Mpact - closing the loop

Mpact Recycling's 15 facilities across South Africa collect over 620,000 tonnes of recyclable paper, plastic, cans and glass every year from pre- and post-consumer streams. This redirects this material from landfill and provides an opportunity to earn a living to collectors who sell recyclable waste to Mpact's buy-back centres.

Paper fibre can be recycled up to seven times before it degrades and every tonne of paper recovered saves 3m3 of landfill space. Around two-thirds of the cardboard and paper recovered by Mpact Recycling is used at Mpact Paper Mills to produce paper and board. The rest is sold to external customers.

Mpact Plastics uses recycled PET and other recycled material according to customers' needs. The Bins and Crates division has a buy-back and exchange model that encourages customers to return products for recycling at the end of life. Approximately 20% of the high-density polyethylene the division uses is recycled from returned product and additional recycling capacity is being added. Recyclable plastics collected by Mpact Recycling are sold to external customers for recycling.

Mpact promotes recycling through the "Ronnie Recycler" schools programme that has reached over 600,000 children since 2013. More than 1,900 Mpact Paper Banks are in place at schools and communities across South Africa to make recycling easy and convenient.

Mpact's integrated business model closes the loop on plastic and paper packaging through recycling and beneficiation.

INTRODUCTION

Contents

COMPANY OVERVIEW

01 Introduction

Mpact - Closing the loop

STRATEGIC OVERVIEW

05 Sustainability

IFCAbout This Report 2

02 Company overview

Key metrics 5

Innovation - a cornerstone of our business 6

Corporate profile 8

Our Vision and Our Values 10

Our operating model 12

Business model 14

Case study: Itumeleng Future Solutions 16

03 Strategic overview

Strategy and objectives 18

Five-year performance history 20

Material matters summary 21

Chairman's Review 22

Case study: Mpact Plastic Containers 24

- turning the wheels on waste

04 Operational review

Chief Executive Officer's report 26

Management team 30

Paper business 32

Plastics business 38

OPERATIONAL REVIEW

SUSTAINABILITY

GOVERNANCE

Abridged Sustainability Review 42

Social and Ethics Committee report 46

Material matters 50

Mpact's contribution to society 53

Value added statement 54

06 Governance

07 Financial statements

Case study: Fundamental science, a foundation for innovation 58

Mpact Foundation Trust report 56

Foundation Trust bursary scheme transforming lives 55

Corporate governance report 62

Risk management 70

Remuneration Committee report 76

Audit and Risk Committee report 106

Approval of the Summarised Consolidated Annual Financial 110

Statements

Directors' Responsibility Statement and Basis of Preparation 110

Certificate by the Company Secretary 110

Board of Directors 60

Chief Financial Officer's report 104

Refer to page

Report of the Directors 111

Independent Auditor's report 114

Summarised Consolidated Annual Financial Statements 115

Notes to the Summarised Consolidated Annual Financial 119

Statements

08 Administration

Shareholders' diary 133

Analysis of Ordinary Shareholders 134

Glossary of terms 137

Corporate information and advisers 138

FINANCIAL STATEMENTS

Navigation

Material matters

ADMINISTRATION

Being a responsible employer

Sustaining profitable growth

Being a responsible corporate citizen

Cost competitiveness and anticipating and meeting customer needsLeading market positionsFocus on performance

Available online on the Company's website:www.mpact.co.za

Mpact's 2021 reporting suite includes:

  • • Integrated Report

  • • Sustainability Review

  • • GRI Index

  • • Annual Financial Statements

  • • Notice of Annual General Meeting

  • • Mpact King IV™ register

The Mpact 2021 reporting suite is available on the Company's website:www.mpact.co.za

About This Report

This Integrated Annual Report provides an overview of the context, business model, strategy, activities, performance, and outlook for the Mpact Group for the financial year-ended 31 December 2021.

Queries regarding this Integrated Report or its contents should be addressed to:

Donna Maree Dickson

Group Company Secretaryddickson@mpact.co.za Tel: +27 11 994 5551

Investor Relations queries should be addressed to:

Marlize Keyter

Investor Relations Consultant Keyter Rech Investor Solutions CCmkeyter@kris.co.za

Tel: +27 87 351 3810

The report is prepared primarily to address the information needs of long-term investors and providers of capital, but also includes information about our environmental and social performance, as well as our governance framework and actions, that are of interest to our broader stakeholder groupings. Material developments after financial year-end are included up to the date of the report's approval by the Board.

The report provides information regarding the Group's most material matters - those that have the most significant potential impact on the Group's ability to create value in the short-, medium- and long-term. These include both financial and non- financial matters, and are identified by reviewing a range of internal and external sources, including the risk assessment process, engagements with key stakeholders, operational issues, management interviews and developments in legislation. Thisprocess is discussed in more detail on page 50. The Board and the

Executive Committee agreed and approved the material matters.

The Annual Financial Statements include financial information for all subsidiaries, associates and joint ventures, in line with IFRS.

Non-financial information is included for all entities over which we have direct control. There have been no material restatements of comparative information disclosed in prior periods.

Mpact's operating model on page 12 shows the Group's main activities and the role we play in closing the loop on the circular economy. The strategic overview section that starts onpage 18 discusses our approach to creating sustainable value for our stakeholders and the business model on page 14 analyses our inputs, activities, outputs, outcomes and the trade-offs between the six capitals that arise from our activities. Mpact's key stakeholders and significant engagements during the yearare discussed on page 42.

Guidelines and frameworks

The report has been prepared in accordance with the requirements and guidance of:

  • • IFRS

  • • the Companies Act

  • • the JSE Listings Requirements

  • • the King Code of Governance Principles for South Africa (King IV™)

  • • the Value Reporting Foundation's Framework, as these apply to the Group

The sustainability information in

Mpact's Sustainability Review is disclosed in accordance with the GRI Standards: Core option.

Assurance

Mpact's combined assurance map provides oversight of the extent of coverage achieved by each assurance provider in terms of the third level of defence in the Combined Assurance Model. Mpact's Annual Financial Statements and Summarised Consolidated Financial Statements were assured by the Group's external auditor, Deloitte & Touche, and a copy of their Independent Auditor's report on the Summarised Consolidated Financial Statements is available on page 114. While the SustainabilityReview as a whole was not independently assured, certain information in the review was reviewed by the Group's internal control functions and by external assurance providers where this has been deemed relevant and necessary. The review is available on the website:www.mpact.co.za.

Disclaimer

The Integrated Report contains certain forward-looking statements concerning the Group's environment, financial performance and conditions, strategy, outlook and growth expectations. Such views involve both known and unknown risks, assumptions, uncertainties and important factors that could materially influence the actual performance of the Group. No assurance can therefore be given that these will prove to be correct and no representation or warranty expressed or implied is given as to the accuracy or completeness of such views.

Board approval

The Board confirms its responsibility for the integrity of this Integrated Report. The content has been collectively assessed by the Board and in its opinion the report addresses the issues that have the potential to most materially impact the performance of the Group. The Board has accordingly authorised the release of this Integrated Report.

AJ Phillips ChairmanBW Strong

Chief Executive Officer

29 April 2022

Some of the photographs used in this report were taken before Covid-19 and therefore may show people not wearing masks or observing social distancing.

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Mpact Limited published this content on 29 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 April 2022 06:51:02 UTC.