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ALLIED ELECTRONICS CORPORATION LIMITED - Preliminary summarised audited consolidated financial statements for the year ended 28 February 2019

Release Date: 09/05/2019 08:30
Code(s): AEL     PDF:  
 
Wrap Text
Preliminary summarised audited consolidated financial statements for the year ended 28 February 2019

ALLIED ELECTRONICS
CORPORATION LIMITED
(Registration number 1947/024583/06)
(Incorporated in the Republic of South Africa)
Share code: AEL  
ISIN: ZAE000191342
   
  
PRELIMINARY SUMMARISED AUDITED CONSOLIDATED FINANCIAL STATEMENTS 
FOR THE YEAR ENDED 28 FEBRUARY 2019 AND FINAL DIVIDEND ANNOUNCEMENT

FINANCIAL COMMENTARY

We continue to deliver on our stated goal of consistent double-digit growth at an EBITDA level despite the
ongoing challenging economy. During the year, the group's financial performance continued to improve
significantly on a statutory basis:

-    Revenue from continuing operations increased by 7% to R15.7 billion.
-    EBITDA from continuing operations increased by 30% to R1.6 billion.
-    HEPS from continuing operations increased by 50% to 179 cents.
-    ROCE from continuing operations at 20%.
-    Final dividend declared of 44 cents per share, with total dividend for the year of 72 cents per share.

In the financial year under review, we secured key wins in both the private and public sector. These included,
amongst others, the Gauteng Broadband Network Phase 2 contract, secured by Altron Nexus. Altron CyberTech was 
awarded the Gautrain management agency tender, through which we provide a secure and protected
technology network. Altron Bytes Systems Integration was awarded a data and analytics contract by
FNB, Netstar won a three-year contract from the eThekwini Municipality for the supply, integration and
maintenance of a vehicle tracking technology solution for 7 000 vehicles, as well as Bytes UK being awarded a
five-year GBP 155 million (R2.7 billion) Windows 10 contract with the UK NHS, as reported at the financial half-year.
Netstar Australia Group was awarded a fleet management contract by Ausgrid.

The disposal of the remaining material non-core businesses and assets of the group has been successfully concluded.
Powertech Transformers was disposed of with effect from 31 July 2018. The disposal of Altech UEC/Multimedia,
being the last non-core control asset, was concluded during the financial year.

To improve market comprehension of our solutions and services, we have grouped our operations into the
following segments, namely Digital Transformation, Fintech/Healthtech, Smart IoT and Managed Services. Our
operating companies are also presented to the market under one identity following the introduction of a new
Altron brand in FY19.

Due to the inclusion of non-core discontinued operations in the total results for the year, the continuing operations' results
provide stakeholders with an accurate measure of the core sustainable earnings of Altron. The numbers
presented in the commentary below are shown on a normalised basis.

FINANCIAL OVERVIEW

CONTINUING OPERATIONS

Gross revenue increased by 30% to R19.2 billion, however, the impact of adopting IFRS 15 Revenue from
Contracts with Customers resulted in reported revenue from the continuing operations increasing by 7% from
R14,7 billion to R15.7 billion, while normalised EBITDA increased by 24% to R1.6 billion, with strong year-on-year
EBITDA growth of 79% from Bytes UK. The group's normalised EBITDA margin on reported revenue increased to
10.4% compared to 8.9% in the prior year. Free cash flow increased significantly to R425 million. Within a South
African context, the group generates 83% of its revenue from the private sector and 17% from the public sector.
Organic EBITDA growth for the year was 18%, with 6% growth attributable through acquisitions.

In line with accounting standards, during the year, the amortisation of contract costs in Netstar were reclassified 
from operating expenses to depreciation, resulting in an increase in depreciation and amortisation expense of R253 million 
in the current year and by R199 million in FY18. Capital items were a loss of R26 million, mostly as a result of the impairment
of contract costs in Netstar, which were offset by profit on the disposal of property. The net interest costs
in the continuing operations at R176 million remained relatively constant compared to the prior year. Other
comprehensive income for the year includes R113 million (a loss of R62 million in FY18) relating to foreign currency
translation differences in respect of foreign operations, due to the weakening of the rand during FY19.

DISCONTINUED OPERATIONS

The results of the discontinued operations continue to show a significant improvement from the previous
financial year. EBITDA improved to R54 million compared to a prior year of R8 million. This was mainly due to
the operational improvement of the Powertech Transformers and Altech UEC/Multimedia businesses, which
maintained their momentum in delivering strong EBITDA turnaround.

Profit after-tax improved significantly from a loss of R253 million in the prior year to a profit of R70 million.
This is mainly due to the improved operational performance, profits on disposals realised in the current year
and a further reduction in the interest expense as proceeds from disposals have been used to reduce debt.
Furthermore, impairments processed in the prior year were not needed in the current year.

CASH MANAGEMENT

The group's overall net debt of R1.3 billion (including deferred disposal receipts) showed a meaningful improvement 
on the FY18 year-end position of R1.5 billion. Cash generated from operations totalled R1.5 billion for the year. 
A total of R184 million was absorbed into working capital, compared to R298 million in the prior year. Net finance 
expenses continued to reduce to R196 million (R239 million in FY18), while tax paid for the year amounted to R147 million.

The group utilised R414 million on investment activities for the year, funded out of internally generated cash.
Included in this amount was R191 million relating to capital rental devices in Netstar, which reflects the
continued improved growth in its subscriber base, R146 million relating to the acquisition of Altron Karabina
and R58 million which was paid towards EZY2C acquired in FY18. Furthermore, R190 million was investment in
property, plant and equipment and R93 million in intangible assets, as development costs were capitalised
throughout the year. Also included in investment activities are inflows of R176 million relating to proceeds on
the disposal of non-core assets and R123 million concerning the disposal of property, plant and equipment.

R185 million cash utilised in financing activities predominantly relates to the net repayment of term loans.
Given the continued improved performance of the group, our long and short-term facilities were successfully
refinanced with effect from 28 February 2019 which will result in a decrease in finance costs during FY20.

OPERATIONAL REVIEW

DIGITAL TRANSFORMATION

Bytes UK had another strong year, growing revenue by 5% and EBITDA by 79% to R368 million. The performance
of the business was positively impacted by the inclusion of Phoenix Software for the full year (acquired in the
second half of the previous financial year). The business is set to grow further, following the five-year, GBP155
million (circa R2.7 billion) NHS contract, secured during the year.

The mandatory adoption of IFRS 15 in the current year impacted the revenue recognition of Bytes UK.
The business changed from a principal to an agent in a major part of its cloud-based business resulting in an
adverse impact of GBP200 million on revenue during the year, although EBITDA remained unaffected.

Altron Bytes Systems Integration ("BSI") refined its operating model which resulted in revenue increasing by 7%,
while EBITDA decreased by 3%. The newly adopted operating model has already started to yield a significant
increase in pipeline opportunities. BSI continues to streamline the business and drives large group initiatives
in Cloud Services, IoT, Data Analytics and Security.

Altron Nexus ("Nexus") produced positive results for the year, with revenue largely in line with the prior year, while
growing EBITDA by 54% to R123 million. The business responded to a disappointing first half of the year, with a
strong performance in the second half, due to delays in the award and implementation of large projects which
have since been realised. The roll-out of the Gauteng broadband network phase 2 project, together with the
closing out of historic projects have resulted in a significant improvement in EBITDA for the year.

As at the date of the release of this announcement, the challenges relating to the City of Tshwane ("CoT")
broadband network contract remain unresolved. While the parties still await the release of the court
judgement, meaningful progress has been made in the group's negotiations with CoT. Management
remains positive regarding the outcome of this matter. The business continues to win and deliver on current
broadband network opportunities, further building on its momentum of evolving into the preferred safe city
solution provider for the smart city evolution.

Altron Karabina was acquired effective 1 September 2018 in response to our strategy to extend Altron's
capabilities in Cloud Services and Data Analytics. The results for the five months of the financial year were in
line with our expectations for the business. We are excited by the enhanced skills introduced to the group by
Altron Karabina, with the team contributing to cross- and up-sell initiatives into our larger customers.

FINTECH/HEALTHTECH

Altron Bytes Secure Transaction Solutions ("BSTS") continues to perform well, growing revenue by 6%
and EBITDA by 14% to R289 million, driven by further improved EBITDA margins of 25% and a number of
new contracts secured during the year. BSTS maintains its status as a key growth focus for the group. All
components of this business performed well, with the NuPay division again being the outstanding performer.
The Healthtech side of the business continues to focus its attention in the healthcare space delivering higher
value services to healthcare professionals, as well as within the public health sector. Looking forward, it is also
assessing opportunities in the Altron Rest of Africa markets. Fintech is expanding its product offerings further
into the unsecured lending environment, which presents significant growth opportunity for this division, while
the CyberTech division is seeing gains through its cyber security operations centre to provide security for
customer networks, such as being awarded the Gautrain management agency tender.

SMART IoT

Netstar, inclusive of its Australian operations, showed continued improvements in its performance. The
business reported a 10% increase in revenue and 19% improvement in EBITDA to R582 million against the prior
year. Netstar further improved the growth in its subscriber base, particularly in stolen vehicle recovery ("SVR"),
with churn and retentions under close control, improving by 6%.

During the second half of the year, Netstar re-evaluated its ground recovery suppliers in SVR. Through a
formal process, managed by Deloitte, Netstar effected a change in its service providers in this space to
ensure enhanced services, while having a lower cost of delivery going into FY20.

During the year, the business consolidated its Australian operations, Pinpoint and EZY2C. These are now driven
through a single Netstar Australia brand.

MANAGED SERVICES

Altron Bytes Document Solutions ("BDS") has seen revenue improve by 11% and EBITDA increase by 10% to
R77 million compared to the prior year. This is testament to the successful efforts by the business of gaining
market share in a declining market.

Strategically the business remains focused on selected growth areas, including managed print services
and the high-end production environment. BDS' growth strategy of driving cross-selling of Altron's various
offerings into its extensive base of more than 4 500 customers remains on course.

Altron Bytes Managed Solutions ("BMS") reported revenue and EBITDA increase of 14% and 5% year-on-year,
respectively. In a highly competitive market, BMS is focused on quality of service while closely managing its
cost base and maintaining its drive to enhance annuity income. Further improvement in the performance of
BMS are being driven by the ongoing diversification of its offerings, including a focus on growing into retail
and end-user computing.

Altron Bytes People Solutions ("BPS") grew revenue by 5% for the year, with EBITDA in line with the prior year.
As BPS' customer base continues to digitally transform their businesses and finding new and innovative ways
to service their customers, it results in declining call volumes through BPS' call centre environments. This
has necessitated an internal drive by the business to reduce costs in line with declining call volumes. BPS is
furthermore focusing on growing its enabling technologies, including robotic processes, in order to diversify
its offerings from traditional call centres, to providing digitally transformed customer experiences.

ALTRON ARROW

Altron Arrow's experienced a challenging year, given the problems faced in the SA contract manufacture
space, whereby the demand for the delivery of components have been curtailed. This resulted in revenue and
EBITDA for the year declining by 11% and 12%, respectively. In challenging economic conditions, the business
maintained its leading component distributor position, with a market share of 27%. Altron Arrow continues to
drive market share expansion in a declining market by leveraging their established global brand.

DIVIDEND

Notice is hereby given that a final cash dividend of 44 cents per share (35.2 cents net of 20% dividend
withholding tax) for the financial year ended 28 February 2019 has been declared, payable to shareholders
recorded in the register of the company at the close of business on the record date appearing below. The
board has confirmed by resolution that the solvency and liquidity test as contemplated by the Companies
Act, No. 71 of 2008, as amended, has been duly considered, applied and satisfied. This is a dividend as
defined in the Income Tax Act, 1962 and is payable from income reserves. The income tax number of the
company is 9725149711. The number of ordinary shares in issue at the date of this declaration is 399 380 572,
including 28 180 080 treasury shares. The salient dates applicable to the interim dividend are as follows:

Dividend dates:                                           
Last day to trade cum dividend                                                    Tuesday, 28 May 2019   
Commence trading ex dividend                                                    Wednesday, 29 May 2019   
Record date                                                                        Friday, 31 May 2019   
Payment date                                                                       Monday, 3 June 2019   

Share certificates may not be dematerialised or rematerialised between Wednesday, 29 May 2019 and Friday,
31 May 2019.

DIRECTORATE AND CHANGE IN FUNCTION

During the past financial year, our board took further steps to ensure alignment to our ICT focused strategy
and implementing its diversity policy at board level. As part of this process, Ms Phumla Mnganga was
appointed as an independent non-executive director on the Altron board, with effect from 1 February 2019.

On 14 March 2019, the board announced the appointment of Mr Cedric Miller as executive financial director
and Chief Financial Officer ("CFO") of Altron, with effect from 1 May 2019. Following Mr Miller's appointment,
Mr Andrew Holden, the Altron Group Chief Operations Officer, who assumed the additional role of acting
CFO on 20 October 2018, stepped down as acting CFO, with effect from 30 April 2019. Furthermore, Mr Miller has
also been appointed to the Altron Risk Management Committee and the Altron Investment Committee, with effect 
from 9 May 2019.

The board further announced that Dr WP Venter, Chairman Emeritus, retired as non-executive director of
the Altron board, with effect from 31 July 2018. Dr Penuell Maduna and Ms Dawn Mokhobo also retired as
independent non-executive directors from the board, with effect from 28 February 2019.

Following the retirement of Ms Mokhobo, Mr Stewart van Graan assumed the role of Chairman of the Altron
Social and Ethics Committee, with effect from 3 May 2019.

OUTLOOK

Despite the muted economic conditions in the jurisdictions in which the group operates, Altron remains well-
positioned for continued growth and accelerating the implementation of its One Altron strategy of offering
end-to-end solutions to its extensive customer base. We continue to focus on organic growth, supplemented
by selective acquisitions. In particular:

-    cross- and up-selling in Altron's top accounts in South Africa;
-    extending our Microsoft capabilities to include Licencing Solutions Provider status;
-    driving margin expansion in Altron BSI;
-    increased focus on the automotive sector within Netstar South Africa;
-    solidify our Netstar operation in India; and
-    the group remains committed to double digit EBITDA growth.

For and on behalf of the board.

MJ Leeming                         M Nyati                                   C Miller
Chairman                           Chief Executive                           Chief Financial Officer

Registered office
Altron House, 4 Sherborne Road, Parktown, 2193

Sponsor
Investec Bank Limited

Transfer secretaries
Computershare Investor Services Proprietary Limited, 1st Floor, Rosebank Towers, 15 Biermann Avenue,
Rosebank, 2196

Directors
MJ Leeming (Chairman), M Nyati (Chief Executive)*, C Miller (Chief Financial Officer)*, AC Ball, BW Dawson,
BJ Francis, GG Gelink, P Mnganga, S Sithole (Zimbabwean), SW van Graan, RE Venter
* Executive

Group Company Secretary
WK Groenewald

9 May 2019

AUDITED SUMMARY CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2019

Independent auditor's report on the summary consolidated financial statements

To the Shareholders of Allied Electronics Corporation Limited

Opinion
The summary consolidated financial statements of Allied Electronics Corporation Limited, contained in the 
accompanying preliminary report, which comprise the summary consolidated balance sheet as at 28 February 2019, 
the summary consolidated statements of comprehensive income, changes in equity and cash flows for the year then 
ended, and the related notes, are derived from the audited consolidated financial statements of 
Allied Electronics Corporation Limited for the year ended 28 February 2019.

In our opinion, the accompanying summary consolidated financial statements are consistent, in all material respects, 
with the audited consolidated financial statements, in accordance with the requirements of the JSE Limited 
Listings Requirements for preliminary reports, as set out in note 3 to the summary consolidated financial statements, 
and the requirements of the Companies Act of South Africa as applicable to summary financial statements.

Summary Consolidated Financial Statements
The summary consolidated financial statements do not contain all the disclosures required by 
International Financial Reporting Standards and the requirements of the Companies Act of South Africa as applicable 
to annual financial statements. Reading the summary consolidated financial statements and the auditor's report thereon, 
therefore, is not a substitute for reading the audited consolidated financial statements and the auditor's report thereon. 

The Audited Consolidated Financial Statements and Our Report Thereon
We expressed an unmodified audit opinion on the audited consolidated financial statements in our report dated 8 May 2019. 
That report also includes communication of key audit matters. Key audit matters are those matters that, in our professional 
judgement, were of most significance in our audit of the consolidated financial statements of the current period.

Director's Responsibility for the Summary Consolidated Financial Statements
The directors are responsible for the preparation of the summary consolidated financial statements in accordance with 
the requirements of the JSE Limited Listings Requirements for preliminary reports, set out in note 3 to the summary 
consolidated financial statements, and the requirements of the Companies Act of South Africa as applicable to summary 
financial statements. 

Auditor's Responsibility
Our responsibility is to express an opinion on whether the summary consolidated financial statements are consistent, 
in all material respects, with the audited consolidated financial statements based on our procedures, which were conducted 
in accordance with International Standard on Auditing (ISA) 810 (Revised), Engagements to Report on the Summary Financial Statements.


PricewaterhouseCoopers Inc. 
Director: A.M Motaung
Registered Auditor 
Johannesburg 
8 May 2019 


SUMMARY CONSOLIDATED
BALANCE SHEET

                                                                                                                   GROUP                            
R millions                                                                                 Note   28 Feb 2019    28 Feb 2018      1 Mar 2017
                                                                                                                 Restated(1)     Restated(1)
ASSETS                                                                                                                                                              
Non-current assets                                                                                      4 171          3 798           2 893   
Property, plant and equipment                                                                             620            615             569   
Intangible assets and goodwill                                                                          1 965          1 669           1 029   
Equity-accounted investments                                                                               19             20              23   
Other investments                                                                                           -            468             302   
Financial assets at amortised cost                                                                        350              -               -   
Financial assets at fair value through profit or loss                                                     202              -               -   
Financial assets at fair value through other
comprehensive income                                                                                       21              -               -   
Finance lease assets                                                                                      196            187             190   
Contract costs capitalised                                                                                 83              -               -   
Capital rental devices                                                                                    293            461             404   
Trade and other receivables                                                                                87              -               -   
Defined benefit asset                                                                                     180            164             178   
Deferred taxation                                                                                         155            214             198   
Current assets                                                                                          7 430          6 138           6 991   
Inventories                                                                                             1 017            993           1 046   
Trade and other receivables                                                                             4 725          3 360           2 752   
Financial assets at fair value through profit or loss                                                       6              -               -   
Contract assets                                                                                           195                              -   
Taxation receivable                                                                                        25              4               3   
Restricted cash                                                                                            26              -               -   
Cash and cash equivalents                                                                               1 381          1 067           1 546   
                                                                                                        7 375          5 424           5 347   
Assets classified as held-for-sale                                                            9            55            714           1 644   
Total assets                                                                                           11 601          9 936           9 884   
EQUITY AND LIABILITIES                                                                                                                         
Total equity                                                                                            3 373          2 545           2 028   
Share capital and share premium                                                                         2 866          2 861           2 448   
Retained earnings                                                                                       3 148          2 543           2 356   
Other reserves                                                                                        (2 479)        (2 614)         (2 536)   
Attributable to Altron shareholders                                                                     3 535          2 790           2 268   
Non-controlling interests                                                                               (162)          (245)           (240)   
Non-current liabilities                                                                                 1 424          1 580           2 048   
Loans                                                                                                   1 262          1 502           2 000   
Provisions                                                                                                  -              5               5   
Contract liabilities                                                                                       87              -               -   
Deferred taxation                                                                                          75             73              43   
Current liabilities                                                                                     6 804          5 811           5 808   
Loans                                                                                                     484            404             395   
Bank overdrafts                                                                                         1 181            972             956   
Provisions                                                                                                 15             20              16   
Trade and other payables                                                                                3 603          3 881           3 350   
Financial liabilities at fair value through profit or loss                                                 18              -               -   
Contract liabilities                                                                                    1 423              -               -   
Taxation payable                                                                                           80             69              67   
                                                                                                        6 804          5 346           4 784   
Liabilities classified as held-for-sale                                                       9             -            465           1 024   
Total equity and liabilities                                                                           11 601          9 936           9 884   

(1) Refer to note 17 for more detail in respect of the restatement of prior year balances                                                                             


SUMMARY CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME

                                                                                                                                %              Restated*   
R millions                                                                                                         Notes   Change       2019        2018   
CONTINUING OPERATIONS                                                                                                                                      
Revenue                                                                                                               13        7     15 723      14 743   
Operating costs excluding capital items*                                                                                            (14 116)    (13 509)   
Earnings before interest, taxation, depreciation,                                                                                                          
amortisation, capital items and equity accounted losses                                                                                                    
(EBITDA and capital items)**                                                                                                   30      1 607       1 234   
Depreciation and amortisation*                                                                                                         (566)       (451)   
Operating profit before capital items                                                                                          33      1 041         783   
Capital items                                                                                                          5                (26)        (38)   
Operating profit                                                                                                               36      1 015         745   
Finance income                                                                                                                           130         164   
Finance expense                                                                                                                        (306)       (342)   
Share of loss of equity accounted investees, net of taxation                                                                             (1)         (1)   
Profit before taxation                                                                                                         48        838         566   
Taxation                                                                                                                               (158)       (145)   
Profit for the year from continuing operations                                                                                 62        680         421   
DISCONTINUED OPERATIONS                                                                                                                                    
Revenue                                                                                                               13     (59)      1 202       2 938   
Operating costs excluding capital items                                                                                              (1 148)     (2 930)   
Earnings before interest, taxation, depreciation,                                                                                                          
amortisation, capital items and equity accounted losses                                                                                                    
(EBITDA and capital items)**                                                                                                              54           8   
Operating profit excluding capital items                                                                                      575         54           8   
Capital items                                                                                                          5                  24       (271)   
Operating profit/(loss)                                                                                                                   78       (263)   
Finance income                                                                                                                            24          56   
Finance expense                                                                                                                         (27)        (77)   
Proft/(loss) before taxation                                                                                                              75       (284)   
Taxation                                                                                                                                 (5)          31   
Profit/(loss) for the year from discontinued operations                                                                                   70       (253)   
Profit for the year from total operations                                                                                                750         168   

*  Costs incurred to fulfil contracts relating to hardware and fitment have been reclassified from materials and
   services consumed to depreciation and amortisation, as a result the prior year has been restated.
** The group presents in its consolidated statement of comprehensive income earnings before interest, taxation,
   depreciation, amortisation, capital items and equity accounted losses from associates. This represents the contribution by
   the group from its revenue after deducting the associated employee costs and materials and services consumed expenses. 
   This also includes other income earned; and finance lease interest income that is considered to be to be revenue for the group.


                                                                                                                                    %          Restated*   
R millions                                                                                                              Note   Change   2019        2018   
Other comprehensive income                                                                                                                                 
Items that will not be reclassified to profit or loss                                                                                                      
Remeasurement of net defined benefit asset                                                                                                 4         (5)   
Items that are or may be reclassified subsequently                                                                                                         
to profit or loss                                                                                                                                          
Foreign currency translation differences in respect of                                                                                                     
foreign operations***                                                                                                                    113        (62)   
Effective portion of changes in the fair value of cash flow hedges                                                                         3           2   
Transfer to reserves                                                                                                                       -         (3)   
Other comprehensive income for the year, net of taxation                                                                                 120        (68)   
Total comprehensive income for the year                                                                                                  870         100   
Net profit/(loss) attributable to:                                                                                                                         
Non-controlling interests                                                                                                                 39        (19)   
Non-controlling interests from continuing operations                                                                                      25          17   
Non-controlling interests from discontinued operations                                                                                    14        (36)   
Altron equity holders                                                                                                                    711         187   
Altron equity holders from continuing operations                                                                                         655         404   
Altron equity holders from discontinued operations                                                                                        56       (217)   
Net profit for the year                                                                                                                  750         168   
Total comprehensive income attributable to:                                                                                                                
Non-controlling interests                                                                                                                 39        (18)   
Non-controlling interests from continuing operations                                                                                      25          17   
Non-controlling interests from discontinued operations                                                                                    14        (35)   
Altron equity holders                                                                                                                    831         118   
Altron equity holders from continuing operations                                                                                         775         356   
Altron equity holders from discontinued operations                                                                                        56       (238)   
Total comprehensive income for the year                                                                                                  870         100   
Basic earnings per share from continuing operations (cents)                                                                6       62    177         109   
Diluted earnings per share from continuing operations (cents)                                                              6       62    175         108   
Basic earnings/(loss) per share from discontinued operations                                                                                               
(cents)                                                                                                                    6      125     15        (59)   
Diluted earnings/(loss) per share from discontinued operations                                                                                             
(cents)                                                                                                                    6      126     15        (58)   
Basic earnings per share from total operations (cents)                                                                     6      276    192          51   
Diluted earnings per share from total operations (cents)                                                                   6      280    190          50   

*** This component of other comprehensive income is not subject to tax.

SUMMARY CONSOLIDATED
STATEMENT OF CASH FLOWS

                                                                                                                                               Restated*   
R millions                                                                                                                              2019        2018   
CASH FLOWS FROM OPERATING ACTIVITIES                                                                                                                       
Cash generated by operations                                                                                                           1 127       1 062   
Interest received                                                                                                                        134         178   
Interest paid                                                                                                                          (330)       (417)   
Dividends received from equity accounted investees and other investments                                                                   4          32   
Taxation paid                                                                                                                          (147)       (142)   
Dividends paid, including to non-controlling interests                                                                                 (111)         (5)   
Net cash inflow from operating activities                                                                                                677         708   
CASH FLOWS FROM INVESTING ACTIVITIES                                                                                                                       
Acquisition of subsidiaries, net of cash acquired                                                                                      (218)       (698)   
Proceeds on the disposal of subsidiaries, associate and businesses net of cash                                                                             
disposed of                                                                                                                              176         233   
Proceeds on disposal of property, plant and equipment and intangible assets                                                              123           3   
Cash (outflow)/received relating to finance lease arrangements                                                                           (6)          15   
Acquisition of intangible assets                                                                                                        (93)        (84)   
Acquisitions of property, plant and equipment                                                                                          (190)       (194)   
Other investing activities                                                                                                             (206)       (246)   
Net cash (outflow) from investing activities                                                                                           (414)       (971)   
CASH FLOWS FROM FINANCING ACTIVITIES                                                                                                                       
Loans repaid                                                                                                                         (1 716)       (755)   
Loans advanced                                                                                                                         1 543         195   
Settlement of finance leases                                                                                                            (12)           -   
Proceeds from share issue                                                                                                                  -         400   
Net cash (outflow) from financing activities                                                                                           (185)       (160)   
Net increase (decrease) in cash and cash equivalents                                                                                      78       (423)   
Net cash and cash equivalents at the beginning of the year                                                                                95         502   
Cash and cash equivalents at the beginning of the year                                                                                    95         590   
Cash previously classified as held-for-sale                                                                                                -        (88)   
Effect of exchange rate fluctuations on cash held                                                                                         27          16   
Net cash and cash equivalents at the end of the year                                                                                     200          95   

* Refer to note 17 for more detail in respect of the restatement of prior year balances.

SUMMARY CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY

                                                                                        Attributable to Altron equity holders 
                                                                                  Share                                                    Non-             
                                                                            capital and   Treasury               Retained           controlling    Total    
R millions                                                                      premium     shares    Reserves   earnings   Total     interests   equity    
Balance at 28 February 2017                                                       2 747      (299)     (2 536)      2 356   2 268         (240)    2 028    
Total comprehensive income for the year                                                                
Profit for the year                                                                   -          -           -        187     187          (19)      168    
Other comprehensive income                                                                             
Foreign currency translation differences in respect of foreign operations             -          -        (62)          -    (62)             -     (62)    
Remeasurement of net defined benefit asset                                            -          -         (5)          -     (5)             -      (5)    
Effective portion of changes in the fair value of cash flow hedges                    -          -           1          -       1             1        2    
Transfer to reserves                                                                  -          -         (3)          -     (3)             -      (3)    
Total other comprehensive income                                                      -          -        (69)          -    (69)             1     (68)    
Total comprehensive income for the year                                               -          -        (69)        187     118          (18)      100    
Transactions with owners, recorded directly in equity                                                  
Contributions by and distributions to owners                                                           
Dividends to equity holders                                                           -          -           -          -       -           (5)      (5)    
Issue of share capital                                                              413          -        (13)          -     400             -      400    
Share-based payment transactions                                                      -          -          20          -      20             -       20    
Total contributions by and distributions to owners                                  413          -           7          -     420           (5)      415    
Changes in ownership interests in subsidiaries                                                         
Buy-back of non-controlling interest                                                  -          -        (16)          -    (16)            16        -    
Acquisition of subsidiary                                                             -          -           -          -       -             2        2    
Total changes in ownership interests in subsidiaries                                  -          -        (16)          -    (16)            18        2    
Total transactions with owners                                                      413          -         (9)          -     404            13      417    
Balance at 28 February 2018                                                       3 160      (299)     (2 614)      2 543   2 790         (245)    2 545    
Adjustment on initial application of IFRS 9 and IFRS 15                               -          -           -        (1)     (1)             -      (1)    
Restated total equity at the beginning of the year                                3 160      (299)     (2 614)      2 542   2 789         (245)    2 544    
Total comprehensive income for the year                                                                
Profit for the year                                                                   -          -           -        711     711            39      750    
Other comprehensive income                                                                             
Foreign currency translation differences in respect of foreign operations             -          -         113          -     113             -      113    
Remeasurement of net defined benefit asset                                            -          -           4          -       4             -        4    
Effective portion of changes in the fair value of cash flow hedges                    -          -           3          -       3             -        3    
Total other comprehensive income                                                      -          -         120          -     120             -      120    
Total comprehensive income for the year                                               -          -         120        711     831            39      870    
Transactions with owners, recorded directly in equity                                                  
Contributions by and distributions to owners                                                           
Dividends to equity holders                                                           -          -           -      (105)   (105)           (5)    (110)    
Issue of share capital                                                                5          -         (5)          -       -             -        -    
Share-based payment transactions                                                      -          -          20          -      20             -       20    
Total contributions by and distributions to owners                                    5          -          15      (105)    (85)           (5)     (90)    
Changes in ownership interests in subsidiaries                                                               
Disposal of operations                                                                -          -           -          -       -            49       49    
Total changes in ownership interests in subsidiaries                                  -          -           -          -       -            49       49    
Total transactions with owners                                                        5          -          15      (105)    (85)            44     (41)    
Balance at 28 February 2019                                                       3 165      (299)     (2 479)      3 148   3 535         (162)    3 373    

Dividend per share declared 44 cents(final) and 28 cents(interim)(2018: nil).

NOTES TO THE SUMMARY CONSOLIDATED
FINANCIAL STATEMENTS

1.    INDEPENDENT AUDIT

      The summary consolidated financial statements have been derived from the audited consolidated
      financial statements. The directors of the company take full responsibility for the preparation of the
      summary consolidated financial statements and that the financial information has been correctly
      derived and are consistent in all material respects with the underlying audited consolidated financial
      statements. The summary consolidated financial statements for the year ended 28 February 2019 have
      been audited by our independent auditors, PricewaterhouseCoopers Inc. who have expressed an
      unmodified opinion thereon. The auditors also expressed an unmodified opinion on the consolidated
      financial statements from which the summary consolidated financial statements were derived.
      A copy of the auditor's report on the consolidated financial statements is available for inspection at the
      company's registered office, together with the financial statements identified in the auditor's report.

2.    GENERAL INFORMATION

      Altron is a leading ICT business, operating in a number of geographies. Its principal subsidiaries are
      Altron TMT Proprietary Limited (which includes various operating divisions); Netstar Proprietary Limited
      and the balance of the Netstar group (including its Australian operations); Altron Nexus Proprietary
      Limited (previously known as Altech Radio Holdings Proprietary Limited); Bytes Software Services Limited
      and Phoenix Software Limited in the UK; and the Altron Rest of Africa operations.

3.    BASIS OF PREPARATION

      The summary consolidated financial statements are prepared in accordance with the requirements
      of the JSE Limited Listings Requirements for preliminary financial statements and the requirements of
      the Companies Act applicable to summary financial statements. The summary financial statements
      were prepared in accordance with the framework concepts and the measurement and recognition
      requirements of International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting
      Guides as issued by the Accounting Practices Committee (APC) and the Financial Pronouncements
      as issued by the Financial Reporting Standard Council (FRSC), and to also, as a minimum, contain the
      information required by IAS 34 Interim Financial Reporting. 

      The accounting policies applied in the preparation of the consolidated financial statements from which
      the summary consolidated financial statements were derived, are in terms of IFRS and are consistent
      with those accounting policies applied in the preparation of the previous consolidated financial
      statements, apart from restatements and the changes to accounting policies noted below. The summary
      consolidated financial statements should be read in conjunction with the consolidated financial
      statements for the year ended 28 February 2019, which have been prepared in accordance with IFRS.
      A copy of the full set of the audited consolidated financial statements is available for inspection from
      the company secretary at the registered office of the company. 
     
      This report was compiled under the supervision of Mr Andrew Holden, Chief Operating Officer and
      Mr Cedric Miller CA(SA), Chief Financial Officer.

4.    PRINCIPAL ACCOUNTING POLICIES

      The group adopted all new, revised or amended accounting pronouncements that became effective in the 
      current reporting period. The following standards had an impact on the group:

      -    IFRS 9 Financial Instruments
      -    IFRS 15 Revenue from Contracts with Customers

      The group had to change its accounting policies and make certain retrospective adjustments, which
      were recorded on 1 March 2018 in terms of the adoption approach elected, following the adoption of
      IFRS 9 and IFRS 15, which is disclosed in note 14. The other amendments listed above did not have a material
      impact on the amounts recognised in prior periods and have not; and are not expected to significantly
      affect the current or future periods.

      The accounting policies applied in the preparation of the summary consolidated financial statements
      are in terms of IFRS and are consistent with those accounting policies applied in the preparation of the
      consolidated financial statements.

      R millions                                                                                                                            2019    2018   
5.    CAPITAL ITEMS                                                                                                                                        
      Continuing operations                                                                                                                                
      Impairment of goodwill                                                                                                                   -    (30)   
      Net profit on disposal of property, plant and equipment                                                                                 16       1   
      Impairment of property, plant and equipment                                                                                            (7)    (17)   
      Contract costs written off                                                                                                            (35)       -   
      Reversal of provision related to East Africa                                                                                             -      10   
      Impairment of historic proceeds receivable                                                                                               -     (2)   
                                                                                                                                            (26)    (38)   
      Discontinued operations                                                                                                                              
      Profit/(loss) on disposal of discontinued operations                                                                                    30    (90)   
      Profit/(loss) on disposal of intangible assets                                                                                         (2)     (6)   
      Profit on disposal of property, plant and equipment                                                                                     63       -   
      Impairment of held-for-sale disposal groups                                                                                           (67)   (175)   
                                                                                                                                              24   (271)   
      Total                                                                                                                                  (2)   (309)   

      Cents                                                                                                                      % change   2019    2018   
6.    EARNINGS PER SHARE                                                                                                                                   
      Headline earnings per share from continuing operations                                                                           50    179     119   
      Headline earnings per share from discontinued operations                                                                        500     12       2   
      Headline earnings per share from total operations                                                                                58    191     121   
      Diluted headline earnings per share from continuing operations                                                                   50    179     119   
      Diluted headline earnings/(loss) per share                                                                                                           
      from discontinued operations                                                                                                    500     12       2   
      Diluted headline earnings per share from total operations                                                                        58    191     121   
      Normalised headline earnings per share from continuing operations                                                                36    183     135  
 
      R millions                                                                                                                            2019    2018   
6.1   Reconciliation between earnings and headline earnings                                                                                                
      Attributable to Altron equity holders                                                                                                  711     187   
      Capital items - gross                                                                                                                    3     309   
      Tax effect of capital items                                                                                                            (6)    (22)   
      Non-controlling interests in capital items                                                                                               -    (26)   
      Headline earnings                                                                                                                      708     448   
      Headline earnings per share from total operations                   (cents)                                                            191     121   
6.2   Reconciliation between earnings and headline earnings from                                                                                           
      continuing operations                                                                                                                                
      Attributable to Altron equity holders                                                                                                  655     404   
      Capital items - gross                                                                                                                   26      38   
      Tax effect of capital items                                                                                                           (18)     (1)   
      Headline earnings from continuing operations                                                                                           663     441   
      Headline earnings per share from continuing operations              (cents)                                                            179     119   

6.3   Reconciliation between earnings and headline earnings from                                                                                                            
      discontinued operations                                                                                                                                      
      Attributable to Alton equity holders                                                                                                    56   (217)   
      Capital items - gross                                                                                                                 (23)     271   
      Tax effect of capital items                                                                                                             12    (21)   
      Non-controlling interests in capital items                                                                                               -    (26)   
      Headline earnings from discontinued operations                                                                                          45       7   
      Headline earnings per share from discontinued operations            (cents)                                                             12       2   

                                                                                                                                   Number         Number   
                                                                                                                                of shares      of shares   
6.4   Reconciliation of weighted average number of shares                                                                                                  
      Issued shares at the beginning of the year (A ordinary and N ordinary shares)                                           399 092 426    370 040 477   
      Share buy back (9 A shares for every 10 N shares)                                                                                 -   (26 438 009)   
      Effect of own shares held at the beginning of the year                                                                 (28 180 081)   (28 180 081)   
      Effect of shares issued during the year                                                                                     100 522     54 726 365   
      Weighted average number of shares                                                                                       371 012 867    370 148 752   
6.5   Reconciliation between number of shares used for earnings per share                                                                                  
      and diluted earnings per share                                                                                                                       
      Weighted average number of shares                                                                                       371 012 867    370 148 752   
      Dilutive options                                                                                                          3 801 170      2 473 130   
      Diluted weighted average number of shares                                                                               374 814 037    372 621 882   

      R millions                                                                                                                     2019           2018   
6.6   Reconciliation between earnings and diluted earnings are as follows:                                                                                 
      Earnings attributable to shareholders                                                                                           711            187   
      Diluted earnings                                                                                                                711            187   
6.7   Reconciliation between headline earnings and diluted headline                                                                                        
      earnings                                                                                                                                             
      Headline earnings                                                                                                               708            448   
      Diluted headline earnings                                                                                                       708            448   
      Diluted headline earnings per share from total operations             (cents)                                                   189            120   

6.8   Reconciliation between headline earnings and normalised headline earnings

      Normalised headline earnings have been presented to demonstrate the impact of material, non-
      operational once-off costs associated with accessing benefits that will only be realised in subsequent
      reporting periods, as well as certain restructuring costs, on the headline earnings of the group.

      The presentation of normalised headline earnings is not an IFRS defined measure or requirement.  
      
      R millions                                                                                                                             2019   2018   
      Headline earnings are reconciled to normalised headline earnings as follows:                                                                         
      Headline earnings                                                                                                                       663    441   
      Foreign currency gains on contingent consideration                                                                                        5    (6)   
      Retrenchment and restructuring costs                                                                                                     34     77   
      Acquisition-related costs                                                                                                                 -      8   
      Settlement of contingent consideration                                                                                                 (13)      -   
      Tax effect of adjustments                                                                                                              (10)   (20)   
                                                                                                                                              679    500   

7.    ACQUISITION OF SUBSIDIARIES AND BUSINESS

      The following material acquisition was concluded during the current year:

      Acquisition of iSPartners Group Proprietary Limited ("Altron Karabina")

      Effective 1 September 2018, Altron TMT SA Group Proprietary Limited acquired 100% of the issued share
      capital of Altron Karabina, a Microsoft solutions business, for a purchase price of R217 million, of which
      R161 million was paid upfront and the remainder is payable over the next two years, with no targets
      attached to the payment of the remaining balance.

      The acquisition contributed revenue of R105 million and a net profit after tax of R6 million to the group
      since acquisition. If Altron Karabina was acquired on 1 March 2018, the contributed revenue would have
      been R210 million and the net profit after tax would have been R12 million.

      Goodwill of R148 million was recognised on the acquisition of Altron Karabina which relates to the
      expected future synergies flowing from the group's intention to increase its footprint in the Microsoft
      environment in South Africa.
      
                                                                                                                     Carrying    Fair value   Recognised   
      R millions                                                                                                       amount   adjustments       values   
      The acquired balances at the effective date were as follows:                                                                                         
      Property, plant and equipment                                                                                         4             -            4   
      Intangible assets                                                                                                    16            50           66   
      Deferred tax                                                                                                        (2)          (14)         (16)   
      Trade and other receivables                                                                                          37             -           37   
      Trade and other payables                                                                                           (37)             -         (37)   
      Cash and cash equivalents                                                                                            15             -           15   
      Net identifiable assets acquired                                                                                     33            36           69   
      Goodwill on acquisition                                                                                                                        148   
      Total purchase consideration                                                                                                                   217   
      Less: Cash and cash equivalents in subsidiary acquired                                                                                        (15)   
      Less: Deferred purchase consideration                                                                                                         (56)   
      Net cash outflow on acquisitions                                                                                                               146   
      
      In addition to the above, the group acquired Cape Office Machines, a partner to the Altron Bytes
      Document Solutions Business for a purchase price of R14 million. The acquisition resulted in intangible
      assets of R15 million being recognised.

8.    DISPOSAL OF SUBSIDIARY 

      Effective 31 July 2018, the group disposed of its collective 80% equity interest in Powertech Transformers
      for R250 million.

      Net assets of the above operations disposed:

      R millions                                                                                                                                    2019   
      Non-current assets                                                                                                                               1   
      Other                                                                                                                                            1   
      Current assets                                                                                                                                 493   
      Inventories                                                                                                                                    252   
      Trade and other receivables                                                                                                                    241   
      Equity                                                                                                                                          49   
      Non-controlling interest                                                                                                                        49   
      Current-liabilities                                                                                                                          (284)   
      Trade and other payables                                                                                                                     (239)   
      Other                                                                                                                                         (45)   
      Disposal value                                                                                                                                 259   
      Less: Proceeds receivable                                                                                                                    (150)   
      Profit on disposal of subsidiaries                                                                                                              30   
      Proceeds received on disposal                                                                                                                  139   

9.    ASSETS AND LIABILITIES HELD FOR SALE AND DISCONTINUED OPERATIONS

      Impairment of held-for-sale disposal groups

      In prior years the decision was taken to dispose of the Powertech group and the Multimedia group and,
      as a result, these businesses were classified as discontinued operations. The relevant requirements
      of IFRS 5 were met for this classification at the time. The disposals of the assets and liabilities held-
      for-sale were completed during the 2019 financial year, except for the investment held in CBI-Electric
      Telecom Cables (ATC), which remains held for sale at the end of the year. Management believe that the
      conclusion of the disposal of the investment will be affected in the 2020 financial year.

      Net assets of disposal group held-for-sale:

      R millions                                                                                                                            2019    2018   
      Assets classified as held-for-sale                                                                                                      55     714   
      Non-current assets                                                                                                                      55     129   
      Current assets                                                                                                                           -     585   
      Liabilities classified as held-for-sale                                                                                                  -   (465)   
      Non-current liabilities                                                                                                                  -     (5)   
      Current liabilities                                                                                                                      -   (460)   
      
      
      During the current year, the group recognised a further impairment loss in respect of the investment in
      ATC based on the determination of the fair value less cost to sell of the investment in accordance with
      IFRS 5 Non-current Assets Held for Sale.
      
      The impairment is based on management's best estimate and judgement of the fair value of the
      investment and represents the lowest value that the group will dispose the investment to a willing buyer.
      The fair value is a level 3 due to the unobservable inputs used in the determining the value.

10.   RELATED-PARTY TRANSACTIONS

      The group has a related-party relationship with its subsidiaries, associates and joint ventures and with
      its directors and key management personnel.

      R millions 2019                                                                                                                        2019   2018   
      Associates and joint ventures                                                                                                                        
      Sale of goods and services to joint venture                                                                                              31    246   
      Services received from associates                                                                                                        57    295   
      Interest earned from associate                                                                                                            -      5   
      Dividends received from joint venture                                                                                                     -     26   
      Dividends received from associates                                                                                                        -      2   
      Balances                                                                                                                                             
      Thobela Telecoms - Joint venture (Trade receivables)                                                                                    301    265   


      Credit risk, concentration risk and significant judgement applied by management

      Gross trade receivable with Thobela Telecoms (RF) Proprietary Limited ("TT")

      Altron Nexus Proprietary Limited (Nexus) holds a jointly controlled interest in TT. TT is the vehicle through
      which the City of Tshwane ("CoT") has contracted for the procurement and installation of a fibre
      broadband network ("CoT project"). Nexus has in turn been contracted by TT to complete the build and
      implementation of the CoT project. In the prior year, CoT initiated legal proceedings to halt progress on
      the project combined with a review of the tender given concerns over internal CoT irregularities related
      to the tender process.

      As at the end of the reporting period, the group had an outstanding balance of R301 million (2018:
      R265 million) outstanding from TT. The increase in the balance from the prior year is as a result of delay
      costs that were invoiced to TT in terms of the agreements entered into.

      Management is of the view that their legal case is sound and that there is a very high probability that
      judgment will go in their favour, which would escalate receipt of the outstanding funding. In addition,
      CoT has commenced with certain initiatives in relation to the project in order to amicably resolve the
      ongoing dispute

      Any potential loss is further negated through the group's right to collect the equipment that has been
      installed due to amounts owing remaining outstanding.

      Management is confident that the judge presiding over the matter will issue judgment in the near future.
      As at year-end management has not raised a loss allowance in respect of the outstanding balance from
      TT. In accordance with IFRS 15; R34 million of the revenue relating to the delay costs charged have been
      constrained at year-end.

11.   FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE

(a)   Accounting classifications and fair values

      The following table shows the carrying amounts and fair values of financial assets and liabilities,
      including their levels in the fair value hierarchy. It does not include fair value information for financial
      assets and financial liabilities not measured at fair value as the carrying amount is a reasonable
      approximation of fair value.

      28 February 2019
                                                                                                  Carrying amount                 Fair value
                                                                                                Designated                                                 
      R millions                                                                             at fair value   Total   Level 1   Level 2   Level 3   Total   
      Financial assets measured                                                                                                                            
      at fair value                                                                                                                                        
      Preference share investment                                                                                                                          
      in Technologies Acceptances                                                                                                                          
      Receivables Proprietary Limited                                                                   21      21         -         -        21      21   
      Cash collateral - Share-linked                                                                                                                       
      incentive ("SLI") hedge*                                                                         108     108       108         -         -     108   
      Investment in Aberdare Cables                                                                                                                        
      Proprietary Limited                                                                               94      94         -         -        94      94   
      Forward exchange contracts                                                                         6       6         -         6         -       6   
                                                                                                       229     229       108         6       115     229   
      Financial liabilities measured                                                                                                                       
      at fair value                                                                                                                                        
      Forward exchange contracts                                                                      (18)    (18)         -      (18)         -    (18)   
                                                                                                      (18)    (18)         -      (18)         -    (18)  
      
      28 February 2018
                                                                                   Carrying amount                                Fair value
                                                                     Designated   Fair value-                                                              
                                                                        at fair       hedging   Available-                                                 
      R millions                                                          value   instruments     for-sale   Total   Level 1   Level 2   Level 3   Total   
      Financial assets                                                                                                                                     
      measured at                                                                                                                                          
      fair value                                                             71             -            -      71        71         -         -      71   
      Equity investments                                                    185             -           21     206         -         -       206     206   
      Forward exchange                                                                                                                                     
      contracts                                                               -            30            -      30         -        30         -      30   
                                                                            256            30           21     307        71        30       206     307   
      Financial liabilities                                                                                                                                
      measured at                                                                                                                                          
      fair value                                                                                                                                           
      Forward exchange                                                                                                                                     
      contracts                                                               -          (96)            -    (96)         -      (96)         -    (96)   
      Contingent                                                                                                                                           
      consideration                                                        (66)             -            -    (66)         -         -      (66)    (66)   
                                                                           (66)          (96)            -   (162)         -      (96)      (66)   (162)   
      
      The carrying amounts of financial assets that are not subsequently measured at fair value i.e. finance
      lease assets and financial assets is considered to approximate the fair value.
      
      The carrying amount of financial liabilities that are not subsequently measured at fair value i.e. financial
      liabilities at amortised cost is considered to approximate the fair value.
      
      The different levels as disclosed in the table above have been defined as follows:
      
      Level 1   Quoted prices (unadjusted) in active markets for identical assets or liabilities.
      
      Level 2   Inputs other than quoted prices included within Level 1 that are observable for the asset or
                liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
      
      Level 3   Inputs for the asset or liability that are not based on observable market date (unobservable
                inputs).
      
(b)   Measurement of fair values

      Valuation techniques and significant unobservable inputs

      The following tables show the valuation techniques used in measuring Level 2 and Level 3 fair values, as
      well as the significant unobservable inputs used.
      Financial instruments measured at fair value
      
                                                                                       Inter-relationship between
                                                               Significant             significant unobservable
                                                               unobservable            inputs and fair value
      Type                Valuation technique                  inputs                  measurements
      
                          Market comparison technique:
                          The fair value of foreign exchange
                          contracts are marked-to-market
      Forward             by comparing the contracted          Not applicable          Not applicable
      exchange            forward rate to the present value        
      contracts           of the current forward rate of an    
                          equivalent contract with the same
                          maturity date
                                                                                       The estimated fair value would
                                                                                       increase (decrease) if:
                                                                                       -  the discount rate were
                                                                                          lower (higher) by 1% then
      Preference share    The dividend growth model was        Discount rate of           the value would increase
      in Technologies     used to determine the fair value     14.68% (2018: 13.50%)      (decrease) by R2 million;
      Acceptances         of the preference share using                                   and
      Receivables         the historic dividends that were     Forecast annual
      Proprietary         received from the investment         perpetuity growth       -  the annual perpetuity
      Limited                                                  0% (2018: 3%)              growth rate were higher
                                                                                          (lower) by 1% then the
                                                                                          value would increase
                                                                                          (decrease) by R2 million.
                          The valuation of the investment
      Investment in       in underpinned by the underlying
      Aberdare Cables     call and put option structure        Contractually           The fair value is driven by
      Proprietary         implemented by the group with        agreed amounts          the put and call structure as
      Limited             the other shareholder to this                                contractually agreed.
                          investment
      
      Transfers

      There were no transfers between levels 1, 2 or 3 of the fair value hierarchy for the years ended
      28 February 2019 and 28 February 2018.

12.   EVENTS AFTER REPORTING PERIOD

      Effective 1 March 2019, the group acquired a 64.59% interest in Altron Aloe Machines for R9.7 million.
      This business forms part of Altron Bytes Document Solutions division.

      The initial accounting for the business combination has not been completed and, as a result, it was
      impracticable for certain IFRS 3 Business Combination disclosures to be made due to the close proximity
      of the acquisition to the financial statements release date.

      The group declared a dividend of 44 cents per share on 8 May 2019.

      The group exercised its put option in respect of the investment in Aberdare Cables Proprietary Limited.
      The directors are not aware of any other events after the reporting period that will have an impact on
      financial position, performance or cash flows of the group.

      R millions                                                                                                                                   2018*   
13.   REVENUE FROM CONTRACTS WITH CUSTOMERS                                                                                                                
13.1  Prior year disclosure                                                                                                                                
      Goods sold                                                                                                                                  12 521   
      Services rendered                                                                                                                            5 084   
      Rental finance income                                                                                                                           76   
                                                                                                                                                  17 681   
      Continuing operations                                                                                                                       14 743   
      Discontinued operations                                                                                                                      2 938   
                                                                                                                                                  17 681  
 
      R millions                                                                                                                           2019    2018*   
13.2  Assets and liabilities related to contracts with customers                                                                                           
      The group has recognised the following assets and liabilities related to                                                                             
      contracts with customers:                                                                                                                            
      Current contract assets                                                                                                               196        -   
      Loss allowance                                                                                                                        (1)        -   
      Total current contract assets                                                                                                         195        -   
      Non-current contract costs capitalised                                                                                                 83        -   
      Current contract costs capitalised                                                                                                     98            
      Total contract costs capitalised                                                                                                      181        -   
      Non-current contract liabilities                                                                                                       87        -   
      Current contract liabilities                                                                                                        1 423        -   
      Total contract liabilities                                                                                                          1 510        -   

      Contract liabilities recognised at the beginning of the year       
                             
      At the beginning of the year, R1 394 million was recognised as a contract                        
      liability. The total amount was recognised as revenue during the current                         
      year, due to the short-term nature of the contracts entered into. The closing                    
      balance represents new contracts entered into where the performance                              
      obligations have not yet been met at year-end. The contract liability is                         
      expected to be recognised as revenue in the next financial year.      
                          
      Revenue in terms of IAS 18                                                                                                                    2019   
      Had the group applied the accounting policies effective in the prior year,                                                                           
      the total revenue would have been:                                                                                                                   
      Revenue                                                                                                                                     20 356   

      Unsatisfied long-term service contracts    
                                                            
      The following table shows unsatisfied performance obligations.   
                                      
      R millions                                                                                                                            2019   2018*   
      Aggregate amount of the transaction price allocated to contracts that are                                                                            
      partially or fully unsatisfied as at 28 February 2019                                                                                3 553       -   
                                                                                                                                           3 553       -   
      Management expects the contract liabilities that are allocated to contracts                                                                          
      with partially or fully unsatisfied performance obligations will be recognised                                                                       
      as follow:                                                                                                                                           
      Within one year                                                                                                                        257       -   
      Within two years                                                                                                                       114       -   
      Thereafter                                                                                                                           3 182       -   
                                                                                                                                           3 553       -   
      
      * The group elected to adopt IFRS 15 using the modified retrospective approach without restating the prior year,
        therefore prior year balances have not been disclosed.
      
13.3  Revenue by segment

      The Altron group is a diversified group which derives its revenues and profits from a variety of sources.

      Segmentation is based on the group's internal organisation and reporting of revenue based upon
      internal accounting presentation.

      Revenue by reportable segment is disaggregated by major product/service and geographic region
      below.
      
      Continuing operations                                   Altron ICT international operations                                          Altron ICT South African operations        
                                                                                      Altron                                             
                                            Altron      Altron         Altron          Bytes        Altron                  Altron       
                                             Bytes       Bytes          Bytes         Secure         Bytes               ICT South        Bytes           Other      Altron ICT                       Corporate              
                                Altron    Document     Managed         People    Transaction       Systems     Altron      African   Technology   international   International   Altron               and con-   Continuing 
      R millions                 Nexus   Solutions   Solutions      Solutions      Solutions   Integration   Karabina   Operations     Group UK      operations      operations    Arrow   Netstar   solidation   operations 
      Revenue by product                                                                                                                 
      Project related revenue      515           -           -              -              -           522         80        1 117          216               2             218        -         -         (42)        1 293 
      Over time                    515           -           -              -              -           522         80        1 117          216               2             218        -         -         (42)        1 293 
      Sale of goods and                                                                                                                  
      related services             150         861         407              -            276           602          -        2 343          320             152             472      499     1 521        (155)        4 680 
      At a point in time           150         861         407              -            245           560          -        2 223          320             152             472      499        85        (105)        3 174 
      Over time                      -          47           -              -             31            42          -          120            -               -               -        -     1 436         (50)        1 506 
      Maintenance, support                                                                                                               
      and outsource services       520         557         761              -            124           580          8        2 550           91              89             180        -         -         (87)        2 643 
      Over time                    520         557         761              -            124           580          8        2 550           91              89             180        -         -         (87)        2 643 
      Training and skills                                                                                                                
      management                     -           -           -            427              -             -          1          428           34               -              34        -         -         (15)          447 
      Over time                      -           -           -            427              -             -          1          428           34               -              34        -         -         (15)          447 
      Software, cloud and                                                                                                                
      related licences,                                                                                                                  
      including software                                                                                                                 
      assurance services             -          33           -             31            168            36          -          268        5 712              42           5 754        -         -        (209)        5 813 
      At a point in time             -          33           -             23            168            36          -          260        4 137              42           4 179        -         -        (154)        4 285 
      Over time                      -           -           -              8              -             -          -            8        1 575               -           1 575        -         -         (55)        1 528 
      Software application                                                                                                               
      and development                -           -           -              -             34           212         16          262            -               -               -        -         -          (9)          253 
      Over time                      -           -           -              -             34           212         16          262            -               -               -        -         -          (9)          253 
      Switching and other                                                                                                                
      transactional services         -           -           -              -            539            75          -          614            -               -               -        -         -         (20)          594 
      Over time                      -           -           -              -            539            75          -          614            -               -               -        -         -         (20)          594 
      Total Revenue              1 185       1 451       1 168            458          1 141         2 027        105        7 535        6 373             285           6 658      499     1 521        (537)       15 676 
      Rental finance income          -          47           -              -              -             -          -           47            -               -               -        -         -            -           47 
      Total Revenue              1 185       1 498       1 168            458          1 141         2 027        105        7 582        6 373             285           6 658      499     1 521        (537)       15 723 
      Revenue by geographic                                                                                                              
      region                                                                                                                             
      South Africa               1 169       1 351       1 056            450          1 120         1 937        105        7 188            5              22              27      494     1 292        (194)        8 807 
      Rest of Africa                16         147         112              1             21            77                     374            2             208             210        5         -         (35)          554 
      Total Africa               1 185       1 498       1 168            451          1 141         2 014        105        7 562            7             230             237      499     1 292        (229)        9 361 
      Europe                         -           -           -              7              -            10          -           17        6 311              17           6 328        -         1        (308)        6 038 
      Rest of world                  -           -           -              -              -             3          -            3           55              38              93        -       228            -          324 
      Total international            -           -           -              7              -            13          -           20        6 366              55           6 421        -       229        (308)        6 362 
      Total Revenue              1 185       1 498       1 168            458          1 141         2 027        105        7 582        6 373             285           6 658      499     1 521        (537)       15 723 
     

      28 February 2019
      Discontinued operations                                                             Discontinued operations
                                                                                                                               Corporate                   
                                                                                   Powertech       Multimedia   Autopage             and   Discontinuing   
      R millions                                                                       Group            Group      Group   consolidation      operations   
      Revenue by product                                                                                                                                   
      Sale of goods and related services                                                 427              761          -               -           1 188   
      At a point in time                                                                 427              761          -               -           1 188   
      Maintenance, support                                                                                                                                 
      and outsource services                                                               -               14          -               -              14   
      Over time                                                                            -               14          -               -              14   
      Total revenue                                                                      427              775          -               -           1 202   
      Revenue by geographic region                                                                                                                         
      South Africa                                                                       394              481          -               -             875   
      Rest of Africa                                                                      33                -          -               -              33   
      Total Africa                                                                       427              481          -               -             908   
      Rest of world                                                                        -              294          -               -             294   
      Total international                                                                  -              294          -               -             294   
      Total revenue                                                                      427              775          -               -           1 202   

14.   CHANGES IN ACCOUNTING POLICIES

      The group has adopted the following new accounting pronouncements as issued by the International
      Accounting Standards Board (IASB), which were effective for the group from 1 March 2018:

      -    IFRS 9 Financial Instruments (IFRS 9).
      -    IFRS 15 Revenue from Contracts with Customers (IFRS 15).

      The changes in accounting policies have been applied retrospectively, however, the comparative
      numbers have not been restated, the cumulative impact of the changes in accounting policies have
      been recognised in opening retained earnings i.e on 1 March 2018.

      Adoption of IFRS 9

      The adoption of IFRS 9 had the following impact on the group:

      -    Change from the IAS 39 incurred loss model to the Expected Credit Loss (ECL) model to calculate impairments on applicable financial assets
      -    Change in classification of the measurement categories for financial instruments.

      Impairments

      Before the adoption of IFRS 9, the group calculated the allowance for credit losses using the incurred loss
      model. Under the incurred loss model, the group assessed whether there was any objective evidence of
      impairment at the end of each reporting period. If such evidence existed the allowance for credit losses
      in respect of financial assets at amortised cost were calculated as the difference between the asset's
      carrying amount and its recoverable amount, being its present value of the estimated future cash flows
      discounted at the original effective interest rate (EIR).

      Under IFRS 9, the group calculates the allowance for credit losses based on the ECLs for financial assets measured at amortised cost,
      finance lease assets, investments at FVOCI and contract assets. ECLs are a probability weighted estimate of credit losses. Credit losses are measured 
      as the present  value of all cash shortfalls, being the difference between the cash flows to the group in accordance with the contract and the cash flows 
      that the group expects to receive. ECLs are discounted at the original EIR of the financial asset.
      
      The impact of applying the ECL model (under the general 3 step approach) on non-current financial assets at amortised cost and at fair value 
      through other comprehensive income was not material on adoption date.
      
      The group applies the simplified approach to determine the ECL for trade receivables, finance lease
      assets and contract assets. This results in calculating lifetime ECLs for these assets. ECLs for trade
      receivables, finance lease assets and contract assets are determined using a simplified parameter-
      based approach.
      
      The table below reconciles the loss allowance as reported on 28 February 2018 in accordance with IAS 39
      to the ECL as determined under IFRS 9 of financial instruments that have been impacted by the adoption
      of IFRS 9:
      
      R millions                                                                                                                                    2018   
      Loss allowance                                                                                                                                       
      Closing balance at 28 February 2018                                                                                                            169   
      Adjustment on adoption of IFRS 9                                                                                                                 3   
      Opening loss allowance as at 1 March 2018                                                                                                      172   

      Due to the conservative approach previously followed, the adoption of IFRS 9 did not result in a material change in 
      the loss allowance on adoption date.39.
      
      Classification, initial recognition and subsequent measurement
      
      IFRS 9 introduces new measurement categories for financial assets, the impact of which is illustrated in
      the table below. From 1 March 2018, the group classifies financial assets in each of the IFRS 9 categories
      based on the group's business model for managing the financial asset and the cash flow characteristics
      of the financial asset.
      
      The group intends to hold the non-current financial assets at amortised costs to maturity to collect
      contractual cash flows and these cash flows consists solely of payments of principal and interest on the
      principal amount outstanding. The group's business model for these instruments is to hold to collect the
      contractual cash flows and is monitored at an investment level.
      
      The group intends to hold the non-current financial assets at FVOCI as long-term strategic investments
      that are not expected to be sold in the short to medium term.
      
                                                                                     Measurement category                       Carrying amount
                                                                                                                     28 February    1 March                
      R millions                                                                           IAS 39           IFRS 9          2018       2018   Difference   
      Non-current financial assets                                                                                                                         
      Participation Loan to TAR                                                Loans and                                                                   
                                                                               receivables          Amortised cost           191        191            -   
      Preference share investment                                                                                                                          
      in TAR                                                                   Available for sale            FVOCI            21         21            -   
      Cash collateral - Share linked                                                                                                                       
      incentive ("SLI") hedge                                                  FVTPL*                        FVTPL            71         71            -   
      Preference share investment in                                           Loans and                                                                   
      Auto X Proprietary Limited                                               receivables*         Amortised cost            91         91            -   
      Investment in Aberdare Cables                                                                                                                        
      Proprietary Limited                                                      FVTPL*                        FVTPL            94         94            -   
      Current financial assets                                                                                                                             
      Cash and cash equivalents                                                Loans and                                                                   
                                                                               receivables          Amortised cost         1 067      1 067            -   
      Trade and other receivables                                              Loans and                                                                   
                                                                               receivables          Amortised cost         3 031      3 028          (3)   
      Forward exchange contracts                                               FVTPL                         FVTPL            30         30            -   
      Non-current financial liabilities                                                                                                                    
      Loans                                                                    Amortised cost       Amortised cost         1 464      1 464            -   
      Loans - contingent consideration                                         FVTPL                         FVTPL            38         38            -   
      Current financial liabilities                                                                                                                        
      Loans                                                                    Amortised cost       Amortised cost           386        386            -   
      Loans - contingent consideration                                         FVTPL                         FVTPL            28         28            -   
      Trade and other payables                                                 Amortised cost       Amortised cost         3 562      3 562            -   
      Bank overdraft                                                           Amortised cost       Amortised cost           972        972            -   
      Forward exchange contracts                                               FVTPL                         FVTPL           101        101            - 
      
      * These financial assets were classified as available for sale in the prior year, however, the measurement of
        these instruments were in accordance with the categories indicated above. These have been amended
        accordingly to present the appropriate classification.

      The reclassification into the new measurement categories of IFRS 9 did not have a significant impact on
      the group. The impact of the reclassifications on financial assets measurement categories was as follows:
      
                                                                                                                                               Amortised   
                                                                                                                                   FVOCI            cost   
                                                                                                                             (Available-      (loans and   
                                                                                                                                for-sale     receivables   
      R millions                                                                                                   FVTPL   under IAS 39)   under IAS 39)   
      Financial assets                                                                                                                                     
      Closing balance at 28 February 2018                                                                            195              21           4 081   
      Change in carrying amount due to change in measurement                                                                                               
      under IFRS 9                                                                                                     -               -             (3)   
      Opening balance at 1 March 2018                                                                                195              21           4 078   

      Transition to IFRS 9
      
      Changes in accounting policies from the adoption of IFRS 9 have been applied retrospectively,
      however, the group has elected not to restate comparative information. Differences between the
      carrying amounts of financial instruments as at 28 February 2018 and 1 March 2018 resulting from the
      initial application of IFRS 9 are recognised in retained earnings. Accordingly, information relating to
      28 February 2018 does not reflect the requirements of IFRS 9 but rather those of IAS 39.
      
      The group has elected as an accounting policy choice to not adopt the hedge accounting requirements
      of IFRS 9, but rather to continue applying the hedge accounting requirements of IAS 39.
      
      Adoption of IFRS 15
      
      IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is
      recognised. It replaced IAS 18 Revenue, IAS 11 Construction Contracts and related interpretations.
      
      Under IFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled for transferring goods or 
      services to a customer when a customer obtains control of the goods or services. For additional information about the group's accounting policy
      relating to revenue recognition, refer to the accounting policies section of the financial statements.
      
      On adoption of IFRS 9 and IFRS 15, the group restated its retained earnings at 1 March 2018 as follows:

      R millions                                                                                                                                    2018   
      Retained earnings - as previously reported at 28 February 2018                                                                                       
      Closing balance at 28 February 2018                                                                                                          2 543   
      Impact on the adoption of IFRS 9                                                                                                               (3)   
      Impact on the adoption of IFRS 15                                                                                                                2   
      Opening retained earnings - 1 March 2018                                                                                                     2 542   
      
      The nature of the changes in the accounting policies are set out below:
      
      Project related revenue
      
      Changes in the accounting policy relate to certain broadband rollout projects where goods and services were provided to customers, in terms
      of which the costs and related revenue relating to equipment delivered at the respective client site, was historically recognised on a milestone
      basis upon delivery.
      
      The group reviewed its contracts relating to these arrangements and in terms of IFRS 15, the goods and services were concluded to be part
      of a combined performance obligation. In addition, taking into account the guidance in IFRS 15 as it relates to uninstalled materials, the group
      resolved that the cost of the uninstalled materials (delivered equipment) be excluded from measuring the progress in these contracts. This 
      resulted in the costs (i.e. fulfilments costs) and related revenue billed to the client (contract liabilities) in respect of open contracts on adoption
      date, being deferred in the opening balance sheet and subsequently recognised during the current financial reporting period.

      Cloud services and related licences

      The group reviewed its accounting policy for the sale of cloud services (and related licences) on adoption of IFRS 15. Previously, management
      applied their judgement in determining the accounting in accordance with the "risks and rewards" approach followed under IAS 18, which resulted
      in these arrangements being accounted for by the group as the principal. One of the considerations applied in reaching this conclusion was the 
      consideration of credit risk.
      
      Under IFRS 15, based on the concept of "control" and the transfer thereof; and the change in the criteria to be considered when assessing
      whether an arrangement should be accounted for on a principal or agent basis, these arrangements are now accounted for by the group as 
      an agent in terms of IFRS 15. One of the previously relevant indicators, i.e. credit risk is no longer included in the guidance under IFRS 15
      further supporting the conclusion reached.

      Transition to IFRS 15
      
      Changes in accounting policies from the adoption of IFRS 15 have been applied retrospectively, however,
      the group has elected not to restate comparative information. The cumulative impact of IFRS 15 is
      recognised as an adjustment in retained earnings, on 1 March 2018. Accordingly, information relating
      to 28 February 2018 does not reflect the requirements of IFRS 15 but rather those of IAS 18.
      
      The group applied the following practical expedients when applying IFRS 15:
      
      1. The group has elected to apply IFRS 15 only to contracts that are not completed as at the date of initial application.

      2. For contracts that were completed that had variable consideration, the transaction price at the date that the contract was completed was 
         used, rather than estimating variable consideration amounts.
      
      3. For contracts that were modified before the adoption date, the contracts were not restated for these contract modifications and instead, the 
         aggregate effect of all modifications that occurred before the adoption date were considered in aggregate when identifying the satisfied and 
         unsatisfied performance obligations, determining the transaction price and allocating the transaction price to the satisfied and unsatisfied 
         performance obligations.
      
      4. For all reporting periods presented before the date of initial application, we have elected not to disclose the amount of the transaction price 
         allocated to the remaining performance obligations and an explanation of when we expect to recognise that amount as revenue.
      
      5. We have elected when, at contract inception, the period between the transfer of a promised good or service and payment for that good or 
         service will be one year or less, not to account for the effects of the time value of money; and

15.   STANDARDS AND INTERPRETATIONS IN ISSUE BUT NOT YET EFFECTIVE

      The group is required to adopt IFRS 16 Leases from 1 March 2019. The group has made an initial
      assessment of the impact that the standards will have on its financial statements and is in the process of
      quantifying the impact on equity as at 1 March 2019. Further the group is in the process of implementing
      changes to its processes relating to leases.

      IFRS 16 Leases

      IFRS 16 was issued in January 2016. It will result in almost all leases being recognised on the statement of
      financial position by lessees, as the distinction between operating and finance leases is removed. Under
      the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are
      recognised. Practical expedients are available for short-term and low-value leases. Lessors continue
      to classify leases as operating or finance, with IFRS 16's approach to lessor accounting substantially
      unchanged from its predecessor, IAS 17 Lease (IAS 17).

      The group expects that the most significant impact of the new standard will result from its current
      property and network site operating leases. As at the reporting date, the group has non-cancellable
      operating lease commitments of R481 million. Of these commitments, approximately R73 million relates to
      non-lease components of operating leases which will continue to be recognised as an expense in profit
      or loss as they are incurred.

      For lease commitments (excluding non-lease components, short-term and low-value leases) the group
      will recognise lease liabilities, representing the present value of the future minimum lease payments
      discounted at a rate appropriate and after taking into account the lease term, value, economic
      environment and security over the asset applicable, on 1 March 2019, and corresponding right-of-use
      assets in respect of these leases, adjusted for prepayments recognised as at 28 February 2019.

      On adoption of IFRS 16 operating lease costs (other than short-term and low value lease) will no longer
      be recognised as part of operating expenses. The group intends to apply a threshold of R100 000
      for assessing what constitutes low-value assets. For the year ended 28 February 2019 the group has
      recognised lease expenses of R176 million. Of these operating lease expenses, approximately R39
      million relates to non-lease components of operating leases which will continue to be recognised as an
      expense in operating expenses as they are incurred.

      As a result of the new accounting rules, EBITDA (as defined) used to measure segment results is expected
      to increase, as the total operating lease payments were previously included in EBITDA (as defined) under
      IAS 17. The group will recognise depreciation on the right-of-use assets and interest on the lease liabilities
      over the lease term in profit or loss - these charges are excluded from EBITDA (as defined).

      Due to the impact of reducing finance charges over the life of the lease, the impact on earnings
      will initially be dilutive, before being accretive in later periods. Furthermore, leases denominated in
      currencies that are not the functional currency of the operation will increase foreign exchange exposure.
      Therefore, the group expects that net profit after tax may decrease for 2019 as a result of adopting the
      new standards.

      Cash generated from operations will increase, as lease costs will no longer be included in this category
      of cash flows. Interest paid will increase, as it will include the interest portion of the lease liability
      repayments. This is expected to have a net positive impact on net cash generated from operating
      activities. Net cash used in financing activities will increase, as the capital portion of lease liability
      repayments will be included within repayment of borrowings.

      The group's activities as a lessor are not material and hence the group does not expect any significant
      impact on the financial statements. However, some additional disclosures will be required in the next
      reporting period.

      The Group will apply the standard using the modified retrospective approach on 1 March 2019 with
      optional practical expedients and will apply its election consistently to all of its leases. Therefore, the
      cumulative effect of adopting IFRS 16 will be recognised as an adjustment to the opening balance of
      retained earnings at 1 March 2019, with no restatement of comparative information. Right-of-use assets
      will be measured at the amount of the lease liability on adoption (adjusted for any prepaid lease
      expenses). The group has elected to apply the practical expedient to not reassess the lease definition.

      Other standards

      The following relevant amended standards and interpretations are not expected to have a significant
      impact on the Group's consolidated financial statements.

      -    IFRIC 23 Uncertainty over Income Tax Treatments.

16.   REPORTING SEGMENTS

      An operating segment is a component of the group that engages in business activities from which it may
      earn revenues and incur expenses, including revenues and expenses that relate to transactions with any
      of the group's other components. The group determines and presents operating segments based on the
      information that is internally provided to the group's executive committee and board of directors, who
      is the group's chief operating decision-makers ("CODM"). An operating segment's operating results are
      reviewed regularly by the CODM to make decisions about resources to be allocated to the segment and
      assess its performance, and for which discrete financial information is available. Segment results that
      are reported to the CODM include items directly attributable to a segment as well as those that can be
      allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the
      group's headquarters and the subgroup's headquarters).

      The segmental information has been prepared to highlight the continuing and discontinued operating segments. 
      This provides more insight into revenue and earnings before interest, tax, depreciation and amortisation before capital 
      items (EBITDA before capital items), disclosed in the statement of comprehensive income.

      The below is categorised in accordance with the group's reporting segments. The segment revenues and
      earnings before interest, tax, depreciation, amortisation and capital items (EBITDA and capital items) by
      each of the group's reportable segments are the key performance measures reviewed by the CODM and
      are summarised as follows:
      
                                                                                                   Revenue                EBITDA before capital items
                                                                                                            Growth                                Growth   
      R millions                                                                           2019      2018        %        2019            2018         %   
      Altron Nexus                                                                        1 185     1 155        3         123              80        54   
      Altron Bytes Document Solutions                                                     1 498     1 353       11          77              70        10   
      Altron Bytes Managed Solutions                                                      1 168     1 027       14          78              74         5   
      Altron Bytes People Solutions                                                         458       438        5          29              29             
      Bytes Secure Transaction                                                                                                                             
      Solutions                                                                           1 141     1 073        6         289             253        14   
      Bytes Systems Integration                                                           2 027     1 897        7         119             123       (3)   
      Altron Karabina                                                                       105         -                   10               -             
      Altron ICT South African                                                                                                                             
      operations                                                                          7 582     6 943        9         725             629        15   
      Bytes Technology Group UK                                                           6 373     6 088        5         368             206        79   
      Other international operations                                                        285       244       17           7              16      (56)   
      Altron ICT international                                                                                                                             
      operations                                                                          6 658     6 332        5         375             222        69   
      Corporate and consolidation                                                                                                                          
      (other)                                                                                 -         -                   29              33      (12)   

                                                                                                     Revenue               EBITDA before capital items
                                                                                                              Growth                              Growth   
      R millions                                                                             2019      2018        %       2019           2018         %   
      Altron ICT                                                                           14 240    13 275        7      1 129            884        28   
      Altron Netstar*                                                                       1 521     1 378       10        582            490        19   
      Altron Arrow                                                                            499       560     (11)         29             33      (12)   
      Corporate and consolidation                                                                                                                          
      (other)                                                                               (537)     (470)     (14)      (107)           (94)      (14)   
      Normalised continuing                                                                                                                                
      operations                                                                           15 723    14 743        7      1 633          1 313        24   
      Foreign currency gains on                                                                                                                            
      deferred acquisition liability                                                                                                         6             
      Retrenchment and                                                                                                                                     
      restructuring costs                                                                                                  (26)           (77)             
      Acquisition related costs                                                                                                            (8)             
      Continuing operations                                                                                                                                
      as reported                                                                          15 723    14 743        7      1 607          1 234        30   
      Altech Multimedia                                                                       775       974     (20)         15             44      (66)   
      Altech Autopage                                                                           -         -                   5           (23)       122   
      Powertech Group                                                                         427     1 964     (78)         34           (13)       362   
      Discontinued operations                                                               1 202     2 938     (59)         54              8       575   
      Altron Group                                                                         16 925    17 681      (4)      1 661          1 242        34   
      
      Segment EBITDA before capital items can be reconciled to operating profit before capital items as
      follows:
      
      R millions                                                                                                                            2019    2018   
      EBITDA before capital items                                                                                                          1 661   1 242   
      Reconciling items:                                                                                                                                   
      Depreciation                                                                                                                         (179)   (149)   
      Amortisation                                                                                                                         (134)   (103)   
      Amortisation of costs incurred to fulfil contracts*                                                                                  (253)   (199)   
      Total operating profit before capital items                                                                                          1 095     791   
      Discontinued operations profit before capital items                                                                                   (54)     (8)   
      Continuing operations profit before capital items                                                                                    1 041     783   
      
      * Costs incurred to obtain contracts and capital rental devices have been reclassified to amortisation.
        The expense was previously included in operating costs before capital items.

      Revenues/EBITDA before capital items from segments below the quantitative thresholds
      are attributable to smaller operating segments of the Altron group.
      
      None of those segments have met any of the quantitative thresholds for determining reportable
      segments for the reportable periods.
      
      Quantitative thresholds have been calculated based on totals for the Altron group and not per
      subgroup.

17.   CORRECTION OF PRIOR YEAR ACCOUNTING TREATMENT

      During the current year, the group undertook a detailed review of the contracts with customers
      and vendors in respect of specific business operations. Upon conclusion of this process, the group
      discovered that the terms and conditions of certain contracts had not been correctly accounted for
      historically. As a consequence, these contracts had an impact on the presentation and disclosure of the
      prior year balances.

      Matters identified 

      The group sells goods under finance lease arrangements in certain parts of its business. As part of these
      transactions, the group enters into back-to-back arrangements with an external party to receive cash
      from the transaction on day one. As the customer settles the monthly lease instalments with the group,
      the group settles its monthly instalments with the external financier. In previous years, the finance lease
      asset and the finance lease liability were set off on presentation in the balance sheet. Upon analysis
      of the IFRS requirements for set off, i.e. that the group currently has a legally enforceable right to set off
      the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the
      liability simultaneously, were not met. Due to the offset requirements not being met in accordance with
      the requirements of IFRS, the finance lease asset and finance lease liability needed to be presented
      separately on the balance sheet and as a result the comparative balances were accordingly restated.

      The group enters into arrangements in terms of which it acts as a clearing/collecting agent on behalf of certain merchants.
      In terms of these arrangements, the group collects the cash on behalf of the merchant which is paid into the group's bank account,
      after which it is paid over by the group to the merchant immediately once the payment clears the bank account. In prior years, the 
      group netted the amounts received into its bank account and the amounts payable to the merchant when presenting its balance
      sheet. Upon reflection, it was concluded that the balance sheet presentation as previously applied was not appropriate and the cash
      received as well as the payable to the merchant should have been included on a gross basis, resulting in the comparative balances
      being restated. As this arrangement had an impact on the cash on hand balances maintained by the group, the statement of cash
      flow has been restated to reflect the impact of the additional cash on hand at the end of the preceeding reporting periods.

      The above has been corrected by updating each of the affected financial statement line items for the prior period noted below. 
      The corrections did not have an impact on the consolidated statement of comprehensive income:

                                                                          Year ended 28 February 2017               Year ended 28 February 2018
                                                                              As                                        As                                 
                                                                      previously                                previously                                 
      R millions                                                        reported       Adjustments   Restated     reported        Adjustments   Restated   
      Statement of                                                                                                                                         
      financial position                                                                                                                                   
      (Extract)                                                                                                                                            
      Non-current assets                                                                                                                                   
      Finance lease assets                                                    98                89        187          113                 77        190   
      Current assets                                                                                                                                       
      Trade and other                                                                                                                                      
      receivables                                                          3 270                90      3 360        2 669                 83      2 752   
      Cash and cash                                                                                                                                        
      equivalents                                                            768               299      1 067        1 373                173      1 546   
      Non-current                                                                                                                                          
      liabilities                                                                                                                                          
      Loans                                                                1 413                89      1 502        1 923                 77      2 000   
      Current liabilities                                                                                                                                  
      Loans                                                                  314                90        404          312                 83        395   
      Trade and other                                                                                                                                      
      payables                                                             3 582               299      3 881        3 177                173      3 350  
      
                                                                                                                              28 February 2018
                                                                                                                         As                                
                                                                                                                 previously                                
      R millions                                                                                                   reported       Adjustments   Restated   
      Cash flow (Extract)                                                                                                                                  
      Cash flows from operating activities                                                                                                                 
      Cash generated from operations                                                                                    936               126      1 062   
      Cash flow                                                                                                                                            
      (Extract)                                                                                                                                            
      CASH FLOWS FROM OPERATING ACTIVITIES                                                                                                                 
      Cash generated from operations                                                                                    936               126      1 062   
      CASH FLOWS USED IN FINANCING ACTIVITIES                                                                                                              
      Loans advanced                                                                                                     67             (128)        195   
      Loans repaid                                                                                                    (627)               128      (755)   
      Net decrease in cash and cash equivalents                                                                       (549)               126      (423)   
      Net cash and cash equivalents at the beginning of the year                                                        329               173        502   
      Net cash and cash equivalents at the end of the year                                                            (204)               299         95   
      
18.   COMMITMENTS
                                                                                         
      R Millions                                                                                            2019  2018
      Non-cancellable operating leases                                                              
      At year-end the group had outstanding commitments under non-cancellable                       
      operating leases, which fall due as follows:                                                  
      Within one year                                                                               
      Property                                                                                               114   155   
      Plant, equipment and vehicles                                                                           13    22   
                                                                                                             127   177   
      One to five years                                                                                                  
      Property                                                                                               250   252   
      Plant, equipment and vehicles                                                                           15    48   
                                                                                                             265   300   
      Thereafter                                                                                                         
      Property                                                                                                44    35   
      Plant, equipment and vehicles                                                                           45     1   
                                                                                                              89    36   
      Total                                                                                                  481   513   
      Capital commitments                                                                           
      Significant capital expenditure authorised and contracted for at the end of the               
      reporting period but not recognised as liabilities are as follow:                             
      Property, plant and equipment                                                       6     -   
                                                                                          6     - 



19.   OTHER MATERIAL TRANSACTIONS DURING THE CURRENT YEAR

      During the current year, the group renegotiated its long-term debt financing with the banks at more
      favourable terms. A long-term facility of R2 billion was granted to the group of which R1.3 billion was
      drawn at 28 February 2019. The previous drawn facility of R1.2 billion was settled on 28 February 2019.

      The remaining undrawn facility at year-end is R700 million. At year-end, R267 million is repayable within
      12 months and R1 033 million repayable after 12 months.

      During the current year the group acquired property, plant and equipment at a cost of R190 million, consisting 
      mainly of land, buildings and leasehold improvements, motor vehicles, furniture and equipment and IT equipment 
      and software. During the current year the group disposed of property, plant and equipment with a carrying amount of 
      R43 million, consisting mainly of land, buildings and leasehold improvements and motor vehicles, furniture and equipment. 

SUPPLEMENTARY INFORMATION
(TOTAL OPERATIONS)

R millions                                                                                                                                  2019    2018   
Total operations                                                                                                                                           
Depreciation and amortisation*                                                                                                               566     451   
Net foreign exchange (profits)/losses                                                                                                       (11)      43   
Cashflow movements                                                                                                                                         
Capital expenditure (including intangibles)                                                                                                  283     278   
Net additions to costs to fulfil contracts                                                                                                  (42)      58   
Additions to costs to fulfil contracts                                                                                                       246     257   
Amortisation of costs incurred to fulfil contracts during the year                                                                         (353)   (199)   
Contract costs written off                                                                                                                  (35)       -   
Lease commitments                                                                                                                            481     513   
Payable within the next 12 months:                                                                                                           127     180   
Payable thereafter:                                                                                                                          354     333   
Weighted average number of shares                                                                                    (millions)              371     370   
Diluted average number of shares                                                                                     (millions)              374     373   
Shares in issue at the end of the year                                                                               (millions)              371     371   
Ratios                                                                                                                                                     
EBITDA margin                                                                                                               (%)              9,8     7,0   
ROCE                                                                                                                        (%)             21,4    17,8   
ROE                                                                                                                         (%)             21,3    16,7   
ROA                                                                                                                         (%)             12,0     9,9   
RONA                                                                                                                        (%)             17,3    14,9   
Current ratio                                                                                                                              1,1:1   1,1:1   
Acid test ratio                                                                                                                            0,9:1   0,9:1   

* Amortisation of contract costs and capital rental devices have been reclassified from operating expenses to
  depreciation and amortisation.

CONTACT US

Altron
4 Sherborne Road, Parktown 2193
Gauteng SOUTH AFRICA

PO Box 981, Houghton 2041
Gauteng SOUTH AFRICA

http://www.altron.com 

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