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Exxoteq - Reviewed group results for the six months ended 31 August 2004
Exxoteq Limited
(Formerly Wild Rush Trading 12 Limited)
Registration number 2002/010132/06
Share Code: EXO
ISIN: ZAE000050183
(`Exxoteq` or `the company`)
Reviewed group results for the six months ended 31 August 2004
Balance sheet at 31 August 2004
Reviewed Audited
31 August 29 February
2004 2004
R`000 R`000
ASSETS
Non-current assets 1 534 1 717
Property, plant and equipment 1 534 1 717
Current assets 921 4 958
Trade and other receivables 581 340
Bank balances and cash 340 4 618
Total assets 2 455 6 675
EQUITY AND LIABILITIES
Capital and reserves (1 013) 2 814
Issued capital 1 1
Share premium 342 408 342 408
Accumulated loss (343 422) (339 595)
Non-current liabilities 579 861
Interest-bearing borrowings 569 851
Non-interest-bearing borrowings 10 10
Current liabilities 2 889 3 000
Trade and other payables 2 688 2 812
Current portion of interest-
bearing borrowings 201 188
Total equity and liabilities 2 455 6 675
Income statement for the six months ended 31 August 2004
Reviewed Audited
six months twelve months
ended ended
31 August 29 February
2004 2004
R`000 R`000
Revenue - -
Cost of sales - -
Gross profit - -
Other operating income 217 152
Administration, distribution and selling expenses (3 987) (339
671)
Loss from operations (3 770) (339 519)
Interest paid 57 13
Net loss for the period (3 827) (339 532)
Weighted average number of shares in issue (`000) 96 000 56
000
Loss per share (cents) (3,99) (606,31)
Headline loss per share (cents) (3,99) (19,25)
Statement of changes in equity
for the six months ended 31 August 2004
Accumu-
Share Share lated
capital premium loss Total
R`0000 R`000 R`000 R`000
Reviewed
Balance at
1 March 2004 1 342 408 (339 595) 2 814
Net loss from
ordinary activities - - (3 827) (3 827)
Balance at
31 August 2004 1 342 408 (343 422) (1 013)
Audited
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
activities - - (339 532) (339 532)
Balance at
29 February 2004 1 342 408 (339 595) 2 814
Cash flow statement
for the six months ended 31 August 2004
Reviewed Audited
six months twelve months
ended ended
31 August 29 February
2004 2004
R`000 R`000
Cash flows to operating
activities (3 958) (5 129)
Cash received from customers - -
Cash paid to suppliers and
employees (3 995) (5 268)
Cash utilised by operations (3 995) (5 268)
Interest paid (55) (13)
Interest received 92 152
Cash flows to investing
activities (38) (1 762)
Acquisition of property,
plant and equipment (38) (1 762)
Cash flows (to)/from financing
activities (282) 11 508
(Repayment of)/proceeds from
interest-bearing borrowings (282) 1 039
Repayments of non-interest-
bearing borrowings - (122)
Increase in loans receivable - (1 942)
Proceeds from issue of share
capital - 12 533
Net (decrease)/increase in cash
and cash equivalents (4 278) 4 617
Cash and cash equivalents at
the beginning of the period 4 618 1
Cash and cash equivalents at
the end of the period 340 4 618
Reconciliation of basic loss to headline loss
Outside
Gross Taxation shareholders Net
R`0000 R`000 R`000 R`000
August 2004
Basic loss (3 827) - - (3 827)
Headline loss (3 827) - - (3 827)
February 2004
Basic loss (339 532) - - (339 532)
Amortisation of
goodwill 4 306 - - 4 306
Research and development
costs 1 444 - - 1 444
Impairment due to
liquidation basis of
accounting 323 000 - - 323 000
Headline loss (10 782) - - (10 782)
Comment
Financial
In the period since last reporting, the operations and expenditure of the
company have been significantly scaled back in order to preserve cash resources.
Additional funding amounting to R4,0 million has been raised by the company
since the period end and is expected to be sufficient to fund the current level
of operations until proposals for significant new funding reach fruition. These
proposals include, inter alia, project funding to be made available by Exxoteq
USA and a transaction with a Black Economic Empowerment group.
New management and general comment
Mr Gavin Zietsman, who was appointed to the board of directors on 1 October
2004, has assumed the role of Chief Executive Officer. The new management
believes that the company is and will remain a viable going concern and that, in
view of this and the prospects outlined in the following paragraph, assets will
be valued on a going concern basis in future. The company has lost its rights to
Angola Blocks 5 and 6 due to the fact that its application to the SA Reserve
Bank to remit the necessary funds was blocked. Management is examining ways of
mitigating the effect on the company.
Prospects
Good progress has been made with the difficulties that have beset the company
since the death of the former Chairman, Mr Prem Sawney, and the outlook for 2005
has improved significantly. The company is continuing to look at ways to develop
its oil assets in South Africa. There have been extensive negotiations to
acquire further oil-related assets and rights elsewhere in Africa and the
outcome of these negotiations is looking promising. A memorandum of
understanding has been signed in respect of the availability of funds for
investment into the group, of which it is expected that, subject to signature of
a full agreement in this regard and the approval of shareholders, US$1 million
will be invested into equity in the company and a further US$20 million will be
made available for investment into projects. A number of other discussions
regarding additional financing are at an advanced stage and limited short term
funding has already been secured. Trading in the company`s shares on the JSE
Securities Exchange South Africa will remain suspended until further notice.
Shareholders will be given full details of developments, by way of a circular,
in due course.
Dividends
No dividends have been or will be proposed for the period under review.
Accounting issues
The results reflected in this statement have been prepared in accordance with
previously adopted accounting policies and with South African statements of
Generally Accepted Accounting Practice and have been reviewed by the company`s
auditors, Fisher Hoffman PKF (Newlands) Inc, whose review report is available
for inspection at the company`s registered office. Comparative figures for the
six months to 31 August 2003 have not been shown, as the group did not exist in
its present form at that stage. The review report contains a qualification as
follows:
`Qualifications
Material irregularity
During the audit for the year ended 29 February 2004 it came to our attention
that a material irregularity existed. In our opinion the company was trading
without reasonable expectation of being able to meet its liabilities, and this,
in our view, was likely to cause financial loss to the company or to alll 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.
Qualified review opinion
Based on our review, except for the effects of the matters referred to in the
preceding paragraphs, nothing has come to our attention that causes us to
believe that the accompanying financial statements are not fairly presented, in
all material respects, in accordance with South African Statements of Generally
Accepted Accounting Practice, and in the manner required by the Companies Act in
South Africa.
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.`
This qualification refers to the period 31 August 2004 (before the new
management took office). Shareholders are referred to the more up to date
opinion of the new management given in the prospects paragraph above.
By order of the Board
M Rwayitaret Cape Town
Chairman 26 January 2005
Directors
M Rwayitare (Chairman)
G Zietsman (Chief Executive Officer)
Sheik M Badrkhan, LM Leoka, R Sahni
Registered Office
Unit B3, Century Square
Heron Crescent
Century City 7446
Transfer Secretaries
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street, Johannesburg 2001
(PO Box 61051, Marshalltown 2107)
Sponsor
LPC Manhattan Sponsors (Pty) Limited
4th Floor, Hyde Park Shopping Centre
Hyde Park, Johannesburg
(PO Box 41966, Craighall 2024)
Auditors
Fisher Hoffman PKF (Newlands) Inc
5th Floor, Protea Place, Protea Road
Claremont, Cape
(PO Box 23383, Claremont, Cape 7735)
Date: 26/01/2005 07:00:14 AM
Produced by the JSE SENS Department
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