Annual Report 2008 - ShareData · PDF fileTable of Contents DVT Holdings Annual Report 2008 1 Table of Contents About DVT Group Structure Financial Highlights Value Added Statement

Annual Report 2008

tailor-made software solutions that always measure up

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Table of Contents

1DVT Holdings Annual Report 2008

Table of Contents

About DVT

Group Structure

Financial Highlights

Value Added Statement

Board of Directors

Chairman’s Report

CEO’s Report

Corporate Governance and Sustainability

Shareholder Analysis

2008 Annual Financial Statements

Directors’ Responsibilities and Approval

Report of the Independent Auditors

Directors’ Report

Consolidated Balance Sheet

Consolidated Statement of Changes in Equity

Consolidated Income Statement

Consolidated Cash Flow Statement

Consolidated Accounting Policies

Consolidated Notes to the Financial Statements

Notice of Change of Name

Notice of Annual General Meeting

Corporate Information

Form of Proxy

Form of Surrender

1

2

3

4

5

6

8

10

14

17

19

29

21

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25

26

27

27

28

37

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56

60

61

63

HISTORY

DVT was formed Cape Town in 1999 by entrepreneurs Chris Wilkins and Clive Hubbard as a provider of software development services focusing on Microsoft technologies. From a handful of staff at inception, the business grew rapidly over the next five years, performing profitably through some of the most challenging times in the IT industry. This resulted in a focused, efficient and resilient business.

Sustained growth within DVT has been achieved by

• expansion into the much larger market of Gauteng during 2004; • simultaneous diversification into another mainstream development technology, viz. Java; and• the addition of licensed software products to DVT’s offering via two small acquisitions (Solutional in 2005 and Offline Digital in 2007).

During 2006 DVT underwent a significant restructure, with a consortium of experienced IT executives buying a controlling stake in DVT from the founders, followed soon after by an investment by black-owned Cornastone.

In 2007, DVT was re-organised in preparation for the listing on ALTX by the acquisition of all minorities in the operating subsidiaries for shares in the holding company and the buyout of one of the founders, Clive Hubbard.

DVT listed on the ALTX on 6 November 2007 and raised R15,8m in a private placement.

About DVT

2

CORE BUSINESS

DVT specialises in the delivery of tailor-made software solutions and a range of software devel-opment professional services.

Solutions are developed using a combination of frameworks and components, packaged software and custom development, primarily based on the Microsoft and Java platforms. DVT is strategically committed to Microsoft and is a Microsoft Gold certified partner.

To deliver these services, the DVT group employs over 130 staff, most of whom are professionals across a wide range of disciplines including project management, business analysis, and software development and testing.

DVT provides solutions to large and medium sized corporate clients in South Africa; primarily in the Financial Services, Retail, Business Services and Telecommunications sectors. Key characteristics of the target market are an inability to attract scarce technical skills, the need to replenish dated systems, a requirement to outsource complex and expensive software development projects and a backlog of requirements for mission critical software solutions.

VISION

To become the premier provider of applications software and services in South Africa.

Group Structure


Cornastone TechnologyInvestments (Pty) Ltd Non-public shareholders

including directors andassociates

243 public shareholdersowning 14 995 165 shares

20,9% 49,1% 30,0%

Dynamic Visual TechnologiesHoldings Limited

100% 100% 100% 66,7%

Dynamic VisualTechnologies

(Pty) Ltd

Microsoft and Java software development

and professional services in Cape Town.

Dynamic VisualTechnologies (Gauteng)

(Pty) Ltd

Microsoft and Java software development

and professional services in Gauteng.

The Talent Exchange(Pty) Ltd

IT recruiting and labour broking.

Offline Digital (Pty) Ltd

Specialist content management and digital

publishing solutions.

61,6%Revenue

Financial Highlights

4

87,6%Operating

Profit

100,3%Attributable

Earnings

Turnover up 61,6% to R58,6 million Operating profit up 87,6% to R8,1 million Attributable earnings up 100,3% to R6,0 million Cash generated from operations up 57,1% to R5,5 million HEPS up 58,8% to 14,1 cents1

Operating Profit (Rm)

2007Pro Forma

2008Audited

2009Forecast

Revenue (Rm)

2007Pro Forma

2008Audited

2009Forecast

80

70

60

50

40

30

20

10

0

14

12

10

8

6

4

2

0

HEPS (Cents)

2007Pro Forma

2008Audited

2009Forecast

18

16

14

12

10

8

6

4

2

0

2008Audited

2007 Pro Forma

Aggregated 12007

AuditedTurnover (R ‘000) 58 601 44 473 36 269Operating profit (R ‘000) 8 123 6 345 4 331Operating profit margin (%) 13,9% 14,3% 11,9%Headline earnings per share (cents) 14,1 8,9 2 612Cash generated from operation (R ‘000) 5 497 3 498Cash and cash equivalents (R’000) 11 818 903 1 759Nett asses value per share (cents) 51 24 3 555Net tangible asset value per share (cents) 31 (1) 1 3251 Pro forma aggregated results for 2007 as presented in the Prospectus dated 29 October 2007 as if the restructuring of the Company was effected on 1 March 2006.

Value Added Statement


2008(R’000) %

2007(R’000) %

Turnover and other income 58 862 26 712

Cost of Goods overheads and other expenses (7 352) (7 636)

Value added 51 509 29 076

Income from investments 455 126

Wealth created 51 965 100,0 29 202 100,0

Distribution Wealth

Employees

Remuneration and benefits 42 993 82,7 23 598 80,8

Providers of Capital

Finance charges 1 0,0 23 0,1

Government

Taxation 2456 4,7 1893 6,5

Retained to develop future growth 6513 12,5 3687 12,6

Deferred tax (46) (0,1) (628) (2,2)

Depreciation and amortisation 530 1,0 1 306 4,5

Net profit for the year 6 029 11,6 3 009 10,3

Wealth Distributed 51 965 100,0 29 202 100,0

2008 2007

Employees


Government

Retained to developfuture growth

Employees


Government

Retained to developfuture growth

Board of Directors

6

H Ratshefola (Chairman)1

BCom (University of North West)

Hamilton is the co-founder and joint chief executive of Cornastone Technology Holdings, which employs over 250 IT professionals and has revenues exceeding R 230 million.

He has over 19 years of IT experience; from technical, to managerial, to board level leadership. He served as the executive leading the IBM Public Sector Business and performed the same role as Executive Director for the then JSE listed Computer Configuration Holdings Limited.

Hamilton received over 18 months of Leadership Development with IBM in Europe and United States between 1996 and 1999.

He has been recognised over the years by the IT Industry for his contribution. In 1999 and 2000 he was recognised as one of the Top 20 Black IT professionals in South Africa.

In 2007 Hamilton won the coveted IT Personality of the Year 2007 Award from the Computer Society of South Africa, Gartner Group and GIBS.

C J Wilkins (CEO)National Higher Diploma (Cape Technikon)

Chris is a founder, CEO and business visionary at DVT.

He has 20 years experience in the software development industry and

has started and managed a number of businesses culminating with the formation of DVT in 1999.

Chris qualified as a management accountant before moving to software development in the mid-eighties. After working as a software developer in Cape Town, he relocated to the UK for seven years where he worked as an independent delivery systems specialist in the software and related services industry.

Chris finished off his term in the UK as a project manager for IBM in London.

He resettled in Cape Town 10 years ago where he now lives with his family.


G Fowler (CFO)BCom (Accounts) (Rand Afrikaans University)

Graham has 18 years experience in financial management, including 9 as a financial director in the IT industry.

Graham graduated in 1990 and completed his articles with G.J. Bazley & Co. He was financial manager of Zotos Construction with sole responsibility for finance and operations in the group, which gave him a solid grounding in a sometimes very challenging project-orientated environment.

In 1999 Graham joined Software Futures as financial manager and was later appointed as financial director. He formed part of a dynamic team of entrepreneurs who managed the company through a series of mergers and acquisitions, growing it to be one of the largest in South Africa in its field.

A De KlerkBusiness Management Diploma (UNISA)

Ashley has 18 years experience in IT including executive and board level positions in both local and multinational software businesses.

He has worked extensively at the highest levels with large corporate customers and government institutions.

Ashley started his career as a teacher in 1986 but left the profession in 1990 and started his career in IT as a mainframe computer operator moving shortly thereafter into software development.

Ashley has performed in a number of senior roles over the years, including regional sales manager for the SAS Institute, managing director of Global Business solutions and managing director (Gauteng) of Software Futures, culminating with his tenure as public sector director at Microsoft South Africa.

D M Hughes1

Derek has a 20-year career in IT with a wealth of experience in managing software businesses. He has been with DVT for 5 years after joining the founders to establish DVT’s new

operations in Gauteng.

Derek was previously CEO of Software Futures which had over 500 staff and was the largest software development company in South Africa at the time, won numerous awards from the industry and was considered one of the best places to work in IT in South Africa.

Prior to that, Derek worked for IBM South Africa as a product manager after starting his career as technical architect and pioneer at Sanlam.

J Mamogale1

BCom (University of North West)

Jackson has a career spanning 18 years in information technology solutions and consulting. He is currently managing director of Cornastone Consulting which employs 100

professionals in various disciplines of application development, outsourcing, enterprise IT management and IT logical access management solutions.

He worked in application development for one of the leading banks in South Africa before joining Andersen Consulting, now known as Accenture, where he worked for 8 years in various disciplines ranging from technical architecture consulting to senior management leadership. He held key positions in various engagements in the transportation, retail, financial services and public sector.

1 Non-executive

Chairman’s Report

8

STRATEGY AND DIRECTION

Despite slowdown in economic conditions, the demand for software solutions and services has shown consistent growth. DVT is fortunate in that most of our solutions are required for mission critical business applications at our clients, which they require to maintain their competitiveness. We see no immediate slowdown in our customer’s current and future requirements for our services. We remain confident that our business will deliver its forecasts and growth objectives.

In the medium to long term DVT is working on strategy to improve and alter the balance of its business mix by increasing the proportion of business based on software products and intellectual property (“IP”). This has the potential to improve our margins and increase the annuity income portion of our earnings.

This will be achieved primarily through a focused acquisition strategy of IP or product based businesses to improve our business mix, while continuing to grow the existing product based businesses.

PERFORMANCE AND MANAGEMENT

In February 2008, the business produced an outstanding organic growth performance which met and exceeded our desire to grow earnings organically by 30%. Earnings grew by 100%, which was phenomenal and a great credit to the DVT management team and professionals.

We are privileged to have a strong executive management team with experience and a track record of delivery. We will continue to strengthen this team in 2008. We recently acquired the services of former Microsoft South Africa director, Ashley De Klerk who is now Chief Operating Officer for DVT Holdings and brings great wealth of knowledge and experience in applications and software management business.

“We see no slowdown in our customer’s

current and future commitment to DVT”

HAMILTON RATSHEFOLA

under review, and have made good progress this year to date. Our greatest challenge is future requirements. There is a real need for us to focus on the acquisition and development of talent for our future success. We are considering a number of options, including a DVT academy, to ensure that we have sufficient skills to meet DVT’s growth objectives well into the future.

Overall the 2008 financial year was a great year for DVT, and we believe 2009 will be another year to remember. At this stage we still anticipate solid growth for the year and are poised to meet the forecasts as presented in our prospectus.

I’d like to thank the directors of DVT for their support and commitment during the past year. It’s been a privilege to work with a great management team, and the excellent set of professionals we have at DVT. I am very confident of our future prospects.

Hamilton RatshefolaNon-executive Chairman


GOVERNANCE AND RISK MANAGEMENT

The DVT Holdings Board is continuing its focus on improving our corporate governance. We intend to strengthen our Board by appointing one or two more independent and non-executive directors in the medium to short term.

We have put significant effort into integrating the principles of Broad Based Economic Empowerment in our overall business strategy. We have made tremendous progress towards complying with the BEE charter requirements in our sector, and we will continue to put a special focus on areas like skills development, affirmative procurement, and enterprise development. Subsequent to the year in review, the board has established a BEE subcommittee to ensure ongoing compliance and improvement of BEE.

DVT’s greatest risk at the moment is the skills shortage. The company has enough market opportunity, but its ability to respond to market opportunities with the right skill at the right time is continuing to be a challenge as competition for skilled resources is fierce. Despite a growing skills shortage in the country we did well in the year

CEO’s Report

10

It is with great pride that we present our maiden report to the shareholders of DVT.

LISTING ON THE ALTX

The past year has been the most significant in the history of DVT as we completed the transition from a private company into a publicly listed business. Only two years ago DVT was a privately owned concern that had a vision of greater things. Inspired by what we believe is an increasing and sustained demand for technology solutions in SA and globally, we made the decision to list DVT.

We had seen a surge in market demand for our type of services after 5 years of market stagnation, and believed that there will be major opportunities for growth in the following 5 years. We also wanted to accelerate our growth via acquisitions in order to better exploit improving market conditions.

After 18 months of hard work DVT was restructured into a more appropriate Holdings company. In addition we concluded a BEE deal with Cornastone; removed minorities in the operating companies; complied with ALTX listing requirements; and raised the required funding.

Our journey culminated with the beating of the JSE drum on 6th November 2007.

THE PASTYear in SummaryThe solid growth achieved by DVT in our turnover and profit numbers for the year under review reflects the foundation we built to take advantage of the increase in demand we anticipate for our software solutions and related services. Most of this increased demand has come from existing clients. DVT has spent time and money appointing and training additional key staff, introducing structural changes for growth, and seamlessly absorbing a small acquisition.

Corporate ActivityIn December 2007 DVT acquired 66,7% of Offline Digital for R1,4m in cash, with an option to acquire the remaining shares within two years. Offline Digital is a specialist software development company that develops and implements content management solutions (CMS). These solutions enable multiple format publishing of personalised, high value

“DVT achieved solid growth in both turnover

and profit for the year.”

CHRIS WILKINS


content suitable for distribution over a range of channels. These solutions complement the services and solutions of the core business of DVT.

Founded in 2003, it has clients across various industries in South Africa, the UK and the EU. Offline Digital has attained Top Technology 100 Company status in the Business Day 2003, 2004 and 2005 awards programmes in recognition of its innovation.

Financial ReviewRestructure and listingDuring the course of the year, DVT restructured its operations for purposes of listing. The extraction of minorities was achieved through the issue 30 959 ordinary shares, resulting in DVT owning 100% its subsidiaries. An additional 39 694 077 ordinary shares were issued by way of a capitalisation issue and 4 494 072 ordinary shares were bought back and cancelled. A staff share incentive trust was established to which 1 994 072 ordinary shares were issued. In terms of the private placing, 12 500 000 ordinary shares were issued resulting in a total of 50 000 000 ordinary shares being in issue on date of listing.

RevenueRevenue for the Group increased by 61,6% to R58,6 million. Strong organic growth and the effects of the restructuring accounted for 60,8% of the 61,6% growth. The remainder of the growth is the result of acquisition.

Operating profitOperating profits increased by 87,6% to R8,1 million at an increased operating margin of 13,9%. On the strength of these results, the Group’s basic earnings for the year grew by 100,3% to R6 million.

Balance sheetThe total assets in the Group increased 133,2% to R33,4 million, which translates into a net asset value per share of 51,0 cents and a tangible net asset value per share of 30,7 cents. The increase in tangible net assets is primarily as a result of the net cash raised on listing of R11 million.

Goodwill of R3.9 million was created through the effects of the restructure and the acquisition of 66,7% of the issued share capital of Offline Digital (Pty) Ltd. The date of acquisition was 1 December

2007, the effects of which have been incorporated into the results for the year.

DVT has no long term debt, and is focussed on managing its working capital as a key objective of its daily operations. DVT generated R7 million in cash from operations, which was mainly used for capital expenditure, acquisitions and the share buy-back prior to listing.

THE PRESENTOur BusinessDVT does not provide ‘nice to have’ solutions. We provide software and services that drive the engine rooms of large and medium sized businesses. DVT strives to extract maximum value from all customer expenditure associated with the entire software development lifecycle. We have geared our business to provide services along the entire software value chain, starting with feasibility and selection, progressing into software design and development, and then providing support, enhancement, and management services on an annual basis. We are also able to offer customers the choice of custom-built or pre-built, packaged software.

The breadth and depth of our services provides us with a large and reliable market in which to find the right business opportunities, and we offer our software and solutions across a broad economic spectrum. We are therefore able to tap into a large and diversified client base. This means that we can follow the demand across all sectors, and we have thousands of potential large and medium sized clients.

Overall, the nature of all our solutions ensures that we are, at all times, a valuable and indispensable partner to our customers.

Our PeopleSince inception, DVT has arguably employed the top professionals in the market. We are able to attract these individuals with the promise of diverse work opportunities, personal growth and learning and an attractive sector-specific brand. We then retain them with a professional and capable employment model. We encourage healthy attrition, but keep key staff close and motivated.

12

THE FUTUREStrategyOrganic GrowthWe expect DVT to show strong organic growth for the foreseeable future. Our organic growth is driven by growing brand recognition, strong market demand, and a business hungry and geared to take advantage of new opportunities. We are also able to attract elusive and scarce technical skills due to our reputation and diverse client base with associated opportunities.

AcquisitionWe are actively pursuing an acquisition strategy to compliment our organic growth. Current trading conditions on the JSE have introduced a different set of challenges, but we will wait for the right deals from the many exciting consolidation opportunities available. We are fortunate in that our strong organic growth precludes the need to conclude a hasty and potentially risky acquisition. In the interim, our strong cash position improves and strengthens our hand every month.

Services versus Product RevenueOur stated objective in our prospectus was to increase revenue from pre-built or packaged software products at a faster rate than that from services.

We remain committed to growing revenue from product or IP related sales, but the services market is presenting DVT with unprecedented opportunities to secure additional market share with relatively little risk. We therefore see product and services revenue growing, but services will continue to grow as fast or faster due to demand.

Group Position and BrandingDVT’s business has grown and diversified and we have acquired two business, with the intention to do further acquisitions.

We are no longer the operating business with a single focus of two years ago. We have multiple technology specialisations and multiple operating brands.

We have decided to streamline and clarify our group branding to better represent our business to the market. As part of this process we intend, subject to shareholder approval, to rename our group and holdings company, and refresh the operating brands of the various group companies.

Market ConditionsIt is uncertain whether a continued softening in the macroeconomic environment will impact the demand for software and services. At present we have not seen any sign of a significant reduction in demand. This is mainly due to our view that the shortage of professional skills is so acute that only a dramatic downturn in all sectors would result in a situation where supply matches or exceeds demand.

Eventually, a sustained downturn might affect business prospects, but at this stage we are on track to make our targets as stated in our prospectus.

Skills ShortageIt is our view that, in general terms, economic growth has surpassed the supply of skilled professionals generally available in information technology. This is further compounded by a decrease in qualified graduates entering the market due to a reduction in student applications from 2000 through 2005, a noticeable increase in IT brain drain to levels last seen 10 years ago, and continuing shortage of new entrants to the market. Unless the economy starts to shrink dramatically, a sentiment change occurs in the country or the education system increases its output, this shortage is unlikely to disappear.

We see the skills shortage as an opportunity for DVT. We have created a desirable place to work and continue to attract highly skilled employees to our businesses.

ProspectsStrong organic growth will be achievable for a number of years given buoyant market conditions, solid industry credentials, track record and the depth and breadth of management experience.

incentive management domains where DVT has an established client base and track record.

There continues to be considerable opportunity in both the local and international markets for products that have a proven track record within an existing client base.

SummaryIn the short and probably medium-term, DVT expects local market demand to fuel positive growth in all areas of the business. Over the next 5 years, increased global demand for offshore software and services will continue to grow the global outsourcing market. If South Africa continues to grow and develop into an international outsourcing destination, DVT will be well-positioned to exploit the global demand for software solutions and products.

CONCLUSION

All in all we are extremely pleased that we have achieved our maiden year targets, and believe we have put a foundation in place that will allow us to continue exploiting the multitude of opportunities we see in the current market.

The success we have enjoyed at DVT would not be possible without the ongoing support of all our stakeholders. We extend our appreciation and thanks to all staff, clients and shareholders for the essential role they play in the business. We look forward to another successful year of opportunity and growth.

Chris WilkinsChief Executive Officer


Outsourced PartnershipsDVT finds itself geared for growth and well positioned to take advantage of an acute shortage of software development skills. This shortage is increasing the demand for outsourced partnership deals. These outsourcing arrangements involve significant deals over long periods of time. Increased outsourced activity translates into predictable revenue flows and annuity income for support and service agreements. DVT will aggressively pursue a larger share of revenue from outsourced partnerships.

Niche Microsoft ExpertiseDVT is a gold certified Microsoft partner, selling Microsoft software and related services. Microsoft has over 4 500 partners in South Africa. Most are small, only offering niche Microsoft solutions and products. There are also a handful of very large, often international systems integrators offering a range of different technologies and products. There is, however, a significant absence of medium-sized Microsoft partners offering comprehensive solutions using the full suite of Microsoft technologies and products. These circumstances in the local market offer DVT an opportunity to establish itself as a major force as a medium-sized Microsoft partner.

Other TechnologiesDVT has built and developed a business model that lends itself easily to providing software solutions on other mainstream technologies. Whilst DVT has achieved its medium-term goal of offering end-to-end Microsoft solutions, the strategy is to continue to diversify into related and complementary technology and service areas.

Intellectual PropertyA natural extension of a custom software development business is the creation of useful IP. This IP comes in the form of an established competency and packaged and licensable software products. There is generally a premium available for this specialised IP and product knowledge.

DVT owns a number of such products and will continue to exploit its technological expertise and vertical industry experience by increasing recurring and annuity based licence revenue associated with selling these products. The initial focus is in the CRM and loyalty and

“We are extremely pleased that we have achieved our maiden

year targets”

Corporate Governance and Sustainability

14

“The board believes that good corporate

governance is fundamental

to our success”

COMPLIANCE WITH THE KING CODE

DVT listed on the ALTX during the year under review. Although always well managed, prior to listing DVT was a private company with few formal structures in place and could therefore not be described as compliant with the Code of Corporate Practices and Conduct (“the King Code”) as set out in the King Report on Corporate Governance for South Africa 2002 (“King II Report”). In preparation for the listing and in the period since listing the board has been reviewing its compliance with the King Code and has begun implementing policies and structures to ensure that DVT becomes compliant as soon as possible.

The board of directors believes that good corporate governance is fundamentally important to the success of the group and is therefore committed to the concept and principles of effective corporate governance as articulated in the King Code.

The board is the focal point for corporate governance of the Group and remains ultimately responsible and accountable for the performance and affairs of the company.

COMPOSITION OF THE BOARD

The board comprises 6 directors of whom 3 are non-executive, one of whom is the Chairperson. The roles of Chairperson and CEO are clearly

separate and the balance of executive and non-executive directors ensures a balance of power and adequate mix of skills to ensure that no one individual has unfettered decision making powers.

The executive directors are intimately involved in the day-to-day management and operation of the Group’s activities and are in the full-time salaried employ of the Group.

Changes made to the board during the year in review:

• Appointment of A de Klerk as an executive director and Group COO on 1 December 2007.• Resignation of C Hubbard and V Diedrick on 1 June 2007

BOARD MEETINGS

The board is scheduled to meet quarterly and additional meetings are convened when necessary. Directors are briefed timeously and comprehensively in advance of these meetings, and are supplied with information to enable them to discharge their responsibilities.

Attendance at Meetings

DirectorJan

2007Mar

2007Nov

2007

H Ratshefola (Chair) √ √ √C Wilkins (CEO) √ √ √G Fowler (CFO) √ √ √D Hughes (non-exec) √ √ √A de Klerk (COO)1 n/a n/a n/a

J Mamogale (non-exec) √ √ √C Hubbard2 √ √ n/a

V Diedrick2 √ √ n/a1 appointed to the board on 1 December 20072 resigned on 1 June 2007


BOARD COMMITTEES

During the year under review no formal sub-committees of the board had been established. Subsequent to 29 Feb 2008 a remuneration and audit committee have been established and mandatedby the board in line with the disclosure included in the prospectus dated 29 October 2007.

Both committees held their first meeting on 20 May 2008 and are composed entirely of non-executive directors as follows:

Audit CommitteeJackson Mamogale (Chairman)Derek HughesHamilton RatshefolaGraham Fowler (by invitation)Designated Advisor (by invitation)

Remuneration CommitteeHamilton Ratshefola (Chairman) Derek HughesJackson MamogaleChris Wilkins (by invitation)

BOARD RESPONSIBILITIES

The board is responsible for setting the direction of the group through the establishment of strategic objectives and policies. It takes overall accountability for the group by taking responsibility for its management. Although the board delegates the day-to-day management of the group to the CEO and executive management team, the board retains full and effective control over the group and decisions on material matters are reserved by the board, including:

• Approval of budgets and financial statements• Major capital expenditure• Mergers, acquisitions and disposals of businesses• Changes in share capital of the Company• Appointment of directors and the chief executive officer• Formulation and approval of policy• Managing the relationship with shareholders and investors

BOARD PROCESSES

All directors have access to the advice and services of the company secretary and, in appropriate circumstances, are entitled and authorised, at the company’s expense, to seek independent professional advice concerning the affairs of the company. The company secretary is responsible to ensure that board procedures and applicable rules and regulations are fully observed.

Share Dealings and Conflicts of InterestDirectors and senior managers likely to have access to the company’s financial results and other price-sensitive information are prohibited from dealing in DVT’s shares during “closed periods” or “prohibited periods” as defined by the JSE Limited. All directors, managers and employees are informed of any closed periods.

In accordance with DVT’s internal policies, any directors’ dealings must first be approved by the Chairman, CFO or company secretary prior to execution. All directors’ dealings announcements are published on SENS.

In addition, directors are required to disclose their shareholdings, additional directorships and any potential conflicts of interest in writing at the commencement of each board meeting.

See page 17 for details of director’s interest and page 48 for director’s emoluments.

Board AppointmentsAll board appointments are the responsibility of the board as a whole. Any appointments made by the board are required to be approved at the next annual general meeting of shareholders.

In line with the Company’s Articles of Association one third of directors are subject to retirement by rotation each year. The re-election of such directors is subject to the approval by shareholders at the annual general meeting. No director has a long-term service contract with the Group.

16

Attendance at general meetingsThe directors, both executive and non-executive, are strongly encouraged to attend the Company’s annual general meeting and any special general meetings of shareholders to foster improved interaction between the board and the stakeholders. The Chairman’s attendance at general meetings is mandatory.

INTERNAL CONTROL

The board is responsible for and has implemented systems of internal control which are designed to detect and minimise the risk of fraud, potential liability, loss and material misstatement.

There are inherent limitations to the effectiveness of any systems of internal control, including the possibility of human error and the circumvention or overriding of controls. The systems are therefore designed to manage rather than eliminate risk of failure and opportunity risk.

Nothing has come to the attention of the board to indicate that there has been a material breakdown in the internal systems of control during the year.

ETHICS

DVT endeavours to act with honesty, responsibility and professional integrity in its dealings with employees, shareholders, customers, suppliers and society at large. In addition the Group strives to provide a work environment that is non-discriminatory with sound safety, health and environmental practices.

SOCIAL RESPONSIBILITY

DVT acknowledges its social responsibility towards the communities in which it operates and deserving institutions at large. However, measured in financial terms, the board believes that the Company has not made an acceptable contribution to social responsibility and is currently remedying this.

BLACK ECONOMIC EMPOWERMENT

During the year under review DVT has conducted a self assessment of its performance against the requirements of BEE. The board is satisfied with the progress made to date and has mandated management to have DVT formally accredited in terms of the BBBEE Codes of Good Practice (“the Codes”) as gazetted in February 2007.

50% of DVT’s director’s are black including the Chairman and COO. As at 29 February 2008 30,7% of DVT’s shares were beneficially owned by previously disadvantaged individuals. 20,9% of these are owned by Cornastone, a 100% black-owned private IT company. As at February 2009 the group employed 115 permanent and contract staff, of which 27% are previously disadvantaged.

Preliminary findings of the appointed BEE auditors indicate that the groups operating subsidiaries will achieve varying ratings between level 2 and level 4 contributors in term of the Codes.

The board has appointed a BEE committee consisting of A de Klerk (Chair) and H Ratshefola to oversee ongoing compliance and improvement.

For the Board of Directors

“DVT is committed to meeting all the goals

of the BEE Codes ofGood Practice”


Shareholder Analysis

Shareholder Spread

As at 29 February 2008 Number of shareholders %

Number of Shares %

1-10,00010,001-100,000100,001-500,000500,001-1,000,0001,000,001-5,000,0005,000,001 and more

85135

254

121

32,4451,53

9,541,534,580,38

348 3003 405 2124 760 0652 741 394

28 307 89210 437 137

0,706,819,525,48

56,6220,87

Total 262 100,000 50 000 000 100,00

Public and Non-Public Shareholders

As at 29 February 2008 Number of shareholders %

Number of Shares %

Non-Public shareholdersMajor shareholders - Cornastone Technology InvestmentsEmployee trusts - DVT Employees Share TrustDirectors of the Company and its subsidiaries (direct and indirect) - C Wilkins - Interest of D Hughes - The Shibumi Trust - D Hughes - The Hughes Trust - G Fowler - J van der Merwe - F de Klerk - J MamogaleAssociates of the above - T Themistocleous - V Diedrick - A Gibbons - F Luthango - W Press

Non-Public Sub TotalPublic Shareholders - Liberty Life Assoc. of Africa Ltd - other non-material shareholders

1

2

241211111

21111

19 243

1242

0,38

0,76

0,76 1.53 0,38 0,76 0,38 0,38 0,38 0,38 0,38

0,76 0,38 0,38 0,38 0,38

7.25 92.75

0.38 92.37

10 437 137

2 624 407

4 499 072 4 124 164 2 368 044 1 694 620

61 500 3 461 655 2 007 750

607 604 8 000

2 411 321 2 511 321 1 115 037

716 540 480 827

35 004 835 14 995 165

2 500 000 12 495 165

20,87

5,25

9,00 8.25 4,74 3,39 0,12 6,92 4,02 1,22 0,02

4,82 5,02 2,23 1,43 0,96

70.01 29.99

5.00 24.99

Total 262 100,000 50 000 000 100,00

Other than the DVT Employees Share Trust, J Mamogale and The Hughes Trust, all of the above mentioned shareholders, holding 64,4% of issued DVT shares, are party to a Voting Pool agreement.

Directors’ interestsThe direct and indirect, beneficial interests (no directors have a non-beneficial interest) of the directors in the Company’s securities as at 29 February 2008, as far as could be determined, is as follows:

As at 29 February 2008Direct

BeneficialIndirect

BeneficialTotal

beneficial

A de KlerkG FowlerD HughesJ MamogaleH RatshefolaC Wilkins

3 461 6551 694 620

8 000

4 499 072

607 604

2 429 544

4 640 155

1,22 6,92 8,25 0,02 9,28 9,00

Total 9 663 347 7 677 302 34,68

* There have been no changes to director’s interest at date of printing.

18

Annual Report 2008

Consolidated Annual Financial Statementsfor the year ended 29 February 2008

h o l d i n g s

Contents



Directors’ Report







20

21

22

25

26

27

27

28

37

G FowlerCompany Secretary

The directors are required by the Companies Act of South Africa, 1973, as amended, to maintain adequate accounting records and are responsible for the content and integrity of the consolidated annual financial statements and related financial information included in this report. It is their responsibility to ensure that the consolidated annual financial statements fairly present the state of affairs of the group as at the end of the financial year and the results of its operations and cash flows for the period then ended, in conformity with International Financial Reporting Standards and the Companies Act of South Africa, 1973, as amended. The external auditors are engaged to express an independent opinion on the consolidated annual financial statements.

The consolidated annual financial statements are prepared in accordance with International Financial Reporting Standards and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgments 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. These 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 minimize 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 consolidated annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss.

The directors have reviewed the group’s cash flow forecast for the year to 28 February 2009 and, in the light of this review and the current financial position, they are satisfied that the group has or has access to adequate resources to continue in operational existence for the foreseeable future.

The external auditors are responsible for independently reviewing and reporting on the group’s consolidated annual financial statements. The consolidated annual financial statements have been examined by the group’s external auditors and their report is presented on page 21.

The consolidated annual financial statements set out on pages 22 to 52, which have been prepared on the going concern basis, were approved by the board on 20 May 2008 and were signed on its behalf by:

CERTIFICATION BY THE COMPANY SECRETARY

In terms of section 268(G) of the Companies Act, 61 of 1973(Act), as amended, I certify that, to the best of my knowledge and belief, the company has, in respect of the financial year reported upon, lodged with the Registrar of Companies all returns required of a public company in terms of the Act and that all such returns are true, correct and up to date.

CJ WilkinsCEO

G FowlerCFO


20

Johannesburg20 May 2008

TO THE SHAREHOLDERS OF DYNAMIC VISUAL TECHNOLOGIES HOLDINGS LIMITED

We have audited the accompanying consolidated annual financial statements of Dynamic Visual Technologies Holdings Limited, which comprise the directors’ report, the consolidated balance sheet as at 29 February 2008, the consolidated income statement, the consolidated statement of changes in equity and consolidated cash flow statement for the year then ended, a summary of significant accounting policies and other explanatory notes, as set out on pages 22 to 52.

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 in the manner required by the Companies Act of South Africa, 1973, as amended. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of consolidated annual financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ 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 auditors’ 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 the directors, 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.

Opinion In our opinion, the consolidated annual financial statements present fairly, in all material respects, the financial position of the group as at 29 February 2008, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards, and in the manner required by the Companies Act of South Africa, 1973, as amended.

GreenwoodsRegistered Auditors

20 May 2008



THE DIRECTORS SUBMIT THEIR REPORT FOR THE YEAR ENDED 29 FEBRUARY 2008.

1. Review of activities Main business and operations The group is mainly engaged in management consultancy and software development within the technology industry and operates in South Africa. The operating results and state of affairs of the group are fully set out in the attached consolidated annual financial statements and do not in our opinion require any further comment. Net profit of the group was R 6,167,309 (2007: profit R 3,168,874), after taxation of R 2,409,656 (2007: R 1,264,586).

2. Post balance sheet events The directors are not aware of any matter or circumstance arising since the end of the financial year until the date of the financial statements.

3. Contracts No contracts, other than those disclosed in note 31, in which directors and officers of the company had an interest and that significantly affected the affairs or business of the company or any of its subsidiaries or which could have resulted in a conflict of interest, were entered into during the year. 4. Accounting policies The following International Financial Reporting Standard was applied prior to the commencement date in the current year: IFRS 8 - Operating Segments which is effective for accounting periods beginning on or after 1 January 2009. IFRS 8 is a disclosure standard which has resulted in a re-designation of the Group’s reportable segments (see note 36), but has no impact on the reported results or financial position of the Group. 5. Authorised and issued share capital The authorised share capital increased from 2,000,000 ordinary shares at R0.005 per share in 2007, to 200,000,000 ordinary shares at R0.005 per share in the financial year under review.

The changes in the issued share capital of the group during the year under review were as follows:

Share allotments • 52,226,615 shares for cash • 1,994,072 shares in terms of a share incentive scheme

Share buy back • 4,495,651 shares for cash

As a result of the above movements, share premium of R9,503,969 was raised.

6. Borrowing limitations In terms of the Articles of association of the companies in the group, the directors may exercise all the powers to borrow money, as they consider appropriate.

7. Non-current assets There were no major changes in the nature of the non-current assets of the group during the year. Please refer to notes 5, 6 and 7 of the financial statements for details regarding additions and disposals of non-current assets.

8. Dividends No dividends were declared to shareholders during the year.


22


9. Directors The directors of Dynamic Visual Technologies Holdings Limited during the year and to the date of this report are as follows:

HMH Ratshefola * (Chairman) CJ Wilkins DM Hughes * G Fowler A de Klerk MEJ Mamogale * * Non-executive

10. Secretary The secretary of Dynamic Visual Technologies Holdings Limited is G Fowler.

Business address Vistar Junction Ground Floor Marlborough Gate Hyde Park Lane Sandton 2199

11. Interest in subsidiaries and special purpose entities

Name of subsidiaryShare

Captial

% Share-

Holding2008

% Share-

holding2007

Shares at cost

Amounts due (to)/

fromsubsidiaries

Dynamic Visual Technologies (Pty) Ltd 200 100 92,5 200 (2,728,431)

Dynamic Visual Technologies Gauteng (Pty) Ltd 200 100 80 200 (722,418)

The Talent Exchange (Pty) Ltd 100 100 - 100 90,000

The Talent Exchange Cape (Pty) Ltd 1,000 100 - 3,975 (1,000)

Offline Digital (Pty) Ltd 1,609 66,7 - 1,073 - In so far as concerns the interest of the holding company in its subsidiaries, the aggregate net income after tax amounts to R 6,347,567 (2007 R 2,812,961).

In terms of SIC Interpretation 12: Consolidation - Special Purpose Entities, the DVT Holdings Employee Share Trust (“Share Incentive Trust”) was consolidated in the annual financial statements of the group.

12. Special resolutions The following special resolutions were passed during the financial year under review:

• To acquire 1,579 ordinary par value shares from Trevor van Rensburg for R45,000.00 of which R7.90 is epresented by share capital. • To increase its authorised share capital to R1,000,000.00 comprising of 200,000,000 ordinary par value shares of R0.005 each, by the authorisation of 198,000,000 ordinary par value shares of R0.005 per share and to amend its memorandum of association accordingly. • To reduce its share premium account by R198,470 pursuant to a capitalisation issue. • To convert DVT Holdings (Pty) Ltd from a private company having share capital to a public company having share capital. • To alter the company’s articles of association following its conversion to a public company.

Postal addressP O Box 408Gallor Manor2052

12. Special resolutions (cont.) • Pursuant to the change in the Articles the Company and any of its subsidiaries, is authorised by way of general approval to from time to time acquire ordinary shares in the share capital of the company in accordance with section 85 of the Companies Act and following the listing of the company on the AltX, the JSE listing requirements, provided that:

a. The number of ordinary shares acquired in any one financial year shall not exceed 20% of the ordinary shares in issue at the date on which the resolution is passed. b. This authority shall lapse in the earlier of the date of the next AGM or 15 months after the date on which the resolution was passed.

• To acquire 4,494,072 ordinary par value shares from Clive Peter Hubbard for R3,146,562 of which R22,470 is represented by share capital.

13. Auditors Greenwoods will continue in office in accordance with section 270(2) of the Companies Act.

14. Directors’ shareholding The directors’ shareholding at year end was as follows:

Directors shareholdingDirect

BeneficialIndirect

Beneficial

HMH Ratshefola - 4,640,155

CJ Wilkins 4,499,072 -

DM Hughes 1,694,620 2,429,544

G Fowler 3,461,655 -

A de Klerk - 607,604

MEJ Mamogale 8,000 -

Total 9,663,347 7,677,303

Share options Options for 1,000,000 shares at an option price of R 0.95 were awarded to A de Klerk on 3 December 2007. None of the options were exercised at the end of the year.

15. Employee share trust In terms of a share-based incentive scheme, 1,994,072 shares were issued to the DVT Holdings Employee hare Trust and 630,335 shares were bought from other shareholders.

As part of the share incentive scheme a loan was advanced to the trust.

Please refer to note 38 to the annual financial statements for detail regarding share based payments.

24



Year ended 29 February 2008 Note(s) 2008 (Rands)

2007 (Rands)

ASSETSNon-Current AssetsProperty, plant and equipmentGoodwillIntangible assetsDeferred tax

Current AssetsTrade and other receivablesCash and cash equivalents

5678

910

11,054,370886,640

9,751,445280,640135,645

22,332,87810,515,19411,817,684

6,906,017773,974

5,839,502142,767149,774

7,411,4845,652,8261,758,658

Total Assets 33,387,248 14,317,501

EQUITY AND LIABILITIESEquityEquity Attributable to Equity Holders of ParentShare capitalReservesRetained incomeMinority interest

LiabilitiesCurrent LiabilitiesOther financial liabilitiesCurrent tax payableOperating lease liabilityTrade and other payablesDeferred incomeDividend payable

11

13

141516

25,495,73413,995,100

71,83611,190,543

238,255

7,891,514-

1,374,88243,583

5,523,278899,771

50,000

9,774,8364,255,628

-5,161,315

357,893

4,542,665253,535769,171

42,4792,877,800

549,68050,000

Total Equity and Liabilities 33,387,248 14,317,501


26

Not

eSh

are

capi

tal

Shar

epr

emiu

mTo

tal s

hare

capt

ial

Rese

rves

Reta

ined

in

com

e

Tota

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trib

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le

to e

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th

e gr

oup

Min

orit

yin

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ty

Bala

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at 0

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ange

s in

equi

ty P

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ear

Iss

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f sha

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re b

uy b

ack

Min

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on

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n D

ivid

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Tota

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1,00

0 - 62

7 (2

52) - -

375

- - 4,

254,

253 - - -

4,25

4,25

3

1,00

0 - 4,

254,

880

(252

) - - 4,

254,

628

- - - - - - -

2,91

0,14

1

3,00

9,50

7 - - - (7

58,3

33)

2,25

1,17

4

2,91

1,14

1

3,00

9,50

7 4,

254,

880

(252

) - (7

58,3

33)

6,50

5,80

2

-

159,

367 - -

248,

526

(50,

000)

357,

893

2,91

1,14

1

3,16

8,87

4 4,

254,

880

(252

)24

8,52

6 (8

08,3

33)

6,86

3,69

5

Bala

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1 M

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71,

375

4,25

4,25

34,

255,

628

-5,

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315

9,41

6,94

335

7,89

39,

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reas

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Ince

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Min

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on

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of m

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tere

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Tota

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- (2

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8,47

0 16

3 72

,470

- (1

3,12

2) - - - 23

5,50

3

- (3

,209

,083

)(1

98,4

70)

2,55

6,46

8 14

,421

,602

(1

,444

,652

)(2

,621

,896

) - - - 9,

503,

969

- (3

,231

,561

) - 2,

556,

631

14,4

94,0

72

(1,4

44,6

52)

(2,6

35,0

18) - - - -

- - - - - - - - - - 71

,836

6,02

9,22

8 - - - - - - - - - 6,

029,

228

6,02

9,22

8 (3

,231

,561

) - 2,

556,

631

14,4

94,0

72

(1,4

44,6

52)

(2,6

35,0

18) - -

71,8

36

15,8

40,5

36

138,

081 - - - - - -

189,

838

(447

,557

) - (1

19,6

38)

6,16

7,30

9 (3

,231

,561

) - 2,

556,

631

14,4

94,0

72

(1,4

44,6

52)

(2,6

35,0

18)

189,

838

(447

,557

)71

,836

15

,720

,898

Bala

nce

at 2

9 Fe

brua

ry 2

008

1023

6,87

813

,758

,222

13,9

95,1

0071

,836

11,1

90,5

4325

,257

,479

238,

255

25,4

95,7

34





2007 (Rands)

RevenueCost of sales 17

58,601,108 (764,097)

36,269,249 (1,323,506)

Gross profitOther incomeOperating expenses

57,837,011 261,113

(49,974,920)

34,945,743 443,549

(31,058,175)

Operating profitInvestment revenueIncome from equity accounted investmentsFinance costs

1819

20

8,123,204 455,332

- (1,571)

4,331,117 33,868 92,196

(23,721)

Profit before taxationTaxation 21

8,576,965 (2,409,656)

4,433,460 (1,264,586)

Profit for the year 6,167,309 3,168,874

Attributable to:Equity holders of the parentMinority Interest

Earnings per share (cents)BasicDiluted

3535

6,029,228 138,081

14.4 14.2

3,009,507 159,367

2,181.1 2,181.1


2007 (Rands)

Cash flows from operating activities

Cash receipts from customersCash paid to suppliers and employees

53,738,740 (46,831,686)

34,764,727 (29,241,843)

Cash generated from operationsInterest incomeFinance costsTax paid

23192024

6,907,054 455,332

(1,571)(1,863,677)

5,522,884 33,868

(23,721)(2,034,979)

Operating profit 5,497,138 3,498,052

Cash flows from investing activities

Purchase of property, plant and equipmentProceeds on sale of property, plant and equipmentPurchase of other intangible assetsAcquisition of businessesProceeds from sale of part of subsidiary

557

26

(438,494)16,287

(295,605)(1,649,769)

-

(296,300)10,375

(38,997)(655,540)

533,347

Net cash from investing activities (2,367,581) (447,115)

Cash flows from financing activities

Proceeds on share issueRepayment of other financial liabilitiesRepayment of shareholders loanReceipt of share premiumDividends paid

11

25

235,503 (253,535)

- 6,947,501

-

375 (576,792)

(4,239,868)4,254,253 (758,333)

Net cash from financing activities 6,929,469 (1,320,365)

Total cash movement for the yearCash at the beginning of the year

10,059,026 1,758,658

1,730,572 28,086

Total cash at end of the year 10 11,817,684 1,758,658


28

1 PRESENTATION OF CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

The consolidated annual financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), and the Companies Act of South Africa, 1973, as amended. The consolidated annual financial statements have been prepared on the historical cost basis, except for certain financial instruments which are carried at fair value, and incorporate the principal accounting policies set out below.

These accounting policies are consistent with the previous period, except for the changes set out in note 2: Changes in accounting policy.

1.1 Underlying concepts The financial statements are prepared on the going concern basis using accrual accounting.

Assets and liabilities and income and expenses are not offset unless specifically permitted by an accounting standard or interpretation.

Financial assets and financial liabilities are offset, and the net amount reported only when a currently legally enforceable right to set off the amounts exists and the intention is either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Changes in accounting policies are accounted for in accordance with the transitional provisions in the standard. If no such guidance is given, they are applied retrospectively - unless it is impracticable to do so, in which case they are applied prospectively.

Changes in accounting estimates are recognised prospectively by including it in profit or loss in the period of the change and future periods, if the change affects both.

Prior period errors are retrospectively restated unless it is impracticable to do so, in which case they are applied prospectively.

Accounting policies are not applied when the effect of applying them would be immaterial.

1.2 Recognition of assets and liabilities Assets are only recognised if they meet the definition of an asset, it is probable that future economic benefits associated with the asset will flow to the group and the cost or fair value can be measured reliably. Liabilities are only recognised if they meet the definition of a liability, it is probable that future economic benefits associated with the liability will flow from the group and the cost or fair value can be measured reliably.

Financial instruments are recognised when the group becomes a party to the contractual provisions of the instrument.

1.3 Derecognition of assets and liabilities Financial assets or parts thereof are derecognised when the contractual rights to receive cash flows have been transferred or have expired or if substantially all the risks and rewards of ownership have passed. Where substantially all the risks and rewards of ownership have not been transferred or retained, the financial assets are derecognised if they are no longer controlled. However, if control in this situation is retained, the financial assets are recognised only to the extent of the continuing involvement in those assets.

The gain or loss arising from the derecognition of an asset is included in profit or loss when the item is derecognised. The gain or loss arising from the derecognition of an asset is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

Financial liabilities are derecognised when the relevant obligation has either been discharged or cancelled or has expired.

1.4 Significant judgements The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts on assets and liabilities. Although estimates and associated assumptions are based on historical experience of the acquired business unit and various other factors that are believed to be reasonable under the circumstances (the results of which form the basis of making the judgements about carrying values of assets that are not readily apparent from other sources), the actual outcome may differ from these estimates. All significant assumptions and estimates are disclosed in the notes to the annual financial statements.


Loans and Receivables The company assesses its loans and receivables for impairment at each balance sheet date. In determining whether an impairment loss should be recorded in the income statement, the company makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset. Available-for-sale financial assets The group follows the guidance of IAS 39 (Financial Instruments: recognition and measurement) to determine when an available-for-sale financial asset is impaired. This determination requires significant judgment. In making this judgment, the group evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost; and the financial health of and near-term business outlook for the investee, including factors such as industry and sector performance, changes in technology and operational and financing cash flow.

Fair value estimation The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the group is the current bid price.

The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the group for similar financial instruments.

Impairment testing The recoverable amounts of cash-generating units and individual assets have been determined based on the higher of value-in-use calculations and fair values. These calculations require the use of estimates and assumptions. It is reasonably possible that the assumption may change which may then impact our estimations and may then require a material adjust-ment to the carrying value of goodwill and tangible assets.

The group reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. In addition, goodwill is tested on an annual basis for impairment. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected future cash flows used to determine the value in use of goodwill and tangible assets are inherently uncertain and could materially change over time. They are significantly affected by a number of factors.

Taxation Judgement is required in determining the provision for income taxes due to the complexity of legislation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

The group recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax assets requires the group to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the group to realise the net deferred tax assets recorded at the balance sheet date could be impacted.

Asset useful lives and residual values Property, plant and equipment is depreciated over its useful life taking into account residual values where appropriate. The actual useful lives of assets and residual values are assessed annually. In re-assessing asset useful lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.

1.5 Property, plant and equipment Items of property, plant and equipment are carried at cost less any accumulated depreciation and any accumulated impairment losses.

Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to write off the depreciable amount of the assets to their residual values over their estimated useful lives, using a method that reflects the pattern in which the asset’s future economic benefits are expected to be consumed by the entity. The straight line method is used for all assets.

30

The depreciation methods, remaining useful lives and residual values are reviewed annually. The following rates were used during the year:

Item Average useful lifeFurniture and fixtures 5 to 10 yearsComputer equipment 3 yearsLeasehold improvements 2 yearsOffice equipment 3 to 10 years

The depreciation charge for each period is recognised in profit or loss.

1.6 GoodwillGoodwill is initially measured at cost, being the excess of the business combination over the group’s interest of the net fair value of the identifiable assets, liabilities and contingent liabilities.

Subsequently goodwill is carried at cost less any accumulated impairment.

The excess of the company’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of the business combination is immediately recognised in profit or loss.

1.7 Intangible assetsIntangible assets are initially recognised at cost if acquired separately or internally generated or at fair value if acquired as part of a business combination.

Research costs are recognised in profit or loss when they are incurred. Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance are not recognised as intangible assets.

Development costs are capitalised only when they meet the criteria for capitalising development expenditure, i.e.

• it is technically feasible to complete the asset so that it will be available for use or sale. there is an intention to complete and use or sell it. • there is an ability to use or sell it. • it will generate probable future economic benefits. • there are available technical, financial and other resources to complete the development and to use or sell the asset. • the expenditure attributable to the asset during its development can be measured reliably.

Costs include expenditure on materials, direct labour and an allocated proportion of project overheads. All other development expenditure is recognised in profit or loss.

Intangible assets are carried at cost less any accumulated amortisation and any impairment losses.

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 at least annually for impairment. The assessment of the estimated useful life of these assets is reviewed at least annually. If assessed as having a finite useful life, they are amortised over their useful lives using a straight line basis and tested for impairment annually if there is an indication that they may be impaired.

The amortisation methods and estimated remaining useful lives are reviewed annually.

Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:

Item Useful lifeTrademarks IndefiniteComputer software 2 - 3 yearsDevelopment expenditure 3 years

1.8 Financial instruments

Initial recognition The group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

Financial assets and financial liabilities are recognised on the group’s balance sheet when the group becomes party to the contractual provisions of the instrument.


Fair value determination The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the group establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models making maximum use of market inputs and relying as little as possible on entity-specific inputs.

Loans to shareholders, directors, managers and employees These financial instruments are classified as loans and receivables and are carried at amortised cost.

Subsequently these loans are measured at amortised cost using the effective interest rate method, less any impairment loss recognised to reflect irrecoverable amounts.

On loans receivable an impairment loss is recognised in profit or loss when there is objective evidence that it is impaired. The impairment is measured as the difference between the investment’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

Impairment losses are reversed in subsequent periods when an increase in the investment’s recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to the restriction that the carrying amount of the investment at the date the impairment is reversed shall not exceed what the amortised cost would have been had the impairment not been recognised.

Trade and other receivables Trade receivables are measured at initial recognition at fair value plus direct transaction costs, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that the trade receivable is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the income statement within operating expenses. When a trade receivable is uncollectible, it is written off. Trade and other receivables are classified as loans and receivables.

Trade and other payables Trade payables are initially measured at fair value plus direct transaction costs, and are subsequently measured at amortised cost, using the effective interest rate method.

Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially and subsequently recorded at fair value.

Financial assets at fair value through profit or loss Investments are recognised and derecognised on a trade date basis where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned.

Investments are measured initially and subsequently at fair value, gains and losses arising from changes in fair value are included in profit or loss for the period.

Available for sale financial assets These financial assets are non-derivatives that are either designated in this category or not classified elsewhere.

Investments are recognised and derecognised on a trade date basis where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned.

These investments are measured initially and subsequently at fair value. Gains and losses arising from changes in fair value are recognised directly in equity until the security is disposed of or is determined to be impaired.

The group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit

32

or loss - is removed from equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement.

Impairment losses recognised in profit or loss for equity investments classified as available-for-sale are not subsequently reversed through profit or loss. Impairment losses recognised in profit or loss for debt instruments classified as available for-sale are subsequently reversed if an increase in the fair value of the instrument can be objectively related to an event occurring after the recognition of the impairment loss.

Changes in the fair value of monetary securities denominated in a foreign currency and classified as available-for-sale are analysed between translation differences resulting from changes in amortised cost of the security and other changes in the carrying amount of the security. The translation differences on monetary securities are recognised in profit or loss, while translation differences on non-monetary securities are recognised in equity. Changes in the fair value of monetary and nonmonetary securities classified as available-for-sale are recognised in equity.

Interest on available-for-sale securities calculated using the effective interest method is recognised in the income state-ment as part of ‘other income’. Dividends on available-for-sale equity instruments are recognised in the income statement as part of ‘other income’ when the company’s right to receive payments is established.

Equity investments for which a fair value is not determinable are held at cost. Impairments on such investments are not reversed.

Held to maturity These financial assets are initially measured at fair value plus direct transaction costs.

At subsequent reporting dates these are measured at amortised cost using the effective interest rate method, less any impairment loss recognised to reflect irrecoverable amounts. An impairment loss is recognised in profit or loss when there is objective evidence that the asset is impaired, and is measured as the difference between the investment’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition. Impairment losses are reversed in subsequent periods when an increase in the investment’s recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to the restriction that the carrying amount of the investment at the date the impairment is reversed shall not exceed what the amortised cost would have been had the impairment not been recognised.

Financial assets that the group has the positive intention and ability to hold to maturity are classified as held to maturity.

1.9 Tax Current tax assets and liabilities Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets and liabilities Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that, at the time of the transaction, affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the company intends to settle its current tax assets and liabilities on a net basis.


Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items credited or debited directly to equity, in which case the tax is also recognised directly in equity, or where they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is taken into account in calculating goodwill or in determining the excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost.

Tax expenses Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from a transaction or event which is recognised, in the same or a different period, directly in equity, or a business combination.

Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly to equity.

1.10 Leases A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership to the lessee lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership to the lessee.

Operating leases - lessee Operating lease payments are recognised as an expense on a straight-line basis over the lease term except where another systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.

1.11 Impairment of assets The group assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the group estimates the recoverable amount of the asset.

Irrespective of whether there is any indication of impairment, the group also:

• tests intangible assets with an indefinite useful life or intangible assets not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount. This impairment test is performed during the annual period and at the same time every period. • tests goodwill acquired in a business combination for impairment annually.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined.

The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use.

If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss. An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in profit or loss.

Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination.

An impairment loss is recognised for cash-generating units if the recoverable amount of the unit is less than the carrying amount of the units. The impairment loss is allocated to reduce the carrying amount of the assets of the unit in the following order:

• first, to reduce the carrying amount of any goodwill allocated to the cash-generating unit and • then, to the other assets of the unit, pro rata on the basis of the carrying amount of each asset in the unit.

The group assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets other than goodwill may no longer exist or may have decreased. If any such indication exists the recoverable amounts of those assets are estimated.

The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods.

34

A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is recognised immediately in profit or loss, unless the asset is carried at a revalued amount. Any reversal of an impairment loss of a revalued asset shall be treated as a revaluation increase .

1.12 Share capital and equity An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

If the group reacquires its own equity instruments, the consideration paid, including any directly attributable incremental costs (net of income taxes) on those instruments are deducted from equity until the shares are cancelled or reissued. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the group’s own equity instruments. Consideration paid or received shall be recognised directly in equity.

1.13 Share based payments Goods or services received or acquired in a share-based payment transaction are recognised when the goods are received, or as the services are rendered. A corresponding increase in equity is recognised if the goods or services were received in an equity-settled share-based payment transaction or a liability if the goods or services were acquired in a cash-settled share-based payment transaction.

When the goods or services received or acquired in a share-based payment transaction do not qualify for recognition as assets, they are recognised as expenses.

For equity-settled share-based payment transactions, the goods or services received are measured, and the corresponding increase in equity, directly, at the fair value of the goods or services received, unless that fair value cannot be estimated reliably.

If the fair value of the goods or services received cannot be estimated reliably, their value and the corresponding increase in equity, indirectly, are measured by reference to the fair value of the equity instruments granted.

For cash-settled share-based payment transactions, the goods or services acquired and the liability incurred are measured at the fair value of the liability. Until the liability is settled, the fair value of the liability is re-measured at each reporting date and at the date of settlement, with any changes in fair value recognised in profit or loss for the period.

If the share based payments granted do not vest until the counterparty completes a specified period of service, the group accounts for those services as they are rendered by the counterparty during the vesting period, (or on a straight line basis over the vesting period).

If the share based payments vest immediately the services received are recognised in full.

For share-based payment transactions in which the terms of the arrangement provide either the group or the counterparty with the choice of whether the entity settles the transaction in cash (or other assets) or by issuing equity instruments, the components of that transaction are recorded, as a cash-settled share-based payment transaction if, and to the extent that, a liability to settle in cash or other assets has been incurred, or as an equity-settled share-based payment transaction if, and to the extent that, no such liability has been incurred.

1.14 Employee benefits Short-term employee benefits The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as paid vacation leave and sick leave, bonuses, and non-monetary benefits such as medical care), are recognised in the period in which the service is rendered and are not discounted.

The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs.

The expected cost of profit sharing and bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments as a result of past performance.

1.15 Provisions and contingencies Provisions are recognised when:

• the group has a present obligation as a result of a past event; • it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and • a reliable estimate can be made of the obligation.


The amount of a provision is the present value of the expenditure expected to be required to settle the obligation.

Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement shall be recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement shall be treated as a separate asset. The amount recognised for the reimbursement shall not exceed the amount of the provision.

Provisions are not recognised for future operating losses.

If the group has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision.

Contingent liabilities acquired in a business combination are initially measured at fair value at the date of acquisition. At subsequent reporting dates, such liabilities are measured at the higher of the amount that would be recognised in accordance with IAS 37 Provisions, Contingent Liabilities and assets and the amount initially recognised less cumulative amortisation recognised in accordance IAS 18 Revenue.

1.16 Revenue Revenue from the sale of goods is recognised when all the following conditions have been satisfied:

• the group has transferred to the buyer the significant risks and rewards of ownership of the goods; • the group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; • the amount of revenue can be measured reliably; • it is probable that the economic benefits associated with the transaction will flow to the group; • and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue shall be recognised only to the extent of the expenses recognised that are recoverable.

Service revenue is recognised by reference to the stage of completion of the transaction at balance sheet date. Stage of completion is determined by services performed to date as a percentage of total services to be performed.

Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of business, net of trade discounts and volume rebates, and value added tax.

Interest income is accrued on a time basis by reference to the principal outstanding and the applicable interest rate. Dividends are recognised, in profit or loss, when the group’s right to receive payment has been established.

1.17 Cost of sales 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 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.

The related cost of providing services recognised as revenue in the current period is included in cost of sales.

1.18 Borrowing costs Borrowing costs are recognised as an expense in the period in which they are incurred.

1.19 Post-balance sheet events Recognised amounts in the financial statements are adjusted to reflect events arising after the balance sheet date that provide evidence of conditions that existed at the balance sheet date. Events after the balance sheet date that are indicative of conditions that arose after the balance sheet date are dealt with by way of a note.

1.20 Business Combinations The acquisition of businesses is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3: Business Combinations, are recognised at their fair values at the acquisition date, except for non-current assets that are classified as held for sale in accordance with IFRS 5: Non-Current Assets Held for Sale and Discontinued Operations, which are recognised and measured at fair value less costs to sell.

36

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the group’s interest in the net assets acquired exceeds the cost of the business combination, the excess is immediately recognised in profit and loss.

The interest of minority shareholders in the acquiree is initially measured at the minority’s proportion of the net fair value, at the date of acquisition, of the assets, liabilities and contingent liabilities recognised.

1.21 Comparative figures Comparative figures are restated in the event of a change in accounting policy, prior period error or reclassification.

1.22 Earnings per shareBasic earnings per share represents the profit on ordinary activities after taxation attributable to the equity shareholders of the parent entity, divided by the weighted average number of ordinary shares in issue during the year.

Diluted earnings per share represents the profit on ordinary activities after taxation attributable to the equity shareholders, divided by the weighted average number of ordinary shares in issue during the year, plus any diluting shares resulting from share options and other potential shares outstanding during the year.



2. CHANGES IN ACCOUNTING POLICIES

Adoption of new and revised Standards

2.1 Standards and Interpretations effective in current period In the current year, the Group has adopted IFRS 7 Financial Instruments: Disclosures which is effective for annual reporting periods beginning on or after 1 January 2007, and the consequential amendments to IAS 1 Presentation of Financial Statements.

The impact of the adoption of IFRS 7 and the changes to IAS 1 has been to expand the disclosure provided in these financial statements regarding the Group’s financial statements and management of capital (see note 12 ).

2.2 Early adoption of Standards and Interpretations The following International Financial Reporting Standard was applied prior to the commencement date in the current year:

IFRS 8 Operating Segments (effective for accounting periods beginning on or after 1 January 2009)

IFRS 8 is a disclosure Standard which has resulted in a redesignation of the Group’s reportable segments (see note 34), but has no impact on the reported results or financial position of the Group.

3. STATEMENTS AND INTERPRETATIONS NOT YET EFFECTIVE

The directors anticipate that the adoption of standards and interpretations mentioned below will not have a material impact on the financial statements of the Group, had they been applied for the year ended 29 February 2008.

IFRS 2 Share-Based Payment Vesting Conditions and Cancellations (Issued February 2008) (effective for the first annual period commencing on or after 1/1/2009)

IFRS 3 Business Combinations (Issued February 2008) (effective for the first annual period commencing on or after 1/7/2009)

IAS 1 Presentation of Financial Statements Comprehensive revision including requiring a statement of comprehensive income (effective for the first annual period commencing on or after 1/1/2009)

IAS 23 Borrowing Costs (Issued August 2007) (effective for the first annual period commencing on or after 1/1/2009)

IAS 27 Consolidated and Separate Financial Statements (Issued February 2008) (effective for the first annual period commencing on or after 1/7/2009)

IAS 32 Financial Instruments: Presentation (Issued February 2008) (effective for the first annual period commencing on or after 1/1/2009)

IFRIC 12 Service Concession Arrangements (effective first annual period commencing on or after 1/1/2008)

IFRIC 13 Customer Loyalty Programmes (effective first annual period commencing on or after 1/7/2008)

IFRIC 14 The limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction (effective first annual period commencing on or after 1/1/2008)

The standards and interpretations not yet effective, as listed above will be adopted as per their commencement date.

38

4. PRIOR YEAR RECLASSIFICATION

The prior year re-classification was done to enhance management decision and for better disclosure. The correction of the reclassification results in adjustments as follows:

Balance sheetFigures in Rands 2008 2007Intangible Assets - Computer SoftwareIntangible Assets - Development expenditure

--

(72,830)72,830

5. PROPERTY, PLANT AND EQUIPMENT

Figures in Rands Cost

2008Accumulated Depreciation

Carrying Value Cost

2007Accumulated Depreciation

Carrying Value

Furniture and fixturesOffice equipmentComputer equipmentLeasehold improvements

418,99278,493

1,236,08232,550

(126,397)(36,092)

(694,076)(22,912)

292,59542,401

542,0069,638

337,20075,471

774,33526,504

(55,863)(21,357)

(348,791)(13,525)

281,33754,114

425,54412,979

Total 1,766,117 (879,477) 886,640 1,213,510 (439,536) 773,974

Reconciliation of property, plant and equipment - 2008

Figures in RandsOpening Balance Additions

Additions through business

combinations

Disposals and

scrappings Depreciation TotalFurniture and fixturesOffice equipmentComputer equipmentLeasehold improvements

281,33754,114

425,54412,979

30,6083,022

378,91425,950

32,166-

40,324-

--

(25,141)-

(51,516)(14,735)

(277,635)(29,291)

292,59542,401

542,0069,638

773,974 438,494 72,490 (25,141) (373,177) 886,640

Reconciliation of property, plant and equipment - 2007

Figures in RandsOpening Balance Additions


combinations

Disposals and

scrappings Depreciation TotalFurniture and fixturesOffice equipmentComputer equipmentLeasehold improvements

185,15261,199

214,665-

79,692-

210,0086,600

55,6647,227

181,55812,066

--

(11,276)-

(39,171)(14,312)

(169,411)(5,687)

281,33754,114

425,54412,979

461,016 296,300 256,515 (11,276) (228,581) 773,974

6. GOODWILL


2008Accumulated amortisation Carrying value Cost

2007Accumulated amortisation

Carrying value

Goodwill 9,751,445 - 9,751,445 5,839,502 - 5,839,502

Reconciliation of goodwill - 2008

Figures in RandsOpening Balance Additions Total

Goodwill 5,839,502 3,911,943 9,751,445

Reconciliation of goodwill - 2007

Figures in RandsOpening Balance Additions Total

Goodwill 5,096,216 743,286 5,839,502


7. INTANGIBLE ASSETS



Carrying Value Cost


Carrying Value

TrademarksComputer software

21,067503,030

-(459,107)

21,067 43,923

21,067433,681

-(384,811)

21,067 48,870

Development expenditure 400,752 (185,102) 215,650 174,496 (101,666) 72,830Total 924,849 (644,209) 280,640 629,244 (486,477) 142,767

Reconciliation of intangible assets - 2008

Figures in RandsOpening Balance Additions Amortisation Total

TrademarksComputer softwareDevelopment expenditure

21,06748,87072,830

-69,349

226,256

-(74,296)(83,436)

21,06743,923

215,650142,767 295,605 (157,732) 280,640

Reconciliation of intangible assets - 2007

Figures in RandsOpening Bal-

ance Additions


combinations AmortisationImpairment

loss TotalTrademarksComputer softwareDevelopment expenditure

21,06787,239

1,691,044

-38,997

-

--

101,913

-(77,366)

(1,259,664)

--

(460,463)

21,06748,87072,830

1,799,350 38,997 101,913 (1,337,030) (460,463) 142,767

Intangible assets with indefinite livesFigures in Rands 2008 2007Trademarks 21,067 21,067

The useful lives of the trademarks are considered indefinite. They are not bound by any expiry period as there is no foreseeable limit to the period over which the assets are expected to generate net cash flows for the group.

Management assesses the useful lives of the trademarks as indefinite based on the fact that the trademarks relate to the names “DVT” and “Dynamic Visual Technologies” which generate future economic benefits for as long as the company is in operation.

8. DEFERRED TAXIntangible assets with indefinite livesFigures in Rands 2008 2007Accelerated capital allowances for tax purposesLease smoothing liabilityProvision for doubtful debtsAccrued incomeIncome received in advanceProvisions disallowedAccruals and provisions

(57,552)12,203 19,758

(88,711)146,295

- 103,652

(11,045)12,319

- -

40,051 59,821 48,628

135,645 149,774

Reconciliation of deferred tax asset (liability)

Figures in Rands 2008 2007

At beginning of the yearAcquired through acquisition of subsidiaryChanges in tax rateOriginating temporary differences on development expenditureIncome received in advanceTemporary difference on accrualsOriginating temporary difference on property, plant and equipmentOriginating temporary difference on intangible assetsLease smoothingProvision for doubtful debtsAccrued income

149,774 (58,804)

(5,164)-

107,626 4,240

(46,888)-

309 (1,978)

(13,470)

(522,016)29,148

- 490,749 126,426

17,472 (4,518)

194 12,319

- -

135,645 149,774

40

9. TRADE AND OTHER RECEIVABLESFigures in Rands 2008 2007

Trade receivables 9,832,055 5,596,195Deposits 40,075 4,150Sundry debtors 643,064 52,481

10,515,194 5,652,826

Trade and other receivables encumbered as security Trade and other receivables amounting to NIL (2007: R3,298,767) are encumbered as security when and if an overdraft occurs.

Credit quality of trade and other receivables The average credit period granted to customers is 30 days. No interest is charged on overdue accounts. Management eval-uates credit risk relating to customers on an ongoing basis. If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board. The utilisation of credit limits is regularly monitored.

Of the trade receivables balance at the end of the year, R 4,993,973 (2007: R-) is due from individual debtors who represents more than 20% of the total balance of trade and other receivables.

The credit quality of trade and other receivables that are neither past due nor impaired can be assessed by reference to historical information about counterparty default rates:

Trade receivables

Counterparties without external credit rating


New customers 1,486,982 1,294,626Existing customers with no defaults in the past 6,611,150 3,971,816Existing customers with some defaults in the past - -

8,098,132 5,266,442

The terms of trade debtors that are fully performing have not been renegotiated in the last year.

Fair value of trade and other receivables The fair values of trade and other receivables are equal to their carrying values.

Trade and other receivables past due but not impaired At 29 February 2008, receivables to the value of R 1,828,010 (2007: R 433,390) were past due but not impaired. These relate to customers for whom there is no history of default or there has not been a significant change in credit quality and the amounts are still considered recoverable.

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


30-90 days past due 955,967 284,418

90-120 days past due 845,356 90,462

120+ days past due 26,677 58,511

1,828,000 433,390

Trade and other receivables impairedAn impairment provision of R 94,087 (2007: R 103,637) was recognised against the trade receivables. The ageing of these impaired trade receivables are as follows:


30-90 days 94,087 -Reconciliation of provision for impairment of trade and other receivablesOpening balance 103,637 -Impairment losses recognized 94,087 -Acquisition through business combinations - 103,637Impairment losses reversed (94,087) -Amounts written off as uncollectible (9,550) -

94,087 103,637


The creation and release of provision for impaired receivables have been included in operating expenses in the income statement. When there is no expectation of recovering additional cash, amounts charged to the allowance account are generally written off.

The maximum exposure to credit risk at the reporting date is the carrying amount of each class of trade and receivables mentioned above. The group does not hold any collateral as security.

10. CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of:


Cash on Hand - 140Bank balances 11,817,684 1,758,518

11,817,684 1,758,518

Cash and cash equivalents are equal to their carrying values.

11. SHARE CAPITALFigures in Rands 2008 2007

Authorised200,000,000 Ordinary shares of R0.005 each 1,000,000 -2,000,000 Ordinary shares of R0.005 each - 10,000

1,000,000 10,000Reconciliation of number of shares issued:Balance at the beginning of the year 1,375 1,000Share buy back (22,478) (252)Capitalisation issues 198,470 -Allotment and issue of shares - ordinary shares 72,633 627Treasury shares held by DVT Holdings Employee Share Trust (13,122) -

236,878 1,375IssuedOrdinary 236,878 1,375Share premium 13,758,222 4,254,253

13,995,100 4,255,628

12. MANAGEMENT OF CAPITAL

The Group’s objectives when managing capital are:

• to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, and • to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk. The group sets the amount of capital in proportion to risk. The company manages the capital structure and makes adjust-ments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt. The company considers its capital to be its share capital and reserves that may arise.

13. OTHER FINANCIAL LIABILITIES Figures in Rands 2008 2007

Held at amortised cost Other financial liability - 253,535Loans are interest free and are not subject to any fixed terms of repayment. Disclosed as current as these loans are repayable on demand. Current liabilitiesAt amortised cost - 253,535

42

14. OPERATING LEASE LIABILITY

Operating lease payments represent rentals payable by the company for its office properties. The lease has a fixed escalation of 8% per annum. Leases are negotiated for an average term of 3 years. Renewal of the lease agreement is to be negotiated on 1 September 2009.

Guarantee has been issued by The Standard Bank of SA Ltd on behalf of DVT Holdings in favour of Paramount Property Fund Limited in lieu of a rental deposit for the Cape Town premises. The guarantee expires at 12h00 on 1 December 2009.

Figures in Rands 2008 2007Guarantee 458,479 -

15. TRADE AND OTHER PAYABLESFigures in Rands 2008 2007Trade payables 1,047,261 544,369Value added taxation 1,322,185 520,633Leave pay accrual 371,529 296,234Other payables 1,108,240 141,487Accrued expenses 1,674,063 1,375,077

5,523,278 2,877,800

The average terms of trade and other payables are 30 days.No interest was charged or paid in respect of any trade or other payables during the year.

16. DEFERRED INCOME

Deferred income consists of licensing and product development fees received in advance.

Figures in Rands 2008 2007Current Liabilities 899,771 549,680

17. REVENUEFigures in Rands 2008 2007

Sale of goods 5,329,541 493,872

Rendering of services 53,271,567 35,775,377

58,601,108 36,269,249

18. OPERATING PROFIT

Operating profit for the year is stated after accounting for the following:

Operating lease charges Figures in Rands 2008 2007Premises Contractual amounts 1,632,486 1,264,119Profit/(Loss) on sale of property, plant and equipment (8,858) 4,738Impairment on trade and other receivables 94,087 -Loss on exchange differences - 2,275Amortisation on intangible assets and impairment loss 157,733 1,797,493Depreciation on property, plant and equipment 373,178 228,581Employee costs 41,938,948 23,300,482Secretarial fees - 25,338Administration and management fees - 43,850

19. INVESTMENT REVENUE

Interest revenue Figures in Rands 2008 2007Bank 455,332 33,868

Bank and cash has been allocated as available for sale.


20. FINANCE COSTSFigures in Rands 2008 2007Current borrowings 1,571 23,721

21. TAXATION

Major components of the tax expenseFigures in Rands 2008 2007CurrentLocal income tax - current periodSecondary Tax on Companies

2,456,228-

1,793,35999,793

DeferredDeferred tax

2,456,228

(46,572)

1,893,152

(628,566)2,409,656 1,264,586

Reconciliation of the tax expenseReconciliation between applicable tax rate and average effective tax rate.

Figures in Rands 2008 2007Statutary tax rate

Capital gains taxPrior year adjustmentDisallowable expenditureCurrent year’s losses in holding company and subsidiarySecondary Tax on CompaniesChange in tax ratePermanent differences

29.00%

-%(0.11)%

0.09%-%-%

0.60%(1.49)%

29.00%

0.08%-%

1.21%(2.14)%

0.37%-%-%

28.09% 28.52%

22. AUDITORS’ REMUNERATIONFigures in Rands 2008 2007Fees 176,216 67,654

23. CASH GENERATED FROM OPERATIONSFigures in Rands 2008 2007Profit before taxationAdjustments for:Depreciation and amortisationLoss / (profit) on sale of assetsInterest receivedFinance costsMovements in operating lease assets and accrualsImpairment loss recognised on trade receivablesMovement in dividends owing to minority shareholdersForeign exchange differencesMovement in share based paymentChanges in working capital:Trade and other receivablesTrade and other payables

8,576,965

530,9118,854

(455,332)1,5711,104

---

71,836

(4,404,497)2,575,642

4,433,460

2,026,074(4,738)

(33,868)23,72142,479

-50,000

2,275-

(1,512,703)496,184

6,907,054 5,522,884

24. TAX PAIDFigures in Rands 2008 2007Balance at beginning of the yearCurrent tax for the year recognised in income statementAqcuisition of subsidiariesBalance at end of the year

(769,171)(2,456,228)

(13,160)1,374,882

(910,998)(1,893,152)

-769,171

(1,863,677) (2,034,979)

44

25. DIVIDENDS PAIDFigures in Rands 2008 2007Balance at beginning of the yearDividendsBalance at end of the year

(50,000)-

50,000

-(808,333)

50,000- (758,333)

26. ACQUISITION OF BUSINESSES

Additional shares acquired in existing subsidiaries Name: Dynamic Visual Technologies Gauteng (Pty) Ltd Principal activity Software development

Transaction date

Proportion of shares acquired

Cost of acquisition

Purchased for cash

Purchased for shares

Costs attributable to combination

01/09/200602/06/2007

4.50%11.25%

456,1641,127,910

381,164-

75,000 1,127,910

--

02/06/2007 4.25% 397,766 - 397,766 -

The following equity instruments were issued in acquiring the interest in the subsidiary:

2,210 DVT Holdings shares, at a fair value of R33.94 each. 2,210 DVT Holdings shares, at a fair value of R33.94 each, and 12,302 DVT Holdings shares for R85.59 each. 4,647 DVT Holdings shares, at a fair value of R85.59 each.

Fair values were determined by the directors of the group.

Name Dynamic Visual Technologies (Pty) Ltd Principal activity Software development

Transaction date


Cost of acquisition

Purchased for cash



01/03/200702/06/2007

4.50%3.00%

390,000521,430

390,000-

-521,430

--

06/06/2007 2.50% 434,525 - 434,525 -

The following equity instruments were issued in acquiring the interest in the subsidiary:

6,092 DVT Holdings shares, at a fair value of R85.59 each. 5,077 DVT Holdings shares, at a fair value of R85.59 each.

Fair values were determined by the directors of the group.

Subsidiaries acquired Name The Talent Exchange (Pty) Ltd Principal activity Recruitment and resource provision

Transaction date


Cost of acquisition

Purchased for cash



01/03/2007 100.0% 1 1 - -

Name Offline Digital (Pty) Ltd Principal activity Content management

Transaction date


Cost of acquisition

Purchased for cash



01/12/2007 66.70% 1,466,233 1,400,703 - 65,530


Name The Talent Exchange (Cape) (Pty) Ltd Principal activity Recruitment and resource provision (Dormant)

Transaction date


Cost of acquisition

Purchased for cash



09/10/2007 100.% 3,975 1,000 - 2,975

Fair values were determined by the directors of the group.Transaction date 2008Total paid for cashTotal purchased for sharesTotal costs attributable to combination

2,172,8682,556,631

68,505Total acquisition costs 4,798,004

Analysis of assets and liabilities acquired (Per subsidiary acquired)

Fair value of assets acquired:

Figures in Rands

DVT-G 20.0%

02-Jun-07

DVT-C 4.5%

01-Mar-07

DVT-C 5.5%

02-Jun-07

Offline Digital

100.0%01-Dec-07

Talent-G 100.0%

01-Mar-07Talent-C 100.0%

Fair value of assets acquired:Fixed assetsIntangible assetsDeferred tax liabilitiesDeferred tax assetInventoryTrade and other receivablesTrade and other payablesTax liabilitiesCashLoans receivableLoans payable

59 331 11 554

- 11 460

- 682 832

(591 477) (15 575)

55 059 - -

25 201 948

- 4 161

- 173 907 (90 038) (31 108)

45 125 -

(7 809)

29 720 1 159

- 5 086

- 214 487

(122 347) (38 021) 118 889

- (1)

71 983 -

(60 701) -

179 624 440 804

(420 024) (13 974) 372 371

- -

507 - - - -

10 687 -

814 160 100

(83 497)

- - - - -

1 000 - - - - -

Total net assets acquiredLess: MinorityLess: ImpairmentGoodwill acquired

213 184 - -

1 768 656

120 387 - -

269 613

208 972 - -

746 983

570 083 (189 838)

- 1 085 988

(71 229) -

33 498 37 730

1 000 - -

2 975 Purchase price 1 981 840 390 000 955 955 1 466 233 1 3 975Net Cash outflow on acquisition 326 105

- 344 875

- (118 889)

- 1 093 862

- (159)

- 3 975

Fair value of assets acquired of all business acquisitionsFigures in Rands 2008 2007Fair value of assets acquired:Fixed assetsIntangible assetsDeferred tax liabilitiesDeferred tax assetInventoryTrade and other receivablesTrade and other payablesTax liabilitiesCashLoans receivableLoans payable

186 742

13 660 (60 701) 20 707

179 624 1 523 718

(1 223 887) (97 864) 591 604

100 (91 307)

256 514 101 913

- - -

1 736 363 (1 871 013)

- 387 988

- (311 522)

Total net assets acquiredLess: MinorityLess: ImpairmentGoodwill acquired

1 042 397 (189 838)

33 498 3 911 943

300 243 - -

743 285 Purchase price 4 798 004 1 043 528 Net Cash outflow on acquisition 1 649 769 655 540

46

Information for the period as if the acquisition date for all business combinations that took effect during the reporting period had been at the beginning of that period:Figures in Rands 2008 2007RevenueProfit

59,988,6026,456,321

42,809,5013,437,216

27. COMMITMENTS

Operating leases - as lessee (expense)Figures in Rands 2008 2007Minimum lease payments due- within one year- in second to fifth year inclusive

1,252,2761,120,462

1,148,2982,282,300

2,372,738 3,430,598

Operating lease payments represent rentals payable by the company for certain part of its office properties. Leases are negotiated for an average term of three years and are subject to an 8% annual increase. No contingent rent is payable.

28. CONTINGENCIES

Tax consequences of undistributed reserves Figures in Rands 2008 2007

Secondary Tax on Companies on remaining reservesLimited security given to ABSA bank in respect of bank facilities utilised by Dynamic Visual Technologies (Pty) Ltd

1,045,512

-

613,245

1,000,000

29. FINANCIAL ASSETS BY CATEGORY

The accounting policies for financial instruments have been applied to the line items below:

2008Loans and

receivablesAvailable

for sale TotalTrade and other receivablesCash and cash equivalents

10,515,194-

-11,817,684

10,515,19411,817,684

10,515,194 11,817,684 22,332,8782007

Loans and receivables

Available for sale Total

Trade and other receivablesCash and cash equivalents

5,652,826-

-1,758,658

5,652,8261,758,658

5,652,826 1,758,658 7,411,484

30. FINANCIAL LIABILITIES BY CATEGORY

The accounting policies for financial instruments have been applied to the line items below:

2008Financial

liabilities at amortised

cost

Total


4,201,09343,583

4,201,09343,583

4,244,676 4,244,676

2007Financial

liabilities at amortised

cost

Total


2,357,16742,479

2,357,16742,479

2,399,646 2,399,646

31. RELATED PARTIES

Subsidiaries During the year the company and its subsidiaries, in the ordinary course of business entered into various sale and purchase transactions with related parties. These transactions occurred under terms that are no less favourable than those arranged with third parties. Intergroup transactions have been eliminated on consolidation.

Details of the group’s subsidiaries are as follows:

• Dynamic Visual Technologies (Pty) Ltd • Dynamic Visual Technologies Gauteng (Pty) Ltd • Offline Digital (Pty) Ltd • The Talent Exchange (Pty) Ltd • The Talent Exchange (Cape) (Pty) Ltd

Shareholders in subsidiaries other than Dynamic Visual Technologies Holdings Limited • Shareholder in Offline Digital (Pty) Ltd R Morrison G Barlow

Previous shareholders in subsidiaries other than Dynamic Visual Technologies Holdings Limited• Shareholder in Dynamic Visual Technologies (Pty) Ltd FG Luthango WR Gabrielse W Press

• Shareholder in Dynamic Visual Technologies (Gauteng) (Pty) Ltd T van Rensburg J van der Merwe F de Klerk

Other Entities controlled by Directors • Cornastone Consulting Group (Pty) Ltd• IndigoCube (Pty) Ltd• Karma Property Investments cc• Vistar (Pty) Ltd• Waterfront Window Cleaning cc• SA BookOnline (Pty) Ltd

Directors Details relating to directors emoluments are disclosed in note 32.

Shareholders The principal shareholders of the company are detailed in note 37.

Key Management personnel Key management personnel are those having responsibilty for planning, directing and controlling activities directly or indirectly, including any director of that entity.

Amounts in Rands 2008 2007Related party balances Loan accounts owing to related parties Directors 40,000 80,000Entities controlled by directors - 173,535

Amounts included in trade receivables / (payables) regarding related partiesOther related parties 52,579 135,741Other related parties (279,893) (166,362)

Dividends payable to shareholders of subsidiaries Shareholders of Dynamic Visual Technologies (Pty) Ltd - (50,000)


48

Amounts in Rands 2008 2007Related party transactions

Sales to related parties Entities controlled by directors

Operating expenses from related parties Entities controlled by directors

Acquisition of property, plant and equipment from related partiesEntities controlled by directors

Share based payments to related partiesDirectorsKey management

Remuneration paid to key management personnelDirectorsKey management

(813,410)

3,058,574

165,965

14,31621,416

2,347,6821,730,205

-

2,298,854

156,658

--

2,591,648-

Share OptionsOptions for 1,000,000 shares at an option price of R 0.95 (option price at grant date, R 0.1909) were awarded to A de Klerk on 3 December 2007. These options can be exercised at the discretion of A De Klerk and vest as follows:

3 December 2008 250,000 options3 December 2009 250,000 options3 December 2010 250,000 options3 December 2011 250,000 options

32. DIRECTORS’ EMOLUMENTS

Executive

2008

Basic salaryTravel

allowanceBonus and performance

related paymentsManagement

Fees Total

G FowlerCJ WilkinsA de Klerk

540,000883,399148,980

45,000120,000

24,000

-299,303

-

287,000--

872,0001,302,702

172,980

1,572,379 189,000 299,303 287,000 2,347,6822007

Basic salaryTravel

allowanceBonus and performance

related paymentsManagement

Fees TotalCJ WilkinsJ van der MerweCP HubbardT van Rensburg

382,570391,684377,709433,032

120,00096,000

120,00042,000

111,052340,393103,179

74,029

----

613,622828,077600,888549,061

1,584,995 378,000 628,653 - 2,591,648

Non-executive

2008Management

Fees Total

DM Hughes 753,233 753,233

753,233 753,233


33. RISK MANAGEMENT The group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk and cash flow interest rate risk), credit risk and liquidity risk. Management do not consider there to be any significant concentration of any of the above risks in the business.

Liquidity risk The group’s liquidity risk relates to ensuring that there are sufficient funds available to cover future commitments. The group manages liquidity risk through an ongoing review of such commitments and credit facilities.

The group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows.

The table below analyses the group’s financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

At 29 February 2008

Less than 6 months

Between 6 months

and 1 year

Between 1 and 2 years


Trade and other payables 5,151,749 371,529 - -

Operating lease liability - - 43,583 -

At 28 February 2007

Less than 6 months

Between 6 months

and 1 year



Trade and other payables 2,581,566 296,234 - -Operating lease liability - - 42,479 -

Interest rate risk The sensitivity analysis below presents the interest rate risks in accordance with IFRS 7. It has been determined based on the exposure to interest rates for financial instruments at the balance sheet date and shows the effects of changes in market interest rates on interest payments, interest income and expenses and if appropriate, shareholders’ equity. For variable rate liabilities, the analysis is prepared assuming the average liability was outstanding for the whole year. A 100 basis point increase or decrease represents management’s assessment of the reasonable possible change in interest rate.

During the year ended 29 February 2008, if interest rates on Rand-denominated borrowings had increased/decreased by 100 basis points with all other variables held constant, the interest income for the year would have been R 92,412 higher/lower, mainly as a result of higher/lower interest income on floating rate borrowings.

Cash flow interest rate risk Financial instrument

Current interest rate

Due in less than a year

Due in one to two years

Due in two to three years

Due in three to four years

Due after five years

Cash in current banking institutions 10.35% 11,817,684 - - - -

Credit risk Credit risk consists mainly of cash deposits, cash equivalents and trade debtors. The group only deposits cash with major banks with high quality credit standing and limits exposure to any counter-party.

Management evaluates credit risk relating to customers on an ongoing basis. If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board. The utilisation of credit limits is regularly monitored.

Figures in Rand 2008 2007Financial assets exposed to credit risk at year end were as follows:

Trade receivables 9,832,055 5,596,195

Other receivables 683,139 56,631

Bank 11,817,684 1,758,658

50

34. POST BALANCE SHEET EVENTS The directors are not aware of any matter or circumstance arising between the end of the financial year and the date of approval of the financial statements.

35. EARNINGS PER SHAREBasic earnings per share (“EPS”)The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:

Figures in Rand 2008 2007Profit for the year attributable to equity holders of the parent 6,029,228 3,009,507

Adjustments - -

Earnings used in the calculation of basic earnings per share from continuing operations 6,029,228 3,009,507

Weighted average number of ordinary shares for the purposes of basic EPS 41,946,841 137,982

Basic earnings per share 14.4 2,181.1

Diluted earnings per share The earnings used in the calculation of all diluted earnings per share measures are the same as those for the equivalent basic earnings per share measures, as outlined above.

The weighted average number of ordinary shares for the purposes of diluted earnings per share reconciles to the weighted average number of ordinary shares used in the calculation of basic earnings per share as follows:

Figures in Rand 2008 2007Weighted average number of ordinary shares for the purposes of basic earnings per share 41,946,841 137,982

Employee options 384,116 -

Weighted average number of ordinary shares used in the calculation of diluted EPS 42,330,957 137,982

Diluted earnings per share 14.2 2,181.1

Headline earnings per share (“HEPS”)The earnings used in the calculation of headline earnings per share reconciles to the earnings used in the calculation of basic earnings per share as follows:


Less: Preference shares dividends and related taxes - -

Earnings used in the calculation of basic EPS from continuing operations 6,029,228 3,009,507

Add: Loss on disposal of equipment 8,858 -

Add: Impairment of intangible asset - 460,463

Less: Profit on disposal of investment in subsidiary (108,012) -

Total tax effect on adjustments - 133,534

Headline earnings 5,930,074 3,603,504

Weighted average number of shares 41,946,841 137,982

Headline earnings per share 14,1 2,611.6

Diluted headline earnings per shareThe earnings used in the calculation of diluted headline earnings per share reconciles to the earnings used in the calculation of basic earnings per share as follows:


Less: Preference shares dividends and related taxes - -

Earnings used in the calculation of basic EPS from continuing operations 6,029,228 3,009,507

Add: Loss on disposal of equipment 8,858 -

Add: Impairment of intangible asset - 460,463

Less: Profit on disposal of investment in subsidiary (108,012) -

Total tax effect on adjustments - 133,534

Headline earnings 5,930,074 3,603,504

Weighted average number of shares used in the calculation of diluted HEPS 42,330,957 137,982

Diluted headline earnings per share 14,0 2,611.6


36. SEGMENT REPORTING

Adoption of IFRS 8, Operating Segments The Group has adopted IFRS 8 Operating Segments in advance of its effective date, with effect from 1 March 2007. IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. In contrast, the predecessor Standard (IAS 14 Segment Reporting) required an entity to identify two sets of segments (business and geographical), using a risk and rewards approach, with the entity’s system of internal financial reporting to key management personnel serving only as the starting point for the identification of such segments. As a result, following the adoption of IFRS 8, the identification of the Group’s reportable segments have changed.

Products and services from which reportable segments derive their revenues Information reported to the Group’s chief operating decision maker for the purposes of resource allocation and assessment of segment performance is focussed on the difference in products and services.

The Group’s reportable segments under IFRS 8 are therefore as follows:

Product: Comprising the sale, implementation and customisation of licensed software products;

Services: Comprising the delivery of software development projects, professional services and resources; and

Central Ops: Which includes the central operation of the Group.

Segment revenues and results The following is an analysis of the Group’s revenue and results by reportable segment:

Figures in Rand Product Services Central OpsTurnover 5,329,541 53,271,567 -EBITDA 215,854 8,661,045 (222,785)

Depreciation and Amortization (95,282) (434,666) (963)

Net interest 9,834 162,019 281,908

Profit before tax 130,406 8,388,399 58,160

Tax (4,010) (2,405,646) -

Profit after tax 126,396 5,982,753 58,160

2.0% 97.0% 0.9%

Segmental assets:Figures in Rands Total AssetsProductServices

3,036,43930,350,809

Total 33,387,248

Basis of segment reporting No comparatives have been provided as the reported segments are not comparable to those of the previous year. During the course of the year, the Group restructured its existing investments in subsidiaries and associated companies through the extraction of minorities.

As a result a comparison in segmented results to those of the previous year is not possible and the transitional provisions in IFRS 8 are not applicable.

Geographical segments The company’s operations are located in South Africa. Major customers Figures in Rands 2008 2007Customer 1Customer 2Customer 3

11,170,57111,023,679

7,383,796

7,125,16310,959,650

3,799,617

37. ANALYSIS OF SHAREHOLDERSSee Shareholder Analysis on page 17 of the Annual Report.

52

38. SHARE BASED PAYMENTS

Employee share option plan Terms of the scheme The scheme is an equity settled share option scheme.

The DVT Group allows certain employees to acquire shares in DVT Holdings Limited over a two to four year period, with options vesting in variable tranches of 25% to 50%. If the options remain unexercised after a period of 5 years from date of the grant, the options expire.

Should a scheme member cease to be an employee of the Group, any unexercised options are forfeited. The exercise price of the options is determined in accordance with the rules of the scheme, being the five day weighted average value per ordinary share immediately preceding the granting of the option.

These options are settled by means of the issue of shares by DVT Holdings Limited. Such equity-settled share based payments are measured at fair value at the date of the grant.

Employees’ share options • No options were outstanding at the beginning of the period as the share option scheme was only implemented during the year. • No options were exercised during the year. • No equity instruments, other than share options, were granted during the year and no arrangement has been modified during the year. Options grantedThe number and weighted average exercise price of the share options for the options granted during the year were as follows:

No of optionsOutstanding at the beginning of the period;Granted during the period;Forfeited during the period;Exercised during the period;Outstanding at the end of the period; andExercisable at the end of the period

-3,127,100

(53,000)-

3,074,100-

Options outstandingThe share options outstanding at the end of the period were as follows:

Number of options

Exercise Price

Estimated fair value per option at

grant date5 November 20075 November 20073 December 20075 February 20085 February 2008

879,0001,062,0001,000,000

8,000125,100

100 cents100 cents

95 cents99 cents99 cents

22.49 cents18.86 cents19.09 cents16.34 cents19.89 cents

Information on options granted during the year The group used the fair value of the equity instruments granted to disclose the share based payment transaction.

The fair value of options are measured using a Black-Scholes-Merton model, the inputs to which are as follows: (no comparatives are listed as the Share Option Scheme was only implemented during the year under review)

Share price at grant date (cents) 86 -100Weighted average exercise price (cents) 98.3Expected volatility 14% - 19.8%Risk free rate 8.93 - 9.33%%Expected dividend yield 1.0% - 2.5%

The expected volatility was determined by calculating the exponentially weighted moving average of the Company’s share price over time. No other features of the option grant were incorporated into the measurement of fair value.

Total expense of R 71 836 (2007: R Nil) relating to equity-settled share-based payments transactions was recognized in 2008.


Notice: Change of Name

Dynamic Visual Technologies Holdings Limited

(“the Company”) or (“the DVT Group”) or (“the Group”)Registration number: 2004/016984/06Share Code: DTH ISIN: ZAE000109070

The notice of the annual general meeting contains a proposed special resolution to change the name of the Company from “Dynamic Visual Technologies (Holdings) Limited” to “DTH Dynamic Technology Holdings Limited”.

The proposed change to “DTH Dynamic Technology Holdings Limited” better describes the business of the group and will allow the company to develop its operating brands without creating confusion with the holdings company’s brand. The name “Dynamic Visual Technologies” or “DVT” will continue to be used for certain existing operating subsidiaries of the Company.

In this regard, shareholders’ attention is drawn to the following should the proposed change of name of the company be approved at the annual general meeting:

• the company’s long name will change from “Dynamic Visual Technologies (Holdings) Limited” to “DTH Dynamic Technology Holdings Limited”• the company’s short name on the JSE list will change from “DVT” to “DTH”;• the company’s ISIN code will change from “ZAE000109070” to “ZAE000124681”;• the company’s JSE share code “DTH” will remain the same; • certificated shareholders need to surrender their share certificates to the Company’s transfer secretaries as current share certificates reflecting the name “Dynamic Visual Technologies (Holdings) Limited” are not good for delivery;• no action need be taken by dematerialised shareholders as their accounts will be updated with the new long name and short name at their CSDP or broker.

Process and approvals1. A special resolution will be proposed to change the name from “Dynamic Visual Technologies (Holdings) Limited” to “DTH Dynamic Technology Holdings Limited” at the annual general meeting to be held on 27 August 2008.2. For a period of not less than one year, the Company will reflect the former name “Dynamic Visual Technologies (Holdings) Limited” on all documents of title in brackets beneath the new name of “DTH Dynamic Technology Holdings Limited”.3. All new share certificates issued subsequent to the name change will bear the new long name “DTH Dynamic Technology Holdings Limited”.4. Approval has been granted by the JSE for the change of name and for the abbreviated name “DTH” to be used with the share code “DTH” and the ISIN code ZAE000124681.5. The new name “DTH Dynamic Technology Holdings Limited” has been reserved at the Companies and Intellectual Property Registration Office.6. Certificated shareholders need to complete the form of surrender attached to this notice and return it, together with their share certificates or other documents of title, to the transfer secretaries, Link Market Services South Africa (Pty) Limited, 11 Diagonal Street, Johannesburg 2001 (P O Box 4844, Johannesburg 2000). New share certificates reflecting the change of name will be posted, by registered post in South Africa, to those certificated shareholders who have surrendered their share certificates or other documents of title on or before 12:00 on Friday, 10 October 2008, on or about Monday, 13 October 2008.7. Shareholders who surrender their existing share certificates or other documents of title after 12:00 on Friday, 10 October 2008 will have their new share certificates mailed within 5 (five) business days of receipt thereof by he transfer secretaries, by registered post in South Africa, at the risk of the shareholders concerned.

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SALIENT DATES AND TIMES OF THE PROPOSED NAME CHANGE

The salient dates and times of the proposed name change are set out below:

2008

Last day to lodge forms of proxy for the annual general meeting by 14:00 on Monday, 8 September

Annual general meeting of shareholders to be held at 14:00 on Wednesday, 10 September

Results of annual general meeting published on the Securities Exchange News Service (SENS) on

Wednesday, 10 September

Last day to trade under the name “Dynamic Visual Technologies (Holdings) Limited” and short name “DVT” and ISIN code ZAE000109070 on

Friday, 3 October

Trade under the new name “DTH Dynamic Technology Holdings Limited” with short name “DTH” and ISIN code ZAE000124681 on

Monday, 6 October

Record date for change of name Friday, 10 October

New share certificates reflecting the change of name posted by registered post to certificated shareholders who have surrendered their documents of title on or before 12:00 on Friday, 10 October (see note 3 below)

Monday, 13 October

Dematerialised shareholders’ accounts updated with the new name by their CSDP or broker

Monday, 13 October

Note 1. The dates and times provided for above are subject to amendment. Any such amendment will be released on SENS.2. Shareholders will not be able to dematerialize or rematerialise shares in the Company’s name after Friday, 3 October 2008 and may only dematerialise their new shares in the Company from Monday, 13 October 2008.3. Certificated shareholders who surrender their existing documents of title after 12:00 on the record date, will have their new share certificates mailed within five business days of receipt thereof by the transfer secretaries, by registered post in South Africa, at the risk of the shareholders concerned.

OPINIONS AND RECOMMENDATIONS

The directors of the Company are of the opinion that the implementation of the name change will be to the long term benefit of DVT shareholders and more closely reflects the main business of the company. Accordingly, the board of directors recommends that shareholders vote in favour of the special resolution to be proposed at the annual general meeting of shareholders.

The directors of the Company who have direct and indirect interests in the issued share capital of the Company support the name change and intend to vote in favour of it in respect of all their shares.

By order of the board

Graham FowlerCompany Secretary

Johannesburg21 July 2008


Notice of Annual General Meeting

Dynamic Visual Technologies (Holdings) Limited

(“the Company”) or (“the DVT Group”) or (“the Group”)Registration number: 2004/016984/06Share Code: DTH ISIN: ZAE000109070

Notice is hereby given that the first annual general meeting of Dynamic Visual Technologies (Holdings) Limited will be held in the boardroom of the company at Victoria Gate, Hyde Lane, Hyde Park on Wednesday, 10 September 2008 at 14:00 for the purpose of transacting the following business.

ORDINARY BUSINESS

Approval of annual financial statements1. To receive, consider and adopt the annual financial statements for the year ended 29 February 2008 together with the reports of the auditors and directors thereon.

Election of directors2. To re-elect, individually, the following directors who retire automatically in terms of the Company’s Articles of Association, and being eligible, offer themselves for re-election: Messrs C Wilkins and DM Hughes.

3. To elect Mr A de Klerk, who was appointed by the board on 1 December 2007 as director of the company. Abbreviated curriculum vitae in respect of each director offering himself for re-election or election is contained on page 6 of the annual report.

Approval of director’s fees4. To authorise the remuneration committee to determine the compensation of the directors for their services.

5. To approve the payment of directors’ fees of R3 100 915 paid for the year ended 29 February 2008.

Re-appointment of auditors6. To approve the re-appointment of Greenwoods Chartered Accountants as auditors of the company and the directors be authorized to determine the remuneration of the auditors.

Other business7. To transact such other business as may be required at an annual general meeting.

ORDINARY RESOLUTIONS

To consider and, if deemed fit, to pass with or without modifications, the following ordinary resolutions:

Authority to place shares under control of the directors

Ordinary Resolution 1“RESOLVED by way of a general authority that the authorised but unissued ordinary shares in the capital of the Company be and are hereby placed under the control and authority of the directors of the company and that the directors be and are hereby authorised and empowered to allot and issue all or any of such ordinary shares, or to issue any options in respect of all or any of such ordinary shares, to such person/s on such terms and conditions and at such times as the directors may from time to time and in their discretion deem fit, subject to the provisions of sections 221 and 222 of the Companies Act (Act 61 of 1973), as amended, the articles of association of the company and the Listings Requirements of JSE Limited from time to time.”

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General authority to issue shares for cash

Ordinary Resolution 2“RESOLVED that the directors of the company be and are hereby authorised to issue all or any of the authorised but unissued ordinary shares of R0.005 each in the capital of the company for cash, at the discretion of the directors, as and when suitable opportunities arise, subject to the Listings Requirements of the JSE.”

The allotment and issue of shares for cash shall be subjected to the following limitations:

• that the securities which are the subject of the issue for cash must be of a class already in issue, or where this is not the case, must be limited to such securities or rights that are convertible into a class already in issue;• that this authority shall not be extended beyond the next annual general meeting or 15 (fifteen) months from the date of this annual general meeting, whichever date is earlier;• issues in terms of this authority in any one financial year shall not exceed 50% (fifty percent) in the aggregate of the number of shares in the company’s issued share capital in issue at the date of this notice of the annual general meeting. The 50% (fifty percent) shall also take into account the number of ordinary shares which may be issued and shall be based on the number of ordinary shares in issue, added to those that may be issued in future (arising from the conversion of options/convertibles) at the date of such application, less any ordinary shares issued, or to be issued in future arising from options/convertible ordinary shares issued during the current financial year, plus any ordinary shares to be issued pursuant to a rights issue which has been announced which is irrevocable and fully underwritten, or securities issued in terms of an acquisition which has had the final terms announced;• after the company has issued securities in terms of the approved general issue for cash representing, on a cumulative basis within a financial year, 5% (five percent) or more of the number of equity securities in issue prior to that issue, the company shall publish an announcement giving full details of the issue, including:

o the number of securities issued;o the average discount to the weighted average trading price of the securities over the 30 (thirty) days prior to the date that the issue was determined or agreed by the directors of the company; ando the impact on net asset value, net tangible asset value and on earnings and headline earnings per share, shall be published at the time of any issue representing, on a cumulative basis within a financial year, 5% (five percent) or more of the number of shares in issue, prior to such issue;

• in determining the price at which shares will be issued in terms of this authority, the maximum discount permitted shall be 10% (ten percent) of the weighted average traded price of such shares, as determined over the 30-day (thirty-day) business period prior to the date that the price of the issue is determined or agreed by the directors of the company. If no shares have been traded in the said 30-day (thirty-day) business period, a ruling will be obtained from the JSE; • any such issue will be made to public shareholders as defined in paragraph 4.25 to 4.27 of the JSE Listings Requirements and not to related parties.

As required by the JSE Listing Requirements, a majority of 75% (seventy five percent) of the votes cast by the shareholders present or represented by proxy at this annual general meeting (excluding the Designated Adviser and the controlling shareholders, together with their associates) is required for this ordinary resolution to be passed.

Authority to company secretary to implement resolutions

Ordinary Resolution 3RESOLVED that the company secretary of the Company be and is hereby individually authorised to sign all such documents and do all such things as may be necessary for or incidental to the implementation of those resolutions to be proposed at the annual general meeting convened to consider this resolution which are passed (in the case of ordinary resolutions) or are passed and registered by the Registrar of Companies (in the case of special resolutions).”


SPECIAL RESOLUTIONS

To consider and, if deemed fit, to pass with or without modifications, the following special resolutions:

Change of name of the company

Special Resolution Number 1RESOLVED that, subject to the provisions of the Companies Act, 61 of 1973, as amended and Listings Requirements of the JSE Limited, the name of the Company be and is hereby changed from “Dynamic Visual Technologies (Holdings) Limited” to “DTH Dynamic Technology Holdings Limited”, with effect from the commencement of trade on Monday, 6 October 2008.

Reason for and effectThe reason for Special Resolution Number 1 is to align the Company’s name in order to more closely reflect the name of the company as identified by the public and as referred to in the media. The effect of Special Resolution Number 1 is that the company will in future be known as “DTH Dynamic Technology Holdings Limited”.

Other DisclosureThe salient dates pertaining to the change of name of the company are set out on page 55 of these financial state-ments.

Shareholders are referred to the explanatory notes set out under special resolution number 2 which apply mutatis mutandis to this resolution”

General authority to the company to repurchase its own shares

Special Resolution Number 2“RESOLVED that the company, or a subsidiary, be and hereby is authorized, by way of general authority in terms of Article 3A of the company’s articles of association, to approve the purchase of shares issued by the company, subject to the requirements of section 85 and 89 of the Companies Act 1973, as amended, the Listings Requirements of the JSE Limited (“JSE”) and the articles of association of the company.

It is recorded that the Listings Requirements of the JSE require, inter alia, that the company or its subsidiary may make a general repurchase of shares issued by the company only if:

• the repurchase of the ordinary shares is effected through the order book operated by the JSE trading system and done without any prior understanding or arrangement between the company and the counterparty;• at any point in time the company may only appoint one agent to effect any repurchases on its behalf;• this general authority shall only be valid until the next annual general meeting of the company, provided that it shall not extend beyond 15 (fifteen) months from the date of passing of the general authority to repurchase shares;• the maximum price at which the shares may be repurchased will be 10% (ten percent) above the weighted average market value at which such ordinary shares are traded on the JSE, for the 5 (five) business days immediately preceding the date on which the transaction is effected;• a repurchase of shares by a subsidiary of the company may not exceed 10% in aggregate of the number of issued shares of the company;• any such repurchase shall not, in any one financial year, exceed 20% (twenty percent) of the company’s issued ordinary shares as at the passing of the general authority;• the company or its subsidiary may not repurchase ordinary shares during any prohibited period as defined in paragraph 3.67 of the JSE Listings Requirements; • the repurchase may only be effected, if the shareholder spread requirements as set out in paragraphs 3.37 to 3.41 of the JSE Listings Requirements are still met after such repurchase;• should derivatives be used, such authority is limited to paragraphs 5.72I and (d) and 5.84(a) of the JSE Listings Requirements;

58

• when the company has cumulatively repurchased 3% (three percent) of the initial number of the relevant class of securities, and for each 3% (three percent) in aggregate of the initial number of that class acquired thereafter, an announcement must be made. Such announcement must be made as soon as possible and in any event by not later than 08:30 on the second business day following the day on which the relevant thresh old is reached or exceeded.

Reason for and effectThe reason for and effect of this special resolution is to obtain an authority for, and to authorize the company and its subsidiaries, by way of a general authority to repurchase the company’s issued ordinary shares.

It is the intention of the directors of the company to use such authority should prevailing circumstances, such as market conditions, in their opinion warrant it.

Other DisclosureThe company may not enter the market to proceed with the repurchase until the company’s Designated Adviser, PSG Capital (Proprietary) Limited, has confirmed the adequacy of the company’s working capital for the purposes of undertaking a repurchase of shares, in writing to the JSE.

Shareholders are referred to the explanatory notes set out hereunder which apply mutatis mutandis to this resolution”

EXPLANATORY NOTES

Working capitalThe board is of the opinion that, after considering the maximum effect of the repurchase contemplated in special resolution number 2, for a period of at least 12 (twelve) months after the date of the notice of the annual general meeting:

• the company and the DVT Group will be able to repay its debts in the ordinary course of business; • the consolidated assets of the company and the DVT Group fairly valued according to International Financial Reporting Standards and on a basis consistent with the last financial year of the company ended 29 February 2008, exceed its consolidated liabilities; • the company and the DVT Group have adequate share capital and reserves; • the company and the DVT Group have sufficient working capital for their requirements.

Material changesThis notice has been distributed with the annual financial statements of the group and no changes have therefore occurred since the publication thereof.

Directors’ responsibility statementThe directors of the Company as set out on page 23 of these financial statements:

• have considered all statements of fact and opinion in the annual report to which this notice is attached;• accept, individually and collectively, full responsibility for the accuracy of such statements; and• declare that, to the best of their knowledge and belief, such statements are correct and no material facts have been omitted, the omission of which would make any such statements false or misleading and that they have made all reasonable enquiries to ascertain such facts.

Litigation statementNeither the company nor its subsidiaries is party to any legal or arbitration proceedings (including such proceedings which are pending or threatened), which may have or have had in the previous 12 (twelve) months a material effect on the group’s financial position.


Other disclosures in terms of paragraph 11.26 of the JSE Listings RequirementsThe JSE Listings Requirements require the following disclosures which are contained in the annual report.Disclosure references in the annual report

1. Directors – Page 232. Major shareholders – Page 173. Directors’ interests in securities – Page 174. Share capital of the company – Page 22

VOTING AND PROXIES

A shareholder entitled to attend and vote at the annual general meeting is entitled to appoint a proxy or proxies to attend, speak and vote in his/her stead. A proxy need not be a member of the company. For the convenience of registered members of the company, a form of proxy is enclosed herewith.

The attached form of proxy is only to be completed by those ordinary shareholders who:

• hold ordinary shares in certificated form; or• are recorded on the sub-register in “own name” dematerialised form.

Ordinary shareholders who have authorized their ordinary shares through a CSDP or broker without “own name” registration and wish to attend the annual general meeting, must instruct their CSDP or broker to provide them with the relevant Letter of Representation to attend the meeting in person or by proxy and vote. If they do not wish to attend in person or by proxy, they must provide the CSDP or broker with their voting instructions in terms of the relevant custody agreement entered into between them and the CSDP or broker.

Proxy forms should be forwarded to reach the transfer secretaries, Link Market Services, 11 Diagonal Street, Johannesburg, 2001, P O Box 4844, Johannesburg, 2000 by not later than Monday, 8 September 2008 at 14:00.

By order of the board

Graham FowlerCompany Secretary

Johannesburg21 July 2008

60

Registered OfficeVistar JunxionMarlborough GateHyde LaneHyde Park

Business addressAnnex ALongkloof StudiosDarters RoadGardensCape Town, 8001

Postal addressP O Box 408Gallor Manor2052

CORPORATE CALENDAR

Financial year-end 2008

Annual general meeting 2008

Half-year interim report

Financial year-end 2009

Abridged report

Annual report and financial statements

Annual general meeting 2009

Corporate Information

Company SecretaryGraham Fowler

Transfer secretariesLink Market Services

AuditorsGreenwoods Chartered Accountants

BankersStandard Bank of South Africa Ltd

Legal AdvisorsLeppan Beech Inc

Designated AdvisorPSG Capital (Proprietary) Limited

29 February 2008

10 September 2008

November 2008

28 February 2009

May 2009

July 2009

August 2009


DYNAMIC VISUAL TECHNOLOGIES (HOLDINGS) LIMITED(“the Company”) or (“the DVT Group”) or (“the Group”)

Registration number: 2004/016984/06Share Code: DTH

ISIN: ZAE000109070

For use only by ordinary shareholders at the annual general meeting of ordinary shareholders of the company at Victoria Gate, Hyde Lane, Hyde Park on Wednesday, 10 September 2008 at 14:00.

I/We (please print names in full) Of (postal address)

being a member/s of Dynamic Visual Technologies (Holdings) Limited, holding shares in the Company, hereby appoint:

1. or, failing him/her,

2. or, failing him/her,3. the Chairman of the Annual General Meeting,

as my/our proxy to act for me/us at the annual general meeting convened for purposes of considering and, if deemed fit, passing, with or without modification, the resolutions (“resolutions”) to be proposed thereat and at each adjournment thereof and to vote for and/or against the resolutions, and/or to abstain from voting for and/or against the resolutions, in respect of the ordinary shares registered in my/our name in accordance with the following instructions:.

My/our proxy shall vote as follows:

Number of ordinary shares

Resolutions For Against Abstain

Approval of annual financial statements of the company

Re-election of Mr C Wilkins, being eligible, as a director of the Company

Re-election of Mr D Hughes, being eligible, as a director of the Company

Election of Mr A De Klerk, being eligible, as a director of the Company

To authorise the remuneration committee to determine the compensation of the directors

To approve the payment of directors’ fees paid for the year ended 29 February 2008

To approve the re-appointment of Greenwoods Chartered Accountants as auditors of the company and authorize the directors to determine their remuneration

Ordinary Resolution 1 – Authority to place shares under control of directors

Ordinary Resolution 2 – General authority to issue shares for cash

Ordinary Resolution 3 – Authority to company secretary to implement resolutions

Special Resolution 1 – Change of name of the company

Special Resolution 2 – General authority to the company to repurchase its own shares(Indicate instruction to proxy by way of a cross in space provided above)Unless otherwise instructed, my/our proxy may vote as he/she thinks fit.

Signed this day of 2008 at

Signature

Please read the instructions on the reverse side hereof.

Form of Proxy

62

INSTRUCTIONS

1. Dematerialised ordinary shareholders holding ordinary shares other than with “own-name” registration who wish to attend the annual general meeting must inform their Central Securities Depository Participant (“CSDP”) or broker of their intention to attend the annual general meeting and request their CSDP or broker to issue them with the relevant Letter of Representation to attend the annual general meeting in person or by proxy and vote. If they do not wish to attend the annual general meeting in person or by proxy, they must provide their CSDP or broker with their voting instructions in terms of the relevant custody agreement entered into between them and the CSDP or broker. These ordinary shareholders must not use this form of proxy.

2. A member may insert the name of a proxy or the names of two alternative proxies of the member’s choice in the space/s provided, with or without deleting “the chairman of the general meeting”, but any such deletion must be initialled by the member. The person whose name stands first on the form of proxy and who is present at the general meeting will be entitled to act as proxy to the exclusion of those whose names follow.

3. Please insert an “X” in the relevant spaces according to how you wish your votes to be cast. However, if you wish to cast your votes in respect of a lesser number of shares than you own in the Company, insert the number of ordinary shares held in respect of which you desire to vote. Failure to comply with the above will be deemed to authorise the proxy to vote or to abstain from voting at the Annual General Meeting as he/she deems fit in respect of the entire member’s votes exercisable thereat. A member or his/her proxy is not obliged to use all the votes exercisable by the member or by his/her proxy, but the total of the votes cast and in respect whereof abstention is recorded may not exceed the total of the votes exercisable by the member or by his/her proxy.

4. Forms of proxy must be received by the Company’s transfer secretaries, Link Market Services (Pty) 11 Diagonal Street, Johannesburg, 2001 (P O Box 4844, Johannesburg, 2000) by not later than Monday, 8 September 2008 at 14:00

5. The completion and lodging of this form of proxy will not preclude the relevant member from attending the Annual General Meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof.

6. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity must be attached to this form of proxy unless previously recorded by the Company’s transfer secretaries or waived by the chairman of the Annual General Meeting

7. Any alteration or correction made to this form of proxy must be initialled by the signatory/ies.

8. A minor must be assisted by his/her parent or guardian unless the relevant documents establishing his/her legal capacity are produced or have been registered by the transfer secretaries of the Company.

9. The chairman of the Annual General Meeting may reject or accept a form of proxy which is completed and/or received, other than in accordance with these notes, if the chairman is satisfied as to the manner in which the member wishes to vote.

10. The Chairman of the Annual General Meeting may in his absolute discretion, accept or reject any form of proxy, which is completed other than in accordance with these notes.

11. If required, additional forms of proxy are available from the transfer secretaries of the Company.


DYNAMIC VISUAL TECHNOLOGIES (HOLDINGS) LIMITED(“the Company”) or (“the DVT Group”) or (“the Group”)

Registration number: 2004/016984/06Share Code: DTH

ISIN: ZAE000109070

For use only by ordinary shareholders who hold ordinary shares in certificated form only

Please read the notes and instructions overleaf. Non-compliance with these instructions may result in the rejection of this form of surrender (“form”). If you are in any doubt as to how to complete this form, please contact your broker, banker, attorney, accoun-tant or other professional adviser.

Note: a separate form is required for each shareholder.To: Dynamic Visual Technologies (Holdings) Limited c/o Link Market Services South Africa (Pty) Limited 11 Diagonal Street, Johannesburg, 2001 (P O Box 4844, Johannesburg 2000)

PART A: TO BE COMPLETED BY CERTIFICATED SHAREHOLDERS

I/We irrevocably and in rem suam authorise you to produce the signature of such documents that may be necessary to complete the replacement of my/our certificated shares in Dynamic in the new name of DTH Dynamic Technology Holdings Limited.I/We hereby instruct you to forward the replacement share certificate(s) to me/us, by registered post in South Africa, at my/our own risk, to the address overleaf and confirm that, where no address is specified, the share certificate(s) will be forwarded to my/our address recorded in the share register of the Company.

My/Our signature(s) on this form constitute my/our execution of this instruction.

In terms of the provisions set out in page 53of the financial statements to which this form is attached and of which it forms part, I/we surrender and enclose the undermentioned share certificate(s).

Documents of title surrendered

Certificate number(s) Number of Dynamic shares covered by each certificate

Total

Signed this day of 2008 at

Signature

Assisted by (where applicable, state name and capacity)

Surname or Name of Corporate Body

First names (in full, if applicable)

Title

Postal Address (preferably a PO Box)

(if different from the address recorded in the register)

Telephone number ( )

Stamp and address of agent lodging this form (if any)

Please see Part B (for emigrants and non-residents) and notes on the reverse side of this form

Form of Surrender

64

PART B: TO BE COMPLETED BY EMIGRANTS FROM AND NON-RESIDENTS OF THE COMMON MONETARY AREA

Nominated authorised dealer in the case of a shareholder who is an emigrant from or a non-resident of the common monetary area (see note 2 below).

Name of authorised dealer

Account number

Title

Postal Address (preferably a PO Box)

(if different from the address recorded in the register)

Notes1. No receipts will be issued for share certificates lodged, unless specifically requested. In compliance with the requirements of the JSE Limited (“JSE”), lodging agents are requested to prepare special transaction receipts, if required. Signatories may be called upon for evidence of their authority or capacity to sign this form.

2. Persons whose registered addresses in the share register are outside the common monetary area, or whose shares are restrictively endorsed, should nominate an authorised dealer in Part B of this form.

3. Any alteration to this form must be signed in full and not initialled.

4. If this form is signed under a power of attorney, then such power of attorney or a notarially certified copy thereof, must be sent with this form for noting (unless it has already been noted by the company or its transfer secretary).

5. Where the shareholder is a company or a close corporation, unless it has already been registered with the company or its transfer secretary, a certified copy of the directors’ or members’ resolution authorising the signing of this form must be submitted if so requested by the company.

6. Note 5 does not apply in the event of this form bearing a recognised JSE broker’s stamp.

7. Where there are joint holders of any shares in the company, only that holder whose name stands first in the register in respect of such shares need sign this form.

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