NOTICE OF ANNUAL GENERAL MEETING FOR THE YEAR ENDED … · Stellenbosch on Friday, 24 June 2016, at 11h00 (the AGM). PURPOSE The purpose of the AGM is to transact the business set

NOTICE OF ANNUAL GENERAL MEETING FOR THE YEAR ENDED 29 FEBRUARY 2016

SALIENT FEATURES

Core revenue

17%

Recurring headline earnings

20%p p

201620152014

2 349Rm 2 8583 346

Rm

201620152014

251341

409

19%

Recurring headline earnings per share

p

cent

s

201620152014

20.627.0

32.1

Assets under management

16%p

Rbn

201620152014

99133 154

Dividend

201620152014

cent

s

Dividend

11.3 12.0 13.2

Gross written premium

17% 10%

201620152014

Rm

1 847 2 1342 490

p p

CONTENTS

2 Letter to shareholders

3 Notice of annual general meeting

9 Annexure 1

11 Summary consolidated financial statements

31 General information

IBC Corporate information

Enclosed Form of proxy

PSG KONSULT LIMITEDIncorporated in the Republic of South Africa Registration number 1993/003941/06ISIN Code: ZAE000191417JSE Share Code: KST, NSX Share Code: KFS(“PSG Konsult” or “the Company”)

NOTICE OF ANNUAL GENERAL MEETING AND PUBLICATION OF ANNUAL FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 29 FEBRUARY 2016

Notice is hereby given in terms of sections 61 and 62 of the Companies Act, No. 71 of 2008, as amended (the Companies Act), of the annual general meeting of the shareholders of PSG Konsult to be held at Spier Wine Estate, Baden Powell Drive, Stellenbosch on Friday, 24 June 2016, at 11h00.

Notice is also given in terms of section 31(1) of the Companies Act to every person who holds, or has a beneficial interest in, any securities issued by the Company (a Holder) of the publication of the annual financial statements of the Company and its subsidiaries (the PSG Konsult Group) for the financial year ended 29 February 2016.

Included with this notice are the summarised financial statements of the PSG Konsult Group for the financial year ended 29 February 2016.

A copy of the complete annual financial statements and of the summarised financial statements of the PSG Konsult Group for the financial year ended 29 February 2016 may be obtained by a Holder, without charge, as follows:

1. By downloading a copy of the annual financial statements or summarised financial statements from the Company’s website at www.psg.co.za; or

2. By requesting a copy of the annual financial statements by any of the following means:

a. Email to [email protected]

b. Post to PO Box 3335, Tyger Valley, 7536

c. Facsimile to (021) 918 7921

E Olivier(On behalf of the company secretary, PSG Management Services Proprietary Limited)

20 May 2016

4th Floor, The Edge, 3 Howick Close, Tyger Waterfront, Bellville, Cape Town, 7530, Tel: +27(21) 918 7800, [email protected] www.psg.co.za

PSG KONSULT LIMITED Registration no. 1993/003941/06 Directors: PE Burton*, ZL Combi*, J de V du Toit*, FJ Gouws (CEO), R Stassen*, PJ Mouton^, MIF Smith (CFO), W Theron^ (Chairman)Company secretary: PSG Management Services Proprietary Limited

* Independent non-executive^ Non-executive

PSG KONSULT LIMITED NOTICE OF ANNUAL GENERAL MEETING 20162

PSG KONSULT LIMITEDIncorporated in the Republic of South Africa Registration number 1993/003941/06ISIN Code: ZAE000191417JSE Share Code: KST, NSX Share Code: KFS(“PSG Konsult” or “the Company”)

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given of the annual general meeting of the shareholders of PSG Konsult to be held at Spier Wine Estate, Baden Powell Drive, Stellenbosch on Friday, 24 June 2016, at 11h00 (the AGM).

PURPOSE

The purpose of the AGM is to transact the business set out in the agenda below.

AGENDA

1. Presentation of the audited annual financial statements of the Company, including the reports of the directors and the audit committee for the year ended 29 February 2016. The complete audited annual financial statements, including the unmodified audit opinion, is available on the Company’s website at www.psg.co.za, or may be requested and obtained in person, at no charge, at the Company’s registered office during office hours.

2. To consider and, if deemed fit, approve, with or without modification, the ordinary and special resolutions set out below.

Note: For any of the ordinary resolutions numbers 1 to 7 (inclusive) to be adopted, more than 50% of the voting rights exercised on each such

ordinary resolution must be exercised in favour thereof. For ordinary resolutions numbers 8 and 9 and for special resolutions numbers 1 to 5 (inclusive) to be adopted, at least 75% of the voting rights exercised on each such ordinary or special resolution must be exercised in favour thereof.

3. Appointment of director

3.1 Ordinary resolution number 1

“Resolved that the appointment by the Company’s board of Mr R Stassen as a director of the Company, be and is hereby confirmed.”

A summary curriculum vitae of Mr R Stassen (Riaan)

Riaan joined Capitec Bank Limited in June 2000 as managing director and served as chief executive officer of Capitec Bank Holdings Limited and Capitec Bank Limited from March 2004. He was instrumental in forming the bank and its unique positioning and service platform in the market. His experience in banking stems from his previous position as managing director of Boland PKS where innovation led the bank from personal banking to a focus on specialised banking for small businesses and mass-market banking via a joint venture with retailer Pep Stores. Prior to his career in banking, he gained extensive experience in the liquor industry through his responsibilities as operations director of Distillers Corporation.

The reason for ordinary resolution number 1 is that the memorandum of incorporation of the Company requires that any appointments made by the board as additional appointments or to fill a vacancy must be confirmed at the next annual general meeting of the Company.

4. Retirement and re-election of directors


”Resolved that Mr W Theron, who retires by rotation in terms of the memorandum of incorporation of the Company, being eligible and offering himself for re-election, be and is hereby re-elected as director.”

A summary curriculum vitae of Mr W Theron (Willem)

Willem founded the chartered accountancy firm Theron du Plessis in Middelburg in 1976. The firm eventually had 10 branch offices in the Western and Eastern Cape. In 1998, he founded PSG Konsult and acted as its chief executive officer until 30 June 2013. He was then appointed as non-executive chairman. He also serves on the board of PSG Group Limited.


“Resolved that Mr PE Burton, who retires by rotation in terms of the memorandum of incorporation of the Company, being eligible and offering himself for re-election, be and is hereby re-elected as director.”

Summary curriculum vitae of Mr PE Burton (Patrick)

Patrick worked for Moores Rowland (Chartered Accountants) for eight years, during which time he completed his training contract. He moved to Canada in 1981 and worked for Lanvethol and Horwath (Chartered Accountants) from 1981 to 1984. Patrick obtained his BComm (Honours) in Financial Management in 1992 and a Postgraduate Diploma in Tax Law in 1993 from the University of Cape Town. Patrick was one of the founding members of Siphumelele Investments Limited, established in 1995. His experience includes executive and non-executive positions in fishing, financial services, telecommunications, media and entertainment, technology and insurance. He currently serves as the financial director of Snoek Wholesalers Proprietary Limited.

3PSG KONSULT LIMITED NOTICE OF ANNUAL GENERAL MEETING 2016

The reason for ordinary resolutions numbers 2 and 3 is that the memorandum of incorporation of the Company and the Listings Requirements of the JSE Limited (JSE Listings Requirements) require that a component of the non-executive directors of the Company rotate at the AGM and, being eligible, may offer themselves for re-election as directors.

5. Appointment of the members of the audit committee


“Resolved that Mr J de V du Toit, being eligible, be and is hereby re-appointed as a member of the audit committee of the Company, as recommended by the board of directors of the Company, until the next annual general meeting of the Company.”

Summary curriculum vitae of Mr J de V du Toit (Jaap)

Jaap was appointed as senior general manager at the Trust Building Society in 1984, financial director at Senekal, Mouton & Kitshoff Securities Proprietary Limited in 1988 and portfolio director at the same firm in 1990. In 1996 and 1998, he co-founded both PSG Group Limited and PSG Konsult and has been a director of both since inception. He also acted as chairman of PSG Konsult from inception in 1998 until 2013. In August 2012, Jaap was appointed as the lead independent non-executive director for PSG Group Limited and PSG Financial Services Limited. He was appointed as chairman of KAP Industrial Holdings Limited in 2012 and is chairman of its nomination committee.


“Resolved that Mr PE Burton, being eligible, be and is hereby re-appointed as a member of the audit committee of the Company, as recommended by the board of directors of the Company, until the next annual general meeting of the Company.”

A summary curriculum vitae of Mr PE Burton is set out in paragraph 4.2.


“Resolved that Mr ZL Combi, being eligible, be and is hereby re-appointed as a member of the audit committee of the Company, as recommended by the board of directors of the Company, until the next annual general meeting of the Company.”

Summary curriculum vitae of Mr ZL Combi (KK)

KK holds a diploma in public relations and was awarded the Ernst & Young South African Best Entrepreneur of the Year award in 2000, as well as the World Entrepreneur of the Year in Managing Change award in 2001. KK is a member of the Institute of Directors and serves on the boards of various listed and unlisted companies, including PSG Group Limited and Curro Holdings Limited, and as chairman of Pioneer Food Group Limited. KK was previously the executive chairman of Thembeka Capital (RF) Limited.

The reason for ordinary resolutions numbers 4 to 6 (inclusive) is that the Company, being a public company listed on the Johannesburg Stock Exchange (JSE), must appoint an audit committee and the Companies Act, No. 71 of 2008, as amended (the Companies Act) requires that the members of such audit committee be appointed, or re-appointed, as the case may be, at each annual general meeting of a company.

6. Re-appointment of auditor

Ordinary resolution number 7

“Resolved that PricewaterhouseCoopers Inc. be and is hereby re-appointed as auditor of the Company for the ensuing year on the recommendation of the audit committee of the Company.”

The reason for ordinary resolution number 7 is that the Company, being a public company listed on the JSE, must have its financial results audited and such auditor must be appointed or re-appointed each year at the annual general meeting of the Company as required by the Companies Act.

7. General authority to issue ordinary shares for cash


“Resolved that the directors of the Company be and are hereby authorised, by way of a general authority, to allot and issue any of the Company’s unissued shares for cash as they in their discretion may deem fit, without restriction, subject to the provisions of the Company’s memorandum of incorporation, the Companies Act and the JSE Listings Requirements, provided that:

• the approval shall be valid until the date of the next annual general meeting of the Company, provided it shall not extend beyond fifteen months from the date of this resolution;

• the general issues of shares for cash under this authority may not exceed, in the aggregate, 10% of the Company’s issued share capital (number of securities) of that class as at the date of this notice of AGM, it being recorded that ordinary shares issued pursuant to a rights offer to shareholders or shares issued to the PSG Konsult Group Share Incentive Trust (the Trust) or options granted by the Trust in accordance with the JSE Listings Requirements shall not diminish the number of ordinary shares that comprise the 10% of the ordinary shares that can be issued in terms of this ordinary resolution. As at the date of this notice of AGM, 10% of the Company’s issued ordinary share capital amounts to 129 799 047 ordinary shares;

• in determining the price at which an issue of shares will be made in terms of this authority, the maximum discount permitted will be 10% of the weighted average traded price of such shares, as determined over the 30 business days prior to the date that the price of the issue is agreed between the Company and the party subscribing for the securities. The JSE will be consulted for a ruling if the securities have not traded in such 30 business day period;

• any such issue will only be made to public shareholders as defined in paragraphs 4.25 to 4.27 of the JSE Listings Requirements and not to related parties;

• any such issue will only be comprised of securities of a class already in issue or, if this is not the case, will be limited to such securities or rights that are convertible into a class already in issue; and

• in the event that the securities issued represent, on a cumulative basis, 5% or more of the number of securities in issue prior to that issue, an announcement containing the full details of such issue shall be published on SENS.”


For listed entities wishing to issue shares for cash (other than issues by way of rights offers and/or in consideration for acquisitions and/or to duly approved share incentive schemes), it is necessary for the board to obtain the prior authority of the shareholders in accordance with the JSE Listings Requirements and the memorandum of incorporation of the Company.

The reason for ordinary resolution number 8 is accordingly to obtain a general authority from shareholders to issue shares for cash in compliance with the JSE Listings Requirements and the memorandum of incorporation of the Company.

For this resolution to be adopted, at least 75% of the shareholders present in person or by proxy and entitled to vote on this resolution at the AGM must cast their vote in favour of this resolution.

8. Amendment of PSG Konsult Group Share Incentive Trust deed


“Resolved that the existing trust deed of the PSG Konsult Group Share Incentive Trust, which contains the terms of and governs the Company’s share incentive scheme (Trust Deed), be amended as set out in Annexure 1 to this notice of AGM.”

The reason for ordinary resolution number 9 is to obtain the prior approval of shareholders to amend the Trust Deed, such approval being required in terms of paragraph 14.2, read with paragraph 14.1, of schedule 14 of the JSE Listings Requirements. The effect of ordinary resolution number 9, if passed, will be that the proposed amendments to the Trust Deed are approved.

For this resolution to be adopted, at least 75% of the shareholders present in person or by proxy and entitled to vote on this resolution at the AGM must cast their vote in favour of this resolution.

A copy of the current Trust Deed is available for inspection by shareholders at the Company’s registered address.

9. Remuneration of non-executive directors

Special resolution number 1

“Resolved, as a special resolution in terms of section 66(9) of the Companies Act, that the Company be and is hereby authorised to remunerate its non-executive directors for their services as directors, which includes serving on various board subcommittees and to make payment of any related fees on the basis set out below, provided that this authority will be valid until the next annual general meeting of the Company:”

Current annual remuneration

Proposed annual remuneration

W Theron R795 000 R842 700J de V du Toit R240 000 R258 000JF Mouton (resigned 14 April 2016) R212 000 –PJ Mouton R212 000 R222 600PE Burton R240 000 R245 000ZL Combi R225 000 R233 500R Stassen (appointed 14 April 2016) – R130 000

The reason for special resolution number 1 is for the Company to obtain the approval of shareholders by way of a special resolution for the payment of remuneration to its non-executive directors in accordance with the requirements of the Companies Act.

The effect of special resolution number 1 is that the Company will be able to pay its non-executive directors for the services they render to the Company as directors without requiring further shareholder approval until the next annual general meeting of the Company.

10. Financial assistance

10.1 Special resolution number 2: Inter-company financial assistance

“Resolved, as a special resolution in terms of section 45(3)(a)(ii) of the Companies Act, as a general approval, that the board of the Company 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 section 45(1) of the Companies Act), that the board of the Company may deem fit, to any company or corporation that is related or inter-related (“related” or “inter-related” will herein have the meaning attributed to it in section 2 of the Companies Act) to the Company, on the terms and conditions and for amounts that the board of the Company may determine, provided that the aforementioned approval shall be valid until the date of the next annual general meeting of the Company.”

The reason for and effect of special resolution number 2 is to grant the directors of the Company the authority, until the next annual general meeting of the Company, to provide direct or indirect financial assistance to any company or corporation which is related or inter-related to the Company. This means that the Company is, inter alia, authorised to grant loans to its subsidiaries and to guarantee the debt of its subsidiaries.

10.2 Special resolution number 3: Financial assistance for the acquisition of shares in the Company or in a related or inter-related company

“Resolved, as a special resolution in terms of section 44(3)(a)(ii) of the Companies Act, as a general approval, that the board of the Company 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 of the Company 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 in any company or corporation that is related or inter-related to the Company, on the terms and conditions and for amounts that the board of the Company may determine for the purpose of, or in connection with, the subscription of any option, or any shares or other securities, issued or to be issued by the Company or by a related


or inter-related company, or for the purchase of any shares or other securities of the Company or a related or inter-related company, provided that the aforementioned approval shall be valid until the date of the next annual general meeting of the Company.”

The reason for and effect of special resolution number 3 is to grant the directors the authority, until the next annual general meeting 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 options, shares or other securities in the Company or in any related or inter-related company. 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 such financial assistance is directly or indirectly related to a party acquiring options, shares or securities in the Company or any related or inter-related company. A typical example of where the Company may rely on this authority is where the Company or a subsidiary raised 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 the Company or of its subsidiary, as the case may be, to the third-party funder arising from the issue of the preference shares. The Company has no immediate plans to use this authority and is simply obtaining same in the interests of prudence and good corporate governance should the unforeseen need arise to use the authority.

In terms of and pursuant to the provisions of sections 44 and 45 of the Companies Act, the directors of the Company confirm that the board will satisfy itself, after considering all reasonably foreseeable financial circumstances of the Company, that immediately after providing any financial assistance as contemplated in special resolutions numbers 2 and 3:

• the assets of the Company (fairly valued) will equal or exceed the liabilities of the Company (fairly valued) (taking into consideration the reasonably foreseeable contingent assets and liabilities of the Company);

• the Company will be able to pay its debts as they become due in the ordinary course of business for a period of 12 months;• the terms under which any financial assistance is proposed to be provided, will be fair and reasonable to the Company; and• all relevant conditions and restrictions (if any) relating to the granting of financial assistance by the Company as contained in the

Company’s memorandum of incorporation have been met.

11. Share repurchases by PSG Konsult and its subsidiaries


“Resolved, as a special resolution, that the Company and the subsidiaries of the Company be and are hereby authorised, as a general approval, to repurchase any of the shares issued by the Company, upon such terms and conditions and in such amounts as the directors may from time to time determine, but subject to the provisions of sections 46 and 48 of the Companies Act, the memorandum of incorporation of the Company, the JSE Listings Requirements and the requirements of any other stock exchange on which the shares of the Company may be quoted or listed, including, inter alia, that:

• the general repurchase of the shares may only be implemented through the order book operated by the JSE trading system and done without any prior understanding or arrangement between the Company and the counterparty;

• this general authority shall only be valid until the next annual general meeting of the Company, provided that it shall not extend beyond fifteen months from the date of this resolution;

• an announcement must be published as soon as the Company has repurchased shares constituting, on a cumulative basis, 3% of the number of shares in issue prior to the repurchase, pursuant to which the aforesaid 3% threshold is reached, containing full details thereof, as well as for each 3% in aggregate of the initial number of shares repurchased thereafter;

• the general authority to repurchase is limited to a maximum of 20% in the aggregate in any one financial year of the Company’s issued share capital at the time the authority is granted;

• a resolution has been passed by the board of directors approving the repurchase, that the Company and its subsidiaries (the PSG Konsult Group) have satisfied the solvency and liquidity test as defined in the Companies Act and that, since the solvency and liquidity test was applied, there have been no material changes to the financial position of the PSG Konsult Group;

• the general repurchase is authorised by the Company’s memorandum of incorporation;• repurchases must not be made at a price more than 10% above the weighted average of the market value of the shares for the five

business days immediately preceding the date that the transaction is effected. The JSE will be consulted for a ruling if the Company’s securities have not traded in such five business day period;

• the Company may, at any point in time, only appoint one agent to effect any repurchase(s) on the Company’s behalf; and• the Company may not effect a repurchase during any prohibited period as defined in terms of the JSE Listings Requirements, unless

there is a repurchase programme in place, which programme has been submitted to the JSE in writing and executed by an independent third party, as contemplated in terms of paragraph 5.72(h) of the JSE Listings Requirements.”

The reason for and effect of special resolution number 4 is to grant the directors a general authority in terms of the Company’s memorandum of incorporation and the JSE Listings Requirements for the repurchase by the Company or by a subsidiary of the Company of shares issued by the Company on the basis reflected in special resolution number 4. The Company has no immediate plans to use this authority and is simply obtaining same in the interests of prudence and good corporate governance should the unforeseen need arise to use the authority.

In terms of section 48(2)(b)(i) of the Companies Act, subsidiaries may not hold more than 10%, in aggregate, of the number of the issued shares of a company. For the avoidance of doubt, a pro rata repurchase by the Company from all its shareholders will not require shareholder approval, save to the extent as may be required by the Companies Act.


12. Amendment of memorandum of incorporation


“Resolved, as a special resolution, that, in terms of section 16(1)(c) and section 16(5)(b) of the Companies Act, and with effect from the date of filing of the required notice of amendment with the Companies and Intellectual Property Commission, the existing memorandum of incorporation of the Company be and is hereby amended by:

• amending the existing heading of clause 7 of the memorandum of incorporation to the following:

“7. CONSOLIDATION, SUBDIVISION, REDUCTION OF CAPITAL AND TREATMENT OF FRACTIONS”

and making the corresponding amendment to the table of contents of the memorandum of incorporation; and

• deleting the existing clause 7.3 thereof and by replacing it in its entirety with the following new clause 7.3:

“7.3 Should any action contemplated in clause 7.1 or any other corporate action give rise to a fraction of a Share, any affected allocation of Shares will be rounded down to the nearest whole number and the Company will make a cash payment in accordance with the JSE Listings Requirements in respect of such fractional entitlement. Notwithstanding the aforesaid, should the JSE require that fractions arising under any such action be dealt with in any other manner, the Company may apply such other principle in respect of the fractions in question.”

The provisions in the JSE Listings Requirements relating to the treatment of share fractions have recently been amended. The reason for and effect of special resolution number 5 is to align the provisions in the memorandum of incorporation of the Company dealing with the treatment of share fractions with the new requirements prescribed under the JSE Listings Requirements.

13. Other business

To transact such other business as may be transacted at an annual general meeting or raised by shareholders with or without advance notice to the Company.

Information relating to the special resolutions

1. The directors of the Company or its subsidiaries will only utilise the general authority to repurchase shares of the Company, as set out in special resolution number 4, to the extent that the directors, after considering the maximum number of shares to be repurchased, are of the opinion that the position of PSG Konsult Group would not be compromised as to the following:

• the PSG Konsult Group’s ability in the ordinary course of business to pay its debts for a period of 12 months after the date of this AGM and for a period of 12 months after the repurchase;

• the consolidated assets of the PSG Konsult Group will, at the time of the AGM and at the time of making such determination, be in excess of the consolidated liabilities of the PSG Konsult Group. The assets and liabilities should be recognised and measured in accordance with the accounting policies used in the latest audited annual financial statements of the PSG Konsult Group;

• the ordinary capital and reserves of the PSG Konsult Group, after the purchase, will remain adequate for the purpose of the business of the PSG Konsult Group for a period of 12 months after the AGM and after the date of the share repurchase; and

• the working capital available to the PSG Konsult Group, after the repurchase, will be sufficient for the PSG Konsult Group’s ordinary business purposes for a period of 12 months after the date of the notice of the AGM.

General information in respect of major shareholders, material changes and the share capital of the Company is set out on page 31 of the summary consolidated financial statements attached to this notice and in the annual financial statements that are available on the Company’s website at www.psg.co.za or which may be requested and obtained in person, at no charge, at the registered office of the Company during office hours.

2. The directors of the Company 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 the notice contains all information required by the JSE Listings Requirements.

3. Special resolution numbers 2, 3 and 4 are renewals of resolutions taken at the previous annual general meeting on 19 June 2015.

VOTING

1. The date on which shareholders must be recorded as such in the share register maintained by the transfer secretaries (the share register) for purposes of being entitled to receive this notice is Friday, 13 May 2016.

2. The date on which shareholders must be recorded in the share register for purposes of being entitled to attend and vote at this AGM is Friday, 17 June 2016, with the last day to trade being Thursday, 9 June 2016.

3. Meeting participants will be required to provide proof of identification to the reasonable satisfaction of the chairman of the AGM and must accordingly bring a copy of their identity document, passport or drivers license to the AGM. If in doubt as to whether any document will be regarded as satisfactory proof of identification, meeting participants should contact the transfer secretaries for guidance.

4. Certificated shareholders and own-name dematerialised shareholders entitled to attend and vote at the AGM, may appoint one or more proxies to attend, speak and vote thereat in their stead. A proxy need not be a shareholder of the Company. A form of proxy, containing the relevant instructions for its completion, is enclosed for the use of such shareholders who wish to be represented at the AGM. Completion of a form of proxy will not preclude such shareholder from attending and voting (in preference to that shareholder’s proxy) at the AGM.

5. The instrument appointing a proxy and the authority (if any) under which it is signed must reach the transfer secretaries at the address given by no later than 11h00 on Wednesday, 22 June 2016.

6. If you are a certificated or own-named dematerialised shareholder in Computershare Central Securities Depository Participant (CSDP) with an e-mail address on record, you may cast your votes online and, for this purpose, a separate e-mail will be forwarded to you with your security pin and link to the online voting facility.


7. Dematerialised shareholders, other than own-name registered dematerialised shareholders, who wish to attend the AGM in person will need to request their CSDP or broker to provide them with the necessary authority in terms of the custody agreement entered into between such shareholder and the CSDP or broker.

8. Dematerialised shareholders, other than own-name registered dematerialised shareholders, who are unable to attend the AGM and who wish to be represented thereat, must provide their CSDP or broker with their voting instructions in terms of the custody agreement entered into between themselves and the CSDP or broker in the manner and time stipulated.

9. Shareholders present in person, by proxy or by authorised representative shall, on a show of hands, have one vote each and, on a poll, have one vote in respect of each share held.

By order of the board

PSG Management Services Proprietary LimitedCompany secretary

Tyger Valley 20 May 2016

Registered address4th Floor The Edge3 Howick Close Tyger WaterfrontBellville Cape Town7530

Postal addressPO Box 3335Tyger Valley 7536

Computershare Investor Services Proprietary LimitedTransfer secretaries

Ground Floor70 Marshall StreetJohannesburg2001

PO Box 61051Marshalltown 2107


Annexure 1

AMENDMENTS TO PSG KONSULT GROUP SHARE INCENTIVE TRUST DEED

The following amendments are proposed to the PSG Konsult Group Share Incentive Trust deed (Trust Deed):

1. The amendment of the existing definition of “Share Scheme” or “Scheme” in clause 1.1.29 of the Trust Deed, by the insertion of the words “and any further incentive scheme (“Further Incentive Scheme”), in terms of which Shares are purchased on behalf of Employees and are matched with Options”, so that such clause will thereafter read as follows:

“1.1.29 “Share Scheme” or “Scheme” means the share scheme implemented in terms of this Deed in order to enable Participants to obtain and exercise Options and pursuant thereto to acquire Shares upon the exercise of such Options and any further incentive scheme (“Further Incentive Scheme”), in terms of which Shares are purchased on behalf of Employees and are matched with Options;”

2. The amendment of the existing definition of “Subsidiary” in clause 1.1.33 of the Trust Deed, by the insertion of the words “or in terms of the laws of any other jurisdiction in which such other company operates”, so that such clause will thereafter read as follows:

“1.1.33 “Subsidiary” means any company which is a subsidiary of the Company within the meaning of the Act or in terms of the laws of any other jurisdiction in which such other company operates;”

3. The amendment of the existing clause 16.1 of the Trust Deed by the insertion of the words “or otherwise” so that such clause will thereafter read as follows:

“16.1 The Board may from time to time offer Shares to the Trust or grant options to such Shares to the Trust in respect of Shares which do not exceed the scheme allocation determined in terms of clause 19 below. The Shares referred to in this clause 16.1, or any options in respect thereof are intended to enable the Trustees (in addition to any other Shares acquired by the Trust in terms of this Deed) to fulfil any obligations to Participants or otherwise from time to time in terms of this Deed. The provisions of clause 26.1 shall apply mutatis mutandis to any applicable provisions of this clause 16.1.”

4. The amendment of the existing clause 16.2 of the Trust Deed by the insertion of the words “or to comply with the obligations of the Trustees under this Trust Deed”, so that such clause will thereafter read as follows:

“16.2 Subject to the provisions of this Deed, the purchase or subscription price of Shares acquired by the Trust pursuant to the Share Scheme, the costs incurred in the acquisition of such Shares, any duties payable upon the transfer of Shares, any disbursements and expenditure incurred by the Trustees in their capacity as such, any amount due to the Trustees in terms of clause 14, any amount in respect of which a Trustee has been lawfully indemnified in terms of clause 15 and any money required to effect any loans under the Share Scheme or to comply with the obligations of the Trustees under this Trust Deed or repayment of any previous borrowings by the Trustees shall be met out of –”

5. The amendment of the existing clause 16.3 of the Trust Deed by the insertion of the words “or the applicable Group Company(ies)”, so that such clause will thereafter read as follows:

“16.3 Any loss incurred by the Trust pursuant to the implementation of the Share Scheme shall be borne by the Company or the applicable Group Company(ies) unless the Board determines to the contrary.”

6. The amendment of the existing clause 16.4 of the Trust Deed by the insertion of the words “or the applicable Group Company(ies)”, so that such clause will thereafter read as follows:

“16.4 The Trust shall not be entitled to any capital gain or profit on any transactions undertaken by it (including in relation to any Shares) and no such capital gain or profit shall accrue to it, unless the Board determines in writing to the contrary. The Trust (unless the Board determines in writing to the contrary) shall cede and transfer to the Company or the applicable Group Company(ies) from time to time upon request, as a quid pro quo for clauses 16.3 and 36.4, its right to any capital gain or profit, which may arise from any such transaction undertaken by it.”

7. The insertion of a new clause number 18.6, to read as follows:

“18.6 Awards under Further Incentive Scheme

18.6.1 The Board may from time to time instruct and authorise the Trustees in writing to acquire and hold Shares on behalf of Employees selected by the Board and who have opted to invest the deferred component of their bonus in the Company, whereupon such Shares will be purchased and/or subscribed for by the Trust and will be kept by the Trust, until such time as the Board instructs the Trustees to release and transfer such Shares (and pay over any distributions that have been received in respect of such Shares, while they were held by the Trust) to the Employees in question (or to the executor of legal representative of such Employee’s estate), and the Trustees cause such Shares and distributions to be delivered and paid to the Employees.

18.6.2 The number of Shares to be acquired by the Trust for an Employee in terms of clause 18.6.1 shall be calculated by dividing the deferred component of such Employee’s bonus, as communicated by the Board, by the VWAP per Share at which such Shares were purchased or subscribed for, as the case may be, by the Trust plus the share transfer tax per Share (if applicable), with any fraction of a Share being rounded up (where such fraction comprises 0.5 or more or a Share) or otherwise being rounded down. Should any Shares be issued to the Trust in relation to clause 18.6.1, such Shares will not be issued at a discount of more than 10% (ten percent) to the VWAP of the Shares, as determined over the 30 (thirty) business days prior to the date of issue.


18.6.3 Save where Scheme Shares revert back to the Scheme in terms of clause 18.6.5 below –

18.6.3.1 half of the Shares held by the Trust on behalf of an Employee, as well as all distributions received in respect of those Shares, will be released by the Trust and be transferred to that Employee with effect from the first anniversary of the date on which such Shares were first acquired by the Trust in terms of clause 18.6.1 (“Acquisition Date”); and

18.6.3.2 the remaining Shares held by the Trust on behalf of such Employee, as well as all distributions received in respect of those Shares, will be released by the Trust and be transferred to that Employee with effect from the second anniversary of the Acquisition Date.

18.6.4 The provisions of clauses 18.2 to 18.5 shall apply mutatis mutandis in respect of such Further Incentive Scheme, save that any reference to Option(s) shall instead refer to Share(s).

18.6.5 Where Scheme Shares that have been allocated to identified Employees are not subsequently delivered to those Employees pursuant to the rules of such Further Incentive Scheme or for any other reason provided for under this Trust Deed, those Scheme Shares shall revert back to the Scheme.”


“22.4 Any reference in this clause 22 to a Beneficiary shall include a reference to an Employee in terms of a Further Incentive Scheme and any reference herein to clause 20.3 shall also refer to clause 18.6.1, as the case may be.”


“30.3 Any reference in this clause 30 or in clause 31 to a Beneficiary, includes an Employee under a Further Incentive Scheme.”

10. Consequential changes to the page numbers appearing in the table of contents of the Trust Deed.


COMMENTARY

PSG Konsult delivered a commendable 20% growth in recurring headline earnings. This is consistent with the group’s long-term growth track record. This year’s earnings growth was achieved despite substantially less earnings from performance fees, having done away with white labels to reduce operational risk and having increased marketing spend with the launch of a television advertising campaign, as investors were previously advised. All divisions achieved good organic topline revenue growth, with PSG Wealth remaining the strongest and most stable revenue driver for the group. This division increasingly benefits from economies of scale, as both the wealth platform business and adviser network grow. PSG Asset Management weathered a tough year in equity markets and consequently earned less in performance fees. The division nevertheless experienced encouraging net inflows and gained market share, mainly due to its competitive long-term investment track record and support from its marketing and sales team initiatives. Results from PSG Insure, which is still in an early growth phase, are also gaining strong positive momentum due to efficiencies gained from benefits of scale and improved focus on optimising and balancing profitable new business growth.

Overall, the board is pleased with this set of results, since the volatile equity market, sharp devaluation of the rand and overall challenging economic environment that the group experienced this financial year were not conducive to growth. The FTSE/JSE All Share Index recorded a negative total return of 7.4% for the period until 29 February 2016, compared to a positive return of 12.7% in the comparable period of 2015. The group’s focus on client service excellence through the quality of its advice, products and platforms is proving resilient in these trying times. PSG Konsult also continued to increase its marketing and technology spend during the year under review. This included the successful launch of a new television advertisement during January 2016, which is enhancing brand recognition.

PSG Konsult retained a stable credit rating and is adequately capitalised to meet regulatory requirements. As a cash-generative business, it remains in a position to make acquisitions, such as the entry into Mauritius. This was the first international acquisition for PSG Konsult since listing on the Johannesburg Stock Exchange (JSE). On 1 November 2015, the group acquired a 70% shareholding in Mauritian-based DMH Associates (DMH) (now PSG Wealth (Mauritius)), the leading independent private wealth advisory firm in Mauritius. DMH was established in 2003 as an investment advisory firm providing independent expert advice to entrepreneurs, high-net-worth individuals and their families. DMH is licensed and regulated by the Mauritius Financial Services Commission and also offers corporate finance, wealth management and family office services. The company, as well as the individuals involved in the company, is regarded as a good fit for PSG Konsult.

The PSG Konsult adviser network, which is the bedrock of the business and one of its key strengths, continues to expand. The group takes pride in the calibre and quality of the advisers that it attracts and their profitable contribution to the business. The second phase of the adviser buyback transaction was completed in July 2015, and a further phase was concluded in March 2016. The buyback initiative supports the further entrenchment of the group’s relationships with advisers and assists in streamlining and standardising the revenue sharing model and contract terms with them.

PSG Wealth remains a key revenue driver for the group through its formidable adviser base and expanding product and platform business offering. Continued positive client inflows resulted from strengthening the division’s competitive position by expanding its adviser network through both organic growth and selected adviser acquisitions. PSG Wealth attracted net managed asset inflows of R12.1 billion during the year under review.

PSG Asset Management remains a high-growth area and a key focus for the group. The division’s retail sales efforts and marketing campaigns are proving effective in raising awareness of the PSG Asset Management brand, leading to strong retail client inflows. PSG Asset Management attracted net inflows of R4.1 billion during the year under review. The focus on generating recurring earnings placed less reliance on performance fees, with these fees contributing only 3.8% of group recurring headline earnings compared to 7.7% during the previous financial year.

PSG Insure continues to make inroads in the highly competitive short-term insurance market, having achieved 17% growth in gross written premium compared to the prior financial year, with a focus on the quality of new business to achieve profitable growth. No significant catastrophe or other related events occurred during the year under review. The division’s insurance advisers, with an ongoing focus on growing the commercial lines side of the business, managed to gain market share without compromising their overall client-loss claim ratios. Against the backdrop of a particularly difficult industry environment, this is an achievement that the group is especially pleased with.


SUMMARY CONSOLIDATED FINANCIAL STATEMENTS

PSG Konsult’s key financial performance indicators for the financial year ended 29 February 2016 are shown below:

29 Feb 16R000

Change %

28 Feb 15 R000

Earnings attributable to ordinary shareholders 292 924 (14) 340 401Non-headline items (622) (1 140)Headline earnings 292 302 (14) 339 261Non-recurring headline earnings 116 446 1 914Recurring headline earnings 408 748 20 341 175

Divisional recurring headline earningsPSG Wealth 285 505 25 228 320PSG Asset Management 82 707 – 82 336PSG Insure 40 536 33 30 519

408 748 20 341 175

Weighted average number of shares in issue (net of treasury shares) (million)

1 274.2 1 1 261.4

Earnings per share (cents)– Recurring headline 32.1 19 27.0– Headline 22.9 (15) 26.9– Attributable 23.0 (15) 27.0

Dividend per share (cents) 13.2 10 12.0

Assets under management (Rbn) 154.1 16 132.5Assets under administration (Rbn) 327.1 6 308.7Gross written premium (Rbn) 2.5 17 2.1

Number of advisers 711 8 659

STRATEGY

The group continues to invest in technology to enhance the overall client experience and to improve the technical capabilities of the business to unlock greater operational scale. During the past financial year, all user interfaces were consolidated into a single integrated platform. The new myPSG platform provides clients with consolidated reporting and the ability to transact across an extensive range of products and services via a single log-in. This includes investments, trading instruments, short-term insurance, wills and more. The transactional functionality facilitates online trading in local shares, derivatives, margin-traded instruments, local unit trusts, offshore shares and will shortly also include offshore unit trust funds.

PSG Wealth’s overall strategy remains to offer an innovative and holistic end-to-end client proposition. Despite an unpredictable economic outlook, the division will continue to invest in people and technology, believing these to be key factors with which to grow its share of the market. The strategy to further expand and equip its adviser network will receive ongoing attention, relying on advisers for client feedback in the development and creation of new products and services. The division also improved its offshore stockbroking offering to include additional foreign markets and is on track to further expand this offering with the inclusion of offshore unit trust funds in the next few months. Improved user functionality, coupled with the group’s television marketing campaign and enhanced investor tools, should further aid the client growth strategy.

PSG Asset Management’s strategy consists of three parts, namely investment excellence, operational efficiency and effective sales and marketing initiatives. Generating the best long-term, risk-adjusted returns for investors is the division’s primary focus. To this end, the division will continue to prioritise the investment team’s performance while managing operational risks and processes. Increasing brand awareness – particularly in the retail investor market – is a key focus area for the marketing team, allowing the division to benefit from a growing investor base.

PSG Insure provides simple and cost-effective short-term insurance solutions to clients, protecting them from unforeseen events. Vertical integration across underwriting, administration and adviser teams underpins the focus on providing value-added products which meet and exceed clients’ expectations. The division continues to invest in its claims and administration departments. This is to build scale and unlock operational efficiencies while freeing up valuable time for top-calibre advisers to focus on sales.

As each division grows, careful attention is paid to the group’s cost structure, in particular to the cost-to-income ratio. Building a cost-efficient and scalable business is a key priority for the board. The management team is committed to continuously investigate new ways in which to manage and reduce costs.

RECOGNITION, AWARDS AND ACHIEVEMENTS

The group is proud of the following notable milestones, achievements and industry awards:

• PSG Wealth was a finalist for the 2015 Morningstar South Africa Fund Awards in the Best Short-term Bond Funds investment category (PSG Wealth Income Fund of Funds).


• PSG Wealth was the overall runner-up in the Private Banks and Wealth Managers Survey conducted by the research house Intellidex for 2015:

– Top wealth manager for up-and-coming professionals (tied)

– Top wealth manager for successful entrepreneurs (tied)

– “People’s Choice” award as one of the top three wealth managers preferred by clients

• At the annual SA’s Top Stockbrokers Awards in September 2015, PSG Wealth was placed third overall. PSG Wealth was also recognised as one of the top three online brokers and received special recognition for the availability of its instruments and trading tools, its client support (including research and tools) and the overall quality of its online and offline services.

• The PlexCrown survey results for 31 December 2015 confirmed that the PSG funds remain solid performers. The PSG Management Company maintained its Top 10 ranking.

• PSG Asset Management was placed third in the category Best Fund House: Larger Fund Range in the 2016 Morningstar South Africa Fund Awards.

• Various PSG Insure offices received Santam awards, ranging from bronze to diamond.

PEOPLE

As at 29 February 2016, PSG Konsult had 206 offices and 2 169 employees, of which 711 were financial planners, portfolio managers, stockbrokers and asset managers. A further 414 were professional associates (accountants and attorneys). During the year under review, 108 new advisers were appointed through a combination of organic growth and selective adviser book acquisitions. In addition, a number of strategic hires were concluded, which have provided the group with a strong operational platform to take the business into the future.

The effectiveness of the group’s succession planning strategy is demonstrated by Corrie de Bruyn, current chief executive officer of PSG Wealth, advising that he will return to his roots to take up a financial adviser position within the Pretoria East office, the group’s largest office, from May 2016. Marilize Lansdell, who is head of PSG Wealth investment and trading platform, has proved herself as the ideal successor and has worked closely with Corrie. Marilize is supported by a strong and capable management team and has been a member of the PSG Wealth executive committee for a number of years. This will assist in ensuring a smooth leadership transition to enable PSG Wealth to continue the current strong growth trajectory of the Wealth business. The board would like to thank Corrie for the valuable contribution he has made in helping to build PSG Konsult over the years, and wishes Marilize all the best in her new role.

CHANGES TO THE BOARD OF DIRECTORS

Jannie Mouton, the founder of PSG Group, has decided to step down as a non-executive director of PSG Konsult. Jannie’s decision is based on his belief in the solid strategy and performance of PSG Konsult. Although the board regrets his departure, it respects his decision and wishes him well. The board is pleased to announce that Riaan Stassen, the former chief executive officer of Capitec Bank, will be joining PSG Konsult as an independent non-executive director. These two board changes take effect on 14 April 2016.

REGULATORY LANDSCAPE AND RISK MANAGEMENT

The group seeks to manage risk exposures within acceptable levels, sustain profit margins and maintain an efficient capital structure while embedding good corporate conduct, regulatory compliance, the highest ethical behaviour and excellent client service.

PSG Konsult is geared to adapt to regulatory change on a continuous basis and has positioned itself as an early adopter. Regulation in other territories is proactively monitored. This is part of the group’s risk management approach and ensures that the board and management are prepared for and informed about potential consequences and opportunities created by new legislation. The Retail Distribution Review (RDR), for example, is expected to significantly change the adviser market and the way financial products are distributed in South Africa. Elsewhere the introduction of similar legislation increased the barriers to entry, increased the potential revenue per adviser and resulted in industry consolidation. This is an opportunity for PSG Konsult as the group has the necessary platforms, systems and practices to take on advisers seamlessly and provide support that meets all regulatory requirements.

One of the significant regulatory events for the business was piloting its first Own Risk and Solvency Assessment (ORSA) report. This enabled PSG Konsult to benchmark the extent to which ORSA principles are embedded across the group and to identify areas of improvement in preparation for the full ORSA report to be submitted in 2017.

TAX DISPUTE SETTLED

Shareholders are referred to PSG Konsult’s announcement made on 11 December 2015. The board subsequently decided to settle this legacy matter, which dates back to 2009, for an amount of R115 million. This amount and the related legal costs incurred were fully provided for in the year-end results and have been treated as non-recurring headline earnings.

MARKETING

Marketing initiatives are critical to the group’s goal of becoming a leader in the financial services industry. During the year under review, the specialist marketing team focused its efforts on a new advertising campaign and on enhancing the group’s website, digital platforms, client communication and client and adviser events. This is with the objective of building the PSG brand within the South African market. The launch of the television advertisement was the highlight of the year and communicates PSG Konsult’s unique competitive advantage as bigger-picture thinkers. It has resulted in increased web traffic and interest from the public and will hopefully take the group’s marketing efforts to new heights as PSG Konsult seeks to further support its network of financial advisers and cement its product offering in the minds of target clients.


INFORMATION TECHNOLOGY (IT)

The integral role that technology plays in the daily operations of PSG Konsult cannot be overstated. The scalability and efficiency of business functions are dependent on the state of its IT systems. It is for this reason that the group continues to invest in new and innovative technologies as it seeks to incorporate further business process automation, reduce operational risk and provide real-time reporting for enhanced management decision-making. The group is confident that the IT strategy, which also includes robust disaster recovery and business continuity plans, will create a solid foundation for future growth.

LOOKING FORWARD

The group’s aim remains to service existing clients well and gain new clients. Current economic circumstances are uncertain and volatility remains in investment markets. However, the group is confident that it will continue to build its client franchise despite this market outlook. A number of initiatives are in place to ensure this happens. The group’s focus on products, platforms and client service excellence through the quality of its advice is proving to be a resilient strategy.

Over the past three years, PSG Konsult re-engineered and refocused its business. Unprofitable or non-core activities were closed, integrated or sold. At the same time, the group invested – and continues to invest – in streamlining and automating processes. This is all with the aim of creating scalable capacity throughout the business.

PSG Konsult will continue to focus on topline revenue while still paying due care to its operating margin. The group will also continue to prioritise organic growth in the domestic market, where it has a relatively low, but rapidly expanding market share.

Risk management systems are set to be further enhanced while the risk universe and quantification methods in the group are further standardised.

The cash flow generation by the business remains strong, and the group will use this to fund current growth initiatives and to pay dividends consistent with its dividend policy.

As always, PSG Konsult continues to focus on providing quality client advice and service to attract new business inflows. This is supported by the establishment of an outbound direct sales initiative to grow its client base. In terms of products, the group continues to expand the range of products and services on offer while embedding the principles of National Treasury’s Treating Customers Fairly (TCF) framework.

EVENTS AFTER THE REPORTING DATE

To further standardise the revenue sharing model and provide advisers with the opportunity to invest in the future of the group, PSG Konsult is pleased to advise that the group concluded further asset-for-share transactions in March 2016 with a number of its advisers through its subsidiary, PSG Wealth Financial Planning Proprietary Limited, in terms of section 42 of the Income Tax Act, No. 58 of 1962. These transactions, which were settled largely through the issue of 14 298 161 PSG Konsult shares, will lead to a win-win situation for the group’s financial advisers and shareholders.

DIVIDEND

The board approved and declared a final gross dividend of 8.8 cents per share (2015: 8.0 cents per share) from income. This follows the interim dividend of 4.4 cents per share (2015: 4.0 cents per share) declared in October 2015, which brings the total gross dividend declared for the 2016 financial year to 13.2 cents per share (2015: 12.0 cents per share).

The dividend is subject to a local dividend tax rate of 15%, resulting in a net dividend of 7.48 cents per share, unless the shareholder is exempt from paying dividends tax or is entitled to a reduced rate in terms of the applicable double-tax agreement. The number of issued ordinary shares is 1 293 421 882 at the date of this declaration. PSG Konsult’s income tax reference number is 9550/644/07/05.

The following are the salient dates for payment of the dividend:

Last day to trade cum dividend Friday, 6 May 2016Trading ex dividend commences Monday, 9 May 2016Record date Friday, 13 May 2016Date of payment Monday, 16 May 2016

Share certificates may not be dematerialised or rematerialised between Monday, 9 May 2016, and Friday, 13 May 2016, both days included.

The board would like to extend its gratitude to all the group’s stakeholders, including shareholders, clients, business partners, management and employees, for their efforts and contributions during the past year.

On behalf of the board

Willem Theron Francois GouwsChairman Chief executive officer

Tyger Valley14 April 2016

psg.co.za


Independent auditor’s review report on condensed consolidated financial statements

TO THE SHAREHOLDERS OF PSG KONSULT LIMITED

We have reviewed the condensed consolidated financial statements of PSG Konsult Limited, set out on pages 16 to 31 of the PSG Konsult Limited Results Booklet, which comprise the condensed consolidated statement of financial position as at 29 February 2016 and the related condensed consolidated income statement, condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated cash flow statement for the year then ended, and selected explanatory notes.

DIRECTORS’ RESPONSIBILITY FOR THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The directors are responsible for the preparation and presentation of these condensed consolidated financial statements in accordance with the JSE Limited’s (JSE) requirements for summary financial statements, as set out in note 2 to the financial statements, and the requirements of the Companies Act of South Africa as applicable to summary financial statements, 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.

AUDITOR’S RESPONSIBILITY

Our responsibility is to express a conclusion on these financial statements. We conducted our review in accordance with International Standard on Review Engagements (ISRE) 2410, which applies to a review of historical financial information performed by the independent auditor of the entity. ISRE 2410 requires us to conclude whether anything has come to our attention that causes us to believe that the financial statements are not prepared in all material respects in accordance with the applicable financial reporting framework. This standard also requires us to comply with relevant ethical requirements.

A review of financial statements in accordance with ISRE 2410 is a limited assurance engagement. We perform procedures, primarily consisting of making inquiries of management and others within the entity, as appropriate, and applying analytical procedures, and evaluate the evidence obtained. The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing. Accordingly, we do not express an audit opinion on these financial statements.

CONCLUSION

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated financial statements of PSG Konsult Limited for the year ended 29 February 2016 is not prepared, in all material respects, in accordance with the JSE’s requirements for summary financial statements, as set out in note 2 to the financial statements, and the requirements of the Companies Act of South Africa as applicable to summary financial statements.

PricewaterhouseCoopers Inc.Director: C van den HeeverRegistered Auditor

Cape Town14 April 2016


Condensed consolidated statement of financial positionat 29 February 2016 and 28 February 2015

Reviewedas at

29 Feb 16R000

Auditedas at

28 Feb 15R000

ASSETSIntangible assets 882 615 859 536 Property and equipment 54 179 42 273 Investment property 7 349 2 245 Investment in associated companies 129 39 562 Investment in joint ventures 16 223 12 971 Deferred income tax 90 245 87 674 Equity securities (note 6.7) 1 747 701 1 025 518 Debt securities (note 6.7) 2 588 565 1 605 418 Unit-linked investments (note 6.7) 29 695 283 12 345 648 Investment in investment contracts (note 6.7) 116 477 338 208 Loans and advances 129 114 116 393 Derivative financial instruments 17 864 23 324 Reinsurance assets 76 184 77 413 Deferred acquisition costs 3 011 1 714 Receivables including insurance receivables 2 816 578 2 133 136 Current income tax assets 7 249 18 954 Cash and cash equivalents (including money market investments) (note 6.7) 1 395 952 972 243 Non-current assets held for sale 38 948 17 751 Total assets 39 683 666 19 719 981

EQUITYEquity attributable to owners of the parentStated capital 1 446 604 1 325 111 Treasury shares (13 462) (546) Other reserves (394 755) (404 471) Retained earnings 650 059 573 065

1 688 446 1 493 159 Non-controlling interest 157 212 132 491 Total equity 1 845 658 1 625 650

LIABILITIESInsurance contracts 607 310 574 331 Deferred income tax 44 925 53 610 Borrowings 274 114 427 843 Derivative financial instruments 17 910 30 749 Investment contracts (note 6.7) 19 836 250 14 222 603 Third-party liabilities arising on consolidation of mutual funds 14 023 726 699 202 Deferred reinsurance acquisition revenue 4 524 3 563 Trade and other payables 2 894 051 2 068 400 Current income tax liabilities 135 198 10 618 Non-current liabilities held for sale – 3 412 Total liabilities 37 838 008 18 094 331

Total equity and liabilities 39 683 666 19 719 981

Net asset value per share (cents) 132.2 118.3


Condensed consolidated income statement for the year ended 29 February 2016

ReviewedYear ended

29 Feb 16R000

AuditedYear ended 28 Feb 15

R000

Gross written premium 940 903 795 237

Less: Reinsurance written premium (242 720) (225 293)

Net premium 698 183 569 944

Change in unearned premium

– Gross (20 986) (34 905)

– Reinsurers' share 434 3 119

Net insurance premium revenue 677 631 538 158

Commission and other fee income 2 461 393 2 138 855

Investment income 612 988 499 554

Net fair value gains and losses on financial instruments 1 104 789 1 209 661 Fair value adjustment to investment contract liabilities (1 389 130) (1 406 791)

Other operating income 34 005 35 163

Total income 3 501 676 3 014 600

Insurance claims and loss adjustment expenses (670 197) (561 548)

Insurance claims and loss adjustment expenses recovered from reinsurers 151 335 137 173

Net insurance benefits and claims (518 862) (424 375)

Commission paid (1 061 309) (910 226)

Depreciation and amortisation (57 308) (55 422)

Employee benefit expenses (590 976) (511 612)

Fair value adjustment to third-party liabilities (67 080) (41 525)

Marketing, administration and other expenses (485 365) (427 457)

Total expenses (2 780 900) (2 370 617)

Share of profits of associated companies 1 496 40

Loss on impairment of associated companies (1 981) –

Share of profits of joint ventures 3 252 914

Total profit from associated companies and joint ventures 2 767 954

Profit before finance costs and taxation 723 543 644 937

Finance costs (91 881) (119 905)

Profit before taxation 631 662 525 032

Taxation (309 838) (163 234)

Profit for the year 321 824 361 798

Attributable to:Owners of the parent 292 924 340 401

Non-controlling interest 28 900 21 397

321 824 361 798

Earnings per share (cents)Attributable (basic) 23.0 27.0

Attributable (diluted) 22.4 26.1

Headline (basic) 22.9 26.9

Headline (diluted) 22.3 26.0

Recurring headline (basic) 32.1 27.0

Recurring headline (diluted) 31.2 26.1


Condensed consolidated statement of comprehensive income for the year ended 29 February 2016

ReviewedYear ended

29 Feb 16R000


R000

Profit for the year 321 824 361 798 Other comprehensive income for the year, net of taxation 9 647 224 To be reclassified to profit and loss: Currency translation adjustments 8 478 224 Not to be reclassified to profit and loss:Gain on revaluation of property and equipment 1 169 –

Total comprehensive income for the year 331 471 362 022

Attributable to:Owners of the parent 302 104 340 625 Non-controlling interest 29 367 21 397

331 471 362 022

Earnings and headline earnings per shareReviewed

Year ended 29 Feb 16

R000


R000

Profit attributable to ordinary shareholders 292 924 340 401

Non-headline items (net of non-controlling interest and related tax effect)Profit on disposal of intangible assets (including goodwill) (190) (757)

Impairment of associated companies 1 189 –

Non-headline items of associated companies and joint ventures (2 151) (251)

Other 530 (132)

Headline earnings 292 302 339 261

Recurring 408 748 341 175

Non-recurring (116 446) (1 914)

Earnings per share (cents)Attributable (basic) 23.0 27.0

Attributable (diluted) 22.4 26.1

Headline (basic) 22.9 26.9

Headline (diluted) 22.3 26.0

Recurring headline (basic) 32.1 27.0

Recurring headline (diluted) 31.2 26.1

Number of shares (million)In issue (net of treasury shares) 1 276.8 1 262.1

Weighted average 1 274.2 1 261.4


Condensed consolidated statement of changes in equityfor the year ended 29 February 2016

Attributable to equity holders of the group

StatedcapitalR000

Treasury sharesR000

Other reserves

R000

Retained earnings

R000

Non-controlling

interestR000

TotalR000

Balance at 1 March 2014 – Audited 1 134 746 (546) (445 146) 399 487 86 222 1 174 763 Comprehensive incomeProfit for the year – – – 340 401 21 397 361 798 Other comprehensive income – – 224 – – 224 Currency translation adjustments – – 224 – – 224 Total comprehensive income – – 224 340 401 21 397 362 022 Transactions with owners 190 365 – 40 451 (166 823) 24 872 88 865 Issue of ordinary shares 190 365 – – – – 190 365 Share-based payment costs – employees – – 11 562 – – 11 562

Transactions with non-controlling interest – – – (1 320) (206) (1 526) Capital contribution by non-controlling interest – – – – 28 000 28 000 Current tax on equity-settled share-based

payments– – 5 084 – – 5 084

Deferred tax on equity-settled share-based payments

– – 32 516 – – 32 516

Loss on issue of shares in terms of share scheme – – (31 636) – – (31 636) Release of share-based payment reserve to

retained earnings on vested share options– – 22 925 (22 925) – –

Dividend paid – – – (142 578) (2 922) (145 500)

Balance at 28 February 2015 – Audited 1 325 111 (546) (404 471) 573 065 132 491 1 625 650

Comprehensive incomeProfit for the year – – – 292 924 28 900 321 824 Other comprehensive income – – 9 180 – 467 9 647 Currency translation adjustments – – 8 478 – – 8 478 Gain on revaluation of property and equipment – – 702 – 467 1 169 Total comprehensive income – – 9 180 292 924 29 367 331 471Transactions with owners 121 493 (12 916) 536 (215 930) (4 646) (111 463) Issue of ordinary shares 121 493 – – – – 121 493 Share-based payment costs – employees – – 16 608 – – 16 608 Transactions with non-controlling interest – – – (3 098) (360) (3 458) Acquisition of subsidiary – – – – 921 921 Net movement in treasury shares – (8 515) – – – (8 515)Current tax on equity-settled share-based

payments– – 20 153 – – 20 153

Deferred tax on equity-settled share-based payments

– – (10 024) – – (10 024)

Loss on issue of shares in terms of share scheme – – (84 974) – – (84 974) Release of share-based payment reserve to

retained earnings on vested share options– – 58 773 (58 773) – –

Release of profits from treasury shares to retained earnings

– (4 401) – 4 401 – –

Dividend paid – – – (158 460) (5 207) (163 667)

Balance at 29 February 2016 – Reviewed 1 446 604 (13 462) (394 755) 650 059 157 212 1 845 658


Condensed consolidated statement of cash flowsfor the year ended 29 February 2016

ReviewedYear ended

29 Feb 16R000


R000

Cash flows from operating activitiesCash generated by operating activities 57 599 232 202

Interest income 529 692 372 278

Dividend income 82 872 126 900

Finance costs (41 939) (44 118)

Taxation paid (172 284) (172 853)

Operating cash flows before policyholder cash movement 455 940 514 409

Policyholder cash movement 87 910 (24 380)

Net cash flow from operating activities 543 850 490 029

Cash flows from investing activitiesAcquisition of subsidiaries (including collective investment schemes) 93 516 –

Acquisition of intangible assets (56 826) (30 473)

Purchases of property and equipment (35 059) (13 241)

Proceeds from sale of assets held for sale 12 646 –

Other 1 864 4 120

Net cash flow from investing activities 16 141 (39 594)

Cash flows from financing activitiesDividends paid (163 667) (145 500)

Capital contributions by non-controlling interest (ordinary shares) – 28 000

Transactions with non-controlling interest (3 458) (1 526)

Repayment of borrowings (3 737) (73 344)

Shares issued 36 519 7 476

Net movement in treasury shares (8 515) –

Other 608 209

Net cash flow from financing activities (142 250) (184 685)

Net increase in cash and cash equivalents 417 741 265 750

Cash and cash equivalents at beginning of year 975 018 709 173

Exchange gains on cash and cash equivalents 3 193 95

Cash and cash equivalents at end of year* 1 395 952 975 018

Current, cheque and money market investment accounts 1 395 952 972 243

Cash and cash equivalents classified as assets held for sale – 2 775

* Includes the following:

Clients’ cash linked to investment contracts 114 864 26 954

Other client-related balances 165 970 139 381

280 834 166 335

Notes to the statement of cash flow:The movement in cash generated by operating activities can vary significantly as a result of daily fluctuations in cash linked to investment contracts, cash held by the stockbroking business and cash utilised for the loan facility obtained by PSG Wealth on the loan facilities provided to clients on their share portfolios at PSG Securities Limited. PSG Life Limited, the group’s linked insurance company, issues linked policies to policyholders (where the value of policy benefits is directly linked to the fair value of the supporting assets). When these policies mature, the company raises a debtor for the money receivable from the third-party investment provider, and raises a creditor for the amount owing to the client. Timing difference occurs at month-end where the money was received from the third-party investment provider, but only paid out by the company after month-end, resulting in significant fluctuations in the working capital of the company. Similar working capital fluctuations occur at PSG Securities Limited, the group’s stockbroking business, mainly due to the timing of the close of the JSE in terms of client settlements.

During the 2016 financial year, R150.1 million was repaid on the loans obtained for providing loan facilities to clients on their share portfolio compared to R89.6 million funding obtained in the 2015 financial year.


Notes to the condensed consolidated financial statementsfor the year ended 29 February 2016

1. Reporting entity

PSG Konsult Limited is a company domiciled in the Republic of South Africa. The condensed consolidated financial statements of the company as at and for the year ended 29 February 2016 comprise the company and its subsidiaries (together referred to as the “group”) and the group’s interests in associated companies and joint ventures.

2. Basis of presentation

The condensed consolidated preliminary financial statements are prepared in accordance with the Listings Requirements of the JSE Limited (JSE) and the requirements of the Companies Act, No. 71 of 2008, as amended applicable to condensed financial statements. The JSE requires condensed financial statements to be prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and to also, as a minimum, contain the information required by IAS 34 – Interim Financial Reporting. The accounting policies applied in the preparation of the consolidated financial statements, from which the condensed consolidated financial statements were derived, are in terms of IFRS and are consistent with those accounting policies applied in the preparation of the previous consolidated annual financial statements.

3. Preparation

The condensed consolidated preliminary financial statements is the responsibility of the board of directors of the company. These condensed consolidated preliminary financial statements were prepared by Stephan van der Merwe, CA(SA), under the supervision of the chief financial officer, Mike Smith, CA(SA). PSG Konsult’s external auditor, PricewaterhouseCoopers Inc., reviewed these condensed consolidated preliminary financial statements and their unmodified review opinion is presented on page 15. Any reference to future financial performance included in this announcement has not been reviewed by or reported on by the company’s auditor.

4. Accounting policies

The accounting policies applied in the preparation of these condensed consolidated financial statements are in terms of IFRS and are consistent with those accounting policies applied in the preparation of the previous consolidated annual financial statements as at and for the year ended 28 February 2015.

The following new accounting standards and amendments to IFRSs, which were relevant to the group’s operations, were effective for the first time from 1 March 2015:

• Amendment to IAS 19 – Employee benefits• Annual Improvements 2010 – 12 cycle• Annual Improvements 2011 – 13 cycle

These revisions have not resulted in material changes to the group’s reported results and disclosures in these condensed consolidated financial statements.

The following new or revised IFRSs and interpretations that are applicable to the group have effective dates applicable to future financial years and have not been early adopted:

• IFRS 9 – Financial Instruments (effective 1 January 2018)• IFRS 15 – Revenue from Contracts with Customers (effective 1 January 2018)• IFRS 16 – Leases (effective 1 January 2019)

The impact of the application of these revised standards and interpretations in future financial reporting periods on the group’s reported results, financial position and cash flows is still being assessed.

5. Use of estimates and judgements

In preparing these condensed consolidated financial statements, the significant judgements made by management in applying the group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated annual financial statements for the year ended 28 February 2015.

6. Segment information

The composition of the reportable segments represents the internal reporting structure and the monthly reporting to the chief operating decision-maker (CODM). The CODM was identified as the chief executive officer for the purpose of IFRS 8 – Operating Segments, supported by the group management committee (Manco). The group’s internal reporting structure is reviewed in order to assess performance and allocated resources. The group is organised into three reportable segments, namely:

• PSG Wealth• PSG Asset Management• PSG Insure

Corporate support costs refer to a variety of services and functions that are performed centrally for the individual business units within each business segment and also include the group’s executive office. Besides the traditional accounting and secretarial services provided to group divisions and subsidiaries, the corporate office also provides legal, risk, information technology (IT), marketing, human resources (HR), payroll, internal audit and corporate finance services. The strategic elements of IT, in terms of both services and infrastructure, are also centralised in the corporate office. The corporate costs are allocated to the three reportable segments.


6.1. Description of business segments

PSG Wealth, which consists of five business units – Distribution, PSG Securities, LISP and Life Platform, Multi Management and Employee Benefits – is designed to meet the needs of individuals, families and businesses. Through the division’s highly skilled wealth managers, PSG Wealth offers a wide range of personalised services (including portfolio management, stockbroking, local and offshore investments, estate planning, financial planning, local and offshore fiduciary services, multi-managed solutions and retirement products). The Wealth offices are fully equipped to deliver a high-quality personal service to customers.

PSG Asset Management is an established investment management company with a proven investment track record. The division offers investors a simple, but comprehensive range of local and global investment products. Its products include both local and international unit trust funds.

PSG Insure, through its registered insurance brokers and PSG‘s short-term insurance company Western National Insurance Company Limited, offers a full range of tailor-made short-term insurance products and services from personal (home, car and household insurance) to commercial (business and agri-insurance) requirements. To harness the insurance solutions available to customers effectively, the division’s expert insurance specialists, through a strict due diligence process, will simplify the selection process for the most appropriate solution for its clients. In addition to the intermediary services the division offers, PSG Short-Term Administration supports clients through the claim process, administrative issues and general policy maintenance, including an annual reappraisal of their portfolio.

The CODM considers the performance of reportable segments based on total income as a measure of growth and headline earnings as a measure of profitability. The segment information provided to the CODM for the reportable segments for the year ended 29 February 2016 is set out below:

6.2 Headline earnings per reportable segments

Headline earningsWealth

R000

AssetManage-

mentR000

InsureR000

TotalR000

For the year ended 29 February 2016 (Reviewed)Headline earnings 169 059 82 707 40 536 292 302 – recurring 285 505 82 707 40 536 408 748 – non-recurring (116 446) – – (116 446)

For the year ended 28 February 2015 (Audited)Headline earnings 227 478 81 915 29 868 339 261

– recurring 228 320 82 336 30 519 341 175

– non-recurring (842) (421) (651) (1 914)

6.3 Income per reportable segment

Total incomeWealth

R000

AssetManage-

mentR000

InsureR000

TotalR000

For the year ended 29 February 2016 (Reviewed)Total segment income 2 595 694 635 148 1 195 809 4 426 651

Inter-segment income (622 393) (265 799) (36 783) (924 975)

Income from external customers 1 973 301 369 349 1 159 026 3 501 676

For the year ended 28 February 2015 (Audited)Total segment income 2 146 463 587 111 979 622 3 713 196

Inter-segment income (461 848) (219 347) (17 401) (698 596)

Income from external customers 1 684 615 367 764 962 221 3 014 600

Other information provided to the CODM is measured in a manner consistent with that of the financial statements.


6.4 Divisional income statements

The profit or loss information follows a similar format to the consolidated income statement.

For the year ended 29 February 2016 (Reviewed)Wealth

R000

AssetManagement

R000InsureR000

TotalR000

Total income 1 973 301 369 349 1 159 026 3 501 676 Total expenses (1 450 023) (257 299) (1 073 578) (2 780 900)

523 278 112 050 85 448 720 776 Total profit from associated companies and joint ventures – – 2 767 2 767 Profit before finance cost and taxation 523 278 112 050 88 215 723 543 Finance costs* (88 278) (359) (3 244) (91 881)Profit before taxation 435 000 111 691 84 971 631 662 Taxation (258 611) (29 131) (22 096) (309 838)Profit for the year 176 389 82 560 62 875 321 824

Attributable to:Owners of the parent 169 488 82 560 40 876 292 924 Non-controlling interest 6 901 – 21 999 28 900

176 389 82 560 62 875 321 824

Headline earnings 169 059 82 707 40 536 292 302

Recurring headline earnings 285 505 82 707 40 536 408 748

For the year ended 28 February 2015 (Audited)

Total income 1 684 614 367 764 962 222 3 014 600

Total expenses (1 219 987) (257 541) (893 089) (2 370 617)

464 627 110 223 69 133 643 983

Total profit from associated companies and joint ventures – – 954 954

Profit before finance cost and taxation 464 627 110 223 70 087 644 937

Finance costs* (115 606) (396) (3 903) (119 905)

Profit before taxation 349 021 109 827 66 184 525 032

Taxation (115 019) (27 905) (20 310) (163 234)

Profit for the year 234 002 81 922 45 874 361 798

Attributable to:Owners of the parent 228 177 81 922 30 302 340 401

Non-controlling interest 5 825 – 15 572 21 397

234 002 81 922 45 874 361 798

Headline earnings 227 478 81 915 29 868 339 261

Recurring headline earnings 228 320 82 336 30 519 341 175

* Finance cost in the PSG Wealth division consists mainly of the finance charge on the held-to-maturity policyholder financial assets (linked investment business). The finance cost of R88.3 million (2015: R115.6 million) consists of R49.9 million (2015: R75.8 million) on the client-related linked investment business, R29.2 million (2015: R25.8 million) on the loan facilities provided to clients on their share portfolios at PSG Securities (secured by the underlying JSE Top 100 equity securities held in excess of four times the value of the loan facilities) on which PSG Wealth receives a margin, with the remaining portion of the finance charge on the CFD margin and the bank overdrafts.


6.5 Statement of financial position (client vs own)

In order to evaluate the consolidated financial position of the group, the CODM segregates the statement of financial position of the group between own balances and client-related balances.

Client-related balances represent the investment contract liabilities and related linked client assets of PSG Life Limited, the broker and clearing accounts, and the settlement control accounts of the stockbroking business, the collective investment schemes consolidated under IFRS 10 – Consolidated Financial Statements and corresponding third-party liabilities, the short-term claim control accounts and related bank accounts, as well as the contracts for difference assets and related liabilities.

Reviewed – as at 29 February 2016

TotalR000

Own balances

R000

Client- related

balancesR000

ASSETSEquity securities 1 747 701 6 023 1 741 678 Debt securities 2 588 565 100 789 2 487 776 Unit-linked investments 29 695 283 443 737 29 251 546 Investment in investment contracts 116 477 – 116 477 Receivables including insurance receivables 2 812 759 225 780 2 586 979 Derivative financial instruments 17 864 – 17 864 Cash and cash equivalents (including money market investments) 1 395 952 1 115 118 280 834 Other assets* 1 309 065 1 309 065 –Total assets 39 683 666 3 200 512 36 483 154

EQUITYEquity attributable to owners of the parent 1 688 446 1 688 446 –

Non-controlling interest 157 212 157 212 –Total equity 1 845 658 1 845 658 –

LIABILITIESBorrowings 274 114 10 674 263 440 Investment contracts 19 836 250 – 19 836 250 Third-party liabilities arising on consolidation of mutual funds 14 023 726 – 14 023 726 Derivative financial instruments 17 910 – 17 910 Trade and other payables 2 894 051 552 223 2 341 828 Other liabilities** 791 957 791 957 –Total liabilities 37 838 008 1 354 854 36 483 154

Total equity and liabilities 39 683 666 3 200 512 36 483 154

* Other assets consist of property and equipment, investment property, intangible assets, investment in associated companies, investment in joint ventures, current and deferred income tax assets, loans and advances, reinsurance assets, deferred acquisition costs and non-current assets held for sale.

** Other liabilities consist of deferred reinsurance acquisition revenue, current and deferred income tax liabilities, insurance contracts and non-current liabilities held for sale.


Audited – as at 28 February 2015

TotalR000

Own balances

R000

Client- related

balancesR000

ASSETSEquity securities 1 025 518 2 259 1 023 259

Debt securities 1 605 418 99 614 1 505 804

Unit-linked investments 12 345 648 378 015 11 967 633

Investment in investment contracts 338 208 – 338 208

Receivables including insurance receivables 2 133 136 228 588 1 904 548

Derivative financial instruments 23 324 – 23 324

Cash and cash equivalents (including money market investments) 972 243 805 908 166 335

Other assets* 1 276 486 1 276 486 –

Total assets 19 719 981 2 790 870 16 929 111

EQUITYEquity attributable to owners of the parent 1 493 159 1 493 159 –

Non-controlling interest 132 491 132 491 –

Total equity 1 625 650 1 625 650 –

LIABILITIESBorrowings 427 843 14 273 413 570

Investment contracts 14 222 603 – 14 222 603

Third-party liabilities arising on consolidation of mutual funds 699 202 – 699 202

Derivative financial instruments 30 749 – 30 749

Trade and other payables 2 068 400 505 413 1 562 987

Other liabilities** 645 534 645 534 –

Total liabilities 18 094 331 1 165 220 16 929 111

Total equity and liabilities 19 719 981 2 790 870 16 929 111

* Other assets consist of property and equipment, investment property, intangible assets, investment in associated companies, investment in joint ventures, current and deferred income tax assets, loans and advances, reinsurance assets, deferred acquisition costs and non-current assets held for sale.

** Other liabilities consist of deferred reinsurance acquisition revenue, current and deferred income tax liabilities, insurance contracts and non-current liabilities held for sale.


6.6 Income statement (client vs own)

In order to evaluate the consolidated income statement of the group, the CODM segregates the income statement by eliminating the impact of the linked investment policies issued and the consolidation of the collective investment schemes from the core operations in the group.

A subsidiary of the group, PSG Life Limited, is a linked insurance company and issues linked policies to policyholders (where the value of policy benefits is directly linked to the fair value of the supporting assets), and as such does not expose the group to the market risk of fair value adjustments on the financial asset as this risk is assumed by the policyholder.

The group consolidates collective investment schemes in terms of IFRS 10 – Consolidated Financial Statements over which the group has control. The consolidation of these funds do not impact total earnings, comprehensive income, shareholders’ funds or the net asset value of the group; however, it requires the group to recognise the income statement impact as part of that of the group.

Reviewed – Year ended 29 February 2016

TotalR000

Corebusiness

R000

Linked investment

business and other

R000

Commission and other fee income 2 461 393 2 438 177 23 216 Investment income 612 988 190 893 422 095 Net fair value gains and losses on financial instruments 1 104 789 12 848 1 091 941 Fair value adjustment to investment contract liabilities (1 389 130) – (1 389 130) Other* 711 636 704 396 7 240 Total income 3 501 676 3 346 314 155 362

Insurance claims and loss adjustment expenses (670 197) (668 808) (1 389) Fair value adjustment to third-party liabilities (67 080) – (67 080) Other** (2 043 623) (2 028 274) (15 349) Total expenses (2 780 900) (2 697 082) (83 818)

Total profit from associated companies and joint ventures 2 767 2 767 – Profit before finance cost and taxation 723 543 651 999 71 544 Finance costs (91 881) (41 939) (49 942) Profit before taxation 631 662 610 060 21 602 Taxation (309 838) (288 236) (21 602) Profit for the year 321 824 321 824 –

Attributable to:Owners of the parent 292 924 292 924 – Non-controlling interest 28 900 28 900 –

321 824 321 824 –

* Other consists of net insurance premium revenue and other operating income.

** Other consists of insurance claims and loss adjustment expenses recovered from reinsurers, commission paid, depreciation and amortisation, employee expenses, marketing, administration and other expenses.


Audited – Year ended 28 February 2015

TotalR000

Corebusiness

R000

Linked investment

business and other

R000

Commission and other fee income 2 138 855 2 114 106 24 749

Investment income 499 554 158 201 341 353

Net fair value gains and losses on financial instruments 1 209 661 12 817 1 196 844

Fair value adjustment to investment contract liabilities (1 406 791) – (1 406 791)

Other* 573 321 572 946 375

Total income 3 014 600 2 858 070 156 530

Insurance claims and loss adjustment expenses (561 548) (561 293) (255)

Fair value adjustment to third-party liabilities (41 525) – (41 525)

Other** (1 767 544) (1 755 855) (11 689)

Total expenses (2 370 617) (2 317 148) (53 469)

Total profit from associated companies and joint ventures 954 954 –

Profit before finance cost and taxation 644 937 541 876 103 061

Finance costs*** (119 905) (44 118) (75 787)

Profit before taxation 525 032 497 758 27 274

Taxation (163 234) (135 960) (27 274)

Profit for the year 361 798 361 798 –

Attributable to:Owners of the parent 340 401 340 401 –

Non-controlling interest 21 397 21 397 –

361 798 361 798 –

* Other consists of net insurance premium revenue and other operating income.

** Other consists of insurance claims and loss adjustment expenses recovered from reinsurers, commission paid, depreciation and amortisation, employee expenses, marketing, administration and other expenses.

*** Finance cost on core business decreased from 2015 largely due to the increase in the loan facilities provided to clients in their share portfolios at PSG Securities (secured by the underlying Top 100 equity securities held in excess of four times the value of the loan facilities), which was countered by the decrease in finance cost paid to external debt (excluding the finance lease) as these were repaid in full during the 2015 financial year.

6.7 Investment contracts are represented by the following financial assets:

Reviewedas at

29 Feb 16R000

Auditedas at

28 Feb 15R000

Equity securities 1 661 713 955 147 Debt securities 783 225 800 198 Unit-linked investments 17 159 971 12 102 096 Investments in investment contracts 116 477 338 208 Cash and cash equivalents 114 864 26 954

19 836 250 14 222 603

7. Receivables including insurance receivables and trade and other payables

Included under receivables are broker and clearing accounts at the stockbroking business of which R2 513.5 million (2015: R1 871.9 million) represents amounts owing by the JSE for trades conducted during the last few days before the end of the period. These balances fluctuate on a daily basis depending on the activity in the market.

The control account for the settlement of these transactions is included under the trade and other payables, with the settlement to the clients taking place within three days after the transaction date.

8. Transactions with non-controlling interest

For the years ended 29 February 2016 and 28 February 2015

Acquisition of a further interest in PSG Namibia Proprietary Limited With effect from 1 March 2015, PSG Konsult Limited (through its subsidiary PSG Distribution Holdings Proprietary Limited) acquired an additional 4% stake from a minority shareholder. The group now holds 58% of the issued share capital of PSG Namibia Proprietary Limited. This transaction follows the acquisition of an additional 3% interest on 1 March 2014.


9. Non-current assets (or disposal groups) held for sale

For the year ended 29 February 2016 and 28 February 2015

PSG Konsult Limited (through its subsidiary Western Group Holdings Limited) sold its 23% interest held in Xinergistix Limited on 1 November 2015 for R38.9 million. The transaction is subject to suspensive conditions and was treated as a non-current asset held for sale on 29 February 2016.

PSG Konsult Limited sold 100% of its shareholding in PSG Academy Proprietary Limited, the group‘s private higher education institute, to Moonstone Information Refinery Proprietary Limited and its health insurance administration business (through its subsidiary Nhluvuko Risk Administration Proprietary Limited) to African Unity Health Proprietary Limited.

The effective date for both of these transactions was 1 March 2015, subject to suspensive conditions, and was treated as non-current assets and liabilities held for sale on 28 February 2015.

10. Acquisition of subsidiaries

For the year ended 29 February 2016

i) PSG Wealth Limited (Mauritius) (previously DMH Associates Limited (Mauritius)) PSG Konsult Limited, through its wholly-owned subsidiary PSG Konsult (Mauritius) Limited, acquired a 70% interest in DMH Holding

Limited, a holding company incorporated in Mauritius. DMH Holding Limited has a wholly-owned subsidiary, PSG Wealth Limited (Mauritius) (previously DMH Associates Limited (Mauritius)), a financial services provider in Mauritius. The effective date of the transaction was 1 November 2015 following the fulfilment of suspensive conditions.

ii) Acquisition of collective investment schemes The group obtained control of the following collective investment schemes during the second half of the 2016 financial year:

PSG Wealth Enhanced Interest Fund, PSG Wealth Creator Fund of Funds and the PSG Wealth Moderate Fund of Funds. These funds were consolidated in accordance with IFRS 10 – Consolidated Financial Statements and are collective investment schemes managed by PSG Asset Management.

Fund consolidated

PSG WealthEnhanced

Interest Fund

PSG WealthCreator Fund of

Funds

PSG WealthModerate

Fund of Funds

% Interest in fund on effective date 31% 31% 30%

Date of acquisition1 September

201529 February

201629 February

2016

Details of the net assets acquired are as follows:GroupR000

GroupR000

GroupR000

Debt securities 610 369 – –

Unit-linked investments 419 456 3 361 218 14 168 287

Receivables including insurance receivables 13 181 715 –

Cash and cash equivalents (including money market funds) 43 345 20 529 32 415

Third-party liabilities arising on consolidation of mutual funds (748 930) (2 344 629) (9 947 685)

Trade and other payables (544) – –

Net asset value 336 877 1 037 833 4 253 017

Fair value of interest held before the business combination (336 877) (1 037 833) (4 253 017)

Total consideration paid – – –

11. Other acquisitions


Standardising of revenue sharing model Effective 1 March 2014, the group (through its subsidiary PSG Wealth Financial Planning Proprietary Limited) concluded an asset-for-share transaction (utilising section 42 of the Income Tax Act) with a large number of its advisers. The purpose of this transaction was to standardise the revenue sharing arrangements between the advisers and PSG Konsult. This provided the opportunity for the advisers to become shareholders in the business and be part of the group’s loyal shareholder base of individuals.

The consideration was paid with the issue of PSG Konsult shares (35.8 million shares at R4.50 per share) and the remaining R12.5 million paid in cash on the effective date. The transaction did not qualify for accounting in terms of IFRS 3R – Business Combinations as the assets acquired (the right to an increased share in the income stream of the adviser) did not constitute a business acquired.

This transaction contributed R10.1 million to PSG Konsult’s headline earnings during the 2015 financial year.


Standardising of revenue sharing model During the year under review, the group, through its subsidiaries PSG Wealth Financial Planning Proprietary Limited and PSG Corporate Financial Planning Proprietary Limited, concluded further revenue sharing arrangements (on the same basis as in the 2015 financial year) with a number of its advisers for a cash consideration of R17.6 million.

These transactions contributed R1.5 million to PSG Konsult’s headline earnings during the 2016 financial year.


12. Financial risk management

The group’s activities expose it to a variety of financial risks: market risk (including price risk, foreign currency risk, cash flow risk and fair value interest rate risks), credit risk and liquidity risk. Insurance activities expose the group to insurance risk (including pricing risk, reserving risk, underwriting risk and reinsurance risk). The group is also exposed to operational risk and legal risk.

The capital risk management philosophy is to maximise the return on shareholders’ capital within an appropriate risk framework.

The condensed consolidated financial statements do not include all risk management information and disclosure required in the annual financial statements and should be read in conjunction with the group’s annual financial statements as at 29 February 2016.

There have been no changes in the group’s financial risk management objectives and policies since the previous financial year-end.

Market risk (price risk, foreign currency risk and interest rate risks)Market risk is the risk of adverse financial impact due to changes in fair values or future cash flows of financial instruments from fluctuations in interest rates, equity prices and foreign currency exchange rates.

A portion of the policyholders’ and shareholders’ investments are valued at fair value and are therefore susceptible to market fluctuations.

With regard to the subsidiary, PSG Life Limited, this company only invests assets into portfolios that are exposed to market price risk that matches linked policies to policyholders (where the value of policy benefits is directly linked to the fair value of the supporting assets), and as such does not expose the business to the market risk of fair value adjustments on the financial asset as this risk is assumed by the policyholder. Fees charged on this business are determined as a percentage of the fair value of the underlying assets held in the linked funds which are subject to equity and interest rate risk. As a result, the management fees fluctuate, but cannot be less than nil.

Included in the equity securities of R1 747.7 million (2015: R1 025.5 million) are quoted equity securities of R1 747.5 million (2015: R1 024.7 million), of which R1 661.7 million (2015: R955.1 million) relates to investments in linked investment contracts. The price risk of these instruments is carried by the policyholders of the linked investment contracts.

Debt securities linked to policyholder investments amounted to R783.2 million (2015: R800.2 million) and do not expose the group to interest rate risk; cash and cash equivalents linked to policyholder investments amounted to R114.9 million (2015: R27.0 million) and do not expose the group to interest rate risk.

Fair value estimationThe information below analyses financial instruments, carried at fair value, by level of hierarchy as required by IFRS 13. The different levels have been defined as follows:

• quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)• input other than quoted prices included within level 1 that is observable for the asset or liability, either directly (that is, as prices)

or indirectly (that is, derived from prices) (level 2)• input for the asset or liability that is not based on observable market data (that is, unobservable input) (level 3)

There have been no significant transfers between level 1, 2 or 3 during the financial year under review.

The table below analyses financial assets and liabilities which are carried at fair value by valuation method. There were no significant changes in the valuation techniques and assumptions applied since 28 February 2015.

Valuation techniques and main assumptions used in determining the fair value of financial assets and liabilities classified within level 2 can be summarised as follows:

Instrument Valuation techniques Main assumptions

Derivative financial instruments Exit price on recognised over-the-counter(OTC) platforms

Not applicable

Debt securities Valuation model that uses the market input (yield of benchmark bonds)

Bond interest rate curvesIssuer credit ratingsLiquidity spreads

Unit-linked investments Quoted put (exit) price provided by the fund manager

Not applicable – prices are publicly available

Investment in investment contracts Prices are obtained from the insurer of the particular investment contract

Not applicable – prices provided by registered long-term insurers

Policyholder investment contract liabilities – unit linked

Current unit price of underlying unitised financial asset that is linked to the liability, multiplied by the number of units held

Not applicable

Third-party financial liabilities arising on the consolidation of mutual funds

Quoted put (exit) price provided by the fund manager

Not applicable – prices are publicly available


The fair value of financial assets and liabilities measured at fair value in the statement of financial position can be summarised as follows:

ReviewedFinancial assets

Level 1R000

Level 2R000

Level 3R000

TotalR000

At 29 February 2016Financial assets at fair value through profit or loss

Derivative financial assets – 17 864 – 17 864 Equity securities 1 747 453 8 – 1 747 461 Debt securities 846 266 1 420 858 – 2 267 124 Unit-linked investments – 28 386 299 1 308 984 29 695 283 Investment in investment contracts – 73 815 – 73 815

Available-for-saleEquity securities – – 240 240

2 593 719 29 898 844 1 309 224 33 801 787

Financial liabilities

At 29 February 2016Financial liabilities at fair value through profit or loss

Derivative financial liabilities – 17 910 – 17 910 Investment contracts – 18 173 163 1 298 984 19 472 147 Trade and other payables – – 5 297 5 297

Third-party liabilities arising on consolidation of mutual funds – 14 023 726 – 14 023 726 – 32 214 799 1 304 281 33 519 080

Audited Financial assets

Level 1R000

Level 2R000

Level 3R000

TotalR000

At 28 February 2015Financial assets at fair value through profit or loss

Derivative financial assets – 23 324 – 23 324 Equity securities 1 024 673 – – 1 024 673 Debt securities 476 539 373 071 – 849 610 Unit-linked investments – 11 228 992 1 116 656 12 345 648 Investment in investment contracts – 226 305 – 226 305

Available-for-saleEquity securities – – 845 845

1 501 212 11 851 692 1 117 501 14 470 405

Financial liabilities

At 28 February 2015Financial liabilities at fair value through profit or loss

Derivative financial liabilities – 30 749 – 30 749 Investment contracts – 12 282 705 1 106 656 13 389 361 Trade and other payables – – 13 453 13 453

Third-party liabilities arising on consolidation of mutual funds – 699 202 – 699 202 – 13 012 656 1 120 109 14 132 765

The following tables presents the changes in level 3 financial instruments during the reporting periods under review:

Reviewed 29 Feb 16

R000

Audited28 Feb 15

R000

AssetsCarrying value at 1 March 1 117 501 2 488 657 Additions 392 791 3 294 440 Disposals (761 413) (4 762 552) Gains recognised in profit and loss 560 345 96 956 Carrying value at 29/28 February 1 309 224 1 117 501

LiabilitiesCarrying value at 1 March 1 120 109 2 498 451 Additions 406 434 3 293 979 Disposals (784 529) (4 769 442) Losses recognised in profit and loss 562 267 97 121 Carrying value at 29/28 February 1 304 281 1 120 109


Level 3 – significant fair value model assumptions and sensitivitiesFinancial assets and liabilitiesUnit-linked investments and debt securities represent the largest portion of the level 3 financial assets and relate to units and debentures held in hedge funds and are priced monthly. The prices are obtained from the asset managers of the particular hedge funds. These are held to match investment contract liabilities, and as such any change in measurement would result in a similar adjustment to investment contract liabilities. Therefore, the group’s overall profit or loss is not materially sensitive to the input of the models applied to derive fair value.

Trade and other payables classified within level 3 have significant unobservable input, as the valuation technique used to determine the fair values takes into account the probability (at each reporting period) that the contracted party will achieve the profit guarantee as stipulated in the business agreement.

The table below summarises the carrying amounts and fair values of financial instruments not presented on the statement of financial position at fair value, for which their carrying values do not approximate their fair values:

Reviewed 29 Feb 16

R000

Audited28 Feb 15

R000

Debt securities – held-to-maturity– Carrying value 321 441 721 341 – Fair value 333 175 736 883

Investment in investment contracts– Carrying value 42 662 111 904 – Fair value 42 707 112 736

Total– Carrying value 364 103 833 245 – Fair value 375 882 849 619

The fair value of the financial assets in the table above is categorised in terms of level 2 (2016: R265.3 million; 2015: R815.1 million) and level 3 (2016: R110.6 million; 2015: R34.5 million) respectively.

13. Related-party transactions

Related-party transactions similar to those disclosed in the group’s annual financial statements for the year ended 28 February 2015 took place during the financial year.

14. Capital commitments and contingencies

Reviewed as at

29 Feb 16R000

Auditedas at

28 Feb 15R000

Operating lease commitments 149 620 82 843 Capital commitments 1 200 16 971

15. Events after the reporting date

No event material to the understanding of these results has occurred between the end of the reporting period and the date of approval of the condensed consolidated financial statements other than the following:

• Shareholders are referred to PSG Konsult’s announcement made on 11 December 2015 regarding a potential tax matter at PSG Life Limited. The board subsequently decided to settle this legacy matter, which dates back to 2009, for an amount of R115 million. This amount and the related legal costs incurred were fully provided for in the year-end results and have been treated as non-recurring headline earnings.

• The group concluded further revenue sharing arrangements (on the same basis as in the 2015 and 2016 financial year) with a number of its advisers during March 2016 (refer to the commentary for the details of these transactions).

GENERAL INFORMATIONLISTINGS REQUIREMENTSIn accordance with the Listings Requirements, the following information is required to be disclosed:

BOARD OF DIRECTORS OF PSG KONSULT LIMITEDIndependent non-executive Non-executiveJacob de Vos du Toit (Jaap) (60) Willem Theron (62)Lead independent non-executive director Non-executive director and chairmanBAcc, CA(SA), CTA, CFA BCompt (Hons), CA(SA)Appointed 17 August 1998 Appointed 1 March 1998

Patrick Ernest Burton (Patrick) (62) Johannes Fredericus Mouton (Jannie) (68)Independent non-executive director Non-executive directorBComm (Hons) Financial Management, PG Dip Tax BComm (Hons), CA(SA), AEPAppointed 2 March 2014 Appointed 1 March 2002

Resigned 14 April 2016


Zitulele Luke Combi (KK) (63) Petrus Johannes Mouton (Piet) (38)Independent non-executive director Non-executive directorDiploma in Public Relations BComm (Mathematics)Appointed 16 April 2014 Appointed 6 December 2012

Riaan Stassen (62)Independent non-executive directorBComm (Hons), CA(SA)Appointed 14 April 2016

ExecutiveFrancois Johannes Gouws (Francois) (50) Michael Ian Frain Smith (Mike) (47)Chief executive officer Chief financial officerBAcc, CA(SA) BComm (Hons), CA(SA), H Dip Tax, H Dip Company LawAppointed 1 March 2014 Appointed 18 July 2013

SHAREHOLDING OF DIRECTORSThe shareholding of directors in the company as at 29/28 February was as follows:

Audited

Total shareholding Beneficial Non-beneficial 2016

Direct Indirect Direct Indirect Number %

J de V du Toit – – – 12 800 000 12 800 000 1.0FJ Gouws 16 466 161 35 000 000 – – 51 466 161 4.0MIF Smith 105 935 – – 1 916 558 2 022 493 0.2W Theron – – – 23 050 924 23 050 924 1.8

16 572 096 35 000 000 – 37 767 482 89 339 578 7.0

Total shareholding

Audited Beneficial Non-beneficial 2015

Direct Indirect Direct Indirect Number %

J de V du Toit – – – 16 000 000 16 000 000 1.3FJ Gouws 16 215 519 35 000 000 – – 51 202 819 4.1MIF Smith – – – 1 708 279 1 708 279 0.1W Theron – – – 22 450 616 22 450 616 1.8

16 215 519 35 000 000 – 40 158 895 91 361 714 7.2

ORDINARY SHARE ANALYSIS

ShareholdersNumber %

Shares heldNumber %

Range of shareholding1 – 50 000 5 750 91.1 47 301 120 3.750 001 – 100 000 237 3.8 15 842 050 1.2100 001 – 500 000 220 3.5 41 876 519 3.3500 001 – 1 000 000 37 0.6 26 106 304 2.0Over 1 000 000 67 1.0 1 145 662 005 89.8

6 311 100.0 1 276 787 998 100.0Treasury shares 13 2 335 723

6 324 1 279 123 721

Public and non-public shareholdingNon-public

Holding company 1 0.0 790 813 029 61.9Directors and management 18 0.3 122 666 657 9.6

Public 6 292 99.7 363 308 312 28.5 6 311 100.0 1 276 787 998 100.0

No individual shareholders (excluding the holding company, PSG Financial Services Limited) held more than 5% of the issued shares as at 29 February 2016 (2015: Nil).

STATED CAPITAL OF THE COMPANYThe company’s authorised and issued share capital at 29 February 2016 was:

Authorised3 000 000 000 ordinary shares with no par value (2015: 3 000 000 000 ordinary shares with no par value)

Issued1 279 123 721 ordinary shares with no par value (2015: 1 262 484 423 ordinary shares with no par value)*

* Gross of 2 335 723 (2015: 357 875) treasury shares.

Total value of stated capital at 29 February 2016 was R1 446 604 111 (2015: R1 325 111 268).

MATERIAL CHANGESOther than the information disclosed in the condensed consolidated financial statements, no material changes in the financial or trading position of the company and its subsidiaries have occurred between 29 February 2016 and the date of this notice.


DIRECTORATENon-executive directors

W Theron (Chairman), PJ Mouton, J de V du Toit^, PE Burton*, ZL Combi*, R Stassen*

(^ Lead independent; * Independent)

Executive directors

FJ Gouws (Chief executive officer), MIF Smith (Chief financial officer)

COMPANY INFORMATIONCompany secretary

PSG Management Services Proprietary Limited

PSG Konsult head office and registered office

4th Floor, The Edge, 3 Howick Close, Tyger Waterfront, Bellville, Cape Town, 7530

PO Box 3335, Tyger Valley, Bellville, 7536

Listing

Johannesburg Stock Exchange (JSE)

Namibian Stock Exchange (NSX)

Transfer secretary

Computershare Investor Services Proprietary Limited, 70 Marshall Street, Johannesburg, 2001

PO Box 61051, Marshalltown, 2107

Sponsors

JSE sponsor: PSG Capital Proprietary Limited

NSX sponsor: PSG Wealth Management (Namibia) Proprietary Limited

Auditor

PricewaterhouseCoopers Inc.

Cape Town

ADMINISTRATIVE INFORMATIONPSG Konsult Limited (Incorporated in the Republic of South Africa)

(“PSG Konsult” or “the Company”)

Registration number: 1993/003941/06

JSE share code: KST

NSX share code: KFS

ISIN code: ZAE000191417

psg.co.za

GREYMATTER & FINCH 9959

www.psg.co.za

Documents

NOTICE OF ANNUAL GENERAL MEETING FOR THE YEAR ENDED … · Stellenbosch on Friday, 24 June 2016, at 11h00 (the AGM). PURPOSE The purpose of the AGM is to transact the business set