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MICROmega Holdings Limited - Audited Abridged Group Results For The Year Ended 31 December 2002 MICROmega Holdings Limited (Incorporated in the Republic of South Africa) (Registration number 1998/003821/06 Share code MMG ISIN ZAE000034435 ("Micromega" or "the Company") AUDITED ABRIDGED GROUP RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002 ABRIDGED INCOME STATEMENT Year ended Year ended 31 December 31 December 2002 2001
Note R("000) R("000) Gross revenue 97 209 100 284 Operating profit 19 139 37 719 Net finance income 3 111 3 332 Equity accounted profits 285 - Profit before taxation 22 535 41 051 Taxation (7 107) (7 092) Headline earnings 15 428 33 959 Write off of associate company - (5 104) Exceptional item 2 (4 270) Amortisation of goodwill (35 397) (24 262) Profit/(Loss) attributable to shareholders (24 239) 4 593 Headline earnings per share (cents) 18.46 45.14 Earnings/(Loss) per share (cents) (29.00) 6.10 Fully diluted earnings/(Loss) per share (cents) (28.67) 5.48 Weighted average number of shares 83 577 75 237 Diluted weighted average shares in issue 84 540 83 833 Total number of shares in issue 85 905 76 377 ABRIDGED CASH FLOW STATEMENT Year ended Year ended 31 December 31 December 2002 2001 R("000) R("000)
Cash generated by operations 22 026 41 267 Net investment income 3 111 3 332 Taxation paid (7 706) (7 555) Dividends - cash portion (5 317) - Secondary tax on companies (664) (124) Net cash from operating activities 11 450 36 920 Net cash from investing activities (18 419) (19 023) Capital raised 22 907 130 Loans repaid (18 402) (5 977) Net cash from finance activities 4 505 (5 847) Net (decrease)/increase in bank and cash (2 464) 12 050 Represented as follows: Bank and cash at beginning of the period 41 333 29 283 Bank and cash at end of the period 38 869 41 333 Net (decrease)/increase in bank and cash (2 464) 12 050 ABRIDGED BALANCE SHEET Year ended Year ended
31 December 31 December 2002 2001 Note R("000) R("000) ASSETS Non-current assets Fixed assets 4 692 6 121 Goodwill 3 51 483 67 060 Deferred taxation 4 584 6 345 Loans receivable 3 875 140 Investment in associates 1 089 - Investments 1 573 3 331 Current assets Bank and cash 38 869 41 333 Other current assets 8 694 9 678 Total assets 114 859 134 008 EQUITY AND LIABILITIES Capital and reserves Shareholders" equity 62 018 69 736 Non-current liabilities Borrowings 18 694 32 659 Current liabilities Taxation 1 896 4 897 Other current liabilities 11 189 10 951 Income received in advance 2 252 3 039 Provisions 18 810 12 726 Total equity and liabilities 114 859 134 008 Net asset value per share (cents) 72.19 91.30 NOTES TO THE FINANCIAL STATEMENTS 1. Accounting policy The financial statements are prepared in accordance with South African Statements of Generally Accepted Accounting Practice. The accounting policies are consistent with those of the previous year, except as otherwise indicated. 2. Exceptional Item This covers costs associated with the need of the group to protect itself from the impact of negative publicity surrounding two of it"s previous directors. 3. Goodwill Carrying value Additions Amortisation Carrying value 1 January 31 December 2002 2002
R"(000) R"(000) R"(000) Goodwill arising from acquisition 67 060 19 820 (35 397) 51 483 Goodwill represents the excess of the cost of acquisition over the fair value of net assets of the subsidiaries on acquisition. Goodwill is amortised using the straight line method over the lesser of the profit warranty period associated with the specific acquisition or five years. The carrying amount of goodwill is reviewed annually and written down for any permanent impairment where considered necessary.The additional goodwill arose as a result of subsidiaries acquired previously meeting profit warranties. STATEMENT OF CHANGES IN EQUITY Accumu- Share Share lated capital premium NDR loss Total R("000) R("000) R("000) R("000) R("000)
Balance at 1 January 2001 725 118 930 - (54 458) 65 197 Net profit for the year as restated - - - 4 593 4 593 Revaluation of foreign entity"s opening reserves (2 208) 2 208 - Foreign currency translation reserve (184) (184) Dividends 36 14 464 (14 500) - Issue of shares 3 249 252 Share issue expenses (122) (122) Restated balance at 31 December 2001 764 133 521 (2 392)(62 157) 69 736 Net loss for the period (24 239) (24 239) Dividends 29 11 236 - (16 582) (5 317) Revaluation of foreign entity"s opening reserves 1 983 (1 983) - Foreign currency translation reserve (1 070) (1 070) Issue of shares 66 22 934 - - 23 000 Share issue expenses (92) (92) Balance at 31 December 2002 859 167 599 (1 479)(104 961) 62 018 COMMENTARY ON RESULTS The results for the year under review reflect both the impact costs associated with closure of operating divisions and the negative effect on operations as a result of market opportunities not being available to certain of our operating divisions. This was largely a function of the extended publicity surrounding our former CEO, Dave King. We believe that the market would have allowed growth in earnings per share in the absence of this publicity. No dividend has been declared for the period. PROSPECTS We experienced a number of event risks subsequent to the year under review. These include the resignation of the managing director and all non-executive directors, a change in auditors and more recently the resignation of our sponsoring brokers. The newly constituted board is reviewing various alternatives to protect shareholder value and further announcements will be made shortly. The annual financial statements have been audited by the group auditors P.R. Niven & Company, the audit opinion is available for inspection at the companies registered offices. By order of the Board Directors: A W Browne R Gibbs G M Kelly F J Pretorius Company Secretary: A W Browne MICROmega Holdings Limited (Incorporated in the Republic of South Africa) (Registration number 1998/003821/06 Share code MMG ISIN ZAE000034435 ("Micromega" or "the Company")
