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MICROMEGA HOLDINGS LIMITED - Provisional Audited Condensed Annual Consolidated Financial Statements for Year Ended 31 March 2015 and Cash Dividne

Release Date: 28/05/2015 13:20
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Provisional Audited Condensed Annual Consolidated Financial Statements for Year Ended 31 March 2015 and Cash Dividne

MICROmega Holdings Limited
Incorporated in the Republic of South Africa
(Registration number 1998/003821/06)
JSE Share code: MMG ISIN: ZAE000034435
(“MICROmega” or “the company” or “the group”)

PROVISIONAL AUDITED CONDENSED ANNUAL CONSOLIDATED FINANCIAL STATEMENTS FOR YEAR ENDED
31 MARCH 2015 AND CASH DIVIDEND

AUDITED CONDENSED GROUP STATEMENT OF PROFIT AND LOSS

                                                   Audited          Audited        Reviewed
                                                 12 months        15 months       12 months
                                                     ended            ended           ended
                                                  31 March         31 March     31 December
                                                      2015             2014            2013
                                                     R’000            R’000           R’000

Revenue                                          1 035 683          907 532         731 716
Cost of sales                                     (576 068)        (549 241)       (457 987)
Gross profit                                       459 615          358 291         273 729
Other net income/(expenses)                         16 590          119 237          36 058
Distribution expenses                               (4 170)          (5 692)         (4 280)
Administration expenses                           (306 093)        (304 337)       (230 299)
Results from operations                            165 942          167 499          75 208
Finance income                                       5 041            6 450           4 993
Finance cost                                        (1 767)          (5 026)         (4 187)
Share of profit of equity accounted associate        1 978            1 392           1 336
Profit before tax                                  171 194          170 315          77 350
Tax expense                                        (44 823)        (33 051)        (22 495)
Profit for the period                              126 371          137 264          54 855

Profit attributable to:
Owners of the parent                               110 653          134 135           51 190
Non-controlling interest                            15 718            3 129            3 665
                                                   126 371          137 264           54 855
Attributable earnings per share (cents)
Basic                                               101.27           130.44            48.88
Diluted                                              99.45           128.37            48.08
Headline                                            101.30            62.91            49.29

AUDITED CONDENSED GROUP STATEMENT OF OTHER COMPREHENSIVE INCOME

                                                               Audited          Audited        Reviewed
                                                             12 months        15 months       12 months
                                                                 ended            ended           ended
                                                              31 March         31 March     31 December
                                                                  2015             2014            2013
                                                                 R’000            R’000           R’000

Profit for the period                                          126 371          137 264          54 855
Other comprehensive income:
Foreign currency translation differences                         1 461            1 175             592
Revaluation of property                                         (2 500)               -               -
Reversal of deal difference reserve                             (1 000)               -               -
Income tax on other comprehensive income                           465                -               -
Total comprehensive income for the period                      124 797          138 439          55 447

Total comprehensive income attributable to:
Owners of the parent                                           109 079          135 310          51 782
Non-controlling interest                                        15 718            3 129           3 665
                                                               124 797          138 439          55 447

Reconciliation of headline earnings:
Profit attributable to owners of the parent                    110 653          134 135          51 190
(Profit)/loss on disposal of property, plant and equipment         (68)              24            (228)
Loss on disposal of investments in subsidiaries                      -              653             653
Impairment of loans receivable                                       -            1 405               -
Reversal of impairment of loans receivable                           -           (3 504)              -
Bargain purchase                                                     -          (68 023)              -
Impairment of intangible assets                                     95                -               -
Headline earnings                                              110 680           64 690          51 615



Weighted average number of shares (000s)                      109 265           102 830         104 727
Diluted weighted average number of shares (000s)              111 270           104 493         106 492
Total number of shares in issue (000s)                        111 504           105 184         100 817



AUDITED CONDENSED GROUP STATEMENT OF FINANCIAL POSITION

                                                              Audited     Audited        Reviewed
                                                                As at       As at           As at
                                                             31 March    31 March     31 December
                                                                 2015        2014            2013
                                                                R’000       R’000           R’000
ASSETS
Non-current assets                                            540 579     414 081         208 523
Property, plant and equipment                                  58 711      47 718          47 231
Intangible assets                                             432 242     305 760         103 141
Investments in associates                                      12 857      10 879          10 000
Other investments                                                 283         208             192
Other financial assets                                              -       9 167               -
Deferred tax assets                                            36 486      40 349          47 959

Current assets                                                439 629     279 842         252 339
Inventories                                                    28 377      13 292           2 607
Trade and other receivables                                   239 225     142 581         110 428
Income tax receivable                                           8 251       7 455               -
Other financial assets                                         15 891       7 668          12 619
Cash and cash equivalents                                     147 885     108 846         126 685
TOTAL ASSETS                                                  980 208     693 923         460 862

EQUITY AND LIABILITIES
EQUITY                                                        671 673     504 269         329 798
Share capital and share premium                               266 203     207 666         167 578
Other reserves                                                  6 261       5 590           6 319
Retained earnings                                             330 218     240 863         155 930
Non-controlling interest                                       68 991      50 150             (29)

LIABILITIES
Non-current liabilities                                        73 125      57 227          18 154
Other financial liabilities                                    11 371      11 491          10 898
Deferred vendor payments                                       13 333       3 484           3 484
Deferred tax liabilities                                       48 421      42 252           3 772



Current liabilities                                           235 410     132 427         112 910
Trade and other payables                                      166 674     117 364          64 315
Other financial liabilities                                     3 101       4 351           4 610
Income tax payable                                              9 688       6 863          18 925
Deferred vendor payments                                       55 947       3 849          25 060

TOTAL LIABILITIES                                             308 535     189 564         131 064

TOTAL EQUITY AND LIABILITIES                                  980 208     693 923         460 862

Net asset value per share (cents)                              540.50      431.74          327.15
Net tangible asset value per share (cents)                     152.86       141.05          224.85



AUDITED CONDENSED GROUP STATEMENT OF CASH FLOW

                                                                   Audited      Audited       Reviewed
                                                                 12 months    15 months      12 months
                                                                     ended        ended          ended
                                                                  31 March     31 March    31 December
                                                                      2015         2014           2013
                                                                     R’000        R’000          R’000

Cash flow from operating activities excluding working capital      151 541       74 129         64 563
changes
Movement in working capital                                        (47 845)      (7 249)       (41 795)
Cash flow from investing activities                                (70 981)     (46 837)       (11 669)
Cash flow from financing activities                                  6 324      (18 924)         7 859
Increase in cash and cash equivalents                               39 039        1 119         18 958
Cash and cash equivalents at the beginning of the period           108 846      107 727        107 727
Cash and cash equivalents at the end of the period                 147 885      108 846        126 685

AUDITED CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY

                                                             Share       Share   Revaluation      Foreign    Deal difference      Share    Retained     Total    Non-controlling   Total equity
                                                            capital   premium       reserve      currency            reserve      based    earnings                     interest
                                                                                               translation                     payment
                                                                                                  reserve                       reserve
                                                             R’000       R’000        R’000         R’000             R’000       R’000       R’000     R’000             R’000          R’000
Balance at 31 December 2012                                    928     178 241        9 970            128            1 000        3 736     95 392   289 395            18 654        308 049
Total comprehensive income for the period
Profit for the period                                             -          -             -            -                  -           -    134 135   134 135             3 129        137 264
Other comprehensive income                                        -          -          (75)        1 175                  -           -         75     1 175                 -          1 175
Foreign currency translation differences                          -          -             -        1 175                  -           -          -     1 175                 -          1 175
Realisation of revaluation reserve through depreciation           -          -          (75)            -                  -           -         75         -                 -              -
Transactions with owners recorded directly in
equity                                                         124      28 373       (9 406)             -                 -      (938)      11 541     29 694            28 970         58 664
Capitalisation issue                                           124       (124)             -             -                 -          -           -          -                 -              -
Treasury shares purchased                                      (45)   (12 098)             -             -                 -          -           -   (12 143)                 -       (12 143)
Share based payment transactions                                  3      2 503             -             -                 -      (938)       2 135      3 703                 -          3 703
Dividends paid to non-controlling interest                        -          -             -             -                 -          -           -          -          (10 566)       (10 566)
Acquisition of subsidiaries                                      42     38 092             -             -                 -          -           -     38 134            52 433         90 567
Derecognition of subsidiary                                       -          -       (9 406)             -                 -          -       9 406          -          (12 897)       (12 897)
Changes in ownership interest in subsidiaries
Acquisitions on non-controlling interest without a change
in control                                                       -           -            -             -                 -           -       (280)     (280)             (603)          (883)
Balance at 31 March 2014                                     1 052     206 614          489         1 303             1 000       2 798     240 863   454 119            50 150        504 269
Total comprehensive income for the period
Profit for the period                                             -          -             -            -                  -           -    110 653   110 653            15 718        126 371
Other comprehensive income                                        -          -       (2 035)        1 461            (1 000)           -          -    (1 574)                -         (1 574)
Foreign currency translation differences                          -          -             -        1 461                  -           -          -      1 461                -           1 461
Revaluation of property                                           -          -       (2 035)            -                  -           -          -    (2 035)                -         (2 035)
Realisation of revaluation reserve through depreciation           -          -           (3)            -                  -           -          3          -                -               -
Realisation of deal difference reserve                            -          -             -            -            (1 000)           -          -    (1 000)                -         (1 000)
Transactions with owners recorded directly in
equity                                                           63     58 474             -            -                  -      2 248    (21 301)     39 484             3 123         42 607
Treasury shares purchased                                      (14)   (22 492)             -            -                  -          -           -   (22 506)                 -       (22 506)
Share issue                                                      52     51 412             -            -                  -          -           -     51 412                 -         51 412
Share based payment transactions                                  9      7 176             -            -                  -      2 248       (133)      9 300                 -          9 300
Acquisition of subsidiaries                                      16     22 378             -            -                  -          -           -     22 394             6 699         29 093
Dividends paid                                                    -          -             -            -                  -          -    (21 168)   (21 168)                 -       (21 168)
Dividends paid to non-controlling interest                        -          -             -            -                  -          -           -          -           (3 576)        (3 576)
Balance at 31 March 2015                                     1 115    265 088        (1 549)         2764                  -      5 046      330 28   602 682            68 991        671 673

NOTES TO THE GROUP FINANCIAL INFORMATION

1. Basis of preparation

These provisional audited condensed annual consolidated financial statements for the year ended 31 March 2015 are
prepared 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 SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
Reporting Pronouncements as issued by Financial Reporting Standards Council, IAS 34 – Interim Financial Reporting, the
Listings Requirements of the JSE Limited and the requirements of the Companies Act of South Africa (Act 71 of 2008), as
amended. The provisional audited condensed annual consolidated financial statements 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. The provisional audited condensed annual consolidated financial statements have
been prepared under the supervision of Russell Dick, CA (SA), the Financial Director and have been audited by the
company’s auditors.

The provisional audited condensed annual consolidated financial statements are extracted from audited information and are
available for inspection at the company’s registered office.

The directors take full responsibility for the preparation of the report and confirm the financial information has been correctly
extracted from the underlying audited annual consolidated financial information.

All financial information presented in South African Rand has been rounded to the nearest thousand.

2. Significant accounting policies

These provisional audited condensed annual consolidated financial statements have been prepared using accounting
policies that comply with IFRS. The accounting policies used are consistent with those used in the audited consolidated
financial statements for the period ended 31 March 2014.

3. Audit opinion

The annual consolidated financial statements were audited by the group’s auditors, Nexia SAB&T, and their unqualified audit
report is available for inspection at the group’s registered office.

4. Business combinations

Mubesko Africa Proprietary Limited
On 1 June 2014, the group acquired a 50% interest in Mubesko Africa Proprietary Limited for a consideration of R27.4
million. Goodwill to the value of R20.7 million was accounted for. The net assets acquired amounted to R13.4 million and a
non-controlling interest of R6.7 million was recognised

Action Training Academy Proprietary Limited and Action Training Consulting Proprietary Limited
On 1 September 2014, the group acquired 100% interest in Action Training Academy Proprietary Limited and Action Training
Consulting Proprietary Limited for a consideration of R28.9 million. Goodwill to the value of R25.6 million was accounted for.
The net assets acquired amounted to R3.3 million.

R-Data Proprietary Limited
On 1 October 2014, the group acquired 100% interest in R-Data Proprietary Limited for a consideration of R12.9 million.
Goodwill to the value of R9.8 million was accounted for. The net assets acquired amounted to R3.1 million.

Aspirata Auditing Testing and Certification Proprietary Limited
On 1 March 2015, the group acquired 100% interest in Aspirata Auditing Testing and Certification Proprietary Limited for a
consideration of R41.8 million. Goodwill to the value of R21.5 million was accounted for. The net assets acquired amounted
to R20.3 million.

The fair value of assets acquired and liabilities assumed relating to the above business combinations are subject to change
should additional information become available within the 12 month re-measurement period from date of acquisition.

5. Segment information

                                                         Audited           Audited            Reviewed
                                                       12 months         15 months           12 months
                                                           ended             ended               ended
                                                        31 March          31 March         31 December
                                                            2015              2014                2013
                                                           R’000             R’000               R’000

SEGMENT REVENUE
Occupational health and safety                           333 253           330 426             274 807
Labour supply                                            264 071           340 431             279 645
Information technology                                   399 605           205 215             144 863
Financial services                                        38 378            33 162              28 152
Holdings and consolidated                                    376            (1 702)              4 249
Total revenue                                          1 035 683           907 532             731 716

SEGMENT PROFIT / (LOSS)
Occupational health and safety                            65 545            59 303              45 042
Labour supply                                              2 125            11 988              10 035
Information technology                                    59 123            24 701              17 547
Financial services                                         5 672             1 750               2 960
Holdings and consolidated                               (21 812)            36 393            (24 394)
Total profit                                            110 653            134 135              51 190

SEGMENT ASSETS
Occupational health and safety                           409 512           358 769             186 100
Labour supply                                             60 566            67 605              59 440
Information technology                                   283 969           183 433             123 776
Financial services                                        71 914            61 426              59 495
Holdings and consolidated                                154 247            22 690              32 051
Total assets                                             980 208           693 923             460 862

6. Corporate Governance

MICROmega has embraced the recommendations of the King III Report on governance and strives to provide reports to
shareholders that are timely, accurate, consistent and informative.

7. Subsequent events

No other significant events have occurred in the period between the reporting date and the date of this report.

8. Commentary on results

We are pleased to have delivered another year of well above market growth in earnings and dividends. Our ongoing strategy
of substantially investing in our own intellectual product continues to benefit us in our chosen market segments. This has
greatly enhanced our client retention and the preservation of strong margins.

It is especially gratifying to have increased our cash flow from operations at an even greater rate than the more than doubling
of headline earnings. This enabled us to increase our dividend by 75%. Cash based earnings are the holy grail for any
business and it is a great testimony to the group operational executives that they have been able to achieve this while
simultaneously meeting the demanding growth targets that have been set.
At this time, in the new financial year, we have some visibility into our likely performance. We are confident that we will
generate above average growth in headline earnings and dividends again this year.


9. Cash dividend

Notice is hereby given that the directors have declared a final gross cash dividend of 35 cents for the financial year ended 31
March 2015, which is adjusted for withholding tax. The final dividend has not been included as a liability in these provisional
condensed annual consolidated financial statements as it was declared subsequent to year end.

The final dividend for March 2015 is payable to all shareholders on the Register of Members on Friday, 19 June 2015. In
terms of the dividends tax, effective 1 April 2012, the following additional information is disclosed:

- This is a dividend as defined in the Income Tax Act, 1962;

- the local dividend tax rate is 15%;

- the dividends will be payable from income reserves;

- the dividend tax to be withheld by the company amounts to 5.25 cents per share;

- therefore the net dividend payable to shareholders who are not exempt from dividends tax amounts to 29.75 cents per
   share, while the gross dividend payable to shareholders who are exempt from dividends tax amounts to 35 cents per
   share; and

- the issued share capital of the company at the declaration date comprises 114 915 089 ordinary shares; and the group´s
   income tax reference number is 9457/323/84/9

The salient dates will be as follows:

Declaration date:                 Thursday, 28 May 2015

Last day to trade:                Thursday, 11 June 2015

Shares trade ex-dividend:         Friday, 12 June 2015

Record date:                      Friday, 19 June 2015

Payment date:                     Monday, 22 June 2015

Share certificates may not be dematerialised or rematerialised between Friday, 12 June 2015 and Friday, 19 June 2015, both
days inclusive.


By order of the board

28 May 2015

Directors: DC King (Executive Chairman); IG Morris (Chief Executive Officer); RB Dick (Financial Director); DSE Carlisle
(Executive Director); DA Di Siena (Independent Non–Executive Director); PH Duvenhage (Non-Executive Director); TW
Hamill (Non–Executive Director); GE Jacobs (Independent Non–Executive Director); RC Lewin (Non–Executive Director); AB
Swan (Lead Independent Non–Executive Director)

Company Secretary: RJ Viljoen

Auditors: Nexia SAB&T
Transfer Secretaries: Computershare Investor Services Proprietary Limited

Sponsor: Merchantec Capital

Attorneys: Di Siena

Note: No forward looking statements in this announcement have been reviewed or reported on by MICROmega’s auditors.

Date: 28/05/2015 01:20:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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