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Exxoteq Limited - Results For The Year To 29 February 2004 And Renewed
Cautionary
Exxoteq Limited
(Formerly Wild Rush Trading 12 Limited)
Registration number 2002/010132/06)
Share Code: EXO ISIN: ZAE000050183
(`Exxoteq` or `the company`)
RESULTS FOR THE YEAR TO 29 FEBRUARY 2004 AND RENEWED CAUTIONARY
BALANCE SHEET
at end 29 February 2004
Group and
Company Group Company
Audited Audited Audited
2004 2003 2003
R000`s R000`s R000`s
ASSETS
Non-current assets 1 717 51 325 50 075
Property, plant and 1 717 9 -
equipment
Goodwill - 51 316 -
Intangible assets - - -
Options - - -
Investments - - 50 000
Amounts owed by group - - 75
companies
Current assets 4 958 284 1
Trade and other receivables 340 208 -
Guarantee - Dept Minerals - 75 -
and Energy
Cash and cash equivalents 4 618 1 1
TOTAL ASSETS 6 675 51 609 50 076
EQUITY AND LIABILITIES
Capital reserves 2 814 49 382 49 812
Share capital 1 - -
Share premium 342 408 49 875 49 875
Accumulated loss (339 595) (493) (63)
Non-current liabilities 861 1 933 132
Interest-bearing borrowings 851 - -
Non-interest-bearing 10 1 933 132
borrowings
Current liabilities 3 000 294 132
Trade and other payables 2 812 294 132
Current portion interest of 188 - -
bearing borrowings
TOTAL EQUITY AND LIABILITIES 6 675 51 609 50 076
Net asset value 0,03 1,37
Tangible net asset value 0,03 (0,05)
INCOME STATEMENT
for the year ended 29 February 2004
Group and
Company Group Company
Audited Audited Audited
2004 2003 2003
R000`s R000`s R000`s
Revenue - - -
Cost of sales - - -
Gross profit - - -
Other operating income 152 - -
Gross income 152 - -
Administration, distribution (339 671) (493) (63)
and selling expenses
Loss from operations (339 519) (493) (63)
Finance cost (13) - -
Nett loss for the year (339 532) (493) (63)
Loss per share (6,06) (0,14)
Headline loss per share (0,11) (0,00)
Reconciliation between basic loss per share and headline loss per
Outside
Share-
Gross Taxation holders` Net
R000`s R000`s interest R000`s
R000`s
2004
Basic loss (339 532) - - (339 532)
Amortisation of goodwill 4 306 - - 4 306
Amortisation of intangible 4 667 - - 4 667
assets
Research and development costs 1 444 - - 1 444
Impairment due to liquidation 323 000 - - 323 000
basis of accounting
Headline loss (6 115) - - (6 115)
2003
Basic loss (493) - - (493)
Amortisation of goodwill 359 - - 359
Headline loss (134) - - (134)
STATEMENT OF CHANGES IN EQUITY
for the year ended 29 February 2004
ACCUMU-
SHARE SHARE LATED
CAPITAL PREMIUM LOSS TOTAL
R000`s R000`s R000`s R000`s
COMPANY
Balance at 01 March 2002 - - - -
Issue of share capital - 50 000 - 50 000
Share issue expense - (125) - (125)
Net loss from ordinary - - (63) (63)
activities
Balance at 28 February 2003 - 49 875 (63) 49 812
Issue of share capital 1 292 975 - 292 976
Share issue expense - (442) - (442)
Net loss from ordinary - - (339 532) (339 532)
activities
Balance at 29 February 2004 1 342 408 (339 595) 2 814
GROUP
Balance at 01 March 2002 - - - -
Issue of share capital - 50 000 - 50 000
Share issue expense - (125) - (125)
Net loss from ordinary - - (493) (493)
activities
Balance at 28 February 2003 - 49 875 (493) 49 382
CASHFLOW STATEMENT
for the year ended 29 February 2004
Group and
Company Group Company
Audited Audited Audited
2004 2003 2003
R000`s R000`s R000`s
CASH FLOWS FROM OPERATING (5 129) (57) (131)
ACTIVITIES
Cash received from customers - - -
Cash paid to suppliers and (5 268) (57) (131)
employees
Cash utilised by operations (5 268) (57) (131)
Finance cost (13) - -
Interest received 152 - -
CASH FLOWS FROM INVESTING (1 762) (74) -
ACTIVITIES
Acquisition of property, (1 762) - -
plant and equipment
Guarantee - Dept Minerals - (75) -
and Energy
Acquisition of subsidiary - 1 -
CASH FLOWS FROM FINANCING 11 508 132 132
ACTIVITIES
Proceeds from interest 1 039 132 -
bearing borrowings
(Repayments)/proceeds of non- (122) - 132
interest bearing borrowings
Increase in amounts owed to (1 942) - -
group companies
Proceeds from issue of share 12 533 - -
capital
Net increase in cash and 4 617 1 1
cash equivalents
Cash and cash equivalents at 1 - -
the beginning of the year
Cash and cash equivalents at 4 618 1 1
the end of the year
COMMENTS
The year under review, and more particularly, the period since the end of the
annual review have been very difficult for the company. On the positive side,
the company was able to secure rights to Angola Blocks 5 and 6, which are very
valuable properties that have attracted a good deal of serious interest from a
number of sources outside the company. Also on the positive side, the late
Chairman, Mr. Prem Sawney had lined up a series of transactions (`the
transactions`) which were due to be completed and signed within a day or two of
his unfortunate and untimely death. Had he survived and completed the
transactions, which were referred to in the announcement dated 18 June 2004,
involving US$4.2 million, there would be no liquidity problems in the company.
Unfortunately, that was not the case and the company now faces a situation where
expenditure has been higher than budgeted and additional cash has not yet
materialised. The fact that expenditure has been higher than the budget became a
problem for the company due to the non-performance of Exxoteq Corporation
(Overseas) LLC in terms of a Memorandum of Co-operation with them and due to the
transactions not being concluded. The company is still attempting to conclude
the transactions but is hampered by the uncertainty surrounding the ability of
Exxoteq International to deliver on the technology agreement following the death
of Mr. Sawney and hence on the status of the 56 million shares that were issued
to Exxoteq International. The directors have been unable, as yet, to reach a
satisfactory outcome with the estate of the late Mr. Sawney in this regard. If
the transactions cannot be concluded, the company will have to terminate all
operations. Shareholders will be kept informed of developments and are again
advised to exercise caution when dealing in shares in the company.
PROSPECTS
The company`s prospects depend on its ability to conclude the transactions. The
staff retrenchment programme has commenced and if the transactions cannot be
concluded within a reasonable time the company will cease all operations.
REVIEW OF FINANCIALS
The results for the period under review have been qualified by the company`s
auditors, Messrs Fisher Hoffman PKF (Newlands) Inc, whose audit report is
available for inspection at the company`s registered office and at the office of
the company`s auditors. The period under review has reflected a loss of R339 532
000. This loss is made up of an operating loss of R12 174 000 and the write down
in the value of the company`s two main assets of R327 358 000, being the Algoa
Basin Oil Field and the Technology Agreement with Exxoteq International. In the
case of the Algoa Basin Oil Field, the write down is due to the fact that the
valuation placed thereon in the company`s prospectus was based on its value as
an operating entity. As the company currently does not have the cash to develop
the oil field, that basis of valuation is currently inappropriate. Further, as
it is difficult to establish the value of the oil field South African Statements
of Generally Accepted Accounting Practice determine that the field should be
shown at zero value. This does not mean that the oil field has a zero value.
Similarly, the value of the technology agreement is questionable in the wake of
Mr. Sawney`s death and it too has been valued at zero for the same reason. This
does not mean that the agreement has no value.
EXTRACT FROM AUDITOR`S REPORT
QUALIFICATIONS
Material irregularity
During the audit it came to our attention that a material irregularity existed.
In our opinion the company is trading without reasonable expectation of being
able to meet its liabilities, and this, in our view, is likely to cause
financial loss to the company or to all or some of its members and creditors.
Accordingly, on 12 May 2004, we reported our view to the board of directors in
terms of s20(5) of the Public Accountants and Auditors Act. By 12 June 2004 (30
days), we were not satisfied that the material irregularity did not exist and
therefore forwarded our letter, together with all the responses thereto to the
Public Accountants and Auditors Board. At the date of this report there was
still significant doubt about the company`s ability to continue as a going
concern.
Valuation of assets
The directors were unable to determine the value of certain assets in a `fire
sale` scenario. Although these assets may have a material value, they have been
written down to Rnil.
EMPHASIS OF MATTER
Accounting basis
There is significant doubt about the company`s ability to continue as a going
concern.
Therefore the financial statements have been prepared on the liquidation basis.
BASIS OF ACCOUNTING
The results have been prepared in accordance with South African Statements of
Generally Accepted Accounting Practice. There is significant doubt about the
company`s ability to continue as a going concern. Therefore the results have
been prepared on the liquidation basis.
DIVIDENDS
No dividends have been declared and no dividend is proposed.
GJ Brink Cape Town
Managing Director 2004
Transfer Secretaries
Computershare Investor Services 2004 (Pty)
Limited, 70 Marshall Street,
Johannesburg 2001 (P O Box 61051, Marshalltown, 2107)
Registered Office
Unit G5 & B3, Century Square,
Heron Crescent, Century City, 7446, Cape Town
Sponsor
LPC Manhattan Sponsors (Pty) Ltd,
PO Box 41966, Craighall, 2024
Auditors
Fisher Hoffman PKF (Newlands) Inc,
PO Box 23383, Claremont, Cape, 7735
DIRECTORS
Miko Rwayitare (Acting Chairman), GJ Brink (Managing), Sheik Marwan Badrkhan, LF
Mahlati, LM Leoka, R Sahni
Date: 01/07/2004 01:54:09 PM
Produced by the JSE SENS Department
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