Interim financial results summary for the six months ended 28 February 2013 Stella Vista Technologies Limited (Incorporated in the Republic of South Africa) Company registration number 1996/000172/06 JSE share code: SLL ISIN: ZAE000018198 ("Stella Vista" or "the Company" or "the Group") Interim financial results summary for the six months ended 28 February 2013 Condensed Consolidated Statement of Comprehensive Income Unaudited Unaudited Audited six months six months 12 months ended ended ended 28 Feb 13 29 Feb 12 31 Aug 12 Notes R'000 R'000 R'000 Revenue 6 564 10 842 17 933 Gross profit 3 856 6 513 10 579 (Loss)/Profit before interest and depreciation (1 520) (40) (782) Depreciation (1 278) (2 007) (1 856) (Loss)/Profit before interest and taxation (2 798) (2 047) (2 639) Investment income (0) (34) 0 Finance cost (57) (16) (104) (Loss)/Profit before taxation (2 855) (2 063) (2 743) Taxation 346 677 (Loss)/Profit after taxation (2 508) (2 063) (2 066) Other comprehensive (loss)/income: Foreign currency translation differences on foreign operations (2 832) 221 (1 582) Total comprehensive (loss)/profit for the year (5 340) (1 841) (3 648) (loss)/profit attributable to: Equity holders of the parent company (2 428) (1 973) (1 980) Non-controlling interests (80) (90) (87) (Loss)/Profit for the year (2 508) (2 063) (2 066) Total comprehensive (Loss)/Profit attributable to: Equity holders of the parent company (6 721) (1 751) (3 473) Non-controlling interests (80) (90) (175) Total comprehensive (loss)/profit for the year (6 800) (1 841) (3 648) Earnings and headline earnings per share (cents) (Loss)/Earnings per share 3 (1.67) (1.36) (1.37) Headline (loss)/earnings per share 3 (1.67) (1.36) (1.38) Diluted number of shares in issue ('000) basic 3 (1.67) (1.36) (1.37) diluted 3 (1.67) (1.36) (1.36) Diluted earnings/(loss) per share (cents) Condensed Consolidated Statement of Financial Position Unaudited Unaudited Audited six months six months 12 months ended ended ended 28 Feb 13 29 Feb 12 31 Aug 12 R'000 R'000 R'000 ASSETS Non-current assets 9 015 9 389 11 512 Property, plant and equipment 7 277 8 328 9 112 Deferred taxation assets 1 738 1 061 2 401 Current assets 12 019 16 727 9 051 Inventory 4 210 7 161 5 911 Tax receivable 346 Trade and other receivables 7 140 9 076 2 331 Cash and cash equivalents 323 490 810 TOTAL ASSETS 21 035 26 116 20 563 EQUITY AND LIABILITIES Equity 399 7 404 5 578 Attributable to Stella Vista 359 7 374 5 618 Non-controlling interests 40 30 (40) Non-current liabilities 128 239 787 Interest-bearing borrowings 4 Deferred revenue 124 239 124 Deferred tax liability 239 663 Current liabilities 20 508 18 473 14 199 Trade and other liabilities 14 554 10 381 6 974 Deferred revenue 58 515 115 Taxation payable 542 459 521 Current portion of interest-bearing borrowings 5 340 7 073 6 550 Bank overdraft 15 45 38 TOTAL EQUITY AND LIABILITIES 21 035 26 116 20 563 Net asset value per share (cents) 0.25 5.09 3.87 Condensed Consolidated Statement of Cash Flows Unaudited Unaudited Audited six months six months 12 months ended ended ended 28 Feb 13 29 Feb 12 31 Aug 12 R'000 R'000 R'000 Net (loss)/profit before tax and separately disclosed items (2 855) (2 063) (2 743) Non-cash items (816) 2 184 (571) Working capital changes 4 471 (4 589) 2 027 Cash generated from operations 800 (4 467) (1 287) Investment income () Finance cost (57) (16) (104) Taxation refunded/(paid) 62 Dividend paid to: Owners of Stella Vista Non-controlling interests Cash flow from operating activities 744 (4 483) (1 391) (Sale)/Purchase of property, plant and equipment (255) 9 Cash flow from investing activities (255) 9 Proceeds from interest-bearing borrowings (1 207) 523 1 710 Cash flow from financing activities (1 207) 523 1 710 Net movement in cash and cash equivalents (463) (4 215) (120) Foreign translation difference in cash and cash equivalents Cash and cash equivalents at beginning of year 771 2 505 891 Cash and cash equivalents at end of year 308 (1 710) 771 Condensed Consolidated Statement of Changes in Equity for the six months ended 28 February 2013 Attributable Foreign Share- to equity currency based holders of Non- Share capital translation payment Accumulated the parent controlling Total R'000 and premium reserve reserve losses company interests equity Audited balance at 31 August 2011 20 343 (1 703) (9 545) 9 095 130 9 225 Total comprehensive loss for the year (1 498) (1 980) (3 478) (170) (3 648) Audited balance at 31 August 2012 20 343 (3 201) (11 525) 5 617 (40) 5 577 Share options forfeited transferred to share premium Total comprehensive loss for the year (2 831) (2 508) (5 339) 80 (5 260) Unaudited balance at 28 February 2013 20 343 (6 032) (13 952) 359 40 399 Notes to the Condensed Consolidated Financial Statements 1. Basis of preparation The interim results for the six months ended 28 February 2013 ("year under review") have been prepared in accordance with lAS 34 Interim Financial Reporting, the South African Companies Act, 2008 (Act 71 of 2008), and the JSE Listings Requirements. 2. Accounting policies The accounting policies and methods of computation applied in the preparation of the results for the year under review are in accordance with IFRS and are consistent with those applied in the preparation of the Group's annual financial statements for the year ended 31 August 2012. 3. Reconciliation of earnings and headline (loss)/earnings (Loss)/Profit after taxation attributable to: Ordinary equity holders of the parent entity for the year (2 428) (1 973) (1 980) Loss on disposal of property, plant and equipment (19) Headline (loss)/earnings (2 428) (1 973) (1 998) Weighted average number of shares in issue (000's) 145 000 145 000 145 000 (Loss)/Earnings per share (cents) (1.67) (1.36) (1.37) Diluted headline (loss)/earnings per share (cents) (1.67) (1.36) (1.38) Headline (loss)/earnings per share (cents) (1.67) (1.36) (1.38) 4. Segment information Management has determined the operating segments based on the monthly reports reviewed by the board of the directors that are used to make strategic decisions. The chief operating decision-maker has been identified as the Group's Chief Executive officer. The Chief Executive Officer considers the business from a geographical basis as the products and business are the same across all business segments. The Chief Executive Officer assesses the performance of the operating segments based on revenue, operating profit and cash flow. The monthly management accounts tabled at the board meeting and used by the chief operating decision-maker are in line with IFRS. South United R'000 Africa Kingdom Total Unaudited at 28 February 2013 Total segment revenue 3 548 3 142 6 690 Inter-segment revenue (126) (126) Revenue from external customers 3 422 3 142 6 564 Cost of sales 1 792 916 2 708 Depreciation and amortisation 77 1 201 1 278 Income tax credit/(expense) Loss after tax 912 1 596 2 508 Inventory 4 210 4 210 Total assets 13 925 7 110 21 035 Total liabilities 14 492 6 184 20 676 Audited at 31 August 2012 Total segment revenue 11 420 6 638 18 058 Inter-segment revenue 126 126 South United R'000 Africa Kingdom Total Revenue from external customers 11 294 6 638 17 932 Cost of sales 6 442 912 7 354 Depreciation and amortisation 343 1 514 1 857 Income tax credit/(expense) 677 677 Loss/(Profit) after tax 1 077 990 2 067 Inventory 5 911 5 911 Total assets 10 021 10 543 20 564 Total liabilities 13 766 538 14 304 DIRECTORS' COMMENTARY Introduction Stella Vista Technologies Limited ("Stella Vista") was established in February 1994 and has over the years been the leader in design and provision of information solutions based on LED electronic displays in South Africa, Middle East, the Indian sub-continent, the Caribbean and the UK and Ireland. In addition to the head office and factory situated in Kyalami, South Africa, the Company owns Stella Vista International Limited, with offices and warehouse in Hampton, England. Stella Vista is one of the frontrunners in the visual mass communications industry worldwide. Driven by the pursuit of excellence, the Company prides itself on reliability and superior service made possible by its vision, creativity, ambition and integrity. the low ownership cost of our products, the high quality of the materials we use and our dedication to building long-term relationships with our customers that sets us apart from our competitors. For more information visit www.stellavista.com or email info@stellavista.com. The market and prospects The economic climate and the continued entry of cheap Chinese displays has resulted in tougher competition and increased pressure on margins. Further complications are introduced by South African regulations being strictly applied to local manufacturers and not applicable to our overseas competitors. The end result is a significant reduction of sales income and diminishing workforce. Local buyers believe they are safer if they import products regardless of price competitiveness and lack of local support what could have grave consequences as the expected life span of an LED display is 10 years. We have embarked on a customer education programme promoting the benefit of procurement through a local manufacturer offering guidance on product design solutions and the benefits of local back-up and technical support thus ensuring an improved ROI for our customers. The continued economic downturn is Europe has added additional pressure on turnover. Products and services A significant portion of the period under review was dedicated to the certification and development of our range of TL products, the first displays of this range were sold to Tanzania and prospects of future sales look positive. We are still in the early stages of realising the benefits of our FaceUp technology where products previously sold are upgraded at a fraction of the cost of new installations and older technology is refurbished and sold into the used product market. We are continuing to develop products and improve our competitiveness through cutting costs and making partnerships in fields where the South African environment is not competitive (production, volume purchasing, cost of doing business etc). A wider range of quality products have been developed and will expand our customer base with more cost-effective products and services. Financial results Stella Vista is operating in difficult environment for LED industry worldwide. The result is a reduction in revenue of 40% year on year. The current economic times continue to be challenging to Stella Vista. In terms of technology we are and will remain committed to innovations and excellence. The Company has streamlined operations and achieved cost reduction whilst still maintaining core strengths over the longer period. Various measures are taken within the Company to adapt to the current economic climate. Restructuring of workforce and widening our scope of products, services and markets are the most important steps. These changes are still to yield positive results. Stella Vista's revenue is derived from sales, rental and maintenance of screens in geographic locations around the world (South Africa, United Kingdom and other countries). Management is committed to the future of Stella Vista, and are implementing new strategies that will yield positive results in the long term. Subsequent events and capital commitments There have been no significant events since the end of the period under review and the date of this report. There was no significant capital expenditure authorised as at 28 February 2013. Dividends The Board has resolved not to declare dividends until the Group's liquidity position has improved. On behalf of the directors M Tabakovic Chief Executive Officer Registered office 62 Kyalami Boulevard, Kyalami Business Park, Kyalami Tel: (0ll) 466 2020 Website: www.stellavista.com E-mail: muris@stellavista.com Directors M Tabakovic (Chief Executive Officer); C Livingstone (Non-executive); D Tabakovic L Kerr Company secretary L Kerr Prepared by: L Kerr (Financial director) Sponsor Auditors Arcay Moela Sponsors IAPA Johannesburg Chatered Accountants (SA) 31 May 2013 Sponsor Arcay Moela Sponsors (Pty) Limited Date: 31/05/2013 04:12:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.