REG - Central Asia Metals - 2014 Full Year Results <Origin Href="QuoteRef">CAML.L</Origin> - Part 3
30/03/2015 07:01
- Part 3: For the preceding part double click ID:nRSd7677Ib
1,940
Exercise of options - - - 3,399 3,399
Sales of EBT shares - - - 202 202
At 31 December 2014 112,069,738 1,121 67,079 (9,644) 58,556
The par value of Ordinary Shares is $0.01 per share (2013: $0.01) and all shares are fully paid.
On 23 May 2014, on the completion of the Kounrad transaction, a total of 21,211,751 Ordinary Shares were issued to Kenges
Rakishev (note 33). The shares were allocated in two tranches with one tranche of 15,336,096 Ordinary Shares at a share
price of $2.57 each for the transfer of the 40% share capital of Kounrad Copper Company LLP to CAML Kazakhstan BV. The
remaining 5,875,655 Ordinary Shares were issued at a share price of $2.87 each for the transfer of the 40% economic
interest in the subsoil use contract to Sary Kazna LLP.
On 23 July 2014 the Company allotted and issued 3,500,000 Ordinary Shares to the trustee of the Central Asia Metals Limited
Share Trust (the Employee Benefit Trust). These Ordinary Shares were issued to satisfy current awards granted under the
Company's Employee Share Plans together with any future awards that may be granted by the Company.
Upon the successful completion of the Initial Public Offering (IPO) on 30 September 2010, Mirabaud Securities (MS) were
granted 1,192,053 warrants. These warrants had an exercise price of 96 pence and on 30 June 2014, MS exercised a total of
260,000 for which the Company received £249,600. MS exercised their remaining 932,053 warrants on 31 July 2014 for which
the Company received £894,771.
16. Other reserves Group Share Option Reserve$'000 Shares Reserve to be Issued $'000 Currency Translation Reserve $'000 Total Group $'000
At 1 January 2013 4,451 - (104) 4,347
Currency translation differences - - (722) (722)
Share based payments 1,588 - - 1,588
Exercise of options (346) - - (346)
Correction of treasury shares (136) - - (136)
Promise of shares to be issued to KR on completion of KCC acquisition (note 21) - 39,409 - 39,409
At 31 December 2013 5,557 39,409 (826) 44,140
Reserve transfer (5,557) - - (5,557)
Currency translation differences - - (10,291) (10,291)
Promise of shares to be issued to KR on completion of SUC acquisition (note 21) - 16,844 - 16,844
Ordinary shares issued to KR on completion of Kounrad transaction (note 21) - (56,253) - (56,253)
At 31 December 2014 - - (11,117) (11,117)
(11,117)
The $10,291,000 currency translation reserve movement (2013: $722,000) is primarily as a result of the 18.7% devaluation of
the Kazakhstan Tenge from 31 December 2013 to 31 December 2014.
Company Share Option Reserve$'000 Shares Reserve to be Issued $'000 Total Group $'000
At 1 January 2013 4,451 - 4,451
Share based payments 1,588 - 1,588
Exercise of options (346) - (346)
Correction of treasury shares (136) - (136)
Promise of shares to be issued to KR on completion of KCC acquisition (note 21) - 39,409 39,409
At 31 December 2013 5,557 39,409 44,966
Reserve transfer (5,557) - (5,557)
Promise of shares to be issued to KR on completion of SUC acquisition (note 33) - 16,844 16,844
Ordinary shares issue to KR on completion of Kounrad transaction (note 21) - (56,253) (56,253)
At 31 December 2014 - - -
Prior to the completion of the Kounrad Transaction, the shares not issued to Kenges Rakishev (KR) were classified within
Shares Reserve to be issued as contingent equity consideration.
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.
17. Trade and other payables
Group Company
31 Dec 14 $'000 31 Dec 13 $'000 31 Dec 14 $'000 31 Dec 13 $'000
Trade payables 1,041 222 439 208
Dividends payable - 1,012 - 1,012
Corporation tax, social security and other taxes 3,211 10,626 785 794
4,252 11,860 1,224 2,014
The carrying value of all the above payables is equivalent to fair value.
As at 31 December 2014, the main liabilities of the Group are the Corporate Income tax liability at Kounrad for the 12
months ending 31 December 2014. The Group made a net provision for this liability of $803,940 (2013: $8,367,253) having
paid an amount of $8,505,272 in advance during the year (2013: $1,302,000).
18. Cash generated from/(used in) operations
Group Company
Note 2014$'000 2013$'000 2014$'000 2013$'000
Profit/(loss) before income tax including discontinued operations 70,019 41,204 (9,704) (21,087)
Adjustments for:
Depreciation 11 9,476 4,564 46 18
Amortisation 12 1,936 68 - -
Loss on disposal of property, plant and equipment 494 - - -
Foreign exchange gain/(loss) 1,887 594 850 (1,111)
Gain on re-measuring to fair value the existing interest on acquisition of control 21 (33,039) (27,835) - -
Change in provision for doubtful receivables 13 8 33 - -
Impairment of Mongolian intercompany receivables - - 206 13,691
Impairment of Mongolian intangible assets and investments - 12,879 60 1,927
Share based payments 1,914 1,588 1,914 1,588
Cash settled share options and EBT shares 16 - (482) - (482)
Finance income (61) (17) - (391)
Finance costs 334 581 (11) 9
Changes in working capital: Inventories 83 306 - -
Trade and other receivables 13 (1,740) 10,444 16,314 82
Trade and other payables 17 (2,842) (2,969) 810 (525)
Movement in provisions (1,317) 122 - -
Cash generated from/(used in) operations 47,152 41,080 10,485 (6,281)
19. Contingencies
The Group has disclosed a contingent liability of $159,793 (2013: nil) representing an estimate of amounts that may become
payable towards research and development activities under the terms of subsoil use contract (SUC) agreement with a
subsidiary of the Group.
The extent to which an outflow of funds will be required is yet to be determined and is considered to be a contingent
liability.
20. Dividend per share
In line with the Company dividend policy, the Company paid $17,932,000 in 2014 (2013: $14,306,000) which consisted of a
2014 interim dividend of 5 pence per share and an annual dividend for 2013 of 5 pence per share (2013: special dividend of
3.7 pence per share and an annual dividend for 2012 of 7 pence per share).
The Directors have the intention to propose a final dividend in respect of the year ended 31 December 2014 of 7.5 pence per
share at the forthcoming Annual General meeting (AGM). The Directors recognise that there are currently insufficient
reserves available in the Company for distribution and are proposing to rectify this by completing a court approved capital
reduction scheme by cancelling the Company's share premium account and transferring such reserves to retained earnings.
This process is expected to become effective on or around 13 May 2015. The Company undertook a previous capital reduction
scheme in 2013.
In September 2013 the Company declared dividends amounting to $5.3 million. Although the Company had sufficient
distributable reserves to make the dividend payments, the relevant interim accounts had not been filed with the Registrar
of Companies as required. Consequently payment of the dividends was a technical infringement of the Companies Act 2006.
The Directors will propose at the upcoming AGM to appropriate distributable profits of the Company to these payments of
dividends and to release the relevant shareholders from any claims that the Company may have in relation to such payments.
These financial statements have been drawn up on the basis that the technical infringement described above has been
regularised in the manner described.
21. Business combination
The Company has been working on the completion of the acquisition of the remaining 40% of the Kounrad project since early
2012. The acquisition (collectively known as the Kounrad Transaction) consisted of two key parts;
· The first transaction involving the transfer of an additional 40% ownership of Kounrad Copper Company LLP (KCC) was
completed on 21 October 2013.
· The second transaction involving the transfer of the remaining 40% economic interest in the subsoil use contract
(SUC) remained outstanding as at 31 December 2013. This was completed on 23 May 2014.
On completion of the Kounrad Transaction and in line with the agreements, a total of 21,211,751 Ordinary Shares were issued
to Mr Kenges Rakishev (KR) on 23 May 2014. In addition a cash payment of $1,432,047 was paid to KR on that date in line
with the agreements to reflect the entitlement to dividends payable.
As a consequence of the completion of both transactions, the Group became 100% owner of the Kounrad project and, in
accordance with IFRS 3 Business Combinations, recognized the acquired assets and liabilities of both KCC and the SUC based
upon their fair values.
Consideration
The fair value of the 21,211,751 Ordinary Shares issued as part of the consideration for the Kounrad Transaction was
determined based on the published share price of the Company on the relevant dates. In the case of KCC this was 21 October
2013 when the remaining 40% of KCC Shares were re-registered and in the case of the SUC transfer it was deemed to be 23 May
2014 when the Kounrad Transaction was finally completed and the agreed consideration paid to KR.
In addition an agreed cash consideration of $1,432,047 was paid on 23 May 2014. This was all allocated as consideration for
the additional 40% shares in KCC as per the legal agreements resulting in a minor adjustment of $1,049,798 to the fair
values associated with the assets and liabilities of KCC as reported at 31 December 2013.
The total purchase consideration amounted to $57,685,494 plus an adjustment for settlement of intercompany borrowings of
$9,471,000.
The table below summarises the consideration paid for both KCC and the SUC together with the fair value of all the assets
acquired and the liabilities assumed for both the KCC and SUC parts of the Kounrad Transaction;
Consideration Subsoil Use Contract - 23 May 2014$'000 Kounrad Copper Company LLP - 21 October 2013$'000 Total$'000
Equity instrument 16,845 39,409 56,254
Cash consideration - 1,432 1,432
Total consideration 16,845 40,841 57,686
Settlement of intercompany borrowings 9,471 - 9,471
Adjusted consideration 26,316 40,841 67,157
Recognised amounts of identifiable assets acquired and liabilities acquired 100% Subsoil Use Contract - 23 May 2014$'000 Kounrad Copper Company LLP - 21 October 2013$'000 Total
Property, plant and equipment 4,196 73,875 78,071
Intangible assets 59,914 - 59,914
Inventories 554 4,075 4,629
Cash and cash equivalents 816 8,233 9,049
Trade and other receivables 2,225 35,855 38,080
Trade and other payables (1,556) (9,853) (11,409)
Other liabilities and charges (359) (10,083) (10,442)
Deferred tax liabilities (10,803) (9,488) (20,291)
Total identifiable net assets at fair value 54,987 92,614 147,601
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