G4S Botswana : PRELIMINARY UNAUDITED ABRIDGED CONSOLIDATED FINANCIAL STATEMENTS

Preliminary Unaudited Abridged Consolidated Financial Statements

For the year Ended 31 December 2023

CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
for the year ended 31 December 2023			GROUP
Figures in Pula	2023	2022
			Restated *
Revenue	214,857,558	212,460,324
Cost of goods sold	-9,876,721	-8,065,884
Cost of providing services	-167,237,344	-165,478,731
Gross profit	37,743,493	38,915,709
Other income gains/(losses)	2,686,436	-335,275
Net impairment losses on financial assets	-2,822,097	-4,326,701
Administrative expenses	-47,547,297	-43,503,708
Impairment of goodwill	-826,123	-
Operating loss	-10,765,588	-9,249,975
Finance income	1,861,588	2,372,578
Finance costs	-1,473,462	-1,345,892
Impairment of investment in subsidiary	-	-
Loss before taxation	-10,377,462	-8,223,289
Taxation	468,824	97,406
Loss for the year	-9,908,638	-8,125,883
Other comprehensive income	-	-
Total comprehensive loss for the year	-9,908,638	-8,125,883
Loss attributable to:
Owners of the parent	-10,361,284	-7,588,919
Non-controlling interest	452,646	-536,964
	-9,908,638	-8,125,883
Total comprehensive loss attributable to:
Owners of the parent of the company	-10,361,284	-7,588,919
Non-controlling interest	452,646	-536,964
	-9,908,638	-8,125,883
Loss per share
Per share information
Basic and diluted loss per share (thebe)	-12.95	-9.49
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
for the year ended 31 December 2023			GROUP
Figures in Pula	2023	2022
			Restated *
Non-Current Assets
Property, plant and equipment	22,571,374	23,455,781
Right-of-use assets	15,415,432	11,650,847
Goodwill	8,889,000	9,715,123
Investments in subsidiaries	-	-
Deferred tax	7,213,475	6,677,657
	54,089,281	51,499,408
Current Assets
Inventories	6,778,083	5,556,272
Amounts due from related parties	52,194,022	50,193,868
Trade and other receivables	18,270,113	26,021,703
Current tax receivable	5,805,104	5,805,104
Cash and cash equivalents	13,500,382	12,051,124
	96,547,704	99,628,071
Total Assets	150,636,985	151,127,479
Equity and Liabilities
Equity
Equity Attributable to Equity Holders of Parent
Stated capital	1,804,557	1,804,557
Retained income	96,911,375	107,272,659
	98,715,932	109,077,216
Non-controlling interest	1,313,806	861,160
	100,029,738	109,938,376
Liabilities
Non-Current Liabilities
Lease liabilities	9,083,280	9,351,505
Current Liabilities
Trade and other payables	29,265,463	25,446,150
Amounts due to related companies	2,914,434	1,091,609
Lease liabilities	9,056,924	5,299,839
Provisions	287,146	-
	41,523,967	31,837,598
Total Liabilities	50,607,247	41,189,103
Total Equity and Liabilities	150,636,985	151,127,479

KEY HIGHLIGHTS

For the year Ended 31 December 2023

Key highlights in million Pula Full Year ended 31 December 2023

250.00	214.86
	212.46
200.00	Key	in milliions
150.00
100.00
50.00			37.74	38.92
0.00
					-10.38	-8.22
-50.00
	Revenue	Gross Profit	Loss before taxation
			December 2023	December 2022

Key highlights in million Pula Full Year ended 31 December 2023

250.00
214.86	212.46	207.02
200.00
150.00
100.00
50.00				37.74	38.92	38.79
0.00
	Revenue				Gross Profit
December 2023	December 2022	December 2021

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2023

Figures in Pula	Stated	Retained	Total	Non	Total
	capital	income		controlling	equity
				interest
GROUP
Balance at 01 January 2022	1,804,557	114,861,578	116,666,135	1,398,124	118,064,259
Loss for the year - as restated*	-	-7,588,919	-7,588,919	-536,964	-8,125,883
Total comprehensive Loss for the year	-	-7,588,919	-7,588,919	-536,964	-8,125,883
Balance at 31 December 2022 - as restated*	1,804,557	107,272,659	109,077,216	861,160	109,938,376
Balance at 01 January 2023 - as restated*	1,804,557	107,272,659	109,077,216	861,160	109,938,376
Loss for the year	-	-10,361,284	-10,361,284	452,646	-9,908,638
Total comprehensive Loss for the year	-	-10,361,284	-10,361,284	452,646	-9,908,638
Balance at 31 December 2023	1,804,557	96,911,375	98,715,932	1,313,806	100,029,738
COMPANY
Balance at 01 January 2022	1,804,557	116,716,527	118,521,084	-	118,521,084
Loss for the year - as restated*	-	-9,065,672	-9,065,672	-	-9,065,672
Total comprehensive Loss for the year	-	-9,065,672	-9,065,672	-	-9,065,672
Balance at 31 December 2022 - as restated*	1,804,557	107,650,855	109,455,412	-	109,455,412
Balance at 01 January 2023 - as restated*	1,804,557	107,650,855	109,455,412	-	109,455,412
Loss for the year	-	-11,813,167	-11,813,167	-	-11,813,167
Total comprehensive Loss for the year	-	-11,813,167	-11,813,167	-	-11,813,167
Balance at 31 December 2023	1,804,557	95,837,688	97,642,245	-	97,642,245

*The comparative information has been restated as a result of the prior period error as disclosed in note 34.

Cash Management | Manned Guarding Security | Electronic Security Systems | Alarm Monitoring and Response | Facilities Management

Preliminary Unaudited Abridged Consolidated Financial Statements (contd)

For the year Ended 31 December 2023

CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2023			GROUP
Figures in Pula	2023	2022
			Restated *
Cash flows from operating activities
Cash generated from operations	18,621,680	15,924,693
Tax paid	-66,994	-5,132,712
Net cash flows generated from operating activities	18,554,686	10,791,981
Cash flows utilised in investing activities
Purchase of property, plant and equipment	-8,762,263	-18,127,216
Purchases of investment in subsidiary	-	-
Cash advanced on amounts due from related parties	-	-
Cash receipts on repayments of amounts due from related parties	-	10,000,000
Interest received	16,620	14,792
Net cash flows utilised in investing activities	-8,745,643	-8,112,424
Cash flows utilised in financing activities
Cash repayments on lease liabilities-capital portion	-6,886,323	-6,423,387
Interest paid	-1,473,462	-1,345,892
Net cash flows utilised in financing activities	-8,359,785	-7,769,279
Total cash movement for the year	1,449,258	-5,089,722
Cash and cash equivalents at the beginning of the year	12,051,124	17,140,846
Cash and cash equivalents at the end of the year	13,500,382	12,051,124

GENERAL INFORMATION

G4S (Botswana) Limited is a public limited company registered under the Companies Act, Chapter 42:01 of Botswana and domiciled in Botswana. G4S (Botswana) Limited is listed on the Botswana Stock Exchange and primarily operates in Botswana.These financial statements represent its statutory financial statements.The consolidated financial statements of the company comprise the company and its subsidiaries (together referred to as the 'Group').

BASIS OF PREPARATION

The abridged consolidated financial results of G4S (Botswana) Limited and its subsidiaries are extracted from the Group financial statements that have been prepared on the going concern basis in accordance with, and in compliance with, IFRS® Accounting Standards as issued by the International Accounting Standards Board issued and effective at the time of preparing the Group financial statements.The financial information is presented in Botswana Pula, which is the group and company's functional currency. The annual financial statements have been prepared under the supervision of the finance director, Mrs Boitumelo Molefe (FCMA, FCGMA). The Board approved the financial statements for the year ended 31 December 2023 on 31 May 2024.

top long standing customers (biggest contract by value in the guarding portfolio) which was retained in November 2022 at a lower margin, than prior period, in line with the customer retention strategy levied. Other aspects impacting the 3% gross margin reduction include costs associated with vehicles, primarily maintenance costs, due to an ageing fleet and insurance premiums which escalated in the prior year due to a heightened risk environment.

Management continued to focus on cost reduction strategies and significant savings were realised in lowering direct labour costs compared to the prior year, and fuel costs due to fuel management efficiencies and strategic sourcing.

Administration costs which increased by 9% year on year were mainly due to a penalty provision for a value added tax (VAT) delayed payment of P3.2 million, increased audit cost overruns as well as impairment of receivables.These were the main contributors to the loss before tax of P10.4 million against the restated prior year's loss of P8.2 million. The Group would have reduced its loss position for the year ended 2023 had it not had the VAT penalty provision which was raised for prudency as the final payment may not result in the total provision payment.

Management continues to roll out effective debt collection methods, as an urgent action, and these have finally started to bear fruits as evidenced by the significant reduction of movement in receivables impairment in the current year of P1.5 million, from an increase of P8.8 million in the prior year. In addition, these efforts by management have led to marked improvements during the year where the carrying amount of trade receivables decreased from P24.7 million, as in 2022, to P15.6 million in the reporting period, a reduction of 57.9%. Days sales outstanding and operating cash flows also showed a marked improvement in the year under review.

During 2023, the Group profits declined significantly compared to 2022 (as restated) due to a high provision on unpaid VAT on sales invoices from January 2023 and a goodwill impairment of P826 123.

Encouragingly, during 2023, the Group's subsidiary G4S Facilities Management Proprietary Limited ('FMB') made a profit of just below P1 million, compared to the loss in 2022.

OUTLOOK

Despite the setbacks experienced during 2023, the company continues to focus on improving the internal controls environment, growing sales, reducing costs of sales and operational expenses in line with the devised costs reduction strategy, improving customer retention strategies and increasing focus on profitable contracts to ensure that G4S Botswana continues not only as a going concern but a leading 'go to' security services provider through harnessing of its competitive advantage. This is evidenced by the continued growth on the top line for three consecutive years albeit at lower gross margins due to stiff competition. A differentiated and niche strategy is being rolled out as well as an innovative digital strategy that infuses technology into our product offerings across all our service lines, tapping into the experiences of other G4S operations in the Group's regional and global networks

Going forward, management´s focus is on addressing challenges related to high administrative expenses and debt collection strategies, which started bearing fruit in 2023. The Board and Management of the company are confident that the company will continue as a going concern and turn the loss-making position into profit within the next reporting period.

RELATED PARTY TRANSACTIONS

ACCOUNTING POLICIES

The accounting policies adopted are consistent with those of the previous financial year. Amendments to IFRS Accounting Standards effective for the financial year ending 31 December 2023 have been adopted during the year. New accounting standards and interpretations that have been published that are not effective for the 31 December 2023 reporting period have not been adopted by the Group. These standards are not expected to have a material impact on the entity or its transactions in the current or future reporting periods.

USE OF JUDGEMENTS AND ESTIMATES

There has been no significant change in the nature of related party transactions from those reported in the annual financial statements for the year ended 31 December 2022 as restated. The amounts due from related parties are unsecured and payable on demand.

EVENTS OCCURRING AFTER REPORTING DATE

No significant events occurred after the reporting date that required adjustment to or disclosure in the annual financial statements for the year ended 31 December 2023.

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Judgements and estimates were similar to those applied to the consolidated financial statements as restated for the year ended 31 December 2022.

2022 FINANCIAL STATEMENT RESTATEMENT

In the prior year, certain long outstanding credit balances included in the trade receivables were written off and derecognised based on application of the prescription rule by the Group and a financial closing adjustment were incorrectly posted to trade receivables. The derecognition of the credit balances and the trade receivable financial closing adjustment were inappropriately accounted for in the financial statements resulting in the overstatement of trade receivables, other payables and retained earnings by P4 429 604, P2 276 351 and P2 153 253 respectively. The reconciliation and recognition for amendment of these transactions were able to be resolved effectively, to ensure a true and fair presentation of the audited financial statements in both the current and prior year (through restatement).

The Group had assessed and concluded, at the time, to limit the recognition of deferred tax assets to the extent of sufficient taxable income that would be available in the future to offset the assessed tax losses at the end of the prior reporting period. As such, no additional deferred tax asset arising from the correction of the prior period error has been recognised.

The prior year financial statements have been restated to correct this error. The effect of the restatement has been summarised in note 34 of the financial statements.

DELAY IN PUBLICATION OF THE 2023 AUDITED FINANCIAL STATEMENTS, ANNUAL REPORT AND ANNUAL GENERAL MEETING OF G4S (BOTSWANA) LIMITED

In terms of the BSE Equity Listing Requirements, G4S (Botswana) Limited (¨the Company¨) is required to publish its consolidated financial statements for the year ended 31 December 2023 on or before 31 March 2024. The Company audited financial statements have been delayed and will be published late due to an ongoing investigation on the financial reporting closing journals that occurred between the years of 2021 and 2022, which may also have an impact in 2023.The publication date has been set for the 31st July 2024.

The Company is publishing these unaudited preliminary financials on X-News in terms of section 5.6 (c) of the BSE Equity Listings Requirements. The Directors of the Company wish to inform stakeholders that as a result of the ongoing investigations, Profit before tax of the audited results may differ materially from the unaudited financial statements.

Due to the delay in finalising the audited Annual Financial Statements as discussed above, the 2023 Annual Report and Annual General Meeting have also been delayed to the 31st July 2024.

KEY HIGHLIGHTS & FINANCIAL PERFORMANCE YEAR ON YEAR COMPARISON

The Group revenue performance for the year increased modestly by 1.1% year on year as the full impact of Government's preferential policy on 100% citizen owned Guarding service providers continued to affect the Group´s ability to access contract opportunities in that space, resulting in reduction of the service line by 2% year on year. Fortunately this trend was, in turn, offset by growth in the Cash service line and marginal increase was also evidenced on the security systems service line.The Group delivered a weaker gross profit due to, in part, the impact of the reduced margin from one of the

INTERNAL CONTROLS

The effectiveness of the internal controls system is monitored through management reviews, internal audits by the regional hub as well as external auditors' reviews and testing of appropriate aspects of the system during their statutory examination of the company and the Group. The group and company directors have considered the results of these reviews and are aware of certain internal control deficiencies and have committed to actioning highlighted red flags in order to close the identified gaps. We believe that with the company having engaged more competent and experienced staff in the finance department, the control environment will improve and elevate its position to a more viable level in future. The G4S Group Internal Audit function offers an internal audit service with the last review conducted in the last half of 2023. Additionally, no breakdowns involving material loss except for the potential VAT penalty have been reported to the directors in respect of the year under review.

SEGMENT REPORTING

An operating segment is a component of the Group that engages in unique business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components.The Group has three primary operating segments: Cash Solutions, Guarding Services and Electronic Security Services. Management generally follows the Group's service lines representing its main products and services in identifying these operating segments. Each of these operating segments is managed separately as each requires different technologies, marketing approaches and other resources. Segment performance is monitored using adjusted segment operating results. Revenue and assets of reportable segments exceed 10 percent of the consolidated revenue and assets reported by the Group.

CONCLUSION

The directors of G4S (Botswana) Limited (the Company) are responsible for the financial statements of the Company and its subsidiaries.Their responsibility includes the maintenance of financial records and the preparation of financial statements consistent with the accounting policies of G4S (Botswana) Limited which comply with IFRS Accounting Standards. The company and subsidiaries maintain systems of internal control which are designed to provide reasonable assurance that the financial records accurately reflect their transactions and to provide protection against serious misuse of the Group's assets. The directors are also responsible for design, implementation, maintenance and monitoring of these internal controls.The internal control environment requires improvements and will continue to be an area of focus for 2024.

The board of directors has reviewed and approved the accompanying condensed financial statements for issue on 31 May 2024.

Signed on behalf of the Board of Directors

T. Mbaakanyi	M. Molokomme
Board Chairperson	Managing Director
	2 July 2024

REGISTERED ADDRESS: Plot 20584 Western Bypass P.O. Box 1488 Gaborone Botswana

AUDITORS: Deloitte & Touche, Deloitte House, Plot 64518, Fairgrounds, Gaborone, Botswana,

BOARD OF DIRECTORS: M. Molokomme*,T. Mbaakanyi*, W. Ramaphoi*, C.M Motswaiso*, T.K Matthews*, R.Smit**, B. Molefe*

* Motswana ** South African

Cash Management | Manned Guarding Security | Electronic Security Systems | Alarm Monitoring and Response | Facilities Management