Unaudited Interim Results For the Six Months ended 31 August 2013 LABAT AFRICA LIMITED Incorporated in the Republic of South Africa (Registration number 1986/001616/06) JSE code: LAB ISIN: ZAE000018354 (“Labat” or “the company”) UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2013 CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION Unaudited Reviewed Audited 6 months 6 months 12 months 31 August 31 August 28 February 2013 2012 2013 Figures in Rand (‘000) R'000 R'000 R'000 ASSETS Property, plant and equipment 26 583 30 793 26 655 Other intangible assets - 87 1 Non-current assets 26 583 30 880 26 656 Other financial assets 10 516 10 Inventories 4 331 4 772 5 296 Trade and other receivables 1 075 1 623 1 837 Cash and cash equivalents 1 718 2 800 830 Current assets 7 134 9 711 7 973 Non-current Assets held for sale - 2 168 - Total assets 33 716 42 759 34 629 EQUITY AND LIABILITIES Share capital and reserves 610 462 1 379 Shareholder loans - 11 073 - Deferred taxation 4 554 5 272 4 553 Non-current liabilities 4 554 16 345 4 553 Trade and other payables 3 169 6 903 3 341 Loans from Directors 8 366 - 7 751 Provisions 5 578 837 5 847 South African Revenue Services 11 439 18 212 11 757 Current liabilities 28 553 25 952 28 696 Total equity and liabilities 33 716 42 759 34 628 CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME Unaudited Unaudited Audited 6 months 6 months 12 months 31 August 31 August 28 February 2013 2012 2013 R'000 R'000 R'000 Revenue 5 217 8 272 13 249 Cost of Sales (1 869) (2 987) (5 975) Gross Profit 3 347 5 285 7 274 Other Income - - 8 055 Operating Expenses (4 868) (7 046)- (14 892) Impairments - - (150) Operating (Loss)/Profit (1 521) (1 761) 287 Investment Revenue 2 5 17 Finance Costs - (195) (1 615) Loss before taxation (1 519) (1 951) (1 311) Taxation 136 853 Loss from continuing operations (1 519) (1 815) (458) Discontinued operations (441) Loss for the year (1 519) (1 815) (899) Other Income (Development Costs) - - Total comprehensive loss/profit for the year (1 519) (1 815) (899) Loss and comprehensive loss attributable to: Owners of the parent: Loss and total comprehensive loss for the year attributable to owners of the parent (1 519 (1 815) (1 356) Loss Per Share From continuing operations Basic loss per share (cents) (0.75) (0.92) (0.23) Total loss per share Basic loss per share (cents) (0.75) (0.92) (0.45) Headline earnings reconciliation: Total comprehensive loss for the year (1 519) (1 815) (899) Adjustments: - - - Impairments 150 - Loss on disposal of property, plant and equipment 370 - Discontinued operations 441 Headline loss attributable to ordinary shareholders (1 519) (1 815) 63 Total Headline (loss)/earnings per share (0.75) (0.92) 0.03 CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOW Unaudited Unaudited Audited Figures in rand (‘000) 6 months 6 months 12 months 31 August 29 2013 31 August February 2012 2013 Net flow from operating activities (1 185) 722 (5 215) Net flow from investing activities 1 322 (672) 3 231 Net flow from financing activities 750 (82) (2 441) Net (decrease)/increase in cash 888 (32) (17) Cash at beginning of period 830 2 832 2 831 Cash at end of period 1 718 2 800 830 CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGE IN EQUITY Non- Total Distrib Capital Share Treasu utable and Capit Share ry Reserve Accumulat reserve R'(000) al Premium Shares s ed loss s Balance at 1 March 2012 1 972 49 065 (482) 15 267 (63 544) 2 278 Total comprehensive income for the year - - - - (898) (898) Transfer of revaluation reserve - - - (253) 253 - Transfer of revaluation reserve on disposal of property - - - (2 088) 2 088 - Balance at 28 February 2013 1 972 49 065 (482) 12 926 (62 101) 1 380 - Total comprehensive income for the year - - - - (1 214) (1 214) New share issue 50 699 - - - 749 Transfer of revaluation reserve on disposal of property - - - - - - Balance at 31 August 2013 2 022 49 764 (482) 12 926 (63 315) 915 OVERVIEW BASIS OF PREPARATION OF THE UNAUDITED INTERIM RESULTS Statement of compliance The unaudited consolidated condensed group interim results have been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (“IFRS”), the AC500 Standards and the presentation and disclosure requirements of IAS 34: Interim Financial Reporting, the JSE Limited Listings Requirements and the Companies Act of South Africa. These interim results have not been reviewed or audited and as such the auditors have not expressed an opinion on the figures. Significant accounting policies The same accounting policies, presentation and methods of computation have been followed in these unaudited interim results as were applied in the preparation of the Group’s Financial Statements for the period ended 28 February 2013. Basis of measurement The unaudited consolidated condensed group interim results have been prepared on the historical cost basis except for certain financial instruments measured at fair value. INTERIM RESULTS Final costs of closing the old plant and property have contributed to a loss of R1.519 million. The SAMES operation is continuing to develop as planned and is currently trading profitably. After significant expenditure on new product development the company is on schedule to complete its current programme which will see new products being rolled out in the next financial year. The company’s new five year plan envisages substantial growth in turnover and profits. The plan calls for further major investment in more new products and investment in new technology which will increase margins substantially. We expect that the company will grow to previous heights. Other technology acquisitions are also being pursued and recruitment of additional product developers is taking place. No segmental report has been prepared as the company principally operates in one segment within South Africa. RIGHTS ISSUE AND SALE OF SURPLUS ASSETS A rights issue and sale of surplus non-core assets is in the process of being finalized. A circular to this effect has been prepared and has been issued for shareholder approval on 23 December 2013. Potential funds to be raised will be in the region of R49m. Proceeds will be used to strengthen the company’s Balance Sheet, eliminate creditors and raise capital for growth. PROSPECTS SAMES is now well positioned for substantial generic growth and by acquisition. Acquisitions and strategic JV’s are being pursued in various sectors including Rail and Infrastructure Development, Energy Resources and Pharmaceuticals. DIVIDENDS In line with group policy, no dividend has been declared. When deemed appropriate, a dividend will be declared. GOING CONCERN The board of directors is of the opinion that the group has sufficient resources to continue as a going concern. SUBSEQUENT EVENTS Other than as disclosed above, management is not aware of any material events which occurred subsequent to the period ended 31 August 2013. For and on behalf of the board B G VAN ROOYEN Prepared by: D. O’NEILL Chief Executive Officer Financial Director 2 January 2014 Directors: B van Rooyen (CEO), D O`Neill (FD), R Majiedt# (Chairperson), B Jacobs# # - Independent non-executive Company Secretary: A Britto Johannesburg Sponsor: Arcay Moela Sponsors (Pty) Ltd Date: 02/01/2014 10:56:00 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.