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INTERCONNECTIVE SOLUTIONS LIMITED
(Incorporated in The Republic of South Africa)
(Registration Number 1997/010540/06)
Share Code : ILT
ISIN Code : ZAE000017943
("Isolutions")
INTERIM REPORT FOR THE SIX MONTHS ENDED 31 OCTOBER 2002
31 October Increase/
Unaudited Unaudited (Decrease)
2002 2001 %
INCOME STATEMENT
Revenue 7,896,407 4,444,131 78
Other operating 231,422 321,316 (28)
income
Changes in (110,535) (197,764) (44)
inventory
Direct operating (3,852,815) (2,756,710) 40
costs
Staff costs (1,932,744) (1,719,349) 12
Depreciation and (449,376) (416,624) 8
amortisation
expenses
Other operating (1,678,682) (1,449,815) 16
expenses
Profit/ (Loss) 103,676 (1,774,815) 106
from operations
Finance costs (82,924) (54,654) 52
Investment income 16,676 75,635 78
Profit/ (Loss) 102
attributable to
ordinary
shareholders
37,428 (1,753,834)
Number of shares 96,600,000 96,600,000
in issue at end of
period
Weighted number of
shares in issue at
the
end of period 96,600,000 96,600,000
Earnings per share 0.04 (1.82) 102
- Fully diluted
Headline earnings 0.04 (1.82) 102
per share - Fully
diluted
Reconciliation
between earnings
and
Headline earnings
Per the income 37,428 (1,753,834)
statement
Items included in
other operating
expenses
above:
Goodwill
amortised
Loss on
disposal of
investments
Headline earnings 37,428 (1,753,834) 102
STATEMENT OF
CHANGES IN EQUITY
Share Capital 96,600 96,600
Balance at 96,600 96,600
beginning of
period
Issue of share
capital
Share Premium 12,483,431 12,483,431
Balance at 12,483,431 12,483,431
beginning of
period
Issues during the - -
year
Share issue costs - -
Accumulated losses (8,879,044) (7,379,795)
Balance at (8,916,472) (5,625,961
beginning of
period
Attributable 37,428 (1,753,834) 102
losses
3,700,987 5,200,236
31 October
2002 2001
BALANCE SHEET
ASSETS
Non Current Assets 3,524,172 4,316,943
Fixed assets 1,402,673 1,688,500
Intangible assets 1,320,999 1,827,943
Loans receivable 800,000 800,000
Investments in 500 500
associates and
subsidiaries
Current Assests 3,344,603 3,833,791
Inventory 165,481 383,904
Trade and other 2,473,592 1,822,004
receivables
Cash and cash 705,530 1,627,883
equivalents
Total Assets 6,868,775 8,150,734
EQUITY AND
LIABILITIES
Capital and 3,700,987 5,200,236
reserves
Non Current
liabilities
Long term loans 309,611 433,181
Current 2,858,177 2,517,317
Liabilities
Trade and other 2,603,077 2,281,064
payables
Current portion of 255,100 236,253
non current
liabilities
Total Liabilities 6,868,775 8,150,734
CASHFLOW STATEMENT
Cash flow from (111,263) (2,396)
operating
activities
Net cash (45,015) (23,377)
(utilized) /
generated by
operations
Finance costs (82,924) (54,654)
Investment income 16,676 75,635
Taxation paid - -
Cash flow from (52,952) (662,639)
investing
activities
Cash flow from (2,540) 268,695
financing
activities
Net decrease in (166,755) (396,340)
cash and cash
equivalents
Cash and cash
equivalents at the
beginning of the
year 872,286 2,024,223
Cash and cash 705,531 1,627,883
equivalents at the
end of the year
COMMENTRY
Financial Results
Comparative turnover for the six months has increased by 78%, which is primarily
due to:
* the strategy of establishing IVR platforms in African countries;
* increased minutes on the FoneWorx South Africa IVR platform which makes the
Group the largest single premium rate service provider to Telkom SA;
* increase revenue from new clients and tighter controls as a result of the
restructuring.
Direct operating costs increased in line with the increased turnover as it is in
direct correlation to turnover being the commission paid to information
providers.
Staff costs and other operating expenses increased in line with the need to
increase capacity to manage increased turnover and African roll-out.
Prospects
The Group`s restructuring has progressed well particularly with regard to the
focus as an Application Service Provider (ASP) for value-added voice and data
services using the Group`s proprietary interactive digital platform in the
provision of services to fixed or mobile devices.
In addition, the Group`s entry into the export of this technology and turnkey
services offering within Africa is progressing well with very exciting prospects
during the calender year of 2003.
The increased footprint of mobile cellular services in many African countries
has established outstanding prospects for the Group to provide hosting of value-
added services using the Group`s IVR platforms supplied to the contracting party
in each territory.
The Group`s proprietary software developed over the last four years and
technology platform (FoneWorx IVR), coupled with our intellectual knowhow
provide the Group with a unique selling proposition to establish autonomous
turnkey interactive digital platforms in a numberof African countries.
The Group has developed a sound business model and due diligence strategy to
enter, evaluate and commission a complete bureau-based interactive voice
response platform and operating business in selected countries where value-added
services are offered to subscribers of mobile and fixed line services.
The FoneWorx IVR platform established in each country provides for a range of
innovative services for the mobile and fixed line subscribers ranging from
infotainment such as news, sports results and games to business applications
such as office automation, fax to e-mail, fax on demand, SMS, banking, financial
services and the sale of prepaid airtime.
The Group currently hosts a platform of 600 channels of digital voice and data
in South Africa and has recently commissioned a platform of 120 channels in
Kenya and Botswana each. Further territories being evaluated are Mozambique,
Swaziland, Uganda, Nigeria, Angola and Rwanda.
The strategy to roll-out to Africa will provide an excellent voice and data
footprint to number of multi-national companies such as those operating in the
Fast Moving Consumer Goods environment promoting their products through media
such as DSTV, satellite radio etc. This footprint will provide these entities
with a "one stop" gateway to market their products and services.
Accounting Policies
The accounting policies of the Group comply in all material respects with
statements of South African Generally Accepted Accounting Practice and the
Companies Act 61 of 1973 (as amended). These policies are consistent with those
applied in the previous financial period.
Dividends
No dividends has been declared or recommended for the interim period.
For and on behalf of the board.
M.A. Smith
Chairman & CEO
24 January 2003
Sponsor & Corporate Advisors
LOGO
Nedbank Corporate
Transfer Secretaries
Compushare Investor Services
Limited
Registered Address
372B Oak Avenue
Randburg, 2419
Date: 31/01/2003 07:30:00 AM Produced by the JSE SENS Department
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