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IFC - IFCA Tech - Audited results for the year ended 31 December 2010
IFCA TECHNOLOGIES LIMITED
Incorporated in the Republic of South Africa)
(Registration number 2006/030759/06)
Share code: IFC ISIN: ZAE000088555
("IFCA Tech" or "the company")
AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2010
The audited results of IFCA Tech for the year ended 31 December 2010, as
compared to the year ended 31 December 2009, are presented below:
Condensed statement of Financial Position
Figures in Rand 31-Dec-10 31-Dec-09
R R
Assets
NonCurrent Assets 2 783 581 11 566 030
Property, plant and equipment 162 420 431 136
Intangible assets 2 523 376 10 834 389
Deferred Tax 97 785 300 505
Current Assets 222 594 902 236
Current tax receivable - 280 622
Trade and other receivables 145 959 337 226
Cash and cash equivalents 76 635 284 388
Total Assets 3 006 175 12 468 266
Equity and Liabilities
Equity (963 082) 8 494 002
Share capital 43 185 965 42 585 965
Retained income (44 149 047) (34 091 963)
Non Current Liabilities 13 715 19 961
Deferred tax 13 715 19 961
Current Liabilities 3 955 542 3 954 303
Current tax payable 88 902 112 051
Trade and other payables 3 556 686 3 148 798
Deferred income 309 954 693 454
Total Equity and Liabilities 3 006 175 12 468 266
Condensed statement of comprehensive income
Figures in Rand Year ended Year ended
31-Dec-10 31-Dec-09
Revenue 2 109 990 2 656 099
Cost of sales (465 179) (906 323)
Gross profit 1 644 811 1 749 776
Other income 466 839 787 555
Operating expenses (3 666 086) (4 497 933)
Operating loss (1 554 436) (1 960 602)
Investment revenue 3 299 125 789
Fair value - 5 496
Finance costs (31 775) (5 723)
Impairment of intangible asset (8 311 013) -
Loss before taxation (9 893 925) (1 835 040)
Taxation (163 159) (68 908)
Loss for the period for continuing
operations (10 057 084)) (1 903 948)
Loss from discontinued operations - (82 820)
Loss for the year (10 057 084) (1 986 768)
Attributable to:
Equity holders of the parent (10 057 084) (1 986 768)
From Continuing operations (10 057 084) (1 903 948)
From Discontinued operations - (82 820)
Loss for the year (10 057 084) (1 986 768)
Basic loss per share (cents per 9.32 1.90
share)
Headline loss per share (cents per 1.43 1.80
share)
Weighted average number of shares in 107 890 411 100 000 000
issue
Condensed statement of cash flows 31-Dec-10 31-Dec-09
Figures in Rand R R
Cash utilised in operating activities (946 613) (3 600 339)
Cash flow from investing activities 138 860 2 535 201
(Maintaining Operations)
Additions to property, plant and
equipment (6 139) (192 852)
Disposal of discontinued operations - 2 627 557
Sale of financial assets - 5 496
Disposal of property, plant and equipment 144 999 95 000
Cash flows from financing activities 600 000 -
Proceeds from share issue 600 000 -
Net cash movement for the year (207 753) (1 065 138)
Cash at the beginning of the year 284 388 1 349 526
Total cash at end of the year 76 635 284 388
Condensed statement of changes in equity
Total
Figures in Rand Share Share share
capital premium capital
Balance at 01 January 2009 100 000 42 485 965 42 585 965
Prior year adjustment - - -
Balance at 01 January 2009 100 000 42 485 965 42 585 965
as restated
Loss for the year - - -
Balance at 01 January 2010 100 000 42 485 965 42 585 965
Prior Year adjustment - - -
Issue of shares 15 000 585 000 600 000
Loss for the year - - -
Balance at 31 December 2010 115 000 43 070 965 43 185 965
Condensed statement of changes in equity (Continued)
Figures in Rand Accumulated Total
Loss equity
Balance at 01 January 2009 (32 454 646) 10 131 319
Prior year adjustment 349 451 349 451
Balance at 01 January 2009 as
restated (32 105 195) 10 480 770
Loss for the year (1 986 768) (1 986 768)
Balance at 01 January 2010 (34 160 871) 8 425 094
Prior Year adjustment 68 908 68 908
Issue of shares - -
Loss for the year (10 057 084) (10 057 084)
Balance at 31 December 2010 (44 149 047) (963 082)
COMMENTARY
The board of directors presents the company`s results for the year ended 31
December 2010, which have been approved by the board on 29 April 2010. The
accounting policies adopted for purposes of this report comply, and have been
consistently applied in all material respects with International Financial
Reporting Standards ("IFRS") and these financial statements have been prepared
in accordance with the requirements of IAS 34 (Interim Financial Reporting).
The same accounting policies and methods of computation have been followed as
compared to the prior year. The results have been audited by Nolands Inc.
The modified audit report contains an emphasis of matter in relation to going
concern due to the continued losses incurred by the group as it is currently
structured. The ability of the group to continue as a going concern is
dependent on a number of factors. The most significant of these is that the
controlling company and significant creditor, IFCA MSC Berhad, continues to
provide support in the future, the group forecasts are achieved and the group
continues to procure new software support agreements. However, shareholders
are referred to subsequent events below.
1. INDUSTRY AND BUSINESS OVERVIEW
IFCA sWare first commenced business in August 1999 as MBS Software (Pty)
Limited and was originally formed for the sole purpose of marketing and
supporting the IFCA MSC Malaysian Group`s suite of software products in
Africa under license. The business paid 50% of its software revenue to
IFCA MSC in Malaysia in terms of its license agreement and the business
grew primarily through the use of Malaysian consultants at a very high
cost to the South African business.
In September 2004, the IFCA Group in Malaysia vended in the IP to the
suite of software products for the African continent and in return, took
up a 49% equity interest in IFCA sWare through its Malaysian listed
company, IFCA MSC. The company then changed its name to IFCA MBS
Software (Pty) Limited.
The name of the company was changed to IFCA sWare on 09 October 2007 in
order to house the group`s software solutions going forward. IFCA MSC
held 44.1% in IFCA sWare following the issue of 10 000 000 shares on the
listing of the company on the JSE Limited.
IFCA MSC entered into an agreement with Kutana investment Group Limited
("Kutana") on 1 July 2009 to introduce a value adding BBBEE shareholder
to IFCA Tech, effectively reducing its shareholding to 33.2%. Kutana
then held 26% in IFCA Tech until Kutana sold its entire 26% holding in
IFCA Tech to Decaweb (Proprietary) Limited ("Decaweb"). See subsequent
events below for more details on the change in control.
IFCA sWare is an enterprise-wide integrated business solutions provider
providing industry specific software solutions for four business
segments, namely:
- Property Development and Management (known as Property+;
- Project Management, Engineering and Construction (known as
Contract+);
- Hospitality (known as Resorts+, D`Hotel and D`Club); and
- Finance & Leasing (Loans+).
IFCA sWare`s solutions encompass the functionalities and features of
products that have been nurtured and matured for almost 20 years by the
IFCA group worldwide, from meeting the business needs of more than 1 200
customers and 16 000 registered users spread across four continents.
IFCA sWare`s customers include The Country Club Johannesburg, Kopanong
Hotel and Conference Centre, Transnet Housing and Eduloan.
2. FINANCIAL RESULTS
The results for the 12 months ended 31 December 2010 reflect a material
decline in profits which is largely attributable to an impairment loss of
R8 311 013 recognised against the intellectual property of the company.
A small group of excellent opportunities has been established. However,
lead times remain lengthy and whilst the Company`s has a product suite
that has vast potential in the South African environment, the Company
needs to establish a good South African reference site. The
opportunities have the support of IFCA MSC Berhad in Malaysia, which is
actively involved in marketing and implementing the new .Net product in
South Africa.
Operational losses reflect a modest improvement from previous year.
Despite the improvement, the company is yet to return to profitability
and the focus for the forthcoming year would be to secure a good
reference site and restore profitability in the company.
3. ACQUISITIONS, DISPOSALS AND ISSUES OF SHARES FOR CASH
15 000 000 ordinary shares were issued during the year at a price of 4
cents per share. There were no acquisitions or disposals during the
year.
4. DIRECTOR CHANGES
The following director changes occurred during the period under review
and to the date of this announcement:
Name of Designation Appointed Resigned
Director
Colin Wayne Independent non- 26 January 2011
Clarke executive Chairman
Anthony Mark Chief Executive 20 October 2010
Barnard Officer
Mark Shaw Financial Director No change
Mike Gahagan Independent non- No change
executive Director
Mark Palmer Independent non- 14 January 2011
executive Director
Zacharias Non-executive 14 January 2011
Johannes van Director
Niekerk
Kian Keong Non-executive 17 February 2009
("Jack") Yong Director
Ian Jeremy Interim CEO 16 January 2008 04 February 2011
Jones
Cynthia Independent non- 03 October 2006 06 August 2010
Thandi Ndlovu executive Director
Thoko Mokgosi- Non-executive 27 August 2009 26 January 2011
Mwantembe Director
William Independent non- 11 November 2009 02 July 2010
Thomas executive Director
Hindshaw
5. SHARE CAPITAL
During the period under review, a Singapore based fund subscribed for 15
000 000 ordinary shares at 4 cents per share introducing new capital in
the amount of R600 000 to IFCA Tech.
Post the 31 December 2010 year end, the Company issued a further 57 500
000 ordinary shares as detailed under subsequent events below.
As at 31 December 2010, there were 115 000 000 issued ordinary shares and
385 000 000 unissued ordinary shares. The unissued shares are under the
control of the directors until the annual general meeting. Shareholders
will be asked to approve the directors` authority in respect of the
unissued shares at the forthcoming annual general meeting.
6. DIVIDEND
The directors have decided not to declare a dividend for the period under
review.
7. LITIGATION
There is no litigation pending against the company or its subsidiaries,
which is expected to have a material impact on the results of the
company.
8. SUBSEQUENT EVENTS
On 17 February 2011, IFCA Tech advised shareholders that it successfully
negotiated and signed a $100 million Special Private Placement Agreement
with Singapore based investment fund Equity Partners Fund SPC.
In addition, on 17 February 2011, the company issued a detailed
cautionary account in relation to the Stonewall transaction. Due to
various delays, the company has renegotiated the terms of the Stonewall
agreement, which will be announced separately in due course. As
previously announced, Stonewall is led by an experienced management team
and its CEO, Lloyd Birrell, has a track record of successfully
recommissioning gold assets and restoring them to profitability.
Stonewall plans to be a 200 000oz producer within 3 years by exploiting
near term projects, commissioning a 100 000oz p.a. producing mine and
increasing the total resource to 7 million oz through exploration.
On 3 January 2011, the Company announced the issue of 20 000 000 shares
under its general authority to issue shares for cash at a subscription
price of 6.9 cents per share. The proceeds from this share issue were
applied to existing creditors and working capital.
On 03 March 2011, the Company announced on SENS the general issue of 6
700 000 and 30 800 000 ordinary shares at 6.9 cents per share and 7.72
cents per share respectively, with some of the shares being placed with
Decaweb. The shares were subsequently successfully placed at a slightly
higher average price of 7.9 cents per share with the general public as
defined, of which the final R2 million will be received on or about 6 May
2011 in terms of an irrevocable commitment received by the company.
In addition, it was announced that Kutana sold its entire holding in IFCA
Tech to Decaweb, which caused Decaweb to hold more than 35% in IFCA Tech,
which will constitute an "affected transaction" in terms of the
Securities Regulations Panel ("SRP") Code and as a consequence is obliged
to make a mandatory offer to minorities at the higher of the issue and
sale price being 7.72 cents per share. The Company is in the process of
drafting a circular to shareholders which will include the details of the
change in control and mandatory offer to minorities in terms of Rule 8.1
of the SRP Code. A cash confirmation has been issued to the SRP in
accordance with their requirements.
9. FUTURE PROSPECTS
Pursuant to the change in control, IFCA Tech is in the process of
changing its investment strategy to providing financial services and
treasury functions to facilitate the funding and development of Mining;
Property, Construction and other opportunities that have growth prospects
into Africa.
IFCA Tech managed to secure a foreign equity draw down facility, as
detailed under subsequent events above, which will enable IFCA Tech to
invest in several exciting new projects and business ventures. Further
announcements in relation to proposed acquisitions will be made in due
course, which will result in the change in strategy and focus going
forward.
The Company is in the process of drafting a circular to shareholders
detailing, inter alia, the new proposed acquisitions, potential change in
name, restructure of the board and change in control and mandatory offer
to minority shareholders, which circular will contain resolutions to be
approved by shareholders as well as revised listing particulars.
10. RENEWAL OF CAUTIONARY ANNOUNCEMENT
Due to numerous negotiations, shareholders are advised to continue to
exercise caution when dealing in their securities until further
announcements are made.
By order of the Board
Mr Colin Clarke A Barnard
Chief Executive Officer
29 April 2011
Johannesburg
Registered Office
Arcay House, Number 3 Anerley Road, Parktown, Johannesburg, 2193
PO Box 62397, Marshalltown, Johannesburg, 2107
Directors
CW Clarke v#(Chairman), AM Barnard (CEO), M Shaw (FD), MR
Gahaganv#, KK Yong*, M Palmerv*, ZJ van Niekerk*, M Palmer #.
# Independent non-executive, * Non-executive, Malaysian, vBritish
Designated Advisor Transfer Office
Arcay Moela Sponsors Link Market Services (Proprietary)
(Proprietary) Limited Limited
Date: 29/04/2011 17:29:01 Supplied by www.sharenet.co.za
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