Annual Financial Statements 2020 Ayo Technology Solutions Limited

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Annual Financial Statements 2020 Ayo Technology Solutions Limited GROUP ANNUAL FINANCIAL STATEMENTS 2020 AYO TECHNOLOGY SOLUTIONS LIMITED AYO TECHNOLOGY SOLUTIONS LIMITED (Incorporated in the Republic of South Africa) Registration number: 1996/014461/06 Share code: AYO ISIN: ZAE000252441 (“AYO” or the “Group” or the “Company”) AYO TECHNOLOGY SOLUTIONS LIMITED Contents Audit and risk committee report 2 Directors’ responsibilities and approval 6 Company secretary’s certification 8 Independent Auditor's report 9 Directors’ report 15 Consolidated statement of financial position 24 Consolidated statement of profit or loss and other comprehensive income 25 Consolidated statement of changes in equity 26 Consolidated statement of cash flows 28 Accounting policies 29 Notes to the consolidated annual financial statements 48 Level of assurance The consolidated annual financial statements have been audited in compliance with the applicable requirements of the Companies Act of South Africa. Preparers The consolidated annual financial statements have been prepared by the Group Financial and Reporting Accountant, Livhuwani Rasifudi CA(SA) and Group Executive: Finance, Nokukhanya Sithole CA(SA), under the supervision of the Group Chief Financial Officer, Isaiah Tatenda Bundo CA(SA). Published 22 December 2020 Group Annual Financial Statements 2020 1 AYO TECHNOLOGY SOLUTIONS LIMITED Audit and Risk Committee Report The Audit and Risk Committee (“the Committee”) is pleased to submit this report for the financial year ended 31 August 2020 as recommended by the King Code, the JSE Listing Requirements and the Companies Act of South Africa (“Companies Act”) . MEMBERS OF THE AUDIT AND RISK COMMITTEE AND ATTENDANCE AT MEETINGS The Committee consists of independent non-executive directors listed below, all of whom have the requisite business acumen and experience as well as financial skills to fulfil the Committee’s duties. During the year under review, eight meetings were held and attendance of those meetings is set out in the table below: 14 November 11 December 28 January 26 February 18 May 3 July 29 July 20 August Name 2019 2019 2020 2020 2020 2020 2020 2020 Rosemary Mosia (Chairperson) O P O P P P P P Dr Dennis George P P P P P P P P Sello Rasethaba P P P P O O O O Aziza Amod P P P P P P P P Adv. Ngoako Ramathlodi P O P P O P P P In addition to the Committee members, the chief executive officer, chief financial officer, head of internal audit, Group Executive: Finance and the external auditors attend the meetings of the Committee by invitation. The external auditors may communicate directly with the Chairperson of the Committee and all of its members throughout the year. The Chairperson of the Committee is also available at the annual general meeting (“AGM”) to answer questions about the Committee’s activities. ROLE AND RESPONSIBILITIES OF THE AUDIT AND RISK COMMITTEE The Committee is constituted as a statutory committee of the Board. The Committee has terms of reference in place, which regulate both its statutory duties and those duties assigned to it by the Board. The Committee reviewed, updated, and adopted the audit and risk constitution and risk management charter (“the charter”) in May 2020 which was updated to take into account material changes to the JSE Listings Requirements during the year under review. The updated charter was approved by the Board. The roles and responsibilities of the Committee include: • to provide independent oversight of the effectiveness of the Group’s assurance functions and services, with particular focus on combined assurance arrangements, including external assurance service providers, internal audit and the finance function; • to provide independent oversight of the integrity of the annual financial statements and, to the extent delegated by the Board, other external reports issued by the Group; • to consider on an annual basis, and satisfy itself of the appropriateness and expertise of the chief financial officer and the finance department; • to ensure that the Group has established financial reporting procedures and that those procedures are operating; • to review the effectiveness of the internal audit department; • to review the quality of the external audit; and • to r ev i e w a n d r e c o m m e n d to t h e B o a r d f o r a p p r ov a l t h e i n te r i m r e s u l t s , p r e l i m i n a r y r e s u l t s , t h e a n n u a l f i n a n c i a l s t a te m e n t s a n d t h e I n te g r a te d R e p o r t . 2 Group Annual Financial Statements 2020 AYO TECHNOLOGY SOLUTIONS LIMITED Audit and Risk Committee Report (continued) KEY FOCUS AREAS IN 2020 The significant areas of focus for the Committee in relation to the 2020 financial year and up to the date of this report included: • approving the appointment of the new external auditors for the Group; • reviewing and approving a related party transactions policy for the Group; • reviewing and approving a materiality policy for the Group; • approving an internal audit plan for the Group; and • reviewing the adequacy of the Group’s controls and procedures over financial reporting. EXTERNAL AUDITOR The previous external auditors of the Group, BDO South Africa Incorporated (“BDO”) did not make themselves available for re-appointment as the external auditors of the Company and its subsidiaries at the AGM of the Company which was held on 14 April 2020. The Board and the Committee appointed Crowe JHB (“Crowe”), which is member of Crowe Global and Thawt Incorporated (“THAWT”) as joint external auditors of the Company and its subsidiaries with effect from 30 April 2020. The joint appointment will be ratified at the next AGM. Mr Gary Kartsounis was appointed as the designated auditor for the 2020 financial reporting period. The Committee is of the view and is satisfied that the external auditor is independent of the Group. The Committee approved the level of scope, external audit fees and the extent of non-audit services for the 2020 audit. The nature and extent of all non-audit services provided by the external auditors are approved and reviewed by the Committee. The external auditors did not provide any non-audit services during the current year under review. The Committee evaluated the audit and was satisfied with the performance of the external auditor during the reporting period and with the quality of the external audit. The Committee considered any reported control weaknesses, management’s response for their improvement and assessed their impact on the general control environment. KEY AUDIT MATTERS RELATING TO THE 2020 AUDIT The Committee considered the key audit matters as outlined in the independent auditor’s report set out on pages 9 to 14. These key audit matters were: • valuation of unlisted shares; • occurrence of related party transactions and completeness of related party disclosures; and • valuation of intangible assets and goodwill. The Committee is satisfied that these key audit matters were adequately addressed in the context of the audit. Group Annual Financial Statements 2020 3 AYO TECHNOLOGY SOLUTIONS LIMITED Audit and Risk Committee Report (continued) INTERNAL AUDIT A head of internal audit was appointed on 1 March 2020. The head of internal audit reports directly to the Chair of the Committee and provides the Committee with assurance on the effectiveness of the Group’s internal control environment. During the year under review the Committee: • reviewed and approved an annual internal audit plan and charter; • assessed the appropriateness and expertise of the head of internal audit as well as the internal audit department. The Committee resolved to bolster the internal audit department with additional resources; • received reasonable assurance on the adequacy of the Group’s financial reporting procedures; • considered the internal audit reports on the Group’s systems of internal controls, including financial controls, and business risk management; and • reviewed significant issues raised by the internal audit processes and the adequacy of corrective action in response to internal audit findings and considered management’s responses to adverse internal audit findings. FINANCIAL REPORTING The Committee reviews the Group’s accounting policies and the annual financial statements to ensure that they are in compliance with International Financial Reporting Standards (“IFRS”), the JSE Listings Requirements and the Companies Act. During the year under review, the Committee: • considered the appropriateness of the accounting policies adopted; • considered the accounting treatment of significant transactions; • reviewed the process implemented by management for the preparation of the annual financial statements and is satisfied that the processes applied in preparing the financial statements were appropriate; • confirmed the going concern as the basis of preparation of the annual financial statements; • ensured that the annual financial statements fairly present the financial position of the Group, the result of operations and cash flows for the financial year ended 31 August 2020; and • considered the findings contained from JSE queries and ensured that these were taken into account when the annual financial statements for the year ended 31 August 2020 were prepared. ANNUAL FINANCIAL STATEMENTS The Committee reviewed the annual financial statements for the year ended 31 August 2020 and is satisfied that they comply in all material respects with the requirements of International Financial Reporting Standard (”IFRS”), the Companies Act, and the JSE Listing Requirements. The Committee recommended the annual financial statements to the Board for approval. 4 Group Annual Financial Statements 2020 AYO TECHNOLOGY SOLUTIONS LIMITED Audit and Risk Committee Report (continued) EXPERTISE AND EXPERIENCE OF THE CHIEF FINANCIAL OFFICER The Committee has satisfied itself in terms of paragraph 3.84(g)(i) of the JSE Limited Listing Requirements that the chief financial officer has the appropriate experience and expertise to meet the responsibilities of the position.
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