1.2 45 173 15 430 29 743

Asset-backed senior loan: Nedbank Limited 21.2 666 400 48 785 617 615

Term loan facility 21.3 23 803 13 121 10 682

Redeemable preference shares 21.4 200 000 140 000 60 000

Unsecured

Third-party loans 21.5 11 127 2 127 9 000

Balance at 30 June 2021 1 262 349 294 196 968 153

2020

Secured

Lease liabilities – properties 21.1.1 295 502 51 897 243 605

Lease liabilities – sale-and-leaseback transactions * 21.1.2 22 909 12 506 10 403

Lease liabilities – motor vehicles 21.1.1 555 236 319

Financial liabilities – sale-and-leaseback transactions ** 21.1.2 18 870 5 608 13 262

Asset-backed senior loan: Nedbank 21.2 624 000 624 000

Term loan facility 21.3 35 750 11 947 23 803

Redeemable preference shares 21.4 400 000 250 000 150 000

Unsecured

Third-party loan 21.5 10 014 – 10 014

Balance at 30 June 2020 1 407 600 332 194 1 075 406

* These sale-and-leaseback transactions existed on transition to IFRS 16.

** These sale-and-leaseback transactions were entered into during the reporting period.





21. INTEREST-BEARING LIABILITIES (continued)

21.1 Leases

The Group leases properties, IT equipment and motor vehicles. Furthermore, the Group enters into sale-and-lease back transactions with customers over equipment.

GROUP

2021R’000

2020R’000

Leases as lessee

Lease liabilities – property 304 246 295 502

Lease liabilities – sale-and-leaseback transactions 10 222 22 909

Lease liabilities – IT equipment 1 378 –

Lease liabilities – motor vehicles – 555

315 846 318 966

Non-current liabilities 241 113 254 327

Current liabilities 74 733 64 639

315 846 318 966

21.1.1 Property, IT equipment and motor vehicle leases

The Group leases various properties for administrative and warehouse storage purposes, IT equipment and motor vehicles. Some of the leases include a fixed monthly lease payment in relation to the parking and operating costs directly associated with the underlying property.

Terms

Property leases typically run for a period of five years, with an option to renew the lease. Lease payments are renegotiated every three to five years to reflect market rentals.

Motor vehicle leases were settled in full during the reporting period.

Right-of-use-assets

The right-of-use assets related to the properties are included in property, plant and equipment, as disclosed in note 8.

Short-term leases

In some instances, the property leases are negotiated on a month-to-month basis. These leases are short-term leases. The Group has elected not to recognise right-of-use assets and lease liabilities for these leases.

In addition, the Group leases equipment on an ad hoc basis which are also short-term leases, for which right-of-use assets and lease liabilities are not recognised.

The portfolio to which the Group is committed at the reporting date is not expected to differ significantly to that of the expense recognised in the current reporting period.






Maturity analysis

The Group’s maturity analysis of the lease liabilities at the reporting date, based on contractual undiscounted cash flows, is as follows:

Carrying amount Total

Less than 3 months

Between 3 to 12

months1 to 5 years

More than

5 years

2021

Lease liabilities – properties 304 246 376 626 22 110 67 247 240 459 46 810

Lease liabilities – IT equipment 1 378 1 393 541 630 222 –

305 624 378 019 22 651 67 877 240 681 46 810

2020

Lease liabilities – properties 295 502 343 945 17 200 54 462 219 058 53 225

Lease liabilities – motor vehicles 555 600 84 235 281 –

296 057 344 545 17 284 54 697 219 339 53 225

Amounts recognised in profit or loss GROUP

2021R’000

2020R’000

Short-term lease expense (included in administration expenses) 13 541 11 722

Depreciation 71 190 64 668

Interest on lease liabilities (included in finance costs) 25 901 27 657

Gain on remeasurement of lease liabilities (included in administration expenses) (121) –

Debt forgiveness related to lease payments* (included in administration expenses) – (1 262)

110 511 102 785

* The Group received debt forgiveness relief in respect of property leases, which was recognised in terms of IFRS 16’s practical expedient. The relief was

received in respect of a minimal number of leases and ranged for lease payments during the months of April 2020 to June 2020.

Amounts recognised in statement of cash flows GROUP

2021R’000

2020R’000

Short-term lease expense (included in net cash flows from operations) (13 541) (11 722)

Interest on lease liabilities (included in net cash flows from operations) (25 901) (27 657)

Capital repayments of lease liabilities (included in net cash flows from financing activities)

(56 933) (44 815)

Total cash outflows (96 375) (84 194)






21.1.2 Sale-and-leaseback transactions

GROUP

2021R’000

2020R’000

Sale-and-leaseback transactions – lease liabilities * 10 222 22 909

Sale-and-leaseback transactions – financial liabilities * 45 173 18 870

55 395 41 779


Current liabilities 21 551 18 114

55 395 41 779

* The Group entered into sale-and-leaseback transactions in prior reporting periods. Previously, these agreements were classified as operating leases under IAS 17. At transition to IFRS 16, these agreements were recognised as lease liabilities with a corresponding right-of-use asset.

** During the prior reporting period, the Group entered into additional sale-and-leaseback transactions which were recognised as financial liabilities as the Group did not transfer control of the underlying assets to its customers.

The Group enters into sale-and-leaseback transactions in relation to office and ICT equipment as the underlying assets.

Terms

The leases typically run for a period of between three and five years with no renewal options. The lease payments range between R172 and R471 394 (2020: R1 120 and R471 394) in respect of the sale-and-leaseback transactions.

Right-of-use-asset

The right-of-use assets and underlying equipment are included in property, plant and equipment as disclosed in note 8.






Maturity analysis

The Group’s maturity analysis of the lease liabilities, based on contractual undiscounted cash flows, at the reporting date, is as follows:

Carrying amount Total

Less than

3 months

Between 3 to 12

months

More than

5 years

2021

Lease liabilities – sale-and-leaseback transactions 10 222 11 430 1 732 5 196 4 502

10 222 11 430 1 732 5 196 4 502

2020

Lease liabilities – sale-and-leaseback transactions 22 909 26 165 3 708 10 843 11 614

22 909 26 165 3 708 10 843 11 614

Amounts recognised in profit or loss GROUP

2021R’000

2020R’000

Depreciation (11 123) (11 363)

Interest on lease liabilities (included in finance costs) (1 963) (3 489)

(13 086) (14 852)

Amounts recognised in statement of cash flows GROUP

2021R’000

2020R’000

Interest on lease liabilities (included in net cash flows from operations) (1 963) (3 489)

Capital repayments of lease liabilities (included in net cash flows from financing activities)

(11 184) (11 455)

Total cash outflows (13 147) (14 944)






21.2 Asset-backed senior loan: Nedbank

The asset-backed senior loan is secured by a cession over finance lease receivables amounting to R784 million (2020: R721 million), cash resources of R86 million (2020: R108 million) and trade receivables of R16 million (2020: R18 million), bears interest at 3-month Jibar plus 2,5% and is repayable from 1 May 2022 over the life of the financed assets.

The following debt covenants are applicable to the asset-backed senior loan:

The covenants are directly linked to the lease book (included as part of ‘finance lease receivables’) applicable to the securitisation agreement with the financial institution:

� debt cover ratio of at least 1, based on a specific lease book formula applied by the bank; and

� specific portfolio covenants and transactional criteria determined by the bank.

21.3 Term loan facility: HP Financial Services

During the previous reporting period, the Group entered into a term funding agreement in relation to a specific underlying transaction with a customer.

The loan is repayable in quarterly instalments and bears interest at a fixed rate of 9,50% per annum. The terms of the loan were structured in accordance with the underlying customer transaction and no additional security was required in respect of the facility.

21.4 Redeemable preference shares

No additional redeemable preference shares were issued to Absa Bank Limited (“Absa”) during the reporting period (2020: 60). Dividends are payable on a bi-annual basis on 31 January and 31 July, respectively, and are calculated at a rate of 79% of the official prime interest rate, compounded monthly. Each preference share amounts to R10 million.

The scheduled redemption dates had originally been set as three years and one month after the respective issue dates of the shares and 10 shares were redeemed on 20 August 2020.

During February 2021, the Group early redeemed 10 preference shares amounting to R100 million and, in addition, in order to distribute redemption payments more evenly, re-negotiated the scheduled redemption dates of a portion of the remaining preference shares with Absa as detailed below.

RedemptionOriginal redemption date

Actual redemption date

Extended redemption date

Shares issued

Scheduled redemption

Early redemption

Balance of

shares

Tranche 1 20 May 2020 20 August 2020 20 August 2020 10 (10) – –

Tranche 2 22 April 2021 8 February 2021 30 September 2021 15 – (10) 5

Tranche 3 28 July 2021 30 May 2022 9 – – 9

Tranche 4 19 August 2022 19 August 2022 6 – – 6

A commitment fee, equal to 0,5% per annum of the commitment fee less the value of the issue price of issued preference shares, is payable to the holder of the preference shares. The maximum number of preference shares that may be issued to the holder is 50 Class B cumulative redeemable non-participating preference shares.

The shares held in Datacentrix Holdings Proprietary Limited (“DXL”), a subsidiary of the Group, have been pledged as security to Absa in respect of the preference shares.

The holder of the preference shares is entitled to monitor the use of the proceeds of the issue of preference shares to ensure that the proceeds are used within the scope of the qualifying purpose. The qualifying purpose of the additional amount received is to finance business acquisitions.






In terms of DCT’s Memorandum of Incorporation, the preference shares will at least rank pari passu with the claims of all of its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies in general and there shall be no class of shares in the stated capital of the company which ranks in priority to the preference shares issued in terms of this agreement.

The agreement requires Alviva to remain listed on the JSE.

No changes in the shareholding between the Company, DCT, DXL and Datacentrix Proprietary Limited (“DXP”) are permitted until Class B preference shares have been redeemed.

The following covenants are applicable to the preference shares:

The Company:

� net leverage ratio may not exceed 3; and

� interest cover ratio of equal to or more than 3.5.

DXP:

� net leverage ratio may not exceed 2; and

� interest cover ratio of equal to or more than 3.5.

The interest expense of R11 million (2020: R13 million), which is payable after the reporting date on 31 July 2021, is included in trade and other payables.

21.5 Third-party loansGROUP

2021R’000

2020R’000

Unsecured

Merlynn Intelligence Technologies Proprietary Limited’s third-party loan 2 127 1 014

Solareff Proprietary Limited’s (“Solareff”) third-party loans 9 000 9 000

11 127 10 014


Current liabilities 2 127 –

11 127 10 014

These loans bear interest at the official prime rate per annum and are repayable on demand. The Solareff loans will be settled after the 2022 reporting date.





22. NON-INTEREST-BEARING LIABILITIESGROUP

Notes

Totalbalance

R’000

Currentportion

R’000

Non-current portion

R’000

2021

Unsecured

Contingent consideration 22.1 35 654 12 664 22 990

35 654 12 664 22 990

2020

Unsecured

Contingent consideration 22.1 79 976 7 584 72 392

Third-party loans 22.2 437 – 437

80 413 7 584 72 829

22.1 Contingent considerationGROUP COMPANY

2021R’000

2020R’000

2021R’000

2020R’000

Balance at 1 July 79 976 89 898 – 9 000

Acquisition of SynergERP Propriety Limited * – 13 381 – –

Acquisition of interest in SynergERP Limited – DWC LLC (“Synerg DWC”)

– 24 288 – –

Acquisition of interest in SynergERP Limited – UK (“Synerg UK”)

– 27 840 – –

Settlement paid to vendors (7 584) (57 724) – –

Total adjustments recognised in profit or loss ** (36 738) (17 707) – (9 000)

Foreign exchange (gain)/loss (7 462) 6 162 – –

Fair value gain (29 276) (23 869) – (9 000)

Balance at 30 June 35 654 79 976 – –

* The contingent consideration was settled in the period that the business was acquired.

** The information presented in the table was reallocated in the current reporting period to disclose the effect of foreign exchange differences separately. Comparative information has been provided.





22. NON-INTEREST-BEARING LIABILITIES (continued)

22.1 Contingent consideration (continued)

Contingent consideration related to the acquisition of VH Fibre

The purchase consideration was settled in full during the current reporting period.

GROUP

2021R’000

2020R’000

The contingent consideration is classified as follows:

Current – 1 827

Non-current – –

– 1 827

Contingent consideration related to the acquisition of Obscure

As previously disclosed, the total purchase price would be determined on a formula that is based on the profits for the current reporting period.

GROUP

2021R’000

2020R’000


Current 12 664 5 757

Non-current – 14 100

12 664 19 857

The fair value of the contingent consideration was determined at the reporting date in terms of the discounted cash flow method. The inputs into the model include the expected cash flows in terms of the performance conditions of the acquiree, based on internally prepared budget and forecasted estimates, discounted at a rate of 5,04% (2020: 5,8%), which represents the borrowing rate of the treasury function of the Group.






22.1 Contingent consideration (continued)

Contingent consideration related to the acquisition of Synerg DWC

As previously disclosed, the total purchase price will be determined and paid on a formula based on the profits for the reporting period ending 30 June 2022.

GROUP

2021R’000

2020R’000


Current – –

Non-current 22 990 27 852

22 990 27 852


Contingent consideration related to the acquisition of Synerg UK

Due to the unforeseen resignation of the key management individual of Synerg UK (refer note 10), the Group has decided not to pursue its UK endeavours at this time resulting in derecognition of the contingent consideration related to Synerg UK.

GROUP

2021R’000

2020R’000


Current – –

Non-current – 30 438

– 30 438







22.2 Third-party loans

GROUP

2021R’000

2020R’000

Unsecured

Parcea Computing Proprietary Limited’s outside shareholders – 437

Balance at 30 June – 437

Loans due to outside shareholders were settled during the reporting period. These loans had no specified repayment terms.

GROUP COMPANY

2021R’000

2020R’000

2021R’000

2020R’000

23. TRADE AND OTHER PAYABLESTrade payables 2 241 672 3 227 763 1 842 1 744

Derivative liabilities – foreign exchange contracts 10 742 11 772 – –

Other payables * 226 002 211 666 – –

Value-Added Tax payable 33 385 24 333 – –

Employee-related accruals 123 933 81 148 – –

Operating cost accruals 70 620 69 712 – –

2 706 354 3 626 394 1 842 1 744

* Other payables comprise other operational payables that are not considered to be trade creditors in the normal operating cycle.

The Group did not recognise a refund liability at the current and prior reporting dates. Refer to note 25.3. Information about the Group’s exposure to liquidity and market risks of trade and payables is included in note 34.





GROUP

2021R’000

2020R’000

24. CONTRACT LIABILITIES

Contract liabilities related to warranty cover 2 108 3 817

Contract liabilities related to service and maintenance contracts 210 296 196 176

212 404 199 993

Non-current portion 16 627 16 064

Current portion 195 777 183 929

Warranty cover

The Group offers warranty cover in relation to the repair or replacement of goods sold with carry-in or on-site warranties of between 12 and 36 months in the event that the product should fail to operate under normal operating conditions.

The portion of the revenue earned on the contractual sale transactions that relate to the warranty cover is deferred and recognised as revenue in profit or loss over the period of the warranties. Refer to note 25.3.


These contracts relate to project installations and 12 to 36-month service and maintenance contracts. The advance consideration received from customers is recognised as revenue in profit or loss on a systematic basis over the remainder of the contract in terms of the services rendered. Refer to note 25.3.

The following tables represent a reconciliation of the contract liabilities of the Group:

Warranty cover

GROUP

2021R’000

2020R’000

Balance as at 1 July 3 817 4 630

Recognised as revenue (1 709) (813)

Balance as at 30 June 2 108 3 817


GROUP

2021R’000

2020R’000

Balance as at 1 July 196 176 121 745

Recognised as revenue (503 888) (471 085)

Contracts entered into 518 008 545 516

Balance as at 30 June 210 296 196 176

No revenue was recognised in the current or prior reporting period in respect of performance obligations satisfied (or partially satisfied) in a previous period.





25. REVENUE

The Group generates revenue primarily from the sale of IT-, fibre- and solar-related products and provision of installation, distribution and maintenance services. Other sources of revenue for the Group include rental income from equipment and finance income from finance leases entered into with customers.

GROUP COMPANY

2021R’000

2020R’000

2021R’000

2020R’000

Revenue from contracts with customers 14 664 917 14 586 277 – –

Other revenue 228 218 217 878 376 746 459 524

– Revenue related to leases 228 218 217 878 – –

– Dividend income – – 376 746 459 524

Total revenue 14 893 135 14 804 155 376 746 459 524

25.1 Disaggregation of revenue from contracts with customers

In the following tables, revenue from contracts with customers is disaggregated by timing of revenue recognition, major service offering and contributing industry. The tables include a reconciliation of the disaggregated revenue with the Group’s reportable segments (refer to note 37). In addition, the Group disaggregated the total revenue into the geographic regions.

2021

Timing of revenue recognition

Reportable segments

Total2021

R’000GROUP

ICTDistribution

R’000


R’000

Financial Services

R’000


At a point in time 10 075 760 2 448 021 – 12 523 781

Over a period of time 194 125 1 947 011 – 2 141 136

Revenue from contacts with customers 10 269 885 4 395 032 – 14 664 917

Revenue related to leases – 27 954 200 264 228 218

Total revenue 10 269 885 4 422 986 200 264 14 893 135





25. REVENUE (continued)

25.1 Disaggregation of revenue from contracts with customers (continued)

Major service offering

Reportable segments

Total2021

R’000GROUP

ICTDistribution

R’000


R’000

Financial Services

R’000

Service offerings

IT-related products 9 929 631 2 362 146 – 12 291 777

Fibre-related products 146 409 – – 146 409

Solar-related products – 85 875 – 85 875

Electric charge-point sales – 3 190 – 3 190

Installation services 1 256 225 895 – 227 151

Infrastructure management – 119 882 – 119 882

Maintenance services – 206 447 – 206 447

Consulting services – usage 111 050 207 670 – 318 720

Consulting services – labour hours 81 539 1 183 927 – 1 265 466



Total revenue 10 269 885 4 422 986 200 264 14 893 135

Contributing industry

Reportable segments

Total2021

R’000GROUP

ICTDistribution

R’000


R’000

Financial Services

R’000

Industries

ICT 10 122 220 3 992 631 – 14 114 851

Fibre solutions 147 665 – – 147 665

Renewable energy – 278 695 – 278 695




Total revenue 10 269 885 4 422 986 200 264 14 893 135







Geographic regions

Reportable segments

Total2021

R’000GROUP

ICTDistribution

R’000


R’000

Financial Services

R’000

Regions

South Africa 8 799 690 4 231 013 – 13 030 703

Africa (excluding South Africa) 1 470 186 71 793 – 1 541 979

Other * 9 92 226 – 92 235



Total revenue 10 269 885 4 422 986 200 264 14 893 135

* Includes Group entities in the UK and the Middle East.

2020


Reportable segments

Total2020

R’000GROUP

ICTDistribution

R’000


R’000

Financial Services

R’000


At a point in time 9 629 391 2 972 845 – 12 602 236

Over a period of time 238 365 1 745 676 – 1 984 041



Total revenue 9 867 756 4 738 894 197 505 14 804 155







Major service offering

Reportable segments

Total2020

R’000GROUP

ICTDistribution

R’000


R’000

Financial Services

R’000

Service offerings

IT-related products 9 508 021 2 899 384 – 12 407 405

Fibre-related products 125 530 – – 125 530

Solar-related products – 73 461 – 73 461

Electric charge-point sales – 4 578 – 4 578

Installation services 13 260 241 217 – 254 477


Maintenance services – 215 206 – 215 206

Consulting services – usage 104 449 180 528 – 284 977

Consulting services – labour hours 116 496 1 001 010 – 1 117 506



Total revenue 9 867 756 4 738 894 197 505 14 804 155

Contributing industry

Reportable segments

Total2020

R’000GROUP

ICTDistribution

R’000


R’000

Financial Services

R’000

Industries

ICT 9 728 966 4 365 744 – 14 094 710

Fibre solutions 138 790 – – 138 790

Renewable energy – 245 996 – 245 996




Total revenue 9 867 756 4 738 894 197 505 14 804 155







Geographic regions

Reportable segments

Total2020

R’000GROUP

ICTDistribution

R’000


R’000

Financial Services

R’000

Regions

South Africa 8 318 072 4 442 623 – 12 760 695

Africa (excluding South Africa) 1 549 684 209 643 – 1 759 327

Other * – 66 255 – 66 255



Total revenue 9 867 756 4 738 894 197 505 14 804 155

* Includes Group entities in the UK and Middle East.

25.2 Contract balances

The following table provides information about receivables from contracts with customers (refer to note 16):

2021R’000

2020R’000GROUP

Receivables

Receivables classified as trade and other receivables 2 392 685 2 885 703

Loss allowance (155 042) (159 400)

2 237 643 2 726 303

Contract liabilities

The contract liabilities refer to payments received in advance in respect of service and maintenance agreements as well as the specific warranties provided (in certain instances). Refer to note 24.

No information is provided about remaining performance obligations at 30 June 2021 that have an original expected duration of one year or less, as allowed by IFRS 15.

The remaining performance obligations at 30 June 2021 that have an original expected duration of longer than one year amount to R327 million (2020: R324 million).






25.3 Performance obligations and revenue recognition policies

Revenue is measured based on the consideration specified in a contract with a customer. The Group recognises revenue when it transfers control over a good or service to a customer. The following table provides information about the nature and timing of the satisfaction of performance obligations in contracts with customers, including significant payment terms, and the related revenue recognition policies.

Type of product/service

Nature and timing of satisfaction of performance obligations, including significant payment terms Revenue recognition policies

IT-related products The Group sells various IT-related products to customers including hardware, software packages and associated licences. The software relates to third-party owned software which is under complete control of the customer.

Revenue is recognised at a point in time when control passes to the specific customer.

Customers obtain control of these products when the goods are delivered to and have been accepted at their premises or electronically.

Revenue is recognised when the products are delivered to the customer, the customer has full discretion over the directed use of the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products.

Invoices are generated at that point in time.

Invoices are usually payable within 30-60 days which indicates that no financing is provided to customers.

Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the contract, the acceptance provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied.

The Group allows for volume and similar rebates on specific deals and contracts but not as a standard term or condition.

Where a volume or similar rebate is allowed, revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. A refund liability (included in trade and other payables) is recognised for expected volume discounts payable to customers in relation to sales made until the reporting date.

Some contracts permit the customer to return an item. Returned goods, are exchanged only for new goods, i.e., no cash refunds are offered. The return policy is rarely exercised by customers.

A refund liability (included in trade and other payables) and a right to the returned goods (included in inventories) are recognised for the products expected to be returned. Accumulated experience is used to estimate such returns at the time of sale at a portfolio level (expected value method). Because the number of products returned has been steady for years, it is highly probable that a significant reversal in the cumulative revenue recognised will not occur. The validity of this assumption and the estimated amount of returns are reassessed at each reporting date.







Fibre- and solar-related products

The Group sells fibre- and solar-related products to customers.

Revenue is recognised at a point in time when control passes to the specific customer.

Customers obtain control of these products when the goods are delivered to and have been accepted at their premises. The Group does not allow any returns on these specialised products.

Revenue is recognised when the products are delivered to the customer, the customer has full discretion over the directed use of the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products.

Invoices are generated at that point in time. Invoices are usually payable within 30 days which indicates that no financing is provided to customers.

Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the contract, the acceptance provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied.

Electric charge-point systems and installations

The Group sells and installs a unique motor vehicle electric charge-point at a customer’s premises.

Revenue is recognised over time.

The overall installation is considered to be specialised and directly linked to the charge-point console.

Installation and charge-point components

Input method based on the costs of the components completed at the reporting date as a proportion of the total cost estimate for the installation of the system.

Customers does not obtain control of the various charge-point components prior to the commencement of the installation at their premises.

Warranty component

Input method based on the number of months lapsed of the warranty period at the reporting date as a proportion of the total contractual term.

Invoices are generated on a milestone basis during the installation process. Invoices are usually payable within 30 days which indicates that no financing is provided to customers.

Unearned warranty revenue is included in contract liabilities.

As part of the installation, an internal warranty is provided to the customer in relation to the malfunctioning of the charge-points which forms part of the invoiced amount. The warranty is usually for a period of 24 months.


25.3 Performance obligations and revenue recognition policies (continued)







Installations The Group installs some of the products sold to customers, i.e., hardware components, fibre-related components and solar solutions.


The overall installations in these cases are not considered to be specialised and are identified as a separate performance obligation.

Installation element

Input method based on the completed labour hours at the reporting date as a proportion of the total labour hours estimated for the installation of the related product.

In some cases the products, mostly IT-related, are controlled by the customer before the installation project commences. In other cases, the products, mostly solar- and fibre-related, are not controlled by the customer before the installation project is initiated and are transferred during the installation process.

Product delivered as part of installation solution

Input method based on the costs of the products completed at the reporting date as a proportion of the total cost estimate for the completed product set.

Invoices are generated on a milestone basis during the installation process. Invoices are usually payable within 30 days which indicates that no financing is provided to customers.

Warranty component

Output method based on the number of months lapsed of the warranty period at the reporting date as a proportion of the total contractual term.

As part of some installation projects, an internal warranty is provided to the customer in relation to failing solutions which forms part of the invoiced amount. The warranty is usually for a period of 12 to 36 months.

Infrastructure management

The Group owns internally developed software which specifically assists customers with infrastructure management.


The software remains in the control of the Group whereby the customer receives merely the right to access and not the right to use the platform.

Licence agreement

Output method based on the number of months lapsed of the licencing agreement period at the reporting date as a proportion of the total contractual term.

Invoices are generated on a monthly basis. Invoices are usually payable within 30 days which indicates that no financing is provided to customers.

Payments received in advance are included in contract liabilities.









Maintenance contracts The Group sells maintenance contracts as part of the service offering in combination with other contracts with customers.



Maintenance agreement

Output method based on the number of months lapsed of the licencing agreement period at the reporting date as a proportion of the total contractual term.


Consulting services – usage

The Group provides access to certain resources such as data, mobile connections, IT storage space on servers, Cloud services and various other similar resources to customers by means of contract with a fixed determined price per consumption unit.



Consumption/resources utilised by customer

Output method based on the utilisation or consumption by the customer measured in the contractually specific unit metric for example data or electric units.


Consulting services – labour hours

The Group provides technical resources to customers by means of consulting services.


Some customers enter into a contract at a fixed monthly fee allowing access to technical consulting staff while other customers request the services on an ad-hoc basis.

Labour hours of consultants

Input method based on the labour hours spent at the reporting date as a proportion of the total labour hours coupled to the specific consulting service (contractually or ad-hoc).

Invoices are generated on a monthly basis or when the ad-hoc service is completed (whichever period is shorter). Invoices are usually payable within 30 days which indicates that no financing is provided to customers.








GROUP

2021R’000

2020R’000

26. OPERATING PROFITOperating profit includes:

Auditor’s remuneration [GRI 405-1] 4 664 4 379

Audit services 4 664 4 379

Employee benefit expenses 1 329 843 1 323 782

Short-term employee benefits 1 263 689 1 255 982

Defined contribution plan expense 66 154 67 800

Depreciation 150 257 132 843

Leasehold improvements 308 858

Equipment and vehicles, owned 79 124 66 833

Buildings 70 736 64 668

Rental equipment 89 484

Amortisation 167 245 186 239

Intangible assets 167 245 186 239

Gain on remeasurement of contingent consideration (29 276) (23 869)

Gain on foreign exchange (30 931) (630)

Profit on disposal of property, plant and equipment (76) (1 611)

Impairment losses and write-offs on trade and finance lease receivables 30 284 45 645

Impairment loss on loan to equity-accounted investee 7 646 27 990

Impairment loss on goodwill 11 062 49 563

Impairment loss on intangible assets 25 656 –

GROUP COMPANY

2021R’000

2020R’000

2021R’000

2020R’000

27. NET FINANCE COSTSFinance income (23 904) (50 666) (7) (42)

Interest income (23 904) (50 666) (7) (42)

Finance costs 159 717 227 640 – –

Short-term finance including lease liabilities * 73 543 140 234 – –

Interest (forward points) on foreign exchange contracts

70 773 57 553 – –

Preference share dividend (deemed interest) 15 402 29 853 – –

* The interest expense on lease liabilities is disclosed in note 21.1.





GROUP COMPANY

2021R’000

2020R’000

2021R’000

2020R’000

28. INCOME TAX28.1 Income tax expense

Normal tax 187 550 114 525 2 12

Current period 186 946 115 018 2 12

Changes in estimates related to the prior period 604 (493) – –

Dividend withholding tax 134 134 – –

Non-residents shareholders’ tax 858 – – –

Deferred tax (53 447) (39 971) – –

Current period – originating (64 392) (39 696) – –

Changes in estimates related to the prior period 10 945 (275) – –

135 095 74 688 2 12

28.2 Reconciliation of tax rateProfit before tax 435 592 211 563 374 642 (468 566)

Income tax expense (135 095) (74 688) (2) (12)

% % % %

Effective tax rate 31,0 35,3 – –

RSA normal tax rate 28,0 28,0 28,0 28,0

Non-residents shareholders' tax 0,2 0,9 – –

Foreign and Trust tax rate differential 1,3 1,7 – –

Unrecognised deferred tax asset 0,8 2,0 – –

Utilisation assessed losses brought forward (0,6) (0,8) – –

Tax allowances not included in profit or loss (1,7) (4,1) – –

Non-deductible expenses

– Relating to finance costs (redeemable preference shares)

1,0 4,0 – –

– Relating to loan to equity-accounted investee 0,5 0,3 – –

– Relating to impairment loss on goodwill 0,7 6,6 – –

– Other non-deductible expenses – 0,6 – –

Exempt income

– Relating to gain on remeasurement of contingent consideration

(1,9) (3,2) – (1,1)

– Relating to local dividends – – (28,0) (26,9)

– Other exempt income – (0,3) – –

Changes in estimates related to the prior period 2,7 (0,4) – –

The estimated tax loss available within the Group for set off against future taxable income is R12 million (2020: R16 million).




for the year ended 30 June 2021GROUP

2021R’000

2020R’000

29. EARNINGS AND HEADLINE EARNINGS PER SHARE AND DIVIDENDS PAID

29.1 Basic and diluted earnings per ordinary shareBasic and diluted earnings per ordinary share has been calculated using the following:

Profit for the period attributable to owners of the Company 300 497 136 875

Net profit attributable to non-controlling interests 25 349 11 849

Earnings attributable to ordinary shareholders 325 846 148 724

Weighted average number of shares in issue (‘000 shares) * 121 895 131 987

Weighted average number of shares in issue for purpose of dilution (‘000 shares) * 125 853 134 351

Basic earnings per ordinary share (cents) 267,3 112,7

Diluted earnings per ordinary share (cents) 258,9 110,7

29.2 Headline and diluted headline earnings per ordinary shareHeadline and diluted headline earnings per ordinary share has been calculated using the following:

Earnings attributable to ordinary shareholders 325 846 148 724

Impairment loss on goodwill net of tax 11 062 49 563

Attributable impairment loss on intangible assets net of tax 10 598 –

Profit on disposal of property, plant and equipment net of tax (55) (1 160)

Headline earnings for the period 347 451 197 127



Headline earnings per ordinary share (cents) 285,0 149,4

Diluted headline earnings per ordinary share (cents) 276,1 146,7

29.3 Core and diluted earnings per ordinary shareCore earnings per ordinary share has been calculated using the following:

Headline earnings for the period 347 451 197 127

Acquisition costs net of tax 2 880 790

Amortisation of intangible assets net of tax 83 554 100 255

Core earnings for the period ** 433 885 298 172



Core earnings per ordinary share (cents) 356,0 225,9

Diluted core earnings per ordinary share (cents) 344,8 222,0

* Excluding treasury shares (refer to note 29.4).

** Core earnings per share is considered a meaningful additional measure of evaluating the performance of the Group’s operations. It is based on the HEPS measure and adjusted to exclude the amortisation of intangible assets recognised on business combinations and related business combination acquisition costs. It is not an IFRS measure.





29. EARNINGS AND HEADLINE EARNINGS PER SHARE AND DIVIDENDS PAID (continued)

GROUP

2021 2020

Actual‘000

Weighted‘000

Actual‘000

Weighted‘000

29.4 Reconciliation of weighted average number of shares in issueShares in issue at 1 July 136 318 136 318 143 422 143 422

Less: Treasury shares (7 815) (6 732) (7 181) (6 274)

Shares acquired and cancelled (13 798) (7 691) (7 104) (5 161)

Shares in issue at 30 June 114 705 121 895 129 137 131 987

Being:

Shares in issue 122 520 128 627 136 318 138 261

Treasury shares (7 815) (6 732) (7 181) (6 274)

Dilutionary effect of FSP schemes – 3 958 – 2 364

Weighted number of shares at 30 June for purposes of dilution

– 125 853 – 134 351

GROUP COMPANY

2021R’000

2020R’000

2020R’000

2020R’000

29.5 Dividends paid [GRI 201-1]

Total dividends paid to ordinary shareholders 20 448 41 492 20 448 41 492

Notice is hereby given that a final dividend of 29 cents (2020: 15 cents) per ordinary share for the year ended 30 June 2021 has been declared by the Board of the Company.

The salient dates applicable to the final dividend are as follows:

Last day of trade “cum” dividend Tuesday, 9 November 2021

First day to trade “ex” dividend Wednesday, 10 November 2021

Record date Friday, 12 November 2021

Payment date Monday, 15 November 2021

No share certificates may be dematerialised or rematerialised between Wednesday, 10 November 2021 and Friday, 12 November 2021, both days inclusive.

Dividends are to be paid out of distributable reserves. Dividends Tax of 20% will be withheld in terms of the Income Tax Act for those shareholders who are not exempted from Dividends Tax. In accordance with paragraphs 11.17(1)(a)(i) and (ix) and 11.17(c) of the JSE Listings Requirements, the following additional information is disclosed:

� The gross local dividend amount is 29 cents per ordinary share for shareholders exempt from Dividends Tax;

� The net local dividend amount is 23,2 cents per ordinary share for shareholders liable to pay Dividends Tax;

� Alviva has 122 520 303 ordinary shares in issue at the date of the declaration (which includes 7 815 000 treasury shares of which all shares constitute FSP shares); and

� Alviva’s income tax reference number is 9675/146/71/7.

Where applicable, payment in respect of certificated shareholders will be transferred electronically to shareholders’ bank accounts on the payment date. Shareholders who have dematerialised their shares will have their accounts at their Central Securities Depository Participant or broker credited on the payment date.





GROUP COMPANY

2021R’000

2020R’000

2021R’000

2020R’000

STATEMENT OF CASH FLOWS30. CASH GENERATED FROM

OPERATIONS Profit before tax 435 592 211 563 378 494 478 721

Adjusted for

Finance income (23 904) (50 666) (7) (42)

Dividends received (included as revenue) – (376 746) (459 524)

Finance costs 159 717 227 640 – –

Non-cash flow items 323 430 396 446 (1 741) (19 155)

Depreciation and amortisation 317 502 319 082 – –

Gain on remeasurement of contingent consideration (29 276) (23 869) – (9 000)

Foreign exchange (gain)/loss on contingent consideration

(7 462) 6 162 –

Profit on disposal of property, plant and equipment (76) (1 611) – –

Share of profit of equity-accounted investee (1 924) – – –

Equity-settled share-based payment expense/(income) 423 20 458 (1 741) (10 155)

Impairment loss on goodwill 11 062 49 563 – –

Impairment loss on intangible assets 25 656 – – –

Impairment loss on loan to equity-accounted investee 7 646 27 990 – –

Gain on remeasurement of lease liabilities (121) – – –

Debt forgiveness relief on leases – (1 242) –

Other non-cash flow items – (87) – –

Changes in working capital (521 433) 1 016 060 98 139

Decrease/(increase) in inventories 33 517 (191 439) – –

Decrease in trade and other receivables 353 242 335 702 – –

(Decrease)/increase in trade and other payables (920 040) 802 715 98 139

Increase in contract liabilities 11 848 69 082 – –

373 402 1 801 043 98 139





31. CASH FLOWS FROM FINANCING ACTIVITIES ANALYSIS The changes in the Company’s cash flows from financing activities can be categorised as follows:

GROUP

Cash movements

R’000Total

R’000

2021

Interest-bearing liabilities raised 83 507 83 507

Interest-bearing liabilities repaid (224 777) (224 777)

Payments of lease liabilities (68 117) (68 117)

Non-interest-bearing liabilities repaid (8 021) (8 021)

Repurchase of shares (114 876) (114 876)

Treasury shares acquired (19 119) (19 119)

Proceeds on disposal of of treasury shares 755 755

Transactions with NCI (28 002) (28 002)

Acquisition of NCI without the loss of control (19 279) (19 279)

Dividends paid to NCI (8 723) (8 723)

Dividends paid to ordinary shareholders (refer to note 29.5) (20 448) (20 448)

(399 098) (399 098)

2020

Interest-bearing liabilities raised 205 000 205 000

Interest-bearing liabilities repaid (4 697) (4 697)

Payments of lease liabilities (56 270) (56 270)

Non-interest-bearing liabilities repaid (57 724) (57 724)


Treasury shares acquired (10 378) (10 378)

Transactions with NCI (25 465) (25 465)

Acquisition of NCI without the loss of control (15 000) (15 000)



(93 220) (93 220)

None of the movements within the cash flows from financing activities in the statement of cash flows are attributable to non-cash transactions.





31. CASH FLOWS FROM FINANCING ACTIVITIES ANALYSIS (continued)

COMPANY

Cash movements

R’000Total

R’000

2021


Group loan raised (21 684) (21 684)


(157 008) (157 008)

2020


Group loan raised (251 336) (251 336)


(395 023) (395 023)

None of the movements within the cash flows from financing activities in the statement of cash flows are attributable to non-cash transactions.

GROUP COMPANY

2021R’000

2020R’000

2021R’000

2020R’000

32. NORMAL TAX PAID Net tax payable/(receivable) at 1 July 1 107 67 7 –

Tax liabilities acquired through business combinations – 2 117 – –

Normal tax (refer note 28.1) 187 550 114 525 2 12

Dividends tax 134 134 – –

Non-residents shareholders’ tax 858 – – –

Net tax (payable)/receivable at 30 June (4 364) (1 107) (1) (7)

Current tax assets 31 049 18 418 – –

Current tax liabilities (35 413) (19 525) (1) (7)

185 285 115 736 8 5





GROUP

2021R’000

2020R’000

33. NON-CONTROLLING INTERESTS (“NCI”)Balance at 1 July 99 971 70 183

Loss allocated to NCI (25 349) (11 849)

Transactions with NCI (8 399) 52 102

Acquisition of subsidiaries (business combinations) with NCI – 58 428

Acquisition of NCI without change in control (8 399) (6 326)



NCIs at the reporting date are summarised below :

GROUP – 2021

Name of subsidiary Segment

Proportionof

ownershipinterests

and votingrights held

by NCI%

Balance at 1 JulyR’000

Profit/(loss)

allocated toNCI

R’000

Acquisitionof NCI

throughshare

acquisitionsR’000

Dividendspaid

R’000

Balance at 30 June

R’000

Solareff Proprietary LimitedServices and Solutions

49,0 14 364 2 578 – – 16 942


Group Central Services

0,0 (1) – 1 – –

GridCars Proprietary LimitedServices and Solutions

61,8 (5 105) (1 072) – – (6 177)



12,2 16 166 991 (8 400) (1 223) 7 534

DG Store SA Proprietary LimitedServices and Solutions

20,0 17 919 3 433 (7 500) 13 852



35,0 7 562 (7 353) – – 209

SynergERP Proprietary LimitedServices and Solutions

30,0 19 003 (3 320) – – 15 683

SynergERP Limited – DWC LLCServices and Solutions

49,0 13 943 (5 515) – – 8 428

SynergERP Limited – UK (“Synerg UK”)


49,0 16 120 (15 091) – – 1 029

Total 99 971 (25 349) (8 399) (8 723) 57 500





33. NON-CONTROLLING INTERESTS (“NCI”) (continued)

GROUP – 2020

Name of subsidiary Segment

Proportionof

ownershipinterests

and votingrights held

by NCI%

Balance at 1 JulyR’000

Profit/(loss)

allocated toNCI

R’000

Acquisitionof NCI

throughbusiness

combinationsR’000

Acquisitionof NCI

throughshare

acquisitionsR’000

Dividendspaid

R’000

Balance at 30 June

R’000

Solareff Proprietary Limited


49,0 13 084 1 280 – – – 14 364


Group Central Services

49,0 655 (656) – – – (1)

GridCars Proprietary Limited


61,8 (3 633) (1 472) – – – (5 105)



24,7 21 987 (981) – – (4 840) 16 166

DG Store SA Proprietary Limited


20,0 22 513 7 357 – (6 326) (5 625) 17 919



35,0 15 577 (8 015) – – – 7 562

SynergERP Proprietary Limited


30,0 – (2 371) 21 374 – – 19 003

SynergERP Limited – DWC LLC


49,0 – (6 991) 20 934 – – 13 943

SynergERP Limited – UK (“Synerg UK”)


49,0 – – 16 120 – – 16 120

Total 70 183 (11 849) 58 428 (6 326) (10 465) 99 971

Changes to non-controlling interests

On 2 November 2020, Alviva, through its subsidiary company DCT Holdings (RF) Proprietary Limited, acquired an additional 7% of the issued share capital of Sintrex Integrated Services Proprietary Limited (“Sintrex”) for an amount of R11 million, thereby increasing its shareholding in Sintrex to 83%.

In addition, Sintrex repurchased 6% of its issued share capital on 5 January 2021 for an amount of R9 million, thereby increasing the Group’s shareholding to 88%.






Summary of financial information of subsidiaries with material NCI

The following tables summarises the information relating to subsidiaries that have material NCIs before any intra-Group eliminations:

Solareff Proprietary Limited

2021 2020

12 months ended

30 June 2021

R’000

12 months ended

30 June 2020R’000

NCI percentage (%) 49,00 49,00



Non-current liabilities (3 246) (4 574)


Net assets 34 573 28 011

Net assets attributable to NCI 16 941 13 725

Revenue 272 347 237 955

Profit for the period 6 562 4 843

Total comprehensive income for the period 6 562 4 843

Profit attributable to NCI 3 215 2 373

Cash flows (used in)/from operating activities (3 681) 21 873

Cash flows from/(used in) investing activities 1 036 (501)

Cash flows used in financing activities (678) (20 332)

Net movement in cash and cash equivalents (3 323) 1 040






DG Store (SA) Proprietary Limited

2021R’000

2020R’000




Non-current liabilities (2 102) –


Net assets 69 011 79 183


Revenue 896 570 1 248 982

Profit for the period 27 327 42 197

Total comprehensive income for the period 27 327 42 197

Profit attributable to NCI 5 465 8 439

Cash flows (used in)/from operating activities (93 065) 161 212

Cash flows used in investing activities (721) (2 942)

Cash flows used in financing activities (2 293) (1 322)

Net movement in cash and cash equivalents (96 079) 156 948






SynergERP Proprietary Limited

2021 2020

12 months ended

30 June 2021

R’000

6 months ended

30 June 2020R’000




Non-current liabilities (128) –


Net assets 21 554 15 114


Revenue 67 871 33 467

Profit/(loss) for the period 6 439 (119)

Total comprehensive income/(loss) for the period 6 439 (119)

Profit/(loss) attributable to NCI 1 931 (36)

Cash flows from operating activities 6 223 1 882

Cash flows used in investing activities (1 713) (2 212)

Cash flows (used in)/from financing activities (251) 622

Net movement in cash and cash equivalents 4 259 292

None of the other NCIs are considered to be material. These immaterial NCIs amounted to a total of R11 million (2020: R46,9 million) at the reporting date.





34. FINANCIAL INSTRUMENTS – FAIR VALUES AND RISK MANAGEMENT34.1 Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance. In order to maintain or adjust the capital structure of the Group, the board of directors may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. This strategy has remained unchanged from the prior reporting period.

Externally imposed capital requirements and debt covenant triggers (“covenants”) are set out in notes 17 and 21 of the financial statements.

The Group provides the relevant banks with the calculations as frequently as is required in terms of the covenants. The Group was not in proximity to breaching any of the covenants at the reporting date and does not expect this to change.

The Board considers the Group’s debt to be of an acceptable level. The Board, as an internal measure, excludes the debt relating to Centrafin Receivables in respect of the asset-backed senior loan with Nedbank, when considering debt levels, since the debt is ring-fenced as part of a securitisation structure.

The Group is considered to be a cash-generating business and current cash resources, amounting to R660 million (2020: R1 billion), would be utilised if the Group were to trigger a breach of any of the imposed covenants. The Board assesses the triggers on a regular basis, in line with the frequency of reporting to the banks, to identify and address any possible concerns timeously.

The debt to equity ratio of the Group is 51,9% (2020: 61,8%). The measure in terms of total debt for the Group excludes derivative financial liabilities, contract liabilities, deferred tax and current tax liabilities as well as trade and other payables when performing this calculation. The main contributing factor to the change of this ratio is as a result of the redemption of 20 redeemable preference shares to Absa (refer to note 21.4). Shareholders’ equity reduced following various share repurchase transactions during the reporting period.

34.2 Estimation of fair values

The following summarises the valuation methods and assumptions used in estimating the fair values of financial instruments reflected in the tables below.

Financial assets at amortised cost

The carrying amount of financial assets at amortised cost with a remaining life of less than 12 months reasonably approximates fair value due to the short-term period to maturity. The fair value of long-term receivables is calculated based on the present value of future principal and interest cash flows. The fair value of finance lease receivables is calculated based on the gross contractual future cash flows.

Financial liabilities at amortised cost

The carrying amount of financial liabilities with a maturity of less than 12 months reasonably approximates fair value due to their short-term nature. For longer maturities fair value is calculated based on the present value of future principal and interest cash flow.

Financial liabilities at fair value through profit or loss

The fair value of financial liabilities that are not traded in an active market is determined using suitable valuation techniques.

Derivative financial instruments

The fair value of derivative financial instruments is based on observable inputs and unobservable inputs, within the valuation model, directly linked to the underlying instrument to which the derivative is linked.





34. FINANCIAL INSTRUMENTS – FAIR VALUES AND RISK MANAGEMENT (continued)

34.2 Estimation of fair values (continued)

Fair value hierarchy

When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

� Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

� Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

� Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The following table presents the fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

Financial assets

GROUP

Fair valuehierarchy

At amortised

costR’000

TotalR’000

Fair valueR’000

2021

Finance lease receivables Level 3 973 763 973 763 1 208 182

Loan to associate 64 497 64 497 64 497

Cash and cash equivalents * 879 613 879 613 –

Trade and other receivables * 2 237 643 2 237 643 –

4 155 516 4 155 516 1 272 679

2020

Finance lease receivables Level 3 854 521 854 521 1 075 235

Loan to associate 41 773 41 773 41 773

Cash and cash equivalents * 1 219 621 1 219 621 –

Trade and other receivables * 2 726 303 2 726 303 –

4 242 218 4 242 218 1 117 008

* The carrying amount is a reasonable approximation of fair value. The financial asset represents a financial instrument which is not measured at fair value on a recurring basis.





34. FINANCIAL INSTRUMENTS – FAIR VALUES AND RISK MANAGEMENT ((continued)



GROUP

Fair value hierarchy

At fair value

through profit or

lossR’000

At amortised

costR’000

TotalR’000

Fair valueR’000

2021

Interest-bearing liabilities – 946 503 946 503 946 503

Non-interest-bearing liabilities * Level 3 35 654 – 35 654 35 654

Trade and other payables ** – 2 538 294 2 538 294 –

Bank overdrafts ** – 220 000 220 000 –

Derivatives related to risk management *** Level 2 10 742 – 10 742 10 742

46 396 3 704 797 3 751 193 992 899

2020

Interest-bearing liabilities – 1 088 633 1 088 633 1 088 633

Non-interest-bearing liabilities * Level 3 79 976 437 80 413 79 976

Trade and other payables ** – 3 509 141 3 509 141 –

Derivatives related to risk management *** Level 2 11 772 – 11 772 11 772

91 748 4 598 211 4 689 959 1 180 381

* Contingent consideration is included as part of non-interest-bearing liabilities. ** The carrying amount is a reasonable approximation of fair value. The financial liability represents a financial instrument which is not measured at fair

value on a recurring basis.

*** This liability is included as part of trade and other payables.

Amounts disclosed in the tables above are exclusive of all statutory amounts payable or refundable from a legislative nature in relation to Value-Added Tax, prepayments and accruals that are not considered to be financial instruments.







Financial assetsCOMPANY

At amortised

costR’000

TotalR’000

Fair valueR’000

2021

Loan to subsidiary 466 708 466 708 466 708

Cash and cash equivalents * 7 7 –

466 715 466 715 466 708

2020

Loan to subsidiary 445 024 445 024 445 024

Cash and cash equivalents * 172 172 –

445 196 445 196 445 024

Financial liabilitiesCOMPANY

At amortised

costR’000

TotalR’000

Fair valueR’000

2021

Trade and other payables * 1 842 1 842 –

1 842 1 842 –

2020

Trade and other payables * 1 744 1 744 –

1 744 1 744 –

* The carrying amount is a reasonable approximation of fair value. The financial instrument represents a financial instrument which is not measured at fair value on a recurring basis.

Amounts disclosed in the tables above are exclusive of all statutory amounts payable or refundable from a legislative nature in relation to Value-Added Tax, prepayments and accruals that are not considered to be financial instruments.

Measurement of fair values and valuation techniques

Financial instruments not measured at fair value

Type Valuation technique

Finance lease receivables Discounted cash flows: The valuation models considers the present value of the expected future payments, discounted using a risk-adjusted discount rate.







Financial instruments measured at fair value

Derivatives related to risk management (Level 2)

The fair value of foreign exchange contracts have been determined using quoted forward exchange rates at the reporting date and present value calculations based on high credit quality yield curves in the respective currencies i.e. forward pricing. The valuations are performed internally by each financial institution with internally specific inputs.

Contingent consideration (Level 3)

The following table addresses the valuation technique as well as the significant unobservable inputs used, for amounts included at 30 June 2021:

TypeValuation technique Significant unobservable inputs

Inter-relationship between significant unobservable inputs and fair value measurement

Contingent consideration

Discounted cash flows: The valuation models considers the present value of the expected future payments, discounted using a risk-adjusted discount rate.

In respect of Obscure:

– Assumed probability adjusted profit after tax R13 472 326 (2020: between R6 999 081 and R15 000 000).

– Risk-adjusted discount rate of 5,04% (2020: 5,80%).

In respect of Obscure:

– 5% (2020: 5%) increase or decrease in the assumed probability-adjusted profit after tax would result in an increase or decrease in fair value of R633 200 (2020: R992 838), respectively.

In respect of Synerg DWC:

– Assumed probability adjusted profit after tax R5 233 786 (2020: R5 233 786).

– Risk-adjusted discount rate of 5,04% (2020: 5,80%).

In respect of Synerg DWC:

– 10% (2020: 10%) increase or decrease in the assumed probability-adjusted profit after tax would result in an increase or decrease in fair value of R2 429 000 (2020: R2 785 198), respectively.

In respect of Synerg UK *:

– Assumed probability adjusted profit after tax R5 998 707.

– Risk-adjusted discount rate of 5,80%.

In respect of Synerg UK:

– 10% increase or decrease in the assumed probability-adjusted profit after tax would result in an increase or decrease in fair value of R1 521 978, respectively.

The total increase or decrease in the assumed probability-adjusted profit after tax would result in a total increase or decrease in fair value of R3 062 200 (2020: R5 300 014).

* The contingent consideration amounts to R nil at the reporting date. For this reason only, the impact on the prior reporting period is presented. Refer to note 22.






34.3 Financial risk management objectives

Risks and related mitigating procedures are assessed by executives with assistance from the managers and employees on a continuous basis to ensure the safeguarding of the Group, its people, its assets and its businesses.

The Group has exposure to the following risks from it’s financial instruments :

� Market risk (including currency and interest rate risk)

� Credit risk

� Liquidity risk

The note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and procedures for measuring and managing risk and the Group’s management of capital. Further quantitative disclosures are included in the note relating to the financial instrument concerned.

The Group’s objective is to effectively manage each of the above risks associated with its financial instruments, in order to limit the Group’s exposure as far as possible to any financial loss associated with these risks.

The Board is ultimately responsible and accountable for ensuring that adequate procedures and processes are in place to identify, assess, manage and monitor key business risks. The Board has established the Audit and Risk Committee, which is responsible for monitoring the Group’s risk management policies.

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

The Audit and Risk Committee reviews the adequacy of the risk management framework in relation to the risks faced by the Group.






34.4 Foreign currency risk

The Group is exposed to foreign currency risk through the importation of merchandise. This risk is mitigated by entering into foreign exchange contracts and by offsetting the risk against foreign currency payables. The Group does not use foreign exchange contracts for speculative purposes and does not apply hedge accounting. Fair value changes are recognised in profit and loss. The Group varies its exposure depending on its view of the currency values, within acceptable risk parameters.

The fair value of foreign exchange contracts has been determined based on inputs obtained from the Group’s bankers.

The primary foreign currencies (FC) to which the Group is exposed are the US Dollar and Euro.

GROUP

Spot rateContract FC

FC’000

Contract spot rate

valueR’000

Derivativeliabilities*

R’000

2021

US Dollar 14,31 149 719 2 142 479 9 944

Euro 16,96 8 911 151 131 798

2 293 610 10 742

2020

US Dollar 17,37 80 985 1 406 709 (10 581)

Euro 19,48 4 313 84 017 (1 191)

1 490 726 (11 772)

* These liabilities are included as part of trade payables.

34.5 Foreign currency sensitivity

The following table indicates the Group’s sensitivity at reporting date to the indicated movements in foreign exchange on financial instruments including foreign exchange contracts. The rates of sensitivity are the rates used when reporting the currency risk to the Group and represents management’s assessment of the possible change in reporting foreign currency exchange rates. Based on the risk profile of the Group at the reporting date, the foreign currency sensitivity is performed only in relation to the US Dollar and Euro as this is the main foreign currency to which the Group has significant exposure.

This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

Profit or loss

Strengtheningof FC

Weakeningof FC

30 June 2021

US Dollar (9,8% movement) (155 106) 155 106

Euro (10,70% movement) (7 147) 7 147

(162 253) 162 253

2020

US Dollar (12,10% movement) (42 997) 42 997

Euro (11,80% movement) (1 680) 1 680

(44 677) 44 677

* Effect on equity is equal to the effect on profit or loss (excluding tax effects thereon).






34.6 Interest rate risk management

The Group’s exposure to interest rate risk is on a floating rate basis. At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments were:

GROUP

2021R’000

2020R’000

Interest-bearing financial assets 973 763 854 521

Interest-bearing financial liabilities (946 503) (1 088 633)

Cash and cash equivalents 659 613 1 219 621

686 873 985 509

Cash flow sensitivity analysis linked to interest rate risk

A change of 150 (2020: 200) basis points in interest rates at the reporting date would have increased/decreased profit or loss by the amounts shown below. This analysis assumes that the other variables remain constant and is based on closing balances compounded annually.

GROUP

2021R’000

2020R’000

Impact on profit or loss for the reporting period * 10 303 19 710

* Effect on equity is equal to the effect on profit or loss (excluding tax effects thereon).






34.7 Credit risk

Credit risk refers to the risk that a customer or counterparty will default on its contractual obligations resulting in financial loss to the Group. The credit risk is concentrated in the Group’s trade and lease receivables and cash and equivalents.

The carrying amounts of financial assets represent the maximum credit exposure.

Summary of impairment losses recognised in profit or loss

The following table provides a summary of the impairment losses recognised in profit or loss during the reporting period:

GROUP

2021R’000

2020R’000

Impairment loss on trade and finance lease receivables (4 611) 30 557

Impairment loss on loan to equity-accounted investee 7 646 27 990

3 035 58 547

Trade and lease receivables

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry and country in which customers operate.

The risk management committee has established a credit policy under which each new customer is analysed individually for creditworthiness before the Group’s standard payment and delivery terms and conditions are offered. The Group’s review includes external ratings, if they are available, financial statements, credit agency information, industry information and in some cases bank references. Sale limits are established for each customer and reviewed quarterly. Any sales exceeding those limits require approval from the risk management committee in each subsidiary.

The major contributing subsidiary within the Financial Services segment, Centrafin Proprietary Limited, requires collateral to be provided under each contract. In addition to the collateral required, the company requires bank references and credit rating information as part of the application process for each contract.

The Group limits its exposure to credit risk from trade receivables by establishing a maximum payment period of between one and two months for customers. In some instances, the standard payment period may be extended with specific approval.

The Group has a limited history of exposure to write-offs in relation to customer accounts. More so, although the Group is continuously expanding its footprint and client base, the Group has credit histories on many of the significant customers dealing with the Group on a recurring basis. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or a legal entity, whether they are a wholesale, retail or end-user customer, their geographic location, industry, trading history with the Group and existence of previous financial difficulties.

The Group is monitoring the economic environment in Zimbabwe and is taking actions to limit its exposure to customers in countries experiencing particular economic volatility. The Group does not deal with customers in any other countries which are considered to have a current volatile economic environment.

The Group requires collateral in respect of trade receivables in extraordinary circumstances and in respect of all lease contracts for lease receivables. The Group does not have trade or lease receivables for which no loss allowance is recognised because of collateral.






34.7 Credit risk (continued)

Exposure to credit risk by geographic region

At the reporting date, the exposure to credit risk for trade and lease receivables by geographic region was as follows:

2021 R’000

2020 R’000

Trade receivables

Lease receivables

Trade receivables

Lease receivables

Geographic region

South Africa 2 185 724 992 752 2 544 506 873 763

Africa 174 198 – 340 052 –

Other 32 763 – 1 145 –

2 392 685 992 752 2 885 703 873 763

Exposure to credit risk by type of counterparty

At the reporting date, the exposure to credit risk for trade and lease receivables by type of counterparty was as follows:

2021 R’000

2020 R’000

Trade receivables

Lease receivables

Trade receivables

Lease receivables

Type of counterparty

Large corporations or enterprises 1 168 381 – 1 198 946 230

SMME type enterprises or similar 842 063 992 685 1 187 428 872 051

Foreign 206 961 – 333 069 –

Government, parastatals and municipalities 175 280 67 166 260 1 482

2 392 685 992 752 2 885 703 873 763

The majority of trade receivables are concentrated in the “Large corporations or enterprises” and “SMME type enterprises or similar” categories based on the strategic model of the Group whereby the Group mostly enters into contracts with customers within these categories. The various distribution status of suppliers held by the Group allows the Group to deal with large corporations or enterprises. The majority of the lease book is concentrated in the “SMME type enterprise or similar” category as is expected from the Group’s strategic lease model. Both these categories are considered to indicate a lower level credit risk exposure to the Group.







Exposure to overall credit risk based on internally designated credit ratings

At the reporting date, the exposure to overall credit risk based on internal credit ratings for trade and lease receivables was as follows:

GROUP

Trade receivables Lease receivables

2021R’000

2020R’000

2021R’000

2020R’000

Type of counterparty

Credit rating of at least substandard risk (level 3) 2 200 483 2 560 725 980 378 860 694

Other customers:

– Higher risk with a credit rating of at least high risk (level 4)

192 202 324 978 12 374 13 069

Total gross carrying amount 2 392 685 2 885 703 992 752 873 763

Loss allowance (155 042) (159 400) (18 989) (19 242)

2 237 643 2 726 303 973 763 854 521

Based on the credit policy of the Group, it is clear that the stringent requirements and policies result in a majority of the trade and lease receivables being classified as at least a “substandard risk” or lower risk level. Trade and lease receivables of 92% (2020: 89%) and 99% (2020: 98%), respectively, were rated as a level 3 or lower based on the Group’s internal grading system which is indicative of a low level exposure to credit risk.

Based on the Group’s credit approval process, the Group does not have any trade and lease receivables which are regarded to have been credit-impaired on initial recognition.

Expected credit loss (ECL) assessment

The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of the risk of loss (including but not limited to external ratings, audited financial statements, management accounts and cash flow projections and available press information about customers) and applying experienced credit judgement. Credit risk grades are internally defined using qualitative and quantitative factors that are indicative of the risk of default.

Exposures within each credit risk grade are segmented by customer type and geographic region and an ECL rate is calculated for each segment based on delinquency status and actual credit loss experience. These rates are adjusted to reflect differences between economic conditions during the period over which the historical data has been collected, current conditions and the Group’s view of economic conditions over the expected lives of the receivables.

The Group has external insurance in place against the loss of certain customers. The insured amounts are considered when calculating the ECLs for the various customers.

ECL rates are based on actual credit loss experience over the past three years. These rates are adjusted to reflect differences between economic conditions during the period over which the historical data has been collected, current conditions and the Group’s view of economic conditions over the expected lives of the receivables.







Trade receivables

The following tables present the ECL rates of the Group having applied all factors as discussed above.

The ECL rates in the model are presented as a range as each risk grade has various ECL rates assigned to the type of customer as set out above.

Loss ratings model 2021

Risk grades

Internal rating

level

ECL rates at 30 June 2020

(Range %)

Forward-looking

adjustment(Range %)

ECL rates at30 June 2021

(Range %)

Low risk Level 1 0,10 to 0,25 0 ,00 0,10 to 0,25

Fair risk Level 2 2,03 to 3,54 0 ,00 2,03 to 3,54

Substandard risk Level 3 4,05 to 15,19 0 ,00 4,05 to 15,19

High risk Level 4 20,25 to 40,51 0 ,00 20,25 to 40,51

Doubtful Level 5 81,02 0 ,00 81,02

In default, i.e., loss Level 6 100,00 0 ,00 100,00

The loss ratings at the previous reporting date were adjusted for forward-looking information by decreasing these ratios with a factor of 0.01%. This factor was determined using macro-economic factors and a weighting as indicated below.

Macro-economic factors considered

Factors consideredWeighting

assignedWeighted

adjustment

CPI Index * 20,00 0,78

Inflation * 20,00 -

Interest rates * 15,00 (0,52)

Moody's ratings ** 15,00 0,30

GDP growth ** 15,00 (0,39)

COVID-19 pandemic *** 15,00 (0,18)

Forward-looking factor (0,01)

* Direct impact on operations in terms of product prices and spend of customers.

** Indirect impact as this is representative of the economy as a whole.

*** Adjusted indirect impact as a result of the COVID-19 pandemic. This factor was reduced at the reporting date based on the fact that the Group was not significantly impacted by the pandemic during the reporting period in conjunction with the stabilisation of the economy due to improved future risk levels implemented by Government.








Risk grades

Internal rating

level


(Range %)

Forward-looking

adjustment(Range %)


(Range %)

Low risk Level 1 0,10 to 0,25 0,00 0,10 to 0,25

Fair risk Level 2 2,00 to 3,50 0,03 to 0,04 2,03 to 3,54

Substandard risk Level 3 4,00 to 15,00 0,05 to 0,19 4,05 to 15,19

High risk Level 4 20,00 to 40,00 0,25 to 0,51 20,25 to 40,51

Doubtful Level 5 80,00 1,02 81,02

In default, i.e., loss Level 6 100,00 0,00 100,00

The loss ratings at the previous reporting date were adjusted for forward-looking information by increasing these ratios with a factor of 1,27%. This factor was determined using macro-economic factors and a weighting as indicated below.



assignedWeighted

adjustment

CPI Index * 20,00 0,46

Inflation * 20,00 0,57



GDP growth ** 12,50 0,01

COVID-19 pandemic *** 20,00 3,37

Forward-looking factor 1,27



*** Adjusted indirect impact as a result of the COVID-19 pandemic.







The following table provides information about the exposure to credit risk and ECLs for trade receivables for customers at the reporting date based on the simplified approach adopted by management in the ECL assessment.

2021

Risk grade

Internal credit rating

level

Weighted average loss rate

%

Gross carrying amount

R’000

Loss allowance

R’000Credit-

impaired

Low risk Level 1 0 * 1 601 104 1 229 No

Fair risk Level 2 2 462 594 11 348 No

Substandard risk Level 3 9 136 785 11 980 No

High risk Level 4 19 40 027 7 755 No

Doubtful Level 5 56 15 442 8 647 Yes

In default, i.e., loss Level 6 83 136 733 114 083 Yes

2 392 685 155 042

* This percentage has been rounded. The weighted average loss rate is 0,1%.

2020

Risk grade


level


%


R’000

Loss allowance

R’000Credit-

impaired

Low risk Level 1 0 * 1 888 154 1 467 No

Fair risk Level 2 2 542 296 10 481 No

Substandard risk Level 3 5 130 274 7 137 No

High risk Level 4 38 48 345 18 257 No

Doubtful Level 5 71 28 683 20 428 Yes

In default, i.e., loss Level 6 41 247 951 101 630 Yes

2 885 703 159 400


Based on the grading, in conjunction with the Group’s credit policy, 86% (2020: 85%) of the total trade receivable balances is graded as either a low risk or a fair risk. This supports the effectiveness of the rigid credit policies and approval processes implemented by the Group. 6% (2020: 9%) of the trade receivables have been graded as in default (level 6) for which the Group has adequate insurance. The weighted average loss rates are aligned to the Group ECL model.







Movements in the allowance for credit losses in respect of trade receivables

The Group assessed the intergroup trade receivables as being a low risk based on the fact that the Group, through its formal treasury function, provides financial guarantees for the total outstanding balances of all intergroup balances which limits any form of non-performance resulting in no exposure to the Group upon default by the related Group company.

The movement in the allowance for impairment in respect of trade receivables was as follows :

GROUP

Description2021

R’0002020

R’000

Balance at 1 July 159 400 111 105

Acquired through business combinations – 1 509

Written off – –

Net remeasurement of loss allowance (4 358) 46 786

Balance at 30 June 155 042 159 400

The Group did not identify any significant changes in the gross carrying amounts of trade receivables that contributed to the changes in the loss allowance during the reporting periods.

Lease receivables

The following tables present the ECL rates of the company having applied all factors as discussed in this note.

The ECL rates in the model are presented as a range as each risk grade has various ECL rates assigned to the type of customer as discussed earlier in this note.


Risk grades

Internal rating

level


(Range %)

Forward-looking

adjustment(Range %)


(Range %)


Fair risk Level 2 0,50 to 3,02 0,00 0,50 to 3,02

Substandard risk Level 3 3,02 to 40,25 0,00 3,02 to 40,25

High risk Level 4 40,25 to 70,44 0,00 40,25 to 70,44

Doubtful Level 5 70,44 to 100,00 0,00 70,44 to 100,00











assignedWeighted

adjustment

CPI Index * 22,50 0,01

Inflation * 22,50 –


Moody's ratings ** 11,50 –

GDP growth ** 11,50 –

COVID-19 pandemic *** 10,00 –

Forward-looking factor 0.00



*** Adjusted indirect impact as a result of the COVID-19 pandemic. This factor was reduced at the reporting date based on the fact that the Group was not significantly impacted by the pandemic during the reporting period in conjunction with the stabilisation of the economy due to improved future risk levels implemented by Government. The assigned weighting was further reduced based on the fact that the lease receivables have a longer lifetime compared to the short-term trade receivables.


Risk grades

Internal rating

level


(Range %)

Forward-looking

adjustment(Range %)


(Range %)


Fair risk Level 2 0,50 to 3,00 0,00 to 0,02 0,50 to 3,02

Substandard risk Level 3 3,00 to 40,00 0,02 to 0,25 3,02 to 40,25

High risk Level 4 40,00 to 70,00 0,25 to 0,44 40,25 to 70,44

Doubtful Level 5 70,00 to 100,00 0,44 70,44 to 100,00











assignedWeighted

adjustment

CPI Index * 20,00 0,42

Inflation * 20,00 0,51



GDP growth ** 12,50 0,01

COVID-19 pandemic *** 20,00 3,50

Forward-looking factor 0,62



*** Adjusted indirect impact as a result of the COVID-19 pandemic.







The following tables provide information about the exposure to credit risk and ECLs on lease receivables from customers at the reporting date.

2021

Risk grade

Present value of

minimumlease

paymentsR’000


level


%


R’000

Loss allowance

R’000Credit-

impaired

Low risk 849 680 Level 1 0* 1 052 687 1 057 No

Fair risk 65 818 Level 2 0** 79 984 387 No

Substandard risk 64 880 Level 3 5 78 832 3 571 No

High risk 9 227 Level 4 85 11 528 9 834 No

Doubtful – Level 5 – – – Yes

In default, i.e., loss 3 147 Level 6 100 4140 4140 Yes

992 752 1 227 171 18 989


** This percentage has been rounded. The weighted average loss rate is 0,5%.

2020

Risk grade

Present value of

minimumlease

paymentsR’000


level


%


R’000

Loss allowance

R’000Credit-

impaired

Low risk 640 225 Level 1 0 * 807 693 652 No

Fair risk 130 034 Level 2 0 ** 158 377 748 No

Substandard risk 90 435 Level 3 4 108 936 4 358 No

High risk 9 176 Level 4 59 13 757 8 081 No

Doubtful 852 Level 5 84 1 959 1 648 Yes

In default, i.e., loss 3 041 Level 6 100 3 755 3 755 Yes

873 763 1 094 477 19 242


** This percentage has been rounded. The weighted average loss rate is 0,5%.

Movements in the allowance for credit losses in respect of lease receivables

Based on the grading in conjunction with the Group’s credit policy, 92% (2020: 88%) of the total lease receivables balance is graded as either a low or fair risk. This supports the effectiveness of the rigid credit policies and approval processes implemented by the Group. None (2020: 0,5%) of the lease receivables has been graded as in default (level 6) (based on gross carrying amounts). The weighted average loss rates are aligned to the Group’s ECL model.

The reason for the lower weighted average loss rate in the fair risk grading, in the current and prior period, is a direct result of the decrease of the lease receivables with government, parastatals and municipalities, which are deemed to have a higher credit risk. The credit risk based on type of counterparty is disclosed earlier in this note.







Movements in the allowance for credit losses in respect of lease receivables (continued)

The movement in the allowance for impairment in respect of lease receivables was as follows :

GROUP

Description2021

R’0002020

R’000

Balance at 1 July 19 242 35 471

Net remeasurement of loss allowance (253) (16 229)


The Group did not identify any significant changes in the gross carrying amounts of lease receivables that contributed to the changes in the loss allowance during the reporting periods.

Loans to Group companies

Impairment of the loans to Group companies have been measured using lifetime ECLs.

The Group considers all of the indicators within the ECL model when determining the credit risk associated with any loans to Group companies. The Group’s assessment indicates that the loans to Group companies generally have a low credit risk based on the financial performance of the related Group company as well as the financial performance and ability of the related company to settle the outstanding balance. The Group also considers the historical default information as well as forward-looking information such as budgets and forecasts.


Due to the considerations above and the application of these considerations in the ECL model, the Company did not recognise an impairment loss on the loan.

Apex Business Solutions Proprietary Limited

The Group recognised an impairment loss on this loan in the current and prior reporting periods. This loan was considered to have a high credit risk with a loss rate of 55% (2020: 73%) (cumulative) based on the company’s financial performance which deteriorated in the current and prior reporting periods based on the non-performance of specific customers.

Refer to note 12.2 for the summarised financial information of the company. The company continued to underperform.







Movements in the allowance for credit losses related to loans to Group companies

The movement in the allowance for impairment in respect of loans to Group companies was as follows :

GROUP

Description2021

R’0002020

R’000

Balance at 1 July 51 200 23 210

Net remeasurement of loss allowance 7 646 27 990


Cash and equivalents

ECLs of cash and cash equivalents has been measured on a 12-month ECL basis and reflects the short maturities of the exposures in terms of the general approach adopted by management.

The Group considers all of the indicators within the ECL model when determining the credit risk associated with cash and cash equivalents.

The Group considers that its cash and cash equivalents have low credit risk based on the external credit ratings of the financial institutions combined with the fact that the institutions are reputable within the economic environment (refer to note 17 of the financial statements) and the fact that none of the other indicators, considered in terms of the ECL model indicated an increased credit risk. Therefore, no loss allowance has been recognised in relation to cash and cash equivalents during the current or prior reporting periods.






34.8 Liquidity risk

The liquidity risk of the Group is managed by the Group’s treasury function which monitors the repayment and settlement terms of all internally and externally funded debt. From a Group perspective, financial assistance is available to Group companies to ensure that all repayment terms outside of the Group are adhered to by each company. Any internal funding is repayable to the intergroup lender only when funds are available.

Refer to note 17 for details of banking facilities available to the Group.

The maturity analysis of financial liabilities at the reporting date is set out in the table below. These amounts are gross and undiscounted, and include contractual interest payments.

GROUP

Carrying amount

R’000Total

R’000

Up to 3 months

R’000

Between 3 to 12

monthsR’000

Between 1 to 5yearsR’000

2021

Interest-bearing liabilities ** 946 503 1 038 030 74 759 201 864 761 407

Non-interest-bearing liabilities 35 654 35 654 – 12 664 22 990

Trade and other payables * 2 538 294 2 538 294 2 538 294 – –

Bank overdraft 220 000 220 000 – 220 000 –

3 740 451 3 831 978 2 613 053 434 528 784 397

2020

Interest-bearing liabilities ** 1 088 633 1 252 877 121 231 211 283 920 362

Non-interest-bearing liabilities 80 413 80 413 7 584 – 72 829

Trade and other payables * 3 509 141 3 509 141 3 509 141 – –

4 678 187 4 842 431 3 637 956 211 283 993 191

* Accrued expenses that are not financial liabilities are excluded.

** The interest bearing liabilities represent all liabilities included in note 21, excluding lease liabilities.





35. DIRECTORS AND PRESCRIBED OFFICERSDirect

numberIndirectnumber

Totalnumber

Total%

35.1 Directors and prescribed officers’ interest in the share capital of the Company2021

Executive directors

P Spies 470 200 – 470 200 0,38

RD Lyon 505 200 280 000 785 200 0,64

Non-executive director

A Tugendhaft 318 600 – 318 600 0,26

Prescribed officer

JV Parkin 248 000 28 700 276 700 0,23

1 542 000 308 700 1 850 700 1,51

2020

Executive directors

P Spies 341 200 – 341 200 0,25

RD Lyon 440 700 280 000 720 700 0,53

Non-executive director

A Tugendhaft 318 600 – 318 600 0,23

Prescribed officer

JV Parkin 226 500 28 700 255 200 0,16

1 327 000 308 700 1 635 700 1,18

There have been no changes between the reporting date and the date of this report. The directors have no non-beneficial shareholdings.





35. DIRECTORS AND PRESCRIBED OFFICERS (continued)

GROUP

BasicsalaryR’000

Direc-tors’ fees

R’000

Travelallow-

anceR’000

Medicalcontri-

butionsR’000

Provi-dent fund

contri-butions

R’000

Short-term

incen-tive

R’000Total

R’000

35.2 Remuneration

2021 [GRI 201-1]

Executive directors

RD Lyon 3 114 – 96 69 321 4 590 8 190

P Spies 5 663 – 144 101 290 7 902 14 100

Non-executive directors

A Tugendhaft – 1 145 – – – – 1 145

MG Mokoka – 375 – – – – 375

PN Masemola – 290 – – – – 290

P Natesan – 605 – – – – 605

SH Chaba – 520 – – – – 520

Prescribed officer

JV Parkin 2 590 – – 110 240 1 960 4 900

11 367 2 935 240 280 851 14 452 30 125

2020

Executive directors

RD Lyon 3 048 – 96 66 390 – 3 600

P Spies 5 668 – 144 95 291 – 6 198

Non-executive directors

A Tugendhaft – 1 145 – – – – 1 145

MG Mokoka 1 – 344 – – – – 344

PN Masemola ² – 266 – – – – 266

P Natesan 3 – 600 – – – – 600

SH Chaba – 520 – – – – 520

Prescribed officer

JV Parkin 2 467 – – 103 370 – 2 940

11 183 2 875 240 264 1 051 – 15 613

1 Appointed as Independent Non-Executive Director and member of the Audit and Risk Committee and Remuneration Committee with effect from 29 July 2019.

2 Appointed as Independent Non-Executive Director and member of the Social and Ethics Committee with effect from 29 July 2019.

3 Appointed as Chairperson of the Audit and Risk Committee and resigned as member of the Social and Ethics Committee with effect from 29 July 2019.






GROUP

2021R’000

2020R’000

35.3 Share awards

Equity-settled share-based scheme

Forfeitable Share Plan 2 Scheme – 14 154

Forfeitable Share Plan 3 Scheme – 10 652

Forfeitable Share Plan 4 Scheme 14 318 7 325

Forfeitable Share Plan PS Scheme 3 432 1 716

Forfeitable Share Plan 5 Scheme 2 365 –

20 115 33 847

Participation

Members of the Board and prescribed officer accepted awards under the FSP schemes as follows:

Forfeitable Share Plan 2 Scheme

P Spies and RD Lyon, executive directors of the Board, accepted awards of 300 000 and 150 000 FSP shares, respectively.

JV Parkin, a prescribed officer, accepted an award for 50 000 FSP shares.

43% of the forfeitable shares that had been awarded under this scheme, vested during the reporting period and were committed in terms of the Minimum Shareholding Requirement Policy. (Refer to Remuneration Committee Report).


P Spies and RD Lyon, executive directors of the Board, accepted awards for 300 000 and 150 000 FSP shares, respectively.

JV Parkin, a prescribed officer, accepted an award of 50 000 FSP shares.




Forfeitable Share Plan PS Scheme

P Spies, Group CEO, accepted an award of 500 000 FSP shares.









35.3 Share awards (continued)

Forfeitable Share Plan 3 Scheme (“FSP 3”)

Overview of scheme

FSP 3 was introduced during the 2019 reporting period. The scheme was introduced to executives and senior management of the Group. At the grant date of the scheme each participant received the respective voting and dividend rights in relation to the listed shares held in the Company.

Vesting conditions

Service conditions

The service condition of the scheme is a period of three years of employment within the Group. Should the employment of the employee be terminated before this date, for any reason, the scheme rules apply and the transfer of ownership is not automatically forfeited.

Performance conditions

The performance conditions are based on the return on equity, core earnings per share and total shareholder return of the Company over the service condition period.

Valuation of the scheme

FSP 3 was valued at Rnil at the reporting date due to the fact that none of the performance conditions were likely to be met and subsequently 100% of the shares awarded under this scheme would be forfeited on the vesting date, being 31 October 2021. The COVID-19 pandemic had the most significant impact on the estimated non-market related performance conditions of this scheme.


Overview of scheme


Vesting conditions

Service conditions



The performance conditions are based on the return on equity, headline earnings per share and total shareholder return of the Company over the service condition period.








The Black Scholes Option Valuation Methodology was applied in valuing of the scheme with the various inputs set out below:

Risk-free rate The zero-coupon bond curve interest rate was used for each grant date in determining this rate.

Volatility The historical Company share price was used to compute daily volatility which was then annualised. The percentage used in the valuation was 40,5% (2020: 40,4%).

Vesting date 31 October 2022.

Dividend yield An average dividend yield of 1,1% (2020: 1,6%) per annum was used within the model.

Quoted share price Quoted share price at date of the valuation.

Forfeitable Share Plan PS Scheme (“FSP PS”)

Overview of scheme

FSP PS was introduced during the 2020 reporting period. The scheme was introduced to the CEO of the Group. At the grant date of the scheme the participant received the respective voting and dividend rights in relation to the listed shares held in the Company.

Vesting conditions

Service conditions



The performance conditions are based on the return on equity, core earnings per share and shareholder return of Merlynn Intelligence Technologies Proprietary Limited over the service condition period.




Volatility The historical Company share price was used to compute daily volatility which was then annualised. The percentage used in the valuation was 40,5% (2020: 40,4%).


Dividend yield An average dividend yield of 1,1% (2020: 1,6%) per annum was used within the model.









Overview of scheme


Vesting conditions

Service conditions



The performance conditions are based on the return on equity, headline earnings per share and total shareholder return of the Company over the service condition period.




Volatility The historical Company share price was used to compute daily volatility which was then annualised. The percentage used in the valuation was 40,5%.


Dividend yield An average dividend yield of 1,1% per annum was used within the model.






36. RELATED PARTY TRANSACTIONS A list of all subsidiaries and equity-accounted investees are included in notes 11 and 12, respectively.

All key management personnel involved in the above related party transactions are directors whose remuneration is disclosed in note 35.2. All related party transactions are conducted on an arm’s length basis and any outstanding balances are no more or less favourable than any other supplier or customer of a similar size.

Transaction/balance

AmountR’000

BalanceR’000

COMPANY

2021

Alviva Treasury Services Proprietary Limited – Subsidiary

Group loan – 466 708

Alviva International Investments Proprietary Limited – Subsidiary

Dividend received (9 811) –

Centrafin Proprietary Limited – Subsidiary


DCT Holdings (RF) Proprietary Limited – Subsidiary


2020

Alviva Treasury Services Proprietary Limited – Subsidiary

Group loan – 445 024

Alviva International Investments Proprietary Limited – Subsidiary


Centrafin Proprietary Limited – Subsidiary


DCT Holdings (RF) Proprietary Limited – Subsidiary






37. SEGMENT AND GEOGRAPHIC ANALYSIS A segment is a distinguishable component of the Group that is engaged in activities from which it may earn revenue and

incur expenses, whose operating results are regularly reviewed by the chief operating decision maker (which by delegation by the Board, is the CEO under advice from his senior executive team) and for which discrete financial information is available. Operating segments are reported in a manner consistent with internal reporting provided to the chief operating decision maker.

GROUP

Segment revenue Inter-segment revenue External revenue *

2021R’000

2020R’000

2021R’000

2020R’000

2021R’000

2020R’000

37.1 Segment analysisBusiness unit

ICT Distribution 10 868 650 10 542 572 (598 765) (674 816) 10 269 885 9 867 756

Services and Solutions 4 488 150 4 819 613 (65 164) (80 719) 4 422 986 4 738 894

Financial Services 200 404 199 819 (140) (2 314) 200 264 197 505

15 557 204 15 562 004 (664 069) (757 849) 14 893 135 14 804 155

* No one customer contributed to more then 10% of the total external revenue.

GROUPSegment EBITDA**

2021R’000

2020R’000

Business unit

ICT Distribution 475 141 346 348

Services and Solutions 278 842 176 465


Group Central Services 7 121 51 308

886 983 707 619

Depreciation and amortisation (317 502) (319 082)

Share of profit of equity-accounted investee 1 924 –

Finance income 23 904 50 666

Finance costs (159 717) (227 640)

Profit before tax 435 592 211 563

** Earnings before interest, tax, depreciation and amortisation.





37. SEGMENT AND GEOGRAPHIC ANALYSIS (continued)

GROUP

Net operating assets

2021R’000

2020R’000

Business unit

ICT Distribution 1 170 468 1 169 630

Services and Solutions 598 217 598 512


Group Central Services 451 334 370 633

2 489 460 2 377 779

GROUP

Segment revenue* Segment EBITDA**

2021R’000

2020R’000

2021R’000

2020R’000

37.2 Geographic analysis [GRI 201-1]

Geographic region of business unit

South Africa 14 202 614 14 078 986 860 392 659 192

– Local 13 258 920 12 978 572 832 723 621 784

– International 943 694 1 100 414 27 669 37 408

Africa (excluding South Africa) 598 286 685 995 24 288 46 924

Other *** 92 235 39 174 2 303 1 503

14 893 135 14 804 155 886 983 707 619

Depreciation and amortisation (317 502) (319 082)

Share of profit of equity-accounted investee 1 924 –

Finance income 23 904 50 666

Finance costs (159 717) (227 640)

Profit before tax 435 592 211 563

* No one customer contributed to more than 10% of the total external revenue.

** Earnings before interest, tax, depreciation and amortisation.

*** Includes Group entities in the UK and Middle East.

GROUP

Net operating assets

2021R’000

2020R’000

Business unit

South Africa 2 381 541 2 257 579

Africa (excluding South Africa) 74 372 89 456

Other **** 33 547 30 744

2 489 460 2 377 779

**** Includes Group entities in the UK and Middle East.





38. CONTINGENT LIABILITIESThe directors are not aware of any contingent liabilities of a material nature.

GROUP2021

R’0002020

R’000

39. GUARANTEESIssued by the Company in favour of:

Attacq Waterfall Investment Company Proprietary Limited 1 800 1 800

Brashville Properties 92 Proprietary Limited 9 589 –

Canadian Solar * 35 767 52 102

Credit Guarantee Insurance Corporation of Africa Limited 15 000 15 000

Dovelight Trading 26 Proprietary Limited 14 622 –

Government Employees Pension Fund 3 102 –

Hewlett-Packard Financial Services Holdings Company Limited 86 638 15 000

Hitachi Vantara Proprietary Limited – –

Huawei Technologies Africa Proprietary Limited 214 605 260 512

IBM Group of companies ** 631 982 711 555

Infoblox Incorporated 30 045 –

JA Solar International Limited 35 767 –

Lenovo PC HK Limited and Lenovo Global Technology HK Limited 371 982 434 187

Longi Solar Technology Co Limited – 34 735

Lodestone Investments Proprietary Limited 8 500 13 653

Microsoft Ireland Operations Limited 300 447 364 718

Nutanix Netherlands BV 57 228 69 470

Nvidia Singapore Private Limited 7 154 –

Pinnacle Property Trust – 26 685

Prima Kommersiële Eiendomme Proprietary Limited 76 047 –

Prysmian Cables and Systems Limited 9 498 97 406

Radware Limited – 27 788

Schneider Electric DC MEA FzCo 1 431 1 737

Splunk Inc 71 535 86 838

VMware International Limited 228 912 277 880

Vodacom Proprietary Limited 10 000 10 000

Wells Fargo Bank NA (previously GE Capital Bank) 429 210 521 025

Ziegler South Africa Proprietary Limited – 7 000

2 650 861 3 029 091

* Canadian Solar International Limited and Canadian Solar South Africa Proprietary Limited.

** IBM South Africa Proprietary Limited, IBM Global Financing South Africa Proprietary Limited, IBM World Trade Corporation, IBM United Kingdom Financial Services Limited and IBM International Finance II BV. Guarantees amounting to R260 million have been ceded to Peridot Financing Solutions LLC.





39. GUARANTEES (continued)

The Company has issued guarantees to the above entities in respect of current facilities granted to its subsidiaries. These facilities are not fully utilised by the subsidiaries at the reporting date. The guarantees would become payable by the Company to the extent of outstanding balances should any subsidiary default. At the reporting date none of the subsidiaries were in default.

The Group assessed all of the subsidiaries, linked to a guarantee provided, to have a low level risk in relation to the ECL model applied based on the financial position and performance of each entity. This is substantiated by the fact that the Group’s treasury function provides financial assistance to each subsidiary when required and the fact that no subsidiary has defaulted in the current or prior reporting period in relation to the payment of each of these vendors. The exposure of the Company to any vendor in terms of the guarantee provided is thus assessed as being highly unlikely.

40. EVENTS AFTER THE REPORTING DATE Other than as disclosed below, there were no events material to the understanding of the financial statements that occurred after

the reporting date and the authorisation date of the financial statements, except the continuation of the risk-adjusted approach implemented by the South African government in response to the COVID-19 pandemic.

General repurchase of shares After the reporting date, the Company repurchased an additional 538 069 shares under the authority granted by shareholders

at the AGM held on 18 November 2020. The repurchase was put in place pursuant to a repurchase programme prior to the commencement of the prohibited period in accordance with the JSE Listings Requirements.

Forfeitable Share Plan Sixth allocation (“FSP 6”) FSP 6, along with its participants and share allocation, was approved by the Board on 15 June 2021. A total of 2 840 000 shares

were allocated to FSP 6. All participants accepted the shares granted to them and the scheme became effective after the reporting date.

Issue of preference shares

On 1 July 2021, Alviva, through its subsidiary, DCT Holdings (RF) Proprietary Limited, issued an additional 10 (ten) redeemable preference shares of R10 million each to Absa Bank Limited (acting through its Corporate and Investment Banking Division).

Civil disorder Riots and protests took place in South Africa from 9 July 2021 in response to the arrest of former president Jacob Zuma in terms

of a judgment issued by the Constitutional Court of South Africa. The riots escalated to looting that started in KwaZulu-Natal province on the evening of 9 July 2021 and spread to the Gauteng province on the evening of 11 July 2021. This was fuelled by job layoffs and economic inequality that had increased during the COVID-19 pandemic.

Road closures on two major national roads, namely the N3 and N2, affected the transportation of goods from the east coast into provinces in the north. This affected the transportation of goods to landlocked countries in Africa, including Botswana, Zimbabwe and Zambia. Multiple logistics and fuel companies in KwaZulu-Natal and Gauteng declared force majeure, citing fears of continued looting, hijackings, truck burnings, and social unrest increasing the costs sustained from the looting and damage to property.

Furthermore, the container ports of Richards Bay and Durban, located in KwaZulu-Natal, ceased operations. After several attacks on trucks, the N3, which links port Durban with Johannesburg, was closed on 10 July 2021.

The South African Rand weakened against major foreign currencies as a direct result of the temporary economic instability caused by the riots and protests.

Alviva was unable to avoid the effects of the riots and approximately R3,7 million of Alviva’s inventory, that was being held at a logistics service provider whilst en route to customers in the Durban area, was either destroyed or looted. A claim has already been submitted to SA Special Risk Insurance Assurance (SASRIA).

Thankfully no staff were physically injured but there was a degree of productivity lost over the period and certain additional costs were incurred to secure the Group’s operations.





40. EVENTS AFTER THE REPORTING DATE (continued)

Acquisition of the Tarsus Group

Alviva, through its subsidiary, DCT Holdings (RF) Proprietary Limited, has recently acquired 100% of the issued share capital of Tarsus Technology Group Proprietary Limited (“Tarsus”). The acquisition of Tarsus was effective 1 July 2021.

The purchase price for the 100% shareholding in Tarsus amounts to a total estimated cash consideration of R178 million. The consideration is payable as follows:

Tranche Date payable Amount

Tranche 1 1 July 2021 R100 million




Tranche 1 was paid on the acquisition date.

The Tarsus Group has two main operating subsidiaries: Tarsus Distribution Proprietary Limited, the company that owns the South African, Botswana and Namibian IT distribution operations, and Tarsus on Demand Proprietary Limited, a company which operates a cloud solutions business.

Tarsus Distribution is a distributor that is focused on making leading IT hardware brands available to the southern African reseller channel similar to Alviva’s subsidiaries, Axiz Proprietary Limited and Pinnacle Micro Proprietary Limited. The company is well positioned to meet the channel’s needs for credit funding, stock availability and efficient logistics. Tarsus on Demand provides customers and partners with leading and advanced cloud solutions.

The transaction meets the definition of a business combination as set out in IFRS 3: Business Combinations. Management is in the process of finalising the acquisition method of recognition in terms of the business combination as the transaction still falls within the allowable measurable period as permitted by IFRS 3: Business Combinations. Therefore, the at acquisition fair values of the identified assets and liabilities acquired and assumed, as well as any possible goodwill that may arise from the transaction, have not been disclosed.

41. GOING CONCERN

Following due consideration of the operating budgets, an assessment of solvency and liquidity, the key risks and the impact of the COVID-19 pandemic and other pertinent matters presented by management, the directors have recorded that they have reasonable expectations that the Group has adequate resources and the ability to continue in operations for the foreseeable future. For these reasons, the financial statements have been prepared on the going concern basis. However, the extent of the impact of the COVID-19 pandemic remains uncertain and cannot be predicted by the directors.





42. ANALYSIS OF SHAREHOLDING

SHAREHOLDER SPREAD 2021 2020

Shareholders Shares in issue Shareholders Shares in issue

Range of shares held Number % Number % Number % Number %

1 – 5 000 4 948 85,77 3 764 621 3,07 3 916 81,70 3 550 921 2,60

5 001 – 10 000 339 5,88 2 631 973 2,15 333 6,95 2 586 024 1,90

10 001 – 50 000 326 5,65 7 611 101 6,21 370 7,72 8 777 088 6,44

50 001 – 100 000 56 0,97 4 191 929 3,42 59 1,23 4 213 389 3,09

100 001 – 1 000 000 79 1,37 23 735 436 19,37 94 1,96 28 272 035 20,74

Over 1 000 000 21 0,36 80 585 243 65,77 21 0,44 88 918 289 65,23

Total 5 769 100,00 122 520 303 100,00 4 793 100,00 136 317 746 100,00

SHAREHOLDER TYPE 2021 2020

Shareholders Shares in issue Shareholders Shares in issue

Number % Number % Number % Number %

Non-public shareholders 22 0,38 33 540 593 27,38 20 0,42 52 916 875 38,82

Strategic shareholders (>10%) 1 0,02 22 000 000 17,96 4 0,08 42 435 057 31,13

Share schemes 1 0,02 7 815 000 6,38 1 0,02 7 180 750 5,27

Directors and associates 11 0,19 2 436 719 1,99 8 0,17 2 102 019 1,54

Other employees 9 0,16 1 288 874 1,05 7 0,15 1 199 049 0,88

Public shareholders 5 747 99,62 88 979 710 72,62 4 773 99,58 83 400 871 61,18

Total 5 769 100,00 122 520 303 100,00 4 793 100 136 317 746 100,00

BENEFICIAL INTEREST GREATER THAN 5% OF ISSUED SHARES * 2021 2020

Shares in issue Shares in issue

Number % Number %

Invesco Canada Limited – – 42 435 057 31,13

Tham Investments (Pty)Ltd 22 000 000 17,96 – –

Fidelity Investments * 11 081 582 9,04 10 956 766 8,04

Forfeitable Share Plan 7 815 000 6,38 7 180 750 5,27

Peresec Prime Brokers (Pty) Ltd * 7 300 931 5,96 6 282 098 4,61

Total 48 197 513 39,34 66 854 671 49,04

* Held on behalf of various funds for the ultimate benefit of various individual shareholders.





42. ANALYSIS OF SHAREHOLDING (continued)

2021 2020

DISTRIBUTION OF SHAREHOLDERS

Number ofshareholders %

Number ofshares %

Number ofshareholders %

Number ofshares %

Banks, brokers and nominees 26 0,45 2 362 245 1,93 29 0,61 7 518 239 5,52

Close corporations 30 0,52 548 480 0,45 35 0,73 611 820 0,45

Collective investment schemes 34 0,59 34 330 511 28,02 67 1,40 72 436 614 53,14

Control accounts and unclaimed shares

3 0,05 14 – 3 0,06 14 –

Employee share plans 2 0,03 8 682 600 7,09 1 0,02 7 180 750 5,27

Hedge funds 3 0,05 549 475 0,45 4 0,08 1 426 499 1,05

Insurance and assurance corporate funds

– – – – 1 0,02 5 148 –

Lending, collateral and pledged accounts

3 0,05 10 037 121 8,19 4 0,08 3 383 840 2,48

Non-SA custodians 31 0,54 6 504 558 5,31 12 0,25 3 727 211 2,73

NPO and charity funds 4 0,07 80 949 0,07 5 0,10 187 711 0,14

Pooled and mutual funds 24 0,42 2 908 739 2,37 36 0,75 5 099 820 3,74

Private companies 110 1,91 25 095 679 20,48 92 1,92 3 123 232 2,29

Retail individuals 5 270 91,35 23 914 687 19,52 4 264 88,96 24 564 352 18,02

Retirement benefit funds 18 0,31 2 237 572 1,83 37 0,77 2 104 892 1,54

Sovereign wealth fund – – – – 2 0,04 66 732 0,05

Trusts and investment partnerships

211 3,66 5 267 673 4,30 201 4,19 4 880 872 3,58

Total 5 769 100,00 122 520 303 100,00 4 793 100,00 136 317 746 100,00

SHARE PRICE PERFORMANCE 2021 2020

Opening price 1 July R6,66 R16,50

Closing price 30 June R13,83 R6,70

High for peroid R14,05 R17,00

Low for peroid R5,21 R3,34

Number of shares in issue 122 520 303 136 317 746

Volume traded during period 72 038 564 41 014 505

Ratio of volume traded to shares issued 58,80% 30,09%

Rand value traded during the period 562 246 702 392 702 267

Market capitalisation at 30 June R1 694 455 790 R913 328 898

290

Shareholders’ information


SHAREHOLDERS’ INFORMATION

291



Financial year-end 30 June

ACTION/EVENT 2021

Record date to determine which shareholders are entitled to receive the 2021 Integrated Annual Report (incorporating the Notice of 2021 AGM) on

Friday, 17 September

2021 Integrated Annual Report (incorporating the Notice of 2021 AGM) distributed to shareholders on

Monday, 27 September

Last day to trade for shareholders to be recorded in the register on the record date for participating in the AGM

Tuesday, 9 November

Last date to trade “cum” dividend Tuesday, 9 November

First date to trade “ex” dividend Wednesday, 10 November

Dividend record date Friday, 12 November

Record date to determine which shareholders are entitled to participate in and vote at the 2021 AGM on

Friday, 12 November

Dividend payment date Monday, 15 November

Last date and time (14:00) by when forms of proxy must be submitted to the transfer secretaries (note 2)

Wednesday, 17 November

Online registration using the online registration portal at www.smartagm.co.za by shareholders or their duly appointed proxy(ies) that wish to participate in the AGM via electronic communication by 14:00 on

Wednesday, 17 November

Electronic participation application forms to be received by the transfer secretaries by 14:00 on Wednesday, 17 November

Electronic participants notified by email of the relevant details through which participants can participate electronically by 14:00 on

Thursday, 18 November

2021 AGM held at 14:00 on Friday, 19 November

Results of the 2021 AGM published on SENS on Friday, 19 November

Notes:

1. All dates and times set out above are subject to change and/or may be subject to certain regulatory approvals being granted. Any change to the aforementioned dates and times will be published on SENS and in the South African press.

2. No share certificates may be dematerialised or rematerialised between Wednesday, 10 November 2021 and Friday, 12 November 2021, both days inclusive.

3. Any form of proxy not delivered to the transfer secretaries by this time may be sent to the Chairperson of the AGM, care of the transfer secretaries at [email protected] at any time before the proxy exercises any rights of the shareholder at the AGM. However, to facilitate administration, it would be appreciated If proxies can be received by the transfer secretaries by 14:00 on Wednesday, 17 November 2021.

4. If the AGM is adjourned or postponed to a later time and/or date, the above dates and times will change, but the applicable form of proxy submitted for the relevant AGM will remain valid in respect of any postponement prior to convening, adjournment or postponement of that AGM.

5. All times given are local times in South Africa.

SHAREHOLDERS’ DIARY

292



ALVIVA HOLDINGS LIMITEDIncorporated in the Republic of South Africa Registration number: 1986/000334/06 Share Code: AVVISIN: ZAE000227484(“Alviva”) or (“the Company”) or (“the Group”)

This document is important and requires your attention. If you are in any doubt as to what action you should take in respect of the resolutions contained in this notice, please consult your Central Securities Depository Participant (“CSDP” or “Participant”), broker, banker, attorney, accountant or other professional adviser immediately.

If you have sold or otherwise transferred all of your ordinary shares in the Company, please send this document together with the accompanying form of proxy at once to the relevant transferee or to the stockbroker, CSDP, bank or other person through whom the sale or transfer was effected, for transmission to the relevant transferee.

For consistency of reference in this notice of annual general meeting (hereinafter the “AGM”), the term “MOI” is used throughout to refer to the Company’s Memorandum of Incorporation (previously the Company’s Memorandum and Articles of Association) which was adopted by the shareholders at the AGM of shareholders held on Friday, 26 October 2012.

Section 63(1) of the Act – Identification of meeting Participants

Kindly note that meeting Participants (including proxies) are required to provide reasonably satisfactory identification before being entitled to attend or participate in a shareholders’ meeting. Forms of identification include valid identity documents, driver’s licenses and passports.

As a result of COVID-19, and guidance from authorities regarding the need for social distancing, the AGM will be conducted entirely by electronic communication.

Shareholders or their duly appointed proxy(ies) that wish to participate in the AGM via electronic communication (“Participant(s)”) must either:

(1) register online using the online registration portal www.smartagm.co.za; or

(2) apply to Computershare Investor Services Proprietary Limited, by delivering the duly completed electronic participation form to: First Floor, Rosebank Towers, 15 Biermann Ave, Rosebank, 2196 or posting it to Private Bag X9000, Saxonwold, 2132 (at the risk of the Participant), or sending it by email to [email protected] so as to be received by Computershare Investor Services Proprietary Limited by no later than 14:00 on Wednesday, 17 November 2021.

The electronic participation application form can be found in Annexure A to this Notice of AGM. Computershare Investor Services Proprietary Limited will first validate such requests and confirm the identity of the shareholder in terms of section 63(1) of the Companies Act, and, if the request is validated, further details on using the communication facility will be provided.

The Company will inform Participants who notified Computershare Investor Services Proprietary Limited of their intended participation in accordance with paragraph 2 under Electronic Participation, on page 307 of this Notice of AGM, by no later than 14:00 on Thursday, 18 November 2021, by email of the relevant details through which Participants can participate electronically.

NOTICE OF ANNUAL GENERAL MEETING

293



NOTICE OF AGMNotice is hereby given that the AGM of the shareholders of Alviva Holdings Limited will be held by virtual attendance in electronic format, as provided by the JSE, the Companies Act and the Company’s MOI, on Friday, 19 November 2021 at 14:00 (or at any adjournment or postponement thereof ) to transact the following business and resolutions with or without amendments approved at the meeting:

The minutes of the AGM held on Wednesday, 18 November 2020 will be available for inspection on the Alviva website at https://alvivaholdings.com/report/financial-year-2020-reports/.

Included in this document are the following:

� The notice of AGM setting out the resolutions to be proposed at the meeting, together with explanatory notes;

� A proxy form for completion, signature and submission to the transfer secretaries by shareholders holding Alviva ordinary shares in certificated form or recorded in the sub-register in electronic form in “own name”. Proxy forms may also be sent to the Chairperson of the AGM, care of the transfer secretaries at [email protected] at any time before the proxy exercises any rights of the shareholder at the AGM;

� Annexure A: Participation in the AGM via electronic communication; and

� Annexure B: Online shareholders’ meeting guide 2021.

Mailing details of the transfer secretaries are detailed on the proxy form and notes thereto.

PRESENTATION OF ANNUAL FINANCIAL STATEMENTS AND REPORTSThe consolidated audited annual financial statements for the Company and the Group, including the external Independent Auditor’s Report, the Audit and Risk Committee Report and the Directors’ Report for the year ended 30 June 2021, have been distributed, as required, and will be presented to shareholders at the AGM.

The consolidated audited annual financial statements, together with the abovementioned reports, are set out on pages 148 to 289 of the integrated annual report.

REPORT FROM THE SOCIAL AND ETHICS COMMITTEEIn accordance with Companies Regulation 43(5)(c), issued in terms of the Companies Act, the Chairperson of the Social and Ethics Committee, or, in the absence of the Chairperson, any member of the Committee, will present the Committee’s report to shareholders at the AGM. The Social and Ethics Committee Report is set out on pages 96 to 101 of the integrated annual report.

SPECIAL RESOLUTIONS

SPECIAL RESOLUTION NUMBER 1To issue a general authority to the Company to repurchase its own shares

“RESOLVED THAT the Company or a subsidiary, be and is hereby authorised, by way of general authority in terms of article 16 of the MOI, to acquire shares issued by it, subject to the requirements of sections 46 and 48 of the Companies Act and the Listings Requirements of the JSE Limited (“JSE”) and the MOI of the Company.”

Notice of annual general meeting continued

294



It is recorded that the Listings Requirements of the JSE require, inter alia, that the Company or a subsidiary may make a general acquisition of shares issued by the Company only if:

� the repurchase of the ordinary shares is effected through the order book operated by the JSE trading system and done without any prior understanding or arrangement between the Company and the counterparty (reported trades are prohibited);

� at any point in time the Company may only appoint one agent to effect any repurchases on its behalf;

� this general authority shall only be valid until the next AGM of the Company, provided that it shall not extend beyond 15 (fifteen) months from the date of passing of this special resolution;

� the maximum price at which the shares may be acquired will be 10% (ten percent) above the weighted average market value at which such ordinary shares are traded on the JSE for such ordinary shares for the 5 (five) business days immediately preceding the date on which the transaction is effected. In the event that the Company’s shares have not traded in such five business-day period, the JSE will be consulted for a ruling;

� any such acquisition shall not, in any one financial year, exceed 20% (twenty percent) of the Company’s issued ordinary shares;

� the Company or its subsidiaries may not repurchase ordinary shares during a prohibited period as defined in paragraph 3.67 of the JSE Listings Requirements, unless they have in place a repurchase programme where the dates and quantities of securities to be traded during the relevant period are fixed (not subject to any variation) and has been submitted to the JSE in writing prior to the commencement of the prohibited period;

� the repurchase may only be effected if the shareholder spread requirements, as set out in paragraphs 3.37 and 4.28(e) of the JSE Listings Requirements, are still met after such repurchase;

� the directors have passed a resolution authorising the repurchase, resolving that the Company or the subsidiary, as the case may be, has satisfied the solvency and liquidity test as defined in Section 4 of the Companies Act and resolving that since the solvency and liquidity test had been applied, there have been no material changes to the financial position of the Group;

� such authority is limited to paragraphs 5.68, 5.72(a), (c) and (d) of the JSE Listings Requirements;

� when the Company has cumulatively repurchased 3% (three percent) of the initial number (the number of that class of shares in issue at the time that the general authority from shareholders is granted) of the relevant class of securities for each 3% (three percent) in aggregate of the initial number of that class acquired thereafter, an announcement must be made. Such announcement must be made as soon as possible and, in any event, by not later than 8:30 on the second business day following the day on which the relevant threshold is reached or exceeded and must contain the following information in terms of paragraph 11.27 of the JSE Listings Requirements:

� the date(s) of repurchase(s) of securities;

� the highest and lowest prices paid for securities so repurchased;

� the number and value of securities repurchased;

� the extent of authority outstanding, by number and percentage (calculated by using the number of shares in issue before any repurchases were effected);

� a statement as to the source of funds utilised;

� a statement by the directors that after considering the effect of such repurchase:

▷ the Company and the Group will be able, in the ordinary course of business, to pay its debts for a period of 12 (twelve) months after the date of the announcement;

▷ the assets of the Company and the Group will be in excess of the liabilities of the Company and the Group for a period of 12 (twelve) months after the date of the announcement. For this purpose, the assets and liabilities should be recognised and measured in accordance with the accounting policies used in the latest audited Group annual financial statements;

▷ the share capital and reserves of the Company and the Group will be adequate for ordinary business purposes for a period of 12 (twelve) months after the date of the announcement;

▷ the working capital of the Company and the Group will be adequate for ordinary business purposes for a period of 12 (twelve) months after the date of the announcement;


295



� a statement confirming that paragraph 5.72 (a) of the JSE Listings Requirements has been complied with;

� an explanation including supporting information (if any) of the impact on the repurchase on the financial information;

� the number of treasury shares held after the repurchase;

� the date on which the securities will be cancelled and the listing removed, if applicable; and

� in the event that the repurchase/purchase was made during a prohibited period through a repurchase programme pursuant to paragraph 5.72 and/or paragraph 14.9(e) of Schedule 14, a statement confirming that the repurchase was put in place pursuant to a repurchase programme prior to the prohibited period in accordance with the JSE Listings Requirements.

The directors of the Company do not have any specific intentions for utilising this general authority as at the date of this AGM.

Additional disclosure requirements required in terms of paragraph 11.26 of the JSE Listings Requirements

Material changes

Other than as set out in the Integrated Annual Report, no material changes have occurred since 30 June 2021 and the date of distribution of this notice as incorporated with the integrated annual report.

Directors’ responsibility statement

The directors, whose names are given on pages 35 and 36 of the Integrated Annual Report have considered all statements of fact and opinion in the notice and integrated annual report to which this notice is attached and therefore collectively and individually accept full responsibility for the accuracy of the information given and certify that to the best of their knowledge and belief there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that the notice and integrated annual report contain all information required by law and the JSE Listings Requirements.

The JSE Listings Requirements require the following disclosures, which are contained in the Integrated Annual Report as tabled below: –

Requirements Reference

Major shareholders Page 288, Note 42

Share capital of the Company Page 220, Note 18

Statement by directors in terms of paragraph 11.26 (d) of the JSE Listings Requirements

The Company’s directors state that they have resolved by resolution that after considering the effect of such maximum repurchase:

� the Company and the Group will be able in the ordinary course of business to pay its debts for a period of 12 (twelve) months after the date of the notice of the AGM;

� assets of the Company and the Group will be in excess of the liabilities of the Company and the Group for a period of 12 (twelve) months after the date of the notice of the AGM. For this purpose, the assets and liabilities should be measured in accordance with the accounting policies used in the latest audited annual Group financial statements;

� the share capital and reserves of the Company and the Group will be adequate for ordinary business purposes for a period of 12 (twelve) months after the date of the notice of the AGM;

� working capital of the Company and the Group will be adequate for ordinary business purposes for a period of 12 (twelve) months after the date of the notice of the AGM; and

� a resolution by the Board of Directors has been passed that it has authorised the repurchase, that the Company and its subsidiaries have passed the solvency and liquidity test and that, since the test was performed, there have been no material changes to the financial position of the Group.

The directors state further, in terms of paragraph 11.26(e) of the JSE Listings Requirements, that such resolution contains a statement that such authority is limited to paragraphs 5.72(a), (c), (d) and 5.68 of the JSE Listings Requirements.


296



Reason for and effect of special resolution number 1

The reason for and effect of special resolution number 1 is to authorise the Company and/or its subsidiaries by way of a general authority to acquire Alviva issued shares on such terms, conditions and in such amounts as determined from time to time by the directors of the Company, subject to the limitations set out above and in compliance with sections 46 and 48 of the Companies Act. It is the intention of the directors of the Company to use such authority should prevailing circumstances, such as market conditions, in their opinion warrant it.

Percentage voting rights

This resolution requires at least 75% (seventy-five percent) of the voting rights exercised by shareholders present or represented by proxy and entitled to exercise voting rights on the resolution.

SPECIAL RESOLUTION NUMBER 2General authority to provide financial assistance in terms of section 44 of the Companies Act

“RESOLVED THAT, in terms of section 44(3)(a)(ii) of the Companies Act, as a general approval, the Board be and is hereby authorised to approve that the Company provides any direct or indirect financial assistance (“financial assistance”) will herein have the meaning attributed to it in sections 44(1) and 44(2) of the Companies Act), that the Board may deem fit to any Company or corporation that is related or inter-related to the Company (“related” or “inter-related” will herein have the meaning attributed to it in section 2 of the Companies Act) and/or to any financier who provides funding by subscribing for preference shares or other securities in the Company or any Company or corporation that is related or inter-related to the Company, on the terms and conditions and for amounts that the Board may determine for the purpose of, or in connection with, the subscription of any shares or other securities, issued or to be issued by the Company or a related or inter-related Company or corporation, or for the purchase of any shares or securities of the Company or a related or inter-related Company or corporation, provided that the aforementioned approval shall be limited to a maximum amount of R1 billion (one billion Rand) and be valid until the date of the next AGM of the Company.”

Reason for special resolution number 2

The reason for and effect of special resolution number 2 is to grant the directors the authority, until the next AGM of the Company, to provide financial assistance to any company or corporation which is related or inter-related to the Company and/or to any financier for the purpose of or in connection with the subscription or purchase of shares or other securities in the Company or any related or inter-related company or corporation.

This means that the Company is authorised, inter alia, to grant loans to its subsidiaries and to guarantee and furnish security for the debt of its subsidiaries where any such financial assistance is directly or indirectly related to a party subscribing for shares or securities in the Company or its subsidiaries. A typical example of where the Company may rely on this authority is where a subsidiary raises funds by way of issuing preference shares and the third-party funder requires the Company to furnish security, by way of a guarantee or otherwise, for the obligations of its subsidiary to the third-party funder arising from the issue of the preference shares.

Approval is not sought for loans to directors or other individuals and no such financial assistance will be provided under this authority.

Compliance with section 44(3)(b)

The directors of the Company will, in accordance with the Companies Act, ensure that financial assistance is only provided if the requirements of that section are satisfied, inter alia, that immediately after providing the financial assistance, the Company would satisfy the solvency and liquidity test set out in section 4(1) of the Companies Act and the terms under which the financial assistance is proposed to be given are fair and reasonable to the Company.


This resolution requires at least 75% (seventy-five percent) of the voting rights exercised by shareholders present or represented

by proxy and entitled to exercise voting rights on the resolution.


297



SPECIAL RESOLUTION NUMBER 3To approve the fee structure, exclusive of Value-Added Tax, to be paid to directors for their services as non-executive directors of the Company

“RESOLVED THAT, in terms of section 66(9) of the Companies Act, the Company be and is hereby authorised to remunerate its directors for their services as directors and/or pay any fees related thereto on the following basis and on any other basis as may be recommended by the Remuneration Committee and approved by the Board of Directors, provided that the aforementioned authority shall be valid with effect from Friday, 19 November 2021 until the next AGM of the Company to be held in the last quarter of 2022 as follows:

2021/2022R

2020/2021R

Chairpersonships

Board Chairperson 888 000 850 000

Lead Independent Director 188 000 180 000

Audit and Risk Committee Chairperson 105 000 100 000

Remuneration Committee Chairperson 52 000 50 000

Social and Ethics Committee Chairperson 52 000 50 000

Memberships

Board 256 000 245 000

Audit and Risk Committee 84 000 80 000

Remuneration Committee 52 000 50 000

Social and Ethics Committee 47 000 45 000

Each fee is paid to each director who is a member of the Board or Committees referred to above. Chairperson fees are paid in addition to membership fees. No fees are paid for attendance per meeting as the base fee is an all-inclusive fee with the non-executive directors’ appointment agreements stipulating attendance at meetings as a requirement. Executive directors do not receive directors’ fees.

Reason for and effect of special resolution number 3

The reason for and effect of special resolution number 3 is for the Company to obtain the approval of shareholders by way of special resolution to remunerate its non-executive directors in accordance with the requirements of the Companies Act without requiring further shareholder approval until the next AGM.


This resolution requires at least 75% (seventy-five percent) of the voting rights exercised by shareholders present or represented by proxy and entitled to exercise voting rights on the resolution.


298



ORDINARY RESOLUTIONSThe minimum percentage of voting rights required for ordinary resolutions 1 to 5 and 7 below to be adopted is more than 50% (fifty percent) of the voting rights exercised on each of the resolutions by shareholders present or represented by proxy. Ordinary resolution 6 must be passed by a 75% (seventy-five percent) majority of votes cast in favour of the resolution by all members present or represented by proxy.

ORDINARY RESOLUTION NUMBER 1Re-appointment of retiring directors

1.1 Ms MG Mokoka

“RESOLVED THAT Ms MG Mokoka, who retires in compliance with the MOI requirement that one-third or more of the non-executive directors must retire at each AGM, and, being eligible offers herself for re-election, be and is hereby re-elected and confirmed as a non-executive director.”

A brief biography of Ms MG Mokoka is as follows:

Ms MG Mokoka (47) BCom (Accounting) (University of Limpopo); Postgraduate Diploma in Management (Financial Accounting) (University of Cape

Town); BCom Honours (Accounting) (University of Natal); Postgraduate Diploma in Auditing (University of Cape Town); CA(SA)

Ms Mokoka is a qualified Chartered Accountant (SA) with diverse work experience in strategic and financial management. She has sound public and private sector experience on boards, and currently holds a number of non-executive board positions for leading South African companies.

External membership and appointments: Director of Sanlam Ltd, Palabora Mining (Pty) Ltd, CSG Holdings Ltd and Stadio Holdings Ltd. Member of the South African Institute of Chartered Accountants (SAICA), the Institute of Directors in South Africa (IoDSA) and African Women Chartered Accountants (AWCA).

1.2 Ms SH Chaba

“RESOLVED THAT Ms SH Chaba, who retires in compliance with the MOI requirement that one-third or more of the non- executive directors must retire at each AGM, and, being eligible offers herself for re-election, be and is hereby re-elected and confirmed as an independent non-executive director.”

A brief biography of Ms SH Chaba is as follows:

Ms SH Chaba (63) BA (Economics and Industrial Psychology); Post-Graduate Diploma in Human Resources Management (Wits); Senior Executive

Programme (Wits and Harvard Business School)

Ms Chaba is an HR expert and business strategist who sits on a number of boards in the private and public sectors. She works as a consultant and in an advisory capacity as a board member. She runs businesses in the areas of horticulture and construction sectors. She has extensive public and private sector experience at both executive and board levels. In the public sector, she has served in all three spheres of government and in state-owned enterprises such as Gauteng Provincial Government, City of Johannesburg and the Central Energy Fund. She has significant experience in the ICT sector, having served on the Boards of SITA and USAASA for nine years. In the private sector, she has experience in the petrochemical, retail, construction and financial industries such as Sasol Limited, AECI Limited, Edgars and Creditworx (a Thebe Investment Corporation (Pty) Ltd subsidiary). She also has significant experience in the insurance sector having served as a non-executive director for Safrican Insurance Company (a Sanlam subsidiary) and a Specialist HR Consultant for both the Legal Practitioners’ Fidelity and Indemnity Insurance Funds remuneration committees.

External membership and appointments: Director of Safrican Insurance Company Limited, Dijalo Mbung (Pty) Ltd, Amispan, Azonex (Pty) Ltd, Africa Cornices (Pty) Ltd and Kgosi Neighbourhood Foundation, a non-profit organisation.


299



ORDINARY RESOLUTION NUMBER 2Appointment of the members of the Audit and Risk Committee

Note: For avoidance of doubt, all references to the Audit and Risk Committee of the Company is a reference to the Audit Committee as contemplated in the Companies Act.

“RESOLVED THAT the following independent non-executive directors, all of whom qualify in terms of section 94(4) of the Companies Act, be appointed as the Chairperson and members of the Audit and Risk Committee, subject to the re-appointment of Ms SH Chaba’s and Ms M Mokoka’s ratification as directors pursuant to ordinary resolution number 1.2:

2.1 Ms P Natesan (Chairperson)

A brief biography of Ms P Natesan is as follows:

Ms P Natesan (42) BCom (Cum Laude) (Nelson Mandela University); BCom (Honours) (Nelson Mandela University); CA(SA); CD(SA)

Ms Natesan is the CEO at the Institute of Directors in South Africa, serving as an executive director on their board and overseeing the business growth and performance on a day-to-day basis. Her areas of expertise include governance, finance, risk and compliance as well as strategy development.

She is a corporate governance specialist and a thought leader in corporate governance in South Africa, having penned many articles and papers on the topic. She also holds the prestigious Chartered Director (SA) designation.

External membership and appointments: Member of the South African Institute of Chartered Accountants, King Committee on Corporate Governance, 30% Club, Integrated Reporting Committee of South Africa and Institute of Directors in South Africa (IoDSA).

2.2 Ms SH Chaba BA (Economics and Industrial Psychology); Post-Graduate Diploma in Human Resources Management (Wits); Senior Executive

Programme (Wits and Harvard Business School)

A brief biography of Ms SH Chaba is included under 1.2 above.

2.3 Ms MG Mokoka BCom (Accounting) (University of Limpopo); Postgraduate Diploma in Management (Financial Accounting) (University of Cape

Town); BCom Honours (Accounting) (University of Natal); Postgraduate Diploma in Auditing (University of Cape Town); CA(SA)

A brief biography of Ms MG Mokoka is included under 1.1 above.

ORDINARY RESOLUTION NUMBER 3Re-appointment of the auditors

“RESOLVED THAT, upon the recommendation given by the Audit and Risk Committee of the Company, SNG Grant Thornton be re- appointed as the auditor of the Company and Mr A Govender be appointed as the designated audit partner who will undertake the audit of the Group, both until the date of the next AGM.”


300



ORDINARY RESOLUTION NUMBER 4Non-binding endorsement of Alviva’s Remuneration Policy and Remuneration Implementation Report

4.1 “RESOLVED THAT shareholders endorse the Company’s Remuneration Policy as detailed in the Remuneration Committee Report in the Integrated Annual Report, through a non-binding advisory vote as recommended in part 5.4 practice 37 of the King IV Report on Corporate Governance for South Africa, 2016.”

4.2 RESOLVED THAT shareholders endorse the Company’s Remuneration Implementation Report as detailed in the Remuneration Committee Report in the Integrated Annual Report, through a non-binding advisory vote as recommended in part 5.4 practice 37 of the King IV Report on Corporate Governance for South Africa, 2016.”

Reason for and effect of ordinary resolution number 4

The reason for ordinary resolutions number 4.1 and 4.2 is that the King IV Report on Corporate Governance for South Africa, 2016 recommends, and the JSE Listings Requirements in paragraph 3.84(j) stipulates, that the Remuneration Policy and the Remuneration Implementation Report of the Company be endorsed through separate non-binding advisory votes by shareholders.

Should either resolution number 4.1 or 4.2 be voted against by 25% or more of the voting rights exercised, the Board will enter into an engagement process to ascertain the reasons for the dissenting votes and appropriately address legitimate and reasonable objections and concerns raised.

ORDINARY RESOLUTION NUMBER 5Placement of unissued shares under the control of the directors

“RESOLVED THAT all of the authorised but unissued ordinary shares in the capital of the Company be and are hereby placed under the control of the directors of the Company as a general authority to allot or issue the same at their discretion in terms of and subject to the provisions of section 38 of the Companies Act, the JSE Listings Requirements and the Company’s MOI and subject to the proviso that the aggregate number of ordinary shares which may be allotted and issued in terms of this ordinary resolution number 5, shall be limited to 10% (ten percent) of the number of ordinary shares in issue from time to time.”

ORDINARY RESOLUTION NUMBER 6Authority to issue shares for cash

“RESOLVED THAT the directors of the Company be and are hereby authorised by way of a general authority to allot or issue all or any of the authorised but unissued shares in the capital of the Company for cash, at the discretion of the directors, as and when suitable opportunities arise, subject to the Listings Requirements of the JSE and shall be limited to 10% (ten percent) of ordinary shares, after deducting any treasury shares, in issue as at the date of the AGM.”


301



In terms of paragraph 5.52 of the JSE Listings Requirements, the allotment and issue of shares for cash shall be subject to the following limitations:

� that the securities which are the subject of the issue for cash must be of a class already in issue, or where this is not the case, must be limited to such securities or rights that are convertible into a class already in use;

� any such issue will be made to public shareholders as defined in paragraphs 4.25 to 4.27 of the JSE Listings Requirements, and not to related parties;

� shares which are the subject of such a general issue for cash must be less than 30% (thirty percent) of the applicant’s listed equity securities as at the date of the notice of AGM seeking the general issue for cash authority, provided that:

� as contemplated in paragraph 5.50(b) of the JSE Listings Requirements, this authority shall not be extended beyond the next AGM or 15 (fifteen) months from the date of this AGM, whichever is earlier;

� the number of issued ordinary shares as at the date of the notice of AGM is 122 520 303 (one hundred and twenty two million five hundred and twenty thousand three hundred and three), which includes 7 815 000 Forfeitable Share Plan shares and 538 069 Treasury Shares;

� shares which are the subject of the general issue for cash shall in any one financial year not exceed 11 416 723 (eleven million four hundred and sixteen thousand seven hundred and twenty three) ordinary shares, being 10% (ten percent) in aggregate of the number of shares (excluding Forfeitable Share Plan Shares and Treasury Shares) in the Company’s issued share capital in issue at the date of this notice of the AGM;

� any shares issued under this authority, prior to this authority lapsing, shall be deducted from the shares that the Company is authorised to issue in terms of this authority for the purpose of determining the remaining number of shares that may be issued in terms of this authority;

� in the event of a sub-division or consolidation of shares, prior to this authority lapsing, the existing authority shall be adjusted accordingly to represent the same allocation ratio;

� after the Company has issued shares in terms of the approved general issue for cash representing, on a cumulative basis within the financial year, 5% (five percent) or more of the number of equity securities in issue prior to that issue, the Company shall publish an announcement giving full details of the issue, including:

� the number of securities issued;

� the average discount to the weighted average trading price of the securities over the 30 (thirty) days prior to the date that the issue was determined and agreed by the directors of the Company; and

� the impact on net asset value, net tangible asset value and on earnings and headline earnings per share;

� in determining the price at which shares will be issued in terms of this authority, the maximum discount permitted shall be 10% (ten percent) of the weighted average traded price of such shares, as determined over the 30-day (thirty-day) business period prior to the date that the price of the issue is determined or agreed by the directors of the Company. If no shares have been traded in the said 30-day (thirty-day) business period, a ruling will be obtained from the JSE.

A 75% (seventy-five percent) majority of votes cast in favour of the resolution by all members present or represented by proxy, is required for this ordinary resolution to be passed.

ORDINARY RESOLUTION NUMBER 7Authorisation of the directors to implement the special and ordinary resolutions

“RESOLVED THAT any one director of the Company or the Company Secretary be and is hereby authorised to do all such things as are necessary and to sign all such documents issued by the Company so as to give effect to such ordinary resolutions and special resolutions with or without amendment and, where applicable, registered.”

Transaction of such other matters as may be transacted at an AGM.


302



SALIENT DATES AND TIMES

Date

Record date to receive notice of AGM Friday, 17 September 2021

Notice of AGM to be posted to shareholders and announced on SENS Monday, 27 September 2021

Last day to trade to be recorded in the register on the record date for participation in the AGM

Tuesday, 9 November 2021

Record date to participate in and vote at the AGM Friday, 12 November 2021

To facilitate administration, it would be appreciated if proxies can be received by the transfer secretaries by 14:00 on

Wednesday, 17 November 2021 *

Online registration using the online registration portal at www.smartagm.co.za by shareholders or their duly appointed proxy(ies) that wish to participate in the AGM via electronic communication by 14:00 on

Wednesday, 17 November 2021

Electronic participation application forms to be received by the transfer secretaries by 14:00 on

Wednesday, 17 November 2021

Electronic Participants notified by email of the relevant details through which Participants can participate electronically by 14:00 on

Thursday, 18 November 2021

Last day for lodging forms of proxy at 14:00 on Friday, 19 November 2021

AGM at 14:00 on Friday, 19 November 2021

Results of AGM released on SENS Friday, 19 November 2021

* Any form of proxy not delivered to the transfer secretaries by this time may be sent to the Chairperson of the AGM, care of the transfer secretaries at [email protected] at any time before the proxy exercises any rights of the shareholder at the AGM.

Note:

Any changes to the above dates will be announced on SENS, subject to JSE approval.

VOTING AND PROXIESCertificated shareholders and dematerialised shareholders who hold shares in “own name” registration who are unable to attend the AGM and who wish to be represented thereat, must complete the form of proxy as attached to this notice of AGM, in accordance with the instructions contained therein and return it to the transfer secretaries to be received by no later than 14:00 on the day of the AGM, being Friday, 19 November 2021. Proxies which are not delivered timeously to the transfer secretaries, may be sent to the Chairperson of the AGM, care of the transfer secretaries at [email protected] at any time before the proxy exercises any rights of the shareholder at the AGM. However, to facilitate administration, it would be appreciated if proxies can be received by the transfer secretaries by 14:00 on Wednesday, 17 November 2021.

Completion of the relevant form of proxy will not preclude such shareholder from participating in or attending and voting (in preference to those shareholders’ proxies) at the AGM.

Voting will be performed by way of a poll, so each shareholder present or represented by way of proxy will be entitled to 1 (one) vote for every ordinary share held or represented.


303



Shareholders’ rights regarding proxies

Shareholders’ rights regarding proxies in terms of section 58 of the Companies Act are as follows:

1. At any time, a shareholder of a Company may appoint any individual, including an individual who is not a shareholder of that Company, as a proxy to –

(a) participate in, and speak and vote at, a shareholders meeting on behalf of the shareholder; or

(b) give or withhold written consent on behalf of the shareholder to a decision contemplated in section 60.

2. A proxy appointment –

(a) must be in writing, dated and signed by the shareholder; and

(b) remains valid for:

(i) a period as set out in 23.7 of the MOI.

(ii) any longer or shorter period expressly set out in the appointment, unless it is revoked in a manner contemplated in section 58(4)(c) of the Companies Act, or expires earlier as contemplated in section 58(8)(d) of the Companies Act.

3. Other –

(a) a shareholder of the Company may appoint two or more persons concurrently as proxies, and may appoint more than one proxy to exercise voting rights attached to different securities held by the shareholder;

(b) a proxy may delegate the proxy’s authority to act on behalf of the shareholder to another person, subject to any restriction set out in the instrument appointing the proxy; and

(c) a copy of the instrument appointing a proxy must be delivered to the Company or to another person on behalf of the Company, before the proxy exercises any rights of the shareholder at a shareholders meeting.

4. Irrespective of the form of instrument used to appoint a proxy –

(a) the appointment is suspended at any time and to the extent that the shareholder chooses to act directly and in person in the exercise of any rights as a shareholder;

(b) the appointment is revocable unless the proxy appointment expressly states otherwise; and

(c) if the appointment is revocable, a shareholder may revoke the proxy appointment by:

(i) cancelling it in writing, or making a later inconsistent appointment of a proxy; and

(ii) delivering a copy of the revocation instrument to the proxy, and to the Company.

5. The revocation of a proxy appointment constitutes a complete and final cancellation of the proxy’s authority to act on behalf of the shareholder as of the later of –

(a) the date stated in the revocation instrument, if any; or

(b) the date on which the revocation instrument was delivered as required in section 58(4)(c)(ii) of the Companies Act.

6. A proxy is entitled to exercise, or abstain from exercising, any voting right of the shareholder without direction, except to the extent that the instrument appointing the proxy otherwise provides.


304



ELECTRONIC PARTICIPATIONShould any shareholder (or a representative or proxy for a shareholder) wish to participate in and/or vote at the AGM by way of electronic participation, such shareholder must either:

1. register online using the online registration portal at www.smartagm.co.za, prior to the commencement of the AGM; or

2. make a written application (the form of which is attached to this notice of the Company’s AGM as Annexure A) to so participate, by delivering the application form to the transfer secretaries, being Computershare Investor Services Proprietary Limited, at First Floor, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196, or posting it to Private Bag X9000, Saxonwold, 2132 (at the risk of the shareholder), or sending it by email to [email protected], so as to be received by the transfer secretaries by no later than 14:00 on Wednesday, 17 November 2021, in order for the transfer secretaries to arrange such participation for the shareholder and for the transfer secretaries to provide the shareholder with the details as to how access to the AGM by means of electronic participation is to be made. Shareholders may still register/apply to participate in and/or vote electronically at the AGM after this date, provided, however, that those shareholders are verified (as required in terms of section 63(1) of the Companies Act) and are registered at the commencement of the AGM.

The transfer secretaries will by no later than Thursday, 18 November 2021, notify eligible shareholders of the username and password through which eligible shareholders can participate electronically. In-person registration of AGM Participants will not be carried out at the registered office of Alviva.

Neither Alviva nor Computershare can be held accountable in the case of loss of network connectivity or other network failure due to insufficient airtime, internet connectivity, internet bandwidth and/or power outages which prevents any such shareholder from participating in and/or voting at the AGM. Shareholders should take note of the following:

1. the cost of the electronic communication facilities will be for the account of the Company although shareholders will be liable for their own network charges in relation to electronic participation in and/or voting at the AGM. Any such charges will not be for the account of Alviva and/or Computershare. Costs of the shareholder’s call will be for his/her/its own expense; and

2. by delivery of the electronic participation notices, the shareholder indemnifies and holds harmless the Company against any loss, injury, damage, penalty or claim arising in any way from the use of the electronic communication facilities to participate in the AGM or any interruption in the ability of the shareholder to participate in the AGM via electronic communication whether or not the problem is caused by any act or omission on the part of the shareholder, or anyone else, including without limitation the Company and its employees.

By order of the Board

Ms SL Grobler Company Secretary

E-mail address: [email protected] number: 011 237 7031

21 September 2021

Registered address

Alviva Holdings Limited The Summit, 269, 16th Road, Randjespark, 1685, Midrand

Transfer secretaries

Computershare Investor Services Proprietary Limited Private Bag X9000, Saxonwold, 2132


305



Incorporated in the Republic of South AfricaRegistration number: 1986/000334/06

Share Code: AVVISIN: ZAE000227484

(“Alviva”) or (“the Company”) or (“the Group”)

Only to be completed by certificated and dematerialised shareholders with “own name” registration.

If you are a dematerialised shareholder, other than with “own name” registration, do not use this form. Dematerialised shareholders other than those with “own name” registration who wish to attend the AGM, must inform their CSDP or broker of their intention to attend and request their CSDP or broker to issue them with the relevant Letter of Representation to attend the AGM in person and vote, or, if they do not wish to attend the meeting in person, but wish to be represented thereat, provide their CSDP or broker with their voting instructions in terms of the relevant custody agreement entered into between them and their CSDP or broker in the manner and cut-off time stipulated therein.

An ordinary shareholder entitled to attend and vote at the AGM to be held virtually by electronic participation, on Friday, 19 November 2021 at 14:00, is entitled to appoint a proxy to attend, speak or vote thereat in his/her stead. A proxy need not be a shareholder of the Company.

All forms of proxy must be lodged at the Company’s transfer secretaries, Computershare Investor Services Proprietary Limited, First Floor, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196 (Private Bag X9000, Saxonwold, 2132) ([email protected]), by no later than 14:00 on Friday, 19 November 2021. Proxy forms may also be sent to the Chairperson of the AGM, care of the transfer secretaries (at [email protected]) at any time before the proxy exercises any rights of the shareholder at the AGM. However, to facilitate administration, it would be appreciated if proxies can be received by the transfer secretaries by 14:00 on Wednesday, 17 November 2021.

I/We (please print name in full)

of (address) Telephone number:

E-mail address: Cellphone number:

being an ordinary shareholder(s) of the Company holding ordinary shares in the Company do hereby appoint

1. or failing him/her

2. or failing him/her

3. the Chairperson of the AGM

as my/our proxy to vote on my/our behalf at the abovementioned AGM (and any adjournment thereof ) to be held virtually via electronic participation at 14:00 on Friday, 19 November 2021, for the purpose of considering and, if deemed fit, passing with or without modifications, the following resolutions to be considered at such meeting:

Number of votes (one per share)

In favour of Against Abstain

SPECIAL RESOLUTIONS

1. Issue a general authority for the Company to repurchase its own shares

2. Issue a general authority to provide financial assistance in terms of section 44 of the Companies Act

3. Approval of the fee structure to be paid to non-executive directors

ORDINARY RESOLUTIONS

1. Re-appointment of retiring directors

1.1 Re-appointment of Ms MG Mokoka as Independent Non-Executive Director

1.2 Re-appointment of Ms SH Chaba as Independent Non-Executive Director

2. Appointment of the members of the Audit and Risk Committee

2.1 Ms P Natesan (Chairperson)

2.2 Ms SH Chaba

2.3 Ms MG Mokoka

3. Approval to re-appoint SNG Grant Thornton and Mr A Govender as auditors

4. Endorsement of the Company’s Remuneration Policy and its Remuneration Implementation Report

4.1 Endorsement of the Company’s Remuneration Policy

4.2 Endorsement of the Company’s Remuneration Implementation Report

5. General authorisation to place unissued shares under the control of the directors

6. General authorisation to issue shares for cash

7. Authorisation of the directors to implement the special and ordinary resolutions

Insert an “X” in the appropriate block. If no indications are given, the proxy will vote as he/she deems fit. Each member entitled to attend and vote at the meeting may appoint one or more proxies (who need not be a member of the Company) to attend, speak and vote in his/her stead.

Signed at on 2021

Signature

Assisted by (where applicable)

Please read the notes on the following page.

FORM OF PROXY

306



1. A shareholder may insert the names of a proxy or the names of two alternative proxies of the member’s choice in the space provided, with or without deleting “the Chairperson of the meeting”, but any such deletion must be initialled by the shareholder. The person whose name appears first on the proxy and which has not been deleted shall be entitled to act as proxy to the exclusion of those names following.

2. A shareholder is entitled to one vote in respect of each ordinary share held. A shareholder’s instructions to the proxy must be indicated by inserting the relevant number of votes exercisable by the shareholder in the appropriate box. Failure to comply with this will be deemed to authorise the proxy to vote or to abstain from voting at the AGM as he/she deems fit in respect of all the shareholder’s votes.

3. A vote given in terms of an instrument of proxy shall be valid in relation to the AGM notwithstanding the death, insanity or other legal disability of the person granting it, or the revocation of the proxy, or the transfer of the ordinary shares in respect of which the proxy is given, unless notice as to any of the aforementioned matters shall have been received by the transfer secretaries or by the Chairperson of the AGM before the commencement of the AGM.

4. If a shareholder does not indicate on this form that his/her proxy is to vote in favour of or against any resolution or to abstain from voting, or gives contradictory instructions, or should any further resolution(s) or any amendment(s) which may properly be put before the AGM, be proposed, the proxy shall be entitled to vote as he/she thinks fit.

5. The authority of a person signing a proxy in a representative capacity must be attached to the proxy unless that authority has already been recorded with the Company’s transfer secretaries or waived by the Chairperson of the AGM.

6. A minor or any other person under legal incapacity must be assisted by his/her parent or guardian as applicable, unless the relevant documents establishing capacity are produced or have been registered with the transfer secretaries.

7. Where there are joint holders of ordinary shares: any one holder may sign the form of proxy; the vote(s) of the senior shareholders (for that purpose seniority will be determined by the order in which the names of ordinary shareholders appear in the Company’s register) who tender a vote (whether in person or by proxy) will be accepted to the exclusion of the vote(s) of the other joint shareholder(s).

8. Proxies must be lodged at or posted or e-mailed to the Company’s transfer secretaries, Computershare Investor Services Proprietary Limited, First Floor, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196 (Private Bag X9000, Saxonwold, 2132) ([email protected]), to be received not later than 14:00 on Friday, 19 November 2021. Proxies which are not delivered timeously to the transfer secretaries, may be sent to the Chairperson of the AGM, care of the transfer secretaries at [email protected] at any time before the proxy exercises any rights of the shareholder at the AGM. However, to facilitate administration, it would be appreciated if proxies can be received by the transfer secretaries by 14:00 on Wednesday, 17 November 2021.

9. Any alteration or correction made to this form of proxy other than the deletion of alternatives must be initialled by the signatory/ies.

10. The completion and lodging of this proxy shall not preclude the relevant shareholder from attending the meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof.

11. The Chairperson of the meeting may reject or accept a proxy that is completed other than in accordance with these instructions, provided that he is satisfied as to the manner in which a shareholder wishes to vote.

NOTES TO THE FORM OF PROXY

307



Shareholders or their duly appointed proxy(ies) that wish to participate in the AGM via electronic communication (“Participant(s)”), must apply to Computershare, by delivering the duly completed form to:

Computershare Investor Services Proprietary Limited, First Floor, Rosebank Towers, First Floor, 15 Biermann Avenue, Rosebank, 2196, or posting it to Private Bag X9000, Saxonwold, 2132 (at the risk of the Participant), or by email to [email protected] so as to be received by Computershare by no later than 14:00 on Wednesday, 17 November 2021.

Important notice

The Company shall, by no later than Thursday, 18 November 2021, notify Participants that have delivered valid notices in the form of this form, by e-mail of the relevant details through which Participants can participate electronically.

APPLICATION FORMFull name of Participant:

ID number:

Email address:

Cellphone number:

Telephone number: (code): (number):

Name of CSDP or broker (if shares are held in dematerialised format) (attach a copy of letter of representation):

I wish to participate electronically

I wish to participate and vote electronically

Signature:

Date:

Terms and conditions for participation in the AGM via electronic communication

1. The cost of electronic participation in the AGM is for the expense of the Participant and will be billed separately by the Participant’s own service provider.

2. The Participant acknowledges that the electronic communication services are provided by a third parties and indemnifies Alviva Holdings Limited against any loss, injury, damage, penalty or claim arising in any way from the use or possession of the electronic services, whether or not the problem is caused by any act or omission on the part of the Participant or anyone else. In particular, but not exclusively, the Participant acknowledges that he/she will have no claim against the Company, whether for consequential damages or otherwise, arising from the use of the electronic services or any defect in it or from total or partial failure of the electronic services and connections linking the Participant via the electronic services to the AGM.

3. The application to participate in the AGM electronically will only be deemed successful if this application form has been completed fully and signed by the Participant.

Participant’s name:

Signature:

Date:

PARTICIPATION IN THE AGM VIA ELECTRONIC COMMUNICATION

Annexure A




308



309



ATTENDING THE AGM ELECTRONICALLYThis year we will be conducting a virtual AGM, giving you the opportunity to attend the AGM and participate online, using your smartphone, tablet or computer.

If you choose to participate online you will be able to view a live webcast of the meeting, ask the Board questions and submit your votes in real time and you will need to visit https://web.lumiagm.com on your smartphone, tablet or computer. You will need the latest versions of Chrome, Safari, Internet Explorer 11, Edge and Firefox. Please ensure your browser is compatible.

Meeting ID: 130-532-555

To login you must have your username and password which you can request from [email protected]

USING THE AGM ONLINE FACILITY

ONLINE SHAREHOLDERS’ MEETING GUIDE 2021




ACCESSOnce you have entered web.lumiagm.com into your web browser, you’ll be prompted to enter the Meeting ID.

You will then be required to enter your:

a) username; and

b) password.

You will be able to log into the site from 13:00 on Friday, 19 November 2021.

To register as a shareholder, select “I have a login” and enter your username and password.

If you are a visitor, select “I am a guest”.

As a guest, you will be prompted to complete all the relevant fields including; title, first name, last name and email address.

Please note, visitors will not be able to ask questions or vote at the meeting.

NAVIGATIONWhen successfully authenticated, the info

screen will be displayed. You can view

Company information, ask questions and

watch the webcast.

If you would like to watch the webcast press

the broadcast icon at the bottom of

the screen.

If viewing on a computer, the webcast will appear at the side automatically once the meeting has started.

ONLINE SHAREHOLDERS’ MEETING GUIDE 2020

Meeting ID: xxx-xxx-xxxTo login you must have your Username and password which you can request from

[email protected]

Attending the AGM electronically

This year we will be conducting a virtual AGM, giving you the opportunity to attend the AGM and participate online, using your smartphone, tablet or computer.

If you choose to participate online you will be able to view a live webcast of the meeting, ask the board questions and submit your votes in real time and you will need to either:

a) Download the Lumi AGM app from the Apple App or Google Play Stores by searching for LumiAGM.

b) Visit https://web.lumiagm.com on your smartphone, tablet or computer. You will need the latestversions of Chrome, Safari, Internet Explorer 11, Edge and Firefox. Please ensure your browseris compatible.

Using the AGM online facility:

ACCESSOnce you have either downloaded the Lumi AGM app or entered web.lumiagm.com into your web browser, you’ll be prompted to enter the Meeting ID.

You will then be required to enter your:a) Username; andb) Password.

You will be able to log into the site from xx:xx, xxth xxxx 2020.

To register as a shareholder, select ‘Ihave a login’ and enter your username and password.

If you are a visitor, select ‘I am a guest’ As a guest, you will be prompted to complete all the relevant fields including; title, first name, last name and email address.

Please note, visitors will not be able to ask questions or vote at the meeting.

NAVIGATIONWhen successfully authenticated, the info screen will be displayed. Youcan view company information, ask questions and watch the webcast.

If you would like to watch thewebcast press the broadcast icon at the bottom of the screen.

If viewing on a computer the webcast will appear at the side automatically once the meeting has started.

i

Annexure B

310



QUESTIONSAny shareholder or appointed proxy

attending the meeting is eligible to ask

questions. If you would like to ask a question,

select the messaging icon . Messages

can be submitted at any time during the

Q&A session up until the Chairperson closes the session.

Type your message within the chat box at the bottom of the messaging screen.

Once you are happy with your message click the send button.

Questions sent via the Lumi AGM online platform will be moderated before being sent to the Chairperson. This is to avoid repetition and remove any inappropriate language.

DOWNLOADSLinks are present on the info screen. When you click on a link, the selected document will open in your browser.

Data usage for streaming the annual shareholders’ meeting or downloading documents via the AGM platform varies depending on individual use, the specific device being used for streaming or download (Android, iPhone, etc.) and the network connection (3G, 4G).

VOTINGThe Chairperson will open voting on all resolutions at the start of the meeting. Once the voting has opened, the polling icon will appear on the navigation bar at the bottom of the screen. From here, the resolutions and voting choices will be displayed.

To vote, simply select your voting direction from the options shown on screen. A confirmation message will appear to show your vote has been received.

To change your vote, simply select another direction. If you wish to cancel your vote, please press Cancel.

Once the Chairperson has opened voting, voting can be performed at any time during the meeting until the Chairperson closes the voting on the resolutions. At that point your last choice will be submitted.

You will still be able to send messages and view the webcast while the poll is open.

For vote received

Annexure B (continued)

311



ALVIVA HOLDINGS LIMITEDIncorporated in the Republic of South Africa Company Registration Number: 1986/000334/06 (“Alviva” or “the Company” or “the Group”)

Business address

The Summit 269 16th Road Randjespark Midrand 1685

Postal address

PO Box 483 Halfway House 1685

COMPANY SECRETARYSL Grobler CA(SA) PO Box 483 Halfway House 1685

E-mail: [email protected]

TRANSFER SECRETARIESComputershare Investor Services Proprietary Limited Private Bag X9000 Saxonwold 2132

JSE LIMITEDShare Code: AVV ISIN: ZAE000227484

AUDITORSSNG Grant Thornton Incorporated 20 Morris Street East Woodmead Johannesburg 2191

ATTORNEYSTugendhaft Wapnick Banchetti and Partners 20th Floor Sandton City Office Towers 5th Street Sandton 2196

BANKERSRand Merchant Bank (a division of FirstRand Bank Limited) 1 Merchant Place Corner Fredman Drive and Rivonia Road Sandton 2196

Nedbank Limited Corporate and Investment Banking Division 5th floor, F block Nedbank 135 Rivonia Campus 135 Rivonia Road Sandown Sandton 2196

SPONSORSDeloitte & Touche Sponsor Services Proprietary Limited Deloitte Place 5 Magwa Crescent Waterfall City Midrand 2090

GRA

PHIC

ULT

URE

CORPORATE INFORMATION

2021 integrated annual report

Documents