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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
South China | LSE:SCR | London | Ordinary Share | GB00B0704D34 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 2.48 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:0931R South China Resources PLC 31 March 2008 31 March 2008 South China Resources Plc ("the Company") INTERIM RESULTS Chairman's Statement On 1 February 2008 South China Resources Plc ("South China" or the "Company") announced that it had decided not to proceed with further negotiations to acquire a 53% interest in the Zhunuo Copper Project ("the Project") in Tibet, China. This decision was set against a background of increased Chinese regulatory resistance to foreign mining investment in nationally significant and strategic metal deposits in China. After reviewing many other potential mining acquisitions and relationships in China during 2007 the Company has determined that in all cases the price expected by vendors relative to the quality of projects it reviewed did not warrant further investment. The Company accordingly terminated its remaining relationships in China. Following these terminations, the South China Board has considered how best to utilise present and future cash reserves. After careful consideration the Company is proposing to pursue a new investing strategy in Southern Africa. The Company's strategy is to make investments in the mining and minerals sector. The geographical focus will be in Southern Africa. The investments may be either quoted or unquoted and may be in companies, partnerships, joint ventures or direct interests in energy projects. The Company intends to be an involved and active investor even though it might not hold a controlling interest in its investments. Accordingly, where necessary, the Company may seek participation in the management or board of directors of a company in which the Company invests. The Directors intend that they will undertake initial assessments and due diligence on potential investments themselves and will take appropriate professional advice if merited by the circumstances. The Company is currently pursuing potential leads and will issue further announcements as appropriate. Results During the six months to 31 December 2007, the Company made a loss before and after tax of £355,103 (31 December 2006 : Loss of £903,140). During the 6 months ended 31 December 2006 expenditure was predominately incurred on the termination and winding up of operations in China as well as conducting due diligence on potential investments and London overheads. Nathan McMahon Chairman 31 March 2008 Consolidated Income Statement For the 6 months ended 31 December 2007 £ £ £ Six months ended 31 Six months ended 31 Year ended 30 December 2007 December 2006 June 2007 Note (Unaudited) (Unaudited) (Unaudited) Administrative expenses (378,047) (721,331) (2,293,025) Exceptional expenses 4 - - (5,993,874) Share based payments - (250,000) - OPERATING LOSS (378,047) (971,331) (8,286,899) Bank interest received 22,944 68,191 95,832 LOSS BEFORE TAXATION (355,103) (903,140) (8,191,067) Taxation 5 - - - LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (355,103) (903,140) (8,191,067) Loss per share (pence) : Basic and diluted 7 (0.22)p (0.57)p (5.13)p Consolidated Balance Sheet At 31 December 2007 £ £ £ As at As at As at 30 June 2007 31 December 31 (Unaudited) 2007 (Unaudited) December 2006 (Unaudited) NON-CURRENT ASSETS Intangible assets - 5,777,542 - Tangible fixed assets 98,095 28,483 115,701 TOTAL NON-CURRENT ASSETS 98,095 5,806,025 115,701 CURRENT ASSETS Debtors 53,300 15,874 50,168 Cash at bank and in hand 1,159,155 3,324,847 1,818,602 TOTAL CURRENT ASSETS 1,212,455 3,340,721 1,868,770 CURRENT LIABLILITES Creditors: Amounts falling due within one year (19,740) (54,655) (338,558) TOTAL CURRENT LIABLITIES (19,740) (54,655) (338,558) NET CURRENT ASSETS 1,192,715 3,286,066 1,530,212 NET ASSETS 1,290,810 9,092,091 1,645,913 CAPITAL AND RESERVES Called up share capital 1,616,500 1,592,750 1,616,500 Share premium 7,179,436 7,166,437 7,179,436 Merger reserve 1,440,000 1,440,000 1,440,000 Equity reserve 55,000 250,000 55,000 Profit and loss account (9,000,126) (1,357,096) (8,645,023) EQUITY SHAREHOLDERS FUNDS 1,290,810 9,092,091 1,645,913 Consolidated Statement of Changes in Equity At 31 December 2007 Share Share Profit Merger Equity Total Capital Premium and Loss Reserve Reserve Account £ £ £ £ £ £ At 30 June 2006 1,576,000 7,103,448 (453,956) 1,440,000 0 9,665,492 (Loss) for the period (903,140) (903,140) Equity based payment 250,000 250,000 Shares issued during the period 16,750 63,000 79,750 Issue expenses (12) (12) At 31 December 2006 1,592,750 7,103,436 (1,294,096) 1,440,000 250,000 9,092,090 (Loss) for the period (7,350,927) (7,350,927) Equity based payment (195,000) (195,000) Shares issued during the period 23,750 76,000 99,750 At 30 June 2007 1,616,500 7,179,436 (8,645,023) 1,440,000 55,000 1,645,913 (Loss) for the period (355,103) (355,103) At 31 December 2007 1,616,500 7,179,436 (9,000,126) 1,440,000 55,000 1,290,810 Consolidated Cash Flow Statement (Unaudited) For the 6 months ended 31 December 2007 £ £ £ Six months ended 31 Six months ended 31 Year ended 30 December 2007 December 2006 June 2007 (Unaudited) (Unaudited) (Unaudited) Reconciliation of operating (loss) to net cash outflow from operating activities Operating (loss) (378,047) (971,331) (8,286,899) Decrease / (Increase) in debtors (3,132) (898) (35,192) (Decrease) / Increase in creditors (318,818) 16,343 300,246 Depreciation 17,606 1,183 17,068 Non-cash exceptional write-off - - 5,993,874 Share based payment - 250,000 55,000 Net cash outflow from operating activities (682,391) (704,703) (1,955,903) Returns on investments and service of finance Interest received 22,944 68,191 95,832 Capital expenditure Purchase of tangible fixed assets - (7,974) (111,077) Purchase of intangible fixed assets - (1,412,198) (1,628,530) Net cash outflow on capital expenditure - (1,420,172) (1,739,607) Financing Shares issued - 79,750 116,500 Issue expenses - (11) (12) Net cash from financing activities - 79,739 116,488 Decrease in cash (659,447) (1,976,945) (3,483,190) Reconciliation of net cash flow to movement in net funds Decrease in cash in the year (659,447) (1,976,945) (3,483,190) Net funds at beginning of period 1,818,602 5,301,792 5,301,792 Net funds at end of period 1,159,155 3,324,847 1,818,602 Notes to the Interim Report For the 6 months ended 31 December 2007 1. PRESENTATION OF INTERIM RESULTS The next annual financial statements of South China Resources plc ("the Company "), for the year ending 30 June 2008, will be prepared in accordance with International Financial Reporting Standards (IFRS) applied in accordance with the provisions of the Companies Act 1985. Accordingly, the interim financial information in this report, for the six months ended 31 December 2007, has been prepared using accounting policies consistent with IFRS. IFRS is subject to amendment and interpretation by the International Accounting Standards Board (IASB), and the International Financial Reporting Interpretations Committee (IFRIC) and there is an ongoing process of review and endorsement by the European Commission. The financial information has been prepared on the basis of IFRS accounting policies that the Directors expect to apply for the year ending 30 June 2008. The principal accounting policies set below have been consistently applied to all periods presented. IFRS transition IFRS 1 permits companies adopting IFRS for the first time to take certain exemptions from the full requirements of IFRS in the transition period. The interim financial information has been prepared on the basis of the following exemptions: (i) Business combinations prior to 1 July 2006 have not been restated to comply with IFRS 3 "Business Combinations"; and (ii) IFRS 2 "Share Based Payments" has been applied retrospectively to those options that were issued after 18th April 2005 but had not vested by 1 July 2006. The disclosures required by IFRS 1 concerning the transition from UK GAAP to IFRS are given in Note 8. Non-Statutory Accounts The financial information for the six months ended 31 December 2007 and 31 December 2006 set out in the Interim Report is unaudited and does not constitute statutory accounts. The financial information for the year ended 30 June 2007 set out in this Interim Report does not comprise the Company's statutory accounts as defined in Section 240 Companies Act 1985. The statutory accounts for the year ended 30 June 2007, which have been filed with the Registrar of Companies, were prepared under UK Generally Accepted Accounting Practice (UK GAAP). The Auditors reported on those accounts; their Audited Report was unqualified and did not contain a statement under either Section 237(2) or Section 237(3) of the Companies Act 1985. The Interim Report for the six months ended 31 December 2007 was approved by the Directors on 31 March 2008. Basis of consolidation The Group financial information consolidates the financial results of the Company and all operating subsidiaries. Acquisitions On the acquisition of a subsidiary, fair values are attributable to the Group's share of net assets. Where the cost of acquisition exceeds the values attributable to such net assets, the difference is treated as purchased goodwill. Where there is any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired (i.e. discount on acquisition) the difference is credited to the income statement in the period of acquisition. Goodwill arising on consolidation is recognised as an asset and reviewed for impairment at least annually. Any impairment is recognised immediately in the income statement and is not subsequently reversed. Depreciation Depreciation is provided on all tangible fixed assets, at rates calculated to write off the cost or valuation, less residual value, of each asset evenly over its expected useful life as follows: Information Equipment - Depreciated over 3 years at an annual rate of 33% Leasehold Improvements - Depreciated over 5 years at an annual rate of 20% Furniture and Fittings - Depreciated over 5 years at an annual rate of 20% Provision for impairment is made if an asset's recoverable amount (higher of net realisable value and value in use) falls below its carrying value. Trade investments Listed trade investments are held as fixed assets, stated at cost less provision for any impairment to their carrying value and are not revalued to their market value. Investment in associated undertakings In the consolidated financial information, shares in associated undertakings are consolidated using the equity method. In the consolidated income statement the Group's share of profits and losses of associated undertakings are shown below operating profit and the consolidated balance sheet includes the Group's share of net assets of its associated undertakings within non-current asset investment. The financial results for all of the Group's associated undertakings are based on financial results to the end of the relevant period/year. Joint venture An entity is treated as a joint venture where the Group holds a long term interest and shares control under a contractual agreement. In the consolidated financial information, interests in joint ventures are accounted for using the gross equity method of accounting. The consolidated income statement includes the Group's share of the results of such undertakings based on unaudited financial statements. In the consolidated balanced sheet the Group's share of the identified gross assets and its share of the gross liabilities attributable to its joint ventures are shown separately. Deferred tax 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 as the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that does not affect profit. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that there will be a reversal. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited to the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. 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 income taxes levied by the same taxation authority and the Group intends to settle its current assets and liabilities on a net basis. Deferred tax is provided on timing differences arising from the revaluation of the properties. Deferred tax assets are recognised to the extent it is regarded as more likely than not that they will be recovered. Deferred tax assets and liabilities are not discounted. Share based payments The cost of share-based employee compensation arrangements, whereby employees receive remuneration in the form of share options, is recognised as an employee benefit expense in the income statement. The total expense to be apportioned over the vesting period of the benefit is determined by reference to the fair value at the date of grant. Fair value is measured by the use of the Black Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of the non-transferability, exercise restrictions and behavioural considerations. Financial instruments Short term debtors and creditors are not treated as financial assets or financial liabilities, except for currency disclosure. The Group does not hold or issue derivatives or any other financial instrument for trading purposes. Financial instruments are classified on initial recognition in accordance with the substance of the contractual arrangement and definitions of a financial liability, financial asset and an equity instrument. Foreign exchange Transactions of UK companies denominated in foreign currencies are translated into sterling at the average rate. Monetary assets and liabilities of UK companies denominated in foreign currencies at the balance sheet date are translated at the rates ruling at the date. These translation differences are dealt with in the income statement. The financial statements of UK companies, which report in foreign currencies, are translated into sterling at the closing rates of exchange for the balance sheet and at the average rates for the income statement. Differences arising from the translation of the opening net investment in subsidiaries at the closing rate is taken directly to reserves. Operating leases Rentals payable under operating leases are charged to the income statement on a straight line basis over the lease term. 2. KEY ACCOUNTING ESTIMATES AND JUDGEMENTS The preparation of financial information in conformity with generally accepted accounting practice requires management to make estimates and judgements that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of income and expenses during the reporting period. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation were: Impairment of intangible fixed assets The Group assesses at each balance sheet date whether there is any indication that any of its assets have been impaired. If such indication exists, the asset's recoverable amount is estimated and compared to its carrying value. For goodwill, intangible assets that have an indefinite life and intangible assets not yet available for use, the recoverable amount is estimated at each balance sheet date and whenever there is an indication of impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. Impairment losses are recognised in the balance sheet. Share based payments In determining the fair value of equity settled share based payments and the related charge to the income statement the Group must make assumptions about future events and market conditions. Judgement is made as to the likely number of shares that will vest, and the fair value of each award granted. Options are measured at fair value at the grant date using the Black-Scholes model. The fair value is expensed on a straight line basis over the vesting period, based on an estimate of the number of options that will eventually vest. Cash settled share based payment transactions results in the recognition of a liability at its current fair value. 3. GEOGRAPHICAL SEGMENT REPORTING To date the group has operated in two principal geographical areas of the world, the UK and China. As the group has decided to cease its operations in China, the group has not had any turnover. £ £ £ Loss Before Taxation Six months ending 31 Six months ending Year ending By geographical area December 2007 31 December 2006 30 June 2007 (Unaudited) (Unaudited) (Unaudited) United Kingdom (249,791) (685,359) (2,197,193) Peoples Republic of China (105,312) (217,781) (5,993,874) (355,103) (903,140) (8,191,067) ======= ======= ======== £ £ £ Net Assets Six months ending 31 Six months ending Year ending By geographical area December 2007 31 December 2006 30 June 2007 (Unaudited) (Unaudited) (Unaudited) United Kingdom 1,290,810 5,777,542 1,645,913 Peoples Republic of China - 3,314,549 - 1,290,810 9,092,091 1,645,913 ======= ======= ======= 4. EXCEPTIONAL ITEMS On 29 May 2007 the company announced the decision to terminate its involvement in the Danfeng Project and the Joint Venture Company established to develop the Project, the Shang Lou City Zhongbei Minerals and Mining Development Company Ltd. Although exploratory drilling conducted since inception confirmed the presence of copper mineralisation, the Board believed the Project did not meet the development criteria of the Company in terms of potential scale and projected returns on a fully risked basis. All costs associated with the project, including provision for all closure costs, were written-off to the profit and loss account in the year ending 30 June 2007. £ £ £ Six months ending 31 Six months ending Year ending December 2007 31 December 2006 30 June 2007 (Unaudited) (Unaudited) (Unaudited) Project Exploration - Danfeng - - 4,193,874 Goodwill on acquisition 1,800,000 _______ _______ _______ - - 5,993,874 ======= ======= ======= 5. TAXATION No taxation has been provided due to losses in the period. 6. DIVIDENDS The Directors do not recommend the payment of a dividend. 7. LOSS PER SHARE £ £ £ Six months ending 31 Six months ending Year ending December 2007 31 December 2006 30 June 2007 (Unaudited) (Unaudited) (Unaudited) Basic and Dilutive Loss per share for the period (Loss) (355,105) (903,140) (8,191,067) Weighted Average Number of Shares 161.65 million 158.43 million 159.54 million (Loss) Per Share - pence (0.22)p (0.57)p (5.13)p The total amount of options held over the shares at 31 December 2007 was 5,859,564. These options are exercisable at between 1p and 40p per share for a period up to 23 February 2010. No dilutive loss per share is presented as the effect of exercise of outstanding options is to decrease the loss per share. 8. TRANSITION TO IFRS South China Resources plc reported under UK GAAP in all previously published financial statements for the year ended 30 June 2007. The analysis below shows a reconciliation of net assets and the loss made as reported under UK GAAP as at 30 June 2007 to the revised net assets and loss under IFRS as reported in this Interim Report. In addition there is a reconciliation of net assets under UK GAAP to IFRS at the transition date for the Company, being 1 July 2006. There is also a reconciliation of net assets under UK GAAP to IFRS at the comparative interim date being 31 December 2006. £ £ £ Previous Effects of IFRS Reconciliation of equity at 1 July 2006 GAAP transition to IFRS Total net assets 1,645,913 - 1,645,913 ======= ======= ======= £ £ £ Previous Effects of IFRS GAAP transition to IFRS Reconciliation of equity at 31 December 2006 Total net assets 9,092,091 - 9,092,091 ======= ======= ======= £ £ £ Previous Effects of IFRS GAAP transition to IFRS Reconciliation of equity at 30 June 2007 Total net assets 1,290,810 - 1,290,810 ======= ======= ======= £ £ £ Previous Effects of IFRS GAAP transition to IFRS Reconciliation of loss at 30 June 2007 Loss on ordinary activities after taxation (8,191,067) - (8,191,067) ======= ======= ======= - END - For further information contact: South China Resources plc Tim Horgan +44 (0) 20 7493 7671 Nabarro Wells & Co. Limited Hugh Oram/Natasha Reed +44 (0) 20 7710 7400 Parkgreen Communications Laura Llewelyn +44 (0) 20 7851 7480 This information is provided by RNS The company news service from the London Stock Exchange END IR ILFFDVLITFIT
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