Audited Condensed Consolidated Results for the year ended 31 December 2012 MMG MICROmega - Audited Financial Statements For The Year Ended 31 December 2012 MICROmega Holdings Limited (Incorporated in the Republic of South Africa) (Registration number 1998/003821/06) Share code MMG ISIN ZAE000034435 ("MICROmega" or "the Group") AUDITED CONDENSED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2012 Decrease In Revenue -4% Increase In Basic earnings Per Share 70% Increase In Headline earnings Per Share 59% Increase In Net Asset Value Per Share 2% SUMMARISED GROUP STATEMENT OF COMPREHENSIVE INCOME Audited Audited year year ended ended 31 December 31 December . 2012 2011 Restated R(?000) R(?000) Revenue 746 030ÿ 775 483 Revenue from continuing operations 694 907 561 477 Revenue from discontinued operations 51 123 214 036 Cost of sales (473 937) (520 318) Gross profit 272 093 255 165 Gross profit from continuing operations 264 497 208 905 Gross profit from discontinued operations 7 596 46 260 Other income 9 694 7 940 Distribution expenses (4 481) (6 429) Administration expenses (263 619) (246 701) Results from operations 13 687 9 975 Results from continuing operations 5 410 36 757 Results from discontinued operations 8 277 (26 782) Finance income 6 754 5 731 Finance cost (6 074) (7 076) Net finance cost 680 (1 345) Share of loss of equity accounted associates 2 060 (628) Profit before taxation 16 427 8 002 Profit before taxation from continuing operations 10 694 35 830 Profit / (loss) before taxation from discontinued operations 5 733 (27 828) Taxation expense (7 753) 3ÿ413 Profit for the year 8 674 11 415 Profit from continuing operations 3 757 31 901 Loss from discontinued operations 4 917 (20 486) Other comprehensive income: Foreign currency translation differences 99 (4) Revaluation of property (2 320) 8 214 Realisation of revaluation reserve - 90 Income tax on other comprehensive income 432 (1 299) Other comprehensive income for the year (1 789) 7 001 Total comprehensive income for the year 6 885 18 416 Profit attributable to: Owners of the company 11 603 6 964 Non-controlling interests (2 929) 4 451 Profit for the year 8 674 11 415 Total comprehensive income attributable to: Owners of the company 10 758 10 105 Non-controlling interests (3 873) 8 311 Total comprehensive income for the year 6 885 18 416 Reconciliation of headline earnings: Profit attributable to ordinary shareholders 11 603 6 964 Profit on disposal of property, plant and equipment (235) 872 Profit on disposal of intangible assets - (1ÿ073) Impairment of intangible assets 18 684 15ÿ291 Impairment of assets classified as held for sale - 1 251 Profit on disposal of investments in subsidiaries (6 893) (6ÿ361) Impairment of loans receivable 5 778 - Impairment of investments in associates 230 - Impairment of property, plant and equipment 271 - Impairment of other investments 1 080 2 679 Headline earnings 30 518 19 623 Earnings per share Headline earnings per share (cents) 32.58 20.50 Basic earnings per share (cents) 12.39 7.27 Diluted earnings per share (cents) 12.24 7.20 Continuing operations Basic earnings per share (cents) 7.14 28.66 Diluted earnings per share (cents) 7.06 28.39 Weighted average number of shares (000?s) 93 660 95 736 Diluted weighted average number of shares (000?s) 94 835 96 674 Total number of shares in issue (000?s) 92 765 94 294 SUMMARISED STATEMENT OF FINANCIAL POSITION Audited Audited Audited as at as at as at 31 December 31 December 1 January 2012 2011 2011 Restated Restated R(000) R(000) R(000) ASSETS Non-current assets 237 998 272 305 262 828 Property, plant and equipment 143 910 147 033 141 332 Intangible assets 48 471 67 421 62 902 Investments in associates 27ÿ 2 038 2 476 Other investments 163 1 573 6 695 Loans receivable 2 188 23 606 24 677 Deferred tax assets 43 239 30 634 24 746 Current assets 240 493 244 156 242 036 Inventories 2 542 43 793 51 631 Retirement benefit surplus 1 881 21 381 26 844 Trade and other receivables 109 725 134 467 113 330 Current portion of loans receivable 18 618 13 539 3 539 Cash and other investments 107 727 23 742 20 963 Income tax receivable - 642 1 043 Non-current assets classified as held for sale - 6 592 24 686 TOTAL ASSETS 478 491ÿ 516 461 504 864 EQUITY AND LIABILITIES EQUITY Share capital and share premium 179 169 187 022 190 797 Non-distributable reserves 14 834 16 653 15 888 Retained earnings 95 392 83 014 76 802 Total equity attributable to owners of the company 289 395 286 689 283 487 Non-controlling interests 18 654 24 303 16 189 Total equity 308 049 310 992 299 676 LIABILITIES Non-current liabilities 69 835 76 480 69 877 Borrowings 55 960 65 192 56 576 Deferred tax liabilities 13 875 11 288 13 301 Current liabilities 100 607 128 989 135 311 Bank overdraft - 9 065 11 844 Current portion of borrowings 12 901 14 418 31 886 Trade and other payables 80 369 99 066 82 286 Current portion of deferred vendor payments 534 534 789 Provisions 5 904 5 906 8 506 Income tax payable 899 - - Total liabilities 170 442 205 469 205 188 TOTAL EQUITY AND LIABILITIES 478 491 516 461 504 864 Net asset value per share (cents) 311.97 304.04 293.88 Net tangible asset value per share (cents) 259.71 232.54 228.68 SUMMARISED GROUP STATEMENT OF CASH FLOWS Audited Audited year year ended ended 31 December 31 December 2012 2011 Restated R(000) R(000) Cash generated by operating activities 70 621 45 848 Movement in working capital 9 725 (14 559) Finance income 6 754 5 731 Finance costs (6 074) (7 076) Taxation paid (15 798) (13 759) Net cash inflows from operating activities 65 228 16 185 Cash outflow from investing activities Expenditure to maintain operating capacity Property, plant and equipment acquired (14 230) (17 485) Intangible assets acquired (446) - Proceeds on disposals of property, plant and equipment 3 996 5 364 Proceeds on disposals of intangible assets - 1 247 Proceeds on disposals of non-current assets held 6 592 16ÿ356 For sale Expenditure for expansion Acquisition of subsidiaries 1 - Disposal of subsidiaries 46 442 16095 Acquisition of non-controlling interests - (2 957) Internally generated intangible assets (7 376) (20 885) Proceeds on disposal of investments (90) 6 524 Loans receivable granted - (8003) Loans receivable repaid 12 066 2 884 Net cash used in investing activities 46 955 (860) Cash flows from financing activities Treasury shares repurchased (8 466) (3 810) Dividends paid to non-controlling interests (1 406) (1 298) Borrowings (repaid)/raised (9 261) (4ÿ404) Deferred vendor payments repaid - (255) Net cash generated by financing activities (19 133) (9 767) Increase / (decrease) in cash and cash equivalents 93 050 5ÿ558 Cash and other investments at the beginning of the year 14 677 9 119 Cash and other investments at the end of the year 107 727 14 677 SUMMARISED GROUP STATEMENT OF CHANGES IN EQUITY Share Share Revalu- Foreign Deal Share Retained capital premium ation currency diffe- based earnings reserve transla- rences payme- / (Accum tion reserve nt re -ulated reserve serve loss) R('000) R('000) R('000) R('000) R('000) R('000) R('000) Balance at 1 965 189 832 9 360 33 1 000 4 017 78 280 January 2011 previously stated Impact of - - - - - 1 478 (1 478) Correction of prior Period error Balance at 1 965ÿ 189 832 9 360 33 1 000 5 495 76 802 January 2011 restated Total comprehens- ive income for The year Profit for the - - - - - - 6 964 year Other comprehens- - - 1 739 (4) - - 1 406 ive income Foreign currency - - - (4) - - - translation diff- erences Revaluation - - 3 055 - - - - of property Realisation of - - (1 316) - - - 1 406 Revaluation reserve Total comprehens- - - 1 739 (4) - - 8 370 ive income for the year Contributions by (22) (3 753) - - - 930 - and distributions to owners Treasury shares (22) (3 788) - - - - - purchased Share-based - 35 - - - 930 - payment transact- IFRS 3 Business - - - - - - - combinations Dividends paid by - - - - - - - subsidiary company to non-controlling interests Changes in owner- - - - - - (1 900) (2 158) ship interests in subsidiaries Acquisitions on - - - - - (970) (2 158) non-controlling interests without a change in control Total transact- (22) (3 753) - - - (970) (2 158) ions with owners Balance at 31 December 2011 943 186 079 11 099 29 1 000 4 525 83 014 Balance at 1 943 186 079 11 099 29 1 000 4 525 83 014 January 2012 Total comprehens- ive income for The year Profit for the - - - - - - 11 603 year Other comprehens- - - (1 129) 99 - - 185 ive income Foreign currency - - - 99 - - - translation diff- erences Revaluation - - (944) - - - - of property Realisation of - - (185) - - - (185) Revaluation reserve Total comprehens- - - (1 129) 99 - - 11 788 ive income for the year Contributions by (15) (7 838) - - - (789) 361 and distributions to owners Treasury shares (15) (8 451) - - - - - purchased Share-based - 613 - - - (789) 361 payment transact- IFRS 3 Business - - - - - - - combinations Dividends paid by - - - - - - - subsidiary company to non-controlling interests Changes in owner- - - - - - - 229 ship interests in subsidiaries Acquisitions on - - - - - - 229 non-controlling interests without a change in control Total transact- (15) (7 838) - - - (789) 590 ions with owners Balance at 31 December 2012 928 178 241 9 970 128 1000 3 736 95 392 SUMMARISED GROUP STATEMENT OF CHANGES IN EQUITY CONTINUED Total Non-con- Total trolling Equity interests R('000) R('000) R('000) Balance at 1 283 487 16 189 299 676 January 2011 Total comprehens- ive income for The year Profit for the 6 964 4 451 11 415 year Other comprehens- 3 141 3 860 7 001 ive income Foreign currency (4) - (4) translation diff- erences Revaluation 3 055 3 860 6 915 of property Realisation of 90 - 90 revaluation reserve Total comprehens- 10 105 8 311 18 416 ive income for the year Contributions by (2 845) (1 298) (4ÿ143) and distributions to owners Treasury shares (3 810) - (3 810) purchased Share-based 965 - 965 payment transact- Dividends paid by - (1 298) (1 298) subsidiary company to non-controlling interests Changes in owner- (4 058) 1ÿ101 (2 957) ship interests in subsidiaries Acquisitions on (4 058) 1ÿ101 (2 957) non-controlling interests without a change in control Total transact- (6 903) (197) (7 100) ions with owners Balance at 31 286 689 24 303 310 992 December 2011 Balance at 1 286 689 24 303 310 992 January 2012 Total comprehens- ive income for The year Profit for the 11 603 (2 929) 8 674 year Other comprehens- (845) (944) (1 789) ive income Foreign currency 99 - 99 translation diff- erences Revaluation (944) (944) (1 888) of property Realisation of - - - revaluation reserve Total comprehens- 10 758 (3 873) 6 885 ive income for the year Contributions by (8 281) (1 406) (9 687) and distributions to owners Treasury shares (8 466) - (8 466) purchased Share-based 185 - 185 payment transact- Dividends paid by - (1 406) (1 406) subsidiary company to non-controlling interests Changes in owner- 229 (370) (141) ship interests in subsidiaries Acquisitions on 229 (370) (141) non-controlling interests without a change in control Total transact- (8 052) (1 776) (9 828) ions with owners Balance at 31 289 395 18 654 308 049 December 2012 NOTES TO THE GROUP FINANCIAL INFORMATION 1. Basis of preparation These audited condensed consolidated annual financial statements have been prepared under the supervision of DJ Case (CA) SA, in accordance with the framework concepts and the recognition and measurement criteria of International Financial Reporting Standards (IFRS), its interpretations adopted by the International Accounting Standards Board (IASB), the presentation and the disclosure requirements of IAS 34 Interim Financial Reporting, the AC 500 standards as issued by the Accounting Practices Board, the Listing Requirements of the JSE Limited and the requirements of the South African Companies Act 71 of 2008, as amended. The condensed consolidated financial results are prepared in accordance with the going concern principle under the historical cost basis as modified by the fair value accounting of certain assets and liabilities where required or permitted by IFRS. All financial information presented in South African Rand has been rounded to the nearest thousand. The annual financial statements were audited by the company?s auditors, Nexia SAB & T, and their unqualified audit report is available for inspection at the company?s registered office. 2. Prior period error In the prior years the group had incorrectly accounted for an employee loyalty scheme. Share options in the equity of a subsidiary were granted to the subsidiary's employees in 2008 and vested over a 3 year period ended August 2011. Due to various conditions that were present upon final vesting and exercising the company purchased the shares from the employees. The group incorrectly recognised the eliminating transaction as an addition to goodwill when the company increased it's investment in subsidiary as opposed to an acquisition of non-controlling interests. Furthermore no amounts had been recognised to profit or loss over the period of vesting of the share options as required by IFRS 2. This has been rectified with retrospective share based payment expenses being allocated to profit or loss and the correction of the eliminating transaction. . All share options in terms of the loyalty scheme were exercised in 2011 and there are no further amendments that are required. The cumulative correction of the error in 2011 and 2010 comparative figures are as follows: December 2010 December 2011 2011 December 2010 Restate- 2010 Move- Restate- 2011 Previously ment Restated ment ment Restated due to due to R('000) R('000) R('000) R('000) R('000) R('000) Statement of financial position Intangible Assets 62 902 - 62 902 7 416 (2 897) 67 421 Equity Share capital And share Premium 190 797 - 190 797 (3 775) - 187 022 Non-distribu- Table reserves 14 410 1 478 15 888 2 243 (1 478) 16 653 Retained earnings 78 280 (1 478) 76 802 7 631 (1 419) 83 014 Statement of comprehensive income Profit for the year 7 808 (633) 7 175 11 837 (422) 11 415 Total compre- hensive income for the year 19 363 (633) 18 730 18 838 (422) 18 416 Earnings per share (cents) 5.86 (0.65) 5.21 7.72 (0.45) 7.27 Diluted earnings per share (cents) 5.83 (0.65) 5.18 7.64 (0.44) 7.20 Headline earnings per share (cents) 16.46 (0.66) 15.80 20.94 (0.44) 20.50 3.Discontinued Operations The group continues to classify Kolbenco Proprietary Limited and Automobile Radio Dealers Association 1989 Proprietary Limited as discontinued operations, as the process to realise assets is still ongoing. As at the end of April 2012 the group disposed of the business and trading assets and liabilities of Deltec Power Distributors Proprietary Limited. The operations of the Deltec segment has been reclassified in the comparative figures from continued operations to discontinued operations due to the sale of the business and its assets and liabilities during the current financial year. 4. Segment information SEGMENT REVIEW Audited Audited year year ended ended 31 December 31 December 2012 2011 R('000) R('000) NOSA External sales 228 689 155 756 MECS Africa External sales 296 056 255 929 Deltec Power Distributors External sales 47 732 129ÿ538 Sebata Municipal Solutions External sales 106 690 100ÿ440 Turrito External sales 20 640 9 746 MICROmega Securities External sales 38 453 40 423 Automotive Disposal External sales 3 390 84 498 Holdings Company and consolidation eliminations External sale 6 785 4 747 Internal sales (2 405) (5 594) Total revenue 746 030 775 483 SEGMENT PROFIT / (LOSS) Audited Audited year year ended ended 31 December 31 December 2012 2011 R('000) R('000) NOSA 28 486 22 763 MECS Africa 188 7 056 Deltec Power Distributors 9 251 8 652 Sebata Municipal Solutions 5 760 8 707 Turrito (6 419) (1 474) MICROmega Securities 9 225 9 593 Automotive Disposal (4 327) (29 637) Holdings Company and consolidation eliminations (30 561) (18 696) Total profit 11 603 6 964 SEGMENT ASSETS Audited Audited as at as at 31 December 31 December 2012 2011 R('000) R('000) NOSA 95 561 72 321 MECS Africa 39 240 62 596 Deltec Power Distributors 39 837 61 230 Sebata Municipal Solutions 65 517 73 496 Turrito 8 335 6 920 MICROmega Securities 56 636 60 383 Automotive Disposal 21 485 62 433 Holdings Company and consolidation eliminations 151 880 117 082 Total assets 478 491 516 461 5. Commentary Commentary Shareholders are advised that whilst the year on year growth in earnings appears satisfactory, 80% of the headline earnings were earned in the first half of 2012. By order of the Board 28 March 2013 Directors: DC King (Executive Chairman); IG Morris (Chief Executive Officer); DSE Carlisle (Managing Director); RB Dick (Financial Director); A Swann (Lead Independent Non-Executive Director); RC Lewin (Independent Non-Executive Director); P Duvenhage (Non-Executive Director) Company Secretary: Acorim Proprietary Limited Auditors: Nexia SAB & T Transfer Secretaries: Computershare Investor Services Proprietary Limited Sponsor: Java Capital Attorneys: Routledge Modise Attorneys Date: 28/03/2013 05:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 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