MMG Financial Statements - MICROmega Home ... of the Companies Act of South Africa. Ruan Viljoen...

ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2016

Index |The reports and statements set out below comprise the annual consolidated financial statements presented to the shareholders:

Prepared: Russell Dick CA(SA)Position: Financial DirectorAudited: Nexia SAB&TPosition: Registered Auditors

01 Independent Auditor's Report 03 Directors' Responsibilities and Approval 04 Audit Committee Report 07 Directors' Report 09 Statement of Financial Position10 Statement of Profit and Loss10 Statement of Comprehensive Income11 Statement of Changes in Equity13 Statement of Cash Flows14 Accounting Policies31 Notes to the Annual Financial Statements

Certification by Company Secretary

In my capacity as company secretary, I

hereby confirm, in terms of section 88(2)(e)

of the Companies Act of South Africa, that

for the year ended 31 March 2016, the

Group lodged with the Companies and

Intellectual Property Commission all such

returns as are required of a public

company in terms of the Act and that all

such returns are true, correct and up to

date.

Level of AssuranceThese annual consolidated financial

statements have been prepared in

compliance with the applicable require-

ments of the Companies Act of South

Africa.

Ruan ViljoenCompany Secretary

Independent Auditor’s Report To the Shareholders of MICROmega Holdings Limited Report on the Consolidated Annual Financial Statements We have audited the accompanying consolidated annual financial statements of MICROmega Holdings Limited and its subsidiaries, set out on pages 9 to 74, which comprise the consolidated statement of financial position as at 31 March 2016, the consolidated statements of comprehensive income, the consolidated statements of changes in equity and cash flows for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information. Directors' Responsibility for the Consolidated Annual Financial Statements The company’s directors are responsible for the preparation and fair presentation of these consolidated annual financial statements in accordance with International Financial Reporting Standards, and requirements of the Companies Act of South Africa and for such internal control as the directors determine is necessary to enable the preparation of consolidated annual financial statements that are free from material misstatement, whether due to fraud or error . Auditor's Responsibility Our responsibility is to express an opinion on these consolidated annual financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the consolidated annual financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated annual financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the consolidated annual financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated annual financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated annual financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

01

Page | 2

Opinion In our opinion, these consolidated annual financial statements present fairly, in all material respects, the consolidated financial position of the MICROmega Holdings Limited and its subsidiaries as at 31 March 2016, and its consolidated financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards, and the requirements of the Companies Act of South Africa. Other reports required by the Companies Act As part of our audit of the consolidated annual financial statements for the year ended 31 March 2016, we have read the Directors’ Report, the Audit Committee’s Report and Company Secretary’s Certificate for the purpose of identifying whether there are material inconsistencies between these reports and the consolidated annual audited financial statements. These reports are the responsibility of the respective preparers. Based on reading these reports we have not identified material inconsistencies between these reports and the audited consolidated financial statements. However, we have not audited these reports and accordingly do not express an opinion on these reports. Report on Other Legal and Regulatory Requirements In terms of the IRBA Rule published in Government Gazette Number 39475 dated 04 December 2015, we report that Nexia SAB&T has been the auditor of MICROmega Holdings Limited and its subsidiaries for 5 years.

Nexia SAB&T Registered Auditor Per: M. F. Sulaman Director Date: 26 May 2016

02

03

Directors' Responsibilities and Approval |

DC King Executive Chairm an

IG Morris CEO

The directors are required by the Companies Act to maintain adequate accounting records and are responsible for the content and integrity

of the annual consolidated financial statements and related financial information included in this report. It is their responsibility to ensure

that the annual consolidated financial statements satisfy the financial reporting standards as to form and content and present fairly the

statement of financial position, results of operations and business of the Group, and explain the transactions and financial position of the

business of the Group at the end of the financial year. The annual consolidated financial statements are based upon appropriate accounting

policies consistently applied throughout the Group and supported by reasonable and prudent judgements and estimates.

The directors acknowledge that they are ultimately responsible for the system of internal financial control established by the Group and

place considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the

board sets standards for internal control aimed at reducing the risk of error or loss in a cost effective manner. The standards include the

proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of

duties to ensure an acceptable level of risk. These controls are monitored throughout the Group and all employees are required to maintain

the highest ethical standards in ensuring the Group's business is conducted in a manner that in all reasonable circumstances is above

reproach.

The focus of risk management in the Group is on identifying, assessing, managing and monitoring all known forms of risk across the Group.

While operating risk cannot be fully eliminated, the Group endeavours to minimise it by ensuring that appropriate infrastructure, controls,

systems and ethical behaviour are applied and managed within predetermined procedures and constraints.

The directors are of the opinion, based on the information and explanations given by management, that the system of internal control

provides reasonable assurance that the financial records may be relied on for the preparation of the annual consolidated financial

statements. However, any system of internal financial control can provide only reasonable and not absolute, assurance against material

misstatement or loss. The going concern basis has been adopted in preparing the annual consolidated financial statements. Based on

forecasts and available cash resources, the directors have no reason to believe that the Group will not be a going concern in the foreseeable

future. The annual consolidated financial statements support the viability of the Group.

The annual consolidated financial statements have been audited by the independent auditing firm, Nexia SAB&T, wh been given ich has

unrestricted access to all financial records and related data, including minutes of all meetings of shareholders, the board of directors and

committees of the board. The directors believe that all representations made to the independent auditor during the audit were valid and

appropriate. The external auditors unmodified report is presented on page 2 to 3. The annual consolidated financial statements as set out on

pages 9 to 74, approved by the board on 26 May 2016 and where signed on their behalf by:

In accordance with section 94(7) of the Companies Act and the principles of King III, the Audit Committee hereunder presents its report for

the 2016 financial year.

At the start of the financial year the Audit Committee comprised three non-executive directors all of whom were independent and one,

namely Alan Swan, being the lead independent non-executive director. In compliance with the JSE Listings Requirements and King III, the

chairperson of the Committee is Deborah di Siena. The other member is Grant Jacobs. At the conclusion of the meeting on the 3rd of

September 2015, it was announced that Alan Swan would be leaving the Committee due to his resignation from the board on 9 September

2015. Donald Passmore was appointed to the board of directors as well as the Audit Committee on 17 March 2016.

The executive directors and representatives from the independent external auditor, Nexia SAB&T, are invited to attend all Audit Committee

meetings. The Internal Audit Manager was changed as a result of Ryan Prettirajh leaving the company and being replaced by Yolande

Erasmus.

The Audit Committee is required to meet at least twice a year. During the 2016 financial year the Committee met four times and attendance

thereat is set out below.

Name

DA di Siena (Chairperson)

GE Jacobs

AB Swan*

DC King

IG Morris

DSE Carlisle

RB Dick

PH Duvenhage

TW Hamill

RC Lewin

R Prettirajh

Y Erasmus

Nexia SAB&T

RJ Viljoen (Company Secretary)

Yes

Yes

Yes

Invitee

Invitee

Invitee

Invitee

Invitee

Invitee

Invitee

Invitee

-

Invitee

Yes

Yes

Yes

Yes

Invitee

Invitee

Invitee

Invitee

Invitee

Invitee

Invitee

-

Invitee

Invitee

Yes

Yes

Yes

No

Invitee

Invitee

Invitee

Invitee

Invitee

-

Invitee

-

Invitee

Invitee

Yes

Yes

Yes

No

-

Invitee

Invitee

Invitee

Invitee

Invitee

Invitee

-

Invitee

Invitee

Yes

2015/05/28 2015/09/03 2015/11/05 2015/03/03

Audit Committee Report |

In accordance with the Audit Committee’s approved terms of reference, the Committee discharged, inter alia, the following responsibilities

during the 2016 financial period:

Reviewed the interim results, annual financial statements, trading updates, SENS announcements and other similar documents and

provided comments thereon to the board of directors.

Made submissions to the board on matters concerning MICROmega’s accounting policies, financial controls and reporting.

Generally reviewed the Group’s financial risk management and controls and held discussions with the independent external auditor,

Nexia SAB&T.

Satisfied itself with the appropriateness of the expertise and adequacy of resources of the finance function.

Monitored the Group’s combined assurance model and ensured that significant risks facing the Group were adequately addressed and

passed onto the Risk Committee where applicable.

Ensured that Nexia SAB&T maintained its independence and objectivity at all times.

Assessed the quality and effectiveness of the audit process and approved the fees paid to the independent external auditor for the 2016

financial period.

Reviewed the directors report to be included in the financial statements prior to endorsement by the board.

Evaluated significant judgements and reporting decisions in the annual integrated report and the clarity and completeness of the

proposed financial and sustainability disclosures.

* Resigned on 9 September 2015

04


At the request of the board, the Committee considers whether the annual report is fair, balanced, understandable and whether it provides

the information necessary for shareholders to assess the Group’s performance, business model and strategy. The Committee reports to the

board on its activities, identifying any matters in respect of which it considers that action or improvement is needed and making

recommendations as to the steps to be taken there upon.

In order to ensure that the Audit Committee performed in accordance with the responsibilities laid out in the Committee’s terms of

reference, a checklist of matters to be considered at each meeting is drafted and circulated to the members. This checklist guides the content

of the agenda for each meeting. It assists Committee members in ensuring that MICROmega complies with required accounting practices

and all relevant matters are timeously brought to the attention of the Audit Committee. Input from the independent external auditors at

Audit Committee meetings provides Committee members with greater insight into the financial management of the Group. The Audit

Committee is therefore satisfied that the financial statements of the Group comply with International Financial Reporting Standards (IFRS)

and are consistent with the previous annual consolidated financial statements and that no matters of significance have been raised during

the 2016 financial year.

The Group has a formal policy on the provision of non-audit services by the independent external auditor that specifies those services that

the auditor is prohibited from providing to the MICROmega Group, as well-as those that require pre-approval by the Audit Committee.

During the year under review Nexia SAB&T did not provide any non-audit services to MICROmega. The Audit Committee duly satisfied itself

that in accordance with section 94(8) of the Companies Act, Nexia SAB&T, the external auditors of the Group, remain independent. Nexia

SAB&T has confirmed to the Committee its continuing independence and compliance with the MICROmega policy on auditor

independence.

The Audit Committee has considered the appropriateness of the expertise and experience of the Group Financial Director, Russell Dick,

together with MICROmega’s finance team, and is satisfied that Russell Dick and the finance team have the necessary knowledge, skills and

expertise to perform the finance function for the Group.

MICROmega’s internal audit department provides the Group with an independent and objective assurance function and continues to

operate in accordance with the internal audit charter and internal audit plan approved by the board. The internal audit department reports

directly to the Audit Committee and has unrestricted access to the Chairman of the Audit Committee.

The internal auditor provides the Audit Committee with updates as to the progress made by the department and brings any significant risks

or issues to the attention of the Audit Committee at every Audit Committee meeting or when required.

MICROmega’s internal audit department has operated successfully in the past financial period in accordance with the internal audit plan. This

plan is a rolling three-year strategic and flexible annual audit plan using appropriate risk-based methodology, including any risks or control

concerns identified by management. As part of this, during the 2016 financial period, internal audit performed planned engagements on

human resources, payroll, learnerships, supply chain management and general internal controls for the Group.

The board is responsible for the internal financial controls and systems in use throughout the Group and the internal audit department has

assisted the board in evaluating the effectiveness of those internal controls. The identification of possible risks and the implementation of

adequate internal financial controls are delegated to the managing directors of each subsidiary, while the board has the ultimate authority

and responsibility for ensuring that systems of internal financial controls are effectively implemented and monitored. The Audit Committee

is satisfied that during the 2016 financial period MICROmega maintained adequate systems of internal control over the financial reporting of

the Group and has ensured that Group assets were adequately safeguarded and nothing has come to the attention of the Committee

members that indicate a material breakdown in the functioning of the Group’s internal control systems.

MICROmega implemented a whistle blowing policy in 2011 in order to demonstrate its commitment to working towards a culture of fairness,

openness and transparency. In conjunction with the whistle blowing policy, the MICROmega Holdings Ethics Hotline, which remains

independently operated by KPMG, provides employees with a mechanism to anonymously bring any unethical business practices to the

attention of management. All reports received from the Ethics Hotline are forwarded to the designated representatives at MICROmega and

to the Audit Committee for review and consideration is made as to whether the action taken by the designated representative was

appropriate or whether further action is required. No incidents were reported during the financial year.

05


The Audit Committee reviews the going-concern status of the Group by considering the documentation prepared by management and the

assurance provided by the Group Financial Director at each meeting and therefore supports the going-concern statement by the board.

MICROmega’s combined assurance model aims to optimise the assurance coverage obtained on the risks affecting the Group. Within the

Group there is interplay between a number of key assurance providers, which includes the Audit and Risk Committees as well as the internal

and external audit functions. This is supported by the assurance provided on an operational and structural level by the executive

management and the management at an individual subsidiary level.

The management team of each subsidiary in the Group identifies and addresses the risks on the day-to-day operations of that particular

business. Monthly management meetings are held with the Group executives during which these issues are discussed. The internal audit

department examines, evaluates and reports on the activities and appropriateness of the systems of internal control, risk management and

governance processes, while the external auditor performs the annual statutory audit in accordance with international auditing standards

and reports in detail on the results of the audit to the subsidiary management, the Audit Committee and the board of directors. Lastly, the

Risk Committee is responsible for monitoring the appropriateness of the combined assurance model.

The Audit Committee is satisfied that the current combined assurance model utilised by the Group ensures that significant risks facing the

Group are adequately addressed.

In accordance with the principles of King III, the Audit Committee fulfilled its oversight role in respect of MICROmega’s annual integrated

report and the reporting process and considered and assessed the information disclosed in the integrated report against the financial,

operational, governance and other information known to the Committee and is satisfied that the information is reliable and consistent with

the financial results.

DA di Siena

Chairperson

Audit Committee

06

The directors present their report for the year ended 31 March 2016.

1. REPORTING ENTITY

MICROmega Holdings Limited is a Group domiciled in the Republic of South Africa. The address of the Group's registered office is 66 Park

Lane, Sandton. The annual consolidated financial statements of the Group as at and for the year ended 31 March 2016, comprise the Group

and its subsidiaries (together referred to as the “Group” and individually as “Group entities”) and the Group’s interest in associates.

2. REVIEW OF ACTIVITIES

MICROmega is a holding company with controlling interests in a number of operating subsidiaries and is listed on the main board of the

South African Johannesburg Stock Exchange (JSE) under the support services sector. Our businesses are primarily focused on the provision

of information technology, financial services, occupational health and safety and labour supply services.

The operating results and consolidated statement of financial position of the Group are fully set out in the attached annual consolidated

financial statements and do not in our opinion require any further comment.

3. GOING CONCERN

The annual consolidated financial statements have been prepared on the basis of accounting policies applicable to a going concern. This

basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities,

contingent obligations and commitments will occur in the ordinary course of business.

4. EVENTS AFTER REPORTING DATE

All events subsequent to the date of the annual consolidated financial statements and for which the applicable financial reporting

framework require adjustment or disclosure have been adjusted or disclosed.

The directors have declared a dividend of 43 cents per share (2015: 35 cents per share) for the year ended 31 March 2016. The final dividend

has not been included as a liability in these annual consolidated financial statements as it was declared subsequent to the year end.

The directors are not aware of any other matters or circumstances arising since the end of the financial year to the date of this report that

could have a material effect on the financial position of the Group.

5. DIRECTORS' INTEREST IN CONTRACTS

On 1 September 2015 the Group disposed of its interest in GIM Holdings Proprietary Limited to Kamberg Investment Holdings Proprietary

Limited. The entire issued share capital of Kamberg Investment Holdings Proprietary Limited is held by the Greg Morris Family Trust, of which

Mr IG Morris, the chief executive officer of the Group, is the sole beneficiary.

To our knowledge none of the directors, other than those disclosed above, had any interest in contracts entered into during the year under

review.

6. AUTHORISED AND ISSUED SHARE CAPITAL

No changes were approved or made to the authorised or issued share capital of the company during the year under review, other than the

disclosed in note 14.

07

Directors' Report |

08

Directors' Report |

7. BORROWING LIMITATIONS

In terms of the Memorandum of Incorporation of the company, the directors may exercise all the powers of the company to borrow money,

as they consider appropriate.

8. DIVIDENDS

Dividends of R40.2 million (2015 : R21.2 million) were declared and paid to the shareholders during the year.

The directors have declared a dividend of 43 cents per share (2015: 35 cents per share) for the year ended 31 March 2016. The final dividend

has not been included as a liability in these annual consolidated financial statements as it was declared subsequent to the year end.

9. DIRECTORS

The directors of the company during the year and to the date of this report are as follows:

DC King Executive Chairman

IG Morris Chief Executive Officer

DSE Carlisle Executive Director

RB Dick Financial Director

AW Swan (Resigned 9 September 2015) Independent Non-Executive Director

DA Di Siena Independent Non-Executive Director

GE Jacobs Independent Non-Executive Director

RC Lewin Non-Executive Director

PH Duvenhage Non-Executive Director

TW Hamill Non-Executive Director

D Passmore (Appointed 17 March 2016) Lead Independent Non-Executive Director

10. SECRETARY

The designated company secretary is RJ Viljoen.

11. AUDITORS

Nexia SAB&T were the auditors for the year under review.

Other reserves

6 261

Retained earnings 330 218

Non-controlling interest 68 991

LIABILITIES

Non-current liabilities

73 125

Other financial liabilities 11 371

Deferred vendor payments 13 333

Deferred tax liabilities 48 421

Current liabilities

235 410

Trade and other payables 166 674

Other financial liabilities 3 101

Income tax payable 9 688

Deferred vendor payments 55 947

Bank overdraft -

TOTAL LIABILITIES 308 535

TOTAL EQUITY AND LIABILITIES 980 208

Net asset value per share (cents) 540.50

Net tangible asset value per share (cents) 152.86

2015

ASSETS

Non-current assets

540 579

Property, plant and equipment 58 711

Intangible assets 432 242

Investments in associates 12 857

Other investments 283

Other financial assets

-

Deferred tax assets 36 486

Current assets

439 629

Inventories 28 377

Trade and other receivables 239 225

Income tax receivable 8 251


15 891

Cash and cash equivalents 147 885

TOTAL ASSETS 980 208

EQUITY AND LIABILITIES

EQUITY

671 673

Share capital and share premium 266 203

12 333

411 651

75 672

103 991

4 998

27 343

71 650

261 818

161 646

3 347

11 879

35 409

49 537

365 809

1 132 317

624.20

109.07

2016

691 877

53 558

581 276

13 648

-

5 063

38 332

440 440

41 851

300 563

6 575

2 024

89 427

1 132 317

766 508

266 852

Statement of Financial Position |

09

Figures in R'000 Note(s)

6

7

8

9

10

19

11

21

10

12

13

14

15

16

17

18

19

20

17

18

21

13

Revenue

Cost of sales

Gross profit

Other net income/(expenses)

Distribution expenses

Administration expenses

Operating profit

Finance income

Finance cost

Share of profit of equity accounted associate

Profit before tax

Tax expense

Profit for the year

Profit attributable to

Owners of the parent

Non-controlling interest

Attributable earnings per share (cents)

Diluted Basic

Diluted Headline

Basic

Headline

Statement of Profit and Loss |

1 035 683

(576 068)

459 615

16 590

(4 170)

(306 093)

165 942

5 041

(1 767)

1 978

171 194

(44 823 )

126 371

110 653

15 718

126 371

101.27

99.45

99.47

101.30123.43

1 193 921

(619 783)

574 138

22 773

(7 384)

(374 779)

214 748

3 279

(5 245)

1 811

214 593

(55 856)

158 737

145 433

13 304

158 737

129.64

126.07

120. 03

Profit for the year

Other comprehensive income

Foreign currency translation differences

Items that will be re-classified into profit and loss

Revaluation of property

Reversal of deal difference reserve

Tax on other comprehensive income

Total comprehensive income for the year

Total comprehensive income attributable to

Owners of the parent


126 371

1 461

(2 500)

(1 000)

465

124 797

109 079

15 718

124 797

158 737

3 347

-

-

-

162 084

148 780

13 304

162 084

Statement of Comprehensive Income |

10

2015 2016Figures in R'000

2015 2016Figures in R'000

Note(s)

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ds

paid

(4

0 2

20

) (

40

22

0)

-

(4

0 2

20

)

Sh

are

-base

d p

aym

en

t tr

an

sact

ion

s 8

2 2

38

69

2 2

52

9 5

46

7 5

46

7

Div

iden

ds

paid

to

no

n-c

on

tro

llin

g

inte

rest

-

(9

26

6)

(9

26

6)

Acq

uis

itio

n o

f su

bsi

dia

ries

10

15

89

2 -

-

15

90

2 2

77

9 1

8 6

81

Dis

po

sal o

f su

bsi

dia

ries

-

-

2 0

33

-

(1

44

7)

58

6 5

86

1 1

72

Sh

are

iss

ue

1 1

27

9 -

-

1 2

80

1 2

80

Treasu

ry s

hare

s p

urc

hase

d (

6)

(1

8 7

73

)

13

63

62

03

36

92

(39 1

38

)(3

5 7

64

)(5

90

1)

(41 6

65

)

-

-

(1

8 7

79

) (

18

77

9)

Ch

an

ges

in o

wn

ers

hip

in

tere

st w

ith

ou

t

a c

han

ge i

n c

on

tro

l

Acq

uis

itio

ns

on

no

n-c

on

tro

llin

g

inte

rest

wit

ho

ut

a c

han

ge in

co

ntr

ol

(2

4 8

62

) (

24

86

2)

(7

22

) (

25

58

4)

Bala

nce

at

31

Marc

h 2

01

6 1

12

8 2

65

72

4 6

59

5 5

73

8 4

11

65

1 6

90

83

6 7

5 6

72

76

6 5

08

No

tes

14

15

16

Statement of Cash Flow |

13

Cash flows from operating activities

Cash generated from operations 32 133 379

Finance income 5 041

Finance costs (1 767)

Income tax paid 21 (32 957)

N�� 103 696

Cash flows from investing activities

Property, plant and equipment acquired 6 (14 966)

Intangible assets acquired 7 (49 997)

Proceeds on disposals of property, plant and equipment 2 655

Acquisition of subsidiaries 33 (9 617)

Acquisition of non-controlling interest without a change

in control -

Proceeds on disposals of subsidiaries 34 -

Loans receivable advanced (6 000)

Loans receivable repaid 6 944

(70 981)

Cash flows from financing activities

Share issue 57 846

Treasury shares repurchased (22 506)

Other financial liabilities repaid (2 228)

Deferred vendor payments repaid (2 044)

Dividends paid to non-controlling interest (3 576)

Dividends paid (21 168)

6 324

(Decrease)/increase in cash and cash equivalents 39 039

Cash and cash equivalents at beginning of the year 108 846

Cash and cash equivalents at end of the year 13 147 885

152 491

3 279

(1 965)

(27 359)

126 446

(16 749)

(106 574)

4 266

(15 117)

(7 793)

2 869

-

8 804

(130 294)

-

(12 029)

(4 161)

(38 471)

(9 266)

(40 220)

(104 147)

(107 995)

147 885

39 890

Figures in R'000 Notes 2016 2015

14

Accounting Policies |

1. STATEMENT OF COMPLIANCE

The annual consolidated financial statements have been prepared in accordance with all applicable International Financial Reporting

Standards (IFRS), and its interpretations adopted by the International Accounting Standards Board (IASB) and financial reporting guides

issued by the accounting practices of the South African Institute of Chartered Accountants and the requirements of the Companies Act of

South Africa.

2. BASIS OF PREPERATION

The annual consolidated financial statements are presented in South African Rand, which is the Group's functional currency. All financial

information presented in South African Rand had been rounded to the nearest thousand, except when otherwise indicated.

The annual consolidated financial statements have been prepared under the historical cost convention, except for the revaluation of land

and buildings and financial assets and financial liabilities at fair value through profit or loss, which are accounted for at fair value.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires

management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of

judgement or complexity, or areas where assumptions and estimates are significant to the annual consolidated financial statements are

disclosed in note 4.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these annual consolidated financial statements are set out below. These

policies have been consistently applied to all the years presented, unless otherwise stated, and have been consistently applied by Group

entities.

3.1 BUSINESS COMBINATIONS

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is

exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power

over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from

the date that control ceases.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a

subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests

issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration

arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially

at their fair values at the acquisition date.

The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, at the non-controlling interest’s

proportionate share of the recognised amounts of acquiree’s identifiable net assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of

any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If the total of

consideration transferred, non-controlling interest recognised and previously held interest measured is less than the fair value of the net

assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the statement of comprehensive

income.


If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the

acquiree is re-measured to fair value at the acquisition date, any gains or losses arising from such re-measurement are recognised in profit or

loss.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the

fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 either in profit or

loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its

subsequent settlement is accounted for within equity.

3.1.1 CHANGES IN OWNERSHIP INTEREST IN SUBSIDIARIES WITHOUT CHANGE OF CONTROL

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is, as

transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share

acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests

are also recorded in equity.

3.1.2 DISPOSAL OF SUBSIDIARIES

When the Group ceases to have control any retained interest in the entity is re- measured to its fair value at the date when control is lost, with

the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently

accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other

comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This

may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

3.1.3 ASSOCIATES

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between

20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting.

Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the

investor’s share of the profit or loss of the investee after the date of acquisition.

The Group’s investment in associates includes goodwill identified on acquisition.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously

recognised in other comprehensive income is reclassified to profit or loss where appropriate.

The Group’s share of post-acquisition profit or loss is recognised in the statement of comprehensive income, and its share of post-

acquisition movements in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to

the carrying amount of the investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate,

including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive

obligations or made payments on behalf of the associate.

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this

is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its

carrying value and recognises the amount adjacent to share of profit/ (loss) of associates in the statement of comprehensive income.

15

16


Profit and losses resulting from upstream and downstream transactions between the Group and its associate are recognised in the Group’s

financial statements only to the extent of unrelated investor’s interests in the associates. Unrealised losses are eliminated unless the

transaction provides evidence of an impairment of the asset transferred.

3.1.4 TRANSACTIONS ELIMINATED ON CONSOLIDATION

Intergroup balances and transactions, and any unrealised income and expenses arising from intergroup transactions, are eliminated in

preparing the annual consolidated financial statements.

3.1.5 JOINT ARRANGEMENTS

The Group has classified its joint arrangement as a joint operation based on the contractual rights and obligations. The Group recognises

their interest in the joint operations revenue and expenses through profit and loss.

3.2 PROPERTY, PLANT AND EQUIPMENT

Land and buildings comprise owner occupied property. Land and buildings are shown at fair value, based on valuations by external

independent valuers, less subsequent depreciation for buildings. Valuations are performed with sufficient regularity, not exceeding three

years, to ensure that the fair value of a revalued asset does not differ materially from its carrying amount. Any accumulated depreciation at

the date of revaluation is eliminated against the gross carrying amount of the asset, and the net amount is restated to the revalued amount of

the asset. All other property, plant and equipment is stated at cost less accumulated depreciation and impairment. Cost includes expenditure

that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that

future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying

amount of the replaced part is derecognised. All other repairs and maintenance are charged to the statement of profit and loss during the

financial period in which they are incurred.

Increases in the carrying amount arising on revaluation of land and buildings are credited to other comprehensive income and shown as

other reserves in the statement of changes in equity. Decreases that offset previous increases of the same asset are charged in other

comprehensive income and debited against other reserves directly in equity, all other decreases are charged to the statement of

comprehensive income. Each year the difference between depreciation based on the revalued carrying amount of the asset charged to the

statement of comprehensive income, and depreciation based on the asset’s original cost is transferred from other reserves to retained

earnings.

Depreciation methods, residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. Useful

lives are affected by technology innovations, maintenance programs and future economic benefits. Residual value assessments consider

issues such as future market conditions, the remaining life of the asset and projected disposal values. Consideration is also given to the

extent of current profits and losses on the disposal of similar assets.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within ‘Other

income’ in the statement of profit and loss. When revalued assets are sold, the amounts included in other reserves are transferred to retained

earnings.


Depreciation is provided on the straight-line basis which, will reduce the carrying amount of the property, plant and equipment to their

residual values at the end of their useful lives. Depreciation is recognised in profit or loss. Leased assets are depreciated over the shorter of

the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Items of

property, plant and equipment are depreciated from the date that they are installed and available for use. Land is not depreciated as it is

deemed to have an indefinite life.

Where an item of property, plant and equipment comprises major components with different useful lives, the components are accounted for

as separate items of property, plant and equipment.

The major categories of property, plant and equipment are depreciated at the following rates:

Building 21 – 50 years

Plant and equipment 5 – 15 years

Motor vehicles 4 – 5 years

Furniture and fittings 5 – 10 years

Office equipment 5 – 10 years

Computer equipment 2 – 5 years

Leasehold improvements Over the period of the lease

3.3 INTANGIBLE ASSETS

3.3.1 GOODWILL

Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets. Goodwill is recognised as the excess of the purchase

price over the fair value of the identifiable assets and liabilities assumed in a business combination.

Goodwill is allocated to each of the cash-generating units, or groups of cash-generating units that are expected to benefit from the

synergies of the business combination.

Goodwill is measured at cost less accumulated impairment losses.

3.3.2 COMPUTER SOFTWARE INTERNALLY GENERATED AND COMPUTER SOFTWARE UNDER DEVELOPMENT

Expenditure of research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is

recognised in profit or loss as incurred. Development activities involve a plan or design for the production of new or sustainable improved

products and processes. Development expenditure is capitalised only if development costs can be, measured reliably, the product or

process is technically commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to

complete development and to use or sell the asset. The expenditure capitalised includes the cost of materials, direct labour, overhead costs

that are directly attributable to preparing the assets for its intended use. Other development expenditure is recognised in profit or loss as

incurred.

Capitalised development expenditure is allocated to computer software under development until such time that the products and

processed are ready for use. The relevant items are then transferred from the computer software under development category to the

computer software internally generated category within intangible assets. Capitalised development expenditure is measured at cost less

accumulated amortisation and accumulated impairment losses.

Work in progress comprises design costs, raw materials, direct labour, other direct costs and related overheads. It excludes borrowing costs.

Work in progress is carried at the lower of cost or net realisable value. Net realisable value is estimated in the ordinary course of business, less

applicable variable selling expenses.

17

18


3.3.3 PATENTS, TRADEMARKS, BRAND NAMES, LICENSES & INTELLECTUAL PROPERTY

Separately acquired licences are shown at historical cost. Licences acquired in a business combination are recognised at fair value at the

acquisition date. Licences have a finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the

straight-line method to allocate the cost of trademarks and licences over their estimated useful lives. Acquired computer software licences

are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their

estimated useful lives.

3.3.4 AMORTISATION

The estimated useful lives for the current and comparative years are as follows:

Brand names Indefinite

Computer software 3 - 5 years

Customer relationships 2 - 4 years

Patents, trademarks and other rights 10 years to indefinite

Intellectual property Indefinite

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

An intangible asset is regarded as having an indefinite useful life when, based on all relevant factors, there is no foreseeable limit to the

period over which the asset is expected to generate net cash inflows. Amortisation is not provided for these intangible assets but they are

tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired,

and it is subsequently carried at cost less accumulated impairment losses.

3.4 IMPAIRMENT OF NON-FINANCIAL ASSETS

The carrying amount of the Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date

to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated.

For goodwill and intangible assets that have indefinite lives or that are not yet available for use, the recoverable amount is estimated at each

reporting date.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from

continuing use that are largely independent of cash inflows of other assets (the “cash-generating unit”). The goodwill acquired in a business

combination, for the purpose of impairment testing, is allocated to cash-generating units that are expected to benefit from the synergies of

the combination.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less cost to sell. In assessing

value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market

assessments of the time value of money and the risks specific to the asset.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment

losses recognised in respect of cash-generated units are allocated first to reduce the carrying amount of any goodwill allocated to the units

and then to reduce the carrying amount of the other assets in the group on a pro rata basis. Impairment losses are recognised in profit or loss.


An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are

assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has

been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s

carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no

impairment loss had been recognised.

3.5 INVENTORIES

Inventories are measured at the lower of cost and net realisable value. The cost of inventories comprises all costs of purchase, costs of

conversion and other costs incurred in bringing the inventories to their present location and condition and is assigned by using the weighted

average cost formula. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production

overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business less the

estimated costs of completion and the estimated costs necessary to make the sale.

When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the related revenue is

recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in

the period when the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net

realisable value, is recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal

occurs.

Where necessary, provision is made for obsolete, slow-moving and defective inventories.

3.6 FINANCIAL ASSETS

3.6.1 CLASSIFICATION

The Group classifies its financial assets in the following categories: at fair value through profit or loss and loans and receivables. The

classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial

assets at initial recognition.

3.6.2 LOANS AND RECEIVABLES

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They

are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-

current assets. The Group’s loans and receivables comprise ‘trade and other receivables’ and ‘cash and cash equivalents’ in the statement of

financial position.

3.6.3 RECOGNITION AND MEASUREMENT

Regular purchases and sales of financial assets are recognised on the trade-date-the date on which the Group commits to purchase or sell

the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit

or loss.

Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the

statement of comprehensive income. Financial assets are derecognised when the rights to receive cash flows from the investments have

expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. Available-for-sale financial

assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently

carried at amortised cost using the effective interest method.

Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in the

statement of comprehensive income within ‘Other net income /(expenses)’ in the period in which they arise. Dividend income from financial

assets at fair value through profit or loss is recognised in the statement of comprehensive income as part of other income when the Group’s

right to receive payments is established.

19

20


3.6.4 IMPAIRMENT OF FINANCIAL ASSETS

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or Group of financial assets

is impaired.

A financial asset or a Group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of

impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or

events) has an impact on the estimated future cash flows of the financial asset or Group of financial assets that can be reliably estimated.

Evidence of impairment may include indications that the debtors or a Group of debtors is experiencing significant financial difficulty, default

or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation, and where

observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic

conditions that correlate with defaults.

For loans and receivables category, the amount of the loss is measured as the difference between the asset’s carrying amount and the

present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s

original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated

statement of comprehensive income.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring

after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised

impairment loss is recognised in the consolidated statement of comprehensive income.

3.6.5 TRADE AND OTHER RECEIVABLES

Trade and other receivables are initially measured at fair value and, after initial recognition, at amortised cost less impairment losses for bad

and doubtful debts, if any, except for the following receivables:

At each reporting date, the Group assesses whether there is any objective evidence that a receivable or Group of receivables is impaired.

Impairment losses on trade and other receivables are recognised in profit or loss when there is objective evidence that an impairment loss

has been incurred and are measured as the difference between the receivable’s carrying amount and the present value of estimated future

cash flows (excluding future credit losses that have not been incurred) discounted at its original effective interest rate, i.e. the effective

interest rate computed at initial recognition. The impairment loss is reversed if, in a subsequent period, the amount of the impairment loss

decreases and the decrease can be related objectively to an event occurring after the impairment was recognised.

3.6.6 CASH AND CASH EQUIVALENT

Cash comprises cash on hand and at bank and demand deposits with bank. Cash equivalents are short-term, highly liquid investments that

are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Cash and cash equivalents

are initially measured at fair value and are subsequently measured at the amortised cost.

Interest-free loans made to related parties without any fixed repayment terms or the effect of discounting being immaterial, that are

measured at cost less impairment losses for bad and doubtful debt, if any; and

Short-term receivables with no stated interest rate and the effect of discounting being immaterial, that are measured at their original

invoice amount less impairment losses for bad and doubtful debt, if any.


For the purpose of statement of cash flows, bank overdrafts which are repayable on demand form an integral part of the Group’s cash

management and are included as a component of cash and cash equivalents.

3.7 FINANCIAL LIABILITIES

3.7.1 TRADE AND OTHER PAYABLES

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.

Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business

if longer). If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

3.7.2 BORROWINGS

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any

difference between the proceeds (net of transaction costs) and the redemption value is recognised in the statement of comprehensive

income over the period of the borrowings using the effective interest method.

3.8 SHARE CAPITAL

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction

from equity, net of any tax effects.

3.9 EMPLOYEE BENEFITS

3.9.1 DEFINED CONTRIBUTION PLANS

The Group pays fixed contributions into independent entities in relation to several state plans and insurance for individual employees. The

Group has no legal or constructive obligations to pay contributions in addition to its fixed contributions, which are recognised as an expense

in the period that relevant employee services are received.

3.9.2 TERMINATION BENEFITS

Termination benefits are recognised as an expense when the Group is demonstrably committed, without realistic possibility of withdrawal, to

a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an

offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognised as an expense if the Group

has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated

reliably. If benefits are payable more than 12 months after the reporting date, then they are discounted to their present value.

3.9.3 SHORT-TERM EMPLOYEE BENEFITS

The cost of all short-term employee benefits is recognised during the period in which the employee renders the related service on an

undiscounted basis.

Accruals for employee entitlement to annual leave represents the present obligation, which the Group has to pay as a result of employees’

services, provided to the reporting date. The accruals have been calculated at undiscounted amounts based on current salary rates.

A liability is recognised for the amount expected to be paid under short term bonuses in the Group as the Group has a present legal

constructive obligation to pay the amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

21

22


3.9.4 SHARE-BASED PAYMENT TRANSACTIONS

The grant date fair value of share-based payment options granted to employees is recognised as an employee expense, with a

corresponding increase in equity, over the period in which the employees become unconditionally entitled to the options. The amount

recognised as an expense is adjusted to reflect the number of share options for which the related service and non-market conditions are met,

such that the amount ultimately recognised as an expense is based on the number of options that meet the related service and non-market

performance conditions at the vesting date.

In the event of expiry of vested share options, the applicable amount held in the non-distributable reserve is transferred to retained earnings

3.10 INCOME TAX

Income tax for the year includes current tax and deferred tax. Current tax and deferred tax are recognised in profit or loss, except to the

extent that the tax arises from a transaction or event which is recognised directly in equity in which case current tax and deferred tax are also

recognised directly in equity.

Current tax liabilities and assets are measured at the amount expected to be paid to or recovered from the taxation authorities, using the tax

rates and tax laws that have been enacted or substantively enacted by the statement of financial position date. Current tax is the amount of

income taxes payable or recoverable in respect of the taxable profit or loss for a year, and any adjustments in respect of previous years.

Deferred tax assets and liabilities arise from deductible and taxable temporary differences respectively. Temporary differences are the

differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. Deferred tax assets

also arise from unused tax losses.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to

income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax

liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary

differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable

that the related tax benefit will be realised.

At each statement of financial position date, the Group reviews and assesses the recognised and unrecognised deferred tax assets and the

future taxable profit to determine whether any recognised deferred tax assets should be derecognised and any unrecognised deferred tax

assets should be recognised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the

liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax assets and liabilities are not discounted.

Dividends withholding taxes that arise from the distribution of dividends are recognised when the distributions are made to shareholders

that do not qualify for exemption in terms of the Income Tax Act.

3.11 REVENUE RECOGNITION

3.11.1 SALES OF GOODS

Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable,

net of returns, trade discounts and volume rebates. Revenue is recognised when the significant risks and rewards of ownership have been

transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated

reliably, and there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably.


If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of

revenue as the sales are recognised.

3.11.2 RENDERING OF SERVICES

Revenue from rendering of services is recognised in profit or loss in proportion to the stage of completion of the transaction at the reporting

date. The stage of completion is assessed by reference to surveys of work performed.

3.12 GOVERNMENT GRANTS

Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them

and that the grants will be received.

Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises the related costs for

which the grants are intended to compensate.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate

financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable.

3.13 FINANCE INCOME AND FINANCE COSTS

Finance income comprises interest income on funds invested, and changes in the fair value of financial assets at fair value through profit or

loss. Interest income is recognised as it accrues in profit or loss, using the effective interest method.

Finance expenses comprise interest expense on borrowings, unwinding of discount on provisions, changes in the fair value of financial assets

at fair value through profit or loss. All borrowing costs are recognised in profit or loss using the effective interest method.

3.14 FOREIGN CURRENCY TRANSLATION

3.14.1 FUNCTIONAL AND PRESENTATION CURRENCY

Items included in the annual consolidated financial statements of each of the Group’s entities are measured using the currency of the

primary economic environment in which the entity operates (‘the functional currency’). The annual consolidated financial statements are

presented in ZAR (R), which is the Group’s presentation currency.

3.14.2 FOREIGN OPERATIONS

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to ZAR

(South African Rand) at exchange rates at the reporting date. The income and expenses of foreign operations are translated to ZAR (South

African Rand) at exchange rates at the dates of the transactions.

Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve in

equity. However, if the foreign operation is a non-wholly owned subsidiary, then the relevant proportion of the translation difference is

allocated to non-controlling interests. When a foreign operation is disposed of, such that control, significant influence or joint control is lost,

the cumulative amount in the foreign currency translation reserve related to that foreign operation is reclassified to profit or loss as part of

the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while

retaining control, the relevant portion of the cumulative amount is reattributed to non-controlling interests.

23

24


When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable

future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign

operation and are recognised in other comprehensive income, and are presented within equity in the foreign currency translation reserve.

3.14.3 TRANSACTIONS AND BALANCES

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions

or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from

the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the

statement of comprehensive income. Foreign exchange gains and losses are presented in the statement of comprehensive income within

‘Other net income/(expences)’.

3.15 EARNINGS PER SHARE

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss

attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding during the period.

Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary

shares outstanding for the effects of all dilutive potential ordinary shares, which comprises share options granted to employees.

The Group calculates headline earnings per share (HEPS) data for its ordinary shares. Headline earnings are determined by excluding certain

items from profit or loss attributable to ordinary shareholders through making use of the table and requirements contained in Circular

02/2015.

3.16 SEGMENT REPORTING

The Group determines and presents operating segments based on the information that is internally provided to the Executive Chairman,

who is the chief operating decision maker. A segment is a distinguishable component of the Group that is engaged either in providing

related products or services (business segment), or in providing products or services within a particular economic environment

(geographical segment), which is subject to risks and returns that are different from those of the other segments. The Group’s primary format

for segment reporting is based on business segments. The business segments are determined based on the reporting business units.

No secondary geographical segment analysis has been included as geographical location does not play a significant role in the Group’s

operations and thus this information will not be beneficial.

3.16.1 SEGMENT REVENUE

Segment revenue represents the gross value of services invoiced and goods sold excluding value added taxation, which is directly

attributable and reasonably allocated to each business segment.

3.16.2 SEGMENT PROFIT AFTER TAX

Segment results equal segment revenue less segment expenses before any adjustment to minority interests.

3.16.3 SEGMENT ASSETS AND LIABILITIES

Segment assets and liabilities include direct and reasonable allocable operating assets, investments in associates and liabilities.


4. CRITICAL ACCOUNTING JUDGEMENTS, KEY SOURCES OF ESTIMATION UNCERTAINTY AND FAIR VALUE DETERMINATION

The Group's management makes assumptions, estimates and judgements in the process of applying the Group's accounting policies that

affect the assets, liabilities, income and expenses in the annual consolidated financial statements prepared in accordance with IFRSs. The

assumptions, estimates and judgements are based on historical experience and other factors that are believed to be reasonable under the

circumstances. While the management reviews their judgements, estimates and assumptions continuously, the actual results will seldom

equal to the estimates.

The estimates and the underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the

period in which the estimate is revised if the revision policy affects only that period, or in the period of the revision and future periods if the

revision affects both current and future periods.

4.1 RESIDUAL VALUES AND USEFUL LIVES OF PROPERTY, PLANT EQUIPMENT

The useful lives and residual values of items of property, plant and equipment are estimated annually. The actual lives and residual values

may vary depending on a variety of factors such as the nature of item, the condition as result of current usage and the expected physical wear

and tear of each item of property, plant and equipment.

4.2 ESTIMATED IMPAIRMENT OF INTANGIBLE ASSETS WITH INDEFINITE USEFUL LIVES

The Group tests annually whether intangible assets with indefinite lives have suffered any impairment, in accordance with the accounting

policy stated in note 3.3. The recoverable amounts of certain cash-generating units have been determined based on value-in use calculation.

These calculations require the use of estimates. Refer to note 7 for detail surrounding the estimations utlilised in these calculations.

The Group assesses on an annual basis whether the classification of indefinite life intangible assets is appropriate.

4.3 MEASUREMENT OF THE RECOVERABLE AMOUNT OF TRADE RECEIVABLES

Management has made estimates on the recoverable amount of the Group's trade receivables and the ability of the customer to settle

outstanding debts when it becomes due. Past payment history and financial wellness are considered part of the estimation uncertainty

associated with the measurement of the recoverable amount of trade and other receivables. Refer to note 12.

4.4 SHARE-BASED PAYMENT TRANSACTIONS

The fair value of employee share options is measured using the Black-Scholes formula. Measurement inputs include share price on

measurement date, exercise price of the instrument, expected volatility, weighted average expected life of the instrument, expected

dividends and the risk free rate. Refer to note 15.

4.5 PERCENTAGE OF COMPLETION

Management estimates the costs to complete projects at each reporting period and calculates the percentage of completion based on the

costs incurred at that date as a percentage of the total costs to be incurred. The percentage of completion is applied to the expected revenue

of the project to measure the revenue to be recognised at the end of each reporting period.

25

26


The amendments as set out below are considered not to have a material impact on the financial statements:

Standards Details of amendment Annual periods beginning on or after

IFRS 7 Financial Instruments:

Disclosures

IFRS 9 Financial Instruments

1 January 2016

1 January 2016

1 January 2018

Annual Improvements 2012-2014 Cycle:

Amendment clarifying under what circumstances

an entity will have continuing involvement in a

transferred financial asset as a result of servicing

contracts

Annual Improvements 2012-2014 Cycle:

Amendment clarifying the applicability of

previous amendments to IFRS 7 issued in

December 2011 with regard to offsetting financial

assets and financial liabilities in relation to interim

financial statements prepared under IAS 34.

A final version of IFRS 9 has been issued which

replaces IAS 39 F inancia l Inst ruments :

Recognition and Measurement. The completed

standard comprises guidance on Classification

and Measurement , Impa i rment Hedge

Accounting and Derecognition: IFRS 9 introduces

a new approach to the classification of financial

assets, which is driven by the business model in

which the asset is held and their cash flow

characteristics. A new business model was

introduced which does allow certain financial

assets to be categorised as “fair value through

other comprehensive income” in certain

circumstances. The requirements for financial

liabilities are mostly carried forward unchanged

from IAS 39. However, some changes were made

to the fair value option for financial liabilities to

address the issue of own credit risk.

The new model introduces a single impairment

model being applied to all financial instruments,

as well as an “expected credit loss” model for the

measurement of financial assets.

IFRS 9 contains a new model for hedge

accounting that aligns the accounting treatment

with the risk management activities of an entity, in

addition enhanced disclosures will provide better

information about risk management and the

effect of hedge accounting on the financial

statements.

IFRS 9 carries forward the derecognition

requirements of financial assets and liabilities

from IAS 39.

5. NEW STANDARDS AND INTERPRETATIONS

The Group has chosen not to early adopt the following standards and interpretations, and will do so in future financial periods.


27

IFRS 10 Consolidated Financial

Statements

1 January 2016

The effective date of this amendment

has been deferred indefinitely until

further notice

IFRS 11 Joint Arrangements 1 January 2016

IFRS 12 Disclosure of Interests

in Other Entities

1 January 2016

IFRS 15 Revenue from

Contracts from Customers

1 January 2018

Investment Entities: Applying the Consolidation

Exception: Narrow-scope amendments to IFRS 10,

IFRS 12 and IAS 28 introduce clarifications to the

requirements when accounting for investment

entities. The amendments also provide relief in

particular circumstances, which will reduce the costs

of applying the Standards.

Sale or Contribution of Assets between an Investor

and its Associate or Joint Venture (Amendments to

IFRS 10 and IAS 28): Narrow scope amendment

address an acknowledged inconsistency between

the requirements in IFRS 10 and those in IAS

28 (2011), in dealing with the sale or contribution

of assets between an investor and its associate or

joint venture.

Amendments adding new guidance on how to

account for the acquisition of an interest in a

joint operation that constitutes a business which

specify the appropriate accounting treatment

for such acquisitions.


Exception: Narrow-scope amendments to IFRS 10,

IFRS 12 and IAS 28 introduce clarifications to the

requirements when accounting for investment

entities. The amendments also provide relief in

particular circumstances, which will reduce the costs

of applying the Standards.

New standard that requires entities to recognise

revenue to depict the transfer of promised goods or

services to customers in an amount that reflects

the consideration to which the entity expects to

be entitled in exchange for those goods or

services. This core principle is achieved through a

five step methodology that is required to be

applied to all contracts with customers.

The new standard will also result in enhanced

disclosures about revenue, provide guidance

for transactions that were not previously

addressed comprehensively and improve guidance

for multiple-element arrangements. The new

standard supersedes:

(a) IAS 11 Construction Contracts;

(b) IAS 18 Revenue;

(c) IFRIC 13 Customer Loyalty Programmes;

(d) IFRIC 15 Agreements for the Construction of

Real Estate;

(e) IFRIC 18 Transfers of Assets from Customers; and

(f) SIC-31 Revenue-Barter Transactions Involving

Advertising Services.


28


IFRS 16 Leases 1 January 2019New standard that introduces a single lessee accounting

model and requires a lessee to recognise assets and

liabilities for all leases with a term of more than 12

months, unless the underlying asset is of low value. A

lessee is required to recognise a right-of-use asset

representing its right to use the underlying leased asset

and a lease liability representing its obligation to make

lease payments. A lessee measures right-of-use assets

similarly to other non-financial assets (such as property,

plant and equipment) and lease liabilities similarly to

other financial liabilities. As a consequence, a lessee

recognises depreciation of the right-of-use asset and

interest on the lease liability, and also classifies cash

repayments of the lease liability into a principal portion

and an interest portion and presents them in the

statement of cash flows applying IAS 7 Statement of Cash

Flows.

IFRS 16 contains expanded disclosure requirements for

lessees. Lessees will need to apply judgement in deciding

upon the information to disclose to meet the objective of

providing a basis for users of financial statements to

assess the effect that leases have on the financial

position, financial performance and cash flows of the

lessee.

IFRS 16 substantially carries forward the lessor

accounting requirements in IAS 17. Accordingly, a lessor

continues to classify its leases as operating leases or

finance leases, and to account for those two types of

leases differently.

IFRS 16 also requires enhanced disclosures to be

provided by lessors that will improve information

disclosed about a lessor’s risk exposure, particularly to

residual value risk.

IFRS 16 supersedes the following Standards and

Interpretations:

(a) IAS 17 Leases;

(b) IFRIC 4 Determining whether an Arrangement con-

tains a Lease;

(c) SIC-15 Operating Leases-Incentives; and

(d) SIC-27 Evaluating the Substance of Transactions

Involving the Legal Form of a Lease.



29

IAS 1, Presentation of Financial

Statements

1 January 2016

IAS 7 Statement of Cash Flows 1 January 2017

IAS 12 Income Taxes 1 January 2017

IAS 16 Property, Plant and

Equipment

1 January 2016

IAS 27 Consolidated and

Separate Financial Statements

1 January 2016

IAS 28 Investments in

Associates and Joint Ventures

1 January 2016

Disclosure Initiative: Amendments designed to

encourage entities to apply professional judgement in

determining what information to disclose in their

financial statements. For example, the amendments

make clear that materiality applies to the whole of

financial statements and that the inclusion of immaterial

information can inhibit the usefulness of financial

disclosures. Furthermore, the amendments clarify that

entities should use professional judgement in

determining where and in what order information is

presented in the financial disclosures.

Disclosure Initiative: Amendments requiring entities to

disclose information about changes in their financing

liabilities. The additional disclosures will help investors to

evaluate changes in liabilities arising from financing

activities, including changes from cash flows and non-

cash changes (such as foreign exchange gains or losses).

Recognition of Deferred Tax Assets for Unrealised Losses

(Amendments to IAS 12): Narrow-scope amendment to

clarify the requirements on recognition of deferred tax

assets for unrealised losses on debt instruments

measured at fair value.

Amendment to both IAS 16 and IAS 38 establishing the

principle for the basis of depreciation and amortisation

as being the expected pattern of consumption of the

future economic benefits of an asset. Clarifying that

revenue is generally presumed to be an inappropriate

basis for measuring the consumption of economic

benefits in such assets.

Amendment to IAS 16 and IAS 41 which defines bearer

plants and includes bearer plants in the scope of IAS 16

Property, plant and Equipment, rather than IAS 41,

allowing such assets to be accounted for after initial

recognition in accordance with IAS 16.

Amendments to IAS 27 will allow entities to use the

equity method to account for investments in

subsidiaries, joint ventures and associates in their

separate financial statements.


Exception: Narrow-scope amendments to IFRS 10, IFRS

12 and IAS 28 introduce clarifications to the

requirements when accounting for investment entities.

The amendments also provide relief in particular

circumstances, which will reduce the costs of applying

the Standards


30


The effective date of this amendment

has been deferred indefinitely until

further notice

IAS 38 Intangible Assets 1 January 2016

There were no new standards adopted in the current financial year.

Sale or Contribution of Assets between an Investor and

its Associate or Joint Venture (Amendments to IFRS 10

and IAS 28): Narrow scope amendment to address an

acknowledged inconsistency between the requirements

in IFRS 10 and those in IAS 28 (2011), in dealing with the

sale or contribution of assets between an investor and its

associate or joint venture.

Amendments to IAS 16 and IAS 38 to clarify the basis for

the calculation of depreciation and amortisation, as

being the expected pattern of consumption of the future

economic benefits of an asset.

Amendment to both IAS 16 and IAS 38 establishing the

principle for the basis of depreciation and amortisation

as being the expected pattern of consumption of the

future economic benefits of an asset. Clarifying that

revenue is generally presumed to be an inappropriate

basis for measuring the consumption of economic

benefits in such assets.


Notes to the Annual Financial Statements |

31

6. PROPERTY, PLANT AND EQUIPMENT

Cost

2016

Accumulated

depreciation

Carrying

value Cost

2015

Accumulated

depreciation

Carrying

value

Owned assets

Land and buildings - - - 11 973 (351) 11 622

Plant and equipment 19 377 (7 487) 11 890 16 402 (4 873) 11 529

Motor vehicles 25 290 (12 717) 12 573 20 505 (10 388) 10 117

Furniture and fittings 19 449 (9 725) 9 724 17 161 (7 298) 9 863

Office equipment 10 794 (6 494) 4 300 8 543 (4 805) 3 738

IT equipment 29 040 (19 175) 9 865 20 334 (13 123) 7 211

Capitalised leased assets

Land and buildings 10 015 (4 809) 5 206 8 484 (3 853) 4 631

113 965 (60 407) 53 558 103 402 (44 691) 58 711

The carrying amounts of property, plant and equipment can be reconciled as follows

2016 Carrying

value at

beginning of

year Additions

Additions

through

business

combinations Disposals

Owned assets

Land and

buildings 11 622 - - (2 832)

Plant and

equipment 11 529 2 539 157 (9)

Motor

vehicles 10 117 7 342 188 (1 277)

Furniture and

fittings 9 863 1 266 549 (23)

Office

equipment 3 738 2 004 126 (32)

IT equipment 7 211 6 066 1 024 (254)

Capitalised

leased assets

Land and

buildings 4 631 1 975 217 -

58 711 21 192 2 261 (4 427)

Disposal of

subsidiaries

(8 765)

-

-

(100)

-

(7)

(541)

(9 413)

Depreciation

(25)

(2 326)

(3 797)

(1 831)

(1 536)

(4 175)

(1 076)

(14 766)

Carrying

value at end

of year

-

11 890

12 573

9 724

4 300

9 865

-

5 206

53 558

Figures in R'000

32


2015 Carrying

value at

beginning of

year

Owned assets

Land and

buildings 14 592

Plant and

equipment 3 844

Motor

vehicles 9 520

Furniture and

fittings 7 102

Office

equipment 2 031

IT equipment 5 254

Capitalised

leased assets

Land and

buildings 5 375

47 718

Additions

-

542

3 922

3 203

2 621

4 450

228

14 966

Additions

through

business

combinations

- -

8 251

2 152

778

73

945

-

12 199

Disposals

(2)

(2 192)

(233)

(22)

(112)

-

(2 561)

Revaluation

(2 500)

-

-

-

-

-

-

(2 500)

Depreciation

(470)

(1 106)

(3 285)

(987)

(965)

(3 326)

(972)

(11 111)

Carrying

value at end

of year

11 622

11 529

10 117

9 863

3 738

7 211

4 631

58 711

Revalued land and buildings

Residentail land and buildings situated on Erf 278, Hyde Park 2016 2015

Original cost price - 11 496

Additions at cost - 511

Accumulated depreciation - (385)

- 11 622

Revalued asset (2015) Fair value Valuation

technique

Unobservable

input (Level 3)

Land and buildings 9 500 Discounted

cash flow 9 500

Figures in R'000

Assets acquired under mortgage bonds and instalment sale liabilities are encumbered as security for repayment of these

borrowings (refer note 17).

The effective date of the revaluation was 20 November 2014. The valuation was performed by an independent valuer,

J.D. Malakou, valuer M.I.V.S.A. The market value was estimated to be R9.5 million.

The principal assumptions underlying estimation of fair value are those related to the receipt of contractual rentals, expected

future market rentals, vacancy factor and saleability of the property. These valuations are regularly compared to actual

market yield data, actual transactions by the entity and those reported by the market.


33

7. INTANGIBLE ASSETS

2016

CostAccumulated

amortisation

Patents and trademarks and

other rights 191 587 (1 440)

Brandnames 2 397 -

Licences, franchises and

customer relationships 446 (446)

Computer software,

internally generated 210 784 (20 647)

Computer software, under

development 15 077 -

Goodwill 177 219 (301)

608 906 (27 630)

Carrying

value

190 147

2 397

-

190 137

15 077

176 918

581 276

Cost

191 394

4 124

1 049

114 623

13 703

143 158

468 301

2015

Accumulated

amortisation

(1 042)

(1 727)

(1 049)

(20 124)

-

(12 117)

(36 059)

Carrying

value

190 352

2 397

-

94 499

13 703

Intellectual property 985 (710) 275 250 - 250

externally purchased 6 325 - Computer software, 10 411 (4 086) - -

131 041

432 242

Figures in R'000

The carrying amounts of intangible assets can be reconciled as follows:

2016 Carrying

value at

beginning of

year Additions

Additions

through

business

combinations Transfers

Disposal of

subsidiaries Amortisation

Carrying

value at end

of year

Patents and

trademarks

and other

rights

190 352 193 - - - (398) 190 147

Brandnames 2 397 - - - - - 2 397

Computer

software,

internally

generated

94 499 88 782 - 7 136 (280) 190 137

Computer

software,

under

development

13 703 8 555 - (7 136) - (45) 15 077

Intellectual

property 250 - 25 - - 275

Computer

software,

externally

purchased

- 9 044 54 (1 580) (1 193) 6 325

Goodwill 131 041 - 45 955 - - (78) 176 918

432 242 106 574 46 034 - (1 580) (1 994) 581 276

34


2015Carrying

value at end

of year

Patents and

trademarks

and other

rights

190 352

Brandnames 2 397

Licences,

franchises

and customer

relationships

-

Computer

software,

internally

generated

94 499

Computer

software,

under

development

13 703

Intellectual

property 250

Computer

software,

externally

purchased

-

Goodwill 131 041

Carrying

value at

beginning of

year

189 318

2 048

345

59 095

1 320

250

-

53 384

305 760

Additions

466

349

-

30 228

18 954

-

-

-

49 997

Additions

through

business

combinations

-

-

-

-

-

-

-

77 657

77 657

Transfers

-

-

-

6 122

(6 122)

-

-

-

-

Reversal of

impairment/

(Impairment)

568

-

(345)

(355)

-

-

-

-

(132)

Amortisation

-

-

-

(591)

(449)

-

-

-

(1 040) 432 242

GoodwillPatents, trade marks and other

rights

2016 2015 2016 2015

Occupational health and safety 91 759 49 677 190 147 190 352

Labour supply 6 570 6 570 - -

Information technology 81 136 74 794 - -

179 465 131 041 190 147 190 352

Intangible assets are allocated to their respective underlying cash-generating units, which support the valuation of the

intangible asset.

Intangible assets are recognised as indefinite useful life intangible assets when an analysis of the relevant underlying factors

confirm there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows for the entity.

Goodwill and indefinite life intangible assets are allocated to the following groups of cash-generating units:

Figures in R'000


35

Growth rate

for 5 year

period

Growth rate

into

perpetuity

Discount rate

2016 % % %

Occupational health and safety 8.00 - 12.50 3.00 10.60 - 14.84

Labour supply 8.00 - 10.00 2.00 11.27 - 12.03

Information technology 8.50 - 17.00 5.00 9.12 - 14.95

2015

Occupational health and safety 8.00 - 10.00 2.00 10.60 - 14.42

Labour supply 8.50 - 14.00 2.00 11.27 -14.62

Information technology 9.00 - 15.50 2.00 8.62 - 14.81

Impairment testing based on value-in use

Value-in use calculations use pre-tax cash flow projections based on financial forecasts, approved by management, and

cover a five year period. The estimated growth rates applied are in line with that of the industry in which the cash- generating unit

operates and are materially similar to assumptions of external market sources. The cash-generating units' recoverable amount is

most sensitive to the growth rate assumptions applied. Assumptions were based on management's past experience and best

estimates regarding forecasts. Management determined forecasted gross margin based on past performance and its expectations

of market developments. The discount rates used are pre-tax and reflect the appropriate risk associated with the industry and

respective businesses.

A segment level summary of the key assumptions used for the value-in use calculations are as follows:

The impairment calculations were tested for sensitivity to significant changes in the key assumptions used. The basis for the

sensitivity analysis was a reduction of up to 20% in the forecasted operating profit used in the value-in use calculation

which resulted in a R17.7 million reduction in the present value. A reduction of 5% of the weighted average cost of capital resulted in

a R8.6 million reduction in the present value.

The sensitivity analysis did not result in any impairment.

Intangible assets with defined useful lives are tested for impairment if conditions are identified which might be indicative

of a potential reduction in the value in use or net realisable value compared to its carrying value.

Figures in R'000

36


Figures in R'000

8. INVESTMENTS AND ASSOCIATES

Carrying value of investment in associate 13 648 12 857

Balance at the beginning of the year 12 857 10 879

Share of profit/(loss) in investments accounted for using

the equity method 1 811 1 978

Change in control of equity accounted investment (1 020) -

13 648 12 857

Total non-current assets 84 000 84 000

Total current assets 16 053 14 331

Total non-current liabilities (72 812) (76 947)

Total current liabilities (14 265) (14 442)

Net assets 12 976 6 942

Revenue 14 320 13 525

Profit for the year 6 035 5 550

2016 2015

Kyostax Proprietary Limited

The group owns 30% of an associate whose shares are not publicly traded. Summarised financial information of the

associate is set out below


9. INVESTMENTS

Listed shares at fair value - 283

- 283

Number of

ordinary

shares 2016

Number of

ordinary

shares 2015

LISTED SHARES

Sanlam Limited - 3 610

The fair value of investments in listed shares is obtained with reference to the closing value of shares as at the period end on the

JSE Limited. The balance of listed shares represents funds held in the trading margin account. A sensitivity analysis has not been

disclosed as the effect of changes in economic conditions on listed investments held is not considered material to Group results.

The shares are classified as level 1 fair value as their values are derived from prices quoted in the active market.

The Group held investments in the following companies:

Figures in R'000 2016 2015

37


10.OTHER FINANCIAL ASSETS

Instalment sale assets 1 105 3 909

ARDA Durban Proprietary Limited 342 342

Kyostax Proprietary Limited 5 640 5 640

Aurora University Proprietary Limited - 6 000

7 087 15 891

Current 2 024 15 891

Non-current 5 063 -

7 087 15 891

No later than one year 556 4 454

Later than one year no later than five years 676 -

1 232 4 454

Future finance charges (127) (545)

Present value of instalment sale assets 1 105 3 909

All loans receivable are denominated in South African Rand. The loans are carried at their amortised cost, which is the same as

the fair value based on interest rates applicable on non- current loans receivables.

Instalment sale assets

Assets under instalment sale agreements are repayable over two to five years at effective interest rates ranging from prime

lending plus 3% per annum to prime lending plus 4.5% per annum. The loans are secured by the assets subject to the

agreements.

Minimum payments under instalment sale assets:

ARDA Durban Proprietary Limited

The loan is secured by the full issued share capital of the loanee and personal suretyships provided by its directors.

The loan is interest free and repayable in equal instalments over 12 months.

Kyostax Proprietary Limited

The loan is unsecured, interest free and is repayable in the normal course of business.

Aurora University Proprietary Limited

The loan was fully settled on 1 August 2015. MICROmega held surety over the loan through cession of a 100% of the shares in

Aurora until payment has been made in full. Additionally, MICROmega had the option, at any time prior to 1 August 2015, to

acquire a 50.1% controlling interest in Aurora for a nominal value of R50.16, while simultaneously extending the loan to

an indefinite payment shareholder loan. The loan was interest free.

Figures in R'000 2016 2015

38

39


11. INVENTORIES

Raw materials 13 530 8 278

Work in progress 5 344 1 007

Finished goods 23 032 19 092

41 906 28 377

Provision for stock obsolescence (55) -

41 851 28 377

The amount of inventories recognised as an expense

during the year:

Carrying amount of inventories sold 95 964 151 501

Write-down of inventories 55 -

12.TRADE AND OTHER RECEIVEBLES

Trade debtors 296 025 234 769

Prepaid expenses and deposits 17 521 15 919

Other 11 682 10 827

325 228 261 515

Allowance for doubtful debt (24 665) (22 290)

300 563 239 225

Items included in trade and other receivables not classified as financial instruments

Prepaid expenses and deposits 17 521 15 919

17 521 15 919

Trade and other receivables net of non-financial instruments (refer note 33) 283 042 223 306

The average credit period is less than 60 days with no interest charged on late payment. The amounts presented above include

amounts that are past due at the end of the reporting period for which the Group has not recognised an allowance for doubtful

debts because there has not been significant change in the credit quality of the receivables and the amounts are considered to

still be recoverable. The credit quality of trade and other receivables that are neither past due nor impaired can be assessed by

reference to external credit ratings (if available) or to historical information about counterparty default rates.

Figures in R'000 2016 2015

The reversal of write-down of inventories made in previous years arose due to an increase in the estimated net realisable

value of certain garment goods as a result of the fact that the goods had been disposed of.


40

Performance categories

Fully performing 192 897 170 851

Past due and not impaired 94 192 51 338

Impaired and provided for 8 936 12 580

296 025 234 769

The aging of amounts past due but not impaired is as follows:

1 month past due 36 555 13 970

2 months past due 57 637 13 982

3 months past due - 13 075

More than 3 months past due - 10 311

94 192 51 338

The aging of amounts impaired and provided for is as follows:

2 months past due - 4 403

3 months past due 2 520 488

More than 3 months past due 6 416 7 689

8 936 12 580

TRADE AND OTHER RECEIVABLES IMPAIRED

Movement on the doubtful debt allowance is as follows:


Impairment loss made during the year 8 851 14 465

Reversal of impairment loss from prior year (6 560) (3 174)

Balance written off 84 414

Balance at the end of the year 24 665 22 290

The carrying amount of trade and other receivables approximates their fair value.

PERFORMANCE CATEGORIES OF TRADE AND OTHER RECEIVEBLES

Trade receivables that are within the prescribed trading terms are considered to be fully performing. Past due and not impaired

trade receivables relate to a number of independent customers for whom there is no history of default. Trade receivables

impaired and provided for mainly relate to independent customers, which are in difficult economic situations. The risk

component of this category has been provided for.

Figures in R'000 2016 2015

41


CURRENCIES

The carrying amounts of trade and other receivables are denominated in the following currencies (all balances are disclosed

in South African Rand):

South African Rand 228 616 193 577

Australian Dollar 1 007 758

British Pound 409 3 030

Chinese Yan Renminbi 14 783 15 442

Euro 106 860

-Hong Kong Dollar 279

Namibian Dollar 1 428 975

New Zealand Dollar 168 176

US Dollar 36 054 8 347

Other currencies 192 141

283 042 223 306

Figures in R'000 2016 2015

13.CASH AND CASH EQUIVALENTS

Favourable cash balances

Cash on hand

Current accounts

Call accounts

Deposit accounts

Overdraft

Bank overdraft

Current assets

Current liabilities

The following facilities are available:

Working capital financing

Asset financing

Guarantees

220

37 352

40 278

11 577

89 427

49 537

89 427

(49 537)

39 890

50 000

10 000

3 270

149

72 350

35 377

40 009

147 885

-

147 885

-

147 885

14 500

9 069

3 270

Cash and cash equivalents comprise cash held. The carrying amount of these assets approximates their fair value. Interest at

variable rates linked to the prime lending rate is earned on these balances.

The credit quality of cash at bank, excluding cash on hand, that are neither past due nor impaired can be assessed by

reference to external credit ratings (if available) or to historical information about counterparty default rates.

42


The carrying amounts of cash and cash equivalents are denominated in the following currencies (all balances are disclosed



Australian Dollar 763 315

Bri�sh Pound 64 -


Euro 47 41

Hong Kong Dollar 1 080 6 893

Namibian Dollar 980 872


US Dollar 426 18 831


39 890 147 885

CURRENCIES

Figures in R'000 2016 2015

43


14.SHARE CAPITAL

Authorised

200 000 000 Ordinary shares of R0.01 each 2 000 2 000

Issued

112 832 661 Ordinary shares of R0.01 each 1 128 1 115

Share premium 265 724 265 088

266 852 266 203

Share reconciliation Number of shares

Shares outstanding - beginning of the period 111 503 571 105 184 415

Treasury shares purchased during the year (491 863) (1 385 516)

Shares issued 70 000 5 205 760

Share-based payment transactions 788 832 925 998

Acquisition of subsidiaries 962 121 1 572 914

Shares outstanding - end of the period 112 832 661 111 503 571

The directors are authorised, until the forthcoming annual general meeting, to dispose of the unissued shares for any purpose and

upon such terms and conditions as they deem fit, subject to the provision of Section 38 and 41 of the Companies Act of South Africa

and Johannesburg Stock Exchange requirements.

During the year the Group repurchased 491,863 (2015:1,385,516) treasury shares on the open market at an average price of 1,536

(2015: 1,624) cents to be utilised to settle future vendor payments and vested share options. An amount of 788,832 (2015: 925,998)

treasury shares were issued to employees during the year for vested and exercised options at an average price of 1,793 (2015: 1,447)

cents and 962,121 (2015: 1,572,914) shares were issued at an average price of 1,652 (2015: 1,424) cents in the acquisition of various

subsidiaries.

15. OTHER RESERVES

Foreign currency translation reserve

The foreign currency translation reserve comprises all foreign currency differences arising from the translation of the financial

statements of foreign operations.

Revaluation reserve

The revaluation reserve comprise all revaluation surpluses to the revaluation of owner-occupied properties. The revaluation reserve

has been recycled as part of the disposal of GIM Holdings Proprietary Limited. Refer to note 34.

Deal difference reserve

The deal difference reserve comprises a retention amount to cover any unmatched trades that may occur in the broking business.

The reserve has been re-assessed in the prior year and, as a result, the reserve has been recycled.

Figures in R'000 2016 2015

44


Number of ordinary share op�ons

Options granted at the beginning of the year 5 408 868 2 976 668

Movement during the year: -

New options granted during the year 733 166 2 981 199

Options exercised during the year (788 832) (475 999)

Options lapsed during the year (423 328) (73 000)

4 929 874 5 408 868

The foreign currency translation reserve, revaluation reserve and the deal difference reserve have not been disclosed separately as

they are not indivually material.

Share-based payment reserve

MICROmega Holdings Limited established the MICROmega Share Incentive Trust in 2001 together with a detailed share incentive

scheme. The purpose of this scheme is to provide employees of the MICROmega Group with the opportunity to acquire an interest

in equity of MICROmega Holdings Limited, thereby providing such employees with a further incentive to advance the

Group's interests, and promoting an identity of interests between such employees and the shareholders of the Group.

The scheme is equity settled and in terms of the scheme, share options may not be exercised until after the period,

provided that the employee remains in the employment of the MICROmega Group, calculated from the acceptance date, of:

more than three years shall have elapsed, in which event not more than one third thereof;

more than four years shall have elapsed, in which event not more than a further one third thereof, representing two thirds

thereof cumulatively;

more than five years shall have elapsed, in which event not more than a further one third thereof, representing 100% thereof

cumulatively.

The share options lapse if employment terminates before share options have vested.

The share options expire on the expiry of the option period, being eight years from grant date.

Outstanding options

The following options have been granted in terms of the MICROmega Share Incentive Trust to employees and are still

outstanding.

Figures in R'000 2016 2015Figures in R'000 2016 2015Figures in R'000 2016 2015

45


Comprising:

Grant Date Remaining

contractual

useful life

Number of ordinary share options

Share options at an issue price of R 1.00 per share March 2009 1 years 513 333 663 335

Share options at an issue price of R 1.45 per share March 2010 2 years 150 003 383 334

Share options at an issue price of R 2.00 per share May 2008 0.2 years 404 966 454 000

Share options at an issue price of R 2.35 per share September-2015 5.5 years 661 335 927 000

Share options at an issue price of R 8.00 per share April 2014 6 years 200 000 300 000

Share options at an issue price of R 20.00 per share Jan 2015 7 years 2 334 546 2 681 199

Share options at an issue price of R 20.00 per share Aug 2015 8 years 485 691 -

Share options at an issue price of R 20.00 per share Dec 2015 8 years 180 000 -

4 929 874 5 408 868

Share-based reserve recognised in equity 5 738 5 046

Share-based expenditure recognised in profit and loss 2 585 2 707

Options issued were valued using the following inputs to the Black-Scholes model:

Grant date December

2015August 2015

Number of options granted 180 000 553 166

Expected life 8 years 8 years

Risk-free rate 9.19% 9.19%

Volatility 16.12% 16.12%

Dividend yield 2.85% 2.16%

Exercise price 20 20

16.NON-CONTROLING ASSETS


2016

On 1 April 2016, the Group acquired the remaining 40% interest in Turrito Networks Proprietary Limited for a consideration of R25.7 million,

which resulted in R0.7 million being recycled from non-controlling interest and R24.9 million being recognised in retained earnings. The

balance of the purchase consideration owing, which is dependant on certain profits being met, has been included in the acquisition vendor

liability note. Refer to note 18.

The volatility was calculated using standard deviation based on the historical share price for the past 12 months. This has been adjusted for

any trades relating to our treasury share movements as it is not representative of normalised trading activity.

Figures in R'000 2016 2015

75 672 68 991

46


17.OTHER FINANCIAL LABILITIES

Non-current liabilities

Mortgage bond

Mortgage bond

- 7 860

Instalment sale liabilities 4 998 3 511

4 998 11 371

Current liabilities

- 719

Instalment sale liabilities 3 347 2 382

3 347 3 101

8 345 14 472

Interest bearing borrowings 8 345 14 472

8 345 14 472

No later than one year

Later than one year no later than five years

Future finance charges

Present value of instalment sale liabili�es

3 947 2 493

5 507 3 660

9 454 6 153

(1 109) (260)

8 345 5 893

Other financial liabilities are denominated in South African Rand.

The fair value of other financial liabilities have been assessed taking into account their respective interest rates and maturity

periods. None of the fair values differ materially from the corresponding carrying values.

Mortgage bonds

Mortgage bonds were de-recognised as part of the disposal of GIM Holdings Proprietary Limited. Refer to note 33.

Instalment sale liabilities

Liabilities under instalment sale agreements are repayable over periods between two and five years, at an average effective rate

of 8.5%. These liabilities are secured by motor vehicles and plant and equipment with a carrying value of R5.2 million (2015:

R5.7 million).

Minimum payments under instalment sale liabilities:

Figures in R'000 2016 2015

47


18.DEFERED VENDOR PAYMENTS

Reconciliation of deferred vendor payment


Acquisition of subsidiaries (refer to note 33) 34 000 65 669

Repayment of vendors through the issue of shares (7 400) (1 861)

Repayment of vendors through the ditribution of cash resources (31 376) (1 861)

Interest accrued 3 241 -

Adjustments due to change in estimate (4 993) -

Balance at the end of the year 62 752 69 280

Non-current liabilities 27 343 13 333

Current liabilities 35 409 55 947

62 752 69 280

The deferred vendor payments will be settled as follows:

Through the issue of shares 33 795 24 661

Through the distribution of cash resources 28 957 44 619

62 752 69 280

Figures in R'000 2016 2015

The amount due to vendors represents the balance of the purchase consideration owing in respect of acquisitions. The loans are settled

through the issue of shares and cash resources on achievement of profit warranties. Deferred vendor payments are recognised when

there is a reasonable expectation that the predetermined profit warranties will be achieved.

48


Figures in R'000

The settlement dates for the respective business acquisitions are as follows:

Net profit

after tax not

less than Shares

Cash

resources

Aspirata Auditing Testing and Certification

June 2016 7 600 1 446 -

March 2017 8 360 1 580 1 800

March 2018 9 196 1 738 2 000

March 2019 10 115 4 112 -

March 2020 11 127 2 103 -

Nerdworks

August 2016 2 600 6 773 -

Profit Reform

July 2016 3 500 - 392

The Training Room Online

September 2016 8 115 - 12 785

September 2017 12 173 - 12 785

Turrito Networks

June 2016 11 000 14 580 -

March 2017 11 517 136 136

March 2018 12 058 296 296

March 2019 12 625 493 493

Yonke Education and Training Solutions

August 2016 1 000 1 300 418

34 557 31 105

Future finance charges @ 9.25% per annum (762) (2 148)

33 795 28 957

49


19.DEFERRED TAX ASSETS AND LIABILITIES

Reconciliation of deferred tax

Balance at beginning of year (11 935) (1 903)

Movements consisting of

Temporary differences recognised in profit and loss (17 097) (11 043)

Change in rate of tax (5 447) -

Temporary differences recognised in equity - 465

Foreign currency translation differences (205) -

Acquisition of businesses 542 546

Disposal of businesses 824 -

Balance at end of year (33 318) (11 935)

The deferred tax asset and liability arises from the following temporary differences

Property, plant and equipment (49) (7 973)

Intangible assets (82 451) (38 279)

Investments 100 100

Income received in advance 438 2 387

Provisions 14 123 8 716

Lease straightlining accrual 3 955 3 530

Assessed loss 30 566 19 584

(33 318) (11 935)

Deferred tax assets 38 332 36 486

Deferred tax liabilities (71 650) (48 421)

(33 318) (11 935)

The directors assessed that the deferred tax assets will be recovered based on profitability forecasts.

20.TRADE AND OTHER PAYABLES

Trade creditors

Unallocated deposits

Accrued expenses

Leave pay accrual

Income received in advance

Lease straightlining accrual

Payroll accruals

Value Added Tax

Sundry creditors

56 101 82 645

6 727 11 265

12 982 12 238

7 242 9 048

30 009 7 692

14 146 12 607

20 043 20 155

6 625 6 878

7 771 4 146

161 646 166 674

Figures in R'000 2016 2015

48


Items included in trade and other payables not classified as financial instruments

Value Added Tax 6 625 6 878

Lease smoothing accrual 14 146 12 607

Leave pay accrual 7 242 9 048

28 013 28 533

Trade and other payables net of non-financial instruments (refer note 33) 133 633 138 141

Figures in R'000 2016 2015

Creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period

taken is less than 60 days. The carrying amounts approximate fair value.

Employees' entitlement to annual leave is recognised when it accrues to employees. An accrual is made for the estimated liability for

annual leave due as a result of services rendered by employees up to statement of financial position date.

49


CURRENCIES

The carrying amounts of trade and other payables are denominated in the following currencies (all balances are disclosed



Australian Dollar 339 210

British Pound 10 -

Chinese Yan Renminbi 1 012 -

Hong Kong Dollar 116 459

Namibian Dollar 686 410


US Dollar 14 998 10 073


133 633 138 141

21.CURRENT TAX RECEIVABLE/(PAYABLE)

Current tax in the Statement of Financial Position represents

Current year

Provision for tax for the year

Provisional tax paid

Prior years

Provision for tax relating to previous years

Final tax payments/(refunds) during the year relating to previous years

Under/(over) provision in prior years accounted for in current year

Interest and penalties received/(incurred)

Other

Withholding tax

Acquisition of businesses

Tax receivable

Tax payable

Total tax payments

(34 508) (35 541)

26 116 30 283

(1 437) (2 059)

1 243 2 674

1 196 1 761

(39) -

1 994 2 651

131 (1 206)

(5 304) (1 437)

6 575 8 251

(11 879) (9 688)

(5 304) (1 437)

27 359 32 957

Figures in R'000 2016 2015

50


22.COMMITMENTS

Not later than one year 27 286 21 408

Later than one year and not later than five years 89 294 73 547

Later than five years 374 9 203

116 954 104 158

23.CONTINGENCIES

24.REVENUE

Sale of goods

Services rendered

25.OTHER NET INCOME/(EXPENCES)

(Loss)/profit on sale of property, plant and equipment

Bad debts recovered

Government grants on learnerships

Loss on sale of other investments

Profit on foreign exchange

Profit on sale of subsidiaries

Re-measurement of deferred vendor payments

Rent received

Revaluation of shares

Sundry income

181 437 185 173

1 012 484 850 510

1 193 921 1 035 683

(161) 94

169 359

2 305 7 753

(283) -

4 671 1 331

7 481 -

4 993 -

- 129

- 75

3 598 6 849

22 773 16 590

Figures in R'000 2016 2015

Operating lease commitments

The Group leases various assets under non-cancellable operating lease agreements. The leases have varying terms and escalation

clauses. The lease expenditure charged to profit and loss is disclosed in note 26.

The future aggregate minimum lease payments under non-cancellable operating leases are as follows

The Group has contingent liabilities in respect of bank and other guarantees and other matters arising in the ordinary course of

business. It is not anticipated that any material liabilities will arise from contingent liabilities.

51


26.EXPENDITURE BY NATURE

Auditors' remuneration

Fees for the current year audit 3 591 2 915

Over/(under) provision for prior year fees 184 (184)

Tax and secretarial services 181 53

3 956 2 784

Depreciation and amortisation

Depreciation of property, plant and equipment 14 766 11 111

Amortisation of intangible assets 1 994 1 040

Impairment of intangible assets - 132

16 760 12 283

Operating lease charges

Premises 40 721 33 184

Equipment 1 919 1 605

Other 2 223 1 523

44 863 36 312

Figures in R'000 2016 2015

52


Other expenses

Employee compensation and benefit expense 215 598 163 043

Motor vehicle expenses 7 384 4 170

Repairs and maintenance 2 800 1 973

Telephone and fax 8 878 8 531

Security 991 1 004

Insurance 2 071 2 878

Computer expense 5 629 3 485

Advertising expense 9 737 10 161

Commissions to third parties 136 -

Courier and postage 1 058 1 053

Printing and stationary 4 396 3 780

Travel - Local 13 262 11 511

Travel - International 1 833 2 175

Consulting fees 2 509 3 485

Electricity 6 552 5 870

Bank charges 2 456 2 280

Legal fees 1 287 2 132

Administration and management fee 177 2 296

Bad debts written off and provided 8 844 12 231

Cleaning 2 336 1 700

Sponsorship, enterprise development and donations 4 953 4 923

Entertainment 2 717 2 866

Fines and penalties 99 20

Other 10 881 7 317

316 584 258 884

Total opera�ng expenses 382 163 310 263

Admin expenses 374 779 306 093

Distribu�on expenses 7 384 4 170

382 163 310 263

Figures in R'000 2016 2015

53


27.FINANCE INCOME

Bank 1 760 4 650

Instalment sale assets 207 169

Trade receivables 329 -

Tax Receivable 325 71

Other 658 151

3 279 5 041

28.FINANCE COSTS

Other financial liabilities 1 045 1 402

Bank overdrafts and acceptances 732 241

Deferred vendor payments 3 241 -

Other 227 124

5 245 1 767

Figures in R'000 2016 2015

54


29. INCOME TAX EXPENCE

Current tax

Current year 34 508 35 541

Prior year (1 196) (1 761)

Deferred taxation

Current year 19 191 9 184

Prior year (2 094) 1 859

Rate adjustment 5 447 -

55 856 44 823

Reconciliation of rate of taxation % %

South African normal taxation rate 28.00 28.00

Adjusted for

Income not subject to tax (6.00) (1.60)

Expenses not deductible for tax 1.10 0.60

Current tax - prior year adjustment (0.70) (1.00)

Deferred tax - prior year adjustment (0.90) 1.00

Tax rate adjustment on capital gains tax 2.60 0.00

Foreign taxation 1.80 (0.70)

Capital gains tax 0.10 0.00

Net reduction (2.00) (1.70)

Effective rate of taxation 26.00 26.30

The increase in the income not subject to tax mainly relates to the section 12H learnership allowances.

Figures in R'000 2016 2015

55


30.DIRECTORS’ EMOLUMENTS

Name

Number of

share

options

available -

2016

Number of

share options

available -

2015 Salary

Bonuses and

performance

related

payments Directors fees Total 2016 Total 2015

DC King - - 2 502 - - 2 502 2 365

IG Morris - - 2 281 - - 2 281 2 266

DSE Carlisle - 280 000 1 966 - - 1 966 1 835

RB Dick 416 667 625 000 1 992 1 000 - 2 992 1 963

AW Swan - - - - 160 160 137

DA Di Siena - - - - 156 156 143

GE Jacobs - - - - 156 156 116

RC Lewin - - - - 160 160 106

PH Duvenhage - - - - 156 156 95

TW Hamill - - - - 156 156 37

Members of

key

management

646 667 763 333 20 918 3 660 - 24 578 16 166

1 063 334 1 668 333 29 659 4 660 944 35 263 25 229

31.EARNINGS PER SHARE

Weighted average ordinary shares

Share op�ons

Weighted average diluted ordinary shares

Figures in R'000

The calculation of earnings per ordinary share of 129.64 cents (2015: 101.27 cents) is based on the earnings attributable to

ordinary shareholders of R145.4 million (2015: R110.7 million) and a weighted average of 112,184,529 (2015: 109,264,751)

ordinary shares in issue throughout the year.

The calculation of diluted earnings per ordinary share of 126.07 cents (2015: 99.45 cents) is based on earnings attributable to

ordinary shareholders of R145.4 million (2015: R110.7 million) and a diluted weighted average of 115,360,076 (2015:

111,269,924) ordinary shares in issue throughout the year.

Reconciliation between weighted average number of ordinary shares and diluted weighted average number of ordinary shares

The shares to be issued as part of the business acquisitions did not have an impact on the weighted average diluted ordinary

shares.

112 184 529 109 264 751

3 175 547 2 005 173

115 360 076 111 269 924

2016 2015

56


Profit before

tax Taxation

Non-

controlling

interest

Net Profit

2016 2015

Profit attributable to owners of the parent 214 593 (55 856) (13 304) 145 433 110 653

Loss/(profit) on disposal of property,

plant and equipment 161 (45) - 116 (68)

Impairment of intangible assets - - - - 95

Loss on disposal of other investments 283 - - 283 -

Profit on disposal of investments in

subsidiaries and businesses (7 481) 116 - (7 365) -

207 556 (55 785) (13 304) 138 467 110 680

Figures in R'000

The weighted average number of shares is the number of shares outstanding at the beginning of the period, adjusted for any

additional shares issued during the period, appropriately weighted for the time the shares are outstanding. Furthermore, any

treasury shares held by the group are deducted from this amount.

The calculation of headline earnings per share of 123.43 cents (2015: 101.30 cents) is based on earnings of R138.5 million (2015:

R110.7 million) and a weighted average of 112,184,529 (2015: 109,264,751) ordinary shares in issue throughout the year.

The calculation of diluted headline earnings per share of 120.03 cents (2015: 99.47 cents) is based on earnings of R138.5 million

(2015: R110.7 million) and a weighted average of 115,184,529 (2015: 111,269,924) ordinary shares in issue throughout the year.

Reconciliation between earnings and headline earnings

57


32.CASH GENERATED FROM OPERATIONS

Profit before tax 214 593 171 194

Adjusted for

Share of profit from equity accounted associates (1 811) (1 978)

Depreciation and amortisation 16 760 12 151

Loss/(profit) on disposal of property, plant and equipment 161 (94)

Impairment of intangible assets - 132

Profit on disposal of subsidiaries (7 481) -

Loss on disposal of investment 283 -

Revaluation of shares - (75)

Adjustment to acquisition vendors (4 993) -

Share-based payment expense 5 467 2 707

Movement in deal difference reserve - (1 000)

Movement in foreign currency translation reserve 3 550 1 461

Finance income (3 279) (5 041)

Finance costs 5 245 1 767

Movement in working capital

Increase in inventories (12 870) (15 085)

Increase in trade and other receivables (42 984) (70 815)

(Decrease)/Increase in trade and other payables (20 151) 38 055

152 490 133 379

33.BUSINESS COMBINATIONS

2016

Figures in R'000 2016 2015

Profit Reform Proprietary Limited Trading as "COID Support"

On 1 August 2015, the Group acquired a 51% interest in COID Support for a consideration of R4.6 million. Goodwill to the value

of R4.3 million was accounted for. The amount of net assets acquired amounted to R0.7 million and a non-controlling interest of

R0.3 million was recognised.

COID contributed revenue of R3.6 million and profit after tax of R1.0 million since the acquisition date. If the acquisition had

occurred on 1 April 2015, Group revenue would have been R8.2 million more, and profit after tax

would have increased by R0.9 million.

Nerdworks Proprietary Limited Trading as "Dial a Nerd"

On 1 September 2015, the Group acquired a 51% interest in Dial a Nerd for a consideration of R7.4 million. Goodwill to the value

of R6.2 million was accounted for. The amount of net assets acquired amounted to R2.3 million and a non-controlling

interest of R1.1 million was recognised.

58The supplementary information presented does not form part of the annual financial statements and is unaudited


Figures in R'000

Dial a Nerd contributed revenue of R18.7 million and profit after tax of R1.6 million since the acquisition date. If the

acquisition had occurred on 1 April 2015, Group revenue would have been R33.6 million more, and profit after tax

would have increased by R2.1 million.

Yonke Education and Training Solutions Proprietary Limited “Yonke”

On 1 September 2015, the Group acquired 50% interest in Yonke Education and Training Solutions Proprietary Limited for a

consideration of R3.1 million. Goodwill to the value of R1.8 million was accounted for. The amount of net assets acquired

amounted to R2.6 million and non-controlling interest of R1.3 million was raised.

Yonke Education and Training Solutions contributed revenue of R9.3 million and profit after tax of R1.8 million since

the acquisition date. If the acquisition had occurred on 1 April 2015, Group revenue would have been R15.2 million

more, and profit after tax would have increased by R1.5 million.

The Group has effective control of the board of directors of Yonke Education and Training Solutions Proprietary Limited by

means of an additional deciding vote.

The Training Room Online Proprietary Limited ”TTRO”

On 1 October 2015, the Group acquired a 100% interest in The Training Room Online Proprietary Limited for a

consideration of R36.8 million. Goodwill to the value of R33.4 million was accounted for. The amount of net assets

acquired amounted to R3.4 million.

The Training Room Online contributed revenue of R16.4 million and profit after tax of R2.7 million since the

acquisition date. If the acquisition had occurred on 1 April 2015, Group revenue would have been R23.1 million more, and

profit after tax would have decreased by R0.1 million.

The fair value of assets acquired and liabilities assumed relating to the above business combinations is subject to

change should additional information become available within the 12 month re-measurement period from date of

acquisition.

59


Net cash flows from acquisitions

The carrying value of trade and other receivables recognised on date of acquisition equals the fair value thereof.

The goodwill is attributable to the workforce acquired and the significant synergies expected to arise after the Group's acquisition

of the acquired subsidiaries

The amount due to vendors represents the balance of the purchase consideration owing in respect of acquisitions, refer to note 18.

2015

Mubesko Africa Proprietary Limited “Mubesko”

On 1 June 2014, the Group acquired a 50% interest in Mubesko Africa (Pty) Ltd for a consideration of R27.4 million. Goodwill to the

value of R20.7 million was accounted for. The amount of net assets acquired amounted to R13.4 million and a non-controlling

interest of R6.7 million was recognised.

The Group has effective control of the board of directors of Mubesko (Pty) Ltd by means of an additional deciding vote.

Figures in R'000

COID Support Dial a Nerd Yonke TTRO Total

Property, plant and equipment 29 625 211 1 396 2 261

Intangible assets 50 279 - - 329

Inventories - 560 - 44 604

Trade and other receivables 650 1 981 2 654 5 621 10 906

Cash and cash equivalents 423 142 1 133 1 082 2 780

Trade and other payables (412) (1 348) (1 667) (5 041) (8 468)

Other financial liabilities - - - (114) (114)

Deferred tax - 49 - 493 542

Tax receivable/(payable) 7 32 222 (130) 131

Total net assets acquired 747 2 320 2 553 3 351 8 971

Goodwill 4 259 6 199 1 828 33 419 45 705

Non-controlling interest (366) (1 137) (1 276) - (2 779)

Purchase consideration 4 640 7 382 3 105 36 770 51 897

Deferred vendor payments (3 890) (6 199) (1 573) (22 338) (34 000)

Cash acquired (423) (142) (1 133) (1 082) (2 780)

Net cash flow from acquisitions 327 1 041 399 13 350 15 117

60


Net cash flows from acquisitions

Mubesko ATA & ATC R-Data Aspirata Total

Property, plant and equipment

Trade and other receivables

Cash and cash equivalents

Trade and other payables

Other financial liabilities

Deferred tax

Tax payable

Total net assets acquired

Goodwill


Purchase consideration

Shares issued

Deferred vendor payments

Cash acquired

Net cash flow from acquisitions

198 1 131 934 9 936 12 199

8 396 4 112 3 003 10 318 25 829

9 033 1 134 2 628 2 203 14 998

(3 395) (2 753) (2 721) (2 597) (11 466)

- (655) (203) - (858)

53 106 39 348 546

(885) 187 (620) 112 (1 206)

13 400 3 262 3 060 20 320 40 042

20 722 25 600 9 886 21 449 77 657

(6 699) - - - (6 699)

27 423 28 862 12 946 41 769 111 000

(6 750) (6 000) (7 966) - (20 716)

(13 500) (10 400) - (41 769) (65 669)

(9 033) (1 134) (2 628) (2 203) (14 998)

(1 860) 11 328 2 352 (2 203) 9 617

Action Training Academy Proprietary Limited and Action Training Consulting Proprietary Limited “ATA & ATC”

On 1 September 2014, the Group acquired 100% interest in Action Training Academy (Pty) Ltd and Action Training Consulting (Pty) Ltd for a

consideration of R28.9 million. Goodwill to the value of R25.6 million was accounted for. The amount of net assets acquired amounted to

R3.3 million.

R-Data Proprietary Limited ”R-DATA”

On 1 October 2014, the Group acquired a 100% interest in R-Data (Pty) Ltd for a consideration of R12.9 million. Goodwill to the value of R9.9

million was accounted for. The amount of net assets acquired amounted to R3.1 million.

Aspirata Auditing Testing and Certification Proprietary Limited “Aspirata”

On 1 March 2015, the Group acquired 100% interest in Aspirata Auditing Testing and Certification (Pty) Ltd for a consideration of R41.8

million. Goodwill to the value of R21.4million was accounted for. The amount of net assets acquired amounted to R20.3 million.

The fair value of assets acquired and liabilities assumed relating to the above business combinations is subject to change should additional

information become available within the 12 month re-measurement period from date of acquisition.

Figures in R'000

61


Property, plant and equipment

Intangible assets

Goodwill




Deferred tax

Total net assets disposed

Profit on disposal

Consideration

Shares to be transferred

Net cash flow from disposals

GIM GoMobile Total

9 406 7 9 413

- 1 580 1 580

- - -

1 241 96 1 337

(12) (84) (96)

(6 523) - (6 523)

(966) 142 (824)

3 146 1 741 4 887

6 353 1 128 7 481

9 499 2 869 12 368

(9 499) - (9 499)

- 2 869 2 869

The carrying value of trade and other receivables recognised on date of acquisition equals the fair value thereof.

The goodwill is attributable to the workforce acquired and the significant synergies expected to arise after the Gourp's acquisition

of the acquired subsidiaries.

The amount due to vendors represents the balance of the purchase consideration owing in respect of acquisitions refer to note 18.

34. DISPOSAL OF SUBSIDIARIES

GIM Holdings Proprietary Limited “GIM”

On 1 September 2015 the Group disposed of its 100% interest in GIM Holdings Proprietary Limited for a consideration of R9.5

million, which resulted in a loss of control of GIM Holdings Proprietary Limited. This event resulted in a profit of R6.4 million

recorded in profit and loss and the re-cycling of R2.0 million to the revaluation reserve in equity. The consideration receivable will

be settled through the receipt of MICROmega shares.

GoMobile Proprietary Limited “GoMobile”

On 2 March 2016 the Group disposed of its 50% interest in GoMobile Proprietary Limited for a consideration of R2.9 million, which

resulted in a loss of control of GoMobile. This event resulted in a profit of R1.1 million recorded in profit and loss and the re-cycling

of R0.6 million to non-controlling interest in equity.

Net cash flows from disposals

Figures in R'000

62


35.FINANCIAL INSTRUMENTS

The Group has classified its financial assets in the following categories

Loans and

receivables

held at

amortised

cost Total

2016

Other financial assets 7 087 7 087

Trade and other receivables 283 042 283 042

Cash and cash equivalents 89 427 89 427

379 556 393 204

2015

Investments - 283




387 082 400 222

The Group has classified its financial liabilities in the following categories

2016




Bank overdraft

2015




Loans

payable at

amortised

cost Total

8 345 8 345

62 752 62 752

133 633 133 633

49 537 49 537

254 267 254 267

14 472 14 472

69 280 69 280

166 674 166 674

250 426 250 426

Figures in R'000

63


The estimated fair values of financial assets and financial liabilities as at 31 March 2016 have been determined using available market

information and appropriate valuation methodologies. The fair value of all financial instruments equals their carrying value, either

because of the short term nature and normal trade terms thereof, or the market related interest rates attached to it.

36. RISK MANAGEMENT

Overview

The Group has exposure to the following risks from its use of financial instruments:

credit risk

liquidity risk

currency risk

interest rate risk

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes

for measuring and managing risk, and the Group’s management of capital. Further quantitative disclosures are included throughout

these financials.

The directors have overall responsibility for the establishment and oversight for the Group’s risk management framework. The

directors are responsible for developing and monitoring the Group’s risk management policies.

The Group’s risk management policies are established to identify and analyse the risk faced by the Group, to set appropriate risk

limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly.

The Board oversees how management monitors compliance with the Group’s risk management policies and procedures and

reviews the adequacy of the risk management framework in relation to the risks faced by the Group.

36.1 CREDIT RISK

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual

obligations, and arises principally from the Group’s trade receivables from customers and deposits with banks.


The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other

receivables and investments. The main components of this allowance are a specific loss component that relates to individually

significant exposures, and a collective loss component established for Groups of similar assets in respect of losses that have been

incurred but not yet identified.

64


Figures in R'000 2016 2015

Credit quality of trade and other receivables can be analysed as follows

Group 1 92 114 22 400

Group 2 144 236 137 939

Group 3 52 313 71 195

Group 4 7 362 3 235

Total 296 025 234 769

Group 1 - new customers (less than six months)

Group 2 - existing customers (more than six months) with no defaults (no bad debt write-off/hand-overs) in the past

Group 3 - existing customers (more than six months) with some defaults

Group 4 - customers with defaults, no trading and hand over. This category of trade receivables related mainly to contractors and sub-

contractors exposed to government and parastatal bodies. Appropriate security policies are in place to limit this category.

Management does not expect any losses from non-performance by these counter parties as the disclosure above is the maximum

exposure due from credit risk.

Deposits with banks

The credit risk policy for financial institutions and service providers has the objective to minimise losses that could result from

counter party failure. All such counter parties are assessed on an annual basis to ensure credit worthiness and the evaluations will be

based on the financial strength of the counter party as published by a recognised rating agency.

Short term credit ratings with banks where balances are held

31 March

2016

31 March

2016

31 March

2015

31 March

2015

Moody's Fitch Moody's Fitch

ABSA Bank Limited P - 2 F3 P - 2 F3

First National (a division of FirstRand Bank Limited) P - 2 F3 P - 2 F3

HSBC Bank Plc P - 1 F1 P - 1 F1

Nedbank Limited P - 2 F3 P - 2 F3

Standard Chartered Bank P - 1 F1 P - 1 F1

Moody's Rating Scale

P - 1: Issuers have a superior ability to repay short-term debt obligations

P - 2: Issuers have a strong ability to repay short-term debt obligations

Fitch Rating Scale

F1: Best quality grade, indicating exceptionally strong capacity of oblior to meet its financial commitments

F3: Fair quality grade with adequate capacity of obligor to meet its financial commitment but near term adverse conditions could

impact the obligor's commitments

Figures in R'000

65


Management does not expect any losses from non-performance by these counterparties.

36.2 LIQUIDITY RISK

Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due. The group’s approach to

managing liquidity is to ensure, as far as possible, that it will always have sufficient cash/ liquid assets to meet its liabilities when due,

under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the group’s reputation.

Typically the group ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days,

including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably

be predicted, such as natural disasters. In addition, the group’s statement of financial position remains lowly geared and thus the

directors are comfortable with the ability to receive lines of credit.

The table below analyses the group's financial liabilities that will be expected to be settled on a net basis into relevant maturity

groups based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table are

the contractual undiscounted cash flows:

2016




Bank overdraft

2015




Less than 1

year

Between 1

and 5 years Over 5 years Total

3 947 5 507 - 9 454

37 695 27 967 - 65 662

133 633 - - 133 633

49 537 - - 49 537

224 812 33 474 - 258 286

3 101 7 078 4 293 14 472

55 947 13 333 - 69 280

138 141 - - 138 141

197 189 20 411 4 293 221 893

66


Figures in R'000 2016 2015

Sensitivity analysis based on balances at reporting date


Cash and cash equivalents 89 427 147 885

Bank overdraft (49 537) -

Other financial liabilities (8 345) (14 472)

Deferred vendor payments (62 752) (69 280)

Less: Non-interest bearing financial assets (5 982) (11 982)

Less: Non-interest bearing deferred vendor payments 14 779 69 280

Net interest-bearing assets/(liabilities) (15 323) 137 322

Interest rate change 2 % 2 %

Potential after tax impact on earnings (221) 1 977

36.3 INTEREST RATE RISK

The Group exposure on fair value interest rate risk mainly arises from its fixed deposits with banks. It also has exposure on cash flow

interest rate risk which is mainly arising from its deposits with banks and interest-bearing borrowings with the banks. It is a common

practice in South Africa to have floating rate borrowings with the banks. In order to manage the cash flow interest rate risk, the Group

will repay the corresponding borrowings when it has surplus funds.

The sensitivity analysis has been prepared with the assumption that the change in interest rates had occurred at the balance sheet

date and had been applied to the exposure to interest rate risk for the relevant financial instruments in existence at that date. The

changes in interest rate represent management’s assessment of a reasonably possible change in interest rates at that date over the

period until the next annual balance sheet date.

36.4 CURRENCY RISK

The Group is exposed to currency risk on sales and purchases that are denominated in a currency other than the respective

functional currency of the Group.

The exposure to currency risk as at year end is disclosed in note 12 trade and other receivables, note 13 cash and cash equivalents

and note 20 trade and other payables.

In respect of purchases and payables, the Group controls its volume of purchase orders to a tolerable level and avoids concentrating

the purchases in a single foreign currency by diversifying such foreign currency risk exposure.

In respect of sales and receivables, the Group sets a prudent credit limit to individual customers who transact with it in other foreign

currencies. The directors’ approval is required on the exposure to an individual customer or transaction that exceeds the limit.

Figures in R'000

67


2016

2016

2015

2015

Average rate Closing rate Average rate Closing rate

10.1054 11.3646 9.64871 9.26715

20.6996 21.2941 17.8017 17.9926

2.1683 2.29751 1.7965 1.98244

15.2003 16.8338 13.9841 13.0924

1.7745 1.9111 1.4262 1.56749

9.3073 10.2484 8.92937 9.09383

Summary of the average and closing rates

Australian Dollar

British Pound

Chinese Yan Renminbi

Euro

Hong Kong Dollar

New Zealand Dollar

US Dollar 13.767 14.8208 11.0591 12.1548

Australian Dollar 1 431 863

British Pound 463 3 030


Euro 153 901

Hong Kong Dollar 1 243 6 434

New Zealand Dollar (418) 460

US Dollar 21 482 17 105

Other currencies 90 (100)

Net foreign currency exposure 54 568 47 982

Potential after tax impact on earnings 3 929 3 455

Sensitivity analysis

The sensitivity analysis has been prepared with the assumption that the change in foreign exchange rates had occurred at the

balance sheet date and had been applied to the exposure to currency risk for the relevant financial instruments in existence at that

date. The changes in foreign exchange rates represent management’s assessment of a reasonably possible change in foreign

exchange rates at that date over the period until the next annual balance sheet date.

A 10% weakening of the Rand against the currencies referred in the trade and other receivables, cash and cash equivalents and trade

and other payables notes would have increased/(decreased) equity and post-tax profit by:

A 10% strengthening of the Rand against the above currencies as at 31 March would have had the equal but opposite effect on the

above currencies to the amounts shown, on the basis that all variables remain constant.

37. CAPITAL MANAGEMENT

The boards policy is to maintain a strong capital base to maintain creditor and shareholder confidence and to sustain future

development of the business. The board monitors return on capital, which the Group defines as net operating income divided by

total shareholders equity. The board also monitors the level of dividends to ordinary shareholders. There were no changes in the

Groups approach to capital management during the year. The Group is not subject to externally imposed capital requirements.

68


Figures in R'000

38.SEGMENTAL ANALISYS

2016 Occupational

health and

safety

Labour

supply

Information

technologies

Financial

services

Holding and

consolidationeliminations

Total

Statement of profit and loss

Revenue 452 594 217 726 494 221 46 821 (17 441) 1 193 921

Depreciation,

amortisation

and

impairments

7 838 202 4 562 132 4 026 16 760

Employee

costs 69 777 13 712 114 378 5 173 12 558 215 598

Operating

profit 102 536 2 411 133 323 11 155 (34 677) 214 748

Finance

income/

(expenses)

59 (10) 1 404 255 (3 674) (1 966)

Share of

profit of

equity

accounted

associates

- - - - 1 811 1 811

Net profit

before tax 102 595 2 401 134 727 11 410 (36 540) 214 593

Tax expense (27 574) 1 656 (36 678) (3 234) 9 974 (55 856)

Net profit

after tax 75 021 4 057 98 049 8 176 (26 566) 158 737

Statement of financial

position

Assets 406 843 59 535 421 999 52 048 191 892 1 132 317

Liabilities 129 661 27 651 236 525 4 860 (39 638) 359 059

69


2015

Statement of profit and loss

Revenue

Depreciation,

amortisation

and

impairments

Employee

costs

Operating

profit

Finance

income/

(expenses)

Share of

profit of

equity

accounted

associatesNet profit

before tax

Tax expense

Net profit

after tax

Statement of financial

position

Assets

Liabilities

Figures in R'000

Holdings and consolidation elimination entries is not considered a reportable segment and reconcile the segmented information to

the Group financial results.

Occupational

health and

safety

Labour

supply

Information

technologies

Financial

services

Holding and

consolidationeliminations

Total

333 253 264 071 399 605 38 378 376 1 035 683

(4 487) (236) (4 768) (103) (3 257) (12 851)

58 771 14 581 69 206 5 702 14 783 163 043

67 410 2 679 88 992 4 418 2 443 165 942

465 (46) 1 212 315 1 328 3 274

- - - - 1 978 1 978

67 875 2 633 90 204 4 733 5 749 171 194

(18 063) (507) (23 273) (1 254) (1 726) (44 823)

49 812 2 126 66 931 3 479 4 023 126 371

409 512 60 566 283 969 71 914 154 217 980 178

71 745 23 710 141 563 15 084 56 433 308 535

70


Figures in R'000 2016 2015

Refer to note 30 for the detailed directors emoluments.

A lis�ng of the group's principal and fellow subsidiaries, joint ventures and associates is set out in note 40.

The following transac�ons were carried out with related par�es

Revenue (Sale of goods and services rendered)

Associates


Joint operations

GFI Securities Nyon SARL 13 046 10 586

27 366 24 111

Balances with related parties were as follows

Trade receivables

Joint operations

GFI Securities Nyon SARL 9 236 5 973

Other -

Kamberg Investment Holdings Proprietary Limited 5 176 -

14 412 5 973


Associates


5 640 5 640

On 1 September 2015 the Group disposed of its interest in GIM Holdings Proprietary Limited to Kamberg Investment Holdings

Proprietary Limited. The entire issued share capital of Kamberg Investment Holdings Proprietary Limited is held by the Greg Morris

Family Trust, of which Mr IG Morris, the Chief executive officer of the Group, is the sole beneficiary. Refer to note 34 for details on the

disposal of GIM Holdings Proprietary Limited.

The Group has a joint arrangement, classified as a joint operation with GFI Securities Nyon SARL ("GFI"), whereby the MICROmega

Securities Group and GFI has a 50% participating interest in the specified profit and loss for the MICROmega Securities Group and

GFI. GFI is eligible to receive 50% of the profit generated by the MICROmega Securities Group and the MICROmega Securities Group

is eligible to receive 50% of the profit generated by GFI.

39. RELATED PARTY TRANSACTIONS AND BALANCES

The Group entered into transactions and had balances with related parties as listed below. These include associates, joint

operations, directors and members of key management. The transactions that are eliminated on consolidation are not included.

Transactions with related parties are effected on a commercial basis and related party debts are repayable on a commercial basis.

71


40.LIST OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

Interest held Interest held Issued

capitalCountry

2016 2015 2016

100% 100% 100 RSA

100% 100% 100 RSA

51% 51% 200 RSA

100% 100% 1 000 RSA

100% 100% 1 RSA

100% 100% 100 RSA

50% 50% 120 RSA

50% 50% 1 000 RSA

100% 100% 100 RSA

55% 55% 100 RSA

0% 100% 100 RSA

0% 50% 100 RSA

100% 100% 1 000 RSA

100% 100% 1 992 310 RSA

100% 100% 200 RSA

100% 100% 16 RSA

100% 100% 100 RSA

100% 100% 100 RSA

100% 0% 100 RSA

51% 51% 100 RSA

100% 100% 100 RSA

100% 100% 2 005 501 RSA

100% 100% 69 282 DRC

100% 100% 100 RSA

100% 100% 8 404 751 RSA

100% 100% 100 RSA

50% 50% 100 RSA

100% 100% 100 RSA

Name

Subsidiaries - direct and indirect interest

Action Training Academy Proprietary Limited

Action Training Consulting Proprietary Limited

Amanzi Proprietary Limited

Arbez Advanced Solutions Proprietary Limited

Aspirata Auditing Testing and Certification Proprietary Limited

Cloudware Proprietary Limited

Empowerisk Management Services Proprietary Limited

Empowerisk Proprietary Limited

ESGA Proprietary Limited

Freshmark Systems Proprietary Limited

GIM Holdings Proprietary Limited

GoMobile Proprietary Limited

Intermap Proprietary Limited

MECS Africa Proprietary Limited

MECS Growth Proprietary Limited

MICROmega Accounting and Professional Services

Proprietary Limited

MICROmega Africa Money Brokers Proprietary Limited

MICROmega Financial Services Proprietary Limited

MICROmega H2O Proprietary Limited

MICROmega Publications Proprietary Limited

MICROmega Revenue Management Solutions Proprietary

Limited

MICROmega Securities Proprietary Limited

MICROmega Services and Support DRC

MICROmega Technologies Proprietary Limited

MICROmega Treasury Solutions Proprietary Limited

MIS Consulting Proprietary Limited

Mubesko Africa Proprietary Limited

National Quality Assurance Proprietary Limited

Nerdworks Proprietary Limited 50% 0% 954 878 RSA

72


The Group has effective control of the board of directors of Empowerisk Proprietary Limited, Empowerisk Management Services

Proprietary Limited, Mubesko Africa Proprietary Limited, NOSA Agricultural Proprietary Limited, Ocneblok Proprietary Limited and

Yonke Proprietary Limited by means of an additional deciding vote.

NOSA Agricultural Services Proprietary Limited 50% 50% 100

NOSA Auditing and Inspection Services Proprietary Limited 100% 100% 120

NOSA Certification Authority Proprietary Limited 100% 100% 120 000

NOSA Global Holdings Proprietary Limited 100% 100% 16 220

NOSA Investment Holdings Proprietary Limited (Hong Kong) 100% 100% 1

NOSA Investment Holdings Proprietary Limited (South Africa) 100% 100% 100

NOSA Mozambique Proprietary Limited 100% 100% 7 418

NOSA Namibia Proprietary Limited 100% 100% 1

NOSA New Zealand Proprietary Limited 100% 100% 5 542

NOSA Proprietary Limited 100% 100% 120

NOSA Technologies Proprietary Limited 84% 84% 100

NOSA Travel Agency Proprietary Limited 100% 100% 1

NOSA Zambia Proprietary Limited 100% 100% 6 955

Ocneblok Proprietary Limited 50% 50% 200

Profit Reform Proprietary Limited 100% 0% 100

R-Data Proprietary Limited 100% 100% 1 000

Riskworks Proprietary Limited 60% 60% 200

SA International and Capital Market Brokers Proprietary

Limited100% 100% 100

SAICMB Proprietary Limited (Australia) 70% 70% 279 653

Sciam Professional Solutions Proprietary Limited 100% 100% 100

Sebata Municipal Solutions Proprietary Limited 100% 100% 7 931 095

Sebata Municipal Solutions Proprietary Limited (Namibia) 100% 100% 100

Shenzhen Proprietary Limited 70% 70% 1 733 948

Stable-Net Proprietary Limited 100% 100% 120

Swazi Occupational Safety and Health Proprietary Limited 100% 100% 100

Symphony Trade and Invest Proprietary Limited 83% 83% 120

The Training Room Online Proprietary Limited 100% 0% 1 000

TTSA Securities Proprietary Limited 100% 100% 100

Turrito Networks Proprietary Limited 100% 60% 100

USC Manufacturing Proprietary Limited 100% 100% 100

USC Metering Proprietary Limited 100% 83% 120

Yonke Proprietary Limited 50% 0% 100

Associates - direct and indirect interest

Kyostax Proprietary Limited 30% 30% 100

Cloudware Investment Holdings Proprietary Limited 0% 33% 100

Mozambique

New Zealand

RSA

RSA

RSA

Hong Kong

Hong Kong

RSA

Namibia

RSA

RSA

RSA

Zambia

RSA

RSA

RSA

RSA

RSA

Australia

Swaziland

RSA

Namibia

China

RSA

Swaziland

RSA

RSA

RSA

RSA

RSA

RSA

RSA

RSA

RSA

73


41.SHAREHOLDERS' INFORMATION

Analysis of Share Register at 31 March 2016

Portfolio size

1 to 50 000

50 001 to 250 000

Over 250 000

Non-public and public shareholders

Non-public shareholders

Friedshelf 1382 (Pty) Ltd

Kamberg Investment Holdings (Pty) Ltd

Seratrix (Pty) Ltd

Subsidiary Companies

Directors (direct and indirect beneficial

interest)

Directors (Subsidiary companies - direct

and indirect beneficial interest)

Total public shareholders

Major shareholders

Friedshelf 1382 (Pty) Ltd

Kamberg Investment Holdings (Pty) Ltd

Seratrix (Pty) Ltd

Enigma Investment Holdings (Pty) Ltd

TTSA Securities (Pty) Ltd

Mr Leon van Heerden

Peregrine Equities (Pty) Ltd

Deutsche Securities (Pty) Ltd

Six Sis (Pty) Ltd

Mr Rene Daubinet

Number of

shareholders

Percentage of

shareholders

Number of

shares

Percentage of

share capital

1 387 95 4 906 680 4

42 3 4 719 905 4

29 2 105 288 504 92

1 458 100 114 915 089 100

Number of

shareholders

Number of

shares

Percentage of

share capital

1 72 534 683 63

1 12 000 800 10

1 3 375 200 3

1 2 077 428 2

4 1 004 596 1

1 233 577 -

9 91 226 284 79

1 354 22 905 488 21

1 363 114 131 772 100

Number of

shares

Percentage of

share capital

72 534 683 63

12 000 800 10

3 375 200 3

3 050 603 3

2 077 428 2

1 419 710 1

1 084 729 1

910 454 1

816 157 1

663 424 1

2016 2015

Direct Indirect Direct Indirect

- 72 534 683 - 72 126 920

- 12 000 800 - 12 000 800

- 641 342 - 641 342

- 3 375 200 - 3 375 200

263 254 - 54 921 -

98 500 - 28 500 -

- - - -

- - - -

- - - -

Directors interest in securities

DC King (Executive Chairman)

IG Morris

RC Lewin

DSE Carlisle

RB Dick

AB Swan

PH Duvenhage

GE Jacobs

DA di Siena

TW Hamill 1 500 - 1 000 -

363 254 88 552 025 84 421 88 144 262

726 508 177 104 050 168 842 176 288 524

74


There were no changes in these shareholdings from the date of the financial year end to the date of approval of the annual

consolidated financial statements.

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