consolidated financial statements - 31 march 2014
TRANSCRIPT
CONSOLIDATED FINANCIAL STATEMENTSfor the period ended 31 March 2014
Independent auditor’s report 02
Directors’ responsibility and approval 03
Directors report 04
Audit commitee report 05
Statements of financial position 08
Statement of profit & loss 09
Statement of other comprehensive income 10
Statement of changes in equity 11
Statement of cash flows 12
Accounting policies 13
Notes to the financial statements 27
CERTIFICATION BY COMPANY SECRETARY
In our capacity as Company Secretary, we hereby confirm, in terms of section 88(2)(e) of the Companies Act, 2008 (Act No. 71 of 2008), as amended (the Act), that for the period ended 31 March 2014, the Group has lodged with the Companies and Intellectual Property Commission all such returns as are required of a public Group in terms of the Act and that all such returns are true, correct and up to date.
Acorim Proprietary LimitedCompany Secretary
Prepared by: RB Dick CA (SA)
INDEPENDENT AUDITORS’ REPORTTo the Shareholders of MICROmega Holdings LimitedWe have audited the consolidated financial statements of MICROmega Holdings Limited set out on pages 3 to 48 which comprise the statement of financial position at 31 March 2014, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows for the 15 month period then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information.
Directors' Responsibility for the Financial StatementsThe Group's directors are responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatements, whether due to fraud or error.
Auditors' responsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement.
An audit includes performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
OpinionIn our opinion, the consolidated financial statements fairly present, in all material respects, the financial position of the Group as at 31 March 2014, and its financial performance and cash flows for the period ended in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa.
Other reports required by the Companies ActAs part of our audit of the consolidated financial statements for the 15 month period ended 31 March 2014, we have read theDirectors' Report, the Audit Committee's Report and the Company Secretary's Certificate, for the purpose of identifying whether there are material inconsistencies between these reports and the audited financial statements. These reports are the responsibility of the respective preparers. Based on reading these reports we have not identified material inconsistencies between these reports and the audited consolidated financial statements. However, we have not audited these reports and accordingly do not express an opinion on these reports.
Nexia SAB&T 12 June 2014
119 Witch Hazel Ave Centurion
F. Sulaman JSE Accredited Auditor Registered Auditor
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 02
DIRECTORS' RESPONSIBILITIES AND APPROVALThese controls are monitored throughout the Group and all employees are required to maintain the highest ethical standards in ensuring the Group’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the Group is on identifying, assessing, managing and monitoring all known forms of risk across the Group. While operating risk cannot be fully eliminated, the Group endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.
The Directors are of the opinion, based on the information and explanations given by management that the system of internal controls provides reasonable assurance that the financial records may be relied upon for the preparation of the consolidated financial statements. However, any system of internal financial control can only provide reasonable and not absolute assurance against material misstatement or loss.
The Directors have reviewed the Group’s cash flow forecast for the period ended 31 March 2014 and, in the light of this review and the current financial position, they are satisfied that the Group has or has access to adequate resources to continue in operational existence for the foreseeable future.
The external auditors are responsible for independently auditing and reporting on the Group's consolidated financial statements.
The consolidated financial statements, which have been prepared on the going concern basis, were approved by the Board on 12 June 2014 and were signed on its behalf by:
The Board of Directors (the Directors) is required, in terms of the Companies Act 71 of 2008, to maintain adequate accounting records and is responsible for the content and integrity of the consolidated financial statements and related financial information included in the integrated report. It is their responsibility to ensure that the financial statements fairly represent the state of affairs of the Group as at the end of the financial year and the results of its operations and cash flows for the period then ended conforms with International Financial Reporting Standards. The external auditors are engaged to express an independent opinion on the consolidated financial statements.
The consolidated financial statements are prepared in accordance with International Financial Reporting Standards and in the manner required by the Companies Act 71 of 2008 and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgments and estimates.
The Directors acknowledge that they are ultimately responsible for the system of internal financial control established by the Group and places considerable importance on maintaining a strong control environment. To enable the Directors to meet these responsibilities, the Board sets standards for internal control aimed at reducing the risk of error or loss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk.
D.C. King I.G. MorrisExecutive Chairman Chief Executive Officer
The directors present their report for the 15 month period ended 31 March 2014.
1. Main business and operationsMICROmega is a holding company with controlling interests in a number of operating subsidiaries and is listed on the main board of South Africa's Johannesburg Stock Exchange (JSE) under the support services sector. Our businesses are primarily focused on the provision of information technology, financial services, occupational health and safety and labour supply services.
The consolidated financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.
The consolidated operating results and statement of financial position of the Group are fully set out in the attached consolidated financial statements and do not in our opinion require any further comment.
2. Events after reporting dateThe directors are not aware of any matter or circumstance arising since the end of the financial year to the date of this report that could have a material effect on the financial position of the Group.
3. Authorised and issued share capitalDuring the current period a capitalisation issue was done in the ratio of 14 shares per 100 shares held. Refer to note 14, share capital and share premium.
4. DividendsThe directors have declared a dividend of 20 cents per share for the 15 month period ended 31 March 2014. The final dividend has not been included as a liability in these consolidated financial statements as it was declared subsequent to period end.
5. DirectorsThe directors of the Group during the period and to the date of this report are as follows:
DC King ChairmanIG Morris Chief Executive OfficerDSE Carlisle Executive DirectorRB Dick Financial DirectorRC Lewin Non-Executive DirectorPH Duvenhage Non-Executive DirectorAB Swan Non-Executive DirectorGE Jacobs Independent Non-Executive DirectorDA Di Siena Independent Non-Executive DirectorTW Hamill Non-Executive Director
6. Company SecretaryThe Group's designated Company Secretary is Acorim Proprietary Limited, whose business and postal adresses are:
2nd Floor, North Block PO Box 41480Hyde Park Office Towers CraighallCnr Jan Smuts Avenue & 6th Road 2024Hyde Park2196
7. AuditorsNexia SAB&T were the auditors for the period under review.
8. Corporate governanceRefer to the governance section of the Annual Integrated Report for a complete assessment of our King III and Companies Act application.
9. Subsidiaries and associated companiesRefer to note 37 to the consolidated financial statements for the detail of the various companies that are represented in the Group.
DIRECTORS' REPORT
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 04
AUDIT COMMITTEE REPORTIn accordance with Section 94(7) (f) of the Companies Act and the Principles of King III, the Audit Committee presents its report for the 2014 financial period to the Board of Directors and to all Group stakeholders.
The Audit Committee is comprised of five Non-Executive Directors of which three are independent. The acting Chairman of the Audit Committee is MICROmega CEO, Greg Morris. The Board will appoint an Independent Non-Executive Director as Chairman of the Audit Committee at the upcoming Board Meeting so as to comply with the JSE Listings Requirements and King III. Following which, the appointment will be ratified by shareholders at the next shareholders meeting.
Attendance at Audit Committee meetings was as follows:
In accordance with the Audit Committee’s approved terms of reference, the Committee discharged, inter alia, the following responsibilities during the 2014 financial period:
Reviewed the interim results, financial statements, trading updates, SENS announcements and other similar documents, and provided comments thereon to the Board of Directors Made submissions to the Board on matters concerning MICROmega’s accounting policies, financial controls and reporting Generally reviewed the Group’s financial risk management and controls and held discussions with the independent external auditor Nexia SAB&T in this regard Satisfied itself with the appropriateness of the expertise and adequacy of resources of the finance function Monitored the Group’s combined assurance model and ensured that significant risks facing the Group were adequately addressed Ensured that Nexia SAB&T maintained its independence and objectivity at all times Assessed the quality and effectiveness of the audit process and approved the fees paid to the independent external auditor for the 2014 financial period Reviewed the Directors’ report to be included in the consolidated financial statements prior to endorsement by the Board of Directors Evaluated significant judgements and reporting decisions in the integrated report and the clarity and completeness of the proposed financial and sustainability disclosures
In order to ensure that the Audit Committee performed in accordance with the responsibilities laid out in the Committee’s terms of reference, a checklist of matters to be considered at each meeting is drafted and circulated to the members. This checklist guides the content of the agenda for each meeting and the completed checklist forms part of the minutes of the Audit Committee.
Members
D.C. KingI.G. Morris (Acting Chairman)
R.C. LewinP.H. DuvenhageA.B. SwanD.S.E. CarlisleR.B. DickR. PrettirajhD. CaseG.E. JacobsT.W HamillD.A Di SienaAcorim (Company Secretary)
Nexia SAB&T (ext. auditors)
27/03/2014Invitee
Invitee
InviteeInviteeInvitee
N/AX
04/12/2014Invitee
Invitee
InviteeInviteeInvitee
N/AInvitee
N/AN/A
25/09/2013Invitee
InviteeInviteeInvitee
N/AN/AN/AN/A
26/03/2013N/A
InviteeInviteeInviteeInvitee
N/AN/AN/A
AUDIT COMMITTEE 2014 FINANCIAL YEAR
INDEPENDENT EXTERNAL AUDITOR APPOINTMENT AND INDEPENDENCE
The Group has a formal policy on the provision of non-audit services by the independent external auditor which specifies those services that the auditor is prohibited from providing to MICROmega as well as those that require pre-approval by the Audit Committee. During the year under review, Nexia SAB&T did not provide any non-audit services to MICROmega. The Audit Committee duly satisfied itself that, in accordance with section 94(8) of the Companies Act, Nexia SAB&T, the external auditors for the Group, remains independent of MICROmega.
The Audit Committee checklist prepared for each meeting assists Committee members in ensuring that MICROmega complies with required accounting practices and all relevant matters are timeously brought to the attention of the Audit Committee. Input from the independent external auditors at Audit Committee meetings provides Committee members with greater insight into the financial management of the Group. The Audit Committee is therefore satisfied that the financial statements of the Group comply with International Financial Reporting Standards and are consistent with the previous financial statements and that no matters of significance have been raised during the 2014 financial period.
The Audit Committee has considered the appropriateness of the expertise and experience of the financial Director, Russell Dick, together with MICROmega’s finance team, and is satisfied that Russell Dick and the finance team have the necessary knowledge, skills and expertise to perform the finance function for the Group.
MICROmega’s internal audit department provides the Group with an independent and objective assurance function and continues to operate in accordance with the internal audit charter and internal audit plan approved by the Board of Directors in March 2011. The internal audit department reports directly to the Audit Committee and has unrestricted access to the Chairman of the Audit Committee.
The internal auditor provides the Audit Committee with updates as to the progress made by the department and brings any significant risks or issues to be considered to the attention of the Audit Committee at every Audit Committee meeting or when required.
MICROmega’s internal audit department has operated successfully for over a year in accordance with the internal audit plan, which is structured as a three year strategic internal audit rolling plan, together with a focused internal audit plan.
During the 2014 financial period internal audit performed planned engagements on human resources, payroll and information technology general controls for the Group. Internal audit also provided an independent assessment of the Group’s risk management function.
The Board of Directors is responsible for the internal financial controls and systems in use throughout the Group and the internal audit department has assisted the Board of Directors in evaluating the effectiveness of these internal controls. The identification of possible risks and the implementation of adequate internal financial controls are delegated to the Managing Directors of each subsidiary, while the Board of Directors has ultimate authority and responsibility for ensuring that systems of internal financial controls are effectively implemented and monitored. The Audit Committee is satisfied that during the 2014 financial period MICROmega maintained adequate systems of internal control over the financial reporting of the Group and has ensured that Group assets were adequately safeguarded and nothing has come to the attention of the committee members that indicate a material breakdown in the functioning of the Group’s internal control systems.
MICROmega implemented a whistle blowing policy in 2011 in order to demonstrate its commitment to working towards a culture of fairness, openness and transparency. In conjunction with the whistle blowing policy, the MICROmega Holdings Ethics Hotline, which remains independently operated by KPMG Inc., provides employees with a mechanism to anonymously bring any unethical business practices to the attention of management. All reports received from the Ethics Hotline are forwarded to the designated representatives at MICROmega and to the Audit Committee for review, and consideration is made as to whether the action taken by the designated representatives was appropriate or whether further action is required.
The Audit Committee reviews the going concern status of the Group by considering the documentation prepared by management and the assurance provided by the financial Director at each meeting and therefore supports the going concern statement of the Board of Directors.
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 06
AUDIT COMMITTEE REPORT
MICROmega’s combined assurance model aims to optimise the assurance coverage obtained on the risks affecting the Group. Within MICROmega the following assurance providers deliver assurance on the Group’s risk:
Subsidiary management assurance Internal assurance via the executive management Internal Audit External Audit Audit Committee Risk Committee
The management team of each Group subsidiary addresses the risks on the day to-day operations of that business while a monthly management meeting is held with MICROmega Executive Directors. The internal audit department examines, evaluates and reports on the activities and appropriateness of the systems of internal control, risk management and governance processes, while the external auditor performs the audit in accordance with international auditing standards and reports in detail on the results of the audit to the subsidiary management, the Audit Committee and the Board of Directors. Lastly, the Risk Committee is responsible for assessing risk for the entire risk universe of MICROmega and the Audit Committee is responsible for monitoring the appropriateness of the combined assurance model.
The Audit Committee is satisfied that the current combined assurance model utilised by the Group ensures that significant risks facing the Group are adequately addressed.
INTEGRATED REPORTING ASSURANCE
In accordance with the principles of King III, the Audit Committee is required to oversee MICROmega’s integrated report and reporting process while the Board of Directors is responsible for ensuring the integrity of the integrated report.
The Audit Committee fulfilled its oversight role in respect of MICROmega’s integrated report and the reporting process and considered and assessed the information disclosed in the integrated report against the financial, operational, governance and other information known to the Audit Committee and is satisfied that the information is reliable and consistent with the financial results.
Greg MorrisActing Chairman of the Audit Committee
CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAs at 31 March 2014
ASSETS
NON-CURRENT ASSETSProperty, plant and equipmentIntangible assetsInvestment in associatesOther investmentsLoans receivableDeferred tax assets
CURRENT ASSETSInventoriesRetirement benefitsTrade and other receivablesLoans receivableCash and cash equivalentsIncome tax receivable
TOTAL ASSETS
EQUITY & LIABILITIESShare capital and share premiumOther reservesRetained earningsTotal equity attributable to owners of the GroupNon-controlling interests
TOTAL EQUITY
LIABILITIES
NON-CURRENT LIABILITIESBorrowingsDeferred vendor paymentsDeferred tax liabilities
CURRENT LIABILITIESBorrowingsDeferred vendor paymentsTrade and other payablesProvisionsIncome tax payable
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
31 March
2014 R'000
47,718 305,760
10,879 208
9,167 40,349
414,081
13,292 -
142,581 7,668
108,846 7,455
279,842
693,923
207,666 5,590
240,863 454,119
50,150 504,269
11,491 3,484
42,252 57,227
4,351 3,849
117,364 -
6,863 132,427
189,654
693,923
31 December
2012 R'000
143,910 48,471
27 163
2,188 43,239
237,998
2,542 1,881
109,725 18,618
107,727 -
240,493
478,491
179,169 14,834 95,392
289,395 18,654
308,049
55,960 -
13,875 69,835
12,901 534
80,369 5,904
899 100,607
170,442
478,491
56789
18
1110129
13
1415
161718
16171920
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 08
REVENUERevenue from continuing operationsRevenue from discontinued operations
Cost of sales
GROSS PROFITGross profit from continuing operationsGross profit from discontinued operations
Other incomeDistribution expensesAdministrative expenses
RESULTS FROM OPERATIONSResults from continuing operationsResults from discontinued operations
Finance income Finance costsShare of profit of equity accounted associates
PROFIT BEFORE INCOME TAXProfit before income tax from continuing operationsProfit before income tax from discontinued operations
Income tax expense
PROFIT FOR THE PERIOD
Profit from continuing operationsProfit from discontinued operations
PROFIT ATTRIBUTABLE TO:Owners of the parentNon-controlling interest
EARNINGS PER SHARE Basic earnings per share (cents)Diluted earnings per share (cents)
HEADLINE EARNING PER SHARE (CENTS)
15 Monthsended
31 March 2014R'000
907,532 907,532
-
(549,241)
358,291 358,291
-
119,237 (5,692)
(304,337)
167,499 167,499
-
6,450 (5,026)
1,392
170,315 170,315
-
(33,051)
137,264
137,264 -
134,135 3,129
137,264
130.44128.37
62.91
12 Monthsended
31 December 2012R'000
746,030 694,907 51,123
(473,937)
272,093 264,497
7,596
9,694 (4,481)
(263,619)
13,687 5,410 8,277
6,754 (6,074)
2,060
16,427 10,694 5,733
(7,753)
8,674
3,757 4,917
11,603 (2,929)
8,674
10.7710.65
28.32
CONSOLIDATED STATEMENT OF PROFIT AND LOSSFor the 15 Months ended 31 March 2014
21
222323
2526
27
PROFIT FOR THE PERIOD
OTHER COMPREHENSIVE INCOMEForeign currency translation differencesRevaluation of propertyIncome tax on other comprehensive incomeOTHER COMPREHENSIVE INCOME FOR THE PERIOD
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:Owners of the parentNon-controlling interest
15 monthsended
31 March 2014R'000
137,264
1,175 - -
1,175
138,439
135,310 3,129
138,439
12 months ended
31 December 2012R'000
8,674
99 (2,320)
432 (1,789)
6,885
10,758 (3,873)
6,885
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFor the 15 Months ended 31 March 2014
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 10
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7 (1
2,89
7)
(883
)
57,
781
504
,269
CONSOLIDATED STATEMENT OF CASH FLOWSFor the 15 Months ended 31 March 2014
35.1
35.2
13
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 12
CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated by operating activitiesFinance income Finance costsTaxation paidNET CASH INFLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Property, plant and equipment acquiredIntangible assets acquiredProceeds of disposals of property, plant and equipmentProceeds of disposals of non-current assets held for saleAcquisition of subsidiariesProceeds of disposal of subsidiaries and associatesAcquisition of non-controlling interests without change in controlInternally generated intangible assetsAcquisition of associatesLoans receivable repaidLoans receivable advancedNET CASH USED IN INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Treasury shares repurchasedDividends paid to non-controlling interestsBorrowings repaidBorrowings raisedDeferred vendor payments repaidNET CASH USED IN FINANCING ACTIVITIES
Increase in cash and cash equivalentsCASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
15 months ended
31 March 2014 R'000
101 177 6 450
(5 026) (35 721) 66 880
(15 698) -
23 916 -
(36 568) 2 231 (603)
(25 467)(500)
11 509(5 657)
(46 837)
(10 060) (10 566)
- 1 702
(18 924)
1 119
107 727 108 846
12 months ended
31 December 2012 R'000
80 346 6 754 (6 074)
(15 798) 65 228
(14 230)(446)
3 996 6 592
1 46 442
- (7 376)
(90) 12 066
- 46 955
(8 466) (1 406) (9 261)
- (19 133)
93 050
14 677 107 727
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAccounting Policies
1. REPORTING ENTITYMICROmega Holdings Limited is a Group domiciled in the Republic of South Africa. The address of the Group’s registered office is 66 Park Lane, Sandton. The consolidated financial statements of the Group as at and for the 15 month period ended31 March 2014, comprise the Group and its subsidiaries (together referred to as the “Group” and individually as “Group entities”) and the Group’s interest in associates. The Group’s activities range across a broad spectrum of sectors (refer to the segment report and the report of the directors).
2. BASIS OF REPORTING
a) Statement of complianceThe consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and its interpretations adopted by the International Accounting Standards Board (IASB) the Financial Reporting Guides issued any the Accounting Practices Committee of the South African Institute of Chartered Accountants, Listings Requirements of the JSE and the requirements of the Companies Act of South Africa.
b) Basis of meaurementThe consolidated financial statements have been prepared on the historical cost basis except for the following material items in the statement of financial position:
Derivative financial instruments are measured at fair value; Financial instruments at fair value through profit or loss are measured at fair value; Available-for-sale assets are measured at fair value; The defined benefit asset is recognised as the net total of the plan assets, plus unrecognised past service cost and unrecognised actuarial losses, less unrecognised actuarial gains and the present value of the defined benefit obligation; and Owner occupied land and buildings are revalued to fair value where there is indication that there is a change from the prior year.
c) Functional and presentation currencyThese consolidated financial statements are presented in ZAR (South African Rand), which is the Group’s functional currency. All financial information presented in Rand has been rounded to the nearest thousand, except when otherwise indicated.
d) Use of estimates and judgementsThe preparation of the consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.
In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements is included in the following notes:
Notes 3(d)(iii) & 5 – useful lives and residual values Note 6 – measurement of the recoverable amounts of cash-generating units Notes 8, 9, 12, 16, 17 & 38 – valuation of financial instruments Note 18 – utilisation of tax losses Note 23 – lease classification Note 20 – provisions and contingencies Note 32 – measurement of shared-based payments Note 30 – business combinations
3. SIGNIFICANT ACCOUNTING POLICIESThe accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, and have been applied consistently by Group entities.
a) Basis of consolidationi) Business combinationBusiness combinations are accounted for using the acquisition method as at the acquisition date – i.e. when control is transferred to the Group. An investor controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
The Group measures goodwill at the acquisition date as follows:
The fair value of the consideration transferred; plus The recognised amount of any non-controlling interests in the acquiree; plus If the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree; less The net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.
Transaction costs, other than those associated with the issue of debt or securities, that the Group incurs in connection with a business combination are expensed.
Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.
ii) Non-controlling interestFor each business combination, the Group elects to measure any non-controlling interests in the acquiree either: At fair value; or At their proportionate share of the acquiree’s identifiable net assets, which are generally at fair value.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as transactions with owners in their capacity as owners. Adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary. No adjustments are made to goodwill and no gain or loss is recognised in profit or loss.
iii) SubsidiariesSubsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date the control ceases. Investments in subsidiaries are carried at cost less impairment adjustments in the Group’s separate financial statements.
The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group.
iv) Loss of controlOn the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently that retained interest is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.
v) Investments in associates (equity-accounted investees)Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence is assumed to exist when the Group holds between 20 and 50 percent of the voting power of another entity.
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 14
ACCOUNTING POLICIES
Investments in associates are accounted for using the equity method and are recognised initially at cost. The cost of the investment includes transaction costs.
The consolidated financial statements include the Group’s share of the total comprehensive income of equity-accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that the significant influence ceases.
When the Group’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest, including any long-term investments, is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.
vi) Transactions eliminated on consolidationIntra-group balances and transactions, and any unrealised income and expenses arising from intra-Group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity-accounted associates are eliminated against the investment to the extent of the Group’s interest in the associate. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
b) Foreign currencyi) Foreign currency transactionsTransactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payment during the period, and the amortised cost in foreign currency at the exchange rate at the end of the period.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency at the exchange rate at the date that the fair value was determined.
Foreign currency differences arising on translation are recognised in profit or loss.
ii) Foreign operationsThe assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to Rand at exchange rates at the reporting date. The income and expenses of foreign operations are translated to Rand at exchange rates at the dates of the transactions.
Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve in equity. However, if the foreign operation is a non-wholly owned subsidiary, then the relevant proportion of the translation difference is allocated to non-controlling interests. When a foreign operation is disposed of, such that control, significant influence or joint control is lost, the cumulative amount in the foreign currency translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to noncontrolling interests.
When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and are presented within equity in the foreign currency translation reserve.
c) Financial Instrumentsi) Non-derivative financial assetThe Group initially recognises loans and receivables on the date that they are originated. All other financial assets (including assets designated at fair value through profit or loss) are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual right to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that are created or retained by the Group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
The Group classifies non-derivative financial assets into the following categories: financial assets at fair value or amortised cost.
Financial assets at fair valueA financial asset is classified at fair value unless it is measured at amortised cost. Upon initial recognition attributable transaction costs are recognised in profit of loss as incurred. Financial assets at fair value through profit or loss are measured at fair value, and changes therein are recognised in profit or loss.
Financial assets at amortised costA financial asset is classified at amortised cost if the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on principal amount outstanding. Financial assets at amortised cost are intially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial assets are measured at amortised cost using the effective interest method, less any impairment losses.
Loans and receivables comprise instalment sale assets and trade and other receivables. Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
ii) Non-derivative financial liabilitiesThe Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.
Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective interest method.
The Group has the following non-derivative financial liabilities: loans and borrowings, deferred vendor payments, bank overdrafts, and trade and other payables.
Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the statement of cash flows.
ii) Share capitalOrdinary sharesOrdinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects.
Repurchase of share capital (treasury shares)When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented as a deduction from total equity. When treasury shares are sold or re-issued subsequently, the amount received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to / from retained earnings.
d) Property, plant and equipmenti) Recognition and meaurementItems of property, plant and equipment, with the exception of land and buildings, are measured at cost less accumulated depreciation and impairment losses. Land and buildings are revalued at regular intervals, not exceeding 3 years, by independent valuers.
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 16
ACCOUNTING POLICIES
Cost includes expenditure that is directly attributable to the acquisition of the items of property, plant and equipment. The cost of self-constructed items of property, plant and equipment includes the cost of materials and direct labour, any other costs directly attributable to bringing the items of property, plant and equipment to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the equipment is capitalised as part of that equipment.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment (calculated as the difference between the net proceeds from the disposal and the carrying amount of the item) is recognised in profit or loss.
ii) Subsequent costsThe cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying value of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss during the financial period in which they are incurred.
iii) DepreciationItems of property, plant and equipment are depreciated from the date they are available for use or, in respect of selfconstructedassets, from the date that the asset is completed and ready for use.
Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated residual values using the straight-line basis over their estimated useful lives. Depreciation is generally recognised in profit or loss, unless the amount is included in the carrying amount of another asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated.
The estimated useful lives for the current and comparative periods are as follows: Buildings 21 – 50 years Plant and equipment 5 – 15 years Motor vehicles 4 – 5 years Furniture and fittings 5 – 10 years Office equipment 5 – 10 years Computer equipment 2 – 5 years Computer software 2 – 3 years Leasehold improvements Over the period of the lease
Depreciation methods, useful lives and residual values are reviewed at each reporting date. Useful lives are affected by technology innovations, maintenance programmes and future economic benefits. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values. Consideration is also given to the extent of current profits and losses on the disposal of similar assets.
e) Intangible assetsi) GoodwillGoodwill that arises upon the acquisition of subsidiaries is included in intangible assets.
Subsequent measurementGoodwill is measured at cost less accumulated impairment losses. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and any impairment loss is allocated to the carrying amount of the equity-accounted investee as a whole.
ii) Research and developmentExpenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in profit or loss when incurred.
Development activities involve a plan or design for the production of new or substantially improved products and processes. Development expenditure is capitalised only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Group intends to, and has sufficient resources to complete development and to use or sell the asset. The expenditure capitalised includes the cost of materials, direct labour and overhead costs that are directly attributable to preparing the asset for its intended use. Other development expenditure is recognised in profit or loss as incurred.
Capitalised development expenditure is measured at cost less accumulated amortisation and accumulatedimpairment losses.
iii) Other intangible assetsOther intangible assets that are acquired by the Group, which have finite useful lives, are measured at cost less accumulated amortisation and accumulated impairment losses.
iv) Subsequent expenditureSubsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.
v) AmortisationAmortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. The estimated useful lives for the current and comparative periods are as follows: Brand names Indefinite Computer software 3 - 5 years Customer relationships 2 - 4 years Patents, trademarks and other rights 10 years to indefinite Intellectual property Indefinite
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
An intangible asset is regarded as having an indefinite useful life when, based on all relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows. Amortisation is not provided for these intangible assets but they are tested for impairmently or more frequently if events or changes in circumstances indicate that the carrying value may be impaired, and it is subsequently carried at cost less accumulated impairment losses.
f) Investment propertyInvestment property is property held either to earn rental income or for capital appreciation or for both, but not for the sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment property is initially measured at cost and subsequently at fair value with any change therein recognised in profit or loss.
Cost includes expenditure that is directly attributable to the acquisition of the investment property. The cost of selfconstructedinvestment property includes the cost of materials and direct labour and any other costs directly attributable to bringing the investment property to a working condition for their intended use.
Any gain or loss on disposal of an investment property is recognised in profit or loss. When an investment property that was previously classified as property, plant and equipment is sold, any related amount included in the revaluation reserve is transferred to retained earnings.
When the use of a property changes such that it is reclassified as property, plant and equipment, its fair value at the date of reclassification becomes its cost for subsequent accounting.
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 18
ACCOUNTING POLICIES
g) Leased assetsLeases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset class.
Other leases are operating leases and the leased assets are not recognised on the Group’s statement of financial position.
h) InventoriesInventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the weighted average cost principle, and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
Where necessary, provision is made for obsolete, slow-moving and defective inventories.
i) Impairmenti) Financial assetsA financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events had a negative effect on the estimated future cash flows for that asset.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its current fair value.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost , the reversal is recognised in the profit or loss.
ii) Non-financial assetsThe carrying amount of the Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, the recoverable amount is estimated at each reporting date.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of cash inflows of other assets (the “cash-generating unit”). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cashgenerating units that are expected to benefit from the synergies of the combination.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that are largely independent from other assets and groups.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less cost to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generated units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the Group on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
j) Non-current assets held for saleNon-current assets (or disposal groups comprising assets and liabilities) that are expected to be recovered primarily through sale rather than through continuing use, are classified as held for sale. Immediately before classification as held for sale, the assets (or components of a disposal group) are remeasured in accordance with the Group’s accounting policies. Thereafter the assets (or disposal group) are measured at the lower of their carrying amount and fair value less cost to sell. Any impairment loss on a disposal group is first allocated to goodwill, and then to remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets or deferred tax assets, which continue to be measured in accordance with theGroup’s accounting policies. Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss. Non-current assets classified as held for sale are not depreciated.
k) Employee benefiti) Defined contribution plansA defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the periods during which related services are rendered by employees. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. Contributions to a defined contribution plan that are made more than 12 months after the end of the period in which the employees render the service are discounted to their present value.
ii) Defined benefit plansA defined benefit plan is a post-employment plan other than a defined contribution plan. The Group’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefits that employees have earned in return for their service in the current and prior periods. Those benefits are discounted to determine the present value. Any unrecognised past service costs and the fair value of any plan assets are deducted. The calculation is performedly by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Group, the recognised asset is limited to the net total of any unrecognised past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan.
When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognised in profit or loss on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognised immediately in profit or loss.
The Group recognises all actuarial gains and losses arising from defined benefit plans immediately in other comprehensive income and all expenses related to defined benefit plans in profit or loss.
iii) Termination benefitsTermination benefits are recognised as an expense when the Group is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognised as an expense if the Group has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months after the reporting date, then they are discounted to their present value.
iv) Short-term benefitsShort-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 20
ACCOUNTING POLICIES
A liability is recognised for the amount expected to be paid under short-term cash bonuses or profit-sharing plans if the company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
v) Share based payment transactionsThe grant date fair value of share-based payment options granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period in which the employees become unconditionally entitled to the options. The amount recognised as an expense is adjusted to reflect the number of share options for which the related service and non-market conditions are met, such that the amount ultimately recognised as an expense is based on the number of options that meet the related service and non-market performance conditions at the vesting date.
In the event of expiry of vested share options the applicable amount held in the non-distributable reserve is transferred to retained earnings.
l) ProvisionsA provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.
The Group recognises an onerous contract as a contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it. The Group recognises the present obligation under the contract as a provision.
m) Revenuei) Sale of goodsRevenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.
ii) Rendering of servicesRevenue from rendering of services is recognised in profit or loss in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed by reference to surveys of work performed.
n) Goverment GrantsGrants that compensate the Group for expenses incurred are recognised in profit or loss on a systematic basis in the same periods in which the expenses are recognised. Grants that compensate the Group for the cost of an asset are recognised in profit or loss on a systematic basis over the useful life of the asset.
o) Lease paymentsPayments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.
Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.
Amendments require entities to disclose gross amounts subject to the rights of set-off, amounts set off in accordance with the accounting standards followed, and the related net credit exposure. This information will help invetors understand the extent to which an entity has set off in its balance sheet and the effects of rights of set-off on the entity’s rights and obligations.
New standard that replaces the consolidation requirements in SIC-12 Consolidation-special purpose entities and IAS 27 consolidation and seperate financial statements. Standard buildson existing principles by identifying the concept of control as the determining factor in wether an entity should be included within the consolidated financial statements of the parent company and provideds additional guidance to assist in the determination of control where this is difficult to assess Amendments to the transition guidance of IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities, thus limiting the requirements to provide adjusted comparative information. IFRS 10 exception to the principle that all subsidiaries must be consolidated. Entities meeting the definition of ‘Investment Entities’ must account for investments in subsidiaries at fair value under IFRS 9, Financial Instruments, or IAS 39, Financial Instruments.
New standard that deals with the accounting for joint arrangements and focuses on the rights and obligations of the arrangement, rather than its legal form. Standard requires a single method for accounting for interests in jointly controlled entities.Amendments to the transition guidance of IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities, thus limiting the requirements to provide adjusted comparative information.
IFRS 7, Financial instruments disclosures
IFRS 10, Consolidatedfinancial statements
IFRS 11, Joint arrangements
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
p) Finance income and expensesFinance income comprises interest income on funds invested, dividend income, gains on the disposal of availablefor-sale financial assets, and changes in the fair value of financial assets at fair value through profit or loss. Interest income is recognised as it accrues in profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on the date that the Group’s right to receive payment is established, which in the case of listed securities is the ex-dividend date.
Finance expenses comprise interest expense on borrowings, unwinding of discount on provisions, changes in the fair value of financial assets at fair value through profit or loss, impairment losses recognised on financial assets and losses on forward exchange contracts that are recognised in profit or loss. All borrowing costs are recognised in profit or loss using the effective interest method.
Foreign currency gains and losses are reported on a net basis.
q) Income taxIncome tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss, except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at the tax rate expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted at the reporting date.
The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Dividends withholding taxes that arise from the distribution of dividends are recognised when the distributions are made to shareholders that do not qualify for exemption in terms of the Income Tax Act.
r) Earnings per shareThe Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprises share options granted to employees. The Group calculates headline earnings per share (HEPS) data for its ordinary shares. Headline earnings is determined by excluding certain items from profit or loss attributable to ordinary shareholders through making use of the table and requirements contained in Circular 02/2013
s) Segment reportingThe Group determines and presents operating segments based on the information that is internally provided to the Executive Chairman, who is the chief operating decision maker. A segment is a distinguishable component of the Group that is engaged either in providing related products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and returns that are different from those of the other segments. The Group’s primary format for segment reporting is based on business segments. The business segments are determined based on the reporting business units.
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 22
ACCOUNTING POLICIES
No secondary geographical segment analysis has been included as geographical location does not play a significant role in the Group’s operations and thus this information will not be beneficial.
Segment revenueSegment revenue represents the gross value of services invoiced and goods sold excluding value added taxation, which is directly attributable and reasonably allocated to each business segment.
Investment income is included in the segment where the business activity holding the investment is situated.
Segment resultsSegment results equal segment revenue less segment expenses before any adjustment to minority interests.
Segment assets and liabilitiesSegment assets and liabilities include direct and reasonable allocable operating assets, investments in associates and liabilities. Segment assets comprise total assets less deferred tax assets, investments in associates, tax receivable assets and loans receivable from group companies. Segment liabilities comprise total liabilities less deferred tax liabilities, tax payable liabilities and loans payable to group companies.
4. Determination of fair valuesA number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and / or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
i) Property, plant and equipmentThe fair value of property, plant and equipment recognised as a result of a business combination is based on market values. The market value of property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The fair value of items of plant, equipment, fixtures and fittings is based on the market approach and cost approaches using quoted market prices for similar items when available and replacement cost when appropriate.
ii) Intangible assetsThe fair value of patents and trademarks acquired in a business combination is based on the discounted estimated royalty payments that have been avoided as a result of the patent or trademark being owned. The fair value of customer relationships acquired in a business combination is determined using the multi-period excess earnings method, whereby the subject asset is valued after deducting a fair return on all other assets that are part of creating the related cash flows.
The fair value of other intangible assets is based on the discounted cash flows expected to be derived from the use and eventual sale of assets.
ii) InventoriesThe fair value of inventories acquired in a business combination is determined on its estimated selling price in the ordinary course of business less the estimated costs of completion and sale, and a reasonable profit margin based on the effort required to complete and sell the inventories.
iv) Investments in equity and debt securitiesThe fair value of financial assets is determined by reference to their quoted closing bid prices at the reporting date. In the absence of a quoted price the multi-period excess earnings method is used.
v) Trade and other receivablesThe fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date. This fair value is determined for disclosure purposes.
vi) Share based payment transactionsThe fair value of employee share options is measured using the Black-Scholes formula. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility adjusted for changes expected due to publicly available information), weighted average expected life of the instrument (based on the rules of the share incentive scheme) expected dividends, and the risk-free interest rate (based on government bonds). Service and non-market performance conditions attached to the transactions are not taken into account in determining fair value.
New standards and interpretationsThe Group has chosen not to early adopt the following standards and interpretations, and will do so in future financial periods
The amendments as set out below are considered not to have a material impact on the financial statements:
Annual Improvements 2010–2012 Cycle: Amendments added the definitions of performance conditions and service conditions and amended the definitions of vesting conditions and market conditions.
Annual improvements 2010-2012 cycle: Amendments to the measurement requirements for all contingent consideration assets and liabilities including those accounted for under IFRS9.Annual improvements 2011-2013 cycle: Amendments to the scope paragraph for the formation of a joint venture.
Annual improvements 2010-2012 cycle: Amendments to some disclosure requirements regarding the judgements made by management in applying the aggrrgation criteria, as well as those to certain reconcilitions.
New standards arising from a three-part project to replace IAS 39 Financial instruments: - Phase 1: Classification and measurement (completed)
Most of the requirements for financial liabilities were carried forward unchanged from IAS 39. However, some changes were made to the fair value option for financial liabilities to address the issue of own credit risk. Annual improvements 2010-2012 cycle: Amendments to the measurement requirements for all contingent consideration assets and liabilities included under IFRS 9.
Annual Improvements 2010-2012 Cycle: Amendments to clarify the measurement requirements for those short-term receivables and payables. Annual Improvements 2011–2013 Cycle:Amendments to clarify that the portfolio exception applies to all contracts within the scope of, and accounted for in accordance with, IAS 39 or IFRS 9.
IFRS 2, Share-based payments
IFRS 3, Business combinations
IFRS 8, Operating segments
IFRS 9, Financial instruments
IFRS 13, Fair valuemeasurement
1 July 2014
1 July 2014
1 July 2014
The mandatory effective date will be announced when IASB has completed all outstanding parts
1 July 2014
1 July 2014
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 24
IFRS 14 permits firt-time adopters to continue to recognise amounts related to its rate regulated activities in accordance with their previous GAAP requirements when they adopt IFRS. However, to enhance comparability with entities that apply IFRS and do not recognise such amounts, the Standard requires that the effect of rate regulation must be presented separately from other items. An entity that already presents IFRS financial statements is not eligible to apply the Standard.
New standard that requires entities to recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be intitled in exchange for those goods or services. This core principle is achieved through a five step methodology that is required to be applied to all contracts with customers.• The new standard will also result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively and improve guidance for multiple-element arrangements.• The new standard supersedes: (a) IAS 11 Construction Contracts; (b) IAS 18 Revenue; (c) IFRIC 13 Customer Loyalty Programmes; (d) IFRIC 15 Agreements for the Construction of Real Estate; (e) IFRIC 18 Transfers of Assets from Customers; and (f) SIC-31 Revenue—Barter Transactions Involving Advertising Services.
Annual Improvements 2010-2012 Cycle: Amendments to the revaluation method -proprtionate restatement of accumulated depreciation.
Annual Improvements 2010-2012 Cycle: Amendments to the definitions and disclosure requirements for key management personnel.
Annual improvements 2010-2012 cycle: Amendments to the revaluation method - proportionate restatement of accumulated depreciation.
Annual improvements 2011-2013 cycle: Amendments to clarify the interrelationship between IFRS 3 and IAS 40 when classifying property as investment property or owner-occupied property.
Amendments add an exception to the retrospective application of IFRSs to require that first-time adopters apply the requirements in IFRS 9 Financial Instruments and IAS 20 Accounting for Government Grants and Disclosure of Government Assistance prospective Annual Improvements 2009–2011 Cycle amendments clarify the options available to users when repeated application of IFRS 1 is required and to add relevant disclosure requirements.Annual Improvements 2009–2011 Cycle amendments to borrowing costs.
IFRS 1, First-time Adoption of International FinancialReporting
IFRS 14, Regulatory deferral accounts
IFRS 15, Revenue fromcontracts from customers
IAS 16, Property, plant and equipment
IAS 24, Related partydisclosures
IAS 38, Intangible assets
IAS 40, Investment property
1 January 2016
1 January 2017
1 July 2014
1 July 2014
1 July 2014
1 July 2014
1 July 2014
ACCOUNTING POLICIES
The Group has chosen to adopt the following standards and interpretations, and will apply these in the current financial period:
The amendments as set out below are considered not to have a material impact on the financial statements:
New guidance on fair value measurement and disclosure requirements.
New requirements to group together items within OCI that may be reclassified to the profit or loss section of the income statement in order to facilitate the assessment of their impact on the overall performance of an entity.Annual Improvements 2009–2011 Cycle: Amendments clarifying the requirements for comparative information including minimum and additional comparative information required.
Rebuttable presumption introduced that an investment property will be recovered in its entirety through sale
Annual Improvements 2009-2011 Cycle: Amendments to the recognition and classification of servicing equipment.
Consequential amendments resulting from the issue of IFRS 10, 11 and 12.
Amendments require entities to disclose gross amounts subject to rights of setoff, amounts set off in accordance with the accounting standards followed, and the related net credit exposure. This information will help investors understand the extent to which an entity has set off its balance sheet and the effects of rights of set-off on the entity’s rights and obligations Annual Improvements 2009–2011 Cycle: Amendments to clarify the tax effect of distribution to holders of equity instruments.
IFRS 13, Fair valuemeasurement
IAS 1, Presentation of financial statements
IAS 12, Income taxes
IAS 16, Property, plant and equipment
IAS 28, Investments inassociates
IAS 32, FInancial instruments: Presentation
1 January 2013
1 July 2012
1 January 2013
1 January 2012
1 January 2013
1 January 2013
1 January 2013
1 January 2013
Amendments require entities to disclose gross amounts subject to the rights of set-off, amounts set off in accordance with the accounting standards followed, and the related net credit exposure. This information will help invetors understand the extent to which an entity has set off in its balance sheet and the effects of rights of set-off on the entity’s rights and obligations.
New standard that replaces the consolidation requirements in SIC-12 Consolidation-special purpose entities and IAS 27 consolidation and seperate financial statements. Standard buildson existing principles by identifying the concept of control as the determining factor in wether an entity should be included within the consolidated financial statements of the parent company and provideds additional guidance to assist in the determination of control where this is difficult to assess Amendments to the transition guidance of IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities, thus limiting the requirements to provide adjusted comparative information. IFRS 10 exception to the principle that all subsidiaries must be consolidated. Entities meeting the definition of ‘Investment Entities’ must account for investments in subsidiaries at fair value under IFRS 9, Financial Instruments, or IAS 39, Financial Instruments.
New standard that deals with the accounting for joint arrangements and focuses on the rights and obligations of the arrangement, rather than its legal form. Standard requires a single method for accounting for interests in jointly controlled entities.Amendments to the transition guidance of IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities, thus limiting the requirements to provide adjusted comparative information.
IFRS 7, Financial instruments disclosures
IFRS 10, Consolidatedfinancial statements
IFRS 11, Joint arrangements
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 26
Land and buildings Plant and equipment Motor vehicles Furniture and fittings Office equipment IT equipment Computer software Leasehold improvements
Cost
14,938 6,184
17,224 11,984 5,297
14,390 2,164 8,512
80,693
2014 Accumulateddepreciation
346 2,340 7,704 4,882 3,266 9,705 1,595 3,137
32,975
Carryingvalue
14,592 3,844 9,520 7,102 2,031 4,685
569 5,375
47,718
Cost
120,523 2,574
14,700 9,874 4,478
12,066 1,204 4,416
169,835
2012 Accumulateddepreciation
3,075 1,079 4,997 3,440 2,290 7,969
943 2,132
25,925
Carryingvalue
117,448 1,495 9,703 6,434 2,188 4,097
261 2,284
143,910
5. PROPERTY, PLANT AND EQUIPMENT
The carrying amounts of property, plant and equipment can be reconciled as follows:
2014Land and buildingsPlant and equipmentMotor vehiclesFurniture and fittingsOffice equipmentIT equipmentComputer softwareLeasehold improvements
Carrying valueat beginning of
the period
117,448 1,495 9,703 6,434 2,188 4,097
261 2,284
143,910
Additions
- 1,012 3,774 2,045
896 3,738
595 3,638
15,698
Additionsthroughbusiness
combinations
2,938 2,008
217 125 28
363 25
237 5,941
Disposals
(23,280) (23)
(438) (4) -
(204) - -
(23,949)
Derecognitionof subsidiary
(82,210) - - - - - - -
(82,210)
Depreciation
(304) (648)
(3,736) (1,498) (1,081) (3,309)
(312) (784)
(11,672)
Carrying valueat end of
the period
14,592 3,844 9,520 7,102 2,031 4,685
569 5,375
47,718
Land and buildings situated on Portion 1 of Erf 90, Sandown Ext2
- Cost at acquisition - Additions at cost - Revaluations - Accumulated depreciation
- - - - -
47,128 11,734 22,149 (2,036) 78,975
The effective date of the revaluation was 2 January 2013. The valuation was performed by J.D. Malakou, valuer M.I.V.S.A.There was no change in value from the prior period. The property was derecognised as part of the disposal of 20% of our interest inKyostax Proprietary Ltd in the current period.
NOTES TO THE FINANCIAL STATEMENTS
2012Land and buildingsPlant and equipmentMotor vehiclesFurniture and fittingsOffice equipmentIT equipmentComputer softwareLeasehold improvements
Carrying valueat beginning of
the period
122,764 865
8,708 6,464 1,797 3,982
173 2,280
147,033
Additions
- 1,553 6,045 1,014 1,300 2,909
239 1,170
14,230
Additionsthroughbusiness
combinations
- - - - - 12 - - 12
Disposals
(1,600) -
(1,691) (62)
(105) (211)
- -
(3,669)
Derecognitionof subsidiary
- (496)
(1,284) (73) (62)
(112) (21)
(128) (2,176)
Depreciation/Impairment/Revaluation
reversal
(3,716) (427)
(2,075) (909) (742)
(2,483) (130)
(1,038) (11,520)
Carrying value atend of the period
117,448 1,495 9,703 6,434 2,188 4,097
261 2,284
143,910
Certain items of property, plant and equipement is encumbered as stated in note 16 - Borrowings
31 March 2014 R'000
31 December 2012 R'000
Residential land and buildings situated on Erf 278, Hyde Park - Cost at acquisition - Additions at cost - Accumulated depreciation
31 March 2014 R'000
11,496 504
(305) 11,695
31 December 2012 R'000
11,496 504
(150) 11,850
The effective date of the revaluation was 2 January 2013. The valuation was performed by J.D. Malakou, valuer M.I.V.S.A.There was no change in value from the prior period.
Factory and office buildings situated on remaining Extent of Stand 140 Wynberg - Cost at acquisition - Additions at cost - Revaluations - Accumulated depreciation
- - - - -
1,203 419
2,378 (145) 3,855
The effective date of the revaluation was 2 January 2013. The valuation was performed by J.D. Malakou, valuer M.I.V.S.A.There was no change in value from the prior period. This property was derecognised as part of thedisposal of our interest in Kyostax Proprietary Limited
Factory and office buildings situated at 6 Liebenberg Street, Alrode, Erf 1599 - Cost at acquisition - Additions at cost - Accumulated depreciation
- - - -
21,700 1,812 (744)
22,768
The property was revalued during the prior perod to the market value as indicated by agentsoperating in the area. This property was disposed of during the current period.
Land and buildings situated on Erf 6989, East London Local Municipality of Buffalo City, Eastern Cape. - Cost at acquisition - Additions at cost - Revaluations - Accumulated depreciation
2,938 - -
(41) 2,897
- - - - -
Patents, trademarks and other rights Brand names Licenses and franchises Computer software, internally generated Computer software, under development Intellectual property Customer relationships Goodwill
Cost
189,512 3,775
446 65,518 1,320
250 603
65,501 326,925
2014 Accumulated
amortisation /impairment
194 1,727
101 6,423
- -
603 12,117 21,165
Carryingvalue
189,318 2,048
345 59,095
1,320 250
- 53,384
305,760
Cost
8,175 2,871
446 24,285 17,681
250 603
31,986 86,297
2012 Accumulated
amortisation /impairment
101 1,701
45 7,744
17,681 -
603 9,951
37,826
Carryingvalue
8,074 1,170
401 16,541
- 250
- 22,035 48,471
6. INTANGIBLE ASSETS
The carrying amounts of intangible assets can be reconciled as follows:
2014Patents, trademarks and other rightsBrand namesLicenses and franchisesComputer software, internally generatedComputer software, under developmentIntellectual propertyCustomer relationshipsGoodwill
Carrying valueat beginningof the period
8,074 1,170
401 16,541
- 250
- 22,035 48,471
Additions
- 878
- 23,269 1,320
- - -
25,467
Additionsthroughbusiness
combinations
181,284 - -
22,029 - - -
31,349 234,662
Disposalsthrough
derecognitionof subsidiary
- - - - - - - - -
Transfers
- - - - - - - - -
Amortisationand
impairments
(40) -
(56) (2,744)
- - - -
(2,840)
Carryingvalue
at end ofthe period
189,318 2,048
345 59,095 1,320
250 -
53,384 305,760
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 28
31 March 2014 R'000
31 December 2012 R'000
31 March 2014 R'000
31 December 2012 R'000
31 March 2014 R'000
31 December 2012 R'000
2012Patents, trademarks and other rightsBrand namesLicenses and franchisesComputer software, internally generatedComputer software, under developmentIntellectual propertyCustomer relationshipsGoodwill
Carrying valueat beginningof the period
7,861 1,545
- 15,933 16,497
250 -
25,335 67,421
Additions
276 -
446 6,291
809 - - -
7,822
Additionsthroughbusiness
combinations
- - -
142 - - - -
142
Disposalsthrough
derecognitionof subsidiary
(6) - - - - - - - (6)
Transfers
- (375)
- -
375 - - - -
Amortisationand
impairments
(57) -
(45) (5,825)
(17,681) - -
(3,300) (26,908)
Carrying valueat end of
the period
8,074 1,170
401 16,541
- 250
- 22,035 48,471
Intangible assets are allocated to their respective underlying cash generating units. The respective companies acquired are defined as the underlying cash generating unit which support the valuation of the intangible asset.
Intangible assets are recognised as indefinite useful life intangible assets when an analysis of the relevant underlying factors confirm that there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows for the entity.
Goodwill is recognised as the excess of the purchase price over the fair value of the identifiable net assets acquired in a business combination.
Goodwill and indefinite life intangible assets are assessed for impairment on an annual basis, which is determined by calculating the recoverable amount of a cash generating unit based on value-in use. These intangable assests results from business combinations where the purchase price, exceeded the net assets acquired.
Value-in use calculations use pre-tax cash flow projections based on financial forecasts approved by management and cover a five year period. The estimated growth rates applied are in line with that of the industry in which the cash generating unit operates and are materially similar to assumptions of external market sources. Anticipated growth over the five year period was assumed at 5%. Cash flows were extrapolated into perpetuity using a terminal growth rate of 2%. Assumptions were based on management's past experience and best estimates regarding forecasts. The discount rates used are pre-tax and reflect the appropriate risk associated with the industry and respective businesses. Thediscount rates used ranged between 16.5% and 22.9% depending on the cash generating unit being assessed.
The impairment calculations were tested for sensitivity to significant changes in the key assumptions used. The basis for the sensitivity analysis was a reduction of up to 20% in the forecasted operating profit used in the value-in use calculation and a reduction of 5% of the weighted average cost of capital.
The sensitivity analysis did not result in any impairment.
7. INVESTMENTS IN ASSOCIATES
Cost of investment in associate Carrying value at beginning of the period Impairment of investment in current period Impairment of loans receivable Investments in associates acquired Equity accounted profit in the current period Movement in loan to associate
10,879
27 - -
9,460 1,392
- 10,879
27
2,038 (319)
(3,692) -
2,060 (60) 27
Kyostax Proprietary LimitedThe Group owns 30% of an associate whose shares are not publicly traded. Summarisedfinancial information of the associate is set out below:
Carrying value of investment: Cost of investment in associate Equity accounted profit in the current period Total assets Total liabilities Net assets Revenue Profit for the year
8,960 1,215
10,175
95,806 64,668 31,138
17,488 6,423
- - -
- - -
- -
NOTES TO THE FINANCIAL STATEMENTS
31 March 2014 R'000
31 December 2012 R'000
31 March 2014 R'000
31 December 2012 R'000
Cloudware Investment Proprietary LimitedThe Group owns 30% of an associate whose shares are not publicly traded. Summarised financialinformation of the associate is set out below:
Carrying value of investment: Cost of investment in associate Equity accounted profit/ (losses) in the current period Total assets Total liabilities Net assets Revenue Profit for the year
31 March 2014 R'000
500 177 677
13,983 18,660 (4,677)
44,131 2,528
31 December 2012 R'000
- - -
- - -
- -
GCM Meter Reading Services Proprietary LimitedThe Group owns 50% of an associate whose shares are not publicly traded. Summarisedfinancial information of the associate is set out below:
Carrying value of investment: Cost of investment in associate Equity accounted profit since acquisition Loan from associate Total assets Total liabilities Net assets Revenue Profit for the year
1 37
(11) 27
63 63 -
- -
1 37
(11) 27
63 63 -
- -
Petrolmecs LDAThe Group owns 49% of an associate whose shares are not publicly traded. Summarised financialinformation of the associate is set out below:
Carrying value of investment: Cost of investment in associate Equity accounted profit/ (losses) in the current period Loan from associate Total assets Total liabilities Net assets Revenue Profit for the year
- - - -
13,401 18,977 (5,576)
10,128 808
- - - -
13,483 13,483
-
4,146 (836)
In the prior period management had impaired the full exposure to the Angolan operations due to the difficulty to effectively realise assets asa minority shareholder in an Angolan operation, no additional equity accounted profit / (loss) was accounted for in the current period.
8. OTHER INVESTMENTS
Financial assets designated at fair value through profit and loss Listed shares 208
208 163 163
The fair value of investments in listed shares is obtained with reference to the closing value of shares as at the period end on the JSE Limited. The balance of listed shares represents funds held in the trading margin account. A sensitivity analysis has not been disclosed as the effect of changes in economic conditions on listed investments held is not considered material to group results.
The shares are classified as level 1 fair value as their values are derived from prices quoted in the active market.
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 30
31 March 2014 R'000
31 December 2012 R'000
31 March 2014 R'000
31 December 2012 R'000
31 March 2014 R'000
31 December 2012 R'000
Detail of listed shares held as at period end:
Listed Sanlam Limited 3,610 3,610
Number of ordinary shares
9. LOANS RECEIVABLE
Instalment sale assets Mguka Trading Close Corporation ARDA Durban Proprietary Limited Kyosatx Proprietary Limited Portion recoverable within 12 months included in current assets
10,836 -
342 5,657
16,835 (7,668) 9,167
20,233 231 342
- 20,806
(18,618) 2,188
All loans receivable are denominated in South African Rand. The loans are carried at their amortised cost which equates to the fair value based on interest rates applicable on non- current loans receivable. Interest implicit in the loan is similar to the average market rate for such borrowings
Mguka Trading Close CorporationThe loan is secured by equity securities in a number of private companies. The loan is interest free and is repayable within 12 months.
Instalment sale assetsAssets under instalment sale agreements are repayable over 2 to 5 years at effective interest rates ranging from prime lending plus 3% per annum to prime lending plus 4.5% per annum. The loans are secured by the assets subject to the agreements.
ARDA Durban Proprietary LimitedThe loan is secured by the full issued share capital of the loanee and personal suretyships provided by its directors. The loan is interest free and repayable in equal instalments over 12 months.
Kyostax Proprietary LimitedThe loan is unsecured, interest free and is repayable in the normal course of business.
10. RETIREMENT BENEFIT
Defined benefit planKolbenco Proprietary Limited, a wholly owned subsidiary, made contributions to a defined benefit plan that provided pension benefits for employees upon retirement. The plan entitled a retired employee to receive an annual payment equal to 2% of the employee's highest annual salary for each year of pensionable service.
The pension fund was closed and finalised for liquidation in 2011. The preliminary liquidation accounts had been submitted to the Finacial Services Board on 1 December 2011. The measurement and disclosures of the fund have been based on these preliminary liquidation accounts and not on a projected unit credit method as per IAS19.
The liquidation accounts have been approved by the Financial Services Board during 2012. The administrator made payment on a portion of the employer surplus however the other liabilities will be settled in early 2013.
NOTES TO THE FINANCIAL STATEMENTS
31 March 2014R’000
31 December 2012 R’000
31 March 2014
31 December 2012
Statement of financial position reconciliation Present value of funded obligations Active members Current pensioners Accounts payable Outstanding benefits payable Liquidation expenses reserve account Present value of unfunded obligations Total present value of defined benefit obligation Fair value of plan assets Total employer surplus Movement in the present value of the defined benefit obligation Defined benefit obligations at beginning of the period Interest cost Current service cost Employee contributions paid into the plan Increase in amount required for pensioners to perpetuity Correction of benefits paid following liquidators audit Increase in sundry payables Benefits paid by the plan Actuarial gain on obligation Defined benefit obligation at the end of the period Movement in the present value of plan assets Fair value of plan assets at the beginning of the period Actual / expected return on plan assets Contributions paid into the plan Employer surplus paid by the plan Actuarial gain/(loss) on plan assets Fair value of plan assets at the end of the period Surplus/(expense) recognised in profit or loss Current service cost Interest cost Increase in amount required for pensioners to perpetuity Correction of benefits paid following liquidatiors audit Increase in sundry payables Actual/expected return on plan assets Actuarial gains/(losses) Contributions paid into the plan Income recognised in profit or loss Membership statistics Number of members Number of pensioners
- - - - - - - - -
- - - - - - - - - -
- - - - - -
- - - - - - - - -
- -
9,370 8,903
395 3,984
267 -
22,919 (24,800) (1,881)
22,919 - - - - - - - -
22,919
44,300 - -
(19,500) -
24,800
- - - - - - - - -
5 11
11. INVENTORIES Inventories comprise: Raw materials Consumable stores Work in progress Finished goods
1,497 -
492 11,303 13,292
- 363 413
1,766 2,542
12. TRADE AND OTHER RECEIVABLES Trade debtors Prepaid expenses Deposits Value Added Tax Other
122,672 8,826 1,340 2,036 7,707
142,581
90,973 7,041 1,195 2,933 7,583
109,725
The carrying amount of trade and other receivables approximates their fair value.
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 32
31 March 2014 R'000
31 December 2012 R'000
Performance categoriesTrade receivables can be categorised in the following performance categories:Fully performing Past due but not impaired Current 31 - 60 days 61 - 90 days 91 - 120 days Impaired and provided for < 90 days 91 -120 days Over 120 days Total
56,336 51,188 8,274
14,826 12,227 15,861 15,148 4,147 1,946 9,055
122,672
35,163 36,729 12,391 13,274 5,696 5,368
19,081 3,991
34 15,056 90,973
Trade receivables that are within the prescribed trading terms are considered to be fully performing. Past due and not impaired trade receivables relate to a number of independant customers for whom there is no history of default and payment cessions exist over these customers. Trade receivables impaired and provided for mainly relate to independant customers, which are in difficult economic situations. The risk component of this category has been provided for.
The entity recognised an impairment loss of R10.6 million (2012: R14.5 million ) against trade receivables due to default by customers.
Movement on the impairment loss is as follows: Balance at the beginning of the period Impairment loss made during the year Reversal of impairment loss Balance written off Balance at the end of the period
14,489 4,183
(10,207) 2,120
10,585
8,999 8,723
(9,791) 6,558
14,489
Currencies
The carrying amounts of the group's trade and other receivables are denominated in thefollowing currencies (all balances are disclosed in South African Rand):
South African Rand US Dollar British Pound Namibian Dollar Total
134,854 6,932
3 792
142,581
97,233 8,731 3,063
728 109,755
13. CASH AND CASH EQUIVALENTS
Favourable cash balances Cash on hand Current account balances Call account balances
172 46,824 61,850
108,846
165 100,800
6,762 107,727
The following security has been provided in respect of facilities made available to group companies:Debtor financing margined @ 80% Working capital financing Asset financing Guarantess
24,000 14,500 9,069 3,270
8,000 12,000
- 311
CurrenciesThe carrying amounts of the group's cash and cash equivalents are denominated in thefollowing currencies (all balances are disclosed in South African Rand)
South African Rand US Dollar New Zealand Dollar Hong Kong Dollar Chinese Renminbi Namibian Dollar Other currencies Total
85,765 6,420
578 5,842 8,767
856 618
108,846
20,736 1,916
153 82,510
- 835
1,577 107,727
NOTES TO THE FINANCIAL STATEMENTS 31 March 2014
R'000 31 December 2012
R'000
31 March 2014 R'000
31 December 2012 R'000
31 March 2014 R'000
31 December 2012 R'000
31 March 2014 R'000
31 December 2012 R'000
31 March 2014 R'000
31 December 2012 R'000
14. SHARE CAPITAL AND SHARE PREMIUM
Authorised share capital 200 000 000 Ordinary shares of R0.01 each
Issue share capital and share premium
2,000
Balance at the beginning of the period Capitalisation issue Treasury shares repurchased during the period Share-based payment transactions Acquisition of subsidiaries Balance at the end of the period
Numberof shares
100,802,677 14,112,412 (4,596,081)
338,038 4,258,043
114,915,089
Ordinaryshares R'000
928 124 (45)
3 42
1,052
Sharepremium
R'000 178,241
(124) (12,098)
2,503 38,092
206,614
Total R'000
179,169 -
(12,143) 2,506
38,134 207,666
The directors are authorised, until the forthcoming annual general meeting, to dispose of the unissued shares for any purpose and upon such terms and conditions as they deem fit, subject to the provision of section 38 and 41 of the Companies Act and the requirements of the JSE Securities Exchange of South Africa.
During the year the group repurchased 4 596 081 treasury shares on the open market at an average price of 277 cents to be utilised to settle future vendor payments and vested share options. 338 038 treasury shares were issued to employees during the year for vested and exercised options at an average price of 741 cents and 4 258 043 shares were issued at an average price of 896 cents in the acquisition of various subsidiaries.
On 1 November 2013 a capitalisation issue in the ratio of 14 shares per 100 shares held were issued. The issued share capital increased with14 112 412 shares as a result of the capitalisation award.
15. OTHER RESERVES
Revaluation reserveThe revaluation reserve comprise all revaluation surpluses to the revaluation of owner occupied properties.
Foreign currency translation reserveThe foreign currency translation reserve comprises all foreign currency differences arisung from the translation of the financial statemetns of foreign operations.
Deal difference reserveThe deal difference reserve comprises a retention amount to cover any unmatched trades that may occcur in the broking businesses.
Share-based payment reserveThe share-based payment reserve represents the vested fair value of services provided inexchange for share options. Refer note 32.
Liabilities under instalment sale agreements are repayable over periods between two and five years at an average effective rate of 8.5%. These liabilities are secured by property, plant and equipment with a carying value of R4.8 million (2012: R6.4 million) together with revenue streams associated with revenue generating equipment financed by the instalment sale agreements.
Morgage bonds are repayable over 120 months at a rate of prime minus 1% to prime minus 1.5% per anum and are secured by property with a value of R14.9 million (2012: 95.9 million).
Borrowings are denominated in South African Rand.
The fair value of borrowings have been assessed taking into account their respective interest rates and maturity periods.None of the fair values differ materialy from the corresponding carrying values.
16. BORROWINGS
Instalment sale liabilities Morgage Bonds Warren Friedland
Current Non-current
6,785 9,057
- 15,842
6,591 56,630 5,64068,861
4,351 11,491 15,842
12,901 55,960 68,861
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 34
31 December 2012 R'000
31 March 2014 R'000
31 March 2014 R'000
31 December 2012 R'000
2,000
17. DEFERRED VENDOR PAYMENTSThe amount due to vendors represents the balance of the purchase consideration owing in respect of acquisitions. The loans are settled through the issue of shares and cash resources upon achievement of profit warranties. Refer note 30 , business combinations.
Amounts to be settled: Through the issue of shares Through the distribution of cash resources
3,849 3,484 7,333
534 -
534
Current Non-current
3,849 3,484 7,333
534 -
534
Deferred vendor payments are recognised when there is a reasonable expectation that the predetermined profit warranties will be achieved.
18. DEFERRED TAX
Deferred tax asset Deferred tax liability
40,349 (42,252) (1,903)
43,239 (13,875)
29,364
The deferred tax asset/( liability) arises from the following temporary differences: Property, plant and equipment Intangible assetsInvestmentsLoans receivableIncome received in advance ProvisionsAccrual for straighlining of leases Assessed loss
(2,784) (42,490)
2,867 1,034 1,910 6,723 3,089
27,748 (1,903)
(10,322) (1,821)
1,224 2,686
540 6,147
105 30,805 29,364
19. TRADE AND OTHER PAYABLES
Trade and other payables Income received in advance Leave pay accrual Payroll accruals Value Added Tax
75,974 7,506 5,186
22,360 6,338
117,364
39,768 7,430 5,280
22,950 4,941
80,369
Creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken is less than 60 days.
The carrying amount of trade and other payables approximates their fair value.
CurrenciesThe carrying amounts of the group’s trade and other payables are denominated in the followingcurrencies (all balances are disclosed in South African Rand)
South African Rand US Dollar British Pound Other currencies Total
115,435 1,574
181 174
117,364
75,015 5,354
-
80,369
NOTES TO THE FINANCIAL STATEMENTS
Reconciliation of the movement on deferred tax: Balance at beginning of period Movements consisting of: Recognised in profit and loss Acquisition of subsidiaries Derecognistion of subsidiary Recognised directly in equity Balance at end of period
29,364
(1,307) (35,865)
6,091 (186)
(1,903)
19,346
9,586 - -
432 29,364
31 December 2012 R'000
31 March 2014 R'000
Deferred tax assets and liabillities are only offset when the income tax relates to the same legal entity or the same fiscal authority or they intend to settle the assets and liabilities on a net basis. The directors assessed that the deferred tax assets will be recovered on profitability forecasts.
31 March 2014 R'000
31 December 2012 R'000
31 March 2014 R'000
31 December 2012 R'000
31 March 2014 R'000
31 December 2012 R'000
22. OTHER NET INCOME/EXPENSESOther income
21. REVENUE
20. PROVISIONS
2014 Carrying amount at the beginning of the year Unused amounts reversed during the period Carrying amount at end of the year
Provision forloyalty
payment - - -
Provision forseverancepackages
5,904 (5,904)
-
Total 5,904
(5,904) -
2012 Carrying amount at the beginning of the year Used during the year Carrying amount at end of the year
2 (2) -
5,904 -
5,904
5,906 (2)
5,904
Loyalty paymentsThe group makes provision for accumulated payments due to specific employees in terms of loyalty programs which become payable after five years from granting date. The balance represents amounts payable to individuals still in employment of the group as per amounts agreed in their employment contracts.
Severance packagesThe group makes provision for severance packages payable to ex-employees of the discontinued operation, Kolbenco (Pty) Ltd.
Sale of goods Rendering of services
62,668 844,864 907,532
85,867 660,163 746,030
Bargain pruchase Bad debts recovered Conference income Warranty income Write back of prescribed liabilities Revaluation of shares Profit on foreign exchange Profit / (loss) on sale of fixed assets Profit / (loss) on sale of investments in subsidiaries Reversal of impairment of loans receivable Rent received Sundry income
68,023 13,892 5,666
- - 46
16,727 (33)
(653) 4,867
273 11,834
120,642
- 244
5,004 237
2,000 79
704 327
8,473 -
766 1,704
19,538Other expenses Impairment of investment in associate Impairment of other investments Impairment of loans receivables
- -
(1,405) (1,405)
119,237
(319) (1,500) (8,025) (9,844)
9,69423. OPERATING EXPENSES
Auditors' remuneration Audit fees -current -under provision in prior year -tax and secretarial services Operating lease charges Premises Equipment
2,812 9
197 3,018
27,001 1,253
28,254
1,988 144 99
2,231
10,105 1,514
11,619
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 36
31 December 2012 R'000
31 March 2014 R'000
31 December 2012 R'000
31 March 2014 R'000
Other operating expenses Employee compensation and benefit expense (refer to note 24) Transportation expenses Repairs and maintance Telephone and fax Security Insurance Computer expense Advertising expense Courier and postage Printing and stationary Travel - Local Travel - Overseas Consulting fees and professional fees Electricity Loss on disposal of assets Bank charges Legal fees Other expenses Total other operating expenses Total operating expenses Admin expenses Distribution expenses
172,657 5,692 4,141 8,156 1,679 1,739 5,120 6,456 1,041 3,276
10,001 3,827 4,196
- -
2,728 4,152
29,384 264,245
310 029
5,692 304,337 310,029
104,763 4,481 2,099 6,380 1,152 1,398 2,449 4,507
873 2,342 7,537 3,936 1,614
- -
2,211 4,365
68,035 218,142
268,100
4,481 263,619 268,100
24. EMPLOYEE BENEFITS
Salaries and wages Pension and provident fund contributions Medical aid contributions Life cover contributions Share options granted to employees
164,278 4,122 1,675 1,142 1,440
172,657
91,252 6,938 4,524 1,864
185 104,763
25. FINANCE INCOME
Bank Loans receivable SARS Interest RecievedInterest from associates Dividend income
2,978 3,214
258 -
- 6,450
2,408 4,248
- 97 1
6,754
26. FINANCE EXPENSES
Bank Instalment sale liability Mortgage bonds Other
1,475 727
2,599 225
5,026
842 1,500 3,730
26,074
27. INCOME TAX EXPENSE
Current tax -current year -prior year
30,797 792
31,589
17,284 55
17,339
Deferred tax -current year - prior year
1,918 (611) 1,307
155 33,051
(9,586) -
(9,586)
- 7,753
NOTES TO THE FINANCIAL STATEMENTS
Impairment of property, plant and equipmentAmortisation of intangible assestsImpairment of intangible assets
8 8243 300
3762,242
21,36636,108
11 672--
2,840-
14,512
31 March 2014 R'000
31 December 2012 R'000
Secondary taxation on companies Income tax for the year
Depreciation, amortisation and impairment of property, plant and equipementDepreciation of property, plant and equipementImpairment of goodwill
Reconciliation of rate of tax: South African normal tax rate Adjusted for: Permanent differences -Non-taxable income -Non-taxable deductible expense Assessed loss utilised Derecognition of deferred tax asset Foreign taxation Secondary tax on companies Adjustments to prior year estimates Taxable capital gain Change in capital gains inclusion rate Effective rate of tax
%
28
0 (12)
4 0 0 0 0
(2) 2 0
20
% 28
0 2 0 0
19 0 0 0
(7) 6
48
28. DIRECTORS' EMOLUMENTS
Name D C King I G Morris D S E Carlisle D J Case R B Dick R C Lewin P V Henwood A W Swan P H Duvenhage G E Jacobs D A Di Siena T W Hamill
Salary
2,826 2,706 1,988
- 1,425
- - - - - - -
8,945
Bonuses
1,500 500
1,500 -
125 - - - - - - -
3,625
Directorsfees
- - - - - 95 - 85 80
300 - -
560
Total 2014
4,326 3,206 3,488
- 1,550
95 - 85 80
300 - -
13,130
Total 2012
2,090 2,731 1,980
857 492 180 145
- - - - -
8,475
D J Case resigned as director on 14 August 2012 and was replaced by R B Dick.
Share options: 2014 Options granted at the beginning of the period Movement during the period: - New options granted during the period - STET the period - Options lapsed during the period - Options granted at the end of the period
DSE Carlisle
600,000
- -
(320,000) 280,000
RB Dick
-
325,000 - -
325,000
DJ Case
-
- - - -
Total
600,000 -
325,000 -
(320,000) 605,000
Comprising: Share options available at an issue price of R 1.00 per share Share options available at an issue price of R 2.35per share
280,000 -
280,000
- 325,000 325,000
- - -
280,000 325,000 605,000
2012 Options granted at the beginning of the period Movement during the period: - Options lapsed during the period - Options granted at the end of the period
600,000
- 600,000
-
- -
500,000
(500,000) -
1,100,000 -
(500,000) 600,000
Comprising: Share options available at an issue price of R 1.00 per share Share options available at an issue price of R 2.00 per share Share options available at an issure price of R 3.70 per share
280,000 70,000
250,000 600,000
- - - -
- - - -
280,000 70,000
250,000 600,000
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 38
31 December 2012
31 March 2014
29. EARNINGS PER SHARE
The calculation of earnings per ordinary share of 130.44 cents (2012: 10.77 cents) is based on the earnings attributable to ordinary shareholders of R134.1 million (2012: R11.6 million) and a weighted average of 102 829 831 (2012: 107 772 375) ordinary shares in issue throughout the period.
The calculation of diluted earnings per ordinary share of 128.37 cents (2012: 10.65 cents) is based on earnings attributable to ordinary shareholders of R134.1 million (2012: R11.6 million) and a diluted weighted average of 104 493 434 (2012: 108 947 006) ordinary shares in issue throughout the period.
Reconciliation between weighted average ordinaryshares and diluted weighted average ordinary shares:
Contingently issued shares for business combinations has not been included because not all the conditions have been satisfied. The weighted average number of shares is the number of shares outstanding at the beginning of the year adjusted for any additional shares issued during the period appropriately weighted for the time the shares are outstanding. Furthermore, any treasury shares held by the Group are deducted from this amount.
A capitalisation issue on 1 November 2013 was done in the ratio of 14 shares per 100 shares held. In terms of the appropriate accounting treatment it was necessary to retrospectively adjust the weighted average number of shares in issue.
The calculation of headline earnings per share of 62.91 cents (2012: 28.32 cents) is based on earnings of R64.7 million (2012: R30.5 million) and a weighted average of 102 829 831 (2012: 107 772 375) ordinary shares in issue throughout the year.
Reconciliation between earnings and headline earnings:
The calculation of earnings per ordinary share of discontinued operations for the prior period of 5.25 cents is based on the earnings attributable to ordinary shareholders of R4 917 099 and a weighted average of 93 659 963 ordinary shares in issue throughout the year.
30. BUSINESS COMBINATIONS
2014Amanzi Meters Proprietary LimitedOn 1 September 2013, the Group acquired a 51% shareholding in the company. Goodwill to the value of R0.7 million was accounted for. Net liabilities acquired amounted to R1.4 million and a non-controlling interest of R0.7 million was recognised. Amanzi has developed state-of-the-art smart technology that will enhance the Group’s service offering for cost and revenue management to local municipailities- both in South Africa and abroad.
NOSA Global Holdings LimitedOn 1 October 2013, the Group acquired a 100% interest in the company and its subsidiary for a consideration of R35 million. NOSA Global Holdings has a 70% shareholding in NOSA Shenzhen, an operating company in the People’s Republic of China. The fair value of NOSA Global Holdings amounted to R181.3 million. This resulted in a bargain purchase of R68.0 million in profit and loss. This acquisition has fast-tracked the provision and growth of the many NOSA service offerings into Hong Kong, China, Indonesia and India. The international development of the NOSA brand is a key component of the Group’s growth strategy.
Freshmark Systems Proprietary LimitedOn 1 December 2013, the Group acquired a 55% interest in the company for a consideration of R10.4 million. The fair value of net assets acquired amounted to R3.5 million, which resulted in goodwill of R8.5 million and a non-controlling interest of R1.6 million being recognised. Freshmark is a key provider of systems to local government and this acquisition has enabled us to cement and expand the existing service offerings that the Group provides to this very important growth sector.
USC Metering Proprietary LimitedOn 1 January 2013, the Group acquired an 83.3% interest in the company for a consideration of R58.5 million. The fair value of the net assets acquired amounted to R44.0 million which resulted in goodwill of R21.7 million and non-controlling interest of R7.3 million being recognised. USC is now a vital component of our smart technology offering to assist local authorities in South Africa and abroad to manage the cost of the provision of water and the revenue collection thereof.
Weighted average ordinary shares Share options granted to employees Weighted average diluted ordinary shares
102,829,831
1,663,603 104,493,434
107,772,375
1,174,631 108,947,006
Per the statement of profit and loss Loss / (profit) on disposal of property, plant and equipment Impairment of property, plant and equipment Bargain purchase Impairment of intangible assets Reversal of impairment of loans receivableLoss / (profi)t on disposal of investments in subsidiaries and businesses Impairment of other investmentsImpairment of loans receivableImpairment of investments in associates
Profit beforetax
170,315 33 -
(68,023) -
(4,867) 653 -
1,405 -
99,516
Taxation
(33,051) (9) - - -
1,363 - - - -
(31,697)
Non-controlling
interest
(3,129) - - - - - - - - -
(3,129)
2014Net Profit
134,135 24 -
(68,023) -
(3,504) 653 -
1,405 -
64,690
2012Net Profit
11,603 (235)
271 -
18,684 -
(6,893) 1,080 5,778
230 30,518
31 December 2012
31 March 2014
Fair values on acquisition
Property, plant and equipment Intangible assets Goodwill Loans receivable Inventories Trade and other receivables Cash and cash equivalents Trade and other payables Borrowings Deferred tax Tax payable Total net assets acquired Goodwill Fair value of intangible assets Non-controlling interest Bargain purchase Deferred tax raised on intangible assets Purchase consideration Net cash flows from aquisitionShares issued Deferred vendor payments Cash acquired Net cash flow from acquisitions
Amanzi (Pty)Ltd
1,687
- - -
245 12 -
(1,385) (1,949)
- -
(1,390) 709
- 681
- - -
- - - -
NOSA GlobalHoldings
Limited
28 -
212 - -
4,812 15,391
(21,175) - - -
(732) -
181,284 (44,224) (68,023) (33,305) 35,000
(17,726)
- (15,391)
1,883
FreshmarkSystems (Pty)
Ltd
3,089 2,672
- 97 15
1,631 1,014
(1,595) (2,181)
- (1,117)
3,625 8,482
- (1,631)
- -
10,476
(1,741) (6,968) (1,014)
753
USCMetering(Pty) Ltd
1,137 19,359
214 -
11,567 19,166 9,533
(7,320) -
(2,560) (3,437) 47,659 21,732
- (7,259)
- -
62,132
(18,667) -
(9,533) 33,932
Total
5,941 22,031
426 97
11,827 25,621 25,938
(31,475) (4,130) (2,560) (4,554) 49,162 30,923
181,284 (52,433) (68,023) (33,305) 107,608
(38,134) (6,968)
(25,938) 36,568
2012MIS Consulting (Pty) LtdOn 1 March 2012, the group acquired 50% of the issued share capital of MIS Consulting (Pty) Ltd for R50 payable in cash. MIS Consulting (Pty) Ltd contributed a loss of R996 652 to group earnings.
31. DERECOGNITION/DISPOSAL OF SUBSIDIARIES
2014Derecognition of interest in Kyostax (Pty) LtdOn 18 July 2013 the group disposed of 20% of the interest in Kyostax (Pty) Ltd for a consideration of R4.1 million, which resulted in a loss of control and Kyostax (Pty) Ltd now being accounted for as an associate. This event resulted in a loss of R0.6 million recorded in profit and loss and the re-cycling of R9.4 million relating to the revaluation reserve accumulated in equity.
Net cash flows from acquisitions
Property, plant and equipment Intangible assets Cash and cash equivalents Trade and other payables Total net assets acquired Non-controlling interest Purchase consideration Cash acquired Net cash flow from acquisitions
MIS Consulting(Pty) Ltd
12 142
1 (296) (141) 141
- 1 1
Net cash flows from disposal Property, plant and equipment Trade and other receivables Cash and cash equivalents Non-distributable reserve Trade and other payables Borrowings Deferred tax Tax payable Total net assets derecognised Loss on derecognition Non-controlling interest Net cash flow on disposal
Kyostax (Pty) Ltd (82,210) (9,367) (1,016) 9,406 1,572
59,473 6,091
270 (15,781)
653 12,897 (2,231)
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 40
NOTES TO THE FINANCIAL STATEMENTS
2012
Deltec Power Distributors (Pty) LtdThe group disposed of the trading assets and liabilities of Deltec Power Distributors (Pty) Ltd on 30 April 2012.
Net cash flows from disposal Property, plant and equipment Intangible asstes Inventories Trade and other receivables Trade and other payables Borrowings Bank overdraft Total net assets disposed Profit on disposal Bank overdraft Total consideration
Deltec PowerDistributors
(Pty) Ltd
(2,176) (6)
(40,075) (19,629) 22,429 1,488 4,942
(33,027) (8,473) (4,942)
(46,442)
32. SHARE-BASED PAYMENTS
The group established the MICROmega Share Incentive Trust in 2001 together with a detailed share incentive scheme. The purpose of this scheme is to provide employees of the group with the opportunity to acquire an interest in equity of the group, thereby providing such employees with a further incentive to advance the group's interest and promoting an identity of interests between such employees and the shareholders of the group. This trust is now owned by MICROmega Holdings Limited and has no assets and liabilities nor are any shares held by the trust. Therefore, the trust has not been consolidated as part of the group annual finanical statements.
In terms of the scheme, share options may not be exercised until after the period, provided that the employee remains inthe employment of the group, calculated from the acceptance date, of:- more than 3 years shall have elapsed, in which event not more than one third thereof;- more than 4 years shall have elapsed, in which event not more than a further one third thereof representing two thirdsthereof cumulatively;- more than 5 years shall have elapsed, in which event not more than a further one third thereof representing 100%thereof cumulatively.
The share options lapse if employement termintaes before share options have vested.
The share options expire upon the expiry of the option period, being 8 years from grant date.
The group occasionally grants options to employees of subsidiary companies in terms of loyalty schemes over the share capital of subsidiary. These share options are constructed on the same basis as the share options of the Share Incentive Trust.
Oustanding optionsThe following options have been granted in terms of MICROmega Share Incentive Trust to employees and are still outstanding.
Options granted at the beginning of the period Movement during the period: - New options granted during the period - Options exercised during the period - Options lapsed during the period - Options granted at the end of the period Comprising: Share options available at an issue prce of R 0.90 per share Share options available at an issue price of R 1.00 per share Share options available at an issue price of R 1.45 per share Share options available at an issue price of R 2.00 per share Share options available at an issue price of R 2.35per share Share options available at an issure price of R 3.70 per share
3,343,334
1,000,000 (231,666)
(1,135,000) 2,976,668
- 746,668 500,000 730,000
1,000,000 -
2,976,668
5,315,081
- (467,499)
(1,504,249) 3,343,333
- 813,333 550,000 880,000
1,100,000 3,343,333
Number of ordinary share options
Group share-based payment expenditure amounting to R 1,4 million (2012: R0.2 million) related to equity-settled sharebased paymenttransactions were recognised directly in the statement of profit and loss.
In September 2013 the group granted 1 000 000 share options to employees.
NOTES TO THE FINANCIAL STATEMENTS
31 December 2012
31 March 2014
33. FINANCIAL INSTRUMENTS
The group has classified its financial liabilities in the following categories:
2014 Loans receivabe Trade and other receivables Cash and cash equivalents 2012 Loans receivabe Trade and other receivables Cash and cash equivalents
Financialassets at
amortisedcost
16,835 130,379 108,846 256 060
20,806 98,556
107,727 227,089
Financialassets at fair
value
- - - -
- - - -
Total
16,835 130,379 108,846 256,060
20,806 98,556
107,727 227,089
The group has classified its financial liabilities in the following categories:
2014 Borrowings Deferred vendor payments Trade and other payables 2012 Borrowings Deferred vendor payments Trade and other payables
Non-financialinstruments
- - - -
- - - -
Financialliabilities
amortisedcost
15,842 7,333
105,840 129,015
68,861 534
70,148 139,543
Total
15,842 7,333
105,840129,015
68,861 534
70,148139,543
33.1 FINANCIAL RISK MANAGEMENT
OverviewThe group has exposure to the following risks from its use of financial instruments: credit risk liquidity risk currency risk
This note presents information about the group’s exposure to each of the above risks, the group’s objectives, policies and processes for measuring and managing risk, and the group’s management of capital. Further quantitative disclosures are included throughout these financial statements.
The Board of Directors has overall responsibility for the establishment and oversight for the group’s risk management framework. The Board is responsible for developing and monitoring the group’s risk management policies.
The group’s risk management policies are established to identify and analyse the risk faced by the group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the group's activities.
The Board oversees how management monitors compliance with the group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the group.
33.2 CREDIT RISKCredit risk is the risk of financial loss to the group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the group’s trade receivables from customers, instalment sale debtors and deposits with banks.
Trade and other receivablesThe group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the group’s customer base, including the default risk of the industry and country, in which customers operate, has less of an influence on credit risk. There is no concentration of credit risk in a single customer.
The Board of Directors has established a credit policy under which each new customer is analysed individually for creditworthiness before the group’s standard payment and delivery terms and conditions are offered. Customers that fail to meet the group’s benchmark creditworthiness may transact with the group only on a prepayment basis.
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 42
The group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified.
Credit quality of trade and other receivables can be analysed as follows:
Group 1 - new customers (less than six months)Group 2 - existing customers (more than six months) with no defaults (no bad debt write-off/hand-overs) in the pastGroup 3 - existing customers (more than six months) with some defaultsGroup 4 - customers with defaults, no trading and hand over. This category of trade receivables related mainly to contractors and sub-contractors exposed to government and parastatal bodies. Appropriate security policies are in place to limit this category.
Management does not expect any losses from non-performance by these counterparties.
33.3 LIQUIDITY RISKLiquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due. The group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient cash/ liquid assets to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the group’s reputation.
Typically the goup ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. In addition, the group’s statement of financial position remains lowly geared and thus the Directors are comfortable with the ability to receive lines of credit.
The table below analyses the group's financial liabilities that will be expected to be settled on a net basis into relevant maturity groups based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cashflows:
33.4 INTEREST RATE RISKThe group exposure on fair value interest rate risk mainly arises from its fixed deposits with banks and investments in fixed rate debt securities, which are classified as held-to-maturity investments and available-for-sale financial assets. It also has exposure on cash flow interest rate risk which is mainly arising from its deposits with banks and interestbearing borrowings with the banks. It is a common practice in South Africa to have floating rate borrowings with the banks.
In order to manage the cash flow interest rate risk, the group will repay the corresponding borrowings when it has surplus funds.
Interest rates on borrowings is disclosed in note 16.
Sensitivity analysisThe sensitivity analysis has been prepared with the assumption that the change in interest rates had occurred at the balance sheet date and had been applied to the exposure to interest rate risk for the relevant financial instruments in existence at that date. The changes in interest rate represent management’s assessment of a reasonably possible change in interest rates at that date over the period until the next annual balance sheet date.
Group 1Group 2Group 3Group 4Total
12,013 58,147 46,694 5,818
122,672
8,775 30,698 47,312 4,188
90,973
2014 Borrowings Deferred vendor payments Trade and other payables 2012 Borrowings Deferred vendor payments Trade and other payables
Less than1 year
12,996 3,849
105,840 122,685
12,901 534
70,148 83,583
Between 1and 5 years
15,396 3,484
- 18,880
25,424 - -
25,424
Over5 years
681 - -
681
30,535 - -
30,535
Undated
- - - -
- - - -
Total
29,073 7,333
105,840 142,246
68,860 534
70,148 139,542
NOTES TO THE FINANCIAL STATEMENTS
31 December 2012 R'000
31 March 2014 R'000
Borrowings Deferred vendor payments Total borrowings Less non-interest bearing borrowings Net variable rate exposure
Interest rate change Potential impact on earnings (after tax)
For further details on borrowing exposures and related maturity dates refer to note 18.
15,842 7,33323,175
(7,333)15,842
2 % 228
68,861 534
69,395 (6,174)63,221
2 % 910
33.5 CURRENCY RISKThe Group is exposed to currency risk on sales and purchases that are denominated in a currency other than the respective functional currency of the Group. The currencies in which these transactions primarily are denominated are the US Dollar and the Euro.
The Group hedges foreign purchases against its exports. No forward exchange contracts are currently used whilst the group retains its natural hedge.
The exposure to currency risk is disclosed in note 12 trade and other receivables, note 13 cash and cash equivalents, note 19 trade and other payables.
Sensitivity analysisThe sensitivity analysis has been prepared with the assumption that the change in foreign exchange rates had occurred at the balance sheet date and had been applied to the exposure to currency risk for the relevant financial instruments in existence at that date. The changes in foreign exchange rates represent management’s assessment of a reasonably possible change in foreign exchange rates at that date over the period until the next annual balance sheet date.
A 10% weakening of the Rand against the currencies referred to above would have increased/(decreased) equity and post tax profit by:
A 10% strengthening of the Rand against the above currencies as at 31 March would have had the equal but opposite effect on the above currencies to the amounts shown, on the basis that all variables remain constant.
33.6 EQUITY PRICE RISKThe investments in equity securities classified fair value through profit & loss financial assets and trading securities expose the group to price risk.
33.7 CAPITAL MANAGEMENTThe Board’s policy is to maintain a strong capital base so as to maintain creditor and shareholder confidence and to sustain future development of the business. The Board of Directors monitors the return on capital, which the group defines as net operating income divided by total shareholders’ equity. The Board of Directors also monitors the level of dividends to ordinary shareholders. There were no changes in the group’s approach to capital management during the year. The group is not subject to externally imposed capital requirements.
34. COMPARATIVE FIGURESThe company has changed their year end from December to March and therefore comparative numbers will not be comparable.
US Dollar British Pound Hong Kong Dollar Chinese Renminbi Other currencies Total
848 (13)
(221) (227)
23 410
381 221
5,941 -
104 6,647
The table below analyses the Group's sensitivity to interest rate movements:
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 44
31 December 2012 R'000
31 March 2014 R'000
31 December 2012 R'000
31 March 2014 R'000
35. CASH FLOW STATEMENT NOTES
35.1 Cash generated from operating activities
Profit before tax Adjusted for: Depreciation and amortisation Loss / (profit) on disposal of property, pland and equipment Loss / (profit) on disposal of businesses and subsidiaries Impairment of property, plant and equipment Impairment of goodwill Impairment of intangible assets Impairment of investment in associates Impairment of other investments Impairment of loans receivable Bargain purchase Share-based payment expense Revaluation of shares Finance income Finance cost Share of profit of equity accounted associates Movement in retirement benefit assets and liabilities Movement in provisions Movement in foreign currency translation reserve Movement in working capital Decrease in inventories (Increase)/decrease in trade and other receivables Increase in trade and other payables 35.2 Tax paid Balance at the beginning of the period Current tax for the period recognised in profit and loss Disposal of subsidiaries Acquisition of businesses Balance at the end of the period
170,315
14,512 33
653 - - - - -
1,405 (68,023)
1,451 (46)
(6,450) 5,026
(1,392)
(5,904) 1,175
1,077 (19,757)
7,102 101,177
899 (31,744)
270 (4,554)
(592)(35,721)
16,427
11,066 (327)
(8,473) 376
3,300 21,366
319 1,500 8,025
- 185
- (6,754)
6,074 (2,060) 19,500
(2) 99
1,176 5,113 3,43680,346
642 (17,339)
- -
899(15,798)
2014Statement of Profit and Loss
RevenueDepreciation and Amortisation
Results from operationsFinance income/(expense)Share of profit/(loss) of equity accounted associatesNet profit before taxTax expenseNet profit after tax
NOSA
330,426(4,854)
83,642 253 -
83,895 (22,964)
60,931
MECS
340,431 (304)
17,585 (683)
- 16,902 (4,880) 12,023
Deltec
- -
- - - - - -
IT Group
205,215 (5,069)
38,250 2,555
- 40,805
(14,215) 26,590
Securities
33,162 (296)
2,386 257 -
2,642 (892) 1,750
Holdings andother
(1,702) (7,238)
25,636 (958) 1,392
26,070 9,900
35,969
Total
907,532 (17,761)
167,499 1,424 1,392
170,315 (33,051) 137,264
36. SEGMENTAL ANALYSIS
Statement of Financial Position
Assets
Liabilities
358,769
129,458
67,605
34,317
-
-
183,433
111,596
61,426
(87,563)
22,690
1,847
693,923
189,654
NOTES TO THE FINANCIAL STATEMENTS
31 December 2012 R'000
31 March 2014 R'000
2012Statement of Profit and LossRevenueDepreciation and AmortisationResults from operationsFinance income/(expense)Share of profit/(loss) of equityaccounted associatesNet profit before taxTax expenseNet profit after tax
NOSA
228,689(3,523)
370
- 39,406
(10,920)28,486
MECS
296,056(231)
(649)
(2,060) (406)(218)
188
Deltec
47,732 (272)
(303)
- 11,749(2,498)
9,251
IT Group
127,330(3,097)
2,122
- 5,657
1035,760
Securities
38,453(314)
1,580
- 14,418(5,193)
9,225
Holdings andother
7,770(2,238)
(2,440)
- (30,334)(10,973)(41,307)
Total
746,030(9,675)
680
(2,060)19,356(7,753)
11,603
Statement of Financial Position
AssetsLiabilities
95,561 25,642
39,240 16,922
39,837 -
73,852 39,829
56,636 7,845
325,873 95,861
630,999 186,099
37. INTEREST IN SUBSIDIARIES AND ASSOCIATES
Subsidiaries - Direct and indirect interests held African Financial Solutions (Pty) Ltd Amanzi Meters (Pty) Ltd Arbez Advanced Solutions (Pty) Ltd ARDA Professional Machining Services (Pty) Ltd ARDA Pro-fit (Pty) Ltd Cloudware (Pty) Ltd Empowerisk (Pty) Ltd Empowerisk Management Services (Pty) Ltd Freshmark Systems (Pty) Ltd GIM Holdings (Pty) Ltd Go Mobile (Pty) Ltd Intermap (Pty) Ltd Kolbenco (Pty) Ltd MECS Africa (Pty) Ltd MECS Growth (Pty) Ltd MICROmega Africa Money Brokers (Pty) Ltd MICROmega Financial Services (Pty) Ltd MICROmega Investment Portfolio (Pty) Ltd MICROmega National Certification Authority (Pty) Ltd MICROmega Properties 1 (Pty) Ltd MICROmega Properties 2 (Pty) Ltd MICROmega Properties 3 (Pty) Ltd MICROmega Publications (Pty) Ltd MICROmega Quality Assurance (Pty) Ltd MICROmega Securities (Pty) Ltd MICROmega Security Solutions (Pty) Ltd MICROmega Services and Support DRC MICROmega Technologies (Pty) Ltd MICROmega Treasury Solutions (Pty) Ltd MIS Consulting (Pty) Ltd
2014
100%51%
100%100%100%100%50%50%83%
100%50%
100%100%100%100%100%100%100%100%100%100%100%51%
100%100%100%100%100%100%100%
2012
100%0%
50%100%100%100%50%50%0%
76%50%
100%100%100%100%100%100%100%100%100%100%100%51%
100%100%100%100%100%100%50%
Issued sharecapital
(Rands)
100200
1,00010016
1001000120100100100
1,0005,000,0101,992,310
200100100135120100135100100100
2,005,5011
69,282100
8,404,751100
Class of share
OrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinary
Country
RSARSARSARSARSARSARSARSARSARSARSARSARSARSARSARSARSARSARSARSARSARSARSARSARSARSADRCRSARSARSA
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 46
The Group determines and presents operating segments based on the information that is internally provided to the Executive Chairman, who is the chief operating decision maker. A segment is a distinguishable component of the Group that is engaged either in providing related products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and returns that are different from those of the other segments. The Group’s primary format for segment reporting is based on business segments. The business segments are determined based on the reporting business units.
Mzimkhulu Investments (Pty) Ltd NOSA (Pty) Ltd NOSA Agricultural (Pty) Ltd NOSA Certification Authority (Pty) Ltd NOSA Global Holdings NOSA Investment Holdings (Pty) Ltd NOSA Investment Holdings Hong Kong NOSA Mozambique NOSA Namibia NOSA New Zealand NOSA Technologies (Pty) Ltd NOSA Zambia Nyl-Data (Pty) Ltd Ocneblock (Pty) Ltd Revenue Managment Solutions (Pty) Ltd Riskworks (Pty) Ltd SA International and Capital Market Brokers (Pty) Ltd Sebata Municipal Solutions (Pty) Ltd Sebata Namibia Shenzen Stable-Net (Pty) Ltd Swazi Ocupational Health and Safety Symphony trade and invest (Pty) Ltd TTSA Securities (Pty) Ltd Turrito Networks (Pty) Ltd USC Metering (Pty) Ltd Associates - Direct and indirect interests held Kyostax (Pty) Ltd Cloudware Investments (Pty) Ltd Petrolmecs LDA GCM Meter Reading Services (Pty) Ltd
Country
RSARSARSARSA
Hong KongRSA
Hong KongMozambique
NamibiaNew Zealand
RSAZambia
RSARSARSARSARSARSA
NamibiaHong Kong
RSASwaziland
RSARSARSARSA
RSARSA
AngolaRSA
Class ofshare
OrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinaryOrdinary
OrdinaryOrdinaryOrdinaryOrdinary
Issued sharecapital
(Rands)
100120100
120,00016,220
1001
7,4181
5,542100
6,955100200100200100
7,931,095
1,733,948120100100100100120
100100
12,500100
'2012
100%100%60%
100%0%
100%100%100%100%100%100%100%100%50%
100%60%
100%100%100%
0%100%100%100%100%60%0%
50%0%
49%50%
2014
100%100%60%
100%100%100%100%100%100%100%100%100%100%50%
100%60%
100%100%100%70%
100%100%100%100%60%83%
30%20%49%50%
NOTES TO THE FINANCIAL STATEMENTS
38. SHAREHOLDERS INFORMATION Analysis of the share register at 31 March 2014 Portfolio size
1 to 50 000 50 001 to 250 000 Over 250 000 Non-public & public shareholders
Non public shareholders Friedshelf 1382 (Pty) Ltd HSBC Investment Management Subsidiary companies Directors (Direct & indirect beneficial interest) Directors - Subsidiary companies (Direct & indirect beneficial interest) Trustee of The MICROmega Share Incentive Scheme Total non - public shareholders Total public shareholders TOTAL
Number ofshareholders
1 1533014
1 197
Percentage ofshareholders
96,32%2,51%1,17%
100,00%
Number ofshareholders
1
124
81 189
1 197
Numberof shares
4 073 4713 215 895
107 625 723
114 915 089
Numberof shares
62 409 99325 011 2579 727 1401 655 8421 337 338
0
100 141 57014 773 519
114 915 089
Percentage ofshare capital
3,54%2,80%
93,66%
100,00%
Percentage ofshare capital
54,31%21,76%8,46%1,44%1,16%0,00%
87,14%12,86%
100,00%
MICROmega HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS PAGE 48
Major shareholders
Friedshelf 1382 (Pty) LtdHSBC Investement ManagementTTSA Securities (Pty) LtdEngima Investements Holdings LtdMICROmega Holdings LtdThe Ross Lewin Family TrustMr Rene DaubinetCredit Suisse AG ZurichSix sis LtdGraeme Patrick Tuck
Numberof shares
62 409 993 25 011 257 9 727 140 3 072 076 2 952 000 1 627 342 1 164 667 1 142 100
901 960 700 000
Percentage ofshare capital
54,31%21,76%8,46%2,67%2,57%1,42%1,01%0,99%0,78%0,61%
Directors’ interest in securities
D C King (Chairman)I G MorrisR C LewinD S E CarlisleR B DickA B SwanP H DuvenhageG E JacobsD A Di SienaT W HamillTotal
Change in these shareholdings to the date ofthe notice of the annual general meeting:
2014Direct
- - - - -
28 500 - - - -
28 500
2014Indirect
87 421 250 -
1 627 342 - - - - - - -
89 048 592
2012Direct
- - - - -
25 000 - - - -
25 000
2012Indirect
21 939 699 -
1 427 493 - - - - - - -
23 367 192
D C King (Chairman)I G MorrisR C LewinD S E CarlisleR B DickA B SwanP H DuvenhageG E JacobsD A Di Siena T W HamillTotal
MovementDirect
- - - - - - - - -
1 000 1 000
MovementIndirect
(15 376 000) 12 000 800
(986 000) 3 375 200
- - - - - -
(986 000)
As at date of notice of the annual
general meeting Direct
- - - - -
28 500 - - -
1 000 29 500
As at date of noticeof the annual
general meetingIndirect
72 045 250 12 000 800
641 342 3 375 200
- - - - - -
88 062 592