Raubex : Annual Financial Statements 2024

Raubex Group Limited and its subsidiaries

Registration number: 2006/023666/06

ANNUAL FINANCIAL STATEMENTS

for the year ended 29 February 2024

Raubex Group Limited and its subsidiaries

Annual financial statements for the year ended 29 February 2024

General information

Nature of business	Diversified infrastructure development and construction materials
Directors	NF Msiza (Chief Executive Officer)
	DC Lourens (Chief Operating Officer)
	SJ Odendaal (Financial Director)
	RJ Fourie (Non-executive, Chairman)
	SR Bogatsu (Lead Independent Non-Executive)
	BH Kent (Independent Non-Executive)
	N Fubu (Independent Non-Executive)
	AM Hlobo (Independent Non-Executive)
Secretary	GM Chemaly
Registered office	Building 1
	Highgrove Office Park
	50 Tegel Avenue
	Highveld
	0169
Business address	Cleveley
	Kenneth Kaunda Road (Extension)
	Bloemfontein
	South Africa
	9301
Postal address	PO Box 3722
	Bloemfontein
	9301
Auditors	PricewaterhouseCoopers Inc.
	Registered Auditors
Company registration number	2006/023666/06
Officer responsible for the preparation of the financial statements	SJ Odendaal
Designation	Financial Director
Qualification	Chartered Accountant (SA)

These financial statements have been audited in compliance with the applicable requirements of the Companies Act, 71 of 2008.

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Raubex Group Limited and its subsidiaries

Annual financial statements for the year ended 29 February 2024

Index

The reports and statements set out below comprise the annual financial statements presented to the shareholders:
Index	Page
Statement of responsibility by the board of directors	3
Chief Executive Officer and Financial Director responsibility statement	4
Statement of compliance by the Company Secretary	4
Independent auditor's report	5 - 11
Audit committee report	12 - 14
Directors' report	15 - 18
Group statement of financial position	19
Group statement of profit or loss	20
Group statement of comprehensive income	21
Group statement of changes in equity	22
Group statement of cash flows	23
Notes to the group financial statements	24 - 102
Holding company statement of financial position	103
Holding company statement of comprehensive income	104
Holding company statement of changes in equity	105
Holding company statement of cash flows	106
Holding company notes to the financial statements	107 - 116

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Raubex Group Limited and its subsidiaries

Annual Financial Statements for the year ended 29 February 2024

Statement of responsibility by the Board of Directors for the year ended 29 February 2024

The Directors are responsible for the maintenance of proper accounting records and the preparation, integrity and fair presentation of the Annual Financial Statements and Group Annual Financial Statements of Raubex Group Limited and its subsidiaries. The Directors' Report and Annual Financial Statements presented on pages 15 to 116 have been prepared in accordance with IFRS® Accounting Standards (IFRS) and in the manner required by the Companies Act, 71 of 2008 of South Africa and the JSE Listings Requirements, and include amounts based on judgements and estimates made by Management. The Directors are also responsible for the preparation of the other information included in the integrated report and for both its accuracy and its consistency with the Annual Financial Statements.

The Directors acknowledge that they are ultimately responsible for the process of risk management and the systems of internal financial control established by the Group and place considerable importance on maintaining a strong control environment. To enable the Directors to meet these responsibilities, the Board sets standards for internal control aimed at reducing the risk of error or loss in a cost-effective manner. These standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk.

These controls are monitored throughout the Group and all employees are required to maintain the highest ethical standards in ensuring the Group's business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the Group is on identifying, assessing, managing and monitoring all known forms of risk across the Group. While operating risk cannot be fully eliminated, the Group endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints. The Directors and Management are further responsible for the controls over, and the security of the website, and, specifically, for establishing and controlling the process for electronically distributing annual reports and other financial information to shareholders.

The Directors are of the opinion, based on the information and explanations given by Management and the Internal Auditors, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the Financial Statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss.

The going concern basis has been adopted in preparing the Financial Statements. The impact of the conflict in Ukraine has been considered by the Directors as part of their going concern assessment. The Directors have no reason to believe that the Group will not be a going concern in the foreseeable future based on its secured order book, available cash resources and forecasts. The viability of the company and the Group is supported by the Financial Statements.

The Financial Statements have been audited by the independent auditors, PricewaterhouseCoopers Inc., who has been given unrestricted access to all financial records and related data, including minutes of all meetings of shareholders, the Board of Directors and committees of the Board. The Directors believe that all representations made to the independent auditors during their audit were valid and appropriate. PricewaterhouseCoopers Inc.'s unmodified audit report is presented on page 5 to 11.

The Financial Statements were approved and authorised for issue by the Board of Directors on 8 May 2024 and signed on its behalf by:

NF Msiza		SJ Odendaal
Chief Executive Officer		Financial Director

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Raubex Group Limited and its subsidiaries

Annual Financial Statements for the year ended 29 February 2024

Chief Executive Officer and Financial Director responsibility statement

Chief Executive Officer and Financial Director responsibility statement pursuant to paragraph 3.84(k) of the JSE Listings Requirements.

Each of the directors, whose names are stated below, hereby confirm that -

1. the Annual Financial Statements set out on pages 19 to 116, fairly present in all material respects the financial position, financial performance and cash flows of the issuer in terms of IFRS;
2. to the best of our knowledge and belief, no facts have been omitted or untrue statements made that would make the annual financial statements false or misleading;
3. internal financial controls have been put in place to ensure that material information relating to the issuer and its consolidated subsidiaries have been provided to effectively prepare the financial statements of the issuer;
4. the internal financial controls are adequate and effective and can be relied upon in compiling the annual financial statements, having fulfilled our role and function as executive directors with primary responsibility for implementation and execution of controls;
5. where we are not satisfied, we have disclosed to the audit committee and the auditors any deficiencies in design and operational

effectiveness of the internal financial controls, and have taken steps to remedy the deficiencies; and

1. we are not aware of any fraud involving directors.

NF Msiza		SJ Odendaal
Chief Executive Officer		Financial Director

Statement of compliance by the Company Secretary

I certify that the Company has lodged with the Registrar of Companies all such returns as are required of a public company in terms of the Companies Act, 71 of 2008, in respect of the year ended 29 February 2024, and that all such returns are true, correct and up to date.

GM Chemaly

Company Secretary

8 May 2024

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Independent auditor's report

To the Shareholders of Raubex Group Limited

Report on the audit of the consolidated and separate financial statements

Our opinion

In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of Raubex Group Limited (the Company) and its subsidiaries (together the Group) as at 29 February 2024, and its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with IFRS Accounting Standards and the requirements of the Companies Act of South Africa.

What we have audited

Raubex Group Limited's consolidated and separate financial statements set out on pages 19 to 116 comprise:

• the group and holding company statements of financial position as at 29 February 2024;
• the group statement of profit or loss for the year then ended;
• the group and holding company statements of comprehensive income for the year then ended;
• the group and holding company statements of changes in equity for the year then ended;
• the group and holding company statements of cash flows for the year then ended; and
• the notes to the financial statements, including material accounting policy information.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the consolidated and separate financial statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group in accordance with the Independent Regulatory Board for Auditors' Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performing audits of financial statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent with the corresponding sections of the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (including International Independence Standards).

PricewaterhouseCoopers Inc.,

61 Second Avenue, Westdene, Bloemfontein, 9301, P O Box 818, Bloemfontein, 9300 T: [phone], F: [phone], www.pwc.co.za

Chief Executive Officer: L S Machaba

The Company's principal place of business is at 4 Lisbon Lane, Waterfall City, Jukskei View, where a list of directors' names is available for inspection. Reg. no. 1998/012055/2 VAT reg.no. 4950174682

Our audit approach

Overview

Overall group materiality

• Overall group materiality: R156.8 million, which represents 0.9% of consolidated revenue.

Group audit scope

• The consolidated financial statements comprise the Company and 127 components (which include subsidiaries, joint ventures, joint operations, and associates). Full scope audits were performed on all 3 financially significant components. Full scope audits were performed on a further 20 components, as well as in respect of the consolidation process, in order to gain sufficient evidence over the consolidated financial statements. Analytical review procedures were performed over the remaining components.

Key audit matters

• Significant estimates and judgements in the accounting for construction contracts

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the consolidated and separate financial statements. In particular, we considered where the directors made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

Materiality

The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements.

Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality for the consolidated financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

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Overall group materiality

How we determined it

Rationale for the materiality benchmark applied

R156.8 million

0.9% of consolidated revenue

We selected consolidated revenue as our materiality benchmark because, in our view, it reflects the activity levels of the Group, and it is a benchmark against which the performance of the Group can be consistently measured in circumstances of volatile year-on-year earnings. This benchmark has remained a key driver of the Group's business.

We chose 0.9% based on our professional judgement, after consideration of the range of quantitative materiality thresholds that we would typically apply when using revenue to compute materiality, and taking into account the levels of debt within the Group

How we tailored our group audit scope

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates.

The Group is structured in four divisions: the Materials Handling and Mining division, the Construction Material division, the Roads and Earthworks division and the Infrastructure division, operating across 9 different geographical locations - South Africa, Australia, Botswana, Cameroon, Eswatini, Lesotho, Mozambique, Namibia and Zimbabwe.

The consolidated financial statements comprise the Company and 127 components (which include subsidiaries, joint ventures, joint operations, and associates). Full scope audits were performed on all 3 financially significant components. Full scope audits were performed on a further 20 components, as well as in respect of the consolidation process, in order to gain sufficient evidence over the consolidated financial statements. Analytical review procedures were performed over the remaining components.

In establishing the overall approach to the group audit, we determined the extent of the work that needed to be performed by us, as the group engagement team, and other component auditors from other PwC network firms, as well as other audit firms operating under our instruction, in order to issue our audit opinion on the consolidated financial statements of the Group. Where component auditors performed the work, we determined the level of involvement necessary in the audit work at those components to be able to conclude whether sufficient appropriate audit evidence has been obtained as a basis for our opinion on the consolidated financial statements as a whole.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated and separate financial statements of the current period. These matters were addressed in the context of our audit of the consolidated and separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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We have determined that there are no key audit matters to communicate in our report in respect ofthe separate financial statements.

Key audit matter

Significant estimates and judgements in the accounting for construction contracts

Refer to Notes 17 (Contract assets and liabilities) and 30 (Revenue) to the consolidated financial statements.

Contracting revenue relating to construction contracts with customers, recognised at an amount of R11.9 billion for the year ended 29 February 2024, contributes a significant portion of the Group's revenue. This revenue is recognised over time, by measuring the progress towards the satisfaction of performance obligations stipulated in its contracts with customers for the construction of assets. To determine the progress towards the satisfaction of the performance obligations on each contract, the Group uses an input method, measuring the costs incurred to date relative to the total estimated cost of the contract.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately to the extent that the remaining contract costs are deemed to be unavoidable.

Construction contract revenue within the Group results from "cost-plus", "re- measurable" and "fixed price" contracts. Each contract has specific assumptions and estimates attributed to it regarding:

• Estimated project costs;
• The profit margins on the contracts; and
• Any variable considerations, claims or uninstalled materials to be recognised.

We considered this to be a matter of most significance to our current year audit due to the following:

• Management's assessment involves making significant estimates in determining the

How our audit addressed the key audit matter

We performed the following procedures on a sample of construction contracts:

• We compared estimated total contract revenue as per management's calculations to relevant documentation as applicable, such as signed contracts, award letters, minutes of meetings with contract clients and signed variation orders. No material differences were noted;
• We discussed the status of contracts with management, directors, finance and technical staff, and contract registers were scrutinised. In these discussions, which included consideration of profit margins, loss making contracts and contract assets and liabilities balances, specific emphasis was placed on uncertified contract revenue. We noted no matters in this regard requiring further consideration;
• We tested a sample of costs incurred to date by agreeing it to underlying documentation. No material differences were noted;
• We recalculated costs incurred to date relative to the total estimated construction costs and agreed it to management's calculations. No material differences were noted;
• We agreed certified revenue recognised to work certified to date by contract engineering experts. No material differences were noted;
• We assessed the competency of the contract engineering experts by obtaining evidence relating to their qualifications, experience and professional memberships;
• We performed reasonability tests on the expected profit margins by comparing it to similar ongoing projects and contracts completed during the year. We tested profit margins from year to year on projects running over the financial year end. Deviations in margins were evaluated against explanations obtained from management and other relevant documentation. We found no aspects in this regard which required further consideration;

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contract revenue that should be recognised; and

Given the magnitude of the contract revenue and contract assets and liabilities balances, the accounting treatment of construction contracts has a significant impact on the consolidated financial statements.

• We recalculated the revenue per contract based on the input method calculations. Based on our recalculation, we agreed the adjustments between certified progress revenue and revenue recognised to the construction contract assets and liabilities in the consolidated financial statements. No material differences were noted;

We agreed the total revenue as per the respective contract schedules to revenue recorded in the accounting records. No material differences noted.

Other information

The directors are responsible for the other information. The other information comprises the information included in the document titled "Raubex Group Limited and its subsidiaries Annual Financial Statements for the year ended 29 February 2024", which includes the Directors' Report, the Audit Committee report and the Statement of compliance by the Company Secretary as required by the Companies Act of South Africa, which we obtained prior to the date of this auditor's report, and the other sections of the document titled "Raubex Group Limited 2024 Integrated Report", which is expected to be made available to us after that date. The other information does not include the consolidated or the separate financial statements and our auditor's report thereon.

Our opinion on the consolidated and separate financial statements does not cover the other information and we do not and will not express an audit opinion or any form of assurance conclusion thereon.

In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor's report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the consolidated and separate financial statements

The directors are responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordance with IFRS Accounting Standards and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated and separate financial statements, the directors are responsible for assessing the Group and the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group and/or the Company or to cease operations, or have no realistic alternative but to do so.

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