R’000 R’000 Fees charged for services rendered:

CAM Fund Management Limited - 6 184 Stenpark Management IC 821 1 606 SA Alpha Capital Management Limited 15 154 18 269 Legae Securities Proprietary Limited 2 428 1 982 Nala Empowerment Investment Company Proprietary Limited 1 100 - Costs recovered:

Legae Securities Proprietary Limited 1 383 1 406

Amounts charged for services rendered and commissions which remained unpaid at year-end amounted to R4.8 million (2014: R3.7 million) and are included in trade and other receivables.

The receivable due arising as a result of the disposal of 1 million Vunani Limited shares to Green Oak Capital Proprietary Limited at 165 cents per share during the course of the 2013 financial year amounted to R4.6 million (2014: R4.6 million) and is included in trade and other receivables.

40.3 Directors

Details of directors’ shareholding in the company are disclosed in the directors’ report. Directors’ emoluments are disclosed in note 4.

Gains on share options arising from the vesting of the third tranche of shares relating to the Peregrine Holdings Limited Share Scheme (note 29.2.1) amounted to R55.1 million (2014: gain from the vesting of the second tranche of shares amounted to R19.8 million).

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Staff are entitled to invest into certain of the funds managed by the group. Other than the reduced management fees for Stenham staff investing into the Stenham funds, the investments are on an arm’s length basis and fees are as charged to external clients.

Citadel key management who are Citadel clients do not pay advisory fees (structuring, management and performance fees) but pay administration and product fees on an arm’s length basis.

41 Critical accounting estimates and judgements

41.1 Estimated impairment of goodwill and intangibles

The group tests semi-annually whether goodwill and intangibles have suffered any impairment, in accordance with the accounting policy disclosed. The recoverable amounts of cash-generating units (CGU) have been determined based on value-in-use calculations.

41.1.1 Stenham group

The Stenham trade name was valued using the relief from royalty method, in which the subject intangible asset is valued by reference to the amount of royalty income it would generate if the intangible were licensed in an arm's length transaction. The income approach was used to value the customer relationships. In this approach, an economic benefit stream of the asset under analysis is selected, usually based on historical or forecast cash flow. The focus is to determine a benefit stream that is reasonably reflective of the assets most likely future benefit stream. The selected benefit stream is discounted to present value with an appropriate risk-adjusted discount rate. Discount factors include general market rates of return at the valuation date, business risks associated with the industry in which the company operates and risks specific to the asset being valued.

In addition, the fair value of goodwill at 31 March 2015 has been determined using the income approach.

The most significant driver of the valuation is the assumed growth of assets under management in the Asset Management division. Overall, annual growth rates were assumed for the 3 year forecast to 31 March 2018. These values were informed by forecast asset subscriptions and redemptions, investment returns and movements in foreign exchange rates, which are based on past experience, future business development expectations and external sources of data.

The recoverable amount as at 31 March 2015 is based on the 3 year growth outlook to 2018 and the standard group assumptions. During the year management reassessed the assumptions used and as a result the discount rate was decreased from 13.63% to 13.36%, as a result of a decrease in the risk free rate applied. These changes were supported by market based evidence.

The valuation for the current year, as well as the prior year, indicated that the recoverable amounts of the goodwill and intangibles attributable to the Stenham Asset Management division was equal to or higher than their respective net book values as at 31 March 2015 and therefore no impairment of these assets was required. There were no material changes to the key assumptions which impacted on the valuations, relative to the prior year. Following the impairment in March 2013, carrying values were written down to their recoverable amounts. In the current year, as well as in the prior year, there was no evidence of further deterioration in the business, however there is also insufficient evidence to consider writing back any of the impairment. As carrying values and recoverable amounts are the same values in some cases, any change in assumptions could cause a write back or a further impairment. In these circumstances management do not believe a meaningful sensitivity analysis can be provided.

The cash generating units to which the goodwill and other intangibles relate have been identified as follows: • Stenham Asset Management (Hedge funds);

• Stenham Trustees (Trust and fiduciary).

During the year Stenham Limited disposed of its interest in Stenham Property Holdings Limited and its subsidiaries Stenham Property Limited and Stenham Property Finance Limited (note 12.2.1).

41 Critical accounting estimates and judgements (continued)

41.1 Estimated impairment of goodwill and intangibles (continued)

41.1.1 Stenham group (continued)

The allocation of the goodwill and other intangibles are allocated to the cash generating units as follows:

Net book Additions / Amortisation Translation Net book Recoverable value at the (disposals) difference value at the amount beginning of the year end of the year

R’000 R’000 R’000 R’000 R’000 R’000 2015 Trade name 57 796 (27 452) (3 207) 1 973 29 110 29 110 Customer relationships 130 110 (1 945) (14 933) 4 714 117 946 246 823 Hedge funds 34 430 - (3 884) 866 31 412 31 411 Property 35 797 (35 328) (2 014) 1 545 - - Trust and fiduciary 59 883 33 383 (9 035) 2 303 86 534 215 412 Goodwill 145 875 6 783 - 2 517 155 175 297 743 Hedge funds 93 156 - - 2 444 95 600 133 480 Property 12 199 (10 787) - (1 412) - - Trust and fiduciary 40 520 17 570 - 1 485 59 575 164 263

333 781 (22 614) (18 140) 9 204 302 231 573 676 2014 Trade name 49 202 - (3 784) 12 378 57 796 61 232 Customer relationships 114 884 - (13 285) 28 511 130 110 205 486 Hedge funds 30 397 - (3 511) 7 544 34 430 34 429 Property 31 608 - (3 656) 7 845 35 797 35 796 Trust and fiduciary 52 879 - (6 118) 13 122 59 883 135 261 Goodwill 115 918 - - 29 957 145 875 203 803 Hedge funds 74 025 - - 19 131 93 156 114 827 Property 9 694 - - 2 505 12 199 12 273 Trust and fiduciary 32 199 - - 8 321 40 520 76 703 280 004 - (17 069) 70 846 333 781 470 521

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The significant driver of the valuation of goodwill of R214,526 million is expected growth in assets under management resulting from new fund inflows and investment returns and taking into account client withdrawals, mandate cancellations and levels of client retention. The assumptions applied for each of these variables are conservative and match those applied in the preparation of group budgets and forecasts. Assumptions are supported by past experience. Future cash flows were discounted at a rate of 14.29% (2014: 14.22%) over a 10 year term and assuming a growth rate of 3% beyond year 10.

41.2 Fair value measurements and valuation processes

Some of the group's assets and liabilities are measured at fair value for financial reporting purposes.

In estimating the fair value of an asset or a liability, the group uses market-observable data to the extent it is available. The determination of fair value requires estimates and judgements particularly where the inputs to valuations are not market observable, as is the case for many of the group’s fair valued assets.

Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in note 43.4.

41.3 Trade and other payables

An assessment of an amount provided for and included in trade and other payables (note 28) required the exercise of significant judgement.

41.4 Share-based payment transactions

The critical estimates and assumptions used in the IFRS 2 calculations are disclosed in note 29.2.

41.5 Financial guarantee contracts

Terms of the guarantee are disclosed in note 43.2.1.

41.6 Unconsolidated structured entities

The group advises on financial assets on behalf of clients and has set up investment funds in which it holds insignificant interests, and does not consolidate these investment funds for the following reasons:

• the group acts in an agency capacity on behalf of clients on these funds; • each fund’s activities are restricted by its prospectus, and

• the funds have narrow and well-defined objectives to provide investment opportunities to clients. The unconsolidated structured entities are disclosed in note 46.

42 Events subsequent to reporting date

The directors are not aware of any other matters or circumstances arising since the end of the financial year, not otherwise dealt with in the financial statements, which significantly affect the financial position of the Peregrine Group or the results of its operations.

43 Risk management - Group

Having regard to the fact that managing risk is an inherent part of the group’s activities, risk management and the ongoing improvement in corresponding control structures remain a key focus of management in building a successful and sustainable business. Within a complex financial services environment, the board recognises that risk management is a dynamic process and that the risk framework should be robust enough to effectively manage and react to change in an efficient and timeous manner. Peregrine has historically evolved as separate, independent operating units with minority ownership and/or participation by management in each of the group’s subsidiaries.

Formalisation of a risk management framework for the group is the responsibility of Peregrine Holdings and the board of directors. The framework ensures:

· efficient allocation of capital across various activities in order to maximise returns and diversification of income streams; · risk taking within levels acceptable to the group as a whole and within the constraints of the relevant business unit; · efficient liquidity management and control of funding costs, and

· appropriate risk management and control.

Whilst the board is ultimately responsible for the management of risk, the board relies on management to operate within the control structures and frameworks established by the board and has delegated the responsibility for implementation of the risk framework to functions within the operating units. The structure of the group promotes the active participation of executive management in all of the operational and strategic decisions affecting their business units. This creates a strong culture of ownership and accountability.

Senior management take an active role in the risk management process and are responsible for the implementation, ongoing maintenance of and ultimate compliance with the risk process as it applies to each business unit. The board is kept abreast of developments through formalised reporting structures, ongoing communication with management, group risk and compliance committee, regular board meetings at an operating subsidiary level and through representation of executive members of the board on certain of the forums responsible for the management of risk at an operating subsidiary level. The group remains committed to employing the highest calibre of staff to ensure a strong financial and operational infrastructure within each of the business units.

Risk management structure

The group’s risk management framework is summarised below. Key responsibilities lie with the following management bodies and committees. Group board of directors: responsible to shareholders for the strategic direction, supervision and control of the group and for defining the group’s overall tolerance for risk.

Risk and Compliance committees: responsible for assisting the board of directors of the group and subsidiary entities, in fulfilling their responsibilities by providing guidance regarding risk governance and the development of the group’s risk profile, including regular review of major risk exposures and the management of risk limits. The chairman of the risk committee reports back to the board of directors of the group in this regard.

Audit committees: responsible for assisting the various boards in fulfilling their oversight responsibilities by monitoring management’s approach with respect to financial reporting, internal controls, accounting and legal and regulatory compliance.

Internal audit function: responsible for assisting the boards, audit committees and management in fulfilling their responsibilities by providing an objective and independent evaluation of the effectiveness of control, risk management and governance processes.

The nature of key risks to which the group is exposed are categorised as follows:

43.1 Market risk

Market risk is the potential change in the value of a financial instrument resulting from changes in market prices. The group’s activities expose it primarily to the financial risks of changes in equity prices, foreign currency exchange rates and interest rates.

43.1.1 Funds under management

As a wealth and asset management group, Peregrine’s revenue is dependent on the level of funds under management, as well as the performance of these funds relative to various benchmarks. The value of these funds fluctuates with market movements. The investment of clients’ funds is managed through structured investment processes within a strong operating control environment.

2015 2014

R'000 R'000