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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Kimcor | LSE:KIM | London | Ordinary Share | GB00B0TNHV95 | ORD 0.5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.325 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:9615Q KimCor Diamonds plc 28 March 2008 28 March 2008 KIMCOR DIAMONDS PLC ("KimCor" or the "Company" or the "Group") INTERIM RESULTS FOR THE PERIOD ENDING 31 DECEMBER 2007 KimCor (AIM:KIM), a diamond producer and exploration company with properties in South Africa and Tanzania, is pleased to announce its interim results for the 9 months ended 31 December 2007. These second set of interim results have been produced following the recent change in the Company's accounting reference date to 30 June. As announced on 20 March 2008, this change has been undertaken in order to align KimCor's financial year end with that of Dwyka Diamonds Holdings Limited ("DDH"), the parent company of the group of companies acquired by KimCor from Dwyka Resources Limited in September 2007. The audited full year results for DDH can be sourced from Dwyka Resources Limited's results for the full year ended 30 June 2007. The Company's next annual results will be for the 15 months ended 30 June 2008 and are expected to be published by 31 October 2008. Enquiries: KimCor Diamonds plc Tel: 020 3178 6179 Martyn Churchouse Strand Partners Limited Tel: 020 7409 3494 Simon Raggett Warren Pearce Victoria Milne-Taylor Bishopsgate Communications Ltd Tel: 020 7562 3350 Maxine Barnes Nick Rome Consolidated income statement for the nine months ended 31 December 2007 Note Nine months to Nine months to 31 December 31 December 2007 2006 Unaudited Unaudited £'000 £'000 Revenue 2,602 2,661 Cost of sales (3,420) (3,388) -------- -------- Gross loss (818) (727) Administrative expenses (2,830) (1,172) Other operating income 613 1,523 -------- -------- Loss from operations (3,035) (376) Finance income 43 19 Finance expense (162) (149) -------- -------- Loss for the period before taxation (3,154) (506) Tax 4 - -------- -------- Loss for the period after taxation attributable to (3,150) (506) equity holders of the parent -------- -------- Basic and diluted loss per share 5 (1.71)p (0.38)p -------- -------- Consolidated balance sheet as at 31 December 2007 31 December 2007 30 June 2007 Unaudited Unaudited £'000 £'000 ASSETS Non - current assets Property, plant and equipment, including mining 8,463 2,402 properties Prospecting rights 119 - Other non-current receivables 189 163 -------- -------- 8,771 2,565 -------- -------- Current assets Inventories 177 189 Trade and other receivables 705 306 Cash and cash equivalents 2,237 177 -------- -------- 3,119 672 -------- -------- Total assets 11,890 3,237 -------- -------- LIABILITIES Current liabilities Trade and other payables 728 765 Accruals 54 - Provisions 468 298 -------- -------- 1,250 1,063 -------- -------- Non-current liabilities Borrowings 1,943 11,937 Deferred tax liability 1,093 - -------- -------- 3,036 11,937 -------- -------- Total liabilities 4,286 13,000 -------- -------- Equity attributable to equity holders of the parent Share capital issued 1,341 - Share premium reserve 7,034 - Cumulative translation adjustments (923) 2,631 Warrant reserve 157 - Retained earnings and other reserves (5) (12,373) -------- -------- Equity attributable to equity holders of the 7,604 (9,742) parent -------- -------- Minority interest - (21) -------- -------- Total equity and liabilities 11,890 3,237 -------- -------- Consolidated statement of changes in equity for six months ended 31 December 2007 Share Share Warrant Retained Translation Total premium reserve earnings Reserve capital and other reserves £'000 £'000 £'000 £'000 £'000 £'000 Balance as of 1 - - - (12,373) 2,631 (9,742) July 2007 Loss for the - - - (2,518) - (2,518) period Foreign exchange on translation of foreign operation - - - - (3,554) (3,554) Reverse takeover 1,341 7,034 157 14,886 - 23,418 Balance as of 31 1,341 7,034 157 (5) (923) 7,604 December 2007 Consolidated cash flow statement for the nine months ended 31 December 2007 Nine months to 31 Nine months to 31 December December 2007 2006 Unaudited Unaudited £'000 £'000 CASH FLOW FROM OPERATING ACTIVITIES Loss before tax: (3,154) (506) Adjustments for: Finance expense 162 149 Finance income (43) (19) Depreciation, amortisation and impairment 1,108 324 Equity settled share-based payment expense 18 - Provision for rehabilitation 11 30 Income from sales of investments - (1,329) Foreign exchange difference 590 684 -------- -------- Operating loss before changes in working capital (1,308) (667) (Decrease)/increase in other payables (821) 298 Decrease/(increase) in other receivables 914 (264) Increase in inventories (132) (57) -------- -------- Net cash flow from operating activities (1,347) (690) INVESTING ACTIVITIES Purchase of property, plant and equipment (360) (723) Interest received 43 5 Loans issued - (2) Cash held in subsidiary at the date of acquisition 85 - -------- -------- (232) (720) FINANCING ACTIVITIES Proceeds from issue of ordinary shares 3,234 - Proceeds from loan raised 648 913 Repayment of the loan (66) - Interest paid (122) (2) -------- -------- 3,694 911 -------- -------- NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS DURING THE 2,115 (499) PERIOD CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 122 879 -------- -------- CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 2,237 380 -------- -------- Notes forming part of the interim financial statements 1. CORPORATE INFORMATION KimCor Diamonds plc (the "Company") is a diamond mining and exploration company incorporated in England and Wales on 21 March 2005 for the purpose of developing diamond mining assets and projects primarily in South Africa. 2. BASIS OF PREPARATION These primary statements and selected notes comprise the unaudited interim consolidated results of the Company and its subsidiaries ("the Group") for the nine months ended 31 December 2007. The audited financial statements for the period ended 31 March 2007 were prepared in accordance with International Financial Reporting Standards (IFRSs and IFRIC interpretations), as adopted by the European Union and with those parts of the Companies Act 1985 applicable to companies preparing their accounts under IFRS. These primary statements and selected notes reflect the acquisition of 100% of the issued share capital of Dwyka Diamonds Holdings Limited ("DDH"). As a result of this transaction, described as a reverse takeover, shareholders of DDH acquired control of the Company. Accordingly, this transaction has been accounted for as an acquisition of the Company by DDH (See Note 6). The interim financial statements therefore represent a continuation of the financial statements of DDH, the legal subsidiary acquired. These interim consolidated financial statements reflect the results of the operations and cash flows of DDH for all periods presented and include those of the Company subsequent to the date of the reverse takeover on 21 September 2007. The consolidated balance sheet at 30 June 2007 and the consolidated income statement and cash flow statement for the 9 months ended 31 December 2006 are that of DDH. The comparative period figures for the income statement are for the nine months ended 31 December 2006. For the balance sheet the figures are at 30 June 2007 and are not audited. The unaudited interim consolidated results of the Group presented in this interim announcement have been prepared on the basis of the accounting policies applied for the interim consolidated results for the 6 months ended 30 September 2007 which are consistent with DDH's accounting policies as set out in Part 4 of the Admission Document (dated 21 August 2007) and the financial statements for the year ended 31 March 2007. These accounting policies are expected to be adopted for the next set of results for the 15 months ended 30 June 2008. As permitted the Group has chosen not to adopt IAS 34 Interim Financial Reporting. The interim financial statements for the 9 months ended 31 December 2007 are unaudited and within the meaning of the section 240 of the Companies Act 1985, such accounts do not constitute full statutory accounts of the Group. 3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. (i) Reverse Takeover ("RTO") Reverse takeover accounting for the acquisition of DDH (Note 6); (ii) Income taxes The Group is subject to income taxes in various jurisdictions where it has foreign operations. Significant judgement is required in determining the worldwide provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred tax provisions in the period in which such determination is made. (iii) Exploration, evaluation and mining properties The Group's main activity is the exploration and evaluation for, and mining of, diamonds. The nature of mining and exploration activities are such that it requires interpretation of complex and difficult geological models in order to make an assessment of the size, shape, depth and quality of resources and their anticipated recoveries. The economic, geological and technical factors used to estimate mining viability may change from period to period. In addition exploration activities by their nature are inherently uncertain. Changes in all these factors can impact exploration and mining asset carrying values, provisions for rehabilitation and the recognition of deferred tax assets. (iv) Rehabilitation obligations The Group estimates the future removal costs of mine operations disturbances at the time of installation of the assets and commencement of operations. In most instances, removal of assets occurs some years into the future. This requires judgemental assumptions regarding removal date, the extent of reclamation activities required, the engineering methodology for estimating cost, future removal technologies in determining the removal cost and asset specific discount rates to determine the present value of these cash flows. 4. SIGNIFICANT ACCOUNTING POLICIES Significant accounting policies are set out below: Basis of consolidation (i) Subsidiaries The consolidated financial statements incorporate the financial statements of the Group and entities controlled by the Group (its subsidiaries). Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Minority interests in the results and equity of subsidiaries are shown separately in the consolidated income statement and balance sheet respectively. (ii) Associates Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20 per cent. and 50 per cent. of the voting rights. Investments in associates are accounted for using the equity method of accounting, after initially being recognised at cost. The Group's share of its associates' post-acquisition profits or losses is recognised in the income statement, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from associates reduce the carrying amount of the investment. When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Business combinations Business combinations are accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired (i.e. discount on acquisition) is credited to the income statement in the period of acquisition. Foreign currency (i) Functional and presentation currency Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in Pounds Sterling. (ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. (iii) Group companies On consolidation, the assets and liabilities of the Group's overseas operations are translated at exchange rates prevailing on the balance sheet date. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Income and expense items are translated at the average exchange rates for the period unless exchange rates fluctuate significantly. Exchange differences arising, if any, are classified as equity and transferred to the Group's translation reserve. Exchange differences recognised in the income statement of 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 the foreign exchange reserve. On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign exchange reserve relating to that operation up to the date of disposal are transferred to the income statement as part of the profit or loss. Property, plant and equipment Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes directly attributable costs and estimated present value of any future costs of dismantling and removing items. The corresponding liability is recognised within provisions. Property, plant and equipment is stated at cost less accumulated depreciation and any impairment losses. Land is shown at cost and is not depreciated. Depreciation is provided on all other assets to write down the cost, less residual value, by equal instalments over their estimated useful lives as follows: - Buildings 10-20 years - Machinery 5-12 years - Vehicles 3-5 years - Furniture, fittings and equipment 3-8 years The depreciation charge for each period is recognised in the income statement, unless it is included in the carrying amount of another asset. Subsequent expenditure relating to an item of property, plant and equipment is capitalised when it is probable that future economic benefits from the use of the asset will be increased. All other subsequent expenditure is recognised as an expense in the period in which it is incurred. Repairs and maintenance which neither materially add to the value of assets nor appreciably prolong their useful lives are charged against income. The gain or loss arising from the de-recognition of an item of property, plant and equipment is included in the income statement when the item is de-recognised. The gain or loss arising from the de-recognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item. The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Assets under construction are carried at cost less any recognised impairment. Borrowing costs attributable to assets under construction are recognised as an expense as incurred. Mining properties Mining properties are stated at cost of acquisition and/or accumulation of exploration, evaluation and development costs in respect of areas of interest in which mining has commenced less accumulated amortisation and any impairment loss. When further development expenditure is incurred in respect of a mining property after the commencement of production, such expenditure is carried forward as part of the mine property only when substantial future economic benefits are thereby established, otherwise such expenditure is classified as part of the cost of production. Amortisation is provided on a unit-of-production basis so as to write off the cost in proportion to the depletion of the proved and probable mineral resources. Exploration and evaluation costs Exploration and evaluation costs include expenditure incurred in connection with the exploration for and the evaluation of economically recoverable diamond resources. These costs include costs of acquisition, exploration and appraisal costs and technical overheads directly associated with those projects. The Company's policy with respect to exploration and evaluation expenditure is to use the "area of interest" method. Under this method, exploration and evaluation costs are carried forward on the following basis: (i) Each area of interest is considered separately when deciding whether, and to what extent, to carry forward or write off exploration and evaluation costs; (ii) Exploration and evaluation costs related to an area of interest may be carried forward provided that rights to tenure of the area of interest are current and provided further that one of the following conditions are met: * such costs are expected to be recouped through successful development and exploitation of the area of interest or alternatively, by its sale; or * exploration and/or evaluation activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active and significant operations in relation to the area are continuing. (iii) The carrying values of exploration and evaluation costs are reviewed by directors where results of exploration and/or evaluation of an area of interest are sufficiently advanced to permit a reasonable estimate of the costs expected to be recouped through successful development and exploitation of the area of interest or by its sale. Expenditure in excess of this estimate is written off to the income statement in the year in which the review occurs; (iv) When development of an area of interest is complete and production commences, all exploration, evaluation and development costs carried forward as an asset (including the cost of extractive rights acquired) are transferred to mining properties. Development costs related to an area of interest are carried forward as an asset to the extent that they are expected to be recovered either through sale or successful exploitation; and (v) The carrying values of exploration, evaluation and development expenditure are carried forward and amortised over the expected useful life of each project. Inventories Inventories, which include rough diamonds, finished goods and raw materials, are stated at the lower of cost and estimated net realisable value. Cost is determined on a first-in, first-out basis and comprises direct labour and direct materials. Net realisable value is the estimated selling price in the ordinary course of business, less the cost of completion and selling expenses. Provisions Provisions are recognised when the consolidated entity has a legal, equitable or constructive obligation to make a future sacrifice of economic benefits to other entities as a result of past transactions or other past events, it is probable that a future sacrifice of economic benefits will be required and a reliable estimate can be made of the amount of the obligation. Rehabilitation and restoration costs The Group has obligations for site restoration related to its mining properties. The Group establishes restoration provisions for future mine closure costs when a legal or constructive obligation exists based on the present value of the future cash flows required to satisfy the obligations. Provisions expected to be utilised in the coming 12 months on areas with lives of less than one year are accounted for in the income statement of the Group. Provisions not expected to be utilized in the coming 12 months are added to the capital cost of the related mining assets in mine properties and amortised over the resource life. The provision is accreted to its future value over the resource life through a charge to borrowing costs. Changes in the estimated cost of rehabilitation are applied on a prospective basis with an adjustment to capital cost 5. BASIC AND DILUTED LOSS PER SHARE Basic loss per share amounts are calculated by dividing net loss for the period, attributable to ordinary equity holders of the parent, by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share amounts are calculated by dividing the net loss suffered by equity shareholders of the parent by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. The loss per share for the 9 month period ended 31 December 2006 is calculated using the number of shares issued to the shareholders of DDH during the RTO, in line with the guidance in IAS 33 Earnings per share. In line with IFRS 3, following the RTO the equity structure of the Group reflects the equity of the legal parent, including the shares issued by it to effect the business combination. In the nine month period ended 31 December 2007, the weighted average number of shares has been calculated as follows: * Number of ordinary shares from beginning of period to date of RTO is the number of shares issued by the Company to the owners of DDH; and * From the acquisition date to the end of the period the number of shares is the actual number of shares of the Company outstanding during the period. The following reflects the loss and share data used in the basic and diluted earnings per share computations: Nine months to 31 Nine months to 31 December December 2007 2006 £'000 £'000 Net loss attributable to equity holders of the parent 3,150 506 --------- --------- No diluted loss per share has been calculated as the Group has incurred a loss for the period. Nine months to 31 Nine months to December 31 December 2007 2006 Number Number Basic weighted average number of shares 184,041,717 134,383,718 --------- --------- There were no transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of completion of these financial statements. 6. REVERSE TAKEOVER On 21 September 2007 the Company became the legal parent of DDH. As part of this combination Dwyka Resources Limited, the sole shareholder of DDH, became the owner of 50.09% of the enlarged share capital. Accordingly, and considering the size of the companies involved, the substance of the combination was that DDH acquired the Company in a reverse acquisition. Under the requirements of the Companies Act 1985 it would normally be necessary for the Company's consolidated accounts to follow the legal form of the business combination. In that case, the pre-combination results would be those of the Company and DDH would be included only in relation to its performance from 21 September 2007. However this would show the combination as the acquisition of DDH by the Company and would, in the opinion of the directors, fail to give a fair view of the substance of the business combination. Accordingly, the directors have adopted reverse acquisition accounting as the basis of the consolidation. On 21 September 2007, DDH acquired 50.09% of the issued share capital of the Company for the consideration of £5,039,608 representing directly attributable costs of £0.7 million and 67,191,859 ordinary shares of the Company in issue immediately prior to the takeover for which the fair value was determined by the directors as the placing price of 6.5p of the new ordinary shares issued and proposed for placing on AIM at the same date. The provisional fair value of the net assets acquired was determined by the directors, having regard to reports by independent experts. The loss incurred in the period to 31 December 2007 by the old KimCor group which was acquired in this reverse takeover was £532,681. Had the acquisition occurred on 1 April 2007, the estimated operating loss for the group would have been £807,996 higher at £3,958,503 for the nine month period ended 31 December 2007. Book and fair values of the net assets at the date of acquisition, were as follows: Book Fair value Fair value values adjustments to group £'000 £'000 £'000 Mining properties 1,763 3,601 5,364 Property, plant and equipment 527 - 527 Other long-term assets 224 360 584 Inventories 4 - 4 Cash and short-term deposits 85 - 85 Other receivables 855 - 855 Trade and other creditors (923) - (923) Deferred tax liability (412) (1,044) (1,456) -------- --------- -------- Net assets 2,123 2,917 5,040 -------- --------- -------- Goodwill arising on acquisition - -------- 5,040 -------- Discharged by: Fair value of shares issued 4,367 Acquisition costs 673 -------- 5,040 ------- No identifiable goodwill has arisen in respect of this transaction. The surplus value of the consideration over the other separable net assets and liabilities of the acquired group has been attributed to the mining properties and represents their estimated fair value as at the date of acquisition of 21 September 2007. 7. POST BALANCE SHEET EVENTS On 20 March 2008, the Group announced a change to its accounting reference date from 31 March to 30 June. The change was made in order to align the accounting reference date of KimCor with that the South African subsidiaries acquired as part of the reverse takeover, further details of which are set out in Note 6 above. In view of the above, the next annual report and accounts will be prepared by the Group for the 15 months ending 30 June 2008. There were no other significant post balance sheet events arising since 31 December 2007. 8. AVAILABILITY OF INTERIM REPORT Copies of this interim report for the nine months ended 31 December 2007 will be available from the offices of KimCor Diamonds plc, 8 Tavistock Street, London, WC2E 7PP, and on the Company's website www.kimcordiamonds.com. This information is provided by RNS The company news service from the London Stock Exchange END IR ILFIRVAIDFIT
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