The interim report is prepared in accordance with and containing the information required by IAS 34 Interim Financial Reporting, as well as the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by Financial Reporting Standards Council. This interim report complies with the Companies Act 71 of 2008 of South Africa and the JSE Limited's Listings Requirements.

The preparation of this interim report for H1 FY22 was supervised by the Chief Financial Officer, Mr Ivan Dittrich, CA (SA).

Accounting policies

The accounting policies applied in the preparation of these interim financial statements are in terms of International Financial Reporting Standards ("IFRS") and are consistent with those accounting policies applied in the preparation of the previous consolidated annual financial statements.

New standards effective for annual periods beginning on or after 1 January 2021

A number of amendments to accounting pronouncements are effective from 1 January 2021, but they do not have a material effect on the Group's interim financial statements.

• Covid-19-related Rent Concessions Amendments (Amendments to IFRS 16 – effective for annual reporting periods beginning on or after 1 June 2020)
• Interest Rate Benchmark Reform ("IBOR") – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) – effective date 1 January 2021. Management is in the process of assessing the impact on the Group's financial results. The Group's facilities have various linked rates including LIBOR, EIBOR, EURIBOR and IDR and the facilities have various maturity dates. The facilities in the Group have not yet transitioned to alternative benchmark rates. Management is still in the process of negotiating new reference rates on the IBOR-linked borrowings with bank syndicates. At present, no material impact is anticipated on the Group's financial results when the transition to alternative benchmark rates take place.

New standards, amendments to existing standards and interpretations that are not yet effective and have not yet been early adopted

• Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37)
• Annual Improvements to IFRS 2018 – 2020 - IFRS 9 Financial Instruments and IFRS 16 Leases
• Reference to the Conceptual Framework (Amendments to IFRS 3 Business Combinations)
• Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
• Proceeds before intended use – (Amendments to IAS 16)
• Covid-19-related Rent Concessions Amendments (additional Amendments to IFRS)
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
• Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28)
• Narrow scope amendments to IAS 1 Presentation of Financial Statements, Practice statement 2 and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

The Group did not early adopt any new, revised or amended accounting standards or interpretations. The accounting standards, amendments to issued accounting standards and interpretations, which are relevant to the Group but not yet effective at 31 August 2021, are being evaluated for the impact of these pronouncements, and are not expected to have a material impact.

Critical accounting judgments and key sources of estimation uncertainty

The results of the Group have many areas where key assumptions concerning the future, and other key areas of estimation could have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the financial period.

The results contain sources of estimation and uncertainty in the following areas:

• estimates made in determining the recoverable amount of goodwill included in the statement of financial position;
• estimates made in determining the probability of future taxable income justifying the recognition of deferred tax assets;
• estimates made in determining the fair value of share-based payment expenses arising from various share incentive schemes in the Group;
• estimates made in determining the level of provision required for obsolete inventory and the accounting for rebates from suppliers;
• estimates made in determining the amount or timing relating to restructuring, legal claims, taxes, pension and dilapidation obligations;
• estimates made when measuring expected credit losses; and
• judgements and estimates in determining if revenue should be net or gross accounted.

Going concern

The Board has reviewed the future profit and cash flow projections in conjunction with the current economic climate, as well as banking facilities in place to support all the operations, in order to express an opinion on the adequacy of working capital and the ability to continue as a going concern for the foreseeable future. These projections covered future financial performance, solvency and liquidity for a period of 12 months from the date of the release of these results. The Board has concluded that the Group will continue to be a going concern for the foreseeable future and therefore the results have been prepared on a going concern basis.