Page 121 - Capricorn IAR 2020

2020 INTEGRATED ANNUAL REPORT
DIRECTORS’ REPORT (continued)
for the year ended 30 June 2020
9. DIRECTORS AND COMPANY SECRETARY (continued)
At the annual general meeting held on 29 October 2019, Ms Nakazibwe-Sekandi, Adv. Schimming-Chase and Mr Reyneke were unanimously re-elected as directors. All directors appointed since a previous annual general meeting have to be confirmed at the next annual general meeting, and the appointment of Mr Menetté was unanimously confirmed.
The authorised but unissued number of ordinary and preference shares of the company subject to the provisions of the Banking Institutions Act, section 229 of the Companies Act of Namibia and the listing requirements of the Namibian Stock Exchange, are under the control of the directors of Capricorn Group. This authority expires at the forthcoming annual general meeting on 27 October 2020, when this authority can be renewed.
H G von Ludwiger was the company secretary during the year under review. The business and postal addresses of the company secretary are:
Capricorn Group Building Kasino Street
Windhoek
Namibia
PO Box 15 Windhoek Namibia
10. DIRECTORS’ INTERESTS
The directors’ interests are disclosed in the corporate governance report.
11. AUDITOR
PricewaterhouseCoopers will continue in office as auditor, until the next annual general meeting, in accordance with the Companies Act of Namibia.
12. EVENTS SUBSEQUENT TO YEAR-END
(1) On15September2020afinaldividendof20centsperordinarysharewasdeclaredfortheyearended30June2020,payable on 30 October 2020.
(2) On31July2020,theGroupsignedaSharePurchaseAgreementwithAccessBank(Zambia)Ltd,asubsidiaryofAccessBankPlc,
to sell its banking subsidiary in Zamibia, Cavmont Bank Ltd, a wholly owned subsidiary of Cavmont Capital Holdings Zambia Ltd. The transaction is expected to be completed during the fourth quarter of 2020 and is subject to shareholder and regulatory approvals from the Bank of Zambia and local and regional competition authorities.
The Group has committed to provide financial support to Cavmont Bank Ltd until the sale of Cavmont Bank to Access Bank Zambia is completed. This support will be provided in the form of a recapitalisation through the ZMW95 million preference share investment that is expected to be completed during September 2020.
No other matters which are material to the financial affairs of the company and Group have occurred between year-end and the date of approval of the consolidated annual financial statements.
13. GOING CONCERN
The board performed a rigorous assessment of whether the Group and company is a going concern in the light of the prevailing economic conditions and other available information about future risks and uncertainties.
The projections of the Group and company have been prepared, covering its future performance, capital and liquidity for a period of
12 months from the date of approval of these consolidated and separate financial statements, including performing sensitivity analysis.
Impact of COVID-19
These analyses have been updated to include the ongoing developments related to the COVID-19 pandemic. These pandemic scenarios continue to evolve as the effects of the pandemic continue to extend.
For purposes of the sensitivity analysis a severe case scenario has been developed in which the following factors have been considered: • Macroeconomic variables
• Government’s response to manage the spread of the pandemic
• Regulatory response in the banking sector to the impact, including interest rate cuts
• How the customer base is affected and the potential impact on default rates • The impact of lower economic activity and transaction volumes
The areas of financial performance of Group and company most significantly affected in the severe case scenario are the net interest margin, non-performing loans, credit provisions and non-interest revenue.
The assumptions used in the sensitivity analysis that represent “worst case scenario” are stressed assumptions based on our current understanding of the continued impact of the pandemic. This scenario is considered to be unlikely, however it is difficult to predict the overall outcome and impact of COVID-19.
The Group and company’s projections and sensitivity analysis show that the Group and company has sufficient capital, liquidity and positive future performance outlook to continue to be able to operate within the level of its current financing and as a result it is appropriate to prepare the consolidated and separate financial statements on a going concern basis, even when considering more severe impacts of the COVID-19 pandemic.
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