Sygnia : Annual Financial Statements - September 2022

SYGNIA LIMITED

ANNUAL FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2022

AUDITED

(REGISTRATION NUMBER: 2007/025416/06)

These financial statements have been audited in compliance with the applicable requirements of the Companies Act

71 of 2008 of South Africa and have been prepared under the supervision of Mr RA Ismail CA (SA).

SYGNIA LIMITED

DIRECTORS' RESPONSIBILITY FOR FINANCIAL REPORTING

FOR THE YEAR ENDED 30 SEPTEMBER 2022

The directors are responsible for the preparation and fair presentation of the annual financial statements of Sygnia Limited ("the Company"). The annual financial statements comprise the directors' report, report by the company secretary, the audit and risk committee's report and the financial statements. The financial statements comprise the statement of financial position at 30 September 2022, and the statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and the notes to the financial statements which include a summary of significant accounting policies and other explanatory notes. The financial statements have been prepared in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board ("IASB"), Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council and the requirements of the Companies Act of South Africa.

The directors are also responsible for such internal control as they determine is necessary to enable the preparation of annual financial statements that are free from material misstatement, whether due to fraud or error, and for maintaining adequate accounting records and an effective system of risk management.

The directors have made an assessment of the ability of the Company to continue as a going concern and have no reason to believe that the business will not be a going concern in the year ahead.

The auditor is responsible for reporting on whether the financial statements are fairly presented in accordance with the applicable financial reporting framework.

Approval of annual financial statements

The annual financial statements were approved by the board of directors and signed on its behalf by:

…………………………………………………	…………………………………………………
MA Sirkot	DR Hufton
5 December 2022

REPORT BY THE COMPANY SECRETARY

FOR THE YEAR ENDED 30 SEPTEMBER 2022

In terms of S88(2)(e) of the Companies Act 2008, as amended and for the year ended 30 September 2022, I, Glen MacLachlan, in my capacity as company secretary of Sygnia Limited, hereby certify that Sygnia Limited has lodged all returns required by the Act with the Companies and Intellectual Property Commission and that all such returns are true, correct and up to date.

…………………………………………………

Glen MacLachlan

5 December 2022

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SYGNIA LIMITED

DIRECTORS' REPORT

FOR THE YEAR ENDED 30 SEPTEMBER 2022

The directors have pleasure in presenting their report on the activities of Sygnia Limited ("the Company") for the year ended 30 September 2022.

Legal form and domicile

The Company's country of incorporation and domicile is South Africa and its registered office is 7th Floor, The Foundry, Cardiff Street, Green Point, Cape Town, 8001, South Africa.

Main business and operations

The Company is a holding company whose subsidiaries are involved in the provision of investment management and related services. The results, stated capital and dividends paid for the current and previous years are set out in the financial statements.

Events subsequent to the reporting date

The dividend proposed and approved by the directors is set out in the financial statements.

The directors are not aware of any matters or circumstances, arising since the end of the financial period, not otherwise dealt with in the annual financial statements that significantly affect the financial position of the Company or the results of its operations.

Consolidation

Consolidated annual financial statements incorporating the Company's interest in its subsidiaries have been prepared. These consolidated annual financial statements incorporate the full directors' report. A copy of the consolidated annual financial statements is available from its registered offices, 7th Floor, The Foundry, Cardiff

Directors
The directors in office during the year were as follows:
	Date of Appointment
MF Wierzycka (Chairperson) #	17 September 2007
DR Hufton (CEO) #	01 September 2018
MA Sirkot (Financial Director) #	16 January 2019
WA Wierzycki #	10 June 2021
G Cavaleros (Lead Independent) *	28 June 2019
HI Bhorat *	11 June 2015
MH Jonas *	01 September 2018
C Appana *	8 September 2020
J Boyd *	29 July 2021
* Independent Non-executive Director
# Executive Director

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SYGNIA LIMITED

AUDIT AND RISK COMMITTEE REPORT

FOR THE YEAR ENDED 30 SEPTEMBER 2022

The Sygnia Group Audit and Risk Committee (ARC) is a committee of the board of directors (board). In addition to its statutory duties, the ARC acts in an advisory capacity to the board in discharging its duties relating to the safeguarding of assets, the operation of adequate systems, risk management and internal controls, the review of financial information and the preparation, by management, of IFRS compliant annual financial statements. This also includes satisfying the board that adequate internal financial controls are in place.

Terms of reference, responsibilities and legal requirements

The ARC operates in terms of a formal board-approved charter which is reviewed and adapted by the Committee annually (or more regularly where required) to cater for evolving oversight, regulatory and other requirements. As part of the annual evaluation of the board, the performance of the ARC was also assessed and found to be satisfactory. The ARC is satisfied that it has conducted its affairs and discharged its duties and responsibilities in accordance with its terms of reference, the JSE Listings Requirements, the Companies Act and the King IV™ Report on Corporate Governance.

Composition and meeting process

The ARC's members at the Company's financial year-end were Mr G Cavaleros, Ms C Appana and Mr J Boyd. The committee's members are independent non-executive directors who met four times during the year with senior management, including the Financial Director, the head of risk, certain other executive management as well as the assurance providers. The internal and external auditors have unfettered access to the ARC and its chairman and attend the Committee meetings.

External audit quality, independence and fees

The ARC considered and satisfied itself with the audit quality (including the audit approach and plan) and independence of Mazars and Ms Y Ferreira in their respective capacities as the appointed external audit firm and lead audit partner. In doing so, the ARC considered the external auditor's suitability assessment and adherence in terms of paragraph 3.84(g)(iii) and section 22.15(h) of the JSE Listings Requirements. The ARC also reviewed the audit quality based on the Committee's own assessment in addition to considering the documents presented by Mazars, as required by the JSE Listings Requirements, and found it to be satisfactory.

Furthermore, the ARC ensured that the scope of non-audit services rendered by Mazars did not threaten auditor independence.

The ARC will recommend to shareholders at the Group's annual general meeting that Mazars be re-appointed as the Company's auditors and Ms Y Ferreira as the designated partner for the year ending 30 September 2023.

Section 92 of the Companies Act requires the rotation of the designated auditor (i.e., the audit engagement partner) after a tenure of five consecutive financial years for companies that are required by the Companies Act or the Companies Regulations to have their annual financial statements audited. Ms Ferreira's tenure will expire at the conclusion of the 2023 audit. The Committee will ensure that the Section 92 rotation provisions are complied with.

Internal audit and internal controls

Mr D Hufton, the Group CEO, continues as head of the internal audit control function, with PwC, led by Mr W de Bruin, continuing to perform the internal audit activities in terms of an outsourced service arrangement. Internal audit has unrestricted access to those charged with governance. The ARC approved and monitored the risk-based internal audit plan, considered the results of the reviews performed by internal audit, and obtained assurance that processes have been implemented by management to ensure that the necessary corrective action is taken to address internal audit's findings. In respect of in-scope areas, internal audit has not identified any significant weakness in the design, implementation or operating effectiveness of the Group's internal financial controls (IFCs) as well as its information systems general controls.

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SYGNIA LIMITED

AUDIT AND RISK COMMITTEE REPORT

FOR THE YEAR ENDED 30 SEPTEMBER 2022

In addition, Mazars conducted an International Standard on Assurance Engagements 3402 (ISAE 3402) Type 2 review of key internal controls at Sygnia Life Limited, Sygnia Asset Management Proprietary Limited, and Sygnia Collective Investments (RF) Proprietary Limited. In this regard, Mazars concluded that for the period 1 October 2021 to 30 September 2022:

• the description of the systems, as outlined in the ISAE 3402 reports, fairly presents Sygnia's investment management operations as designed and implemented;
• the controls related to the control objectives stated in the ISAE 3402 report were suitably designed throughout; and
• the controls tested were those necessary to provide reasonable assurance that the control objectives stated in the ISAE 3402 report were achieved and operated effectively.

Fraud or misconduct

The ARC is not aware of any instances of fraud or misconduct, or any material compliance breaches during the current period.

Effectiveness of the Financial Director and the finance function

In terms of JSE Listings Requirement 3.84(g), the Committee considered and satisfied itself of the effectiveness of the Financial Director, Murad Sirkot, as well as the experience and adequacy of resources within the finance function.

Risk management

The ARC reviewed and approved the Group-wide risk management practices, and ensured that the executive team had implemented:

• robust processes to identify and assess the Group's risk exposures;
• a risk management infrastructure capable of mitigating such risks within an approved risk appetite; and
• practices allowing for prompt communication of key risk-related matters to the ARC and other key internal stakeholders.

Combined assurance

Sygnia has developed and implemented a combined assurance model in respect of its key risks which were identified during a thorough top-down and bottom-up approach. The combined assurance model continues to be reviewed regularly and refined as appropriate to enhance its effectiveness and to cater for changing risk exposures and 'lines of defence' responsibilities. For each key risk, an appropriate action plan was developed and monitored. Combined assurance is evaluated against the Group's board approved risk appetite. The Committee's view is that the current combined assurance arrangements are sufficiently robust in order to achieve their objectives.

Annual financial statements

The Committee reviewed the accounting policies, significant accounting matters as well as the going concern assessment applicable to the Company's 2022 annual financial statements, and ensured that the annual financial statements and the related results announcements were, in all material respects, in compliance with the provisions of the Companies Act, IFRS and the JSE Listings requirements. The ARC also considered matters, including those emanating from the JSE's pro-active monitoring process in respect of accounting policies and financial reporting as well as numerous other matters communicated by the JSE over the past few months in respect of reporting and disclosure. The Committee has concluded that appropriate financial reporting procedures exist and are operational within the Company to facilitate the preparation and dissemination of financial information that is free of material misstatement, whether due to fraud or error.

The Committee is satisfied that the annual financial statements fairly present the financial position of the Company at 30 September 2022 and the results of its operations and cash flows for the year then ended. The annual financial statements were recommended to the board for approval.

G Cavaleros

Chairman of the Audit and Risk Committee

5 December 2022

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