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Falcon - Preliminary unaudited results for the year ended 30
September 2003
Falcon Investment Holdings Societe Anonyme
(Incorporated in Luxembourg - R.C. Number B39773)
("the Company")
Share code: FLC
ISIN number: LU0042254812
Registered Office
6 rue Adolphe Fischer,
L-1520, Luxembourg
The highlight of this year has been the sale by our Chilean
subsidiary of its iodine project for US$13 million. The profit on
this sale is US$10 million before tax. Our Chilean subsidiary is
now in the process of being wound up and we have so far received
US$3 million in Europe.
Our accounts include a profit of US$2.5 million after Chilean
taxes (35%), expenses and minorities, however there is still a
degree of uncertainty regarding this figure. We are part way
through an arbitration process regarding the interpretation of
terms in the shareholders agreement covering distributions to
shareholders. We expect to receive up to an additional US$1
million to US$1.4 million depending on the outcome of this process
which is due to be completed in 2004.
We are profoundly grateful to our loyal staff who continue to work
admirably through these difficult times in Zimbabwe. Our gold
mines continue to trade profitably despite the uncertain operating
environment and hyperinflationary pressures. The mines produced
847kg of gold, a considerable decline (23%) from 1,093kg last
year. However, the rise in the price of gold of US$62 (19%) over
the year, combined with (i) an improvement in the exchange rate
used in converting part of the gold sale proceeds into Zimbabwe
dollars and (ii) an increase in the proportion of the proceeds
paid in US dollars, has meant that profits have increased
considerably in Zimbabwe dollar terms. In view of the uncertain
situation in Zimbabwe, we have maintained the carrying value of
our investments in Zimbabwe at US$130,000.
Gold is a major foreign currency earner for Zimbabwe but
production has declined significantly over recent years. We
expect that the Government of Zimbabwe will continue to manage the
mechanism for the purchase of gold by the State in a manner, which
will enable the remaining gold miners to continue to operate.
Prospects
Zimbabwe
To the extent that results allow, we aim to preserve our
infrastructure of both staff and equipment for as long as possible
to be able to take advantage of opportunities as they may arise.
Our subsidiary is unable to afford out of profits the reinvestment
necessary to replace the reserves that we are mining. Sadly, this
is reducing the future earnings potential of our mines.
Europe
We are investigating opportunities to re-invest the Group"s cash
in a well-established and profitable business and hope to have a
proposal to put before shareholders in the current financial year.
David C Marshall
Chairman
24 December 2003
NOTICE OF MEETING
The Annual General Meeting will take place on Friday 26th March
2004 at 3.00 p.m. at the registered office of the Company, 6 rue
Adolphe Fischer L-1520 Luxembourg.
Unaudited Consolidated Profit and Loss Account
FOR THE YEAR ENDED 30th SEPTEMBER 2003 2002
US$000 US$000
Revenue - -
Operating costs (387) (361)
Operating loss before interest and taxation (387) (361)
Income from investment in Zimbabwean 65 125
subsidiary- dividend
Interest received 11 11
Exchange gains/(losses) 89 (4)
Loss before exceptional item and taxation (222) (229)
Exceptional item (Note 2) 10,108 (559)
Profit/(Loss) before taxation 9,886 (788)
Tax charge on ordinary activities (3,199) (33)
Profit/(Loss) on ordinary activities after 6,687 (821)
tax
Minority interests (4,341) 24
Profit/(Loss) attributable to shareholders 2,346 (797)
and retained for the year
Reconciliation of headline earnings per
share
Basic earnings/(loss) per share (US 126 c (43)c
cents)
Less: Exceptional item (US cents) (542) c 30 c
Add: Tax adjustment 172 c 1c
Add: Minority interests (US cents) 233 c (1)c
Headline loss per share (US cents) (11)c (13)c
Unaudited Consolidated Statement of Recognised Gains and Losses
FOR THE YEAR ENDED 30TH SEPTEMBER 2003 2002
US$000 US$000
Exchange differences on translation of the
financial statements of foreign entities 720 31
Net gain not recognised in the income 720 31
statement
Net profit/(loss) for the year 2,346 (797)
Total recognised gains/(losses) and movement 3,066 (766)
in shareholders" funds
Opening shareholders" funds 1,153 1,919
Closing shareholders" funds 4,219 1,153
Unaudited Consolidated Balance Sheet
AT 30th SEPTEMBER 2003 2002
US$000 US$000
Assets
Non current assets
Property, plant and equipment - 1,722
Investments 130 130
130 1,852
Current assets
Accounts receivable 57 111
Cash and bank balances 8,084 319
8,141 430
Current liabilities
Accounts payable (falling due within one (2,477) (272)
year)
Net current assets 5,664 158
Total assets less current liabilities 5,794 2,010
Capital and reserves
Called up share capital 2,060 2,060
Legal reserves 326 326
Retained earnings 1,833 (1,233)
Shareholders" funds 4,219 1,153
Minority interests 1,575 857
5,794 2,010
Unaudited Consolidated Cash Flow Statement
FOR THE YEAR ENDED 30th SEPTEMBER 2003 2002
US$000 US$000
Cash flows from operating activities
Cash generated/(used) by operations 202 (435)
Interest received 11 11
Dividend received from Zimbabwean 65 125
subsidiary
Taxation paid (1,157) (40)
Net cash outflows from operating (879) (339)
activities
Investment activities
Purchase of tangible assets (12) (90)
Net proceeds on disposal of tangible 11,729 -
fixed assets
Net cash inflow(outflow) from investment 11,717 (90)
activities
Net cash inflow(outflow) before financing 10,838 (429)
activities
Financing activities
Minority interests in Falcon de Chile - 29
Dividend paid to outside shareholders (3,705) -
Net cash (outflow)/inflow from financing (3,705) 29
Net increase/(decrease) in funds 7,133 (400)
Net funds at start of year 319 721
Effect of foreign exchange rate changes 632 (2)
Net funds at end of year 8,084 319
Notes
1.In accordance with the practice adopted in 2002, the earnings,
assets and liabilities of Zimbabwean subsidiary companies have not
been consolidated. Investments have been reflected in accordance
with IAS 39. The results for the year ended 30th September 2003
and the balance sheet at that date, which are unaudited, have been
prepared on the basis of accounting policies adopted for the year
ended 30th September 2002. The financial statements comply with
International Accounting Standards and Luxembourg law in all
material respects. The results are unaudited.
2.The extraordinary item is the profit realised on the sale of the
Chilean iodine project (2002 - provision against investment in
subsidiary).
3.Profit/(Loss) per share is based on the result for the year
attributable to members and the number of shares in issue of
1,864,026.
4.Capital expenditure during the year was equivalent to US$12,000
(2002 - US$34,000). At 30th September 2003, there were no
outstanding capital commitments (2002 - Nil).
Date: 24/12/2003 09:00:07 AM Produced by the JSE SENS Department
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