Sephaku : FY 2022 Annual Financial Statements for the 12 months ended 31 March 2022

20

22

BUILDING BLOCKS FOR GROWTH

ANNUAL

FINANCIAL

STATEMENTS

GENERAL INFORMATION

Country of incorporation and domicile	South Africa
Nature of business and principal activities	Construction materials company
Directors	B Williams	Chairperson - independent non-executive director
	MM Ngoasheng	Independent non-executive director
	MJ Janse van Rensburg	Independent non-executive director
	B Bulo	Independent non-executive director
	Dr. L Mohuba	Non-executive director
	NR Crafford-Lazarus	Chief executive officer and financial director
	KJ Capes	Executive director
Registered office	Southdowns Office Park
	First floor, Block A
	Cnr Karee and John Vorster Streets
	Irene, X54
	0062
Website	www.sephakuholdings.com
Postal address	PO Box 7651
	Centurion
	0046
Bankers	Nedbank
Company secretary	Acorim Proprietary Limited
	Telephone: [phone]
	Email: [e-mail]
Métier Mixed Concrete (wholly owned subsidiary)	Physical address: Romead Business Park, 23 Malone Road, Maxmead 3610
	Postal address: Postnet Suite #546, Private Bag X4, Kloof 3640
	Telephone: [phone] 638437
	Website: www.metiersa.co.za
Dangote Cement South Africa (Associate)	Physical address: Southdowns Office Park, Block A, Ground Floor
	Cnr Karee and John Vorster Streets, Irene, X54 0062
	Postal address: PO Box 68149, Highveld 0169
	Telephone: [phone]
	Website: www.sephakucement.co.za
Company registration number	2005/003306/06
Preparer	The annual financial statements were internally compiled under the supervision of:
	NR Crafford-Lazarus
Transfer secretaries	Computershare Investor Services Proprietary Limited
	Rosebank Towers, 15 Biermann Avenue, Rosebank, Johannesburg 2196
	Private Bag X9000, Saxonwold 2132
	Telephone: [phone]
JSE sponsor	QuestCo Corporate Advisory Proprietary Limited
	Telephone: [phone]
Investor relations officer	Sakhile Ndlovu
	Email: [e-mail]
	Telephone: [phone]

INDEX

The reports and statements set out below comprise the annual financial statements presented to the shareholders:

Audit and risk committee report

Independent auditor's report

Directors' responsibilities and approval

Director responsibilities statement

Certificate by company secretary

Directors' report

Statements of financial position

Statements of profit or loss and other comprehensive income

Statements of changes in equity

Statements of cash flows

Accounting policies

Notes to the annual financial statements

Shareholders' analysis

02

05

08

08

08

09

14

15

16

17

18

26

61

The annual financial statements have been audited by BDO South Africa Inc in compliance with the applicable requirements of the Companies Act, 71 of 2008, as amended (Companies Act) and have been prepared under the supervision of NR Crafford-Lazarus, CA(SA).

Issued

21 June 2022

Annual financial statements for the year ended 31 March012022

AUDIT AND RISK COMMITTEE REPORT

1. MANDATE AND TERMS OF REFERENCE

The committee acts according to a formal mandate and terms of reference that have been approved by the board of directors (board) of Sephaku Holdings Limited (SepHold). The committee has executed its duties during the past financial year according to this mandate and terms of reference, and has discharged its responsibilities contained therein. The terms of reference are reviewed each year.

The members of the audit committee are all independent non-executive directors of the group and consist of:

Name

MJ Janse van Rensburg (chairperson)

B Bulo

B Williams

The committee is satisfied that the members thereof have the required knowledge and experience as set out in Section 94(5) of the Companies Act and Regulation 42 of the Companies Regulation, 2011.

2. COMPOSITION AND ATTENDANCE AT MEETINGS

There was no change to the committee members during the year under review. In addition, the chief executive officer (CEO) and financial director are permanent invitees to meetings. The committee performs the duties laid upon it by section 94(7) of the Companies Act by holding meetings at least three times per annum and special committee meetings are convened as required.

The external auditors attended and reported at all meetings of the committee. The external auditors have unrestricted access to the committee.

Full details of the attendance and dates of the meetings have been disclosed in the corporate governance section of the integrated annual report.

3. STATUTORY DUTIES

The committee's roles and responsibilities include its statutory duties as per the Companies Act and the responsibilities assigned to it by the board, which are reviewed annually.

The committee has performed the following statutory duties:

• Nominated and recommended the appointment of BDO South Africa Inc as the external auditor of SepHold, with J Barradas as the lead engagement partner. BDO South Africa Inc is, in the opinion of the committee, independent of the group.
• Reviewed and agreed to the fees to be paid to the external auditor and their terms of engagement in consultation with executive management.
• Ensured that the appointment of the external auditor complies with the Companies Act and any other legislation relating to the appointment of auditor.
• Determined the nature and extent of allowable non-audit services and pre-approved any proposed agreement with the external auditor for the provision of non-audit services to SepHold.
• Received no complaints relating to the accounting practices, the auditing or content of annual financial statements, and the internal financial controls of SepHold.
• Considered and, when appropriate, made recommendations to the board on internal financial controls, accounting policies, records and reporting.
• Ensured, on an annual basis, that the financial director has the appropriate expertise and experience.
• Ensured that the group and company has established appropriate financial reporting procedures and that those procedures are operating.
• Ensured suitability of the appointment of external auditors and the designated individual partner, specifically taking into account any information pursuant to paragraph 22.15(h) of the JSE Limited Listings Requirements (JSE Listings Requirements).

4. EXTERNAL AUDITOR

The committee has satisfied itself that the external auditor, BDO South Africa Inc, is independent of the group, as defined by the Companies Act and other relevant legislation. Requisite assurance was sought and provided by the auditor that internal governance processes within the audit firm support and demonstrate its claim to independence. Furthermore, the approval of all non-audit-related services are governed by an appropriate approval framework.

The committee agreed to the engagement letter, terms, audit plan and budgeted audit fees for the financial year ended 31 March 2022. This was done after consultation with executive management taking into consideration such factors as the timing of the audit, the extent of work required and the scope.

The external auditor is invited to and attends all committee meetings. Findings by the external auditor arising from his annual statutory audit is tabled and presented at a committee meeting following the audit. The external auditor has expressed an unqualified opinion on the annual financial statements for the year ended 31 March 2022. This will be presented at the annual general meeting.

02Sephaku Holdings Limited and its Subsidiaries

AUDIT AND RISK COMMITTEE REPORT continued

SepHold has satisfied itself that BDO South Africa Inc and J Barradas appear on the JSE's list of accredited auditors and their advisors. The committee also acted according to the section 22 requirements of the JSE Listings Requirements and the auditor approval process per 3.84(g) (iii) in requesting from the audit firm (and if necessary consulting with the audit firm on) the information detailed in paragraph 22.15(h) in their assessment of the suitability for appointment of their current or a prospective audit firm and designated individual partner both when they are appointed for the first time and thereafter annually for every re-appointment as well as for an applicant issuer prior to listing.

5. INTERNAL FINANCIAL CONTROLS

The committee has reviewed:

• the effectiveness of the risk management, controls and governance processes, including receiving assurance from management and external audit;
• significant issues raised by the external audit process; and
• policies and procedures for preventing and detecting fraud.

The committee believes that internal financial controls are effective and form a basis for the preparation of reliable annual financial statements. No findings have come to the attention of the committee to indicate that any material breakdown in internal financial controls has occurred during the financial year.

6. ANNUAL FINANCIAL STATEMENTS

The committee reviews the annual financial statements, preliminary results announcements, interim financial information and integrated annual report - this culminates in a recommendation to the board to approve them. The annual financial statements were prepared in accordance with the International Financial Reporting Standards (IFRS), the JSE Listings Requirements and the requirements of the Companies Act.

7. GOING CONCERN

The committee reviewed a documented assessment by management of the going concern premise of the group. Based on this assessment, the committee agrees with management's assessment that the group will be a going concern in the foreseeable future. Refer note 40 for further details.

8. EXPERTISE AND EXPERIENCE OF FINANCIAL DIRECTOR AND THE FINANCE FUNCTION

The committee has satisfied itself that the financial director of SepHold, Mr. NR Crafford-Lazarus, has appropriate expertise and experience to meet his responsibilities in that position as required in terms of the JSE Listings Requirements.

The committee also satisfied itself of the appropriateness of the expertise and adequacy of resources of the finance function of the company.

9. DUTIES ASSIGNED BY THE BOARD

The duties and responsibilities of the members of the committee are set out in the committee's terms of reference which are approved by the board. The committee fulfils an oversight role regarding SepHold's integrated annual report and the reporting process, including the system of internal financial control.

The committee is satisfied that it has complied in all material respects, with its legal, regulatory and other responsibilities during the year, which includes consideration of the JSE's findings contained in the latest monitoring report when preparing the annual financial statements for the year under review.

10. INTERNAL AUDIT

Due to the nature and size of the head office, the accounting function is structured to accommodate current requirements and as such, the committee does not believe that an internal audit function is viable at this stage. The committee believes that new appointments should strengthen the accounting function and improve control through the division of duties. As such, this is better suited to the company's needs than the performance of an internal audit function. On an operational level, Dangote Cement South Africa Proprietary Limited (SepCem) has a functional internal audit department that reports to the SepCem audit committee on which SepHold is also represented. The internal audit reports for Métier Mixed Concrete Proprietary Limited (Métier) that were previously received were incorporated in the current period and an external review will be conducted during the new financial year.

Annual financial statements for the year ended 31 March032022