| Fri 30 Sep 2005, 17:54 | | Matodzi Resources Limited - No Change Statement |
|
Matodzi Resources Limited - No Change Statement, Notice Of Annual General
Meeting And Renewal Of Cautionary Announcement
MATODZI RESOURCES LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1933/004523/06
Share code: MTZ ISIN: ZAE000042412
("Matodzi" or "the Company")
NO CHANGE STATEMENT, NOTICE OF ANNUAL GENERAL MEETING AND RENEWAL OF CAUTIONARY
ANNOUNCEMENT
No change statement
With regard to the reviewed results for the year ended 31 March 2005,
shareholders are advised that the annual financial statements will be
distributed to shareholders on or about 7 October 2005 and contain no material
modifications to the reviewed results, which were published on SENS on 29 July
2005.
GROUP INCOME STATEMENTS (ABRIDGED)
Audited Reviewed Restated
Year- Year- Year-
ended ended ended
Notes 31 March 31 March 31 March
2005 2005 2004
Revenue 280 121 280 121 153
Operating profit before 97 873 97 873 (5 257)
items listed below
Depreciation (23 704) (23 704) (13)
Impairment of property,
plant and equipment (24 207) (24 207) -
Loss on disposal of (13 439) (13 439) -
investments
Profit on restructuring of 2 40 732 39 149 -
debt
Fair value adjustments (81 945) (81 945) 27 711
Operating (loss)/profit (4 690) (6 273) 22 441
for the year
Investment income 2 439 2 439 3
Finance costs 3 (61 999) (58 453) (51 848)
Net loss before taxation (64 250) (62 287) (29 404)
Taxation 4 (35 748) (35 748) (317)
Net loss after taxation (99 998) (98 035) (29 721)
Profit attributable to
outside shareholders (12 870) (12 870) -
Loss attributable to
shareholders (112 (110 (29 721)
868) 905)
Loss per share (cents) 5
- headline loss (86.7) (84.3) (19.9)
- attributable loss (75.6) (74.3) (19.9)
GROUP BALANCE SHEETS (ABRIDGED)
Audited Reviewed Restated
31 March 31 March 31 March
Notes 2005 2005 2005
ASSETS
Non-current assets
Property, plant and 201 370 201 370 25 177
equipment
Goodwill 81 618 81 618 -
Investments 6 51 461 51 461 248 661
Loans receivable 4 800 4 800 -
339 249 339 249 273 838
Current assets
Cash and cash equivalents 58 566 58 566 97
Other 41 932 41 999 751
100 498 100 565 848
Total assets 439 747 439 814 274 686
EQUITY AND LIABILITIES
Capital and reserves
Shareholders" interest (262 259) (263 315) (149 391)
Outside shareholders" 22 359 22 359 -
interest
Interest bearing
borrowings
- Preference shares 2 337 216 338 272 339 024
- Other 232 759 232 759 78 067
Deferred tax 35 641 35 641
365 716 365 716 267 700
Current liabilities
Interest bearing 33 991 33 991 73
Non-interest bearing 40 040 40 107 6 914
74 031 74 098 6 986
TOTAL EQUITY AND 439 747 439 814 274 686
LIABILITIES
Number of shares in issue 149 262 149 262 149 262
157 157 157
"B" preference shares of
1 cent each 200 000 200 000 200 000
000 000 000
GROUP CASH FLOW STATEMENTS (ABRIDGED)
Audited Reviewed Restated
Year- Year- Year-
ended ended ended
31 March 31 March 31 March
2005 2005 2005
Cash flows from/(utilised
in) operating activities 66 897 66 592 (5 114)
Cash flows utilised in
investing activities (21 388) (21 388) (63 661)
Cash flows from financing
activities 3 110 1 924 68 637
Net increase/(decrease)
in cash equivalents 48 619 47 128 (138)
Cash and cash equivalents
at beginning of year 97 97 235
Cash and cash equivalents
on acquisition of 9 850 11 341 -
subsidiary
Cash and cash equivalents
at end of year 58 566 58 566 97
STATEMENT OF CHANGES IN EQUITY
Share
capital
Notes and Accumulated
premium loss Total
R"000 R"000 R"000
Balance at 31 March 218 705 (89 800) 128 905
2003
Reclassification of
preference shares 2 (139 (91 528) (230
380) 908)
Balance as at 31
March 2003 79 325 (181 328) (102
(restated) 003)
Change in accounting
policy - AC133 - (17 667) (17 667)
(restated)
Net loss for the
year (restated) - (29 721) (29 271)
Balance as at 31
March 2004 79 325 (228 716) (149
(restated) 391)
Net loss for the - (112 868) (112
year 868)
Balance as at 31
March 2005 79 325 (341 584) (262
259)
NOTES TO THE AUDITED RESULTS
1 Basis of accounting
The consolidated results are prepared in accordance with South African
Statements of Generally Accepted Accounting Practice and Schedule 4 of the
Companies Act, 61 of 1973, as amended. The Accounting Policies applied are
consistent with those used in the annual financial statements for the year ended
31 March 2004, except for the adoption of
AC140: Business Combinations, in terms of which goodwill is no longer amortised
but is instead reviewed for impairment in terms of AC128: Impairment of Assets.
2 Preference shares
As a result of the reclassification of the preference shares, the opening
balance of the accumulated loss at the beginning of 2003 was adjusted, while the
comparative amounts were restated accordingly. The effect of the
reclassification of the preference shares on the financial results of 2004 was
as follows:
Restated
Year-
ended
31 March
2004
R"000
Increase in finance costs 37 116
Decrease in profit attributable to outside (4 167)
shareholders
Decrease in profit attributable to shareholders 32 949
Decrease in adjustment on 1 April 2004 on 22 667
adoption of AC133
Adjustment to accumulated loss at 1 April 2003 91 528
Reclassification of share capital and premium 139 380
Reclassification of outside shareholders" 52 500
interest
Preference shares - 31 March 2004 339 024
Matodzi Prefs
A substantial amendment to the terms relating to the Matodzi Prefs, lead to an
extinguishment of the existing preference shares and the recognition of a new
financial liability. The difference between the carrying amount of the existing
preference shares and that of the new preference shares of R40 732 000 was
recognised as a profit in the current year.
The gross redemption price of these shares on 31 July 2006 is R191 380 000.
Interest to be expenses in terms of AC125 and AC133 between 1 April 2005 and 31
July 2006 amounts to R29 241 000. The interest charged is calculated by
applying a market related rate of prime plus 1%.
Witnigel Prefs
An amount of R175 077 000 in respect of these shares is included in the amount
of R337 216 000 reflected as preference shares at 31 March 2005.
3. Finance costs
Audited Reviewed Restated
year- Year- Year-
ended 31 ended 31 ended 31
March March March
2005 2005 2004
R"000 R"000 R"000
Interest bearing borrowings
- other 23 075 23 075 14 732
- preference shares 38 924 35 378 37 116
61 999 58 453 51 848
4. Taxation
Audited Reviewed Restated
year- Year- Year-
ended 31 ended 31 ended 31
March March March
2005 2005 2004
R"000 R"000 R"000
Current SA normal taxation
- current year 127 127 5
- prior year underprovision - - 312
Deferred tax
- current year 35 621 35 621 317
5. Loss per share
Reconciliation between attributable loss and headline loss:
Audited Reviewed Restated
year- Year- Year-
ended 31 ended 31 ended 31
March March March
2005 2005 2004
R"000 R"000 R"000
Attributable loss (112 868) (110 905) (29 721)
Impairment of mineral
rights and mining assets 24 207 24 207 -
Profit on restructuring of (40 732) (39 149) -
debt
Headline loss (129 393) (125 847) (29 721)
Weighted average number of
ordinary shares in issue 149 262 149 262 149 262
157 157 157
6. Investments
Audited Reviewed Restated
year- Year- Year-
ended 31 ended 31 ended 31
March March March
2005 2005 2004
R"000 R"000 R"000
Listed investments - at fair 50 461 50 461 132 406
value
Unlisted investments 1 000 1 000 1 000
Associated company - - 84 632
Directors" valuation 1 000 1 000 1 000
7. During the year under review, the Company"s authorised share capital
remained unchanged at 250 000 000 ordinary shares of 25 cents each and 200 000
000 "B" preference shares of 1 cent each, of which 149 262 157 ordinary shares
and 200 000 000 "B" preference shares remained in issue throughout the period.
RECLASSIFICATION AND RESTRUCTURING OF THE PREFERENCE SHARES
The terms relating to the 200 million unsecured redeemable convertible
participating "B" Preference shares ("Matodzi Prefs") issued by the Company were
amended at the Annual General Meeting held on 18 August 2004. As a result, the
Company reviewed the manner in which the Matodzi Prefs and the 200 million
cumulative redeemable preference shares issued by a subsidiary company, Witnigel
Investments (Pty) Limited ("Witnigel Prefs") had been accounted for in terms of
AC125: Financial Instruments: Disclosure and Presentation and AC133: Financial
Instruments, Recognition and Measurement. It was concluded that in terms of
these accounting statements the Matodzi Prefs and the Witnigel Prefs should have
been disclosed in the financial statements as debt and not as part of
shareholders equity and outside shareholders interest and as a consequence the
financial results for the year ended 31 March 2004 have been restated.
The Group balance sheets reflects a negative ordinary shareholders interest of
R262 million, and a liability relating to the Matodzi Prefs
and the Witnigel Prefs of R337 million which gives a positive combined ordinary
and preference shareholders" interest of R75 million.
In order to resolve the apparent insolvency of Matodzi, JCI Limited ("JCI"), the
beneficial owner of all of the 200 million Matodzi prefs:
* has agreed to convert the Matodzi prefs into ordinary shares, on the basis of
one ordinary share for each Matodzi pref, ("the conversion");
* will acquire for a consideration of R1 the entire issued share capital of
Witnigel Investments (Pty) Limited ("Witnigel"), a wholly
owned subsidiary of Matodzi (in which JCI holds 200 million Witnigel Prefs).
Witnigel"s net liabilities, including the Witnigel Prefs,
amount to R155 million (collectively "the proposals").
These proposals are subject to:
* JSE Limited granting a listing for the 200 million ordinary shares to be
issued in terms thereof;
* ordinary shareholders of Matodzi at the forthcoming Annual General Meeting
passing a special resolution to amend the terms of the preference shares to
provide for the early conversion and to the registration of the special
resolution by the Companies and Intellectual Registration Office;
* to the extent necessary, the unconditional written approval of the Competition
Authorities arising from the change of control of respectively Matodzi and
Witnigel referred to below;
* the proposals are subject to such other regulatory approvals as may be
necessary.
The effect of the proposals is that:
* Matodzi will, for accounting purposes, be solvent as the Matodzi Prefs which
are classified as debt, will become equity and the Witnigel prefs will have been
acquired by JCI;
* JCI will become the beneficial holder of 57% of the issued ordinary share
capital of Matodzi. Prior to the conversion, JCI did not own any ordinary shares
in the share capital of Matodzi.
At the general meeting of Matodzi shareholders held on 30 July 1999, resolutions
were passed approving the terms and issue of the Matodzi Prefs and to waive any
right or entitlement by ordinary shareholders to a mandatory offer in terms of
the Securities Regulation Code on Take-Overs and Mergers ("the Code"). The
Securities Regulation Panel ("the SRP") has confirmed that no mandatory offer is
required to be made to ordinary shareholders as a consequence of the conversion.
GOING CONCERN
The Group"s total liabilities exceed its total assets by R240 million at year
end, an increase of R91 million compared to that of the previous year, taking
into consideration the reclassification of the preference shares.
Currently the Witnigel Prefs are redeemable but as Witnigel"s balance sheet
consists of the preference shares and assets with a market value of R20 million,
the net liability as at year-end for the Group would be R20 million if the
holder of the preference shares wanted to redeem the preference shares.
The holder of the Matodzi Prefs can only impose redemption of these preference
shares after the redemption date of 31 July 2006.
For further information refer to the proposals set out above titled
Reclassification and restructuring of the preference shares.
Should the Group not be successful in the proposals as set out above and only if
the holders of the preference shares impose redemption, there is significant
doubt that the Group will be able to meet its obligations in the normal course
of business and therefore a material uncertainty exists that the Group would be
able to continue as a going concern without undertaking further borrowings
and/or the partial disposal of a portion of its assets.
The directors are confident that the proposed restructuring of the preference
shares and the disposal of Witnigel will be satisfactorily concluded. The
solvency position of the Group would then be restored and the Group would meet
its obligations as they fall due. Accordingly, the directors continue to adopt
the going concern basis in the preparation of the financial statements.
AUDIT OPINION
The results have been audited by the Company"s auditors Charles Orbach &
Company. In their report, they have included an emphasis of matter paragraph
drawing attention to the directors" statement set out above relating to going
concern.
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the annual general meeting of Matodzi shareholders
is to be held on Wednesday, 2 November 2005 at 10h00, in the Auditorium, Ground
Floor, 28 Harrison Street, Johannesburg.
RENEWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the cautionary and renewal of cautionary
announcements published on 12 April 2005, 9 June 2005, 28 July 2005
respectively, and are advised that the discussions detailed in those
announcements are continuing. As these negotiations may have an effect on the
price of the Company"s shares, shareholders
Johannesburg
30 September 2005
Registered office
28 Harrison Street, Johannesburg, 2001.
PO Box 6966, Johannesburg, 2000.
Transfer secretaries
Computershare Investors Services 2004 (Pty) Limited.
70 Marshall Street, Johannesburg, 2001.
PO Box 61051, Johannesburg, 2107.
Sponsor
River Sponsors (Pty) Limited.
Block C, 1st Floor, Parc Nouveau,
225 Veale Street,
Brooklyn, Pretoria, 0181.
PO Box 1666, Groenkloof, 0027.
http://www.matodzi.co.za/
Date: 30/09/2005 05:54:46 PM Produced by the JSE SENS Department
