| Thu 16 Oct 2003, 10:07 | | ABRIDGED AUDITED FINANCIAL RESULTS FOR THE YEAR EN |
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Zenith -
Zenith Concessions Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1994/009012/06)
Share code: ZNT ISIN: ZAE000009064
("Zenith" or "the company")
ABRIDGED AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2003
BALANCE SHEET as at 30 June
(Figures in Rand) Audited 2003 Audited 2002
Assets
Non-current assets 1,765,397 94,382
Plant and equipment 1,615,397 85,742
Intangible assets 150,000 -
Loans receivable - 8,640
Current assets 560,380 34,635
Receivables and deposits 28,898 6,121
Sundry debtors 500,000 -
Cash and cash equivalents 31,482 28,514
Total assets 2,325,777 129,017
Equity and liabilities
Capital and reserves (1,390,752) (1,728,362)
Issued capital 8,262,419 5,799,000
Accumulated loss (9,653,171) (7,527,362)
Non-current liabilities 3,380,771 1,512,603
Shareholders" loans 1,331,985 3,382
Loans from directors 2,048,786 1,509,221
Current liabilities
Accounts payable 335,758 344,776
Total equity and 2,325,777 129,017
liabilities
Net asset value per share (0.5) (3.9)
(cents)
Net tangible asset value (0.6) (3.9)
per share (cents)
Shares in issue - closing 265,551,884 44,210,007
INCOME STATEMENT for the year ended 30 June
(Figures in Rand) Audited 2003 Audited 2002
Gross revenue 149,948 -
Other income - 303,919
Operating costs (2,136,387) (1,033,198)
Operating loss (1,986,439) (729,279)
Net finance costs (139,370) (1,608)
Net loss for the year (2,125,809) (730,887)
-
Loss per ordinary share (1.1) (1.7)
(cents)
Headline loss per ordinary (1.1) (1.7)
share (cents)
Shares in issue - weighted 191,771,258 44,210,007
average
STATEMENT OF CHANGES IN EQUITY for the year ended 30 June 2003
(Figures in Rand) Share Share Accumulated Total
capital premium loss
Balance at 01 July 2001 442,100 5,356,900 (6,796,475) (997,475)
Net loss for the year - - (730,887) (730,887)
Balance at 01 July 2002 442,100 5,356,900 (7,527,362) (1,728,362
Net loss for the year - - (2,125,809) (2,125,809
Issue of share capital* 2,213,419 250,000 - 2,463,419
Balance at 30 June 2003 2,655,519 5,606,900 (9,653,171) (1,390,752
* At a general meeting of the company held on 26 September 2002, shareholders
approved the issue of 109,312,400 shares to DC Bird, 41,611,600 shares to SD
Crossland and 45,417,877 shares to Gemdicor Mining Company (Pty) Ltd, all at
1cps and the issue of 25,000,000 shares to GCM Rader at 2cps.
CASH FLOW STATEMENT for the year ended 30 June
(Figures in Rand) Audited 2003 Audited 2002
Cash flows from operating (1,918,091) (774,478)
activities
Cash receipts from customers 149,948 -
Cash paid to suppliers and (1,928,669) (772,870)
employees
Cash utilised in operating (1,778,721) (772,870)
activities
Net interest paid (139,370) (1,608)
Cash flows from investing (1,456,349) (93,879)
activities
Expenditure to maintain
operating capacity
Plant and equipment acquired (1,314,989) (85,239)
Intangible assets acquired (150,000) -
Loan repaid / (advanced) 8,640 (8,640)
Cash flows from financing
activities
Loans raised 3,377,408 925,254
Increase in cash and cash 2,968 56,897
equivalents
Cash and cash equivalents at 28,514 (28,383)
beginning of year
Cash and cash equivalents at 31,482 28,514
end of year
REVIEW OF RESULTS AND OPERATIONS
The JSE Securities Exchange South Africa ("JSE") lifted its suspension on the
trading in Zenith shares with effect from 14 October 2002, following the
approval by shareholders of resolutions required to give effect to the
recapitalisation of the company, the acquisition of certain diamond recovery
rights and the acquisition of mining and other equipment necessary to carry out
the anticipated diamond recovery operations. As detailed in the interim
financial statements, the company"s new diamond recovery operations, which were
due to start in November 2002, suffered from certain set-up delays with the
result that operations only commenced in January 2003. A lower than anticipated
grade of stone, weaker than expected diamond prices and the strength of the Rand
against the US dollar impacted the operations severely and the company had to
suspend its operations at the end of February 2003. As a consequence, the
company realised a loss of 1.1 cents per share ("cps") during the year (2002:
loss of 1.7cps). In the light of the events described below, however, these
results have little relevance as to assessing the future prospects of the
company.
SUBSEQUENT EVENTS AND PROSPECTS
Against the background of unfavourable operating conditions and with the
company"s financial position casting serious doubt about its ability to continue
as a going concern, it was announced on 4 August 2003 that corporate
restructuring specialists, Gandalf Trust ("Gandalf"), had acquired control of
Zenith. This was achieved through the purchase of 55% of its issued share
capital from the then controlling shareholders for an amount of R300,000 (or
0.205cps) and resulted in the board of directors being reconstituted. The
change of control agreement also allowed for the company"s balance sheet to be
restructured by writing off shareholders" loans amounting to R2 million, which
in effect restored the company to solvency.
It was further announced on 3 September 2003 that Zenith had, subject to certain
conditions, acquired the entire issued share capital of Jigmining (Pty) Ltd.
Shareholders are referred to a separate progress report and further cautionary
announcement on the transaction which is being released simultaneously with
these financial results. The new directors are optimistic about the company"s
prospects and are confident that its fortunes will be restored by the Jigmining
acquisition. Shareholders will be advised as soon as practicably possible
regarding the expected financial impact of the transaction on the company.
QUALIFIED AUDIT OPINION
The auditors of the company, Compendium (Pretoria) Incorporated, have qualified
their audit opinion on the grounds that they were unable to satisfy themselves
that all diamond sales were properly recorded in the records of the company and
that there were no alternative auditing procedures available. Without further
qualifying their opinion, the auditors also drew attention to the existence of a
material uncertainty, which may cast doubt on the company"s ability to continue
as a going concern were shareholders not to approve the Jigmining acquisition.
The qualified audit report is available for inspection at the registered office
of the company.
ACCOUNTING POLICIES
The accounting policies of the company comply in all material respects with
South African Statements of Generally Accepted Accounting Practice and Schedule
4 of the Companies Act of 1973. These policies are consistent with those
adopted during the previous financial year. The audit report in respect of the
year ended 30 June 2002 was unqualified.
DIVIDENDS
No dividends were declared or recommended for the year.
For and on behalf of the board
KJ Gribnitz
Chairman
Pretoria, 15 October 2003
Directors: KJ Gribnitz (Executive), JP Nel*, PE du Preez*, PA Byrne* (*Non-
executive)
Corporate advisor Sponsor
Radagast Capital (Proprietary) Limited LPC Manhattan Sponsors (Pty) Ltd
Transfer secretaries Registered address
Computershare Investor Mirkwood Estate
Services Limited Klipkop - JR 396
Gauteng
Date: 16/10/2003 08:34:38 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
