TIDMCICC
RNS Number : 5276K
CIC Capital Ltd
31 July 2013
CIC CAPITAL LTD.
(formerly CIC Mining Resources Ltd.)
("CIC" or the "Company")
AUDITED FINANCIAL STATEMENTS YEAR ENDED 31 JANUARY 2013
CIC (AIM: CICC), the consulting and advisory firm operating
primarily in the mining and energy infrastructure sectors, is
pleased to announce the Audited Financial Statements for the year
ended 31 January 2013.
Financial Highlights
Revenue CAD$15,143,814
Net Profit of CAD$11,894,818
In last year's statement to shareholders the Company stated
three key goals for the year:
1) long term historical debt reduction;
2) increase our cash position by selling equities we hold interests in; and
3) maintain our work in progress for future revenue generation.
We delivered on all three. Our historical debt has been
significantly reduced from CAD$2,058,399 to CAD$862,332 and the
Company did not incur new debt. The value of the Company's
investments increased significantly from CAD$2,652 to
CAD$41,654,619. The Company raised CAD$2,102,541 of cash from
private placements.
This next fiscal year our objective is to further increase its
cash position and grow equity values by providing the support and
services to CIC Gold Limited, CIC Fuels Limited and Sino Reserves
Limited to facilitate them going public on a prescribed
exchange.
On 31 May 2013 the Company changed its name to CIC Capital
Ltd.
The Board's approach has resulted in significant added value to
the Company this financial year and along with our work in progress
firming up equity values in other companies that we hope will
deliver significant growth and returns for our shareholders. The
Company holds minority interest in its investments and does not
control their boards or directors.
The Company is also in the process of establishing company
structures in specific market segments like CIC Gold that allow for
"bolt on acquisitions". Our aim is to increase the value of the
companies in which we hold equity interests. If made, acquisitions
will be acquired for services not shares in our Company.
The growth in our asset value is significant from CAD$122,502 to
CAD$53,038,675. The benchmark for asset growth that the Board is
going to measure the Company's performance in future is the annual
growth rate of the S&P (YE 2012: 16.61%). We surpassed this by
some margin last year.
The Company earned revenues of CAD$15,143,814 (2012:
CAD$1,661,077), CAD$4,996,860 of which was received in shares. Of
the remaining revenue earned in 2013, a further CAD$9,117,287of
this is receivable on or before 31 December 2013. Pre-tax profit of
CAD$13,736,659 (2012: CAD$324,379). Cash at end of year was
CAD$91,510 (2012: CAD$7,608).
The Company earned a profit of CAD$11,894,818 (2012:
CAD$324,379) and significantly reduced historical debt. For the
next financial year we aim to have no liabilities with some key
operating expenditure pre-paid.
The audit report contains an emphasis of matter relating to
going concern and the valuation of the Company's assets, the text
of the audit report is reproduced in full in note 18 of this
announcement.
I would like to take this opportunity to thank the employees and
shareholders for their continued support and belief in the Board
strategies for the Company direction.
Stuart J. Bromley
Chairman/founder CIC Capital Ltd.
Enquiries:
CIC Capital Ltd.
Stuart Bromley
Tel: +86 136 0113 1912
Nominated Adviser
Cairn Financial Advisers LLP
Tony Rawlinson
Tel: +44 (0)207 148 7900
CIC CAPITAL LTD.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Year Ended January 31,
2013
(In Canadian Dollars "CAD")
Note 2013 2012
---- ----------------------------------------- ------- ------------ -----------------
Revenue
Consulting and advisory services 3 15,143,814 1,661,077
Administrative costs 4 1,407,155 1,336,698
Profit before income taxes 13,736,659 324,379
Income tax 7 1,841,841 ---
----------------------------------------- ------- ------------ -----------------
Net Profit for the year attributable
to shareholders 11,894,818 324,379
Other comprehensive income
Changes in fair value of available 27,493,319 -
for sale investments (net of
tax)
Foreign exchange translation (loss)
/ gain (10,743) 202,689
----------------------------------------------- ------- ------------ -----------------
Other comprehensive income for
the year, net of tax 27,482,576 202,689
Total Comprehensive Income attributable
to the shareholders 39,377,394 527,068
----------------------------------------------- ------- ------------ -----------------
Basic earnings per share 14 0.078 0.002
Diluted earnings per share 14 0.049 0.002
Weighted average number of shares
outstanding 152,544,908 152,451,777
----------------------------------------------- ------- ------------ -----------------
The notes to the non-statutory financial statements form an
integral part of these non-statutory financial statements
CIC CAPITAL LTD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at January 31, 2013 (In Canadian Dollars "CAD")
----------------------------------------------------------------------------------------------------------
Note 2013 2012
ASSETS
Non-current assets
Available for sale financial
assets 8 41,650,194 -
Property and equipment - 41
41,650,194 41
Current assets
Trade and other receivables 9 11,292,546 112,201
Available for sale financial
assets 8 4,425 2,652
Cash 91,510 7,608
---------------------------------- ------------------ ------------------------- -----------------
11,388,481 122,461
TOTAL ASSETS 53,038,675 122,502
---------------------------------- ------------------ ------------------------- -----------------
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities
Accounts payable and accrued
liabilities 11 1,961,889 1,799,476
Income taxes payable 1,945,407 103,307
Due to related parties 16 505,087 1,076,853
---------------------------------- ------------------ ------------------------- -----------------
Non-current liabilities 4,412,383 2,979,636
Deferred tax liabilities 7 9,164,440 -
---------------------------------- ------------------ ------------------------- -----------------
9,164,440 -
Share capital 13 26,707,310 24,592,434
Contributed surplus 13 5,485,207 4,646,153
---------------------------------- ------------------ ------------------------- -----------------
32,192,517 29,238,587
Accumulated deficit (20,369,152) (32,251,631)
Foreign currency translation
reserve 143,586 154,328
Other reserve 27,494,901 1,582
7,269,335 (32,095,721)
-
TOTAL EQUITY AND LIABILITIES 53,038,675 122,502
---------------------------------- ------------------ ------------------------- -----------------
The non-statutory financial statements were approved by
the board and authorised for issue on July 31 2013 and signed
on its behalf by:
Stuart J. Bromley
Director
The notes to the non-statutory financial statements form an
integral part of these non-statutory financial statements
CIC CAPITAL LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Year Ended January 31, 2013
(In Canadian Dollars "CAD")
Foreign Currency
Contributed Accumulated Translation
Share Capital Surplus Deficit Reserve Other Reserve
--------------------------- -------------- ------------ ----------------- ----------------- ---------------
Balance, January 31, 2011 24,592,434 4,646,153 (32,576,010) 357,017 1,582
Net profit for the year - - 324,379 - -
Other comprehensive
income:
------------ ----------------- ----------------- ---------------
Foreign exchange
translation - - - (202,689) -
------------ ----------------- ----------------- ---------------
Balance, January 31, 2012,
attributable to equity
shareholders of the parent 24,592,434 4,646,153 (32,251,631) 154,328 1,582
----------------------------- -------------- ------------ ----------------- ----------------- ---------------
Net profit for the year - - 11,894,818 - -
Other comprehensive
income:
Foreign exchange (10,742)
translation - - - -
Changes in fair value
of available for sale
investment net of taxes 27,493,319
-------------- ------------ ----------------- ----------------- ---------------
Total Comprehensive -
Income - - - -
-------------- ------------ ----------------- ----------------- ---------------
Transactions with equity
shareholders of the
parent:
Share issue net of -
transaction
costs 2,102,537 - - -
Share transfer proceeds -
received - 839,054 - -
Dividend and issue of
B shares 12,339 (12,339)
Balance, January 31, 2013,
attributable to equity
shareholders of the parent 26,707,310 5,485,207 (20,369,152) 143,586 27,494,901
----------------------------- -------------- ------------ ----------------- ----------------- ---------------
Other reserves includes the unrealised movements on available
for sale financial assets.
CIC CAPITAL LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended January 31, 2013
(In Canadian Dollars)
-----------------------------------------------------------------------------------
Note 2013 2012
---------------------------------------------- ------ ------------- ----------
Operating activities
Net profit for the year 11,894,818 324,379
Items not affecting cash:
Income received in shares not (4,996,860) -
cash
Depreciation - 9,223
6,897,958 333,602
Changes in operating assets and liabilities:
Amounts receivable (11,222,400) 11,316
Prepaid expenses 42,054 (35,143)
Accounts payable and accrued liabilities 1,718,067 (476,071)
------------------------------------------------------ ------------- ----------
Cash used in operating activities (2,564,321) (166,296)
Financing activities
Proceeds from share issuance 2,102,541 -
Proceeds from Shares to be issued 287,555 -
Proceeds from Share transfer 839,055 -
Increase in amounts due to related
parties (571,767) 169,053
----------------------------------------------- ------ ------------- ----------
Cash provided by financing activities 2,657,384 169,053
Effects of exchange rate change in (9,161) -
cash
Increase in cash during the year 83,902 2,757
Cash, beginning of the year 7,608 4,851
------------------------------------------------ ------ ------------- ----------
Cash, end of the year 91,510 7,608
------------------------------------------------ ------ ------------- ----------
1. General information
CIC Capital Ltd. (the "Company") is a public company
incorporated on June 20, 2003 under the Canada Business
Corporations Act listed on the AIM market of the London Stock
Exchange. The Company subsequently de-listed its shares from
trading on the Canadian CNSX as of June 24, 2011 but remains a
reporting issuer in British Columbia, Alberta and Ontario, Canada.
The Company is subject to a cease trade order to Canadian residents
and citizens.
The Company is a consulting and advisory company, operating
primarily in the mining and energy infrastructure sectors. The
Company seeks to provide consulting and advisory services to
entities operating at various stages of resource development, and
the exclusive right to control the public listing process of any
client company if the client company is an unlisted company. The
Company principally seek equity interests in client companies in
return for its services.
The non-statutory financial information is presented in Canadian
Dollars (CAD$), unless otherwise stated.
2. Significant Accounting Policies
2.1 Basis of preparation
The principal accounting policies adopted by the Group in the
preparation of the non-statutory financial statements are set out
below.
The non-statutory Consolidated financial statements have been
presented in Canadian Dollars (CAD$) as this is the functional
currency of the Company while the functional currency of the
subsidiaries is Chinese Renminbi (RMB).
The non-statutory Consolidated financial statements have been
prepared in accordance with International Financial Reporting
Standards, including interpretations made by the International
Financial Reporting Interpretations Committee (IFRIC) issued by the
International Accounting Standards Board (IASB) - together
"IFRS".
The company has adopted all relevant standards effective for
accounting periods beginning on or after 1 February 2012. At the
date of authorisation of these non-statutory financial statements,
the following standards and interpretations were issued but not yet
effective.
IAS 19 Amendment - Employee Benefits
IFRS 7 and IAS 32 Offsetting financial assets and financial
liabilities
IAS 27 Separate Financial Statements
IAS 28 Investments in Associates and Joint Ventures
IFRS 10 Consolidated Financial Statements
IFRS 11 Joint Arrangements
IFRS 12 Disclosure of Interests in Other Entities
IFRS 13 Fair Value Measurement
IFRIC 20 Stripping Costs in the Production Phase of a Surface
Mine
IFRS 1 Amendments - Government Loans
Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS
12)
IFRS 9 Financial Instruments
Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS
27)
IFRIC 21 Levies
IAS 36 Amendments Recoverable Amount Disclosures for
non-Financial Assets
Novation of Derivatives and Continuation of Hedge Accounting
(Amendments to IAS 39)
Numerous other minor amendments to statements have been made as
a result of the IASB's annual improvement project. The preparation
of financial statements in conformity with IFRSs accounting
principles requires the use of estimates and assumptions that
affect the reported amount of assets and liabilities at the date of
the non-statutory financial statements and the reported amount of
expenses during the reporting period. Although these estimates are
based on a manager's best knowledge of the amount, events or
clients, actual results may differ from those estimates.
The directors do not anticipate that the adoption of these
standards will have a material impact on the financial statement in
the year of initial application.
2.2 Basis of consolidation
The consolidated non-statutory financial statements incorporate
the results of the Company and its subsidiaries CIC Beijing Ltd
("CICMR"), and Top Ten Mining Investment Limited ("Top Ten")
collectively (the "Group").
Prior to the January 31, 2008 fiscal year, these two
subsidiaries were considered inactive and all transactions related
to the Company's PRC operations were recorded directly by CIC
Capital Ltd. in its own accounts. Effective February 1, 2008 the
Company used these subsidiaries to conduct the majority of its
operations in PRC and they became active. Accordingly, the assets,
obligations and operations of these subsidiaries were consolidated
with those of the Company from that date forward. All significant
inter-company transactions and balances have been eliminated upon
consolidation.
The non-statutory financial statements of the subsidiaries are
prepared for the same reporting year as the parent company using
consistent accounting policies. Control is achieved where the Group
has the power to govern the financial and operating policies of an
investee entity so as to obtain benefits from its activities.
Control is lost where the Group no longer has the power to govern
and financial operating policies of an entity so as to obtain
benefits from the activity.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of
disposal, as appropriate.
All intra-group balances, transactions, income and expenses and
profits and losses resulting from intra-group transactions are
eliminated in full on consolidation. Unrealised losses are also
eliminated when the transaction provides evidence of an impairment
of the asset transferred.
No non-controlling interests exist as the subsidiaries are
entirely owned by the parent company.
Acquisitions of subsidiaries and equity in businesses are
accounted for using the purchase method. The acquirer's
identifiable assets, liabilities and contingent liabilities that
meet the conditions for recognition under 'IFRS 3 Business
Combinations' are recognised at their fair values at the
acquisition date, except for non-current assets (or disposal
groups) that are classified as held for sale in accordance with
IFRS 5 'Non-current Assets Held for Sale and Discontinued
Operations', which are recognised and measured at fair value less
costs to sell.
The cost of an acquisition is measured as the fair value of the
assets given, equity instruments issued and liabilities incurred or
assumed at the date of exchange. Acquisition related costs are
expensed as incurred. Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. On
an acquisition-by-acquisition basis, the group recognises any
non-controlling interest in the acquire either at fair value or at
the non-controlling interest's proportionate share of the
acquirer's net assets.
The excess of the cost of acquisition over the fair value of the
Group's share of the identifiable net assets acquired is recorded
as goodwill. If the cost of acquisition is less than the fair value
of the net assets of the subsidiary acquired, the difference is
recognized directly in the statement of comprehensive income.
Where necessary, adjustments are made to the non-statutory
financial statements of subsidiaries to bring the accounting
policies used in line with those used by the Group.
In accordance with IAS 28 "Investments in Associates",
associates are not included in the consolidated financial
statements when held by venture capital organisations. This
exemption is conditional on the investments being designated at
fair value through profit and loss or being classified as available
for sale upon initial recognition.
The characteristics of these investments are:
1) Investments are held for the short to medium term rather than for the long term;
2) The most appropriate point for exit is actively monitored; and
3) Investments form part of a portfolio that is monitored and
managed without distinguishing between investments that qualify as
associates or joint ventures and those that do not
2.3 Going concern
The non-statutory financial statements have been prepared on the
assumption that the Group will continue as a going concern. Under
the going concern assumption, an entity is ordinarily viewed as
continuing in business for the foreseeable future with neither the
intention nor the necessity of liquidation, ceasing trading or
seeking protection from creditors pursuant to laws or regulations.
In assessing whether the going concern assumption is appropriate,
management takes into account all available information for the
foreseeable future, in particular for the twelve months from the
date of approval of the non-statutory financial statements.
Although the current ongoing economic conditions create
uncertainty, the Group's forecasts and projections, taking account
of reasonable possible changes in trading performance, together
with mitigation actions that are within management's control show
that the Group is expected to be able to operate within the level
of its available resources.
The Directors are carefully monitoring cash resources across the
Group and have instigated a number of initiatives to ensure funding
will be available for future operations and to reduce debt. As
described in note 8 significant working capital has been raised and
used to reduce debt.
In undertaking this assessment, the Directors have reviewed the
underlying ongoing costs of the Group undertaking its business and
generating ongoing income (and cash) to cover these. The Directors
have also considered the recovery of a discrete number of key trade
receivables, and based on confirmations received from these
companies, the Directors expect to recover these trade receivables
by December 2013.
Additionally, Stuart Bromley has continued to provide his
ongoing support for at least 12 months from the date of approval of
these non-statutory financial statements.
Following the review of ongoing performance and cash flows, the
Directors have a reasonable expectation that the Group has adequate
resources to continue operational existence for the foreseeable
future, subject to the sale of these equity interests. For this
reason they continue to adopt the going concern basis in preparing
these non-statutory financial statements.
Further information relating to the transactions listed above
can be found in note 8.
2.4 Significant accounting judgments, estimates and assumptions
The key assumptions concerning the future and other key sources
of estimation uncertainty at the statement of financial position
date that have a significant risk of causing a material adjustment
to the carrying amount of assets and liabilities in the next
financial period are discussed below:
Available for sale investments - initial presentation
For equity interests held by the Company or options to acquire
equity interests in non-public companies, these are classified as
available for sale investments and the valuation of these interests
is not recorded unless equity has been sold pre-IPO to non-related
investors or parties. Actual sale of any equity in these companies
is recorded.
Paragraph 27A of IFRS 7 states that the level within the fair
value hierarchy, at which an instrument measured at fair value is
categorised, is determined on the basis of the lowest level input
that is significant to the measurement of fair value in its
entirety. The Company therefore values shares in entities in which
it hold equity at the pre-IPO price established by arms-length
investors (Level 3 in the established Fair Value hierarchy).
Available for sale investments - valuation
The Group reviews the fair value of its unquoted equity
instruments at each statement of financial position date. This
requires management to make an estimate of the fair value of the
unquoted securities in the absence of an active market. Uncertainty
also exists due to the early stage of development of certain of the
investments. The fair value of the available for sale investments
at 31 January 2013 is detailed in note 8.
Fair value is the amount for which an asset could be exchanged,
or a liability settled, between knowledgeable, willing parties in
an arm's length transaction on the measurement date.
When available, the group measures the fair value of an
investment, note 8, using quoted prices in an active market for
that investment. A market is regarded as active if the quoted
prices are readily and regularly available and represent actual and
regularly occurring market transactions on arm's length basis.
If a market for a financial instrument is not active, then the
group establishes fair value using a valuation technique. Valuation
techniques include using recent arm's lengths transactions between
knowledgeable, willing parties (if available), reference to the
current fair value of other instruments that are substantially the
same, discounted cash flow analyses and option pricing models. The
chosen valuation technique makes maximum use of the market inputs,
relies as little as possible on estimates specific to the group,
incorporates all factors that market participants would consider in
setting a price, and is consistent with accepted economic
methodologies for pricing financial instruments. Inputs to
valuation techniques reasonably represent market expectations and
measures of the risk-return factors inherent in the financial
instrument. The group calibrates valuations techniques and tests
them for validity using prices from observable current market
transactions in the same instrument or based on other available
observable market data.
The best evidence of the fair value of a financial instrument at
initial recognition is the transaction price, i.e the fair value of
the consideration given or received, unless the fair value of that
instrument is evidenced by comparison with other observable current
market transactions in the same instrument (i.e without
modification or repackaging) or based on a valuation technique
whose variables include only data from observable markets. When
transaction price provides the best evidence of fair value at
initial recognition, the financial instrument is initially measured
at the transaction price and any difference between this price and
the value initially obtained from the valuation model is
subsequently recognized in other comprehensive income on an
appropriate basis over the life of the instrument but not later
than when the valuation is supported wholly by observable market
data or the transaction is closed out.
Recoverability of trade receivables
Included within trade receivables of CAD$11,216,420 (2012: nil)
are amounts in respect of the sales of equities as detailed in note
8. The Directors have reviewed the likelihood of recovery of these
receivables, as well as obtaining certain confirmations from these
companies, and consider that these balances are recoverable and no
provision is required.
2.5 The Company's investments in subsidiaries
In its separate non-statutory financial statements the Company
recognises its investments in subsidiaries at cost, less any
impairment for permanent diminution in value.
2.6 Foreign exchange
Monetary assets and liabilities denominated in foreign
currencies are translated into Canadian Dollars at the rates of
exchange ruling at the reporting date. Transactions in foreign
currencies are recorded at the rate ruling at the date of
transaction. All differences are taken to the profit and loss.
For the purpose of presenting non-statutory financial
statements, the assets and liabilities of the Group's foreign
operations are expressed in Canadian Dollars using exchange rates
prevailing at the reporting date. Income and expense items are
translated at the average exchange rates for the period, unless
exchange rates fluctuated significantly during that period, in
which case the exchange rates at the dates of the transactions are
used.
Exchange differences arising, if any, are classified as equity
and recognised in the Group's foreign currency translation
reserve.
Such exchange differences are recognised in profit or loss in
the year in which the foreign operation is disposed of.
Goodwill and fair value adjustments arising on the acquisition
of a foreign operation are treated as assets and liabilities of the
foreign operation and translated at the closing rate.
2.7 Financing costs and interest income
Financing costs comprise interest payable on borrowings and
finance lease payments and interest income which is calculated
using the effective interest rate method. All borrowing costs are
charged to the income statement as expense in the period in which
they are incurred.
2.8 Impairment of financial assets
At each balance sheet date, an assessment is made whether there
is objective evidence that an available-for-sale equity instrument
is impaired. A significant or prolonged decline in the fair value
of the security below its cost is considered objective evidence of
impairment.
2.9 Financial instruments
Financial assets and financial liabilities are recognised when
the Group becomes a party to the contractual provisions of the
instruments and on a trade date basis. A financial asset is
derecognised when the Group's contractual rights to future cash
flows from the financial asset expire or when the Group transfers
the contractual rights to future cash flows to a third party. A
financial liability is derecognised only when the liability is
extinguished.
(a) Investments
Financial assets are classified as either financial assets at
fair value through the statement of comprehensive income, loans and
receivables, held to maturity investments and available-for-sale
financial assets, as appropriate. When financial assets are
recognised initially, they are at fair value plus, in the case of
investments not at fair value through the income statement,
directly attributable transaction costs. The Group determines the
classification of its financial assets after initial recognition
and, where allowed and appropriate, re-evaluates this designation
at each financial year-end. All regular purchases and sales of
financial assets are recognised on the trade date being, for
example the day that the Group commits to purchase the asset.
Regular purchases or sales of financial assets are those that
require delivery of assets within the period generally established
by regulation or convention in the market place.
The fair value of investments that are actively traded in
organised financial markets is determined by reference to quoted
market bid prices at the closure of business on the reporting date.
For investments where there is no active market, fair value is
determined using valuation techniques. Such techniques include
using recent arm's length market transactions; reference to current
market value of which is substantially the same; discounted cash
flow analysis and option pricing models.
(b) Trade and receivables and other receivables
Trade and other receivables are measured at initial recognition
at fair value, and are subsequently measured at amortised cost
using the effective interest rate method. Appropriate allowances
for estimated irrecoverable amounts are recognized in the statement
of comprehensive income when there is objective evidence that the
asset is impaired.
(c) Cash and cash equivalents
The Group considers all highly liquid investments which are
readily convertible into known amounts of cash and have a maturity
of three months or less when acquired to be cash equivalents. At
the reporting date management believes that the carrying amount of
cash equivalents approximates fair value because of the short
maturity of these financial instruments. Cash and cash equivalents
comprise cash at bank and in hand and short term deposits with an
original maturity of three months or less, all of which are
available for use by the Group unless otherwise stated. Cash and
cash equivalents are measured at fair value, based on the relevant
exchange rates at the reporting date.
(d) Financial liabilities and equity
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into. An equity instrument is any contract that evidences a
residual interest in the assets of the Group after deducting all of
its liabilities. The Group's financial liabilities include trade
and other payables and loans. All financial liabilities, except for
derivatives, are recognised initially at their fair value plus
transaction costs that are directly attributable to the acquisition
or issue of the financial liability and subsequently measured at
amortised cost, the effective interest method, unless the effect of
discounting would be insignificant, in which case they are stated
at cost.
(e) Other financial liabilities
Other financial liabilities, including trade and other payables
and loans are initially measured at fair value, net of transaction
costs. Other financial liabilities are subsequently measured at
amortised costs, using the effective interest rate method.
Interest-bearing bank loans and overdrafts are recorded at the
proceeds received net of direct issue costs. Finance charges,
including premiums payable on settlement or redemption and direct
issue costs, are accounted for on an accrual basis to the profit
and loss account using the effective interest method and are added
to the carrying amount of the instrument to the extent that they
are not settled in the period in which they arise.
2.10 Provisions
Provisions are recognised when the Group has a present legal or
constructive obligation as a result of a past event, where it is
probable that an outflow of economic benefits will be required to
settle the obligations, and a reliable estimate of the amount can
be made.
2.11 Share capital
Ordinary shares are without par value. When new shares are
issued they are recognised within share capital at their issue
price. Proceeds received after the initial issue, in connection
with exchanges, are accounted for as share premium. Both ordinary
shares and share premium are classified as equity. Costs incurred
directly to the issue of shares are accounted for as a deduction
from share capital, otherwise they are charged to the income
statement.
2.12 Taxation
Tax on profit or loss for the period comprises current and
deferred tax. Tax is recognised in the statement of comprehensive
income except to the extent that it relates to items recognised
directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income
for the period, using tax rates enacted or substantively enacted at
the reporting date, and any adjustment to tax payable in respect of
previous years.
Deferred tax is provided on temporary differences between the
carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. The following
temporary differences are not provided for: the initial recognition
of assets or liabilities that affect neither accounting nor taxable
profit other than in a business combination, and differences
relating to investments in subsidiaries to the extent that they
will probably not reverse in the foreseeable future. The amount of
deferred tax provided is based on the expected manner of
realization or settlement of the carrying amount of assets and
liabilities, using tax rates enacted or substantively enacted at
the balance sheet date.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the asset can be utilised.
2.13 Share-based payments
The Company operates a share option scheme for granting share
options, for the purpose of providing incentives and rewards to
eligible employees of the Group. The cost of share options granted
is measured by reference to the fair value at the date at which
they are granted. It is recognised together with a corresponding
increase in equity, over the vesting period. The cumulative expense
recognized at each reporting date until the end of the vesting
period reflects the extent to which the vesting period has expired
and the number of shares that in the opinion of the directors of
the Group at that date will ultimately vest.
2.14 Contingent liabilities and contingent assets
A contingent liability is a possible obligation that arises from
past events and whose existence will only be confirmed by the
occurrence or non-occurrence of one or more uncertain future events
not wholly within the control of the Group. It can also be a
present obligation arising from past events that is not recognized
because it is not probable that outflow of economic resources will
be required or the amount of obligation cannot be measured
reliably.
A contingent liability is not recognised but is disclosed in the
notes to the accounts. When a change in the probability of an
outflow occurs so that the outflow is probable, it will then be
recognized as a provision.
A contingent asset is a possible asset that arises from past
events and whose existence will be confirmed only by the occurrence
or non-occurrence of one or more uncertain events not wholly within
the control of the Group.
Contingent assets are not recognised but are disclosed in the
notes to the accounts when an inflow of economic benefits is
probable. When inflow is virtually certain, an asset is
recognized.
2.15 Events after balance sheet date
Post year-end events that provide additional information about
the Group's position are reflected in the non-statutory financial
statements. Post year-end events that are not adjusting events are
disclosed in the notes when material.
2.16 Revenue recognition
Revenue comprises the fair value of the consideration received
or receivable for the sale of goods and services in the ordinary
course of the group's activities. Revenue is shown net of value
added tax, returns, rebates and discounts and after eliminating
sales within the group.
The group recognises revenue when the amount of revenue can be
reliably measured, it is probable that future economic benefits
will flow to the entity and when specific criteria have
been met. The group bases its estimates on historical results,
taking into consideration the type of customer, the type of
transaction and the specifics of each arrangement.
Where the Company holds equity interests in companies as an
investment, the company may elect to measure the investments in
these associates at fair value through profit and loss. On using
this exemption, it is anticipated that the investments are held for
short-to medium-term rather than long term; that the most
appropriate exit point is actively monitored and that investments
form part of a portfolio that is monitored and managed without
distinguishing between investments that qualify as associated
undertakings and those that do not.
2.17 Employee benefits
(a) Defined contribution plan
Obligations for contributions to any plans are recognised as an
expense in the statement of comprehensive income as they are
due.
(b) Short-term benefits
Short-term employee benefit obligations are measured on an
undiscounted basis and are expensed in the statement of
comprehensive income as the related service is provided.
(c) Termination benefits
Termination benefits are recognised as an expense when the Group
is demonstrably committed, without realistic probability of
withdrawal, to a formal detailed plan to either terminate
employment before the normal retirement date, or to provide
termination benefits as a result of an offer made to encourage
voluntary redundancy. Termination benefits for voluntary
redundancies are recognised as an expense if the Group has made an
offer encouraging voluntary redundancy, it is probable that the
offer will be accepted, and the number of acceptances can be
measured reliably.
2.18 Available for sale financial assets
Non-current assets classified as available for sale are measured
at the lower of their carrying amount and fair value less costs to
sell. Fair value is the underlying principle and is defined as "the
price that would be received to sell an asset in an orderly
transaction between market participants at the measurements date",
in the guidelines issued by the International Private Equity and
Venture Capital valuation board. Fair value is therefore an
estimate and, as such, determining fair value requires the use of
judgement, as disclosed in note 2.4.
The majority of the Group's assets are unquoted investments.
These are valued with reference to recent reported relevant
transactions.
2.19 Capital Management Policy
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital. The capital structure of the group consists of
borrowings and equity attributable to equity holders of the Group,
comprising issued share capital and reserves.
3. Business Segments
For the purpose of IFRS8, the Chief Operating Decision Maker
("CODM") takes the form of the board of Directors, the Directors
are of the opinion that the business of the Group comprises a
single activity being investments and advice within emerging
markets.
The analysis of the Group's turnover, gross profit, assets,
liabilities, additions to plant, property and equipment and
depreciation and amortisation by the components used by the CODM to
make decisions about operating matters are as follows:
Year ended Year ended
31 January 31 January
2013 2012
CAD$ CAD$
Revenue 15,143,814 1,661,077
------------ ------------
Gross profit 13,736,659 324,379
------------ ------------
Carrying amount of assets 53,038,675 122,502
------------ ------------
Liabilities 13,576,823 2,979,636
------------ ------------
Revenue
Three customers each provided greater than 10% of total revenue
in the year:
1) Revenue from one customer amounted to CAD$5,078,653, (2012: CAD$347,845) arising from sales of pre-IPO shares.
2) Revenue from one customer amounted to CAD$4,751,334, (2012: CAD$nil) arising from sales of pre-IPO shares.
3) Revenue from one customer amounted to CAD$4,992,435 (2012: CAD$nil) arising from advisory services paid for in equity in CIC Fuels.
4. PROFIT FROM OPERATIONS
Profit from operations has been arrived at after charging:
Year ended Year ended
31 January 31 January
2013 2012
CAD$ CAD$
Auditors remuneration - audit
fees 20,000 35,000
Depreciation of fixed assets - 9,222
Professional Fees 99,254 159,949
Rent 343,482 456,314
Directors fees 396,411 116,005
5. DIRECTORS' REMUNERATION
The remuneration of the directors, who are the key management
personnel of the Group and Company, is set out below in
aggregate:
Year ended Year ended
31 January 31 January
2013 2012
CAD$ CAD$
Short term employee benefits
Directors' fees 396,411 116,005
------------ ------------
The highest paid director received CAD$320,390 (2012:
CAD$38,669) during the year.
At the year end the following balances were due to directors in
relation to loans:
Year ended Year ended
31 January 31 January
2013 2012
CAD$ CAD$
Short term employee benefits
Directors' fees 505,086 116,005
------------ ------------
Per director, this was as follows:
Year ended Year ended
31 January 31 January
2013 2012
CAD$ CAD$
Short term employee benefits
- directors' fees
Stuart J. Bromley 314,584 38,669
Hu Ye 38,160 -
Li Hongguang 76,171 38,668
Rob Rhodes 76,171 38,668
------------ ------------
505,086 116,005
------------ ------------
6. STAFF COSTS
The Group and Company's staff costs are as follows:
Year ended Year ended
31 January 31 January
2013 2012
CAD$ CAD$
Salaries and wages 116,989 123,836
Social security contribution - -
------------ ------------
116,989 123,836
------------ ------------
The average number of salaried employees during the period was 9
(2012: 8). The Company uses the services of its executive
directors, public officers, staff and consultants to perform their
work.
7. TAXATION
Year ended Year ended
31 January 31 January
2013 2012
CAD$ CAD$
Total tax charge 1,841,841 -
--------------- -----------------------
Factors affecting tax charge:
Profit before tax 13,736,659 324,379
--------------- -----------------------
Tax on profit at standard rate
- 25% (2012 - 26.37%) 3,434,165 85,539
Effects of:
Losses utilised (1,739,038) (81,744)
Other adjustments 146,714 (3,795)
Total tax charge 1,841,841 -
--------------- -----------------------
The Company is a Canadian Federal Corporation subject to a
corporate tax rate on profits of 15% (at January 1, 2013).
A deferred tax liability of CAD$9,164,440 (2012: nil) has been
recognised in respect of timing differences associated with the
fair value increase in available for sale investments.
8. AVAILABLE FOR SALE FINANCIAL ASSETS
Current Assets (Level 1 fair value hierarchy IFRS)
Shares, options and warrants ("securities") received as
consideration are recognised when the services have been performed
or the agreed effort has been expended, pursuant to a contract or
agreement, the securities have been received by the Company, and
the value of the securities received is measurable by way of the
securities being listed on a stock exchange.
The fair value of the listed equity securities are based upon
their current bid prices in active markets. A market is regarded as
active if quoted prices are readily and regularly available from an
exchange, dealer, broker, industry group, pricing service or
regulatory agency, and those prices represent actual and regularly
occurring market transactions on an arm's length basis.
Year ended Year ended
31 January 31 January
2013 2012
CAD$ CAD$
Listed equity securities 4,425 2,652
------------ ------------
Shares received for services are:
No of Shares Trading Value
Price CAD$ CAD$
Sirius Minerals Plc. 10,000 0.44 4,425
CAD$ 4,425
For equity interests held by the Group or options to acquire
equity interests in non-public companies, the valuation of those
interests is recorded at the lower of cost and fair value less
costs to sell. Actual sale of any equity in those companies is
recorded. It is anticipated that the Group will in future record
valuations based on certainty of value.
Non-Current Assets (Level 3 fair value hierarchy IFRS)
No of shares Pre IPO Fair Value
% Holding Price GBP CAD$
----------- ----------- -----------
CIC GOLD Limited* 58,160,000 48.46 0.30 27,633,759
CIC Fuels Limited** 29,500,000 48.36 0.30 14,016,435
-----------
41,650,194
The holding period of the Group's non-current assets is on
average greater than one year. For this reason these investments
are classified as non-current. It is not possible to identify with
certainty investments that will be sold within one year.
Unrealised fair value gains (net of deferred tax) of
CAD$27,493,319 were recognised in the statement of comprehensive
income on the unquoted equity investments using Level 3 inputs.
Level 3 inputs are sensitive to assumptions made when
ascertaining fair value as described in the accounting
policies.
* CIC GOLD ("CICG")
The Company holds a 48.46% (2012: 43.0%) interest in CICG which
is a non-publicly listed entity as at 31 January 2013.
CIC Gold Limited is a newly established precious metals company
focused initially on gold mineral assets. CICG was established by a
Chinese precious metals miner shareholders to establish a specific
publicly traded Precious Metals Company.
CICG's focus is on mineral property assets where medium to large
gold oxide mining may be conducted in the short term, mineral
property assets that the directors consider to be undervalued or
have strong fundamentals and attractive growth prospects, and
de-risk those assets by way of exploration or mining. At present it
has two assets, one in China and the other in Eastern Congo further
details of which are below.
CICG has in its shareholder base certain of China's oxide and
hard rock gold miners whom will be conducting the initial mining
and processing. CICG and its Directors intend to utilise their
collective prior experience and informal network of contacts in the
mining sectors to grow the mineral property asset portfolio.
The Company equity sale transaction
The Company facilitated the sale of part of the equity held
("CICG transaction') as follows:
Balfour Transaction (November 2011)
The Transaction was for a total consideration of US$3,000,000
(CAD$2,992,800). An initial payment of US$300,000 (CAD$299,280) was
made in December 2011 on agreement with the balance of the purchase
price US$2.7 million (CAD$2,693,520) would be paid within three
years of the IPO of these shares. As detailed in note 17, this
agreement has been subsequently amended to state that the balance
of the purchase price will be paid before 31December 2013. The CICG
shares were issued in March 2012.
Jarada Fund (November 2012)
The Transaction was for a total consideration of GBP1,500,000
(CAD$2,377,500). An initial payment of GBP150,000 (CAD$237,750) was
made in November 2012 on agreement with the balance of the purchase
price GBP1,350,000 (CAD$2,139,750) would be paid within two years
of the IPO of these shares. As detailed in note 17, this agreement
has been subsequently amended to state that the balance of the
purchase price will be paid before December 2013. The CICG shares
were issued in March 2012.
Miyazawa Transaction
The Transaction was for a total consideration of GBP3,000,000
(CAD$4,755,000). An initial payment of US$126,000 (CAD$125,697) on
agreement with the balance of the purchase price (GBP2.7 million
approximately CAD$4,279,500) to be paid within two years of the IPO
of these shares. The lower initial payment in respect to Balfour
transaction was due to the fact that Miyazawa is contributing
significant costs to the gold leases in Eastern Congo. US$63,000
(CAD$62,848) was received in November 2011 and US$63,000
(CAD$62,848) received in April 2012. The CICG shares were issued in
March 2012.
Subject to market conditions, the Directors of the Company are
making every effort to progress the IPO of CICG before end of the
year ending 31 Jan 2015.
** CIC FUELS LIMITED ("CICF")
The Company holds a 48.36% (2012: 31.5%) interest in CICF which
is a non-publicly listed entity as at 31 January 2013. Additional
shares were earned by the Company during the year for provision of
advisory services.
CICF focuses on the world's leading alternative heavy oil
emulsion fuels technologies. CICF technologies allow up to fifty
(50%) percent water to be molecularly bonded with heavy oil without
the loss of calorific value (energy loss) whilst reducing CO(2)
gases by up to 75% and No(x) gasses to 0.4%.
A pilot operation has commenced in Fukuoka Japan located in
heavy industry multiple boiler operation and has, to date,
demonstrated significant fuel cost savings.
The Company equity sale transaction
The Company facilitated a pre IPO of CICF sale of part of the
equity held ("CICF transaction").
Balfour Transaction (April 2012)
The Transaction was for a total consideration of GBP1,500,000
(CAD$2,377,500). An initial payment of GBP150,000 (CAD$237,750) was
made in November 2012on agreement, and the original agreement noted
that the balance of GBP1,350,000 (CAD$2,139,750) would be paid
within two years of the IPO of these shares. As detailed in note
17, this agreement has been subsequently amended to state that the
balance of the purchase price will be paid before December
2013.
Jarada Fund (October 2012)The Transaction was for a total
consideration of GBP1,500,000 (CAD$2,377,500). An initial payment
of GBP150,000 (CAD$237,750) was made in November 2012 on agreement
with the balance of the purchase price GBP1,350,000 (CAD$2,139,750)
would be paid within two years of the IPO of these shares. As
detailed in note 17, this agreement has been subsequently amended
to state that the balance of the purchase price will be paid before
December 2013.
Subject to market conditions, the Directors of the Company are
making every effort to progress the IPO of CICF before end of the
year ending 31 Jan 2015.
9. TRADE AND OTHER RECEIVABLES
31 January 31 January
2013 2012
CAD$ CAD$
Trade receivables 11,216,420 -
Amount due from directors* 26,385 20,406
Prepaid expenses** 49,741 91,795
11,292,546 112,201
----------- -----------
* cash advance to directors for travel and other expected
expenses
** office and staff accommodation lease deposits (China)
Of the amounts due from directors, no amounts are considered
past their due dates and there are no impaired balances.
10. CASH AND CASH EQUIVALENTS
Cash and cash equivalents include the following for the purposes
of the cash flow statement:
31 January 31 January
2013 2012
CAD$ CAD$
Cash in banks 91,510 7,608
91,510 7,608
----------- -----------
11. TRADE AND OTHER PAYABLES
31 January 31 January
2013 2012
CAD$ CAD$
Trade and other
creditors 1,961,889 1,799,476
Amount due to
directors 505,087 1,076,853
Tax payable (China) 103,566 103,307
Tax payable (Canada) 1,841,841 -
----------- -----------
4,412,383 2,979,636
----------- -----------
The Company has financial risk management policies in place to
ensure that all payables are paid with minimal interest being
claimed if any.
Of the trade and other creditors, CAD$862,332 was past due as at
31 January 2013 (2012: CAD$981,546). No other amounts are
considered past their due dates and there are no impaired
balances.
12. INTEREST BEARING LOANS AND BORROWINGS
31 January 31 January
2013 2012
CAD$ CAD$
Financial liabilities
loans* - 1,076,853
------------ ------------
* Non-interest bearing loan from Stuart J. Bromley
This loan has been settled in the year by way of issue of
shares, as detailed in note 13.
13. SHARE CAPITAL
Authorised:
Unlimited common shares without par value.
Issued and allotted shares outstanding:
Ordinary Shares
Number of
shares Amount
----------------------------------------------- ------------ ---- -----------
CAD
Balance, January 31, 2011 152,451,777 $ 24,592,434
----------------------------------------------- ------------ ---- -----------
Issued for cash
----------------------------------------------- ------------ ---- -----------
Pursuant to private placements
of shares and units - -
----------------------------------------------- ------------ ---- -----------
Shares issued but unpaid - -
----------------------------------------------- ------------ ---- -----------
Issued for top up of previous
private placement - -
----------------------------------------------- ------------ ---- -----------
Cancellation of escrow shares - -
CAD
Balance, January 31, 2012 152,451,777 $ 24,592,434
----------------------------------------------- ------------ ---- -----------
Issued for cash
Pursuant to private placements
of shares and units 16,500,000 986,717
Issued for Stuart Bromley loan
conversion 17,492,650 1,115,820
CAD
Balance, January 31, 2013 186,444,427 $ 26,694,971
----------------------------------------------- ------------ ---- -----------
33,992,650 shares were issued in aggregate in year ending
January 31, 2013.
Share Issues:
During the year 16.5m ordinary shares were issued to a third
party. The gross value received during the year was CAD$1,039,500.
The figure shown in the table above is net of transaction costs
incurred of CAD$52,783.
Ordinary B Shares
In July 2012, the group issued a series of B Class non-voting
shares to all registered shareholders via a dividend. The number of
ordinary B shares that registered shareholders were entitled to was
equivalent to 4 percent of their shareholding at 30 July 2012.
The ordinary B shares have the right to convert into ordinary
shares after one year at the equivalent price of one ordinary B
share for one ordinary share at which point application for the
converted shares to be admitted to trading on AIM shall be
made.
Stuart Bromley, and Hao Quan, each a substantial shareholder,
elected not to receive their dividend entitlement in respect of a
total of 84,619,999 ordinary shares representing 45.38 per cent of
the issued share capital of the Company.
Number of
shares Amount
--------------------------- ---------- ------ ---------
Balance, January 31, 2012 - CAD$ -
--------------------------- ---------- ------ ---------
Issued via dividend 963,843 12,339
CAD
Balance, January 31, 2013 963,843 $ 12,339
--------------------------- ---------- ------ ---------
In order to determine the fair value of these shares, the group
hasused the Black-Scholes option pricing model. The inputs into the
model were as follows:
2013
Share price 0.02p
Exercise price 0.02p
Expected volatility 100%
Expected life (yrs.) 1
Risk free rate 2.47%
Other Reserve:
The gains/losses transferred to Other Comprehensive Income of
CAD$27,493,319 in 2013 (2012: NIL) shown in "Other" relates to the
changes in fair value of available for sale investments.
Escrow:
At January 31, 2013, 18,000,000 common shares were held in
escrow (CIC Resources Limited). These escrowed shares are due for
cancellation as per escrow agreement.
Warrants:
The following is the summary of the changes in the Company's
outstanding warrants at January 31, 2013 and 2012:
2013 2012
----------------------- ------------------------------- -------------------------
Weighted Weighted
Average Exercise Average
Price Exercise
Warrants Warrants Price
----------------------- ----------- ------------------ ------------- ----------
Balance of warrants
at beginning of the
period 350,000 CAD$ 0.10 35,112,170 CAD$ 0.15
Issued 67,554,820 0.05 - -
Expired (350,000) 0.10 (34,762,170) 0.15
Balance of warrants
at end of the period 67,554,820 CAD$ 0.05 350,000 CAD$ 0.10
----------------------- ----------- ------------------ ------------- ----------
At January 31, 2013, the Company had 67,554,820 (January 31,
2012 - 350,000) warrants outstanding. Each warrant entitles the
holder thereof the right to purchase one common share for each
warrant held as follows:
2013 2012
Number of Number of
Expiry date Exercise price warrants warrants
------------------- ------------------ ----------- -----------
July 14, 2012 - - 350,000
July 31, 2014 CAD$0.04 33,562,170
December 31, 2014 CAD$0.06 16,500,000 -
December 31, 2014 CAD$0.06 17,492,650 -
67,554,820 350,000
-------------------------------------- ----------- -----------
Share Purchase Options:
The Company has an equity settled stock option plan which
authorises the board of directors to grant incentive stock options
to directors, officers and employees. The exercise price and
vesting provisions of the options are determined by the board based
on the market values of the shares using the closing price on the
date prior to date of the grant. The continuity of options
outstanding is as follows:
2013 2012
-------------------------- ------------------------ ------------------------
Weighted Weighted
Average Average
Stock Exercise Stock Exercise
Options Price Options Price
-------------------------- ------------ ---------- ------------ ----------
Balance, beginning of
year 14,150,000 CAD$0.07 15,775,000 CAD$0.32
Granted - - - -
Expired (100,000) 0.68
Expired (1,600,000) 0.10 (1,625,000) 0.75
Balance, end of year 12,450,000 CAD$0.06 14,150,000 CAD$0.07
-------------------------- ------------ ---------- ------------ ----------
Exercisable, end of year 12,450,000 14,150,000
-------------------------- ------------ ---------- ------------ ----------
As at January 31, 2013, there were 12,450,000 employee, director
and consultant options outstanding. The weighted average remaining
life for outstanding options is 0.68 years, and weighted average
exercise price is $0.06.
Weighted average Options Options
Expiry date remaining life Exercise Outstanding Exercisable
price
--------------- ----------------- ----------- ------------- -------------
February 7,
2013 0.02 CAD$0.10 1,700,000 1,700,000
September
24, 2013 0.65 CAD$0.10 150,000 150,000
November 15,
2013 0.79 CAD$0.05 10,600,000 10,600,000
--------------- ----------------- ----------- ------------- -------------
0.68 CAD$0.06 12,450,000 12,450,000
--------------- ----------------- ----------- ------------- -------------
14. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Group by the weighted average
number of ordinary shares in issue during the period:
Profit attributable to equity holders of the Group:
CAD$11,894,818(2012: CAD$324,379)
Weighted average number of ordinary shares in issue:
152,544,908(2012: 152,451,777)
Basic earnings per share: CAD$0.078 (2012: CAD$0.002)
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. The Group has
three categories of dilutive potential ordinary shares: shares to
be issued post year end, share options and warrants. Where the
Group makes a loss attributable to the equity holders of the Group,
the warrants and share options are anti-dilutive and these
contingently issuable shares are not included in the
calculation.
2013 2012
CAD$ CAD$
Profit attributable to the
equity holders of the Group 11,894,818 324,379
Weighted average number of
ordinary shares in issue: 152,544,908 152,451,777
Adjustments for:
Share issues outstanding
at year end 8,558,065 -
Convertible B Shares 963,843 -
Share Options 12,450,000 14,150,000
Warrants 67,554,820 350,000
242,071,636 166,951,777
----------- -----------
Diluted earnings per share
(CAD$) 0.049 0.002
15. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group's activities expose it to a variety of financial
risks: currency risk, credit risk, liquidity risk and cash flow
interest-rate risk. These risks are limited by the Group's
financial management policies and practices as described below:
(a) Credit risks
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the
Group's receivables from customers and investment securities.
Financial instruments that potentially subject the Company to
concentrations of credit risk consist of cash and amounts
receivable. To minimize its credit risk the Company deposits its
cash in bank accounts with financial institutions. Transaction
costs are expensed as incurred.
Financial assets past due:
At January 31, 2013, the Company did not have any amounts
receivable considered doubtful.
The Company reviews financial assets past due on an ongoing
basis with the objective of identifying potential matters which
could delay the collection of funds at an early stage. Once items
are identified as being past due, contact is made with the
respective company to determine the reason for the delay in payment
and to establish an agreement to rectify the breach of contractual
terms. At January 31, 2013, the Company had no provision for
doubtful accounts.
(b) Liquidity risks analysis
All of the Group's financial liabilities have contractual
maturities of 30 days or are due on demand. The Group does have
issues of transferring money directly out of out of China to have
sufficient cash to meet past liabilities. The Company in Year
Ending January 31, 2013 has generated sufficient cash to meet
current liabilities and reducing past debt in previous fiscal
years. The Company in next fiscal year will sell in part its equity
in companies the Company has interests in to extinguish debt. In
the case of outstanding loans, shares in the Company will
extinguish the loans.
2013 2012
------------------------------------- ----- ------------- ------------ -------------
Held for sale (i) CAD$ 41,650,194 CAD$ 7,608
Loans and receivables (ii) CAD$ 11,292,546 CAD$ 20,406
Other financial liabilities
(iii) CAD$ 4,412,383 CAD$ 2,979,636
Available for sale (iv) CAD$ 4,425 CAD$ 2,652
------------------------------------- ----- ------------- ------------ -------------
(c) Market risks
Market risk is the risk to the Company that the fair value or
future cash flows of financial instruments will fluctuate due to
changes in interest rates and foreign currency exchange rates.
Market risk arises as a result of the Company generating revenues
and incurring expenses in foreign currencies, holding cash and cash
equivalents which earn interest, and having operations based in
countries using currencies other than the Canadian dollar.
(d) Capital management
The group's objectives when managing capital are to safeguard
the group's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital.
In order to maintain or adjust the capital structure, the group
may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce
debts.
(e) Interest Rate Risk
The Company does not currently have financial instruments that
expose the Company to interest rate risk.
(f) Foreign Exchange Risk
The Company's financial instruments are substantially all
denominated in Chinese RMB and the Canadian dollar. Fluctuations in
the exchange rates between the RMB and Canadian dollar could have a
material effect on the Company's business and on the reported
amounts of various financial instruments. The Company does not
utilize any financial instruments or cash management policies to
mitigate the risks arising from changes in foreign currency
rates.
At January 31, 2013, approximately 37% of the Company's net
liabilities are denominated in Chinese RMB and are exposed to
foreign exchange risk.
(g) Fair value
Fair value is used as a certainty of the market value of an
asset (or liability) for which a market price can be determined
(usually because there is no established market for the asset).
Fair value is the amount at which the asset could be bought or sold
in a current transaction between willing parties, or transferred to
an equivalent party, other than in a liquidation sale. This is used
for assets whose carrying value is based on mark-to-market
valuations.
The Company's financial instruments consist of cash, available
for sale financial assets, accounts payable, and amounts due to
related parties. The carrying amounts of these financial
instruments are a reasonable estimate of their fair values because
of their current nature. The available for sale financial assets
are carried at fair values based on quoted market prices.
The Company classifies its fair value measurements in accordance
with an established hierarchy that prioritizes the inputs in
valuation techniques used to measure fair value as follows:
Level 1 - Unadjusted quoted prices in active markets for
identical assets or liabilities;
Level 2 - Inputs other than quoted prices that are observable
for the asset or liability either directly (i.e. as prices) or
indirectly (i.e. derived from prices); and
Level 3 - Inputs that are not based on observable market
date.
Unquoted equity instruments and debt instruments are measured in
accordance with the International Private Equity and Venture
Capital valuation guidelines with reference to the most appropriate
information available at the time of measurement.
The following table sets forth the Company's financial assets
measured at fair value by level within the fair value
hierarchy:
2013 Level 1 Level 2 Level Total 2013
3
-------------------- -------- -------- ----------- -----------
Available for sale
financial assets 4,425 - 41,650,194 41,654,619
-------------------- -------- -------- ----------- -----------
4,425 - 41,659,194 41,654,619
-------------------- -------- -------- ----------- -----------
2012 Level 1 Level 2 Level Total 2012
3
-------------------- -------- -------- ------ -----------
Available for sale
financial assets 2,652 - - 2,652
-------------------- -------- -------- ------ -----------
2,652 - - 2,652
-------------------- -------- -------- ------ -----------
16. RELATED PARTY TRANSACTIONS
Directors' fees
The following amounts were paid to the directors during the year
in the form of remuneration:
31 January 31 January
2013 2012
CAD$ CAD$
Directors'
fees 396,411 116,005
Loans to Directors
The Group has provided its directors with short term loans at
rates comparable to the average commercial rate of interest.
At the year-end amounts outstanding are:
31 January 31 January
2013 2012
CAD$ CAD$
Loans to directors 26,385 20,405*
* Cash advance to Stuart J. Bromley against travel and other
expenditures.
Loans from Directors
Stuart J. Bromley Executive Director provided the Group with
short-term non-interest bearing loans in previous fiscal year. In
the current fiscal year no loans to the Company was made by
Directors.
At the year-end amounts payable are:
31 January 31 January
2013 2012
CAD$ CAD$
Loans from
directors 505,086 1,076,853
Stuart J. Bromley did not charge management fees in the year
ended 31 January 2012 due to debt position of the company. Past
fiscal years management fees was CAD$25,000 per month. This fiscal
year a salary was applied of CAD$300,000 per year plus RMB10,000
per month (total CAD$20,290 per year) in China to comply with
employment and residency permits. Stuart J. Bromley being the only
full time Director no Annual Director Fee was earned rather the
salary as stated above.
During the year each of the Directors earned GBP 24,000 per
year.
17. SUBSEQUENT EVENTS
a) Related Party Fee's which includes Director Fee's totaling
CAD$505,086 have been reduced to zero by way of converting to B
Class shares non-voting to be released at future date by Board
Resolution by independent Directors. The B class shares was awarded
at 3 pence per share due to the long outstanding Directors fees
where by the share price was at an average of GBP0.0165 pence over
the period.
b) In June 2013, Dell Balfour and Jarada have amended their
agreements relating to placements of CIC Gold and CIC Fuels shares
whereby all final outstanding payments will be paid out on or
before 31 December 2013.
18. AUDIT REPORT
We have audited the non-statutory financial statements of CIC
Capital Ltd. for the year ended 31 January 2013 which comprise the
Consolidated Statement of Financial Position, the Consolidated
Statement of Comprehensive Income, the Consolidated Cash Flow
Statement, the Consolidated Statement of Changes in Equity and the
related notes numbered 1 to 17.
The financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union.
This report is made solely to the company's members, as a body.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of directors and auditors
As explained more fully in the Statement of Directors'
Responsibilities, the directors are responsible for the preparation
of the non-statutory financial statements and for being satisfied
that they give a true and fair view. Our responsibility is to audit
and express an opinion on the non-statutory financial statements in
accordance with applicable law and International Standards on
Auditing (UK and Ireland). Those standards require us to comply
with the Auditing Practices Board's Ethical Standards for
Auditors.
Scope of the audit of the non-statutory financial statements
An audit involves obtaining evidence about the amounts and
disclosures in the non-statutory financial statements sufficient to
give reasonable assurance that the non-statutory financial
statements are free from material misstatement, whether caused by
fraud or error. This includes an assessment of: whether the
accounting policies are appropriate to the company's circumstances
and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the
directors; and the overall presentation of the non-statutory
financial statements.
In addition, we read all the financial and non-financial
information in the Chairman's Statement to identify material
inconsistencies with the audited non-statutory financial
statements. If we become aware of any apparent material
misstatements or inconsistencies we consider the implications for
our report.
Opinion on the non-statutory financial statements
In our opinion the non-statutory financial statements:
-- give a true and fair view of the state of the Group's affairs
as at 31 January 2013 and of its profit for the year then ended;
and
-- have been properly prepared in accordance with IFRSs as adopted by the European Union.
Emphases of matter - Going Concern & Valuation of Assets
In forming our opinion, which is not modified, we have
considered the adequacy of the disclosure made in:
-- note 2.3 regarding the Group's ability to continue as a going
concern. The future operations of the Group are dependent on the
receipt of funds from the sale of equity interests to cover both
working capital and meeting its liabilities as they fall due. These
conditions indicate the existence of a material uncertainty which
may cast significant doubt about the Group's ability to continue as
a going concern. The non-statutory financial statements do not
include the adjustments that would result if the Group were not to
continue as a going concern
-- note 8 to the financial statements, which concerns the
Group's valuation model applied in determining the fair value of
its available for sale investments. The note highlights that the
valuation of these assets is based on assumptions and that the
valuation overall represents a best possible estimate based on
available information. If the assumptions need to be adjusted in
respect of future events or information, the valuation of these
investments may be subject to significant changes.
Crowe Clark Whitehill LLP
Chartered Accountants
St Brides House
10 Salisbury Square
London, EC4Y 8EH, UK
This information is provided by RNS
The company news service from the London Stock Exchange
END
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