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AYO TECHNOLOGY SOLUTIONS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1996/014461/06
JSE share code: AYO
ISIN: ZAE000252441
("AYO" or "the Company" or “the Group”)
PUBLICATION OF AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2024,
AVAILABILITY OF INTEGRATED ANNUAL REPORT, NOTICE OF VIRTUAL ANNUAL GENERAL MEETING AND B-
BBEE ANNUAL COMPLIANCE REPORT
Shareholders are referred to the reviewed condensed consolidated financial statements (“Reviewed Results”)
released on SENS on 29 November 2024. Management, the auditors, and their Engagement Quality Control
Reviewers identified certain adjustments necessary to ensure the audited annual financial statements of the
Group (“Audited results”) are fairly and accurately presented. These adjustments, which involved highly
technical matters requiring robust consultation, were made to confirm the correct application of accounting
treatments. In the spirit of transparency and upholding the highest standards of financial integrity, these
material changes have been carefully implemented. We take these adjustments seriously, as they reflect our
commitment to providing shareholders with a true and reliable representation of the Group’s financial health.
These adjustments and related notes are detailed below, demonstrating our dedication to accountability and
ensuring the interests of shareholders are at all times considered.
1. Adjustments
CONSOLIDATED STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 31 AUGUST 2024
Audited Reviewed Explanatory
Adjustments
Results Results notes
Assets R’000 R’000 R’000
Non-current assets 327 160 875 966 (548 806)
Property, plant and equipment 28 020 26 673 1 347 1
Right-of-use of assets 38 452 36 142 2 310 2
Goodwill 12 974 75 458 (62 484) 3
Intangible assets 47 596 102 164 (54 568) 4
1
Investments in equity accounted
42 328 56 889 (14 561)
joint ventures 5
Loans to related party companies 88 544 327 309 (238 765) 6
Other loans receivable 11 216 124 109 (112 893) 7
Investments at fair value through
47 891 62 063 (14 172) 8
profit or loss
Other financial assets 1 374 216 1 158 9
Deferred tax 8 765 64 943 (56 178) 10
Current assets 1 249 362 1 128 014 121 348
Inventories 174,496 223,631 (49,135) 1 &11
Costs to fulfil contracts - Work in
47 788 – 47 788 11
progress
Loans to related party companies 162 798 85 801 76 997 6
Other loans receivable 112 389 – 112 389 7
Trade and other receivables 365 191 447 131 (81 940) 12
Other financial assets 170 047 182 805 (12 758) 9
Current tax receivable 271 9 903 (9 632) 13
Cash and cash equivalents 216 382 178 743 37 639 12
Total assets 1 576 522 2 003 980 (427 458)
Non-current assets held for sale 15 703 15 703 –
Total assets 1 592 225 2 019 683 (427 458)
Equity and liabilities
Equity
Share capital 3 821 752 3 821 752 –
Reserves (285 008) (36 976) (248 032) 14
2
Accumulated loss (2 950 182) (2 476 171) (474 011) 15
Equity attributable to shareholders
586 562 1 308 605 (722 043)
of AYO
Non-controlling interests 59 634 84 272 (24 638) 16
Total equity 646 196 1 392 877 (746 681)
Liabilities
Non-current liabilities 342 082 35 589 306 493
Loans from group companies – 2 328 (2 328) 17
Lease liabilities 27 086 23 564 3 522 2
Derivatives 248 032 – 248 032 14
Employee benefit obligation 2 922 2 922 –
Deferred income 902 – 902 17
Deferred tax 54 938 – 54 938 10
Other financial liabilities 8 202 6 775 1 427 17
Current liabilities 603 032 590 303 12 729
Trade and other payables 288 369 288 369 _
Loans from group companies – 628 (628) 18
Other financial liabilities 2 527 1 899 628 18
Lease liabilities 19 010 20 222 (1 212) 2
Deferred income 8 304 8 304 –
Current tax payable 23 547 22 204 1 343 13
Provisions 214 269 201 670 12 599 19
Dividend payable 47 001 47 001 –
3
Bank overdraft 5 5 –
Total current liabilities 603 032 590 303 12 729
Non-current liabilities held for sale 914 914 –
Total liabilities 946 029 591 217 354 812
Total equity and liabilities 1 592 225 2 019 683 (427 458)
4
Explanatory notes
1. Property, plant and equipment
A total of R1.3 million has been reclassified from inventory to property, plant, and equipment. This
adjustment pertains to an immaterial amount that was not identified during the finalisation of the Reviewed
Results as our focus was directed towards more substantial matters at that time.
2. Right-of-use assets
An adjustment has been made that increased right-of-use assets by R2.3 million, decreased non-current
financial liabilities by R1.2 million, and increased current lease liabilities by R3.5 million. This adjustment
was necessary due to an error identified in the disclosure of one of the subsidiaries during the finalisation
stage of the audit.
3. Goodwill
The impairment of goodwill associated with two cash-generating units (CGUs)—one within the Managed
Services division and the other within the Unified Communications division—had not been finalized when
the Reviewed Results were published. Contributing factors, including adverse media coverage, restricted
access to banking facilities, and contract losses, resulted in suboptimal future cash flow projections.
These circumstances adversely affected the valuation of investments in subsidiaries, which remained
incomplete at the time of the Reviewed Results. Upon completion of the valuation process, a significant
decline in the investment values was observed. This prompted a comprehensive review of all assets
associated with the CGUs, leading to impairments of goodwill, intangible assets, and deferred tax assets.
The assessment of these impairments necessitated substantial time and involved extensive collaboration
with valuation experts and auditors. This thorough review ultimately delayed the finalisation of the audited
financial statements due to the materiality of these balances in the statement of financial position.
Audited Reviewed Adjustment
Results Results
2024 2024
R'000 R'000 R'000
Opening balance 75 458 75 458 -
Impairment (62 484) - (62 484)
Closing balance 12 974 75 458 (62 484)
4. Intangible assets
Due to the winding down of major contracts at a CGU in the Managed Services division coupled with
negative media coverage and the loss of banking facilities, the outlook for future profitability and cash flows
from the brand and customer lists was reassessed and found to be lower than previously anticipated. This
introduced uncertainty regarding the future benefits of these intangible assets, leading to their impairment.
5
Similarly, a CGU in the Unified Communication division faced challenges such as the loss of banking facilities,
negative media attention and the loss of a key contract due to the vendor and the unit’s long-term strategies
not being aligned, which raised concerns about the recoverability of the intangible assets recognised at the
time of its acquisition, necessitating an impairment. Given the material nature of these matters related to
the intangible asset valuation, extensive engagement with external experts and the auditors was required,
causing delays in finalising the impairment assessments prior to the publication of the Reviewed Results.
Audited Results Reviewed Adjustment
2024 Results 2024
'R000 'R000 R’000
Opening balance 109 524 109 524 –
Additions 5 763 5 763 –
Disposal (243) (243) –
Impairment (54 568) – (54 568)
Amortisation (12 186) (12 186) –
Foreign exchange (losses) gains (694) (694) –
Closing balance 47 596 102 164 (54 568)
5. Investments in equity accounted joint ventures and associates
At the time of publishing the Reviewed Results, the audit of the Vunani Fintech Fund was still ongoing. We
initially recognised a preliminary equity accounted loss of R3.2 million based on the reviewed financial
results of Vunani Fintech Fund. However, upon completion of the audit, the final equity accounted losses
attributable to AYO was adjusted upward by R14.6 million. This adjustment resulted in a reduction of the
investment in associates by R14.6 million and a corresponding increase in losses from equity-accounted
investments by R14.6 million.
6. Loans to related party companies
The Reviewed Results included a misclassification identified during the audit process where non-current
loans to related parties were overstated by R54.7 million, while current loans to related parties were
understated by the same amount. This adjustment has been reflected in the audited results. The
reclassification was prompted by the loan terms to Global Command and Control Technologies Proprietary
Limited not being renegotiated as anticipated, resulting in those loans becoming due and payable within 12
months of the year-end (current).
Additionally, Crealpha Proprietary Limited, a start-up entity, experienced typical early-stage performance
challenges, leading to impairments based on recoverability considerations. The Vunani Fintech Fund
portfolio, which primarily consists of start-ups, also faced performance challenges, which increased the
assessment of risk related to the recoverability of some loans.
The ECL’s were initially calculated taking into account anticipated renegotiations of terms and repayment
plans which ultimately did not materialise. As a result, the ECL’s were recalculated result in a downward
adjustment of R161.8 million to loans to related party companies. Overall, this led to a R238.8 million
decrease in non-current loans, a R77 million increase in current loans, and a net decrease of R161.8 million
in total loans to related parties.
6
AEEI Loan 2 per Reviewed results
Audited Reviewed Adjustments
Results Results
2024 2024
R’000 R’000 R’000
AEEI Loan 2 – 6 750 (6 750)
This loan is unsecured, and interest is charged at the prime overdraft rate. There are no fixed terms of
repayment, however the Company has granted African Equity Empowerment Investments Limited (“AEEI”)
an unconditional right to defer payment for at least 12 months. The Gross amount of the loan is R8.5 million.
AEEI Loan terms per Audited AFS
The loan is unsecured, and interest is charged at the prime overdraft rate. There are no fixed terms of
repayment, however, AEEI had been granted an unconditional right to defer payment for at least 12 months.
This was settled in the current year.
AEEI Loan 3 per Reviewed results
AEEI Loan 3 – – –
The loan is unsecured, and interest is charged at the prime overdraft rate. There are no fixed terms of
repayment, however, AEEI had been granted an unconditional right to defer payment for at least 12 months.
This was settled in the current year.
AEEI Loan 3 terms per Audited results
This loan is unsecured, and interest is charged at the prime overdraft rate. There are no fixed terms of
repayment, however the Company has granted AEEI an unconditional right to defer payment for at least
12 months. The Gross amount of the loan is R8.5 million.
Vunani Fintech Fund Proprietary Limited (“VFF”) Loan 1 per Reviewed results
Vunani Fintech Fund Proprietary Limited (“VFF”) Loan 1 91 093 154 772 (72 854)
The loan is unsecured, bears interest at the prime rate and is repayable on 28 March 2026. The Gross amount
of the loan is R165.6 million.
Vunani Fintech Fund Proprietary Limited (“VFF”) Loan 1 loan terms per Audited results
The loan is unsecured, bears interest at the prime rate and is repayable on 28 March 2025. The Gross amount
of the loan is R165.6 million.
Vunani Fintech Fund Proprietary Limited (“VFF”) Loan 1 per Reviewed results
Vunani Fintech Fund Proprietary Limited (“VFF”) Loan 2 81 794 138 015 (56 221)
The loan is unsecured and bears interest at prime plus 2%. R35 million of the loan is repayable on 14 October
2025; R15 million of the loan is repayable on 19 April 2026; R39.2 million is repayable on 1 June 2026 and
R10.8 million is repayable on 4 April 2027. The Loan Gross amount is R148.7 million.
7
Vunani Fintech Fund Proprietary Limited (“VFF”) Loan 2 terms
Vunani Fintech Fund Proprietary Limited (“VFF”) Loan
2 terms
The loan is unsecured and bears interest at prime plus 2%
and is repayable as follows:
A total of R35 million of the loan is repayable on 14 October 2025.
A total of R15 million of the loan is repayable on 19 April 2026. 16 991 27 772 (10 781)
A total of R39.2 million is repayable on 1 June 2026.
A total of R10.8 million is repayable on 4 April 2027.
The Loan Gross amount is R148.7 million.
GCCT – Loan 2 31 716 32 934 (1 218)
The loan bears interest at the prime rate and due for repayment 31 December 2025. The loan is secured by
the current assets of GCCT with a carrying amount of R68.1 million (2023: R63.4 million) and non-current
assets of GCCT with a carrying amount of R14.8 million (2023: R17.8 million) as at 31 August 2024. The
carrying amounts of the assets secured are measured in accordance with the applicable IFRS standard and
none of these assets were revalued in the current year. The Gross amount of the loan is R45.4 million.
GCCT - Loan 2 terms per Audited results
The loan bears interest at the prime rate and due for repayment 31 December 2024. The loan is secured by
the current assets of GCCT with a carrying amount of R68.1 million (2023: R63.4 million) and non-current
assets of GCCT with a carrying amount of R14.8 million (2023: R17.8 million) as at 31 August 2024. The carrying
amounts of the assets secured are measured in accordance with the applicable IFRS standard and none of
these assets were revalued in the current year. The Gross amount of the loan is R45.4 million.
GCCT – Loan 3 22 998 26 874 (3 876)
The loan is unsecured, bears interest at the prime rate. The loan repayment date is 31 December 2025. The
Gross amount of the loan is R27.7 million.
GCCT-Loan 3 terms per Audited results
The loan is unsecured, bears interest at the prime rate. The loan repayment date is 31 December 2024.
The Gross amount of the loan is R27.7 million.
GCCT – Loan 4 – – –
The loans are unsecured, bear interest at the prime rate is repayable as follows:
A total of R4.3 million no later than 31 August 2023.
A total of R4.5 million no later than 31 August 2023.
A total of R4.8 million no later than 28 February 2023.
A total of R3.8 million no later than 31 May 2023.
The outstanding balance inclusive of interest will be repaid no later than 31 December 2023.
This was settled in the current year. Furthermore, loans of R61.6 million have been subordinated.
8
Crealpha Proprietary Limited per Reviewed results
Crealpha Proprietary Limited – 25 993 (25 993)
The loan is unsecured, has no fixed repayment terms. The loan bears no interest for the first three years from
the date of draw down and thereafter shall bear interest at the prime rate. The Gross value of the loan is
R32.8 million.
Crealpha Proprietary Limited loan terms per Audited results
The loan is unsecured, has no fixed repayment terms. The loan bears no interest for the first three years
from the date of draw down and thereafter shall bear interest at the prime rate. The outstanding loan
amount has been fully impaired. The Gross value of the loan is R32.8 million.
Total 251 342 413 110 (161 768)
Split between non-current and current portions:
Non-current assets 88 544 327 309 (238 765)
Current assets 162 798 85 801 76 997
Loans to related party companies:
Gross amount is the contractual loan amount with the interest and subsequent loan repayments.
The interest on the Vunani Loan 1 is R18.3 million (2023: R15.0 million), the impairment is R74.5 million
(2023: R nil).
The interest on the Vunani Loan 2 is R19.1 million (2023: R15.5 million), the impairment is R67.0 million
(2023: R nil).
The current year interest on the Crealpha loan is R3.6 million (2023: R2.8 million) and the impairment is
R30.9 million (2023: R nil).
The current year combined interest on the GCCT Loans is R13.1 million (2023: R12.5 million) and the
combined impairment is R29.4 million (2023: R5.0 million).
The current year interest on the GCCT Loans 1 is R4.1 million (2023: R2.5 million) and the impairment is
R9.1 million (2023: R1.5 million).
The current year interest on the GCCT Loans 2 is R5.0 million (2023: R6.9 million) and the impairment is
R11.7 million (2023: R1.9 million).
The current year interest on the GCCT Loans 3 is R3.6 million (2023: R2.99 million) and the impairment is
R8.5 million (2023: R1.4 million).
The current year interest on the AEEI Loan 3 is R0.9 million (2023: R0.8 million) and the impairment is R1.7
million (2023: R nil).
In the current year, AEEI's Loan 2 was fully settled for an amount of R11.3 million. The prior year balance of
R8.2 million had been recorded net of an accumulated impairment of R2.2 million.
9
7. Other loans receivable
Preference share - Bambelela
There was a slight overall reduction of R0.6 million in the carrying value of other loans receivable, consisting
of a decrease in non-current loans of R112.9 million and an increase in current loans of R112.3 million
primarily due to a reassessment of expected credit losses (ECLs) for the Bambelela Capital Proprietary Limited
and Dinaledi Technologies Proprietary Limited (“Bambelela”) preference shares. Additionally, the Bambelela
preference share was reclassified from non-current to current assets. This reclassification was necessary as
the renegotiation of terms had not been formalised at year end. Consequently, the preference share
remained repayable within 12 months of the year-end, warranting its classification as a current asset.
Audited Reviewed Adjustment
Results Results
2024 2024
R'000 R’000 R’000
112 390 112 296 94
Preference share - Bambelela terms per Reviewed results
On 28 September 2018, AYO subscribed for 500 000 cumulative, redeemable, non-participating convertible
class C preference shares of no-par value in Bambelela for consideration of R145 million. The preference
shares are redeemable on 31 March 2026. AYO has the right to convert the preference shares into ordinary
shares equal to the redemption amount of redemption date. Interest is accrued at variable prime rate
multiplied by adjustment rate at 72%.
Preference share - Bambelela terms per Audited results:
On 28 September 2018, AYO subscribed for 500 000 cumulative, redeemable, non-participating convertible
class C preference shares of no-par value in Bambelela for consideration of R145 million. The preference
shares are redeemable on 31 March 2025. AYO has the right to convert the preference shares into ordinary
shares equal to the redemption amount of redemption date. Interest is accrued at variable prime rate
multiplied by adjustment rate at 72%.
Preference shares – Dinaledi Technologies Proprietary Limited 11 216 11 894 (678)
(“Dinaledi”)
On 1 November 2021, AYO subscribed for 50 cumulative and redeemable preference shares of no par value
in Dinaledi for R20 million. The preference shares are redeemable on the 10th anniversary from subscription
date. Interest is accrued at the designated coupon rate.
On 9 April 2020, AYO subscribed for 1 500 cumulative, redeemable, non-participating convertible preference
shares of no-par value (“preference shares”) in 4Plus for a consideration of R15 million and on 4 May 2020,
AYO subscribed for a further 1 500 preference shares in 4Plus for a consideration of R15 million. On 21
December 2021 and 2 February 2022, AYO subscribed for 500 preference shares in 4Plus for a consideration
of R5 million each. On 6 April 2022 AYO subscribed for 2000 preference shares for a consideration of R20
million. At 31 August 2024, AYO holds 6 000 preference shares in 4Plus. The preference shares are
redeemable on 9 April 2027, 4 May 2027, 21 December 2028, 2 February 2029 and 6 April 2029 respectively.
AYO has the right to convert the preference shares into ordinary shares equal to the redemption amount
on redemption date. Interest is accrued at prime rate plus 2%. In the current year these were fully impaired
due to the doubt of recoverability of debt.
10
Last Mile Logistics Solutions Proprietary Limited (“LMLS”) – – – –
Loan 5
The loan is secured by trade debtors, bank accounts and loans receivable of LMLS. Interest is charged at
the prime rate. The loan is repayable on 30 September 2024. The loan was fully impaired in the current
year.
– – –
Fueltech Solutions Proprietary Limited (“Fueltech”)
The loan is unsecured. The loan is interest-free for the first – – –
two years, thereafter interest is charged at the prime rate.
The loan is repayable on 27 May 2032. The loan was settled in
the current period.
Total 123 606 124 190 (584)
Split between non-current and current portions: 11 216 124 190 (112 974)
Non-current assets 112 390 – 112 390
Current assets 123 606 124 190 (584)
Total
The general approach is used for loans receivables and other financial assets measured at amortised cost.
The Group considers a financial asset in default when contractual payment are 90 days past due. However,
in certain cases, the Group may also consider a financial asset to be in default when internal or external
information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before
taking into account any credit enhancements held by the Group. A financial asset is written off when there
is no reasonable expectation of recovering the contractual cash flows.
Loans receivables:
Loans receivables include borrowings to entities that are non-related to the Group, it also includes
redeemable cumulative preference shares. The loans are unsecured except for the loan to LMLS which is
secured by trade debtors, bank accounts, loan accounts and motor vehicles. All the loans receivables
measured at amortised cost are considered to have credit risk, and the expected loss allowance is based on
the 12 months expected credit loss.
Some of the loans receivable had a significant increase on the credit risk which resulted in expected credit
loss being recognised by Group. The below loans receivables were impaired due to significant doubt on
the recoverability of the debt:
Dinaledi
An impairment of R3.3 million was raised against the preference shares in the prior year due to doubt of the
recoverability of the loans. The impairment in the current year is R0.07 million.
11
8. Investments at fair value through profit or loss
The valuation of the investment in Bambelela depends on the valuation of the Vunani Fintech Fund. When
the Reviewed Results were published, the Vunani Fintech Fund audit was not completed, so Bambelela's
valuation was based on a preliminary assessment. After the Vunani Fintech Fund audit was finalised,
adjustments led to a R14.1 million decrease in Bambelela's fair value and a R14.1 million increase in other
operating losses.
The change in the opening balance is due to a R19.9 million decrease in Bambelela's valuation after the
Reviewed Results for the financial year ended 31 August 2023. This adjustment was initially considered
immaterial and not made. However, reclassifying the R619 million payment to the PIC from prepayment to
equity reduced the group's total assets, lowering the materiality threshold for the 2023 financial year.
Consequently, the previously immaterial adjustment for Bambelela became material, requiring a prior period
adjustment. Thus, the reduction in fair value adjustments was R5.8 million instead of R14.1 million, reflecting
the downward adjustment of the opening balance by R19.9 million.
Audited Reviewed Adjustments
Results Results
2024 2024
R'000 R’000 R’000
Investments comprise of:
Bambelela 47 891 62 063 (14 172)
Total 47 891 62 063 (14 172)
Reconciliation of investments R’000 R’000 R’000
Opening balance 98 274 118 227 19 953
Additions – – –
Changes in fair values (50 383) (56 164) (5 781)
Total 47 891 62 063 (14 172)
Other operating losses
Audited Reviewed Adjustments
Results Results
2024 2024
R’000 R’000 R’000
Fair value losses on investments at fair value through profit (50 383) (62 491) (12 108)
/loss
Fair value loss on other financial assets (5 019) – (5 019)
Net foreign exchange gains losses (2 979) (2 979) –
Profit on sale of property, plant and equipment 930 942 (12)
Profit on early termination of lease 530 530 –
Fair value loss on foreign exchange contracts (1 294) – (1 294)
Total (58 215) (63 998) (5 783)
12
9. Other financial assets
A reclassification has been made for an immaterial balance of R1.2 million from other non-current financial
assets to current financial assets due to a classification error that was not identified when the Reviewed
Results were published. Additionally, a supplier development loan of R11.6 million was assessed as impaired
because the supplier failed to make payments as agreed. Although this impairment is still considered
immaterial, we chose to make the amendment because it was identified during the final audit.
As a result, the net impact is a reduction of R12.8 million in non-current financial assets, an increase of
R1.2 million in current financial assets, and an increase of R11.6 million in other operating expenses.
Audited Reviewed Adjustments
Results Results
2024 2024
R’000 R’000 R’000
Other financial assets are comprised of:
At fair value through profit or loss
Cadiz Life Investment Enterprise Development Fund 216 216 –
Foreign exchange contracts 206 206 –
Inyosi Supplier Development Fund 1 141 1 141 –
Vunani securities (Funds invested in the stock market) 148 301 148 301 –
Cybersage Africa Joint Venture 233 233 –
Funds invested in unit trusts 14 309 14 309 –
164 406 164 406 –
Loans and receivables at amortised cost
Supplier development loan – 11 600 (11 600)
Staff loans 5 315 1 939 3 376
Loan to directors – 3 376 (3 376)
Mantella Trading 634 Proprietary Limited 1 700 1 700 –
7 015 18 615 (11 600)
171 421 183 021 (11 600)
Split between non-current and current portions:
Non-current assets 1 374 216 1 158
Current assets 170 047 182 805 (12 758)
Total 171 421 183 021 (11 600)
10. Deferred tax
Adjustments made to various account balances during the finalisation of the audit gave rise to temporary
differences resulting in a revision to deferred tax. The final deferred tax balance is contingent on the audit
of balances subject to deferred tax. In compliance with IFRS 12, the deferred tax liability and asset have
been separately disclosed in the Audited results, whereas the Reviewed Results presented a net deferred
tax asset. The previously reported net deferred tax asset of R64.9 million has been adjusted to reflect a
deferred tax asset of R8.8 million (a decrease of R56.1 million) and a deferred tax liability of R54.9 million
(an increase of R54.9 million), resulting in a net deferred tax liability of R46.1 million. The deferred tax
movement primarily arose from the derecognition of deferred tax assets, as their utilisation through future
taxable income and capital gains was deemed uncertain. Refer to note 23.
13
11. Inventories and Costs to fulfil contracts - work in progress
The Work-In-Progress (WIP) balance at two subsidiaries was initially accounted for in accordance with IAS
2. However, during the audit, the auditor's engagement quality control review (EQCR) raised concerns
about the applicability of IFRS 15 instead of IAS 2. After the publication of the Reviewed Results, a
consultative process was conducted, including consultation with an IFRS expert. It was concluded that
these assets should be accounted for under IFRS 15. As a result, an amount of R47.8 million was
reclassified from inventories to a separate line item titled "Costs to Fulfil Contracts - Work in Progress," in
compliance with IFRS 15 requirements. There is no change to the previously reported loss after taxation
of the Group.
12. Trade and other receivables
A write-off of R44.3 million was recognised for a VAT receivable under dispute with SARS. While a favourable
outcome was initially expected, no resolution was reached by the audit’s conclusion. Management felt that
it would be prudent to impair the VAT receivable. This resulted in an increase in operating expenses by
R44.3 million.
In 2024, management reassessed R37.6 million held in attorney trust accounts, reclassifying these
unrestricted, interest-earning funds from other receivables to cash and cash equivalents to reflect their
liquidity and change in use. This adjustment required significant judgment and was not included in the
Reviewed Results.
Consequently, trade and other receivables decreased by R81.9 million, cash and cash equivalents increased
by R37.6 million, and operating expenses rose by R44.3 million.
Other trade receivables movements were a result of reclassification within the trade and other receivables
line items for more appropriate presentation.
Audited Reviewed
Results Results Adjustments
2024 2024
R’000 R’000 R’000
Financial Instruments:
Trade receivables 339 643 357 717 (18 074)
Loss allowance (16 959) (16 959) –
Trade receivables at amortised cost 322 684 340 758 (18 074)
Deposits 16 925 36 675 (19 750)
Accrued income – 17 (17)
Funds held in Trust – 37 636 (37 636)
Related party receivables 19 410 48 469 (29 059)
Provision for impairment of related party receivables (14 081) (68 902) 54 821
Sundry customers 1 044 904 140
Other receivables – (11 931) 11 931
Non-financial instruments
Value added taxation 3 210 47 506 (44 296)
Prepayments 25 040 15 999 9 041
Provision for impairment of prepayments (9 041) – (9 041)
Other prepayments – – –
–
Total 365 191 447 131 (81 940)
14
Cash and cash equivalents
R’000 R’000 R’000
Cash and cash equivalents consists of:
Cash on hand 178 178 –
Bank balances 178 565 178 565 –
Bank overdraft (5) (5) –
Funds held in Trust 37 640 – 37 640
Total 216 378 178 738 37 640
13. Current tax receivable and payable
The tax computations were finalised after the Audited figures were completed, following the publication of
the Reviewed Results. Since the current tax expense, which determines tax receivable or payable, relies on
the Audited figures, this led to a R9.6 million reduction in the tax receivable.
14. Reserves
An adjustment was made to recognise a liability of R248 million arising from the option granted to the PIC,
allowing them to sell up to 5% of their equity stake to AYO after three years from the initial repurchase of
4.99% of their stake in AYO. The corresponding entry was recorded directly through equity thus decreasing
reserves by R248 million. The recognition of this option liability was identified during the final audit
procedures, following a detailed reassessment of material contracts as part of the year-end close process.
Given the complexity of the contractual terms and the timing of the initial review, this item was not
identified at the time of the Reviewed results publication.
15. Accumulated loss
The accumulated loss increased by R474 million because of adjustments that impacted profit and loss as
indicated in the explanatory notes to the income statement. Refer to explanatory note 24.
16. Non-controlling interests
The equity attributable to non-controlling interests increased by R24.6 million due to adjustments in
underlying subsidiaries whose audits were finalised after the publication of the Reviewed Results. This
increase corresponds to the decrease in comprehensive loss attributable to non-controlling interests, as
reflected in the statement of profit or loss.
17. Loans from group companies (Non – Current)
An adjustment identified during the finalisation of the financial statements' preparation has been made to
reclassify a total of R2.3 million from loans from group companies. Of this amount, R0.9 million has been
reclassified to deferred income and R1.4 million to other financial liabilities.
15
18. Loans from group companies (Current)
Loans from group companies amounting to R0.6 million were reclassified to other financial liabilities, as they
were deemed immaterial to warrant separate disclosure on the face of the statement of financial position.
This reclassification aligns with the final Audited results, whereas the Reviewed Results had initially
presented them separately.
19. Provisions
During the financial statement review, the team missed reconciling the VAT provision with filed returns
due to an oversight in closing procedures. While the data was available, it was not reviewed before
issuance. This resulted in the provision in the Reviewed Results being understated by R12.6 million. This
was an isolated lapse, not a systemic control failure. We have since corrected the error in the Audited
results and strengthened controls by:
• Adding VAT reconciliation as a mandatory step in the pre-issuance checklist
• Implementing a secondary review for tax reconciliations
• Enhancing staff training on tax verification
16
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR
ENDED 31 AUGUST 2024
Reviewed
Audited Results Results Explanatory
2024 2024 Adjustments notes
R’000 R’000 R’000
Revenue 1 871 765 1 879 844 (8 079) 20
Cost of sales (1 524 581) (1 524 581) –
Gross profit 347 184 355 263 (8 079)
Other operating income 22 349 14 270 8 079 20
Other operating (losses) gains (58 215) (63 998) 5 783 8
Other operating expenses (648 119) (437 015) (211 104) 21
Movement in credit loss allowances (304 971) (176 810) (128 161) 22
Finance income 96 330 96 330 –
Finance costs (13 751) (13 751) –
Profit/ (Loss) from equity-accounted investments (17 823) (3 262) (14 561) 5
Loss before taxation (577 016) (228 973) (348 043)
Taxation (147 821) (25 728) (122 093) 23
Loss after taxation (724 837) (254 701) (470 136) 24
Other comprehensive income:
Items that will be subsequently reclassified to
profit or loss:
Exchange differences on translating foreign
operations 15 975 (960) 25
Total comprehensive loss for the period (724 822) (253 726) (471 096)
Loss after taxation attributable to:
Shareholders of AYO (680 265) (234 767) (445 498)
Non-controlling interests (44 572) (19 934) (24 638) 16
Total loss after taxation (724 837) (254 701) (470 136)
Total comprehensive loss attributable to:
Shareholders of AYO (680 250) (233 792) (446 458)
Non-controlling interests (44 572) (19 934) (24 638) 16
Total comprehensive loss (724 822) (253 726) (471 096)
Earnings per share (cents)
Basic and dilute loss per share (cents) (208.68) (72.02) (136.66) 26
17
Explanatory notes
20. Revenue
The reclassification of R8.1 million in dividend income from revenue to other income was identified after
the publication of the Reviewed Results, during the preparation of the Audited results.
Audited Reviewed
Results Results
2024 2024 Adjustments
Revenue from contracts with customers R’000 R’000 R’000
Sale of goods 1 128 406 1 128 411 (5)
Rendering of services 743 359 751 433 (8 074)
1 871 765 1 879 844 (8 079)
Disaggregation of revenue from contracts with customers
*
The Group disaggregates revenue from customers as
follows:
Sale of goods 1 128 406 1 128 346 60
Rendering of services 743 359 751 498 (8 139)
Fees earned 52 167 52 167 –
Services revenue 691 192 699 331 (8 139)
Total revenue 1 871 765 1 879 844 (8 079)
Timing of revenue recognition by revenue pattern
At a point in time*
Software and consulting related 14 948 14 948 –
Communication products and hardware-related 572 863 572 863 –
Project-related services 545 708 545 708 –
1 133 519 1 133 519 –
Over-time*
Software and consulting related 66 307 66 307 –
Communication products and hardware related products 849 849 –
Project related services 679 169 679 169 –
746 326 746 326 –
Total revenue 1 871 765 1 879 844 (8 079)
*Disaggregation in the Audited results has been presented
on a different basis i.e. per segment but totals remained the
same except for the decrease of R8 million decrease in
revenue.
18
21. Other operating expenses
This increase in operating expenses of R211.1 million is because of adjustments described in the
following explanatory notes:
• Explanatory Note 3: Impairment of goodwill R62.5 million
• Explanatory Note 4: Impairment of intangible assets R54.6 million
• Explanatory Note 12: Write-off of VAT receivable under dispute with SARS of R44.3 million
• Explanatory Note 22: The reclassification of an ECL allowance of R45.7 million, which was
incorrectly included in operating expenses in the Reviewed Results, has been adjusted to reflect
the correct presentation under movements in credit losses
• Explanatory Note 19: Increase in provision for VAT dispute which increased operating expenses by
R12.6 million
• Explanatory Note 32: Immaterial prior year adjustment of R8.5 million
22. Movement in credit losses
After the initial publication of the Reviewed Results, the expected credit loss (ECL) allowance was revised to
better reflect the risk of recovering the carrying values of the loans. The adjustment of R173.8 million
included:
• R161.8 million for loans to related companies (refer to explanatory note 6)
• R11.6 million for other financial assets (refer to explanatory note 9)
• R0.5 million for other loans receivable (refer to explanatory note 7)
However, an error in the Reviewed Results incorrectly classified R45.7 million of the ECL allowance under
operating expenses. This was corrected in the Audited results, resulting in the correct ECL movement of
R128.1 million being reflected.
23. Taxation expense
The finalisation of the audit led to adjustments in the financial statements, resulting in an increase in the tax
expense. This includes an increase of R17.8 million in normal income tax flowing up from the finalisation of
the subsidiaries results post the Reviewed results, and an increase of R104 million in deferred tax expense.
The deferred tax movement primarily arose from the derecognition of deferred tax assets, as their
utilisation through future taxable income and capital gains was deemed uncertain.
Audited Reviewed
Results Results
2024 2024 Adjustments
R’000 R’000 R’000
Major components of the tax expense
South African normal taxation 13 961 (3 859) 17 820
Under/(Over) provision – prior periods (14) (14) –
Total current tax expense 13 947 (3 873) 17 820
Deferred tax expense
Deferred tax arising on originating and reversing temporary
differences 133 864 29 591 104 273
Arising from prior period adjustments 10 10 –
Total deferred tax expense 133 874 29 601 104 273
Total tax expense 147 821 25 728 122 093
19
24. Loss after taxation
The adjustments to the profit or loss resulted in an increase in the after-tax loss of R470.1 million, which
consequently raised the accumulated loss by the same amount. This total adjustment comprises several
changes, including:
• An increase of R128.1 million movement in credit loss allowances (Explanatory note 22)
• An increase of R211.1 million in other operating expenses (Explanatory note 21)
• An increase of R122.1 million in taxation (Explanatory note 23)
• A decrease of R5.8 million in other operating losses (Explanatory note 8)
• An increase of R14.6 million in the loss from equity-accounted investments (Explanatory note 5)
25. Exchange differences on translating foreign operations
During the audit, certain figures of a foreign-denominated subsidiary were adjusted, with the most
significant change being a write-down of an intangible asset. This adjustment increased the gains from
exchange differences on translating foreign operations by R0.96 million. The corresponding adjustment of
R0.96 million was allocated across various asset and liability items of the foreign operation in the statement
of financial position.
26. Loss per share
As a result of all the adjustments impacting profit or loss, the loss per share and headline loss per share
increased from 72.02 cents to 208.68 cents and from 71.81 cents to 177.09 cents, respectively.
Audited Reviewed Explanatory
Results Results note
2024 2024 Adjustments
R’000 R’000 R’000
Earnings per share (“EPS”) is derived by dividing the
earnings attributable to equity holders of AYO by
the weighted average number of ordinary shares.
Basic and diluted loss per share (cents)
(208.68) (72.02) (136.66)
There are no dilutive options and other dilutive
potential ordinary shares, therefore, basic and
diluted earnings per share are the same.
The earnings and weighted average number of
ordinary shares used in the calculation of basic and
diluted earnings per share are as follows:
Losses attributable to owners of AYO (680 265) (234 767) (445 498)
Weighted average number of shares (‘000) –
325 983 325 983
20
Headline earnings per share
Headline earnings is determined as follows:
Losses attributable to owners of AYO (680 265) (234 767) (445 498)
Adjusted for:
Profit on sale of property, plant and equipment 930 942 (12) 26.1
Impairment on goodwill 62 484 – 62 484 3
Impairment on intangible assets 54 568 – 54 568 4
Tax effect of adjustments (14 984) (254) (14 730)
Headline loss (577 267) (234 080) (343 187)
Weighted average number of shares (‘000) 325 983 325 983
Headline loss per share (cents) (177.09) (71.81) (105.28)
26.1 Profit on sale of property, plant & equipment
The decrease of R0.012 million in profit from the disposal of property, plant, and equipment is attributed to
the reclassification of a loss on the disposal of furniture from other income, which was identified during the
preparation of the audited financial statements. This adjustment was necessary to ensure that all
movements related to PPE are recorded in the same category.
21
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 AUGUST 2024
Audited Reviewed Explanatory
2024 2024 Adjustment note
R’000 R’000 R’000
Cash generated from operations 19 066 583 585 (564 519) 27.1
Finance income 14 910 14 863 47 27.2
Finance costs (11 951) (15 475) 3 524 27.3
Dividend income 9 696 9 696 –
Tax paid (35 933) (29 127) (6 806) 27.4
Net cash (to)/ from operating
activities (4 212) 563 542 (567 754) 27
Cash flows from investing activities
Purchase of property, plant and
equipment (7 467) (5 934) (1 533) 28.1
Sale of property, plant and equipment 1 970 1 970 –
Purchase of intangible assets (5 763) (5 763) –
Loans advanced to related party
companies - (937) 937 28.2
Loans from related party companies 24 601 29 628 (5 027) 28.3
Other loans advanced (232) – (233) 28.5
Other loans repaid 28 660 28 660 –
Amounts advanced to acquire other
financial assets (11 600) (11 600) –
Amounts repaid from other financial
assets 30 323 7 150 23 173 28.4
Funds held in trust fund transfers – 112 (112) 28.6
Funds withdrawn in trust – 57 142 (57 142) 28.6
Funds advanced in trust – (104) 104 28.6
Finance lease receipts 3 130 3 130 –
Net cash to investing activities 63 622 103 454 (39 832) 28
Cash flows to financing activities –
Increase in financial liability 6 028 1 190 4 838 29.1
Other financial liabilities repayments (12 090) (35 284) 23 194 29.2
Lease liabilities repayments (24 924) (23 354) (1 570) 29.3
Movement in long term service
awards (270) (270) –
Dividends paid (903) (903) –
Net cash to financing activities (32 159) (677 920) 645 761
Total cash movement for the period 26 709 (10 924) 37 633 30
Cash at the beginning of the period 189 651 189 651 –
Effect of exchange rate 16 16 –
Total cash at the end of the period 216 377 178 743 37 634 30
22
27. Net cash from operating activities and cash flows to financing activities
Total decrease in net cash to operating activities of R515.8 million resulting from:
27.1 Reduction in cash generated from operations: R564.5 million due to the reclassification of funds held
in trust from working capital of R54.5 million and the prior period reclassification of the PIC prepayment of
R619 million from working capital to an equity reserve. The inflow from reversal of the prepayment was an
inflow in the Reviewed Results which is no longer applicable in the Audited results. These two amendments
were only identified during the final audit on closer inspection of the numbers.
27.2 Increase in finance income: R0.047 million due to a missed intergroup payment elimination during our
consolidation process.
27.3 Decrease in finance costs: R3.5 million due to elimination of intergroup payments due to a missed
intergroup payment elimination during our consolidation process.
27.4 Increase in tax paid: R6.8 million was due to subsidiaries incorrectly allocating the tax paid on their cash
flow, which subsequently affected the Group level reporting.
28. Net cash to investing activities
Total decrease in net cash to investing activities of R39.8 million resulting from:
28.1 A decrease in cash used to purchase property, plant and equipment of R1.5 million due to
reclassification from inventory to property, plant, and equipment. This adjustment pertains to an immaterial
amount from a subsidiary that was not identified during the finalisation of the Reviewed Results as our focus
was directed towards more material matters at that time. This reclassification was necessary due to the
item being used by the subsidiary rather than being held for sale. The difference of R0.133 million is a result
of removing the purchase of PPE that was held for sale, this was an error that has subsequently been
corrected.
28.2 An increase of R0.9 million in cash used for loans advanced to related party companies is attributed to
an error in the cash receipts related to loan repayments at the subsidiary level. This amount was incorrectly
recorded under loans advanced to related parties. The correction was made during the preparation of the
final audited cash flow statement.
28.3 A decrease in cash received from loans from related party companies of R5.0 million due to an
elimination of an interco ...
