Extract from the annual financial statements for

the year ended 30 June 2022

STATEMENT OF FINANCIAL POSITION
as at 30 June 2022

2022 2021
Notes R’000 R’000
ASSETS
Non-current assets 4 860 065 4 449 968
Property, plant and equipment 5 3 771 195 3 337 340
Intangible assets 6 503 717 475 205
Goodwill 7 476 385 529 317
Investment in associate 8 11 635 10 577
Other share investments 33 946 30 309
Loans receivable 10 63 187 67 220

Current assets 9 407 744 7 339 603

Inventory 12 6 257 129 4 813 176
Accounts receivable 13 2 696 513 2 348 292
Loans receivable 10 11 230 10 495
Bank balances and cash on hand 442 872 167 640
Total assets 14 267 809 11 789 571

EQUITY AND LIABILITIES

Capital and reserves 5 588 540 4 873 465
Share capital 14 2 560 931 2 133 373
Revaluation reserve 36 224 31 499
Accumulated profit 2 976 727 2 695 145

Equity attributable to owners of the company 5 573 882 4 860 017

Non-controlling interest 14 658 13 448

Non-current liabilities 3 682 755 2 730 250

Interest bearing borrowings 16 3 308 054 2 362 896
Deferred taxation liability 17 374 701 367 354

Current liabilities 4 996 514 4 185 856

Accounts payable and accruals 18 1 534 065 1 394 727
Short-term loans 16 105 641 101 578
Current portion of interest-bearing borrowings 16 1 124 738 803 385
Taxation payable 90 067 86 603
Dividends payable 113 572 109 204
Bank overdraft 2 028 431 1 690 359
Total equity and liabilities 14 267 809 11 789 571
STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
for the year ended 30 June 2022

Notes 2022 2021

R’000 R’000

Revenue 7 512 598 7 223 652

Cost of goods sold (5 916 171) (5 453 857)
Gross profit 1 596 427 1 769 795
Other income 22 235 23 710
Operating costs (901 209) (1 016 962)
Profit before interest and taxation 19 717 453 776 543
Interest paid 21 (209 851) (207 773)
Non-recurring gains and losses 19 24 014 31 568
Dividends received 1 876 1 742
Interest received 2 238 1 998
Profit before taxation 535 730 604 078
Taxation 22 (136 849) (154 563)

Profit after taxation 398 881 449 515

Preference share dividends (6 714) (6 216)
Profit for the year 392 167 443 299

Profit attributable to:

Owners of the company 390 833 442 058
Non-controlling interest 1 334 1 241
392 167 443 299
STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2022
Ordinary Preference Revaluation Accumulated Non-controlling
share share reserve profit interest Total
capital capital
Notes R’000 R’000 R’000 R’000 R’000 R’000

Balance at 30 June 2020 1 881 185 31 586 30 582 2 355 191 13 056 4 311 600
Issue of ordinary share capital 14 213 337 - - - - 213 337
Ordinary share repurchases (Treasury shares) 14 - - - - - 0
Issue of preference share capital 14 - 7 265 - - - 7 265
Total comprehensive income for the year - - - 442 058 1 241 443 299
Revaluation of property, plant and equipment - - 917 - - 917
Decrease in non-controlling interest - - - - (849) (849)
Dividend paid - - - (102 104) - (102 104)
Balance on 1 July 2021 2 094 522 38 851 31 499 2 695 145 13 448 4 873 465
Issue of ordinary share capital 14 453 500 - - - - 453 500
Ordinary share repurchases (Treasury shares) 14 (29 050) - - - - (29 050)
Issue of preference share capital 14 - 35 608 - - - 35 608
Conversion of preference shares 14 - (32 500) - - - (32 500)
Total comprehensive income for the year - - - 390 833 1 334 392 167
Revaluation of property, plant and equipment 15 - - 4 725 - - 4 725
Increase in non-controlling interest - - - - (124) (124)
Dividend paid - - - (109 251) - (109 251)
Balance on 30 June 2022 2 518 972 41 959 36 224 2 976 727 14 658 5 588 540
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 30 June 2022

5. PROPERTY, PLANT AND EQUIPMENT

Opening Additions Disposals Revaluations Closing

balance balance
2022 R’000 R’000 R’000 R’000
COST
Land 934 653 48 262 - 2 835 985 750
Buildings and improvements 466 868 144 786 - 1 890 613 544
Plant and machinery 2 308 975 579 142 (184 755) - 2 703 362
Motor vehicles 451 648 96 524 (110 853) - 437 319
Office equipment 275 048 57 914 (51 731) - 281 231
Furniture and fittings 181 674 38 609 (22 171) - 198 113
4 618 866 965 237 (369 509) 4 725 5 219 319

Opening Closing
balance Depreciation Disposals balance
R’000 R’000 R’000 R’000
ACCUMULATED DEPRECIATION
Buildings and improvements 130 249 26 912 - 157 161
Plant and machinery 771 012 161 472 (51 261) 881 223
Motor vehicles 254 209 53 824 (30 757) 277 276
Office equipment 76 053 16 147 (14 353) 77 847
Furniture and fittings 50 003 10 765 (6 151) 54 617
1 281 526 269 120 (102 522) 1 448 124
Net book value 3 337 340 3 771 195

Opening Additions Disposals Revaluations Closing

balance balance
2021 R’000 R’000 R’000 R’000 R’000
COST
Land 803 281 130 455 - 917 934 653
Buildings and improvements 401 641 65 228 - - 466 868
Plant and machinery 2 008 203 326 139 (25 367) - 2 308 975
Motor vehicles 401 641 65 228 (15 220) - 451 648
Office equipment 240 984 39 137 (5 073) - 275 048
Furniture and fittings 160 656 26 091 (5 073) - 181 674
4 016 405 652 277 (50 733) 917 4 618 866

Opening Closing
balance Depreciation Disposals balance
2021 R’000 R’000 R’000 R’000
ACCUMULATED DEPRECIATION
Buildings and improvements 111 437 18 812 - 130 249
Plant and machinery 668 622 112 874 (10 484) 771 012
Motor vehicles 222 874 37 625 (6 290) 254 209
Office equipment 66 862 11 287 (2 097) 76 053
Furniture and fittings 44 575 7 525 (2 097) 50 003
1 114 370 188 123 (20 967) 1 281 526
Net book value 2 902 035 3 337 340
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 30 June 2022

5. PROPERTY, PLANT AND EQUIPMENT

The net book value of all the property, plant and equipment, serving as security, is as follows:
2022 2021
R’000 R’000
Nedbank Limited 2 262 717 2 002 404
First National Bank Limited 188 560 166 867
Other third parties - 35 000

A register of particulars of the freehold land and buildings is maintained at the company's registered office and is
available for inspection.

6. INTANGIBLE ASSETS
Opening Closing
balance Acquisitions Disposals Balance
2022 R’000 R'000 R’000 R’000
COST
Indefinite useful life intangible assets
Trademarks 314 630 - (100 000) 214 630
Export quota 9 227 - - 9 227
Definite useful life intangible assets 0
Trademarks 178 409 - - 178 409
Customer lists 92 273 - - 92 273
Computer software - 157 024 - 157 024
594 539 157 024 (100 000) 651 563

Opening Closing
balance Disposals Amortisation Balance
2022 R’000 R'000 R’000 R’000
ACCUMULATED AMORTISATION
Trademarks 43 349 - 5 702 49 052
Customer lists 75 985 - 22 810 98 794
119 334 - 28 512 147 846
Net book value 475 205 503 717

Opening Closing
balance Acquisitions Disposals balance
2021 R’000 R’000 R’000 R’000
COST
Indefinite useful life intangible assets
Trademarks 322 955 (8 325) 314 630
Export quota 9 227 9 227
Definite useful life intangible assets 0
Trademarks 138 409 40 000 178 409
Customer lists 92 273 92 273
562 864 40 000 (8 325) 594 539

Opening Closing
balance Disposals Amortisation balance
2021 R’000 R’000 R’000 R’000
ACCUMULATED AMORTISATION
Trademarks 32 295 (842) 11 896 43 349
Customer lists 69 205 (751) 7 531 75 985
101 500 (1 593) 19 427 119 334
Net book value 461 364 475 205
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 30 June 2022

7. GOODWILL
Opening Closing
balance Impairment balance
2022 R’000 R’000 R’000
Cost 529 317 (52 932) 476 385
Opening Closing
balance Impairment balance
2021 R’000 R’000 R’000
Cost 545 688 (16 371) 529 317

On acquisition of a business that qualifies as a business combination in terms of IFRS 3, the Group allocates the purchase price
paid to the assets acquired, including identifiable intangible assets, and the liabilities assumed. The goodwill acquired in a
business combination is allocated, at acquisition, to the cash-generating unit that is expected to benefit from that business. In
the current year management reassessed the goodwill allocation to the respective CGUs and split it to a lower level to reflect the
manufacturing and commercial value generated from the CGU.

Impairment assessment

Goodwill is assessed for impairment annually, irrespective of whether there is any indication of impairment.

The impairment assessment compares the carrying amount of the CGU, including goodwill, to the value-in-use, or fair value of
the CGU. The recoverable amount of the CGU is determined from the value-in-use calculation. The key assumptions for the value-
in-use calculation are those regarding discount rates, growth rates and expected changes to selling prices and the direct costs
during the period. Discount rates are based on a weighted average pre-tax cost of capital, while growth rates are based on
management's experience and expectations. Terminal growth rates used do not exceed the long-term average growth rate for
the area in which the CGU operates. Changes in selling prices and direct costs are based on past practices and expectations of
future changes in the market, and are derived from the most recent financial budgets and forecasts that have been prepared by
management.

The value in use of the CGU is compared to the carrying amount of the CGU, including goodwill allocated. Where the carrying
value of the CGU exceeds the value-in-use an impairment loss is recognised in the statement of profit or loss and other
comprehensive income.

Key assumptions:

Pre-tax discount rate 13.89%

Growth rate year 1 – 5 6.10%
Terminal growth rate subsequent to year 5 2.00%
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 30 June 2022
2022 2021
R’000 R’000

10. LOANS RECEIVABLE

Non-current assets
Magenta Technologies Proprietary Limited 37 209 38 858
Ragnar Data Proprietary Limited 2 233 2 331
Floki Network Technologies Proprietary Limited 6 698 6 994
Advance MS Proprietary Limited 23 069 24 092
Other loans 5 209 5 440
74 417 77 715
Less: Current portion (11 230) (10 495)
Long-term loans 63 187 67 220

The loan to Magenta Technologies Proprietary Limited is unsecured and repayable in monthly instalments until September 2030.
Interest is charged at an average rate of 6% per annum.

The loans to Ragnar Data Proprietary Limited and Floki Network Technologies Proprietary Limited are unsecured, bear interest at
0% and prime less 3.5% respectively. These loans are repayable in equal monthly instalments until December 2027 and
December 2030 respectively.

The loan to Advance MS Proprietary Limited is unsecured, bears no interest and is repayable from future rent paid for a
warehouse to the abovementioned entity.

Other loans were unsecured, bore no interest and were repayable on demand.

2022 2021
R’000 R’000

12. INVENTORY

Finished goods 3 191 136 2 454 720

Work-in-progress 938 569 721 976
Raw materials 2 189 995 1 684 612
6 319 700 4 861 308
Provision for obsolete inventory (62 571) (48 132)
6 257 129 4 813 176

The value of the inventory disclosed at net realisable value is R199.405 million (2021: R170.879 million). Refer to the cost of
goods sold per the statement of profit or loss and other comprehensive income where the expense relating to inventories is
recognised.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 30 June 2022

13. ACCOUNTS RECEIVABLE

2022 2021
R’000 R’000
Trade receivables 2 341 475 1 761 219
Less: Allowance for doubtful debt (53 930) (46 966)
Net trade receivables 2 287 544 1 714 253
Sundry receivables 134 826 117 415
Prepayments 30 920 281 795
Deposits 107 861 93 932
Other receivables 27 502 23 483
VAT receivable 107 861 93 932
2 696 513 2 348 292

Refer to note 5 for details of encumbrances.

Trade receivables

No interest is charged on trade receivables with amounts outstanding longer than the credit period.

Of the trade receivables balance at year end R107.302 million (2021: R105.307 million) is outstanding from two (2021: one)
customers who represent more than 10% of the total balance of the Group's trade receivables.
2022 2021
R'000 R’000
Customer A 46 830 -
Customer B 60 472 105 307
107 302 105 307

Before extending credit to any new customers, the Group assesses the potential customer's creditworthiness based on
information obtained from credit bureaus and sets credit limits accordingly. In determining the recoverability of a trade
receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted
up to the reporting date. Accordingly, the directors believe that an allowance for doubtful debt of R25.535 million (2021:
R23.440 million) is adequate for the Group. The impairment recognised represents the difference between the carrying amount
of these trade receivables and the present value of the expected liquidation proceeds.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 30 June 2022

13. ACCOUNTS RECEIVABLE CONTINUED

2022 2021
R’000 R’000
Movement in allowance for doubtful debts
Balance at the beginning of the year (46 966) (37 573)
Doubtful debt allowance raised (16 179) (14 090)
Doubtful debt allowance reversed 9 215 4 697

Balance at the end of the year (53 930) (46 966)

Ageing of past due not impaired trade receivables
90 – 120 days 18 876 16 438
120 days and over 35 055 30 528
Closing balance 53 930 46 966

Included in the Group’s trade receivables balance are debtors which exceed the allowable credit terms. No allowance has been
raised because there was no change in credit quality and the amounts are still considered recoverable.
2022 2021
R’000 R’000
Ageing of past due but not impaired trade receivables
60 – 90 days 93 659 70 449
90 – 120 days 23 415 17 612
More than 120 days 46 829 35 224
163 903 123 285

14. SHARE CAPITAL

2022 2021
R’000 R’000
Authorised
1 800 000 000 ordinary shares
9 000 000 “A” redeemable convertible preference shares
9 000 000 “B” redeemable convertible preference shares

Issued
371 179 000 ordinary shares 2 518 972 2 094 522
1 333 100 “A” redeemable convertible preference shares 17 203 13 598
1 376 922 “B” redeemable convertible preference shares 24 756 25 253
2 560 931 2 133 373
Reconciliation of ordinary and preference shares in issue:
Ordinary and treasury shares at the beginning of year 2 133 373 1 912 771
Ordinary shares issued on 29 September 2021 at R6.80 per share 408 000 213 337
“A” redeemable preference shares converted into ordinary shares on 31 August 2021 (11 375) -
“B” redeemable preference shares converted into ordinary shares on 31 August 2021 (21 125) -
Ordinary shares issued from conversion of “A” redeemable preference shares 11 375 -
Ordinary shares issued from conversion of “B” redeemable preference shares 21 125 -
on 31 August 2021 at R6.50 per share
"A" Redeemable Preference shares issued on 31 October 2021 at R6.00 per share 14 980 7 265
"B" Redeemable Preference shares issued on 28 February 2022 at R6.35 per share 20 628 -
Ordinary shares issued on 31 May 2022 from conversion of debentures at 13 000 -
R 6.50 per share
Ordinary shares repurchased on 22 June 2022 at R 7.00 per share (29 050) -
Ordinary and preference shares at the end of year 2 560 931 2 133 373
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 30 June 2022

16. INTEREST BEARING LOANS

16.1 SECURED LONG-TERM LOANS AT AMORTISED COST

2022 2021
R’000 R’000
Mortgage and term loans 3 440 376 2 457 412
Debentures 827 014 590 724
Liabilities capitalised under finance leases 165 403 118 145
Total long-term loans at amortised cost 4 432 792 3 166 281
Less: Current portion (1 124 738) (803 385)
Long-term loans 3 308 054 2 362 896
Refer to note 5 for details of encumbrances.

16.2 INTEREST RATE ANALYSIS

Variable linked long-term loans Range

Mortgage and term loans SA Prime less 1.75% to SA prime less 1.25%
Liabilities capitalised under finance leases SA Prime less 4.00% to SA prime plus 1.60%

16.3 UNSECURED SHORT-TERM LOANS

2022 2021
R’000 R’000
Cryptocorp Proprietary Limited 32 749 31 489
Newdata Holdings Proprietary Limited 31 692 30 473
Demtec Proprietary Limited 41 200 39 615
Short-term loans 105 641 101 578
The unsecured loan from Cryptocorp Proprietary Limited bears interest at 13.25% and is repayable in full by 30 April 2023.
The unsecured loan from Newdata Holdings Proprietary Limited bears interest at 15.25% and is repayable in full by 31 May 2023.

The unsecured loan from Dentec Proprietary Limited bears interest at 16.25% and is repayable in full by 30 June 2023.

18. ACCOUNTS PAYABLE AND ACCRUALS

2022 2021
R’000 R’000
Trade payables 1 169 685 1 044 362
Accruals 364 380 350 365
1 534 065 1 394 727

The Group does not pay interest on trade payables within the credit period granted.

The Group has financial risk management policies in place to ensure that all payables are paid within a reasonable time of the
credit time frame.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 30 June 2022

19. PROFIT BEFORE INTEREST AND TAXATION

Profit before interest and taxation is arrived at after taking the following items into account:
2022 2021
R’000 R’000
Income
Insurance claim received 3 324 8 694
Foreign exchange gains 4 998 20 613
Gain on disposal of property, plant and equipment - 9 954
Gain on disposal of intangible assets 35 000 23 000

Expenses
Auditors’ remuneration 4 436 4 275
Audit fee
–– current year: Group auditor 2 950 2 688
–– current year: component auditors 995 912
Other services
–– current year: Group auditor 452 633
–– current year: component auditors 39 42
Depreciation 269 120 188 123
Buildings and improvements 26 912 18 812
Plant and machinery 161 472 112 874
Motor vehicles 53 824 37 625
Office equipment 16 147 11 287
Furniture and fittings 10 765 7 525
Amortisation of intangible assets 28 512 22 810
Impairment of goodwill 52 932 16 371
Loss on disposal of intangible assets - 1 386
Loss on disposal of property, plant and equipment 10 986 -
Directors’ emoluments
- executive 17 526 15 092
- non-executive 3 015 2 573
Management fee 1 230 935
Operating lease charges – paid 79 536 61 320
Total staff costs 915 176 871 596
–– included in cost of goods sold 415 100 395 338
–– included in operating expenses 500 076 476 258
Foreign exchange losses - 684
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 30 June 2022

21. INTEREST PAID

2022 2021
R’000 R’000
Bank overdraft 25 182 24 933
Long-term loans 167 881 166 218
Other short-term loans 16 788 16 622
209 851 207 773

22. TAXATION 2022 2021

R’000 R’000
Taxation: South Africa
Current taxation
- current year 150 534 170 019
- prior year over provision (20 527) (23 184)
Securities transfer tax 1 368 1 546
Deferred taxation
- current year 5 474 6 183
136 849 154 563
Deferred taxation recognised through other comprehensive
income – remeasurement of defined benefit liability 28.00 28.00

% %
Tax rate reconciliation
Standard rate 28.00 28.00
Non-deductible expenses 0.52 2.03
Legal and professional fees 0.52 0.68
Acquisition costs 0.00 0.77
Penalties and interest 0.00 0.58
Prior year over provision (0.63) (4.18)
Other reconciling items (0.56) 0.79
Learnership allowance (0.51) (0.51)
Tax rate differences 0.00 (0.89)
Section 12I allowances (1.61) (1.22)
Market value of revalued assets adopted as cost 0.53 1.73
Other non-recurring reconciling items 1.03 1.68
Effective tax rate 27.33 26.64