REG - Central Asia Metals - 2014 Full Year Results <Origin Href="QuoteRef">CAML.L</Origin> - Part 2
30/03/2015 07:01
- Part 2: For the preceding part double click ID:nRSd7677Ia
- - - - (17,855) (17,855)
Total transactions with owners, recognised directly in equity 259 67,079 (5,544) (44,966) (13,814) 3,014
Balance as at 31 December 2014 1,121 67,079 (9,644) (11,117) 140,484 187,923
* The Group and Company made a reserve transfer during 2014 to include the share option reserve as part of retained
earnings as permitted by IFRS.
During 2014 the Group had no balances attributable to non-controlling interests (2013: nil).
Company Statement of Changes in Equity
for the year ended 31 December
Company Note Ordinary Shares $'000 Share Premium $'000 Treasury Shares $'000 Other Reserves $'000 RetainedEarnings $'000 TotalEquity $'000
Balance as at 1 January 2013 862 61,431 (4,236) 4,451 6,234 68,742
Loss for the year - - - - (21,087) (21,087)
Total comprehensive expense - - - - (21,087) (21,087)
Transactions with owners Share based payments 16 - - - 1,588 - 1,588
Forfeited options 16 - - - (346) - (346)
Capital reduction 15 - (61,431) - - 61,431 -
Promise of shares to be issued to KR on completion of KCC acquisition 16 - - - 39,409 - 39,409
Dividends - - - - (10,204) (10,204)
Correction to treasury shares 16 - - 136 (136) - -
Total transactions with owners, recognised directly in equity - (61,431) 136 40,515 51,227 30,447
Balance as at 31 December 2013 862 - (4,100) 44,966 36,374 78,102
Loss for the year - - - - (9,704) (9,704)
Total comprehensive expense - - - - (9,704) (9,704)
Transactions with owners
Reserve transfer* 16 - - - (5,557) 5,557 -
Share based payments - - - - 1,914 1,914
Promise of shares to be issued to KR on completion of SUC acquisition 16 - - - 16,844 - 16,844
EBT shares granted 15 35 9,110 (9,145) - - -
Ordinary shares issue to KR on completion of the Kounrad transaction 15 212 56,041 - (56,253) - -
Exercise of warrants 15 12 1,928 - - - 1,940
Exercise of options 15 - - 3,399 - (3,236) 163
Sale of EBT shares 15 - - 202 - (194) 8
Dividends - - - - (17,855) (17,855)
Total transactions with owners, recognised directly in equity 259 67,079 (5,544) (44,966) (13,814) 3,014
Balance as at 31 December 2014 1,121 67,079 (9,644) - 12,856 71,412
* The Group and Company made a reserve transfer during 2014 to include the share option reserve as part of retained
earnings as permitted by IFRS.
Statements of Cash Flows
for the year ended 31 December
Group Company
Note 2014$'000 2013$'000 2014$'000 2013$'000
Cash flows from operating activitiesCash generated from/(used in) operations 18 47,152 41,080 10,485 (6,281)
Interest paid (58) (190) (11) (9)
Income tax paid (16,624) (5,533) - -
Net cash generated from/(used in) operating activities 30,470 35,357 10,474 (6,290)
Cash flows from investing activities
Purchases of property, plant and equipment 11 (11,004) (2,464) (7) (207)
Proceeds from sale of property, plant and equipment - 9 - -
Purchase of intangible assets 12 (115) (5,750) - (50)
Investment in Kounrad project - - (598) (502)
Investment in Copper Bay project - - - (3,222)
Repayment of loan from subsidiary 23 - - 11,270 32,360
Loans to subsidiaries 23 - - (135) -
Interest received 61 17 - -
Acquisition of subsidiary, net of cash acquired 21 327 3,293 - -
Net cash (used in)/generated from investing activities (10,731) (4,895) 10,530 28,379
Cash flows from financing activities
Dividends paid to owners of the parent 20 (17,932) (19,739) (17,932) (19,739)
KR payment on completion of Kounrad transaction 21 (1,432) - (1,432) -
Receipt on exercise of share options 15, 16 168 - 168 -
Exercise of warrants 15 1,942 - 1,942 -
Restricted cash 14 1,586 (1,734) 1,649 (1,649)
Net cash used in financing activity (15,668) (21,473) (15,605) (21,388)
Effect of foreign exchange (losses)/ gains on cash and cash equivalents (707) (65) (687) -
Net increase in cash and cash equivalents 3,364 8,924 4,712 701
Cash and cash equivalents at the beginning of the year 14 42,795 33,871 28,932 28,231
Cash and cash equivalents at the end of the year 46,159 42,795 33,644 28,932
The notes below are an integral part of this consolidated financial information.
Notes to the Condensed Financial Information for the year ended 31 December 2014
1. General information
Central Asia Metals plc (CAML or the Company) and its subsidiaries (the Group) are a mining and exploration organisation
with operations primarily in Kazakhstan and a parent holding company based in the United Kingdom.
The Group's principal business activity is the production of copper cathode at its Kounrad operations in Kazakhstan. The
Group also owns various exploration projects in Mongolia which are held for sale and has an investment in a copper tailings
project in Chile.
CAML is a public limited company, which is listed on AIM and incorporated and domiciled in the UK. The address of its
registered office is Masters House, 107 Hammersmith Road, London, W14 0QH. The Company's registered number is 5559627.
2. Summary of significant accounting policies
The principal accounting policies applied in the preparation of this consolidated financial information are set out in the
2014 Annual Report. These policies have been consistently applied to all the years presented, unless otherwise stated.
Basis of Preparation of the Condensed Financial Information
The financial information set out above does not constitute the Group's statutory financial statements for the year ended
31 December 2014, but is derived from the Group's audited full financial statements. The auditors have reported on the 2014
financial statements and their reports were unqualified and did not contain statements under s498(2) or (3) Companies Act
2006. The 2014 Annual Report was approved by the Board of Directors on 27 March 2015, and will be mailed to shareholders in
April 2015. The financial information in this statement is audited but does not have the status of statutory accounts
within the meaning of Section 434 of the Companies Act 2006.
The Group's consolidated financial information has been prepared in accordance with International Financial Reporting
standards (IFRS) and IFRS Interpretations Committee (IFRSIC) interpretations as adopted by the European Union, and the
Companies Act 2006 applicable to companies reporting under IFRS. The consolidated financial information has been prepared
under the historical cost convention with the exception of assets held for sale which have been held at fair value. The
accounting policies which follow set out those policies which apply in preparing the financial information for the year
ended 31 December 2014. The Group's financial information is presented in US dollars ($) and rounded to the nearest
thousand.
The preparation of financial information in conformity with IFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
consolidated financial information are explained in note 3.
Comparative results
The Group commenced production of copper cathodes on 30 April 2012. The cathodes are produced by the SX-EW plant at Kounrad
which is owned and operated by Kounrad Copper Company LLP (KCC). On 21 October 2013, the ownership of KCC increased from
60% to 100% following the acquisition of 40% of KCC. Consequently, the comparative results for the year ended 31 December
2013 comprise only 60% of the revenues and costs associated with the Kounrad project for the first nine months of the year
but 100% for the final three months of the year. In contrast, the results for the year ended 31 December 2014 account for
100% of the revenue and costs associated with the Kounrad project throughout the year.
The impact of the above event makes annual comparisons difficult from the annually reported numbers in several of the notes
to this financial information. A more meaningful analysis of the reported revenues and costs can be obtained from the
Financial Review section.
Going concern
The Group meets its day-to-day working capital requirements though its profitable operations at Kounrad. The Group has
substantial cash balances as at 31 December 2014 and on the date of issue of this financial information. The Directors have
a reasonable expectation that the Group has adequate resources to continue in operational existence for the forseeable
future.
The Group sells and distributes its copper cathode product primarily through an offtake arrangement with 90% of the SX-EW
plant's output committed as sales for the period up until 31 December 2015.
The Group therefore continues to adopt the going concern basis in preparing its consolidated financial information. Please
refer to notes 5, 14 and 17 for information on the Group's revenues, cash balances and trade and other payables.
Basis of Consolidation
Joint Venture Accounting - Kounrad Project
The Kounrad project ownership changes have taken a significant amount of time to complete. Throughout the periods of joint
ownership and under the terms of the Joint Operating Agreement (JOA), both of the parties had an equal vote on all
significant operational, financial and planning matters. Consequently, it was concluded that Joint Control existed over the
Kounrad project and so, whilst the various transactions have been negotiated and submitted for government approval, the
Kounrad project has been accounted for in the following manner;
1. The subsoil user licence operations (SUC) under Sary Kazna LLP (SK) are classified as a jointly controlled asset. The
assets, liabilities, income and expenditure have been proportionately consolidated on a 60:40 basis.
2. All of the operations conducted under Kounrad Copper Company LLP (KCC) have also been proportionately consolidated on
a 60:40 basis as it has been a jointly owned legal entity.
The Kounrad transaction resulted in CAML obtaining control over the Kounrad project in two transactions:
1. The first transaction (KCC) was effected in October 2013 by CAML's wholly owned subsidiary, CAML Kazakhstan BV (CAML
BV), acquiring the remaining 40% share capital of KCC.
2. The second and final part of the transaction (SUC) was effected in May 2014 by CAML's wholly owned subsidiary SK
acquiring the remaining 40% economic interest in the SUC.
Following the completion of the Kounrad Transaction on 23 May 2014, the Group now owns 100% of the Kounrad project and
during the year ended 31 December 2014 has accounted for 100% of the income and expenditure together with 100% of the
assets and liabilities of the legal entities associated with the Kounrad project.
Business Combinations - Kounrad Project
The completion of both transactions, being the acquisition of the remaining 40% of KCC and the SUC, resulted in a change
in control of the Kounrad project from joint control to control by CAML. As such an IFRS 3 Business Combination was deemed
to have taken place upon completion.
Details of the accounting treatment for the business combination are contained in note 21.
3. Critical accounting estimates and judgments
The Group has five key areas where critical accounting estimates and judgements are required that could have a material
impact on this financial information:
Impairment
As mentioned above estimates are required periodically to assess assets for impairment. These estimates will incorporate
the expected future commodity prices, estimates of the ore reserves and projected future costs of development and
production. This includes an assessment of the carrying values of assets held for sale.
The carrying value of the goodwill generated by accounting for the business combination of the Group acquiring an
additional 40% in the Kounrad project requires an annual impairment review. This review will determine whether the value of
the goodwill can be justified by reference to the carrying value of the business assets and the future discounted cash
flows of the business.
Mineral reserves and resources
The major value associated with the Group is the value of its mineral resources. The value of the resources have an impact
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