| Wed 4 Mar 2009, 7:05 | | IFC - IFCA Technologies Limited - Audited Results for the Year Ended 31 December |
|
IFC
IFC
IFC - IFCA Technologies Limited - Audited Results for the Year Ended 31 December
2008 and Change to the Board of Directors
IFCA TECHNOLOGIES LIMITED
Incorporated in the Republic of South Africa)
(Registration number 2006/030759/06)
Share code: IFC & ISIN: ZAE000088555
("IFCA Tech" or "the company")
AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2008 AND CHANGE TO THE BOARD OF
DIRECTORS
The audited results of IFCA Tech for the year ended 31 December 2008, as
compared to the year ended 31 December 2007, are presented below:
Balance Sheets
Figures in Rand 31-Dec-08 31-Dec-07
R R
Assets
NonCurrent Assets 11 371 114 44 745 310
Property, plant and equipment 536 725 5 698 813
Intangible assets 10 834 389 38 050 984
Deferred tax - 995 513
Current Assets 2 367 062 5 484 110
Inventories - 5 000
Current tax receivable 241 409 241 409
Trade and other receivables 776 126 3 924 094
Cash and cash equivalents 1 349 527 1 313 607
Non-current assets held for sale and 4 471 930 -
assets of disposal groups
Total Assets 18 210 106 50 229 420
Equity and Liabilities
Equity 10 131 312 44 714 463
Share capital 42 585 965 42 585 965
Retained income (32 454 653) 2 119 415
Minority interest - 9 083
NonCurrent Liabilities - 1 755 919
Other financial liabilities - 1 755 919
Current Liabilities 6 234 420 3 759 038
Other financial liabilities - 74 777
Current tax payable 158 476 151 172
Trade and other payables 5 268 536 2 552 578
Deferred income 731 269 755 240
Provisions 76 139 225 271
Liabilities of disposal groups 1 844 374 -
Total Equity and Liabilities 18 210 106 50 229 420
Net asset value per share (cents per 10.13 44.71
share)
Net tangible asset value per share (cents -0.7031 6.66
per share)
Number of shares in issue at period end 100 000 000 100 000 000
Income statements
Figures in Rand Year ended Year ended
31-Dec-08 31-Dec-07
Revenue 7 251 407 12 221 802
Cost of sales (5 225 498) (6 696 875)
Gross profit 2 025 909 5 524 927
Other income 8 688 424 662
Operating expenses (35 458 560) (8 848 861)
Operating profit (33 423 963) (2 899 272)
Investment revenue 83 815 213 610
Finance costs (247 080) (139 026)
Profit before taxation (33 587 228) (2 824 688)
Taxation (995 922) 1 538 263
Profit for the period (34 583 150) (1 286 425)
Attributable to:
Equity holders of the parent (34 574 067) (1 295 508)
Minority interest (9 083) 9 083
Adjustments for headline earnings:
Basic Earnings (34 583 150) (1 286 425)
- Profit on disposal of asset 182 106 (356 652)
- Impairment of fixed assets 193 324 -
- Impairment of intangible assets 27 332 038 -
Headline loss for the period (6 875 682) (1 643 077)
Loss per share (cents per share) -34.58 -1.29
Headline loss per share (cents per share) -6.88 -1.64
Weighted average number of shares in 100 000 000 100 000 000
issue
Statement of Changes in Equity
Figures in Rand Share capital Share Total share
premium capital
Balance at 01 100 000 42 485 965 42 585 965
January 2007
Changes in equity
Loss for the year - - -
Total changes - - -
Balance at 01 100 000 42 485 965 42 585 965
January 2008
Changes in equity --
Loss for the year -
Total changes -
Balance at 31 100 000 42 485 965 42 585 965
December 2008
Table Continues:...
Accumulated Loss Total attributable Minority Total equity
to equity holders interest
of the group
3 414 923 46 000 888 - 46 000 888
(1 295 509) (1 295 509) 9 083 (1 286 426)
(1 295 509) (1 295 509) 9 083 (1 286 426)
2 119 414 44 705 379 9 083 44 714 462
(34 574 067) (34 574 067) (9 083) (34 583 150)
(34 574 067) (34 574 067) (9 083) (34 583 150)
(32 454 653) 10 131 312 - 10 131 312
Abridged Cash Flow Statement
Figures in Rand 31-Dec- 31-Dec-
08 07
R R
Cash flows from operating activities 538 977 (431
464)
Cash flows from investing activities (516 (4 198
735) 142)
Cash flows from financing activities 13 678 1 237
574
Total cash movement for the period 35 920 (3 392
032)
Cash at the beginning of the period 1 313 4 705
607 639
Total cash at end of the period 1 349 1 313
527 607
COMMENTARY
The board of directors presents the company`s results for the year ended 31
December 2008, which have been prepared in accordance with IAS 34: Interim
Financial Reporting on the basis of consistent accounting policies that comply
with International Financial Reporting Standards ("IFRS"). The results have been
audited by Rain whose modified audit report is available for inspection at the
company`s registered offices. The audit report contains an emphasis of matter
relating to the valuation of intellectual property rights, which valuation after
impairment is based on recently approved budgets and forecasts, which in turn
assume continuing and new software support agreements, as well as an emphasis of
matter as to going concern, which has been assumed on the basis of the above
budgets and forecasts, the continued support of the controlling shareholder and
significant creditor IFCA MSC Berhad and the procuring of new software support
agreements.
1. INDUSTRY AND BUSINESS OVERVIEW
IFCA sWare first commenced business in August 1999 as MBS Software (Pty)
Limited and was originally formed for the sole purpose of marketing and
supporting the IFCA MSC Malaysian Group`s suite of software products in
Africa under license. The business paid 50% of its software revenue to IFCA
MSC in Malaysia in terms of its license agreement and the business grew
primarily through the use of Malaysian consultants at a very high cost to
the South African business.
In September 2004, the IFCA Group in Malaysia vended in the IP to the suite
of software products for the African continent and in return, took up a 49%
equity interest in IFCA sWare through its Malaysian listed company, IFCA
MSC. The company then changed its name to IFCA MBS Software (Pty) Limited.
The name of the company was changed to IFCA sWare on 9th October 2007 in
order to house the group`s software solutions going forward. IFCA sWare
became a wholly owned subsidiary of IFCA Tech and IFCA MSC now holds 44.1%
in IFCA Tech.
IFCA sWare is an enterprise-wide integrated business solutions provider
providing industry specific software solutions for four business segments,
namely:
- Property Development and Management (known as Property+);
- Project Management, Engineering and Construction (known as Contract+);
- Hospitality (known as Resorts+, D`Hotel and D`Club); and
- Finance & Leasing (Loans+).
IFCA sWare`s solutions encompass the functionalities and features of
products that have been nurtured and matured for almost 20 years by the IFCA
group worldwide, from meeting the business needs of more than 1 200
customers and 16 000 registered users spread across four continents. IFCA
sWare`s customers include The Country Club Johannesburg, Arivia.kom,
Kopanong Hotel and Conference Centre, Eagle International Group Holding,
Atlantic Beach Golf Club in Cape Town, Transnet Housing, The Botswana
Housing Corporation, Namibia Housing Corporation and more recently
Serengeti.
The business of IFCA hWare, being primarily distribution of the mimio Xi and
the TOTalizer, has been wound down as a separate business during the past
year.
2. ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS
The accounting policies adopted for purposes of this report comply, and have
been consistently applied in all material respects, with International
Financial Reporting Standards ("IFRS").
3. FINANCIAL RESULTS
The results for the year ended 31 December 2008 reflect the clean up of the
group`s balance sheet and operations, with a down-sizing of the business in
line with the decreased levels of business pursuant to Transnet disposal of
the housing loan book in early 2008. The controlling shareholder has stepped
in to assist with the down-sizing, stabilisation and refocusing of the
company, positioning it for the launch of the new .Net product range.
Earnings per share has decreased from a loss of (1.29) cents per share to a
loss of (34.58) cents per share, with headline losses showing a decline from
a loss of (1.64) cents per share to a loss of (6.88) cents per share.
Turnover declined from the prior year primarily due to the reduction in
turnover of R500 000 per month in IFCA sWare, whereby one of the company`s
larger contracts was reduced due to the impending sale of the customer`s
loan book, following which ongoing development was cancelled. In April 2008,
this contract came to an end.
During the period under review, the staff complement and company`s overhead
structure was substantially downsized. In addition, the company sold one of
its properties that was no longer required for Malaysian consultants. A
general manager was seconded from Malaysia and Jack Yong stepped in as
acting Chief Executive Officer, with a focus on addressing any issues of the
existing customer base to ensure that the group is well positioned for the
launch of its upgraded solutions.
The company has presented segmental information for the revenue relating to
the Software Solutions and Computerised Business Equipment as follows:
Revenue 31 December 31
2008 December
R 2007
R
Software Solutions 5 939 494 10 186 231
Computerised Business Equipment 1 311 913 2 035 571
Total 7 251 407 12 221 802
The computerised business equipment division has been wound down as a separate
entity.
4. ACQUISITIONS, DISPOSALS AND ISSUES OF SHARES FOR CASH
There were no acquisitions or issue of shares for cash during the year under
review. Shareholders are referred to subsequent events in relation to the
disposal of shares in property holding companies.
5. DIRECTOR CHANGES
The following director changes occurred during the period under review:
Director Date Date
appointe resigned
d
Mr Craig Christensen (Chief 01 December 31 March
Executive Officer) 2007 2008
Mr Chris Boshoff 03 October 01 July 2008
2006
Mr Mark Shaw (Financial 01 July
Director) 2008
Mr HK Chan (Alternate 19 February
director) 2008
Mr Jack Yong has acted as the acting Chief Executive Officer of the group
until the date of this announcement. Mr Jeffrey Chris has been appointed as
the new Chief Executive Officer with immediate effect.
6. AUDITORS
RAiN acted as the company`s auditors for the period under review from date
of incorporation and will continue in office in accordance with section
270(2) of the Companies Act, 1973, as amended, subject to RAiN being
admitted to the JSE Limited`s Register of Auditors by 31 May 2009.
7. SHARE CAPITAL
As at 31 December 2008, there were 100 000 000 issued ordinary shares and
500 000 000 unissued ordinary shares. The unissued shares are under the
control of the directors until the annual general meeting. Shareholders
will be asked to approve the directors` authority in respect of the unissued
shares at the forthcoming annual general meeting.
8. DIVIDEND
The directors have decided not to declare a dividend for the period under
review.
9. LITIGATION
There is no litigation pending against the company or its subsidiaries,
which is expected to have a material impact on the results of the company.
Action has been initiated against Standard Bank Limited for recovery of
amounts fraudulently withdrawn through the internet banking system, which
amount has been written off in the prior year group`s results.
10. SUBSEQUENT EVENTS
The group has entered into negotiations to sell the shares of two
subsidiaries, namely Erf 235 Woodmead (Proprietary) Limited ("Erf 235") and
Erf 531 Ferndale (Proprietary) Limited ("Erf 531"). An agreement has been
entered into for the sale of Erf 235 for a cash consideration of R3 150 000
but the sale was not effective at year end. Negotiations to sell the shares
of Erf 531 are in an advanced stage. The relevant assets and liabilities of
the two companies have been classified in terms of IFRS 5 as Non-current
assets held for sale and assets/liabilities of disposal groups. There are
no other subsequent events that have occurred outside of normal business
operations from 31 December 2008 until the date of this report.
11. FUTURE PROSPECTS
The directors of the company believe that the company has sound prospects
based on the following:
- the significant reduction in fixed operating expenses to a relatively
low base;
- the imminent launch of the .Net products in South Africa and the
existing client base;
- the expansion of the existing client base, with the signing of new
contracts during January and February 2009;
- excellent reference clients;
- the superior integrated product offering; and
- the training and upliftment of local employees.
The directors consider that the business prospects are sound based on the
above factors as well as the existing client base, levels of annuity income,
recent client referrals and the successful launch of the .Net product
overseas.
By order of the Board
Dr CT Ndlovu J Yong
Chairman Acting Chief Executive Officer
27 February 2009
Johannesburg
Registered Office
Arcay House, Number 3 Anerley Road, Parktown, Johannesburg,
2193
PO Box 62397, Marshalltown, Johannesburg, 2107
Directors
Dr CT Ndlovu *(Chairman), MR Gahagan*, KC Yong *, KK Yong
(Acting Chief Executive Officer). M Shaw (Financial Director)
* Non-executive
Designated Advisor Transfer Office
Arcay Moela Sponsors Link Market Services (Proprietary)
(Proprietary) Limited Limited
Date: 04/03/2009 07:05:09 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
