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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:5687K South China Resources PLC 21 December 2007 21st November 2007 South China Resources plc (AIM: SCR) Final Results for the 12 months ended 30th June 2006 Chairman's Statement 2007 has been a year of challenge and change for South China Resources Plc (the Company). On 29 May 2007, the Company decided to terminate its involvement in the Danfeng Project ("the 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 in the 18 months prior to July 2007 largely confirmed the presence of copper mineralisation, disappointing check assaying for Molybdenum mineralisation and verification by SRK Geological Consultants, convinced the Board that the Project unfortunately did not meet the development criteria of the Company in terms of potential scale and projected returns on a fully risked basis. Further, the Company decided that there was no utility in proceeding 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. South China's efforts to progress the acquisition in line with the Exploration and Mining Right Cooperation and Sale Agreement with Qinghai Province Geermu Zangge Kalium Fertiliser Company Limited have now been frustrated. Accordingly the Company announced to the market on 21 December 2007 that it was withdrawing from further negotiations on Zhunuo Copper Project in Tibet, China. David Tyrwhitt, as director primarily responsible for overseeing the Tibet acquisition, resigned from the Company on 21 December 207. The Company reviewed many other potential mining acquisitions and relationships in China during 2007. The Company determined that in all cases the price expected by vendors and the quality of projects did not warrant further investment. Accordingly the Company announced on 21 December 2007 that it had terminated its remaining relationships in China and closed its offices in order to focus on projects elsewhere. The strategy of the Company will now be 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 new strategy of the Company will be the subject of a shareholder resolution at the forthcoming Annual General Meeting of the Company. The Company is currently pursuing potential leads and will make an announcement to the market when appropriate. Nathan McMahon Chairman 21 December 2007 For further information, please contact: South China Resources plc Tim Horgan +44 (0) 20 7292 9110 Nabarro Wells & Co. Limited Hugh Oram +44 (0) 20 7710 7400 Parkgreen Communications Beth Harris/ Laura Llewelyn +44 (0) 20 7851 7480 Final Accounts Profit and Loss Account - Group and Company for the year 30th June 2007 Year ended 30th Year ended 30th June 2007 June 2006 Note £ £ Administrative expenses (2,293,025) (499,369) Exceptional expenses 3 (5,993,874) - _______ _______ Operating loss 4 (8,286,899) (499,369) _______ _______ Interest received on bank deposits 95,832 79,203 _______ _______ Loss on ordinary activities before (8,191,067) (420,166) taxation _______ _______ Tax on loss on ordinary activities 6 - - _______ _______ Loss for the period (8,191,067) (420,166) _______ _______ Retained loss for the year (8,191,067) (420,166) ====== ====== Loss per share (pence) - basic 7 (5.13)p (0.31)p Continuing operations All items relate to the continuing operations of which the company's mandate is to explore and develop base-metal projects. Total recognised gains and losses There were no recognised gains or losses in the year other than those included within the profit and loss account. The specific costs relating to the Danfeng project are disclosed as exceptional in Note 3, with segmental analysis provided in Note 2 to the accounts. The accompanying notes are an integral part of this group profit and loss account. Balance Sheet - Group and Company 30th June 2007 Year Year Ended Ended 30th June 2007 30th June 2006 Note £ £ Fixed assets Intangible assets 8 - 4,365,344 Tangible assets 9 115,701 21,692 Investments 10 - - _______ _______ 115,701 4,387,036 _______ _______ Current assets Debtors 11 50,168 14,976 Cash at bank and in hand 1,818,602 5,301,792 _______ _______ 1,868,770 5,316,768 _______ _______ Creditors: amounts falling due within one year 12 (338,558) (38,312) _______ _______ Net current assets 1,530,212 5,278,456 _______ _______ Net assets 1,645,913 9,665,492 ====== ====== Capital and reserves Called up share capital 13 1,616,500 1,576,000 Share premium 14 7,179,436 7,103,448 Merger reserve 15 1,440,000 1,440,000 Equity reserve 16 55,000 - Profit and loss account 18 (8,645,023) (453,956) _______ _______ Equity shareholders' funds 19 1,645,913 9,665,492 ====== ====== The accompanying notes are an integral part of these balance sheets. These Financial Statements were approved by the Board of Directors on 21 December 2007 and were signed on its behalf by: Nathan McMahon Chairman Group Cash Flow Statement for the year ending 30th June 2007 Year Year Ended Ended 30th June 2007 30th June 2006 £ £ Reconciliation of operating (loss) to net cash outflow from operating activities Operating (loss) (8,286,899) (499,369) Decrease / (Increase) in debtors (35,192) 21,308 (Decrease) / Increase in creditors 300,246 (88,188) Depreciation 17,068 4,071 Non-cash exceptional write-off 5,993,874 - Share based payment 55,000 - _______ _______ Net cash (outflow) / inflow from operating activities (1,955,903) (562,178) _______ _______ Returns on investments and service of finance Interest received 95,832 79,203 _______ _______ Capital expenditure Purchase of tangible fixed assets (111,077) (25,763) Purchase of intangible fixed assets (1,628,530) (2,565,344) _______ _______ Net cash outflow on capital expenditure (1,739,607) (2,591,107) _______ _______ Financing Shares issued 116,500 5,547,000 Issue expenses (12) (161,347) _______ _______ Net cash from financing activities 116,488 5,385,653 _______ _______ (Decrease) / Increase in cash (3,483,190) 2,311,571 ====== ====== Reconciliation of net cash flow to movement in net funds (Decrease)/ increase in cash in the year (3,483,190) 2,311,571 Net funds at 1st July 2006 5,301,792 2,990,221 _______ _______ Net funds at 30th June 2007 1,818,602 5,301,792 ====== ====== The accompanying notes are an integral part of this cash flow statement. Notes to the Accounts for the year ended 30th June 2007 1. ACCOUNTING POLICIES The principal accounting policies are summarised below and have been applied consistently throughout the year. (a) Accounting convention The accounts have been prepared under the historical cost convention and in accordance with applicable U.K. Accounting Standards. (b) Basis of Consolidation The group accounts consolidate the accounts of South China Resources PLC and its wholly-owned subsidiary undertaking, Copper Developments Pty Limited, drawn up to 30th June 2007. Copper Developments Pty Limited is a dormant company with cash and share capital of AU$1, therefore there is no disclosed difference between the company's financial statements and those of the group. (c) Deferred taxation Full provision is made for deferred taxation resulting from timing differences between the recognition of gains and losses in the accounts and their recognition for tax purposes. A deferred tax asset is only recognised when it is more likely than not that the asset will be recoverable in the foreseeable future out of suitable taxable profits. (d) Foreign currencies Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. All differences are taken to the profit and loss account. On consolidation of a foreign operation, assets and liabilities are translated at the balance sheet rates, income and expenses are translated at rates ruling at the transaction date. Exchange differences on consolidation are taken to the foreign exchange reserve account where material. (e) Tangible fixed assets Tangible fixed assets are stated at cost less accumulated depreciation. Depreciation of tangible fixed assets is provided where it is necessary to reflect a reduction from book value to estimated residual value over the estimated useful life of the asset to the Company. Depreciation of tangible fixed assets is calculated by the straight-line method and the annual rates applicable to the principal categories are: 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% Notes to the Accounts for the year ended 30th June 2007 cont.../ (f) Exploration and development expenditure Exploration, evaluation and development expenditure incurred as accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves. Accumulated costs in relation to an abandoned area are written off in full against the profit in the year in which the decision to abandon the area is made. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Restoration, rehabilitation and environmental costs necessitated by exploration and evaluation activities are expensed as incurred and treated as exploration and evaluation expenditure. (g) Revenue recognition The company recognises revenue from operations in its profit and loss account, on an invoiced basis. (h) Options and share based payments The ompany has applied the requirements of FRS 20. Where equity instruments are to persons other than employees, the income statement is charged with the fair value of goods and services received, except where it is in respect to costs associated with the issue of securities, in which case it is charged to the share premium account. Equity-settled share based payments are measured at fair value at the date of the grant. 2. TURNOVER AND SEGMENTAL ANALYSIS As the group remains focussed on exploration activities, the group had no turnover for the year ended 30th June 2007, nor for the prior period 30th June 2006. Year ended 30th June 2007 Year ended 30th June 2006 Loss before Net assets/ Loss before Net assets/ taxation (liabilities) Taxation (liabilities) By geographical area United Kingdom (2,197,193) 1,645,913 (420,166) 5,300,148 Peoples Republic of China (5,993,874) - - 4,365,344 _______ _______ _______ _______ (8,191,067) 1,645,913 (420,166) 9,665,492 ====== ====== ====== ====== Notes to the Accounts for the year ended 30th June 2007 cont.../ 3. EXCEPTIONAL ITEM On the 29th May 2007 the company announced the decision to terminate its involvement in the Danfeng Project ("the 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, have been written-off to the profit and loss account as follows: 2007 2006 £ £ Project Exploration - Danfeng 4,193,874 - Goodwill on acquisition 1,800,000 - ________ ________ As at 30 June 2007 5,993,874 - ====== ====== 4. OPERATING LOSS 2007 2006 £ £ This is stated after charging: Exceptional write-off 5,993,874 - Depreciation 17,068 4,071 Auditors' Remuneration - Audit 7,500 7,500 - Other - 7,000 Services Directors' Emoluments 407,000 210,500 Directors' Shared based payment 55,000 - ====== ====== Notes to the Accounts for the year ended 30th June 2007 cont.../ 5. DIRECTORS AND EMPLOYEES A summary of the total remuneration of the Directors is comprised as follows: 2007 2006 Director £ £ Steve Leithead 141,000 116,000 Alastair Clayton 63,000 47,500 Nathan McMahon (Chairman) 24,000 45,000 Bruce Stewart (i) 35,000 2,000 Mario Vazquez (ii) 120,000 - David Tyrwhitt (iii) 79,000 - _______ _______ Directors' fees / remuneration 462,000 210,500 ====== ====== (i) Remuneration disclosed for Bruce Stewart includes the Executive share based payment valuation on options granted as incentivisation for performance (Note 17). (ii) Remuneration disclosed for Mario Vazquez includes the Executive share based payment valuation on options granted as incentivisation for performance (Note 17). (iii) David Tyrwitt performed consultancy services for the company in addition to being appointed as director on 12th March 2007. The remuneration disclosed includes of consultancy fees of £76,785 (Note 23). The average number of employees, including Directors during the year was 21, allocated as follows: 2007 2006 Number Number Management and administration 7 7 Operation resources 14 8 ====== ====== 6. TAXATION 2007 2006 £ £ Analysis of charge in year Tax on loss on ordinary activities - - ====== ====== Notes to the Accounts for the year ended 30th June 2007 cont.../ 6. TAXATION cont.../ Factors affecting tax charge for year The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows: 2007 2006 £ £ Loss on ordinary activities before tax (8,191,067) (420,166) Loss on ordinary activities multiplied by the standard rate of corporation tax in the UK of 30% (2,457,320) (126,050) Effects of: Future tax benefit not brought to account - revenue 1,915,507 123,686 Future tax benefit not brought to account - capital 540,000 - Expenses not deductible for tax purposes 1,813 2,364 _______ _______ Current tax charge for period - - ====== ====== The Group has a potential deferred tax asset arising from revenue losses of £2,049,330 incurred since inception. No deferred tax asset has been recognised because there is insufficient evidence of the timing of suitable future profits against which the losses can be recovered. 7. LOSS PER SHARE The basic loss per share is derived by dividing the loss for the year attributable to ordinary shareholders by the weighted average number of shares in issue. 2007 2006 £ £ Loss for the year (8,191,067) (420,166) Weighted average number of Ordinary shares of 1p on issue 159,535,414 132,731,507 Loss per share - basic (stated in pence) (5.13) p (0.31) p Weighted average number of Ordinary shares of 1p on issue 172,845,896 136,573,505 inclusive of outstanding options There are no dilutive share options as at 30 June 2007. Notes to the Accounts for the year ended 30th June 2007 cont.../ 8. INTANGIBLE FIXED ASSETS Project Goodwill Total Exploration £ £ £ Net book value At 30th June 2006 2,565,344 1,800,000 4,365,344 Additions 1,628,530 - 1,628,530 _______ _______ _______ At 30th June 2007 4,193,874 1,800,000 5,993,874 _______ _______ _______ Amortisation At 30th June 2006 - - - at 30th June 2007 4,193,874 1,800,000 5,993,974 _______ _______ _______ Net book value At 30th June 2007 - - - ====== ====== ====== At 30th June 2006 2,565,344 1,800,000 4,365,344 ====== ====== ====== On the 29th May 2007 the company announced the decision to terminate its involvement in the Danfeng Project ("the Project") and the Joint Venture Company established to develop the Project, the Shang Lou City Zhongbei Minerals and Mining Development Company Ltd. 9. TANGIBLE FIXED ASSETS IT Equipment Leasehold Furniture & Total Improvement Fittings £ £ £ £ Cost At 1st July 2006 25,763 - - 25,763 Additions 13,914 83,760 13,403 111,077 _______ _______ _______ _______ At 30th June 2007 39,677 83,760 13,403 136,840 _______ _______ _______ _______ Depreciation At 1st July 2006 4,071 - - 4,071 Charge for year 11,721 4,230 1,117 17,068 _______ _______ _______ _______ At 30th June 2007 15,792 4,230 1,117 21,139 _______ _______ _______ _______ Net book value At 30th June 2007 23,885 79,530 12,286 115,701 ====== ====== ====== ====== At 30th June 2006 21,692 - - 21,692 ====== ====== ====== ====== Notes to the Accounts for the year ended 30th June 2007 cont.../ 10. INVESTMENTS The Company holds 20% or more of the share capital of the following Company: Country of Shares held registration or Company incorporation Class Percentage Copper Developments Pty Limited Australia Ordinary 100% 2007 2006 £ £ Carrying value of investment in subsidiary - - ====== ====== Copper Developments Pty Limited is a wholly owned dormant company with cash and share capital of AU$1. 11. DEBTORS 2007 2006 £ £ VAT Receivable 30,519 6,200 Prepayments 5,967 8,776 Accounts Receivable 13,682 - _______ _______ 50,168 14,976 ====== ====== 12. CREDITORS: amounts falling due within one year 2007 2006 £ £ Trade Creditors 90,599 23,812 Accruals 247,959 14,500 _______ _______ 338,558 38,312 ====== ====== Notes to the Accounts for the year ended 30th June 2007 cont.../ 13. SHARE CAPITAL 2007 2006 £ £ Authorised 5,000,000,000 ordinary shares at 1p each 50,000,000 50,000,000 ====== ====== 2007 2006 £ £ Allotted, called up and fully paid 161,650,003 Ordinary shares at 1p each 1,616,500 1,576,000 (30 June 2006: 157,600,003 Ordinary shares of 1p each) ====== ====== On 7 July 2006, 100,000 ordinary shares were issued at a price of 1 pence for cash. On 2 October 2006, 1,050,000 ordinary shares were issued at a price of 5 pence for cash. On 16 October 2006, 525,000 ordinary shares were issued at a price of 5 pence for cash. On 4 December 2006, 225,000 ordinary shares were issued at a price of 5 pence for cash. On 1 March 2007, 250,000 ordinary shares were issued at a price of 1 pence for cash. On 29 March 2007, 1,800,000 ordinary shares were issued at a price of 1 pence for cash. On 24 April 2007, 100,000 ordinary shares were issued at a price of 5 pence for cash. Share Options The following options were granted by the Company and have not been exercised at 30th June 2007: Number of Exercise Expiry ordinary shares price date 249,997 5.0p 23rd February 2010 840,000 5.0p 8th November 2007 442,500 5.0p 8th March 2008 2,500,000 40.0p 30th August 2008 10,333,334 40.0p 30th June 2009 On 30th August 2006, 2,500,000 options were granted at an exercise price of 40 pence. On 8th March 2007, 1,282,500 options were granted at an exercise price of 5 pence. Notes to the Accounts for the year ended 30th June 2007 cont.../ 14. SHARE PREMIUM 2007 2006 £ £ At 1st July 7,103,448 2,133,795 Arising on shares issued 76,000 5,131,000 Share issue expenses (12) (161,347) _______ _______ At 30th June 7,179,436 7,103,448 ====== ====== 15. MERGER RESERVE 2007 2006 £ £ At 1st July 1,440,000 - On acquisition of subsidiary - 1,440,000 _______ _______ At 30th June 1,440,000 1,440,000 ====== ====== Upon the acquisition of the Company's wholly-owned subsidiary, a merger reserve was created to deal with the excess of the fair value of shares acquired over the nominal value of shares allotted, in accordance with the merger relief provisions in the Companies Act 1985. 16. EQUITY RESERVE 2007 2006 £ £ At 1st July - - Share based payment (Note 17) 55,000 - _______ _______ At 30th June 55,000 - ====== ====== Notes to the Accounts for the year ended 30th June 2007 cont.../ 17. SHARE BASED PAYMENT During the financial year the company granted options to senior executives as incentivisation for performance. The expense in respect to these options was charged to the share premium account. Share Price Fair Value Name Date Granted Number Exercise Expiry Date Grant Date Grant Date Price per Option Total £ Mario Vasquez 30/08/06 2,000,000 40p 30/08/08 19.25p 44,000 Bruce Stewart 30/08/06 500,000 40p 30/08/08 19.25p 11,000 The fair value of the options granted to senior executives during the period was £55,000. The assessed fair value at the grant date was determined using the Black-Scholes Model that takes into account the exercise price, the term of the option, the share price at grant date, the expected volatility of the underlying share of 56%, the expected dividend yield and the risk free interest rate of 5.5% for the term of the option. In assessing the fair value of the options, a discount of 10% has been applied to the theoretical value calculated by the Black-Scholes Model to take into account the lack of marketability of the options and the inherent limitations of the Black-Scholes Model. 18. PROFIT AND LOSS ACCOUNT 2007 2006 £ £ At 1st July (453,956) (33,790) Retained loss (8,191,067) (420,166) _______ _______ At 30th June (8,645,023) (453,956) ====== ====== 19. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS 2007 2006 £ £ At 1st July 9,665,492 2,900,005 Loss for the financial period (8,191,067) (420,166) Shares issued 116,500 7,347,000 Share based payment 55,000 - Issue expenses (12) (161,347) _______ _______ At 30th June 1,645,913 9,665,492 ====== ====== Notes to the Accounts for the year ended 30th June 2007 cont.../ 20. CONTINGENT LIABILITIES AND COMMITMENTS On 20th March 2007 the company entered into a 5 year rental lease expiring on 19th March 2012. The annual rental charge totals £85,150. As at the 30 June 2007, the remaining rental commitment amounted to £383,175. 21. FINANCIAL INSTRUMENTS The Group uses financial instruments comprising cash, liquid resources and debtors/creditors that arise from its operations. The Group's exposure to currency and liquidity risk is not considered significant. The majority of the Group's cash balances are held in Sterling. The net fair value of financial assets and liabilities approximates the carrying values disclosed in the financial statements. The currency and interest rate profile of the financial assets is as follows: Cash and short Cash and short Term deposits term deposits At 30th June 2007 At 30th June 2006 £ £ Sterling 1,818,602 4,916,754 People's Republic of China - 385,038 _______ _______ 1,818,602 5,301,792 ====== ====== The financial assets comprise interest earning bank deposits. 22. EVENTS AFTER THE BALANCE SHEET DATE On the 30th September 2007, Mario Vazquez resigned from his position of Executive Director to the company. Mario's resignation effectively voided the 2,000,000 performance based options (Note 13) granted on the 30th August 2006. On the 21st December 2007, David Tyrwhitt resigned from his position of Executive Director to the company. 23. RELATED PARTIES The following director related party transaction occurring the year: The company paid consultancy fees at agreed commercial rates to an Australian company titled David Tyrwhitt & Associate Pty Ltd, of which David Tyrwhitt is an Executive. The amount of consultancy fees for the financial year amounted to £76,785. This information is provided by RNS The company news service from the London Stock Exchange END FR OKDKNABDDOBB
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