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ZARARA - REVIEWED PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2003
ZARARA ENERGY LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1895/001078/06)
Share code:ZRR
ISIN: ZAE000033080
("Zarara" or "the company" or "the group")
REVIEWED PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2003
Issued: 20 082 894 (2002: 27 430 900) Ordinary shares of 5 cents each
Weighted average number of shares used in earnings calculations:
2003: 22 760 387 (2002: 27 430 900)
ABRIDGED CONSOLIDATED INCOME STATEMENT
Reviewed Audited
Year ended Year ended
30 Sept 2003 30 Sept 2002
R"000 R"000
Revenue 129 399 159 913
Operating profit/(loss) 6 446 (23 485)
Profit/(loss) before investment and interest income 6 446 (23 485)
Release of negative goodwill 178 357
Other income 2 921 903
Net interest received 3 970 1 955
Profit/(loss) before taxation 13 515 (20 270)
Taxation (9 230) (4 283)
Net profit/(loss) after taxation 4 285 (24 553)
Outside shareholders" interest (11 253) (6 075)
Net loss for year (6 968) (30 628)
Determination of headline profit/(loss)
Net loss per income statement (6 968) (30 628)
Profit on sale of property, plant and equipment (1 758) (74)
Loss on sale of investments in subsidiaries 18 436 -
Impairment of property, plant and equipment - 11 619
Release of negative goodwill (178) (5 680)
Headline profit/(loss) 9 532 (24 763)
Headline profit/(loss) per share (cents) 42 (90)
Attributable loss per share (cents) (31) (112)
SUMMARISED CASH FLOW
Cash generated by operating activities 38 312 41 556
Cash generated/(utilised) in investing activities 13 790 (53 891)
Cash (outflow)/inflow from financing activities (67 450) 13 879
Net cash (outflow)/inflow (15 348) 1 544
ABRIDGED CONSOLIDATED BALANCE SHEET
Reviewed Audited
At At
30 Sept 2003 30 Sept 2002
R"000 R"000
Assets
Property, plant and equipment - 37 766
Negative goodwill - (1 327)
Deferred taxation - 775
Investment - 16 429
Non-current assets - 53 643
Current assets 6 917 91 683
Total assets 6 917 145 326
Equity and liabilities
Capital and reserves 4 695 79 113
Outside shareholders" interest - 9 693
Long term liabilities - 17 122
Current liabilities 1 119 39 398
Shareholders for capital reduction 1 103 -
Total equity and liabilities 6 917 145 326
Net asset value per share (cents) 23 288
ABRIDGED STATEMENT OF CHANGES IN EQUITY
Share capital and premium
Opening balance 352 831 352 831
Share buy-back (10 199) -
Capital reduction (57 236) -
Write off of odd lot offer (15) -
285 381 352 831
Non-distributable reserves
Opening balance 4 141 2 868
Pre-acquisition reserves - 1 913
Transfer to accumulated loss - (640)
4 141 4 141
Accumulated loss
Opening balance (277 859) (247 871)
Transfer from non-distributable reserves - 640
Net loss (6 968) (30 628)
(284 827) (277 859)
Total equity 4 695 79 113
REVIEW REPORT BY THE AUDITORS TO THE SHAREHOLDERS OF ZARARA
We have reviewed the accompanying balance sheet of Zarara at 30 September
2003 and the related statements of income and cash flows for the year then
ended. The preliminary financial information is the responsibility of the
company"s directors. Our responsibility is to issue a report on the preliminary
financial information based on our review.
Scope
We conducted our review in accordance with the Statements of South African
Auditing Standards applicable to review engagements. This standard requires that
we plan and perform the review to obtain moderate assurance that the preliminary
financial information is free of material misstatement. A review is limited
primarily to enquiries of company personnel and analytical procedures applied to
financial data and thus provide less assurance than an audit. We have not
performed an audit and, accordingly, we do not express an audit opinion.
Disclaimed opinion
We did not perform any audit work on the income statement and balance sheet
results of SA Bioproducts Holdings (Proprietary) Limited, a subsidiary of the
group until 30 March 2003, at which time it was sold as we did not have access
to the records of this company to conduct an audit for the purposes of reporting
on Zarara. This subsidiary is of such significance to the financial results of
the group that we did not obtain all the information and explanations we
considered necessary to conclude on the income statement, cash flow statement
and the statement of changes in equity of the group for the year ended 30
September 2003.
Review opinion
Based on our review nothing has come to our attention that causes us to believe
that the accompanying balance sheet is not fairly presented, in all material
respects, in accordance with the South African Statements of Generally Accepted
Accounting Practice applicable to Interim Financial Reporting and the Companies
Act in South Africa.
Going concern
Without qualifying our opinion, we draw attention to the notes to the
preliminary financial statements, which indicate that the company will be
suspended by the JSE Securities Exchange South Africa ("JSE") on 23 December
2003. Further, we draw attention to the potential litigation between the company
and American Custom Components Incorporated relating to a claim of R7 420 850
plus interest and costs. These conditions, along with other matters as set forth
in the notes, indicate the existence of a material uncertainty, which may cast
significant doubt about the company"s ability to continue as a going concern.
Deloitte & Touche
18 December 2003
Notes to the preliminary report
Accounting policies
The statements have been prepared in accordance with South African Statements of
Generally Accepted Accounting Practice applicable to Interim Financial
Reporting. The accounting policies used in preparing the previous preliminary
financial statements are consistent with those used in preparing the previous
annual financial statements.
The statements are prepared on a going concern basis and reflect historical
Costs.
Borrowings
The company has no borrowings nor does it have any commitments, other than those
derived in the normal course of its business.
Legal
The company still has the outstanding summons issued against it by American
Custom Components Incorporated for an amount of R7 420 850 plus interest and
costs. The directors, on advice of its legal team, contend that the particulars
of the claim are vague and embarrassing. It is expected that a trial date could
be allocated during the course of next year. The costs in this matter could
amount to approximately R300 000.
A summons has been received from the City of Johannesburg in the amount of R19
116 for the supply of electricity which is purported to have been supplied to
the company after it had sold its building in Illovo. The action is being
defended.
Capital reduction
A capital distribution of R57 236 248 was made to shareholders recorded as such
in the shareholders" register on 6 June 2003.
Offers to acquire Zarara
Shareholders are referred to the various announcements in connection with an
offer to acquire the entire issued share capital of Zarara from Northridge Field
Operations (Proprietary) Limited ("Northridge") and a notice of a firm intention
to make an offer to acquire the entire issued share capital of Zarara from each
of Buccoli Investments CC and Eric Capital Limited. The Zarara board of
directors elected to proceed with the offer from Northridge, which was to be
implemented by way of a scheme of arrangement in terms of section 311 of the
Companies Act, 1973 (Act 61 of 1973), as amended ("the scheme"). A further
announcement dated 25 November 2003 informed shareholders that Northridge"s
intended proposal of the scheme had been withdrawn due to the likelihood that
the scheme could not be implemented.
SA Bioproducts
The directors do not intend to have the results of SA Bioproducts Holdings
(Proprietary) Limited audited as they are of the opinion that the cost would be
out of proportion to the benefit to shareholders.
Performance
The operating profit of the group was mainly attributable to the activities of
SA Bioproducts (Proprietary) Limited which company was sold in March 2003 after
approval was received from shareholders in general meeting.
As per previous announcements the company continues to realise its assets for
cash. This process is still ongoing and should be completed in the 2004
financial year.
Prospects
The company"s listing on the JSE will be suspended from 23 December 2003 in
terms of JSE regulations. It should also be noted that should suitable assets
not be placed in the company it will be delisted during the calendar year 2004.
On behalf of the board:
W J D I Scott L M Carroll
Non-executive Chairman Director and Company Secretary
18 December 2003
Date: 18/12/2003 07:15:04 AM Produced by the JSE SENS Department
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