MTN : FY 23 Annual Financial Statement

Annual Financial Statements

for the year ended 31 December 2023

Contents

STATUTORY REPORTS

• 1 Statement of directors' responsibility

• 2 CEO and CFO responsibility statement

• 2 Certificate by the Company Secretary

• 3 Report of the Audit Committee

• 9 Directors' Report

• 13 Independent Auditor's Report to the Shareholders of MTN Group Limited

GROUP FINANCIAL STATEMENTS

• 18 Group income statement

• 19 Group statement of comprehensive income

• 20 Group statement of financial position

• 21 Group statement of changes in equity

• 22 Group statement of cash flows

• 23 Index to the notes to the Group financial statements

24

Notes to the Group financial statements

The Group and Company financial statements were audited in terms of the Companies Act, No 71 of 2008 as amended.

The Group and Company Annual Financial Statements have been prepared by the MTN finance staff under the guidance of the Group Finance Executive, S Perumal CA(SA) and were supervised by the Group Chief Financial Officer, TBL Molefe CA(SA).

COMPANY FINANCIAL STATEMENTS

• 121 Company statement of comprehensive income

• 121 Company statement of financial position

• 122 Company statement of changes in equity

• 122 Company statement of cash flows

• 123 Notes to the Company financial statements

• 134 Financial definitions

ANNEXURES

• 136 Annexure 1 - Shareholders' information

• 137 Annexure 2 - Administration

These Annual Financial Statements were authorised on 22 March 2024 by the Board of Directors.

Statement of directors' responsibility

The directors are responsible for the integrity, preparation and fair presentation of the annual separate and consolidated financial statements of MTN Group Limited (the Company), its subsidiaries, joint ventures, associates and structured entities (together, the Group) in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and Interpretations as issued by the IFRS Interpretations Committee (IFRIC), the South African Institute of Chartered Accountants (SAICA) Financial Reporting Guides as issued by the Accounting Practices Committee (APC), Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council (FRSC), the Johannesburg Stock Exchange (JSE) Listings Requirements and the requirements of the South African Companies Act, No 71 of 2008, as amended (the Companies Act) and the Company's memorandum of incorporation (MOI).

The Company also subscribes in all its activities to principles of best practice and corporate governance, as set out in the King IV Report on Corporate Governance for South Africa 2016 (King IV*).

The preparation of financial statements in conformity with IFRS requires management to consistently apply appropriate accounting policies, supported by reasonable judgements and estimates. The directors are of the opinion that the information contained in the Annual Financial Statements fairly present, in all material respects, the financial position at year-end and the financial performance and cash flows of the Group and the Company for the year then ended.

The directors have taken the responsibility for ensuring that accurate and complete accounting records are kept to enable the Group and the Company to satisfy their obligation with respect to the preparation of financial statements. The directors confirm that no facts have been omitted or untrue statements made that would make the financial statements false or misleading.

The directors are also responsible for the oversight of the Group's system of internal controls. This responsibility includes designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

The Group operates in an established control environment, which is documented and regularly reviewed. The Group Risk Management and Compliance Committee plays an integral role in risk management. Risk management and internal control procedures are designed to provide reasonable assurance that assets are safeguarded and that the risks facing the business are controlled.

Internal financial controls have been put in place to ensure that material information relating to the Company and the Group has been provided to effectively prepare the Annual Financial Statements. The internal financial controls are considered adequate and effective and can be relied upon in compiling the Annual FinancialStatements. Where deficiencies in the design and operational effectiveness of internal financial controls have been identified, the Group continues to make improvements to the internal financial controls.

The directors are responsible for the controls over, and the security of, the website and where applicable, for establishing and controlling the process for electronically distributing Annual Financial Statements and other financial information to shareholders and to the Companies and Intellectual Property Commission.

The Group's internal audit function, which operates unimpeded by operational management, and has unrestricted access to the Group's Audit Committee, assesses and, when necessary, recommends improvements in the system of internal control and accounting practices, based on audit plans that take cognisance of the relative degrees of risk of each function or aspect of the business. The Group's internal audit function operates within the Group's combined assurance framework.

The directors have reviewed the Group and the Company budgets and cash flow forecasts for the year to 31 December 2024. In light of this review, the current financial position and existing borrowing facilities, the going concern basis has been adopted in preparing the Group and the Company Annual Financial Statements. The directors have no reason to believe that the Company or its subsidiaries will not be going concerns in the year ahead. These financial statements support the viability of the Group and the Company.

The Group's external auditor, Ernst & Young Inc (EY) audited the Group and the Company Annual Financial Statements and their unqualified audit report is presented on pages 13 to 16.

The external auditor was 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 auditor during their audit are valid and appropriate.

The Group and the Company Annual Financial Statements which appear on pages 1 to 137 were approved for issue by the Board of Directors on 22 March 2024 and are signed on its behalf by:

Group President and Chief Executive Officer (CEO) Fairland

TBL Molefe

Group Chief Finance Officer (GCFO) Fairland

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CEO and CFO responsibility statement

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

• (a) The Annual Financial Statements set out on pages 1 to 137, fairly present in all material respects the financial position, financial performance and cash flows of MTN Group Limited in terms of IFRS.

• (b) 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.

• (c) Internal financial controls have been put in place to ensure that material information relating to MTN Group Limited and its consolidated subsidiaries have been provided to effectively prepare the financial statements of MTN Group Limited.

• (d) 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.

• (e) Where we are not satisfied, we have disclosed to the Group Audit Committee and the auditor any deficiencies in design and operational effectiveness of the internal financial controls and have taken steps to remedy deficiencies.

• (f) We are not aware of any fraud involving directors.

Certificate by the Company Secretary

for the year ended 31 December 2023

I certify that, to the best of my knowledge and belief, MTN Group Limited has filed all its returns and notices with the Registrar of Companies and Intellectual Property Commission for the year ended 31 December 2023, as required of a public company in terms of section 88(2)(e) of the Companies Act, and that such returns and notices are true, correct and up to date.

PT Sishuba-Bonoyi

Group Secretary

Fairland

22 March 2024

Report of the Audit Committee

This report is provided by the MTN Group Audit Committee ("the committee"), in respect of the 2023 financial year, in compliance with section 94 of the Companies Act, King IV, the JSE Listings Requirements and other applicable regulatory requirements, and describes how the committee has discharged its statutory duties in terms of the Companies Act and its additional duties assigned to it by the Board in respect of the financial year ended 31 December 2023.

COMPOSITION AND GOVERNANCE

Members of the committee are all independent non-executive directors, all of whom satisfy the requirements of section 94(4) of the Companies Act and King IV. The committee is adequately skilled, and all members possess the appropriate financial and related qualifications, skills, expertise and experience required to discharge their responsibilities.

The composition of the committee and the attendance at the meetings by its members during the 2023 financial year are set out below.

Special meeting held.

X An apology was tendered for non-attendance.

√

Attended the meeting.

Four formal committee meetings were held in line with the Group's financial reporting and regulatory cycle in the financial year under review. There were five ad hoc meetings held to consider and approve various head office subsidiary annual financial statements, MTN Group trading statements, and JSE regulatory engagements. Members' fees are included in the table of directors' emoluments and related payments in note 10.

The Group President and CEO, the Group Chief Financial Officer, the Group Chief Risk Officer, the Group Chief Legal Counsel, the Group Executive: Internal Audit, the Group Executive: Finance, and representatives of the external auditor attend committee meetings by invitation. Other members of management are invited to attend certain meetings to provide the committee with assurance and greater insight into specific issues or areas in the Group.

The committee chairman has regular contact with the Group senior management team to discuss relevant matters directly during the year. The internal auditors and the external auditor have direct access to the committee, including closed sessions without management, during the year on any matter they regard as relevant to the fulfilment of the committee responsibilities. Further, the committee meeting agenda allows for the internal auditors, external auditor and senior management to meet separately with the members.

The committee chairman reports to the Group Board on committee activities and the matters discussed at each meeting, highlighting any key issues that the committee believes warrant action by the Board, and providing recommendations to resolve the said issues.

The Group's Company Secretariat annually assesses the effectiveness of the committee. An external facilitated assessment is conducted every two years. Both processes are endorsed by the committee.

TERMS OF REFERENCE

The committee assists the Board in discharging its duties by independently monitoring the strength of the operational, financial and control processes. These include internal financial controls and ensuring that assurance services and functions enable an effective control environment and that these support the integrity of information produced in compliance with applicable legal and regulatory requirements.

FEEDBACK ON KEY FOCUS AREAS FOR THE YEAR UNDER REVIEW

Key focus areas

Monitor the progress on the implementation and standardisation ofkey controls to further enhance the overall control environment.

Strengthening the effectiveness of internal controls and internal financial controls.

Annual Financial Statements restatements identified during 2023.

Oversight of the salient matters reported by the Audit Committees of the Group's operating companies

Review the progress on the implementation of the enterprise cloud solution across the Group's footprint.

Considered the enterprise resource planning set-up and readiness for the implementation of United Arab Emirates (UAE) corporate tax.

Review of internal audit and forensic services governance structures.

Ensure fair reporting.

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Developments in key focus areas

Progress on activities to coordinate and oversee the standardisation of key controls across key processes includes:

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Understanding the current maturity levels of the Finance Operating Model with an intention to identify opportunities for control improvement. Developing an Internal Control Framework (ICF) in consultation with the organisation-wide assurance partner.

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Launching a strategic initiative aimed at optimising control processes in six operating companies.

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Fast tracking of the cloud Enterprise Resource Planning implementation to all operating companies and monitoring maturity after implementation.

The Group conducted proactive assessments to identify areas of improvement to analyse the people, processes and systems with specific focus on the internal financial control environment.

The internal audit plan for the financial reporting period encompassed coverage of financial and non-financial factors to provide independent assurance on the adequacy and effectiveness of critical internal financial controls across the Group's operating and holding companies.

Insights obtained from these targeted deep dives have led to control environment improvement efforts designed to address the specific areas of control improvement and beyond, specially where control design changes were necessary and warranted.

The committee considered management's assessment of accounting matters identified and evaluated the appropriate accounting treatment thereof, after considering the relevant legal and accounting opinions and views of the Group's auditor. The committee evaluated and reviewed the disclosure of the restatements and related stakeholder engagements. The committee reviewed management's assessment of the root cause analysis as well as the corrective actions to internal financial controls to mitigate risks in future.

The Group's operating companies including its platform businesses, Fintech and Bayobab, submit quarterly reports to the Group Audit Committee. The committee reviews these reports and identifies key themes or material items that require further management attention.

The committee reviews the execution of the enterprise cloud solution against the Group's strategic implementation roadmap. During 2023, Scancom PLC Ghana (MTN Ghana) implemented the enterprise cloud solution in February 2023. Fintech Holdings continued deployment across its entities with a combination of enterprise resource planning solutions. The cloud payroll system was deployed in a number of South African-based entities.

The enterprise resource planning system has been set up and implementation considerations are in the process of being finalised.

The committee reviewed the appropriate governance structures and effectiveness of the functions. The committee approved the separation of the internal audit and forensic services functions. Following the separation, the forensic services function formed part of the Group's Risk Management and Compliance function.

The committee considered the appropriateness of the Group's financial reporting to ensure fair and balanced reporting is achieved. The committee reviewed submissions and presentations by management on the financial results, significant transactions, critical accounting judgements and assumptions as well as views by the Group's auditor on key audit matters and internal auditors on internal financial controls.

The committee has recommended that the Board approve both the summary and Annual Financial Statements.

EXECUTION OF FUNCTIONS OF THE AUDIT COMMITTEE The committee is satisfied that, in respect of the period under review, it has conducted its affairs and discharged its duties and responsibilities in accordance with its terms of reference and the Companies Act and paragraph 3.84(g) of the JSE Listings Requirements.

The committee discharged the following responsibilities during the year under review:

EXTERNAL AUDITOR

The committee is responsible for the appointment, compensation and oversight of the external auditor for the Group, namely Ernst & Young Inc (EY) in 2023. EY is a global auditing firm and is a level 1 broad-based black economic empowerment (B-BBEE) contributor.

During the period under review the committee:

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Considered and satisfied itself with the independence and objectivity of the external auditor and designated registered auditor and ensured that the scope of non-audit services rendered did not impair their independence. Approved the non-audit related services performed by the external auditor during the year in accordance with

the policy established and approved by the Board.

The fees paid for non-audit services are disclosed in note 2.3 of these Annual Financial Statements and represents 9% of audit fees, which is within the Group's policy of 25% of audit fees. These comprised:

Assurance related Consulting

Tax

Other servicesServices assigned to the Group audit firms were pre-approved following an evaluation of the impact on auditor independence based on the Group's approved policy.

Services for larger assignments are individually evaluated by the committee and approved if the committee is satisfied that the independence of the audit firms will not be compromised. These appointments relate to work that will further complement the audit engagement or where the audit firm will be in a position to provide a higher quality or more cost-effective service. Other than for the fees for approved services, no other benefits were provided to the auditor. Larger projects during 2023 included limited assurance reviews on revenue assurance maturity and control self-assessment, agreed upon procedures on remuneration and tax administration and consultation services.

The committee performed the following oversight role of the external audit function:

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Determined the external auditor terms of engagement and fees for 2023. Fees paid to auditor for the year under review are disclosed in note 2.3 of these Annual Financial Statements.

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Satisfied itself with the performance of the external auditor and designated registered auditor.

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Satisfied itself that the designated registered auditor is within his tenure and rotation requirements.

- EY has been auditing the Group for three years.

Mr EAL Botha has been the engagement partner since 2021.

●

Assessed the audit firm as well as the engagement partner's suitability for appointment, taking into account the quality of the audit work and related reporting to the committee, industry expertise of the firm and its designated partner, findings by the Independent Regulatory Board for Auditors (IRBA) and statements relating to independence as well as the representations made by the external auditor to the committee including those under ISQC 1 International Standard on Quality Control 1.

●

The committee recommends the re-appointment of EY at the Company's 29th Annual General Meeting (AGM).

2023 %

2022 %

57 35

3 31

40 33

- 1

100

100

FINANCIAL STATEMENTS, ACCOUNTING PRACTICES AND OTHER FINANCIAL MATTERS

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Reviewed and approved the accounting policies and the Annual Financial Statements of the Group and the Company for the year ended 31 December 2023, and based on the information provided to it, the committee considered that, in all material respects, they are appropriate and comply with the provisions of the Companies Act, IFRS, the SAICA Financial Reporting Guides as issued by the APC, Financial Reporting Pronouncements as issued by the FRSC, and the JSE Listings Requirements as well as content from the JSE's annual proactive monitoring report and references to prior year reports highlighted therein.

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Reviewed the processes in place for the reporting of concerns and complaints relating to financial reporting and accounting practices, internal audit, contents of the Group's and the Company's financial statements, internal financial controls and any related matters. The committee can confirm that there were no such complaints of substance during the year under review.

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Reviewed Group tax exposures and assessed the appropriateness of the Group's tax policies.

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Reviewed the Group Treasury Policy, compliance thereof and management's counter-party risk assessments. Considered the effectiveness of T Shomang as the Debt Officer in line with requirements of paragraph 7.3(g) of the JSE Debt Listings Requirements.

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Reviewed progress on litigation and legal exposures and the related accounting applied and disclosure included in these Annual Financial Statements.

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Received regular updates from management on the repatriation of funds from the Group's operating entities. Considered the appropriateness of management judgements, estimates made and the accounting treatment of significant transactions.

●

Considered if the established financial reporting procedures are appropriate and that the procedures are operating effectively, which includes a consideration of all entities included in the consolidated Group Annual Financial Statements. The committee considered if the Group had access to all the financial information of MTN Group Limited and its subsidiaries, associates and joint ventures to allow the Group to effectively prepare and report on the financial statements.

Significant matters that the Group Audit Committee has considered in relation to the Annual Financial Statements were:

Significant matters considered

Significant transactions for 2023 included:

●

The Group disposed 160 million shares in MTN Ghana to pension funds as part of localisation for net proceeds of R215 million, decreasing the Group's effective shareholding by 1.3% to 82.8% (note 9.4.1.3).

●

The Group received an offer for Spacetel Guinea-Bissau S.A (MTN Guinea-Bissau) and Areeba Guinea SA (MTN Guinea-Conakry). The two operations have been classified as held for sale as at 31 December 2023 (note 9.4.2.2).

Judgement relating to uncertain tax exposure, legal and regulatory matters

The Group operates in a number of complex and uncertain regulatory and tax jurisdictions where judgement is required in assessing the regulatory and tax exposures (note 1.5.7; note 3 and note 6.6).

Judgement applied regarding the impairment of cash-generating units

Cash-generating units are tested at least annually for impairment to assess whether the recoverable amounts exceed the carrying amounts. The calculation of the recoverable amounts require judgement in estimating discount rates and future cash flows (note 1.5.1 and note 5.2.1).

Following the binding offer for the sale of MTN Afghanistan Limited (MTN Afghanistan), the Group signed a sale and purchase agreement which closed on 21 February 2024. Accordingly, MTN Afghanistan's assets and liabilities have been presented as held for sale. An impairment loss of R900 million after writing down the carrying amount of the disposal group to its fair value less costs to sell has been recognised in profit or loss (note 9.4.2.1).

Due to the conflict in Sudan, there was limited damage during the period to the network infrastructure, resulting in a R277 million impairment of property, plant and equipment. The impairment as at 31 December 2023 is R746 million due to hyperinflationary adjustments (and exchange rate movements (note 5.1.1).

An impairment loss of R48 million for property, plant and equipment and intangible assets was recognised for MTN Guinea-Bissau.

Actions and conclusions

The committee considered the accounting treatments and the disclosures of the transactions proposed by management.

The committee was satisfied that these transactions were appropriately accounted for and disclosed by management.

The committee reviewed risk and compliance, legal and tax reports from management and requested opinions from independent specialists where it considered appropriate. The committee considered management's assessment of possible, probable and remote exposures and the related provisions and contingent liability disclosure on tax, regulatory and legal matters, in light of the latest correspondence on these matters by the respective authorities. The committee also considered the assessment by the Group's external auditor of the appropriate recognition, measurement and disclosure of uncertain tax, legal and regulatory matters.

The committee was satisfied that the recognition, measurement and disclosure of uncertain tax, legal and regulatory matters by management was appropriate.

The committee reviewed submissions and presentations by management on the financial results, significant transactions, critical accounting judgements and assumptions as well as views by the Group's external auditor on key audit matters.

INTERNAL AUDIT AND FORENSIC SERVICES FUNCTION OVERSIGHT

The committee has oversight over the Group internal audit and forensic services function (IAFS). The committee:

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Considered the effectiveness and independence of the internal audit function, its impact as a third line of assurance and monitored adherence to the annual internal audit plan.

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Reviewed the continued embedment of the third line of defence as a central reporting function and its effective positioning within the organisation's operation. Considered the appropriateness of IAFS key performance indicators (KPIs) for alignment to the mandate of an independent third line assurance function.

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Reviewed the performance of the Chief Audit Executive to assess her skills, experience, human resources and budgetary support from the organisation in order to successfully execute the IAFS mandate in the year under review.

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The Audit Committee obtained appropriate evidence to satisfy themselves that the Group IAFS function fulfilled its mandate appropriately.

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Reviewed the reported results of audit work and forensic investigations in order to be satisfied that they appropriately supported the final annual assessment of governance, risk management and system of internal controls of the Group.

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Reviewed the critical matters raised by the IAFS function, obtained and evaluated management's action plans to address those matters and assessed the adequacy of those actions to appropriately and sustainably resolve those critical matters.

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Considered the effectiveness of the combined assurances provided by all the lines of assurance, through a review of management's representations and attestations, reports from the risk and compliance function and other similar second lines of assurance, together with an evaluation of the assurance of third

lines, namely external and internal audit functions.

INTERNAL FINANCIAL CONTROLS

The committee utilises the skills and expertise of the IAFS to monitor, review and evaluate the effectiveness of the internal financial controls. The committee:

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Reviewed the journey towards a digitally transformed operating model.

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Reviewed the assessment, prepared by internal audit, on the effectiveness of the Group's risk management, governance and system of internal financial controls. This assessment, together with the report on the overall control environment, formed the basis of the committee's recommendation to the Board in this regard. The Board's report on the effectiveness of the system of internal controls, which the committee fully supports, is included in the directors' report on page 12.

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Reviewed the report from the Group's forensic services function on the result of forensic investigations conducted in the period under review and their financial impact as they pertain to financial reporting.

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Provided oversight of a successful cyber risk management program. Monitored managements' preparation for and response to cyber threats. Reviewed reports from management on cybersecurity breaches.

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Reviewed the reports of the external auditor detailing the findings arising from their audit.

The IAFS performed an audit of the following in respect of the risk function:

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Reviewed the Group risk management framework i.e., policies and processes of risk identification, assessment, and continuous risk monitoring.

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Reviewed the matters related to financial reporting presented on the risk registers, its impact, likelihood of occurrence and mitigating actions.

GROUP CHIEF FINANCIAL OFFICER AND FINANCE FUNCTION

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Reviewed the performance of the GCFO, TBL Molefe, and was satisfied that she has the appropriate expertise and experience to fulfil this role and that she had performed appropriately for the year ended 31 December 2023.

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The committee also considered and has satisfied itself of the appropriateness of the expertise and experience of the Group finance function and adequacy of resources employed to fulfil all financial, control and reporting requirements of the Group and management's actions to develop and strengthen finance skills across its footprint.

GOING CONCERN STATUS

The committee was satisfied that the Group's and Company's Annual Financial Statements have been prepared on a going concern basis, and the directors are satisfied that the Group is in a sound financial position to meet its foreseeable cash requirements. The Board's statement on the going concern status of the Group and the Company is contained on page 10 of the Directors' report.

SOLVENCY AND LIQUIDITY REVIEW

The committee is satisfied that the Board has performed a solvency and liquidity test on the Company in terms of section 46 of the Companies Act and has concluded that the Company will satisfy the test after payment of the final dividend.

The committee also considered guarantees issued on behalf of subsidiaries.

INTEGRATED REPORT

During the course of April 2024, the committee will evaluate the integrated report for the 2023 financial year and assess its consistency with operational, financial and other information available to the committee. Similarly, the committee will ensure that the report is prepared in accordance with appropriate reporting standards and conforms to the requirements of King IV and the JSE Listings Requirements.

In collaboration with the Social, Ethics and Sustainability Committee, the committee will review the integrity of the sustainability disclosures included in the sustainability report and confirm that they are reliable and do not conflict with financial information. On the basis of the processes and assurances obtained, the committee will recommend the 2023 integrated report to the Board for approval.

KEY FOCUS AREAS FOR 2024

The committee has set the following key areas of focus for 2024 in addition to its annual governance responsibilities:

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Consider the potential benefits from the introduction of RPA (Robotic Process Automation) for key finances processes and controls.

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Continue to review the implementation of the enterprise cloud solution across the Group's footprint, the delivery of additional functionality, enhancements to platform performance management and incident resolution and the decommissioning of some legacy platforms. Continuous improvement of the separate governance structures for the Fintech Group and GlobalConnect Solutions Limited (Bayobab) enhancements to the related risk and control and compliance capabilities.

●

Enhance specialised finance skills across the Group's operations and strengthen centres of excellence of key finance functions.

APPROVAL OF THE AUDIT COMMITTEE REPORT

The committee hereby confirms that it has functioned in accordance with its terms of reference and discharged its duties for the financial year under review.

SN Mabaso-Koyana

Group Audit Committee Chairman

22 March 2024

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MTN Group Ltd. published this content on 24 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 March 2024 05:24:01 UTC.