Metrofile : Annual Financial Statements 2021

2021

AUDITED ANNUAL FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2021

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CONTENT

ANNUAL FINANCIAL STATEMENTS

CEO and CFO responsibility statement Statement of responsibility and approval Certificate by company secretary Report of the directors

Audit, Governance and Risk Committee report

Social, Ethics and Transformation Committee report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Independent Auditor's report Income statements

Statements of comprehensive income Statements of financial position Statements of changes in equity Statements of cash flows

Notes to the financial statements Corporate information

CEO AND CFO RESPONSIBILITY STATEMENT

STATEMENTS

After due care and proper consideration, and in accordance with paragraph 3.84(k) of the JSE Listings Requirements, the directors, whose names are stated below, hereby confi rm that:

• the annual fi nancial statements set out on pages 10 to 50, fairly present in all material respects the fi nancial position, fi nancial performance and cash fl ows of Metrofi le Holdings Limited in terms of the International Financial Reporting Standards;
• no facts have been omitted or untrue statements made that would make the annual fi nancial statements false or misleading;
• internal fi nancial controls have been put in place to ensure that material information relating to Metrofi le Holdings Limited and its consolidated subsidiaries have been provided to effectively prepare the fi nancial statements of the issuer; and

• the internal fi nancial controls are adequate and effective and can be relied upon in the process of compiling the annual fi nancial statements, having fulfi lled our role and function within the combined assurance model pursuant to principle 15 of the King Code. Where we are not satisfi ed, we have disclosed to the Audit, Governance and Risk Committee and the auditors the defi ciencies in design and operational effectiveness of the internal fi nancial controls and any fraud that involves directors, and have taken the necessary remedial action.

PG Serima	S Mansingh
Group Chief Executive Officer	Group Chief Financial Officer

ANNUAL FINANCIAL

STATEMENT OF RESPONSIBILITY AND APPROVAL

The directors are responsible for the preparation of consolidated and separate fi nancial statements (fi nancial statements) that fairly present the fi nancial position and results of operations and cash fl ows of the Company and the Group for the year ended 30 June 2021 in accordance with the appropriate accounting policies based on International Financial Reporting Standards and in the manner required by the Companies Act of South Africa.

The directors accept responsibility for the maintenance of adequate accounting records and for the integrity, objectivity and reliability of the fi nancial statements of Metrofi le Holdings Limited and its subsidiaries. The directors support the principle of transparent reporting and delegated the responsibility for the preparation and presentation of the fi nancial statements to management.

The directors are responsible for systems of internal control. These are designed to provide reasonable, if not absolute, assurance as to the reliability of the financial statements and adequately safeguard, verify and maintain accountability of assets, and to prevent and detect material misstatement and loss. The systems are implemented and monitored by suitably trained personnel with appropriate segregation of authority and duties.

Nothing has come to the attention of the directors to indicate that any material breakdown in the functioning of these control procedures and systems has occurred during the year under review.

The annual financial statements have been prepared in accordance with the Companies Act of South Africa and International Financial Reporting Standards and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and are based on appropriate accounting policies, supported by reasonable and prudent judgements.

These accounting policies have been consistently applied as in the prior year except for changes as a result of adoption of new accounting standards.

These fi nancial statements have been prepared on a going concern basis, which presumes that assets will be realised and liabilities settled in the normal course of business. No adjustments have been processed to the classifi cation or valuation of assets or liabilities, which may be necessary if the Group and Company are not able to continue as a going concern.

The fi nancial statements have been audited by Deloitte & Touche, who are independent and were given unrestricted access to all fi nancial records and related data, including all minutes of shareholders' meetings, the Board of Directors and Committees of the Board. The directors believe that all representations made to the independent auditor during their audit are valid and appropriate. Their unmodifi ed audit report is presented on pages 7 to 9.

The Audit, Governance and Risk Committee has reviewed the scope as well as the independence and objectivity of the external auditor. The Committee has satisfi ed itself that the external auditor is independent as defi ned by the Companies Act of South Africa and the Committee has approved the audit fees for the year. The Committee has nominated Deloitte & Touche as external auditor for the 2022 fi nancial year, and Mr H Loonat as the designated partner, for approval at the annual general meeting.

The annual fi nancial statements have been prepared under the supervision of Mr S Mansingh, CA (SA), MBA. The fi nancial statements which appear on pages 10 to 50 were approved by the Board on 13 September 2021 and are signed on their behalf by:

PG Serima	S Mansingh
Group Chief Executive Officer	Group Chief Financial Officer

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CERTIFICATE BY COMPANY SECRETARY

In terms of section 88(2)(e) of the Companies Act, I certify that, to the best of my knowledge, the Company has complied with all the requirements of the Companies Act and more specifi cally that all returns and notices as are required by the Companies Act for a public company have been lodged with the Companies and Intellectual Properties Commission and that all such returns and notices are true, correct and up-to-date.

Paige Atkins

Company Secretary

Johannesburg

13 September 2021

REPORT OF THE DIRECTORS

The directors submit their report together with the audited annual fi nancial statements of Metrofi le Holdings Limited (the Company) and its subsidiaries (the Group) for the year ended 30 June 2021.

NATURE OF BUSINESS

Metrofi le Group is a leading global records and information management specialist in Africa and the Middle East, providing clients with end-to-end solutions for the complete data management lifecycle, while ensuring they extract maximum value from their information assets. The business was formed in 1983 and 38 years later, its operations service clients of all sizes and sectors across South Africa, Kenya, Botswana, Mozambique and the Middle East. Group companies operate from 67 facilities, at 36 locations, covering 115 750 square metres of warehousing space.

Metrofile's storage, digital services and products enable businesses to manage their greatest risk, the security of information. We have an acclaimed track record in organising, backing up, managing and protecting large volumes of active and inactive documents, images and data, in physical or electronic format. The Group offers the infrastructure, technology and services to securely manage each phase of the document's lifecycle until its ultimate destruction and recycling.

Details of the Group's operating subsidiaries at 30 June 2021 are set out in note 33.

DIRECTORS AND COMPANY SECRETARY

The directors of the Company during the fi nancial year and up to the date of this report were as follows:

CS Seabrooke^* (Chairman)	MS Bomela* (Deputy Chairman)
PG Serima (CEO)	S Mansingh (CFO)
MZ Abdulla*	P Langeni†*
LE Mthimunye^*	GD Wackrill*
SV Zilwa^*	L Rood^* (Alternate to CS Seabrooke)

DL Storom* (Alternate to MZ Abdulla)

^ Independent † Lead independent * Non-executive

The Company Secretary is Paige Atkins.

All directors who retired in terms of the Company's Memorandum of Incorporation were re-appointed for a further term of offi ce as approved at the annual general meeting held on 24 November 2020.

The Board comprises two executive and seven non-executive directors, of whom four are independent directors. Mr DL Storom was appointed alternate to Mr MZ Abdulla, effective 26 March 2021. There were no other changes to the Board for the year ended 30 June 2021 and up to the date of this report. Shareholders are advised of the changes to the Board and Board Committees effective after the date of this report being 30 September 2021 as published on SENS on 14 July 2021.

2021 ANNUAL FINANCIAL STATEMENTS

At 30 June 2021, interests of the directors in the shares of the Company were as follows:

	Beneficial		Non-beneficial
Directors and officers	Direct		Indirect	Direct	Indirect	Total shares
Mary Sina Bomela & Muhammed Zaheer Abdulla†	-	-	-	165 480 445	165 480 445
Phumzile Langeni	-	-	-	-	-
Shivan Mansingh	150 000		-	-	-	150 000
Lindiwe Evarista Mthimunye	-	-	-	-
Christopher Stefan Seabrooke*	-	-	-	51 000 000	51 000 000
Pfungwa Gore Serima	46 035		-	-	-	46 035
Graham Dunbar Wackrill	2 999 505		-	-	-	2 999 505
Sindiswa Victoria Zilwa	-	-	-	-	-

• The Seabrooke Family Trust has an economic interest of 40.1% in this shareholding through Sabvest Limited i.e. an effective economic interest of 4.72%.

• Mary Bomela and Zaheer Abdulla are CEO and Senior Investment Manager of MIC respectively, which owns 165 480 445 shares being an economic interest of 38.1%. As MIC's representatives on Metrofi le's Board, they have no economic interest in MIC personally.

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DIRECTORS' INTERESTS IN TRANSACTIONS

None of the directors, except where indicated in note 26 to the annual financial statements, has any interest in any transactions that were entered into by the Group during the current or prior financial year, or during an earlier financial year, which remain in any respect outstanding.

FINANCIAL RESULTS

The income statements and other statements of comprehensive income set out on pages 10 and 11 reflect the results of the operations of the Company and of the Group for the year ended 30 June 2021.

STATEMENT OF FINANCIAL POSITION

To present a statement of financial position that fairly reflects the financial position, asset values have been tested for impairment and no impairments were identified. Investments and loans are recorded at fair market or realisable values. Working capital has been assessed to ensure a fair carrying value for inventory and the recoverability of accounts receivable.

The Group's properties have been recorded at their carrying value, and have been tested for impairment.

COMMITMENTS

Capital investment plans for the 2022 financial year amount to R90 million.

SIGNIFICANT CONTRACTS

Save for those agreements that have been disclosed to shareholders in terms of the Listings Requirement of the JSE Limited, the Group has not entered into any material contracts, other than in the ordinary course of business, during the two years prior to the date of this report.

LITIGATION

The Group is not involved in any legal or arbitration proceedings, nor are the directors aware of any such proceedings which may be pending or threatened, which may have, or which have had, in the 12-month period preceding the date of these annual financial statements, a material effect on the Group's financial position.

DIVIDENDS

The Board has resolved to declare a final cash dividend of 8 cents per share.

Notice is hereby given that a final gross cash dividend of 8 cents per share in respect of the year ended 30 June 2021 has been declared payable, from income reserves, to the holders of ordinary shares recorded in the books of the Company on Friday, 1 October 2021. The last day to trade cum-dividend will therefore be Tuesday, 28 September 2021 and Metrofile shares will trade ex-dividend from Wednesday, 29 September 2021. Payment of the dividend will be on Monday, 4 October 2021. Share certificates may not be dematerialised or rematerialised from Wednesday, 29 September 2021 (which is ex- date) to Friday, 1 October 2021, both days inclusive. Withholding tax on dividends will be deducted for all shareholders who are not exempt

in terms of the legislation at a rate of 20% which will result in a final net cash dividend of 6.4 cents per share. The Company's issued share capital at the period end is 433 699 958 shares and the Company's tax number is 9375/066/71/0.

SUBSIDIARIES

Details of the Company's operating subsidiaries at 30 June 2021 are set out in note 33.

SHARE CAPITAL

The authorised ordinary share capital of the Company remains unchanged at 500 million ordinary par value shares of 0.6146 cents each.

The following ordinary shares were in issue at the end of the year under review:

	2021	2020
Opening balance	452 649 116	443 854 886
Issue in terms of dividends paid	-	8 794 230
Cancellation of treasury shares	18 949 158	-
Closing balance	433 699 958	452 649 116
Treasury shares	-	18 949 158
Closing balance net of treasury
shares	433 699 958	433 699 958

Further details of share capital can be found in note 17 to the annual financial statements

SPECIAL RESOLUTIONS

Special resolutions to approve the remuneration of the non-executive directors, a general authority to acquire the Company's own shares, authority to provide financial assistance to related/inter-related parties and to provide inter-Group loans and other financial assistance for purposes of funding the Group and a general authority to allot and issue shares pursuant to the Conditional Share Plan, were approved in the year under review.

REVIEW OF OPERATIONS

MRM South Africa

Operating profit increased by 3% to R214 million (FY2020: R207 million) as a result of a reduction in cost as well as revenue increasing by 1% to R549 million (FY2020: R543 million). The rise in revenue was as a result of a 3% growth in core storage, digital work flow solutions and scanning revenue, which was partially offset by a reduction in box service related revenue. New box volume intake is expected to increase, whilst we seek to improve efficiencies in our warehouses. Key focus areas centre around the operationalisation of the digital services pipeline and key projects.

MRM Rest of Africa

MRM Rest of Africa consists of operations in Kenya, Botswana and Mozambique. Improved trading conditions positively impacted operating profit which increased by 15% to R35 million (FY2020: R30 million), despite a decrease in revenue of 6% to R100 million (FY2020: R106 million) due to the disposal of the Zambian business and closure

ANNUAL FINANCIAL STATEMENTS

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