Contents. It s a way of life... The Nictus Philosophy 3. Chairman s Report 4. Group Chief Executive s Report 6. Board of Directors 8

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1 The Nictus Philosophy 3 Chairman s Report 4 Contents Group Chief Executive s Report 6 Board of Directors 8 Executive Committee 10 Geographical Spread 12 Corporate Governance Report 13 Five Year Review of the Group 15 Definitions of Ratios and Terms 16 Group Value Added Statement 17 Consolidated Annual Financial Statements 19 Notice to Shareholders 84 Brief Curriculum Vitae of Retiring Directors 86 Form of Proxy 87 Notes to Proxy 88 It s a way of life...

2 AUAS MOTORS Corporate Guarantee...Still adding colours

3 The Nictus Philosophy Nictus has been very successful in change initiatives. The challenge remains to reach a top level of EXCELLENCE throughout the organisation. The philosophy and core focus will be to drive EXCELLENCE in every aspect of the organisation and through this establish Nictus as a leading entity where we are present. VISION Nictus is an independent diversified investment holding group that creates above average value for shareholders and other stakeholders through sustainable growth. MISSION With a culture of excellence and through a visionary and dynamic leadership we will achieve our vision through: Protecting our independence Expanding our business base in Southern Africa Growing a satisfied customer base Optimising all resources Being innovative and technology driven Being the preferred employer CORE VALUES Individual and collective ownership Teamwork Respect Adaptability Integrity Transparency We are what we repeatedly do. Excellence then, is not an act but a habit. Aristotle (384 BC BC)

4 OVERVIEW It is again a privilege to report on a very successful financial year. The results have surpassed the previous year s record performance in most segments. Chairman s Report Although our motor segment did not repeat its overall performance of last year, it did remarkably well in comparison to the motor industry in the RSA, and maintained its position in Namibia despite economic conditions and stock shortages. Despite the turmoil and volatility which persists in all economies and financial markets, the Nictus Group was again fortunate to be able to maintain a sustainable growth and build shareholders value with a solid capital growth and profit performance. We are particularly satisfied with the performance of the RSA Insurance and Finance segment which helped to underpin our strategy to grow the Nictus RSA operations. Our Namibian division of the Insurance and Finance segment performed exceptionally well. The following summary confirms the above stated: Revenue increased by 4.1% to R385 million; Profit before taxation for the year increased by R3.8 million to R11.7 million; Return on equity of 10.2% was achieved; The Group s asset base increased by 28.8%; The cash position of the Group improved by 45.5% to R238 million; The equity of the Group grew by R20.3 million to R99.2 million; The net asset value per share increased by 25.1% to cents. The process where by the Managing Directors and Boards have each taken ownership of their respective segments, with the Holding Company Board acting as an investment holding company, contributed to the success of the Group, and confirms the Board s previous decisions in this regard. THE FUTURE VIEW The past two year s remarkable performance have placed significant pressure on the structure, personnel and management of the Group. This pressure, and the additional challenge of availability of appropriately skilled labour, mainly in Namibia, will require the Board to consolidate its position in the coming year, once more strengthening the pillars which brought us success. It will also require further attention to risk mitigation on our financial position. The Board will however, endeavour to explore those opportunities which exist for growth, but this will be done, for now, within the capabilities of the Group s structure. Taking cognizance of the state of the two different economies in which we operate, reduced growth of disposable income, and potential stock shortages in the motor segment, we believe that the retail segments will be hard pressed to maintain their past performance. We are however more confident as our Insurance and Finance segment is reaching its targets and maintaining steady growth. 4 Nictus Annual Report

5 Any current planning is however subject to unpredictable influences, from which the respective economic environments in which Nictus operates, cannot be excluded. For this reason this Group will have to remain dynamic in its decision making. The prospects for economic growth of Namibia are promising and the Group expects to benefit from this factor. DIRECTORATE To proceed with our succession planning within the Board, the following steps were taken: - Mr. Wilmar Fourie was appointed on 1 April 2010 as an Executive Financial Director to the Holding Company s Board. Wilmar is a Chartered Accountant and has been part of the executive management of the Group for the past 3 years. He will make a valuable contribution in fulfilling this responsible position. - The Board has finalised the discussions with a candidate for the appointment of a further independent non executive director, which we hope to be effective from the 15th of June This is being done to further strengthen and enlarge the experience of the Board and to comply with the King 3 requirements and the proposed new company law. Both individuals are welcomed to the Board, and we look forward to their valuable contributions. CORPORATE GOVERNANCE This report complies with the Johannesburg Stock Exchange and Namibian Stock Exchange requirements and reflects the various International Financial Reporting Standards. The Board also remains committed to all aspects of Corporate Governance and to manage the Group in a transparent and accountable manner. DIVIDEND The sustained performance of the Group as well as the strengthening of its statement of financial position has enabled the board to maintain its dividend policy of three times cover. APPRECIATION I am privileged to serve on the Board of such a committed team, which remains focused on our Vision and Mission, and has a culture of delivering. I wish to thank, with deep appreciation, my fellow board members for their continued support as well as all our loyal employees, managers and all stakeholders for their co-operation and efforts in building a growing Nictus. What we again achieved this year and what we plan for the coming year is eventually dependent on the Grace of God Almighty. JL Olivier Chairman: Nictus Group Nictus Annual Report

6 OVERVIEW It is with gratitude that I can report that the Group is successfully weathering global economic uncertainty. Group Chief Executive s Report Based on forecasts from various markets, I am of the opinion that the recovery of the global economy will however take longer than initially envisaged and that a period of austerity is unavoidable. As a major role player in the Namibian motor vehicle market, we are acutely aware of the difficulties that were caused by the global meltdown. However, we expect a faster recovery in the Namibian economy, as it was not as severely affected as elsewhere. We believe that uranium exports will speedily replace diamond exports, sustaining economic activity. We also foresee a similar improvement in the South African economy, and are of the opinion that there will be a period of sustainable growth ahead. The Euro remains a significant concern, and we need to be cautious in expectation of gains against the currency going forward. We are of the opinion that after the FIFA World Cup there will be a sustainable growth in the economy. FINANCIAL OVERVIEW The details of the exceptional results are reflected in the Chairman s Report and Annual Financial Statements. SEGMENTAL PERFORMANCE We are satisfied with the performance of all the segments under the existing circumstances. FURNITURE SEGMENT Turnover in the furniture segment increased satisfactorily by 22%. Operating profit has not been maintained due to unforeseen costs in relocating the Windhoek furniture branch. We expect sustainable growth in turnover and operating profit for the coming year in this segment. MOTOR SEGMENT Turnover in the motor segment dropped by 3%. Although the General Motors issue appears to be resolved, we are experiencing inventory shortages on all newly launched products, which will directly affect the bottom line profit. Operating profit decreased by 32% due to lower throughput during the year. We expect marginally better performance in this segment for the coming year. INSURANCE AND FINANCE SEGMENT Our insurance segment once again performed well, with an increase of 31% in premium income. 6 Nictus Annual Report

7 The South African subsidiary is building momentum. We were able to broaden our customer base in South Africa and Namibia. Lower interest rates impacted negatively in this segment and the financing division. We expect to maintain growth in this segment during the coming year. GROWTH STRATEGY Strategically our objectives remain unchanged, and the Group will strive to increase sales from its profit centres. The Group is driving customer acquisition and retention, and will maintain the quality of all debtors books. Product sourcing will be expanded as we aim to maximise this competitive advantage. Organic growth has always been our preferred strategy. We expect considerable consolidation in our industries within the Group due to the contraction of the global economy. HUMAN CAPITAL Focus on human resource management is paying off for the Group. Management monitors the development of human capital in the Group on an ongoing basis. Competition for skilled and experienced people is fierce in the current environment. The Group has a policy of preserving its human capital and therefore this must be matched by prudence in allocation for remuneration. OUTLOOK Trading conditions are expected to remain tough, while external factors such as oil prices and food inflation affect our target markets. We however have an experienced management team that has successfully weathered the global crisis. Brand loyalty plays an increasing role in tough times, and the Group has a portfolio of well established brands with a loyal customer base. APPRECIATION I would like to express my gratitude to the dedication and contribution of our management and staff in achieving the excellent results. I would like to thank our suppliers and manufacturers, our business partners, the investment and financial community and the media for their support. We are committed to serving our customers and thank them for the loyalty they continue to show towards our brands. N.C. Tromp Group Chief Executive Nictus Annual Report

8 J.L. Olivier (63) Board of Directors N.C. Tromp (61) Group Chief Executive B.Com Independent Non-executive Chairman B.Com Chairman of Remuneration Committee Member of Audit Committee F.R. van Staden (46) Director Managing Director: Motor Retail CA (SA), CA (NAM) Chairman of Risk Committee 8 Nictus Annual Report

9 J.N. Campbell (70) Independent Non-executive Director CA (SA) Chairman of Audit Committee Member of Remuneration Committee J.J. Retief (45) Director: Human Resources Managing Director: Furniture Retail B.Com Member of Risk Committee W.O. Fourie (34) Director: Finance CA (SA), CA (NAM) Member of Risk Committee Nictus Annual Report

10 N.C. Tromp (61) Group Chief Executive B.Com Executive Committee F.R. van Staden (46) Director Managing Director: Motor Retail CA (SA), CA (NAM) J.J. Retief (45) Director: Human Resources Managing Director: Furniture Retail B.Com 10 Nictus Annual Report

11 G.W. Swart (50) Managing Director: Corporate Guarantee (South Africa) Ltd CAIB (Institute Bankers) P.J. DE W. Tromp (35) Managing Director: Financial Services (Namibia) B.Com EDP: USB, SMP: USB W.O. Fourie (34) Director: Finance CA (SA), CA (NAM) G.R. DE V. Tromp (28) Group Company Secretary B. Com Marketing, B Compt Hons (CTA) Nictus Annual Report

12 Geographical Spread It s a way of life... NAMIBIA Tsumeb Windhoek Swakopmund Walvis Bay Gobabis Mariental SOUTH AFRICA Louis Trichardt Polokwane Randburg Cape Town Furniture retail Motor retail Insurance & Finance 12 Nictus Annual Report

13 Corporate Governance Report It s a way of life... The board of directors of Nictus accepted the challenge to achieve a top level of excellence, manageable throughout the organisation. The board is therefore committed to the highest levels of corporate governance, as set out in the King reports. Throughout the business unit s of the group, we pro-actively strive to achieve excellent corporate governance and best practice. We recognise that, maintaining and continuously improving these standards, integrity and ethics, will have a positive effect in every aspect of our business, our bottom-line and equity performance in the long run. The board therefore acknowledge its responsibility to ensure that business within the group is conducted with transparency, prudence, justice, accountability and integrity and take pride to account therefore in accordance with International Financial Reporting Standards (IFRS) and the Companies Act of South Africa in the best interests of all stakeholders. The board is satisfied that the provisions of the second King Report on Corporate Governance for South Africa had been materially complied with for the reporting period. MAJOR CONTRIBUTORS As governance structures are dynamic, the Nictus Group reviews and reassesses its corporate governance practices on an ongoing basis and maintains a strong drive to identify and implement global best practice. Although the following also stays on the charts for continuous review and improvement, it stands out as the major factors that contributed to our success with regard to excellent corporate governance. The Group s flat hierarchical and reporting structure allows close contact between managers and employees. This in turn ensures good control of conduct and practice and allows quick notice of exceptions. Well suited and empowered management and talented people in general. The Group developed sound practices of selecting, retaining and developing talent. Excellent internal processes and systems, including specially developed software, sound IT systems and support, clear policy and procedures. A clear framework of approval. Clear framework of responsibilities, objectives and task descriptions, in conjunction with well established and effective team structures. Close relationships with customers up to the level of the managing director. A number of board appointed committees have been established to assist the board in discharging its responsibilities. The membership, attendance and principal functions of these committees are set out below: BOARD OF DIRECTORS The board, which meets at least four times a year, currently consists of five directors, two non-executives and three executives. Directors appointments are made in terms of formal and transparent procedures applied by the audit committee. There is a clear division of responsibilities at board level to ensure a balance of power and authority, such that no one individual has unfettered powers of decision-making. The non-executive directors are independent of the company management and they bring appropriate qualities of expertise to the board. They have full access to company employees and, if necessary, company funded external professional advice. In terms of the company s articles of association, every year one-third of the directors must retire in rotation. These directors may be re-elected. Details of directors emoluments and beneficial interest in shares of the company are provided in notes to the annual financial report. The directors collectively determine major strategies and policies. Their responsibilities include the development and maintenance of a system of control, the maintenance of adequate accounting records and the preparation of annual financial statements. REMUNERATION COMMITTEE The remuneration committee, meets twice a year and consists of two non-executive directors, the group chief executive (ex officio) and the executive director handling the human resource function may attend on invitation. The committee is chaired by a non-executive director, and details of the members are provided in the annual report. This committee: Provides guidance for group remuneration in general. Reviews remuneration recommendations of senior management to the board. Confirms that recommendations are market related for senior management. Ensures that recommendations comply with policy and sound governance principles. AUDIT COMMITTEE The company has an audit committee which operates under an approved charter, the members of which are all nonexecutive directors. The committee is chaired by an independent non-executive director. The group chief executive, the financial director and the group financial manager and at least one representative of the external auditors and internal audit are required to attend the audit committee. The audit committee has a formal charter against which its effectiveness is annually measured. Under the terms of reference, the committee s key duties include: Determining whether management has created and maintained an effective control environment and that they demonstrate and stimulate the necessary respect for the internal audit control structure amongst all parties. Nictus Annual Report

14 14 Nictus Annual Report It s a way of life... Reviewing the scope and outcome of audits. The review will include an assessment of the efficacy of the audit function, ensuring that emphasis is placed in areas where the committee, management and auditors believe special attention is necessary. Ensuring that the board of directors makes informed decisions and is aware of the implications of such decisions regarding accounting policies, practices and disclosures. Providing a safeguard of director s liabilities by informing the board of directors on issues of importance to the business and the status of the financial reporting The audit committee does not only rely on the internal control processes but receives and regularly reviews the findings of both the internal and external auditors covering: system of internal control; compliance with relevant laws and regulations; and the credibility, independence and objectivity of the external auditor The audit committee has adopted a policy limiting the consulting work of the auditors apart from their work as external auditors. Prior approval of any consulting work is required. The external auditors have unrestricted access to the audit committee members. RISK MANAGEMENT COMMITTEE The risk management committee s primary task is to ensure that a risk management framework as provided for in its charter, together with its compliance framework, exists and is implemented and monitored regularly. Risk management meetings are held at least twice a year. The committee was established to formalise the risk management process. The committee reports to the Board of directors twice a year on the risks areas identified in the Group. Each year a zero based analysis for the group is performed by the committee. INTERNAL AUDIT The internal audit function operates under the charter for the internal audit function and has been approved by the Board. The internal audit function, although partially functional during the year, proved to be ineffectual necessitating structural revision. This resulted in the external auditors being unable to rely on this important support source, as had been anticipated, and necessitated them revising their audit approach accordingly. A review of the internal audit structure and approach has been considered in depth and is being extensively revised for reintroduction during the coming year. FINANCIAL REPORTING AND CONTROLS Stakeholders are kept informed through formal communication of the interim report and annual report. The directors responsibilities regarding the systems of control and financial statements are disclosed in their statement of approval on page 21 of the annual report. The systems of control are based on established organisational structures and written policies and procedures. The effective functioning of these controls, procedures and systems are verified by the internal and external auditors. The group internal audit department will co-ordinates the internal audit functions and reports to the audit committee on the coverage and possible breakdowns in the systems of control. CODE OF ETHICS All employees of Nictus are required to maintain high standards of behaviour, integrity and ethics to ensure that the business is conducted in a proper manner. Personal conduct and customer relations are sufficiently documented by the company to guide the behaviour of all employees. The company is committed to the principle of equality of employment opportunity to enable it to carry on its business in a fair, commercially competitive manner. GOING CONCERN The directors test the going concern basis for the preparation of financial statements at the year end and reconsider this conclusion at the interim reporting period. The directors have sufficient reason to believe that the group has adequate resources to continue operating as a going concern. Board and Committee Members and Attendance: Name Board Remuneration Audit Risk Total meetings Scheduled NC Tromp FR van Staden JJ Retief JL Olivier JN Campbell All directors attended a two day strategic session.

15 Five Year Review of the Group It s a way of life R' 000 R' 000 R' 000 R' 000 R' 000 STATEMENTS OF FINANCIAL POSITION Assets Non-current assets 379, , , , ,731 Current assets 429, , , , ,696 Total assets 808, , , , ,427 Equity and liabilities Total shareholders' equity 99,158 78,856 70,327 65,531 43,823 Minority interest ,031 Non-current liabilities 23,245 30,072 21,135 20,666 22,552 Current liabilities* 686, , , , ,021 Total equity and liabilities 808, , , , ,427 STATEMENTS OF COMPREHENSIVE INCOME Revenue 384, , , , ,649 Operating profit** 16,970 13,211 12,719 10,649 6,425 Financing costs (5,229) (5,265) (5,536) (5,407) (5,235) Share of profits of associates Profit before taxation 11,741 7,946 7,183 5,930 1,295 Taxation (1,661) 2,097 (486) 87 1,792 Profit for the year 10,080 10,043 6,697 6,017 3,087 Attributable to: Equity holders of the parent 10,080 10,043 6,697 6,501 3,004 Minority interest (484) 83 Profit for the year 10,080 10,043 6,697 6,017 3,087 Ordinary dividends (R'000) 3,340 2,138 2, Number of ordinary shares issued 53,443,500 53,443,500 53,443,500 53,443,500 53,443,500 Treasury shares 265, ,250 1,779,125 1,985,193 - Weighted average number of shares 53,177,875 52,912,250 51,664,375 51,458,307 53,443,500 KEY RATIO'S Performance per ordinary share Earnings (share) Headline earnings (cents) Dividends (cents) Net worth (cents) Profitability and asset management Net operating income** to turnover (%) Return on assets managed (%) Net asset turn (times) Return on shareholders' equity (%) Liquidity Interest cover (times) Dividend cover (times) Borrowings ratio Liability ratio Current ratio Johannesburg / Namibian Stock Exchange performance Market price (cents) High Market price (cents) Low At year end Price earnings ratio Earnings yield (%) Volume of shares traded to weighted number of issued shares (%) Market capitalisation (R' 000) 46,190 51,276 34,738 32,066 26,722 * Included in current liabilities is the insurance contract liability (refer note 21). Premiums received under this liability are invested in terms of the respective insurance acts enacted in Namibia and South Africa with the result that certain investments are of a long term nature. ** Amounts stated before taking into account finance costs and share of profits from associates. Nictus Annual Report

16 Definitions of Ratios and Terms It s a way of life... EARNINGS PER SHARE Profit or loss for the year after adjusting for outside shareholders interest, divided by the weighted average number of shares in issue during the year. WEIGHTED AVERAGE NUMBER OF SHARES IN ISSUE DURING THE YEAR The number of shares determined by relating the number of days within the year that a particular number of shares have been entitled to share in earnings to the total number of days in the year. HEADLINE EARNINGS PER SHARE Headline earnings divided by the weighted average number of shares in issue during the year. DIVIDENDS PER SHARE Dividends for the year divided by the number of shares in issue at the date of each dividend declaration. NET WORTH PER SHARE Equity attributable to equity holders of the parent divided by the number of ordinary shares in issue at year end. OPERATING PROFIT TO TURNOVER Operating profit before financing costs divided by revenue. RETURN ON ASSETS MANAGED Operating profit before financing costs expressed as a percentage of average net assets. AVERAGE NET ASSETS The sum of net assets at the end of the current year and the previous year, divided by two. NET ASSETS Total assets less non-interest bearing debt and insurance contract liabilities also equivalent to total equity and liabilities plus current interest bearing liabilities. NET ASSET TURN Revenue divided by average net assets. RETURN ON SHAREHOLDERS EQUITY Profit or loss attributable to the equity holders of the parent for the year expressed as a percentage of equity attributable to the equity holders of the parent. INTEREST COVER Operating profit or loss before financing costs divided by financing costs. DIVIDEND COVER Headline earnings divided by ordinary dividends paid in the current year. BORROWINGS RATIO The sum of current and non-current interest bearing borrowings to the sum of total equity and deferred taxation. LIABILITY RATIO The sum of non-current interest bearing borrowings and current liabilities to total equity and deferred taxation. CURRENT RATIO Current asset to current liabilities. PRICE EARNINGS RATIO Market price at year end to headline earnings per share. EARNINGS YIELD (%) Headline earnings per share to market price at year end. 16 Nictus Annual Report

17 Group Value Added Statement It s a way of life R'000 R'000 Wealth created Revenue 384, ,529 Investment income 31,677 20,321 Cost of material and services (365,797) (339,488) 50,467 50,362 Applied as follows % R'000 % R'000 Employees -Salaries, wages and other benefits 54 27, ,410 Government -Taxation 4 2, Providers of capital -Finance cost 11 5, ,265 -Dividends 7 3, ,138 Re-invested to support future growth: 24 12, ,642 Depreciation and amortisation 4 2, ,599 Profit attributable to equity holders of the parent 20 10, , , ,362 R.S.A. Namibia Direct and indirect taxes % R'000 % R'000 Value added tax 52 2, ,278 PAYE ,182 Company tax Secondary taxation on companies 33 1, , ,525 Nictus Annual Report

18 Consolidated Annual Financial Statements for the year ended 31 March 2010 Independent Auditor s Report 20 Directors Responsibilities and Approval 21 Contents Directors Report to the Members of Nictus Limited 23 Statements of Financial Position 26 Statements of Comprehensive Income 27 Statements of Changes in Equity 28 Statements of Cash Flows 30 Significant Accounting Policies 31 Notes to the Consolidated Annual Financial Statements 43 It s a way of life... Nictus Annual Report

19 Independent Auditor s Report It s a way of life... To the shareholders of Nictus Limited We have audited the group annual financial statements and annual financial statements of Nictus Limited, which comprise the statements of financial position as at 31 March 2010, the statements of comprehensive income, the statements of changes in equity and statements of cash flows for the year then ended and notes to the financial statements, which include a summary of significant accounting policies and other explanatory notes and the directors report as set out on pages 23 to 83. Directors Responsibility for the Consolidated Annual Financial Statements The company s directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and in the manner required by the Companies Act of South Africa, This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, these financial statements present fairly, in all material respects, the consolidated and separate financial position of Nictus Limited at 31 March 2010, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards, and in the manner required by the Companies Act of South Africa, KPMG Inc Registered Auditor Per: Nicolaas Botha Chartered Accountant (SA) Registered Auditor Director 14 June Empire Road, Parktown, South Africa, 2193 Private Bag 9, Parkview, South Africa, Nictus Annual Report

20 Directors Responsibilities and Approval It s a way of life... The directors are required by the Companies Act of South Africa, 1973, to maintain adequate accounting records and are responsible for the content and integrity of the Company and Group annual financial statements and related financial information included in this report. It is their responsibility to ensure that the financial statements fairly present the state of affairs of the Company and Group as at the end of the financial year and the results of their operations and cash flows for the period then ended, in conformity with International Financial Reporting Standards. The external auditors are engaged to express an independent opinion on the Group and Company financial statements. The financial statements are prepared in accordance with International Financial Reporting Standards and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgments and estimates. The directors acknowledge that they are ultimately responsible for the system of internal financial control established by the Group and place considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the board sets standards for internal control aimed at reducing the risk of error or loss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the Group and all employees are required to maintain the highest ethical standards in ensuring the Group s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the Group is on identifying, assessing, managing and monitoring all known forms of risk across the Group. While operating risk cannot be fully eliminated, the Group endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints. The directors are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss. The directors have reviewed the Group s and Company s cash flow forecast for the year to 31 March 2011 and, in the light of this review and the current financial position, they are satisfied that the Group and Company has access to adequate resources to continue in operational existence for the foreseeable future. The directors have made an assessment of the Group and Company s ability to continue as a going concern and there is no reason to believe that the businesses will not be going concerns in the year ahead. The auditor is responsible for reporting on whether the consolidated annual financial statements and separate financial statements are fairly presented in accordance with the applicable financial reporting framework. Approval of the Group annual financial statements The consolidated annual financial statements and separate financial statements of Nictus Limited which have been prepared on the going concern basis, were approved by the board on 14 June 2010 and were signed on its behalf by: NC Tromp FR van Staden Windhoek Nictus Annual Report

21 Directors Responsibilities and Approval - (continued) Certificate of the Company secretary for the year ended 31 March 2010 In our opinion as Company secretary, we hereby confirm, in terms of the Companies Act of South Africa, 1973, that for the year ended 31 March 2010, the Company has lodged with the Registrar of Companies all such returns as are required of a public Company in terms of this Act and that all such returns are true, correct and up to date. Veritas Board of Executors (Pty) Ltd Company Secretary 3rd Floor Corporate House 17 Lüderitz Street Windhoek... Namibia 14 June 2010 Report of the audit committee The Group audit committee is in compliance with the Corporate Laws Amendment Act. The committee members are all independent non-executive directors of the Group. Four audit committee meetings were held during the year during which the members fulfilled all their functions as prescribed by the Companies Act of South Africa. A detailed list of the functions of the audit committee is contained in the corporate governance report. Per the JSE listing requirements, the audit committee must consider and be satisfied, on an annual basis, of the appropriateness of the expertise of the financial director and the Company must confirm this by reporting to the shareholders in its annual report that the audit committee has executed this responsibly. In respect of the above, we believe that FR van Staden, the Group financial director, possesses the appropriate expertise and experience to meet his responsibility in that position. The audit committee has satisfied itself that the auditors are independent of the Group and are thereby able to conduct their audit functions without any influence from the Group. JN Campbell Chairman audit committee 22 Nictus Annual Report

22 Directors Report to the Members of Nictus Limited It s a way of life... Your directors have pleasure in reporting on the activities and financial results of the Group for the year ended 31 March Review of subsidiaries Details of subsidiaries are dealt with in note 7 of the consolidated annual financial statements R'000 R'000 The interest of the company in the aggregate net profit after tax of subsidiaries is: Profit after taxation 38,993 37,385 The subsidiaries of this Company are mainly involved in furniture retail, motor retail, immovable properties, short-term insurance and financing in South Africa and Namibia. Financial results For the year under review the Group's profit before taxation amounted to R 11,741 million compared to R 7,946 million in the previous year. The Company's profit before taxation for the year was R 1,060 million compared to a profit of R 0,873 million for The profit for the year for the Group was R 10,080 million against a profit of R 10,043 million in the previous year. The loss for the year for the Company was R 0,840 million compared to a profit of R 0,873 million for Segmental analysis A detailed segmental analysis is included in note 43 of the consolidated annual financial statements. Directors Citizenship Date of appointment Executive N.C. Tromp (Group chief executive) Namibian 27 April 1979 F.R. van Staden Namibian 1 April 1997 J.J. Retief Namibian 1 April 2006 W.O. Fourie Namibian 1 April 2010 Independent Non Executive J.L. Olivier (Chairman) South African 17 July 1989 J.N. Campbell South African 1 March 2006 Dividends Preference dividend paid - On 30 September On 31 March Ordinary dividend paid The following dividend was declared and paid by the Group for the year ended 31 March ,25 cents for 2010 and 4,00 cents per share for ,340 2,138 Since 31 March 2010, the following dividend was proposed and approved by the directors for The dividend has not been provided for and there are no accounting implications for the current financial year. 6,25 cents per share (2009: 6,25 cents per share) 3,340 3,340 Last date to trade ordinary shares "cum" dividend Friday 16 July 2010 Ordinary shares trade "ex" dividend Monday 19 July 2010 Record date Friday 23 July 2010 Payment/issue date Monday 26 July 2010 Share certificates may not be dematerialised or rematerialised between Monday 19 July and Friday 23 July 2010 both days inclusive. By order of the Board Nictus Annual Report

23 Directors Report to the Members of Nictus Limited - (continued) Management of the group The operations of the Group have been managed partly by companies in which Messrs NC Tromp (Tromp Consulting International (Pty) Ltd), FR van Staden (Premier Services (Pty) Ltd) and JJ Retief (H&Z Properties (Pty) Ltd) have material interest. Number of Number of shareholders % shares % Ordinary shares Composition of shareholders Non-public shareholders ,954, Directors and associates ,019, Strategic Holdings (more than 10%) ,670, Share Trust , Public shareholders ,488, ,443, Distribution of shareholders Number of Number of shareholders % shares % Ordinary shares Banks , Close Corporations , Endowment Funds , Individuals ,849, Investment Companies Nominees & Trusts ,610, Other Corporations , Private Companies ,740, Public Companies ,626, Treasury shares Share trust , Unlisted cumulative redeemable preference shares ,443, Held by non-public shareholders ,000, Shareholders with an interest above 5% in ordinary shares: N.C. Tromp (Director) 27,022, Ultra Investments (Pty) Ltd 7,568, KCB Trust 5,670, Interest of directors, including their families, in share capital Number of shares Indirect interests Beneficial N.C. Tromp 27,022,640 26,655,540 Non-beneficial N.C. Tromp 3,976,694 3,976,694 F.R. van Staden 1,479, ,231 J. J Retief 1,176, ,293 J.L. Olivier 574, ,438 34,229,334 32,975,196 Directors share incentive scheme grants Directors participate in the Group s share option and incentive scheme, which are designed to recognise the contributions of senior staff to the growth in the value of the Group s equity and to retain key employees. Within the limits imposed by the Company s shareholders, options are allocated to the directors and senior staff in proportion to their contribution to the business as reflected by their seniority and the Company s performance. The options, which are allocated at a price determined by the directors, in terms of a resolution and the applicable JSE Limited rules, vest after stipulated periods and are exercisable over a ten-year period in terms of the trust deed rules. Share option allocations are considered annually and are recommended by the trustees of the share trust and approved by the Board of directors. 24 Nictus Annual Report

24 Directors Report to the Members of Nictus Limited - (continued) Analysis of executive directors' share options as at 31 March 2010 Opening balance Granted Entitlements under share options Share options excercised Share options lapsed Closing balance Gain on exercise of share options N.C. Tromp 106,250-53,125-53,125 18,594 F.R. van Staden 106,250-53,125-53,125 18,594 J.J. Retief 106,250-53,125-53,125 18, , , ,375 55, March 2009 N.C. Tromp 306, , ,250 90,000 F.R. van Staden 306, , ,250 90,000 J.J. Retief 287, , ,250 81, , , , ,563 Beneficial and non-beneficial shareholding The aggregate beneficial holdings at 31 March 2010, held by the directors of the Company and their immediate families, in the issued shares of the Company and details of future entitlements under the share option scheme and share incentive arrangements are detailed below. Executive directors' shareholding at Number of fully paid shares held 31 March 2010 Direct Indirect Future entitlements under share option scheme N.C. Tromp - 30,999,334 53,125 F.R. van Staden - 1,479,287 53,125 J.J. Retief - 1,176,275 53,125-33,654, , March 2009 N.C. Tromp - 30,632, ,250 F.R. van Staden - 961, ,250 J.J. Retief - 807, ,250-32,400, ,750 Post balance sheet events No material facts or circumstances have occurred between the accounting date and the date of this report. Share capital There were no new shares issued during the year. The 46,556,500 unissued ordinary shares remain under the control of the directors with the authority to allot and issue such shares at their sole discretion until the next annual general meeting of the shareholders of Nictus Limited. Secretary Veritas Board of Executors (Proprietary) Limited, Private Bag 13231, 3rd Floor Corporate House, 17 Lüderitz Street, Windhoek. Registered offices Republic of South Africa Nictus Limited Corner of Pretoria and Dover Street, Randburg P O Box 2878, Randburg, 2125 Namibia Nictus Limited 3rd Floor, Corporate House 17 Lüderitz Street, Windhoek Private Bag 13231, Windhoek Windhoek... Namibia 14 June 2010 Nictus Annual Report

25 Statements of Financial Position - as at 31 March 2010 Group Company Figures in thousands of Rand Note(s) Assets Non-Current Assets Investment property 3 16, Property, plant and equipment 4 73,109 55, Goodwill 5 1,647 1, Intangible assets Investments in subsidiaries ,730 85,276 Investments 8 31,036 20, Deferred tax assets 9 14,535 13,992 2,280 2,280 Loans and receivables , ,543-2, , ,614 33,101 90,599 Current Assets Inventories 11 45,887 40, Current tax receivable Loans to group companies ,811 9,492 Trade and other receivables , , ,558 Cash and cash equivalents , , Assets classified as held for sale 15-2, , ,166 21,690 11,105 Total Assets 808, ,780 54, ,704 Equity and Liabilities Equity Share capital 16 26,589 26,456 26,722 26,722 Reserves 17&18 51,713 33, Retained earnings 20,856 18,409 5,540 9,720 99,158 78,856 32,262 36,442 Liabilities Non-Current Liabilities Loans from group companies ,000 18,500 Interest bearing loans and borrowings 20 11,936 21, Deferred tax liabilities 9 11,309 8, ,245 30,072 10,000 18,500 Current Liabilities Bank overdraft 14 17,452 14,389 4,043 3,098 Loans from group companies ,061 34,982 Interest bearing loans and borrowings 20 45,142 50,558-6,776 Insurance contract liability , , Trade and other payables 22 49,018 39,876 2,425 1,906 Current tax payable , ,852 12,529 46,762 Total Liabilities 709, ,924 22,529 65,262 Total Equity and Liabilities 808, ,780 54, , Nictus Annual Report

26 Statements of Comprehensive Income - for the year ended 31 March 2010 Group Company Figures in thousands of Rand Note(s) Revenue , ,529 1,123 11,339 Cost of sales (301,497) (289,512) - - Gross profit 83,090 80,017 1,123 11,339 Other income 24 3,758 3, Operating expenses (60,008) (57,460) (3,040) (6,543) Investment income from operations 26 26,606 17,083 3, Administrative expenses (41,547) (33,349) (743) (1,558) Results from operating activities 25 11,899 9, ,803 Investment income 26 5,071 3,238 4,425 6,377 Finance expenses 27 (5,229) (5,265) (3,729) (9,307) Profit before taxation 11,741 7,946 1, Taxation 28 (1,661) 2,097 (1,900) - Profit/(loss) for the year 10,080 10,043 (840) 873 Other comprehensive income: Gains and losses on property revaluation 16, Taxation related to components of other (2,929) comprehensive income Other comprehensive income for the year 29 13, net of taxation Total comprehensive income/(loss) 23,509 10,043 (840) 873 Profit/(loss) attributable to: Owners of the parent 10,080 10,043 (840) 873 Non-controlling interest ,080 10,043 (840) 873 Total comprehensive income/(loss) attributable to: Owners of the parent 23,509 10,043 (840) 873 Non-controlling interest ,509 10,043 (840) 873 Basic earnings per share (cents) Diluted earnings per share (cents) Nictus Annual Report

27 Statements of Changes in Equity - for the year ended 31 March 2010 Figures in thousands of Rand Share capital Revaluation reserve Contingency reserve Total reserves Retained earnings Total equity Group Balance at 01 April ,832 17,002 10,693 27,695 16,800 70,327 Changes in equity Total comprehensive income for the year Profit for the year ,043 10,043 Transfer from treasury shares Transfer to contingency reserve - - 6,296 6,296 (6,296) - Dividends to equity holders (2,138) (2,138) Total changes 624-6,296 6,296 1,609 8,529 Balance at 01 April ,456 17,002 16,989 33,991 18,409 78,856 Changes in equity Total comprehensive income for the year Profit for the year ,080 10,080 Revaluation of property - 13,429-13,429-13,429 Transfer from treasury shares Transfer to contingency reserve - - 4,293 4,293 (4,293) - Dividends to equity holders (3,340) (3,340) Total changes ,429 4,293 17,722 2,447 20,302 Balance at 31 March ,589 30,431 21,282 51,713 20,856 99,158 Note(s) Nictus Annual Report

28 Statements of Changes in Equity - for the year ended 31 March 2010 Figures in thousands of Rand Share capital Revaluation reserve Contingency reserve Total reserves Retained earnings Total equity Company Balance at 01 April , ,985 37,707 Changes in equity Total comprehensive income for the year Profit for the year Dividends to equity holders (2,138) (2,138) Total changes (1,265) (1,265) Balance at 01 April , ,720 36,442 Changes in equity Total comprehensive income for the year Loss for the year (840) (840) Dividends to equity holders (3,340) (3,340) Total changes (4,180) (4,180) Balance at 31 March , ,540 32,262 Note(s) Nictus Annual Report

29 Statements of Cash Flows - for the year ended 31 March 2010 Group Company Figures in thousands of Rand Note(s) Cash flows from operating activities Cash generated from/(utilised in) operations , ,254 (7,246) 3,927 Investment income from operations received 9,850 6, Dividends received 16,756 10,344 3, Finance expenses paid (5,229) (5,265) (3,729) (9,307) Tax paid 32 (2,689) (105) - - Net cash movement in operating activities 171, ,967 (7,975) (4,880) Cash flows from investing activities Expansion of property, plant and equipment 4 (3,709) (3,041) (188) (28) Proceeds on sale of property, plant and equipment Acquisition of investment property 3 (14,097) Purchase of intangible assets 6 (186) (169) - - Acquisition of investments (10,366) (7,120) (3,500) (5,090) Investment income received 5,071 3,238 4,425 6,377 Proceeds from disposal of investment - 3,288 58,046 - Intergroup loan advances made - - (7,167) (21,790) Loans and receivables (advanced) / repaid (55,494) (64,224) 2, Net cash movement in investing activities (78,513) (67,931) 54,583 (20,499) Cash flows from financing activities Movement in treasury shares (Decrease)/increase in interest bearing loans and (15,139) 30, borrowings Repayment of interest bearing loans and - - (15,276) (117) borrowings Dividends paid 33 (3,340) (2,138) (3,340) (2,138) Intergroup loans (repaid) / raised - - (28,921) 33,442 Net cash movement in financing activities (18,346) 29,218 (47,537) 31,187 Total cash movement for the year 74,475 73,254 (929) 5,808 Cash and cash equivalents at the beginning of the 163,507 90,253 (3,043) (8,851) year Total cash and cash equivalents at end of the year , ,507 (3,972) (3,043) 30 Nictus Annual Report