TIDMCAF
RNS Number : 5696X
China Africa Resources PLC
09 May 2016
China Africa Resources plc
("China Africa Resources" or "the Company")
Final Results for the Period to 31 December 2014
China Africa Resources plc is pleased to announce its final
results for the period to 31 December 2015.
Financial Results
During the year the Group made a loss of US$0.6 million (2014-
US$0.8 million). The loss incurred during the year consists of
costs of running the head office in London and associated listing
and regulatory requirements. All costs of the Berg Aukas
feasibility study have been capitalised.
As at 31 December 2015 the Group had US$0.7 million (2014-
US$1.2 million) in cash reserves.
The company received a loan for US$200,000 from its parent, HK
ECE in the year. The loan bears interest at 12 month libor and is
repayable on 30 June 2016. In common with many exploration and
development companies, the Company raises finance for its
activities in discrete tranches. The Group and the Company has not
generated revenues from operations. As such, the Group's and
Company's ability to continue to adopt the going concern
assumptions will depend upon a number of matters including future
successful capital raisings for necessary funding or loans from
third parties. In order to continue to meet the Group's working
capital needs, loan repayments and development plans further
funding will be required. In the event that the Company is unable
to secure further finance either through third parties or capital
raising, it may not be able to fully develop its projects or meet
its working capital requirements. In the absence of such further
financing opportunities being successful, there exists a material
uncertainty that may cast significant doubt on the entity's ability
to continue as a going concern, and therefore, it may be unable to
realise it's assets and discharge its liabilities in the ordinary
course of business.
Review of the year
During the year the Group has engaged in reviewing options to
fund the feasibility study for the Berg Aukas Mine in Namibia
having successfully completed the pre- feasibility study last
year.
The pre-feasibility study of the Berg Aukas mine demonstrates it
to be a viable project. The project has pre-tax Net Present Values
(NPVs), with an effective date of November 2013, using a discount
rate of 10% of between US$49 million and US$51 million
(best-estimated value), dependent on the processing option
selected. The post tax NPV is US$29m on best-estimated value, with
a pre-tax internal Rate of Return (IRR) of 25% in real US$
terms.
We are also continuing to seek opportunities to enlarge the Lead
and Zinc asset base of CAR and grow the Company for the benefit of
our shareholders.
The directors continue to seek funding to finance the
feasibility study of Berg Aukus.
Cungen Ding
Director and Chairman of the Board
For further information please contact:
Rod Webster, Chief Executive
Officer
Kevin Ellis, CFO and Company
Secretary +44 (0) 1707 800774
RFC Ambrian Limited
(Nominated Adviser & Broker)
Stephen Allen / Kim Eckhof +44 (0) 20 3440 6800
Further information is available on the Company's website
www.chinaafricares.com
Principal risks and Uncertainties
Nature of Risk How we manage it
---------------------------------- --------------------------------
Funding Risk We believe the Berg Aukas
The company will need to feasibility study will
secure additional funding be attractive to investors.
to complete its feasibility Ongoing costs have been
study. reduced to the minimum
Impact and the Group can look
Shortage of cash for completion to its key shareholders
of the feasibility study. for support until investment
is found.
---------------------------------- --------------------------------
Project Risk We manage the project in
The feasibility study of stages to minimise investment
Berg Aukas is not considered at each decision making
bankable. point.
Impact We have already completed
Berg Aukas cannot be developed. the pre feasibility study
for the Berg Aukas mine
which indicates the potential
feasibility of the project.
---------------------------------- --------------------------------
Currency and Commodity Management and Directors
Risk review trends in the commodity
The Group's costs and the markets and exchange rates
feasibility of its projects on a regular basis when
are affected by exchange considering the Group's
rate movements between risk management strategy.
the US dollar and other The Namibian dollar has
currencies specifically been a depreciating currency
the Namibian dollar and for several years. As funding
sterling. and revenue is generally
Impact denominated in US dollars
Costs increase and revenue this reduces costs. The
decreases. Group will review the need
to hedge commodity prices
as and when appropriate.
The Group maintains balances
in the UK in sterling and
US dollar to reduce risk.
---------------------------------- --------------------------------
Human Resources Risk The Group outsources the
The achievement of the development of its project
Group's objectives will to Weatherly International
be dependent on the Group plc who has an established
attracting qualified and presence in Namibia. Weatherly
motivated staff. will also assist in the
Impact recruitment stage when
The efficiency of a particular appropriate.
aspect of the Group's operations
could be affected leading
to reduced profitability.
---------------------------------- --------------------------------
Country Risk The Fraser Institute annual
Some investors may perceive survey of mining destinations
Namibia as a high risk (2015) rates Namibia as
country in which to operate. the top country in Africa
Impact for investment attractiveness.
Legal, regulatory or political The Government pursues
changes could impact on a constant strategy of
the Group's operations. encouraging investment
in the country and is keen
to keep the climate attractive
for foreign investors.
---------------------------------- --------------------------------
Business Review & Development
Key Performance indicators
KPI Measure Performance
-------------------- ------------------------ ------------------------
Shareholder returns Share price performance The company's share
price dropped from
11.5p to 4.1p in
a year that was
generally punishing
for the mining
sector. Improvements
in the coming year
will be dependent
on whether to progress
to a full feasibility
study or not.
-------------------- ------------------------ ------------------------
Cash flows Cash balances Cash balances reduced
from US$1.2m to
$0.7m. The Group
implemented a series
of cost savings
initiatives to
reduce the cash
burn going forward.
-------------------- ------------------------ ------------------------
Performance of Achievement of The pre feasibility
mine development project milestones study indicates
the Berg Aukas
mine is a viable
development project.
-------------------- ------------------------ ------------------------
Corporate and Social Responsibility Report (CSR)
China Africa Resources plc is committed to complying with all
Health and Safety, environmental and social legislation in the
countries in which it operates and protecting the health and
general well being of its employees and contractors. It is
committed to preserving the environment and the communities in the
areas where we operate.
Environment
Concern for the environment is of upmost importance to China
Africa Resources plc. As well as meeting all the environmental
standards required by Namibian legislation it is our policy to
reduce to a minimum the potential environmental impact of our
activities and have a positive impact on the areas in which we
operate.
Health, Safety and Security
The health, safety and security of the personnel and communities
in which we operate takes priority in the management of our
operations. Our goal is to prevent injury and ill health to
employees and contractors by providing a safe and healthy working
environment and by minimising risks associated with occupational
hazards.
Business Ethics
China Africa Resources plc is committed to carrying out all its
operations with high moral and legal standards. China Africa
Resources plc has an anti-corruption and anti-bribery policy which
are in line with the requirements of the UK Bribery Act. Staff and
contractors are made aware of their obligations both on recruitment
and by periodical updates.
The strategic Report was approved by the Board of Directors on 6
March 2016 and was signed on its behalf by Cungen Ding, Chairman of
the Board.
Cungen Ding
Director and Chairman of the Board
Directors' report
Principal activity
The principal activity of China Africa Resources Plc is the
exploration and development of base metals, primarily lead and
zinc.
The subsidiary undertaking principally affecting the profits or
net assets of the Group in the period is China Africa Resources
Namibia (pty) Ltd.
Business review and future development
A review of the business and future developments of the Group
are included within the Chairman's statement and the strategic
report.
Results and dividends
During the year the Group made a loss of US$0.6 million (2014-
US$0.8m). The loss incurred during the year consists of costs of
running the head office in London and associated listing and
regulatory requirements. All costs of the Berg Aukas feasibility
study have been capitalised. The Directors do not recommend payment
of a dividend (2014: nil).
Going concern
In common with many exploration and development companies, the
Company raises finance for its activities in discrete tranches. The
Group and the Company has not generated revenues from operations.
As such, the Group's and Company's ability to continue to adopt the
going concern assumptions will depend upon a number of matters
including future successful capital raisings for necessary funding
or loans from third parties.
In order to continue to meet the Group's working capital needs,
loan repayments and development plans further funding will be
required. In the event that the Company is unable to secure further
finance either through third parties or capital raising, it may not
be able to fully develop its projects or meet its working capital
requirements. In the absence of such further financing
opportunities being successful, there exists a material uncertainty
that may cast significant doubt on the entity's ability to continue
as a going concern, and therefore, it may be unable to realise it's
assets and discharge its liabilities in the ordinary course of
business.
Post reporting date events
No matters or circumstances have arisen since the end of the
period to the date of signature of these financial statements which
significantly affected or may significantly affect the operations
of the Group or Company, the results of those operations or the
state of affairs of the Group or Company in future financial
years.
Directors
The Directors who served during the year ended 31 December 2015
and up to the date of signing the financial statements were as
follows:
Cungen Ding Non Executive Chairman
Roderick Webster Chief Executive Officer
John Bryant
Frank Lewis
Li Ming
James Richards
Jingbin Tian (Resigned 16 November 2015)
Wuming Wang
All directors except Roderick Webster were non executives.
Directors' indemnities
China Africa Resources plc maintained liability insurance for
its Directors and officers during the period and also as at the
date of the report of the Directors. This Group cover extends to
and includes the Directors and officers of the subsidiary
Company.
Financial instruments
The financial risk management policies and objectives are set
out in detail in Note 23 of the financial statements.
Information on exposure to risks
Price and cash flow risks are discussed in the Strategic report,
while credit and liquidity risks are covered in note 23.
Statement as to disclosure of information to auditors
The Directors who were in office on the date of approval of
these financial statements have confirmed, as far as they are
aware, that there is no relevant audit information of which the
auditors are unaware. Each of the Directors have confirmed that
they have taken all the steps that they ought to have taken as
Directors in order to make themselves aware of any relevant audit
information and to establish that it has been communicated to the
auditor.
Auditors
BDO LLP have expressed their willingness to continue in office
and a resolution to re-appoint them as auditors will be proposed at
the next annual general meeting.
By order of the Board
Rod Webster
Director
Directors' Remuneration Report
The Group remunerate the Directors at a level commensurate with
the size of the Group and the experience of its Directors. Only the
two Independent Non-Executive Directors are remunerated directly by
China Africa Resources Plc as the other Directors are all
remunerated directly by the company that nominated them to the
Board of Directors. However as the Group grows it will be necessary
to recruit senior management and the Remuneration Committee will
review the Directors' remuneration and that of senior management to
ensure that it upholds the objectives of the Group with regard to
this issue. Details of Directors' emoluments and of payments made
for professional services rendered are set out below:
Other
2015 Fees Benefits Total
US$'000 US$'000 US$'000
Frank
Lewis 40 - 40
James
Richards 40 - 40
80 - 80
Other
2014 Fees Benefits Total
US$'000 US$'000 US$'000
Frank
Lewis 49 - 49
James
Richards 49 - 49
98 - 98
On behalf of the Remuneration Committee
James Richards
Non Executive Director
Corporate governance
Introduction
The Board of Directors is committed to high standards of
corporate governance.
The Board is accountable to its shareholders for good
governance, and the statement below is based on the review of
corporate governance that was carried out prior to the listing of
the Company on AIM and as reviewed by the Audit Committee and
describes how the principles of good governance have been applied.
Due to the size and nature of its operations the Group does not
seek to comply with the provisions of the UK Corporate Governance
Code in its entirety.
Constitution of the Board
During the year there were two Board meetings, two Audit
Committee Meetings and no Remuneration Committee meetings or
Nomination Committee meetings. Attendance at the Board meetings is
shown below.
The Directors' attendance was as follows:
Number of meetings
Cungen Ding Non Executive Chairman (2/2)
Chief Executive
Roderick Webster Officer (1/2)
John Bryant (2/2)
Frank Lewis (2/2)
Li Ming (1/2)
James Richards Senior Independent (2/2)
Jingbin Tian (1/2)
Wuming Wang (1/2)
Committees of the Board
The Audit Committee is made up of Frank Lewis (Chairman), John
Bryant, James Richards and Cungen Ding.
Attendance was as follows:
Number of meetings
Frank Lewis Chairman (2/2)
John Bryant (2/2)
Cungen Ding (2/2)
James Richards (2/2)
The Audit Committee meets as required. It reviews the financial
reports and accounts and the preliminary and interim statements,
including the Board's statement on internal financial control in
the annual report, prior to their submission to the Board for
approval. The Audit Committee also reviews corporate governance
within the Group and reports on this to the Board. In addition, it
assesses the overall performance of the external auditor including
scope, cost effectiveness and objectivity of the audit.
The Audit Committee is also charged with reviewing the
independence of the external auditor and monitors the level of
non-audit fees. These fees are disclosed in note 7. In the opinion
of the Audit Committee, which has reviewed these fees and the
procedures that BDO have in place to ensure they retain their
independence, the auditor's independence is not compromised. The
Committee met twice in 2015 to perform its functions in respect of
the review of the Report and Accounts.
The Audit Committee can meet for private discussion with the
external auditor, who attends its meetings as required. The Company
Secretary acts as secretary to the committee.
The Remuneration Committee is made up of James Richards
(Chairman), Frank Lewis and John Bryant. Jingbin Tian served until
his resignation from the Board on 16 November 2015.
The Remuneration Committee did not meet in 2015. It should be
noted that the Board has determined the remuneration of the
Independent Non-Executive Directors. All the other Directors do not
receive any direct remuneration from the Company but are paid by
the company that nominated them to the Board. In the future as the
Company develops the Remuneration Committee will determine on
behalf of the Board, the Group's policy on executive remuneration
and the remuneration packages for executive Directors. It would
also approve and administer any executive share option scheme and
the grant of options as part of a remuneration package.
The Nominations Committee is made up of Wuming Wang (Chairman),
James Richards and Frank Lewis and did not meet during the period
under review.
Internal control
The Board is responsible for reviewing and approving the
adequacy and effectiveness of the Group's internal controls,
including financial and operational control, risk management and
compliance.
The key elements of the Group's internal control are set out in
the Accounting Procedures Manual and the Board Protocol and
contain:
-- a clearly defined structure for the Group, its subsidiaries and management teams;
-- powers which the Board has reserved for itself. These include
the approval of all business plans and budgets for the Group and
its subsidiary, the establishment of subsidiary companies and
appointment of Directors to them, and the process for project
approval and capital expenditure;
-- terms of reference for the Audit, Remuneration and
Nominations Committees, which define the roles of their
members;
-- information about how often the Board should meet (as a
minimum) and an annual cycle of meetings. This covers the process
for the preparation of Board agendas and, Board papers and their
prior consideration by the Management team at its weekly
meetings;
-- detailed business plans and budgets to be approved annually
and performance monitored by the Management team and Board at its
meetings, which occur on a quarterly basis; and
-- procedures for the approval of expenditure, the levels of
authority and the management controls.
The Directors acknowledge their responsibility for the Group's
system of internal financial control and risk management, and place
considerable importance on maintaining this. The Manual of Internal
Control and the process for authorisation that it imposes, together
with the Board Protocol setting out the process for authorising
business plans, budgets and projects, form an important part of our
decision making process; however, this can only provide reasonable
and not absolute assurance against material errors, losses or
fraud.
There is currently no internal audit function within the Group
owing to the small size of the administrative function. However,
there is a high level of review by Directors and a clear
requirement for them to authorise transactions. Should the need for
a separate internal audit function become apparent, the Board will
establish one.
The Board Protocol and the Accounting Procedures Manual have
both been updated and refined as China Africa Resources Plc
business evolves and grows.
Bribery Act
At its Board Meeting on 16 May 2011 the Company adopted a Policy
for Compliance with the Bribery Act 2010 together with a set of
Management Procedures; these were reviewed by the Audit Committee
at its meetings in March 2015.
Relations with shareholders
The Company endeavours to maintain communication with
shareholders through regulatory announcements, via the Company's
website and by direct contact with its major shareholders. The
Board values the views of its shareholders and fosters continuing
dialogue with investment and fund managers, other investors and
equity analysts to ensure that the investing community receives an
informed view of the Group's prospects, plans and progress.
Directors' responsibilities
The Directors are responsible for preparing the strategic report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have elected to prepare the Group and Company financial statements
in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union. Under company law the
Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of
affairs of the Group and Company and of the profit or loss of the
Group and Company for that period. The Directors are also required
to prepare financial statements in accordance with the rules of the
London Stock Exchange for companies trading securities on the
Alternative Investment Market.
In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether they have been prepared in accordance with
IFRSs as adopted by the European Union, subject to any material
departures disclosed and explained in the financial statements;
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the company and enable them to ensure that
the financial statements comply with the requirements of the
Companies Act 2006. They are also responsible for safeguarding the
assets of the company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the annual report and
the financial statements are made available on a website. Financial
statements are published on the Company's website in accordance
with legislation in the United Kingdom governing the preparation
and dissemination of financial statements, which may vary from
legislation in other jurisdictions. The maintenance and integrity
of the Company's website is the responsibility of the Directors.
The Directors' responsibility also extends to the ongoing integrity
of the financial statements contained therein.
Independent Auditor's Report to the Members of China Africa
Resources plc
We have audited the financial statements of China Africa
Resources Plc for the year ended 31 December 2015 which comprise
the consolidated income statement, the consolidated statement of
comprehensive income, the consolidated and Company statement of
financial position, the consolidated and Company statement of
changes in equity, the consolidated and Company cash flow
statements and the related notes. 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 and as regards the parent company financial
statements, as applied in accordance with the provisions of the
Companies Act 2006.
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
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 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 financial statements in accordance with applicable
law and International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Financial Reporting
Council's (FRC's) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements
is provided on the FRC's website at
www.frc.org.uk/auditscope/private.cfm.
Opinion on financial statements
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and the parent company's affairs as at 31
December 2015 and of the Group's loss for the year then ended;
-- the Group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
-- the parent Company's financial statements have been properly
prepared in accordance with IFRS'S as adopted by the European Union
and as applied in accordance with the provisions of the Companies
Act 2006; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Emphasis of matter - Going concern
In forming our opinion on the financial statements, which is not
modified, we have considered the adequacy of the disclosures made
in note 3 to the financial statements concerning the Group's and
the Company's ability to continue as a going concern. The Directors
note that additional funds need to be raised either through equity
raisings or other financial arrangements. This cannot be guaranteed
and there are no legally binding agreements in place relating to
the raising of additional funds. These circumstances indicate the
existence of a material uncertainty, which may cast significant
doubt on the Group and the Company's ability to continue as a going
concern. The financial statements do not include the adjustments
that would result if the Company were unable to continue as a going
concern.
Opinion on other matters prescribed by the Companies Act
2006
In our opinion the information given in the Strategic Report and
Directors' Report for the financial year for which the financial
statements are prepared is consistent with the financial
statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of Directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Scott Knight (senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
London, United Kingdom
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
Consolidated income statement
For the year ended 31 December 2015
Year Year
ended ended
31 December 31 December
2015 2014
Note US$'000 US$'000
Administrative expenses (546) (784)
Operating loss 6 (546) (784)
Finance cost 10 (16) (49)
Loss for the year before
taxation (562) (833)
Tax expense 11 - -
Loss for the year attributable
to the equity holders
of the parent (562) (833)
Year Year
ended ended
Loss per share expressed 31 December 31 December
in US cents 2015 2014
Basic and diluted attributable
to the equity holders
of the parent 12 (2.44c) (3.61c)
All amounts relate to continuing activities during the
period.
Consolidated statement of comprehensive income
For the year ended 31 December 2015
Year Year
ended ended
31 December 31 December
2015 2014
Note US$'000 US$'000
(Restated)
Loss for the year attributable
to the equity holders
of the parent (562) (833)
Items that may be reclassified
to profit and loss
Exchange differences
on translation of foreign
operations (1,351) (504)
Total comprehensive
loss for the year attributable
to equity holders of
the parent (1,913) (1,337)
Consolidated and Company statements of financial position
As at 31 December 2015
Group Group Group Company Company
as at as at as as at as at
at
31 December 31 December 1 January 31 December 31 December
2015 2014 2014 2015 2014
Note US$'000 US$'000 US$'000 US$'000 US$'000
Assets (Restated) (Restated)
Non-current
assets
Intangible
assets 13 3,137 4,474 4,940 - -
Property,
plant and
equipment 14 3 9 14 - -
Investment
in subsidiary 15 - - - 3,567 4,156
Loans to subsidiaries 16 - - - - 4,789
Total non-current
assets 3,140 4,483 4,954 3,567 8,945
Current assets
Trade and
other receivables 17 22 24 77 17 18
Cash and cash
equivalents 18 675 1,151 1,922 645 1,105
697 1,175 1,999 662 1,123
Total assets 3,837 5,658 6,953 4,229 10,068
Current liabilities
Trade and
other payables 19 (70) (178) (136) (68) (178)
Loans 20 (200) - - (200) -
Total liabilities (270) (178) (136) (268) (178)
Net assets 3,567 5,480 6,817 3,961 9,890
Equity
Share capital 21 377 377 377 377 377
Share premium 6,556 6,556 6,607 6,556 6,556
Merger relief
reserve 4,052 4,052 4,052 4,052 4,052
Foreign exchange
reserve (3,968) (2,617) (2,113) - -
Retained deficit (3,450) (2,888) (2,106) (7,024) (1,095)
Equity attributable
to shareholders
of the parent
company 3,567 5,480 6,817 3,961 9,890
R J Webster
Chief Executive Officer
Consolidated and Company statements of changes in equity
For the year ended 31 December 2015
Share Share Merger Foreign Retained Total
capital premium relief exchange deficit
reserve reserve
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
The Group
Balance at 31 December
2013 377 6,607 4,052 (724) (2,106) 8,206
Prior year adjustment - - - (1,389) - (1,389)
Balance at 31 December
2013 (Restated) 377 6,607 4,052 (2,113) (2,106) 6,817
Loss for the period - - - - (833) (833)
Other comprehensive
income
Exchange differences
on translation of
foreign operations
(Restated) - - - (504) - (504)
Total Comprehensive
income 377 6,607 4,052 (2,617) (2,939) 5,480
Share based payments - (51) - - 51 -
Balance at 31 December
2014 (Restated) 377 6,556 4,052 (2,617) (2,888) 5,480
Loss for the period - - - - (562) (562)
Other comprehensive
income
Exchange differences
on translation of
foreign operations - - - (1,351) - (1,351)
Balance at 31 December
2015 377 6,556 4,052 (3,968) (3,450) 3,567
The Company
Balance at 31 December
2013 377 6,607 4,052 - (1,060) 9,976
Loss for the period - - - - (86) (86)
Total Comprehensive
income 377 6,607 4,052 - (1,146) 9,890
Share based payments - (51) - - 51 -
Balance at 31 December
2014 377 6,556 4,052 - (1,095) 9,890
Loss for the period - - - - (5,929) (5,929)
Balance at 31 December
2015 377 6,556 4,052 - (7,024) 3,961
The following describes the nature and purpose of each reserve
within owners' equity
Reserve Description and purpose
Share capital Nominal value of shares issued.
Share premium Amount subscribed for share capital
in excess of nominal value.
Merger relief reserve Reserve created on issue of shares
on acquisition of its subsidiary
in accordance with Companies Act
2006 provisions.
Foreign exchange Cumulative translation differences
reserve of net assets of subsidiary.
Retained deficit Cumulative net gains and losses recognised
in the consolidated statement of
comprehensive income.
Consolidated and Company cash flow statements
For the year ended 31 December 2015
Group Group Company Company
Year Year Year Year
ended ended ended ended
Notes 31 December 31 December 31 December 31 December
2015 2014 2015 2014
US$'000 US$'000 US$'000 US$'000
Cash flows from
operating activities
Loss for the year (562) (833) (5,929) (86)
Adjusted by:
Depreciation 14 4 4 - -
Unrealised exchange
losses (33) (47) (37) (37)
Impairment of loans
to subsidiaries - - 588 -
Non cash items within
loans to subsidiary
company - - 4,789 (736)
(591) (876) (589) (859)
Movements in working
capital
Decrease in trade
and other receivables 17 2 53 2 54
(Decrease) / increase
in trade and other
payables 19 (120) 42 (110) 47
Net cash used in
operating activities (709) (781) (697) (758)
Cash flows used
in investing activities
Payments for evaluation
of feasibility studies - (37) - -
Net cash used in
investing activities - (37) - -
Cash flows used
in financing activities
Receipt of loans 200 200
Net cash inflow
from financing activities 200 - 200 -
Decrease in cash (509) (818) (497) (758)
Reconciliation to
net cash
Opening cash balance 1,151 1,922 1,105 1,826
Decrease in cash (509) (818) (497) (758)
Foreign exchange
movements 33 47 37 37
Cash and cash equivalents
at year end 18 675 1,151 645 1,105
Notes to the consolidated financial statements
For the 12 month year ended 31 December 2015
1. NATURE OF OPERATIONS AND GENERAL INFORMATION
China Africa Resources plc and subsidiary ("the Group's")
principal activities include exploration and evaluation of mining
assets.
China Africa Resources plc is incorporated and domiciled in
England. The address of China Africa Resources plc's registered
office, which is also its principal place of business, is 180
Piccadilly, London W1J 9HF. China Africa Resources plc's shares are
listed on the Alternative Investment Market of the London Stock
Exchange.
China Africa Resources plc's financial statements are presented
in United States dollars (US$), which is also the functional
currency of the parent company.
These consolidated financial statements were approved for issue
by the Board of Directors.
2. STANDARDS AND INTERPRETATIONS NOT YET APPLIED BY THE GROUP
2.1 Overall considerations
The company has adopted the new interpretations, revisions and
amendments to IFRS issued by the International Accounting Standards
Board.
The adoption had no significant effects on current, prior or
future periods due to the first-time application of these new
requirements in respect of presentation, recognition and
measurement. An overview of relevant new standards, amendments and
interpretations to IFRS's issued but not yet effective is given in
note 2.2.
2.2 Standards, amendments and interpretations to existing
standards that are not yet effective and have not been adopted
early by the company
At the date of authorisation of these financial statements,
certain new standards, amendments and interpretations to existing
standards have been published but are not yet effective, and have
not been adopted early by the Group.
Management anticipates that all of the pronouncements will be
adopted in the Group's accounting policy for the first period
beginning after the effective date of the pronouncement. The new
standards and interpretations are not expected to have a material
impact on the Group's financial statements.
-- IFRS 9 Financial Instruments (effective 1 January 2018) (not yet EU adopted)
-- IFRS 5 Non Current assets held for resale and discontinued
operations (effective 1 January 2016)
-- IFRS 10 The narrow-scope amendments to IFRS 10 Consolidates
Financial Statements (effective 1 January 2016)
-- IFRS 11 Amendments to Joint Arrangements (effective 1 January 2016)
-- IFRS 12 Amendments to Disclosure of Interest in Other Entities (effective 1 January 2016)
-- IAS 1 Amendments to Presentation of Financial Statements (effective 1 January 2016)
-- IAS 16 Amendments to Property, Plant and Equipment (effective 1 January 2016)
-- IAS19 Amendments to Employee Benefits (effective 1 January 2016)
-- IAS 27 Amendments to Consolidated and Separate Financial
Statements (effective 1 January 2016)
-- IAS 28 Amendments to Investments in Associates and Joint
Ventures (effective 1 January 2016)
-- IAS 34 Amendments to Interim Financial Reporting (effective 1 January 2016)
-- IAS 38 Amendments to Intangible Assets (effective 1 January 2016)
3. SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the European Union.
Going concern
In common with many exploration and development companies, the
Company raises finance for its activities in discrete tranches. The
Group and the Company has not generated revenues from operations.
As such, the Group's and Company's ability to continue to adopt the
going concern assumptions will depend upon a number of matters
including future successful capital raisings for necessary funding
or loans from third parties.
In order to continue to meet the Group's working capital needs,
loan repayments and development plans further funding will be
required either through equity raisings or other financial
arrangements. This cannot be guaranteed and there are no legally
binding agreements in place relating to the raising of additional
funds. In the event that the Company is unable to secure further
finance it may not be able to fully develop its projects or meet
its working capital requirements. In the absence of such further
financing opportunities being successful, there exists a material
uncertainty that may cast significant doubt on the entity's ability
to continue as a going concern, and therefore, it may be unable to
realise its assets and discharge its liabilities in the ordinary
course of business.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the company and entities controlled by the company
(its subsidiary) made up to 31 December each year. The company
controls an investee if all three of the following elements are
present: power over the investee, exposure to variable returns from
the investee and the ability of the investor to use its power to
affect those variable returns.
The results of acquired operations are included in the
consolidated statement of comprehensive income from the date on
which control is obtained. They are deconsolidated from the date on
which control ceases.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by the Group.
All intra-Group transactions, balances, income and expenses and
intra-Group unrealised profits and losses are eliminated on
consolidation.
Intangible assets
Exploration and evaluation costs
Exploration and evaluation expenditure in relation to each
separate area of interest are recognised as an exploration and
evaluation asset in the period in which they are incurred where the
following conditions are satisfied:
(i) the rights to tenure of the area of interest are current; and
(ii) at least one of the following conditions must also be met:
(a) The exploration and evaluation expenditures are expected to
be recouped through successful development and exploration of the
area of interest, or alternatively, by its sale, or
(b) Exploration and evaluation activities in the area of
interest have not, at the reporting date, reached a stage which
permits a reasonable assessment of the existence or otherwise of
economically recoverable reserves, and active and significant
operations in, or in relation to, the area of interest are
continuing.
Exploration and evaluation assets are initially measured at cost
and include the acquisition of rights to explore, studies,
exploratory drilling, trenching and sampling and associated
activities and an allocation of depreciation and amortisation of
assets used in exploration and evaluation activities. General,
administrative and any share based payment costs are only included
in the measurement of exploration and evaluation costs where they
are related directly to exploration and evaluation activities in a
particular area of interest.
Exploration expenditure is transferred to property, plant and
equipment upon achieving a bankable feasibility study. An
impairment test is required prior to transfer to property, plant
and equipment.
Property, plant and equipment
Property, plant and equipment are recorded at cost, net of
accumulated depreciation and any provision for impairment.
Depreciation is provided using the straight-line method to write
off the cost of the asset less any residual value over its useful
economic life as follows:
Plant and machinery 3 to 15 years
Impairment of intangible assets
At each reporting date, the Group reviews its intangible assets
to determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any). Where the asset does
not generate cash flows that are independent from other assets, the
Group estimates the recoverable amount of the cash-generating unit
to which the asset belongs.
The recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised as an expense
immediately.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (cash-generating unit) in prior years. A reversal of
an impairment loss is recognised as income immediately, unless the
relevant asset is carried at a revalued amount, in which case the
reversal of the impairment loss is treated as a revaluation
increase.
Foreign currency translation
The individual financial statements of each Group company are
presented in the currency of the primary economic environment in
which it operates (its functional currency). For the purpose of the
consolidated financial statements, the results and financial
position of each Group company are expressed in US dollars, which
is the functional currency of the company and the presentation
currency for the consolidated financial statements.
In preparing the financial statements of the individual
companies, transactions in currencies other than the entity's
functional currency (foreign currencies) are recorded at the rates
of exchange prevailing on the dates of the transactions. At each
reporting date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing on the reporting date. Non-monetary items carried at
fair value that are denominated in foreign currencies are
translated at the rates prevailing at the date when the fair value
was determined. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not retranslated.
Exchange differences arising, if any, are recognised in profit or
loss except for:
-- exchange differences which relate to assets under
construction for future productive use, which are included in the
cost of those assets when they are regarded as an adjustment to
interest costs on foreign currency borrowings;
Exchange differences recognised in the profit or loss in the
Group entities' separate financial statements on the translation of
long-term monetary items forming part of the Group's net investment
in the overseas operation concerned are reclassified to other
comprehensive income and accumulated in the foreign exchange
reserve on consolidation.
On consolidation, exchange differences arising from the
translation of the net investment in foreign entities are
recognised in other comprehensive income and accumulated in the
Group's foreign currency translation reserve. On disposal of a
foreign operation, the cumulative amount of exchange differences
relating to that operation is reclassified from equity to profit or
loss.
Taxes
The tax expense represents the sum of the tax currently payable
and deferred tax.
The tax currently payable is based on taxable result for the
period. Taxable profit differs from net profit as reported profit
or loss because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items
that are never taxable or deductible. The Group's liability for
current tax is calculated using tax rates that have been enacted or
substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences, and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if
the temporary difference arises from the initial recognition of
goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and associates,
and interest in joint ventures, except where the Group is able to
control the reversal of the temporary difference and it is expected
that the temporary difference will not reverse in the foreseeable
future. In addition, tax losses available to be carried forward as
well as other tax credits to the Group are assessed for recognition
as deferred tax assets.
The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised. Deferred tax is charged or credited in profit or loss,
except when it relates to items charged or credited directly to
equity, in which case the deferred tax is also dealt with in
equity. Tax relating to items recognised in other comprehensive
income is recognised in other comprehensive income.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to taxes levied by the
same taxation authority and the Group intends to settle its current
tax assets and liabilities on a net basis.
Financial instruments, assets and liabilities
The Group uses financial instruments comprising cash, loans to
subsidiaries, trade receivables and trade payables that arise from
its operations.
Financial assets
The only financial assets currently held by the Group are
classified as loans and receivables and cash and cash equivalents.
These assets are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They
are initially recognised at fair value plus transaction costs that
are directly attributable to their acquisition or issue, and are
subsequently carried at amortised cost using the effective interest
rate method, less provision for impairment.
Impairment provisions are recognised when there is objective
evidence (such as significant financial difficulties on the part of
the counterparty or default or significant delay in payment) that
the Group will be unable to collect all of the amounts due under
the terms receivable, the amount of such a provision being the
difference between the net carrying amount and the present value of
the future expected cash flows associated with the impaired
receivable. For receivables, which are reported net, such
provisions are recorded in a separate allowance account with the
loss being recognised within administrative expenses in the
consolidated statement of comprehensive income. On confirmation
that the receivable will not be collectable, the gross carrying
value of the asset is written off against the associated
provision.
Loans and receivables comprise trade and other receivables and
cash and cash equivalents in the statement of financial
position.
Included within loans and receivables are cash and cash
equivalents which include cash in hand and other short term highly
liquid investments with a maturity of three months or less. Any
interest earned is accrued monthly and classified as interest.
Short term deposits comprise deposits made for varying periods of
between one day and three months.
For the purposes of the statement of cash flows, cash and cash
equivalents consist of cash and cash equivalents as defined
above.
Derecognition of financial assets
The Group derecognises a financial asset only when the
contractual rights to the cash flows from the asset expire; or it
transfers the asset and substantially all the risk and rewards of
ownership of the asset to another entity.
Financial liabilities
Trade payables and other short-term monetary liabilities are all
classified as other financial liabilities. At present, the Group
does not have any liabilities classified as fair value through
profit or loss.
Trade payables and other short-term monetary liabilities, are
initially recognised at fair value and subsequently carried at
amortised cost using the effective interest method. All interest
and other borrowing costs incurred in connection with the above are
expensed as incurred and reported as part of financing costs in the
consolidated statement of comprehensive income.
Derecognition of Financial liabilities
The Group derecognises financial liabilities when, and only
when, the Group's obligations are discharged, cancelled or they
expire.
Investment in Subsidiaries
In its separate financial statements the Company recognises its
investments in subsidiaries at cost, less any provision for
impairment. The cost of acquisition includes directly attributable
professional fees and other expenses incurred in connection with
the acquisition. It also includes share based payments issued to
employees of the Company for services provided to subsidiaries.
Finance Income
Finance income is recognised as interest accrues using the
effective interest method.
Loans
Loans are recognised when the Group becomes a party to the
contractual provisions of the instrument and are recognised at fair
value plus transaction costs.
Merger Relief
The difference between the fair value of an acquisition and the
nominal value of the shares allotted in a share exchange has been
credited to a merger relief reserve account, in accordance with the
merger relief provisions of the Companies Act 2006 and accordingly
no share premium for such transactions has been setup.
4. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Group's accounting policies, described
in note 3, the Directors are required to make judgments, estimates
and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future
periods if the revision affects both current and future
periods.
Critical judgment in applying the Group's accounting
policies
The following are the critical judgments that the Directors have
made in the process of applying the Group's accounting policies and
that have the most significant effect on the amounts recognised in
financial statements.
Impairment of intangibles
The Group determines whether intangibles are impaired when facts
and circumstances suggest that the carrying amount may exceed its
recoverable amount. Such indicators include the point at which a
determination is made as to whether or not a commercial reserve
exists. The carrying amount of intangibles at 31 December 2015 was
US$3.1 million, (2014- US$4.5 million) - refer to note 13. At the
end of the year the Directors impaired the inter company loans to
subsidiaries in order to address the disparity between the Group
and Company net assets.
Prior year adjustment
In preparing the financial statements for the year ended 31
December 2015, the Directors have identified that the fair value
uplift of $4.1m attributable to the mining license at Group level
should be considered to have the same functional currency as the
entity which benefits from the license. The prior year financial
statements have therefore been amended to reflect the required
accounting. This has resulted in a decrease of US$1.6m in the
carrying value of the consolidated exploration and evaluation
assets previously reported for the period ended 31 December 2014
with the other side of the adjustment being to the foreign exchange
reserve for the same amount.
5. OPERATING SEGMENTS
Operating segments are reported in a manner consistent with the
internal reporting provided to the Board, who are responsible for
allocating resources and assessing performance of the operating
segment.
The Group had no operating revenue during the year.
The Group currently has one operating segment, the Mining
segment. This segment is currently engaged in the evaluation of the
Berg Aukas Mine in Namibia.
There is only one segment, therefore all IFRS 8 disclosures are
incorporated within other notes to the accounts.
6. OPERATING LOSS
Year ended Year ended
31 December 31 December
This is stated after charging: 2015 2014
US$'000 US$'000
Staff costs (note 8) 86 108
Auditor's remuneration (note
7) 32 51
Depreciation (note 14) 4 4
Management fee 270 360
7. AUDITOR'S REMUNERATION
Year ended Year ended
31 December 31 December
2015 2014
US$'000 US$'000
Remuneration receivable by the
company's auditors for the audit
of 30 47
these accounts
Fees payable to the company's
auditor and its associates
for other
services:
Remuneration receivable by associates
of the company's auditors for 2 4
the audit of subsidiary accounts
Total remuneration 32 51
8. EMPLOYEES AND KEY MANAGEMENT
The total Directors' emoluments for the year were US$80,000
(2014- US$98,000) and social security payments were US$6,000 (2014
- US$10,000). Those of the highest paid director were US$40,000
(2014 - US$49,000). Detailed disclosure of Directors' remuneration
is disclosed in the Directors' remuneration report.
The Group averaged 8 (2014 - 8) employees during the year ended
31 December 2015.
Key management personnel as defined under IAS 24 have been
identified as the Board of Directors.
9. LOSS FOR THE FINANCIAL YEAR
The Company has taken advantage of Section 408 of the Companies
Act 2006 and has not included its own statement of comprehensive
income in these financial statements. The Company's loss for the
year was US$5,929,000 (2014- loss of US$85,000.)
10. FINANCE COSTS
Year ended Year ended
31 December 31 December
2015 2014
US$'000 US$'000
Finance Costs
Exchange losses (16) (49)
Total finance costs (16) (49)
11. TAX EXPENSE
Year ended Year ended
31 December 31 December
2015 2014
US$'000 US$'000
Current tax:
UK corporation tax on the result
for the year - -
------------ ------------
Total current taxation - -
Deferred taxation - -
Taxation - -
Differences explained below:
Loss before tax (562) (833)
Loss before tax multiplied by the
standard CT rate 20.25% (2014:
21.49%) (114) (179)
Effect of:
Differences in local tax rates (376) (186)
Tax losses for future utilisation 212 199
Other short term timing differences 278 166
Tax charge for the year - -
Unrecognised deferred tax provision
Short term timing differences (816) (429)
Tax losses UK (187) (189)
Tax losses Namibia (508) (78)
(1,511) (696)
The deferred tax assets are currently unrecognised as the
likelihood of sufficient future taxable profits does not yet meet
the definition of "probable".
The unrecognised deferred tax asset has no expiry period.
The estimated value of the potential deferred tax asset in
respect of losses was measured using an expected tax rate of 20%
and 37.5% for the UK and Namibian tax losses respectively (2014:
20%, 37.5%).
12. LOSS PER SHARE
The calculation of basic and diluted loss per ordinary share is
based on the following data:
Year ended Year ended
31 December 31 December
2015 2014
Basic and diluted loss per share
(US cents) (2.44c) (3.61c)
Weighted average number of shares
for basic and diluted loss per
share 23,076,924 23,076,924
The basic and diluted earnings per share have been calculated
using the loss attributable to shareholders of the parent company,
China Africa Resources plc, of US$562,000 (2014: US$833,000) as the
numerator, i.e. no adjustment to loss was necessary. The basic and
dilutive loss per share are the same as the Group made a loss in
the year.
13. INTANGIBLE ASSETS
Group Group Group
Mining Evaluation Total
Licenses Costs
US$'000 US$'000 US$'000
(Restated) (Restated)
Cost
At 1 January 2014 4,156 2,173 6,329
Restatememt of opening
balance for exchange
movements (1,389) - (1,389)
At 1 January 2014 2,767 2,173 4,940
Additions - 65 65
Exchange adjustment (256) (275) (531)
At 31 December 2014 2,511 1,963 4,474
Net book value at 31
December 2014 (restated) 2,511 1,963 4,474
Net book value at 31
December 2013 (restated) 2,767 2,173 4,940
Cost
At 1 January 2015 2,511 1,963 4,474
Additions - - -
Exchange adjustment (642) (695) (1,337)
At 31 December 2015 1,869 1,268 3,137
Net book value at 31
December 2015 1,869 1,268 3,137
Net book value at 31
December 2014 (restated) 2,511 1,963 4,474
The mining licenses and evaluation costs relate to the Berg
Aukas mine in Namibia.
In preparing the financial statements for the year ended 31
December 2015, the Directors have identified that the fair value
uplift of US$4.1m attributable to the mining license at Group level
should be considered to have the same functional currency (Namibian
dollars) as the entity which benefits from the license. The prior
year financial statements have therefore been amended to reflect
the required accounting. This has resulted in a decrease of US$1.6m
in the carrying value of the consolidated exploration and
evaluation assets previously reported for the period ended 31
December 2014 with the other side of the adjustment being to the
foreign exchange reserve for the same amount.
14. PROPERTY PLANT AND EQUIPMENT
Group
US$'000
Cost
At 1 January 2014 23
Exchange adjustment (2)
At 31 December 2014 21
Depreciation
At 1 January 2014 9
Charge for the year
for depreciation 4
Exchange adjustment (1)
At 31 December 2014 12
Net book value at
31 December 2014 9
Net book value at
31 December 2013 14
Cost
At 1 January 2015 21
Exchange adjustment (6)
At 31 December 2015 15
Depreciation
At 1 January 2015 12
Charge for the year
for depreciation 4
Exchange adjustment (4)
At 31 December 2015 12
Net book value at
31 December 2015 3
Net book value at
31 December 2014 9
All property plant and equipment can be classified as mobile
plant.
15. INVESTMENT IN SUBSIDARY
Company Company
as at as at
31 December 31 December
2015 2014
US$'000 US$'000
China Africa Resources
Namibia (pty) Ltd
Opening balance 4,156 4,156
Impairment (589) -
3,567 4,156
China Africa Resources Namibia (pty) Ltd is 100% owned by China
Africa Resources plc and is incorporated in the Republic of
Namibia.
On 1 August 2011 the Group acquired 100% of the voting equity
instruments of China Africa Resources Namibia (pty) Ltd a company
whose principal activity is exploration and evaluation of mining
assets in Namibia. The company was acquired by the issuing of
6,326,923 ordinary 1p shares at a price of 40p being the price on
the date of acquisition. The acquisition price was converted to US
dollars at an exchange rate of 1.642. The principal reason for this
acquisition was to develop the Berg Aukas Mine in Namibia.
The impairment recorded within the year has been charged to the
company's income statement. An impairment provision was considered
appropriate given the disparity between the Group and Company Net
Assets.
16. LOANS TO SUBSIDARIES
Company Company
as at as at
31 December 31 December
2015 2014
US$'000 US$'000
China Africa Resources
Namibia (pty) Ltd - 4,789
- 4,789
The intercompany loan is was fully impaired in the year in order
to address the disparity between the Group and Company Net Assets.
The loan remains repayable in November 2018 and is unsecured. The
loan attracts interest of US$ 12 month libor +2%.
17. TRADE AND OTHER RECEIVABLES
Group Group Company Company
as at as at as at as at
31 December 31 December 31 December 31 December
2015 2014 2015 2014
US$'000 US$'000 US$'000 US$'000
Prepayments 12 12 12 12
Sales Taxes 10 12 5 6
22 24 17 18
18. CASH AND CASH EQUIVALENTS
Group Group Company Company
as at as at as at as at
31 December 31 December 31 December 31 December
2015 2014 2015 2014
US$'000 US$'000 US$'000 US$'000
Cash and short
term deposits 675 1,151 645 1,105
19. TRADE AND OTHER PAYABLES - CURRENT
Group Group Company Company
as at as at as at as at
31 December 31 December 31 December 31 December
2015 2014 2015 2014
US$'000 US$'000 US$'000 US$'000
Trade payables 34 136 34 136
Other payables
and accruals 36 42 34 42
------------ ------------ ------------ ------------
70 178 68 178
Trade and other payables are non interest bearing and normally
settled in the month following date of invoice.
20. LOANS
Group Group Company Company
as at as at as at as at
31 December 31 December 31 December 31 December
2015 2014 2015 2014
US$'000 US$'000 US$'000 US$'000
Total loans 200 - 200 -
Short term
portion of
loan (200) - (200) -
Long term portion
of loans - - - -
The loan from the Group's parent HK ECE, is unsecured and bears
interest at 12 month libor and is repayable on 30 June 2016.
21. SHARE CAPITAL
Allotted, called up 31 December 31 December 31 December 31 December
and fully paid 2015 2014 2015 2014
US$ US$ GBP GBP
Ordinary shares of
0.1p converted at
an exchange rate of
GBP:USD 1.642, except
for the share capital
at incorporation,
which was converted
at an exchange rate
of GBP:USD 1.6032 377,001 377,001 230,769 230,769
31 December 31 December
2015 2014
Number of ordinary
0.1p shares in issue 23,076,924 23,076,924
22. CAPITAL AND CONTRACTUAL COMMITMENTS
There were no capital or contractual commitments at 31 December
2015 (2014- nil.).
23. FINANCIAL INSTRUMENTS
Significant accounting policies
Details of the significant accounting policies and methods
adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are
recognised, in respect of each class of financial asset, financial
liability and equity instrument, are disclosed in note 3.
The only financial assets currently held by the Group are
classified as loans and receivables and cash and cash
equivalents.
Categories of financial instruments
The carrying amounts presented in the statement of financial
position relate to the following categories of assets and
liabilities.
Carrying value Carrying value
Group Group Company Company
as at as at as at as at
31 December 31 December 31 December 31 December
2015 2014 2015 2014
US$'000 US$'000 US$'000 US$'000
Financial assets
Current
Loans and receivables
Intercompany receivables - - - 4,789
Trade and other
receivables 10 12 5 6
Cash and cash equivalents 675 1,151 645 1,105
685 1,163 650 5,900
============ ============ ============ ============
Financial liabilities
Current- Amortised
cost
Trade and other
payables (70) (178) (68) (178)
Loans (200) - (200) -
(270) (178) (268) (178)
============ ============ ============ ============
As at 31 December 2015 there were no trade receivables that were
past due (2014- nil) and all are believed to be recoverable.
All financial liabilities are repayable within one year.
The fair value is equivalent to book value for current assets
and liabilities. Non-current liabilities are discounted at
prevailing interest rates for both the long and short term
elements.
The main risks arising from the Group's financial instruments
are liquidity risk, interest rate risk, credit risk and foreign
currency risk. The Directors review and agree policies for managing
these risks and these are summarised below.
Liquidity risk
Liquidity risk arises from the Group's management of working
capital. It is the risk that the Group will encounter difficulty in
meeting its financial obligations as they fall due. As noted
elsewhere in the financial statements the Group's short term loan
of $200,000 from its shareholder HK ECE falls due for repayment on
30 June 2016. The Directors are current assessing the Group's
options in respect of raising additional finance for the
business.
The Directors monitor cash flow on a daily basis and at
quarterly Board meetings in the context of their expectations for
the business, in order to ensure sufficient liquidity is available
to meet foreseeable needs.
Credit risk
The Company monitors the credit risk of its intercompany loan
through its management accounts and assesses the subsidiary's
ability to repay the loans. It also monitors the political risk
within Namibia and its effect on the loan's credit worthiness.
Under existing contractual arrangement loans with subsidiary is
repayable in November 2018. Repayment will be dependent on the mine
going into production and repayment terms will be extended if
necessary.
Interest rate risk
The Group's policy is to minimise interest rate cash flow
exposures on long term financing. At 31 December 2015, the Group
was exposed to changes in market interest rates through its Parent
Company, which are subject to variable interest rates.
The following table illustrates the sensitivity of the net
results for the year and equity to a reasonably possible change in
interest rates of +/-1.0 base points (2014 +/- 1/0 basis points)
with effect from the beginning of the year. These changes are
considered to be reasonably possible based on observations of
current market conditions. The calculations are based on the
Company's financial instruments held at each balance sheet date.
All other variables are held constant.
2015 2014
US$'000 US$'000
+1.0 +1.0
Base Base
points points
Net effect on
after tax profits 2 -
Equity 2 -
The interest rate profile of the Group's cash and cash
equivalents as at 31 December 2015 was as follows:
US Pound Namibian
As at 31 December
2015 Dollars Sterling Dollars Total
$'000 $'000 $'000 $'000
Cash at bank with
no interest rate 545 100 30 675
545 100 30 675
US Pound Namibian
As at 31 December
2014 Dollars Sterling Dollars Total
$'000 $'000 $'000 $'000
Short term deposits
with fixed interest
rates 650 - - 650
Cash at bank with
no interest rate 129 326 46 501
779 326 46 1,151
At the reporting date, the cash at bank with fixed interest rate
is accruing weighted average interest of 0.0% per annum (2014:
0.1%). As required by IFRS 7, the Group has estimated the interest
rate sensitivity on year end balances and determined that a one
percentage point increase or decrease in the interest rate earned
on short term deposits would have caused a corresponding increase
or decrease in net income in the amount of US$ nil (2014:
US$6,500).
All cash and short term deposits were held by the Company except
the Namibian dollars which were held by the subsidiary company.
23. FINANCIAL INSTRUMENTS (continued)
Foreign currency risk management
The functional currencies of the companies in the Group are US
dollars and Namibian dollars. The surplus cash to operating needs
is held in US dollars to limit currency risk against the Group's
functional currency. The Group does not hedge against the effects
of movements in exchange rates, risks are monitored by the Board on
a regular basis.
The following table discloses the year end rates applied by the
Group for the purposes of producing the financial statements:
Translation 2015 2014
Year
end 1 GBP - USD 1.48 1.56
Year
end 1 USD - NAD 15.53 11.56
The carrying amounts of the Group's foreign currency denominated
monetary assets and monetary liabilities at the reporting date are
as follows:
Group Group Company Company
as at as at as at as at
31 December 31 December 31 December 31 December
2015 2014 2015 2014
US$'000 US$'000 US$'000 US$'000
Cash and cash
equivalents
Pound Sterling 100 326 100 326
Namibian Dollars 30 46 - -
130 372 100 326
The following table details the Group's sensitivity to a 10%
increase and decrease in the US dollar against the relevant foreign
currencies. 10% is the sensitivity rate used when reporting foreign
currency risk internally to key Management personnel and represents
Management's assessment of the reasonably possible change in
foreign exchange rates. The sensitivity analysis includes only
outstanding foreign currency denominated monetary items and adjusts
their translation at the year-end for a 10% change in foreign
currency rates. The sensitivity analysis includes external loans as
well as loans to foreign operations within the Group where the
denomination of the loan is in a currency other than the currency
of the lender or the borrower. A positive number below indicates an
increase in profit and equity where the US dollar strengthens 10%
against the relevant currency. For a 10% weakening of the US dollar
against the relevant currency, there would be an equal and opposite
impact on the profit and equity, and the balances below would be
negative.
British Namibian British Namibian
pound dollar pound dollar
currency currency currency currency
impact impact impact impact
31 December 31 December 31 December 31 December
2015 2015 2014 2014
US$'000 US$'000 US$'000 US$'000
Effect
on loss +10% 11 3 33 5
-10% 11 3 33 5
Effect
on equity +10% 11 3 33 5
-10% 11 3 33 5
24. EVENTS SUBSEQUENT TO REPORTING DATE
There were no significant subsequent post reporting date
events.
25. RELATED PARTY TRANSACTIONS
The controlling party of China Africa Resources plc is East
China Mineral Exploration and Development Bureau for Non Ferrous
Metals. The immediate holding company is HK ECE.
31 December 31 December
2015 2014
US$'000 US$'000
Group and Company
The Group and Company had
the following transactions
with
Weatherly International plc
a 25% shareholder of the Group.
Management Fee paid 270 360
Trade payables - (108)
The Group and Company had
the following transactions
with
HK ECE a 65% shareholder of
the Group.
Loans received during the
year 200 -
Loans outstanding at the end
of the year
200 -
Company only
Transactions with China Africa
Resources Namibia (pty) Ltd
a wholly owned subsidiary
Management Fee charged 420 600
Interest charged 141 110
Gross loans receivable 5,350 4,789
Impairment (5,350) -
Net loans receivable - 4,789
26. CAPITAL MANAGEMENT POLICIES AND PROCEDURES
The Group considers its capital to comprise its ordinary share
capital, share premium and accumulated retained losses as well as
loans and reserves (consisting of share based payments reserve,
foreign currency translation reserve and merger relief
reserve).
The Group's objective when maintaining capital is to safeguard
the entity's ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other
stakeholders.
The Company meets its capital needs by equity financing and
borrowing. The Group sets the amount of capital it requires to fund
the Group's project evaluation costs and administration expenses.
The Group manages its capital structure and makes adjustments to it
in the light of changes in economic conditions and the risk
characteristics of the underlying assets.
Capital for the reporting period under review is summarised as
follows:
31 December 31 December
2015 2014
US$'000 US$'000
Total equity 3,567 9,900
Borrowings 200 -
3,767 9,900
Company information
Directors Cungen Ding (Chairman and Non-executive
Roderick Webster Director)
James Richards (Chief Executive Officer)
Frank Lewis (Senior Independent
John Bryant Non-executive Director)
Li Ming (Independent Non-executive
Wuming Wang Director)
(Non-executive Director)
(Non-executive Director)
(Non-executive Director)
Secretary Kevin Ellis
Registered office 180 Piccadilly
London W1J 9HF
Registered number 07352056 (England
and Wales)
Auditor BDO LLP
55 Baker Street
London W1U 7EU
Bankers Bank of Scotland
St James's Gate
14-16 Cockspur Street
London SW1Y 5BL
Solicitors Cooley (UK) LLP
Dashwood
69 Old Broad Street
London EC2M 1QS
Nominated adviser RFC Ambrian Ltd
and broker Level 5, Condor House,
10 St Paul's Churchyard
London EC4M 8AL
Registrars Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Website www.chinaafricares.com
TDIM CAF
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SSDFMMFMSESI
(END) Dow Jones Newswires
May 09, 2016 02:00 ET (06:00 GMT)
Pembridge Resources (LSE:PERE)
Gráfico Histórico do Ativo
De Jul 2024 até Ago 2024
Pembridge Resources (LSE:PERE)
Gráfico Histórico do Ativo
De Ago 2023 até Ago 2024
