| Mon 2 Jul 2007, 10:18 | | ZCI - Zambia Copper Investments - Unaudited Consol |
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ZCI
ZAKK
ZCI - Zambia Copper Investments - Unaudited Consolidated Financial Results for
the year ended 31 March 2007
ZAMBIA COPPER INVESTMENTS LIMITED
Registered in Bermuda
Registration number 1970/000023/01
JSE code: ZCI & ISIN: BMG988431240
("ZCI" or "the Company")
UNAUDITED CONSOLIDATED FINANCIAL RESULTS
Consolidated Income Statement
for the year ended 31 March 2007
expressed in thousands of US Dollars
Year ended 1 January 2005
31 March to 31 March
2007 2006
Finance income 730 2,248
General and administration expenses (849) (1,359)
Income from associated companies 83,949 37,640
Investment income 1,628 -
Profit before taxation 85,458 38,529
Taxation (60) (76)
Profit for the year/period 85,398 38,453
Headline earnings per ordinary share in US
cents 67.67 30.47
Net profit per ordinary share in US cents 67.67 30.47
Number of ordinary shares in issue 126 197 362 126 197 362
Consolidated Statement of Cash Flows
for the year ended 31 March 2007
expressed in thousands of US Dollars
Year ended 1 January 2005
31 March to 31 March
2007 2006
Cash flow from operating activities
Cash paid to suppliers and employees (876) (1,480)
Cash absorbed by operations (876) (1,480)
Interest received 114 96
Income tax paid (76) (90)
Net cash absorbed by operating activities (838) (1,474)
Cash flow from investing activities
Purchase of available for sale investments (7,220) (2,800)
Dividends received from associated companies 1,628 -
Proceeds from partial disposal of investment
in subsidiary 5,220 5,220
Cash (absorbed)/generated by investing
activities (372) 2,420
Net (decrease)/increase in cash (1,210) 946
Net cash at the beginning of the year/period 4,066 3,120
Net cash at the end of the year/period 2,856 4,066
Consolidated Balance Sheet
as at 31 March 2007
expressed in thousands of US Dollars
31 March 31 March
2007 2006
Non-current assets
Long-term accounts receivable 4,890 9,477
Investment in associated companies 170,313 84,502
175,203 93,979
Current assets
Available for sale investment 10,593 2,842
Accounts receivable 5,250 5,296
Cash and cash equivalents 2,856 4,066
18,699 12,204
Current liabilities
Accounts payable and accrued liabilities (188) (260)
Net current assets 18,511 11,944
Total assets less current liabilities 193,714 105,923
Net assets 193,714 105,923
Capital and reserves
Capital 334,547 334,547
Revaluation reserve 573 42
Deficit on hedging reserve (12,558) (14,420)
Accumulated deficit (128,848) (2214,246)
Shareholders` equity 193,714 105,923
Consolidated Statement of Changes to Equity
for the year ended 31 March 2007
expressed in thousands of US Dollars
Share Contributed Revaluation
capital surplus reserve
Balance at
31 December 2004 30,299 304,248 -
Revaluation on
available for sale
investment - - 42
Hedging reserve
of associated
company - - -
Profit for the period - - -
Balance at
31 March 2006 30,299 304,248 42
Revaluation on
available for sale
investment - - 531
Hedging reserve
of associated
company - - -
Profit for the year - - -
Balance at
31 March 2007 30,299 304,248 573
Accu-
Hedging mulated Total
reserves deficit equity
Balance at
31 December 2004 - (252,699) 81,848
Revaluation on
available for sale
investment - - 42
Hedging reserve
of associated
company (14,420) - (14,420)
Profit for the period - 38,453 38,453
Balance at
31 March 2006 (14,420) (214,246) 105,923
Revaluation on
available for sale
investment - - 531
Hedging reserve
of associated
company 1,862 - 1,862
Profit for the year - 85,398 85,398
Balance at
31 March 2007 (12,558) (128,848) 193,714
CHAIRMAN`S REPORT
I am pleased to present the Company`s audited annual financial statements for
the year ended 31 March 2007. These results show a significant improvement on
those of the preceding financial year, with a consolidated net profit figure of
USD 85.4 million (2006: USD 38.5 million) amounting to a profit per share
figure in US cents of 67, 67 (2006: US cents 30, 47).
Although production levels at Konkola Copper Mines ("KCM") remain below their
targeted levels, KCM returned excellent results for the year, with a net profit
figure of USD 301 million (2006: USD 114 million). The effect of the sustained
strong international copper price continues to have an extremely positive
influence on KCM`s performance. I am also delighted to announce that KCM
declared an inaugural interim dividend during the 2006/2007 financial year of
USD 5.74 million, of which ZCI received USD 1.6 million in November 2006.
Indications are that KCM will shortly confirm the declaration of a final
dividend in the same amount and we hope that this is a positive indication of
what KCM`s shareholders may continue to expect in the new financial year.
Your Board remains highly involved with continuing negotiations with Vedanta
Resources Plc ("Vedanta") resulting from the exercise by Vedanta of its call
option in terms of the Vedanta Call Option Deed ("the Deed") over the remaining
28.4% of KCM shares held by ZCI through its wholly owned subsidiary, ZCI
Holdings S.A. In September 2006, as a result of a material difference of
opinion in the interpretation of certain provisions relating to the Deed, ZCI
served notice of arbitration on Vedanta in accordance with the dispute
resolution provisions in the Deed, in order that these differences be resolved
prior to the commencement of the valuation process by the independent bank.
Confidentiality provisions in the Deed unfortunately prevent the dissemination
of detailed information relating to the arbitration proceedings, but
shareholders are informed that the arbitration was heard between 12 and 14 June
2007, and further announcements on the process will be released by ZCI.
Steps will be taken to finalise the terms of appointment of the independent
investment bank in order that they may commence with valuation of ZCI`s 28.4%
shareholding in KCM. It should be noted that the outcome of the arbitration may
have a material impact on the Company`s share price, either positively or
negatively. The Directors will closely monitor developments in order to avoid
potential prejudice to shareholders and investors arising from undue volatility
in the share price.
Shareholders are reminded that in the event that Vedanta is unwilling to pay
the option exercise price as determined by the Bank, it shall not be required
to proceed with the associated purchase of ZCI`s KCM shares. In terms of the
provisions of the Deed, ZCI shall be bound to accept the valuation made by the
Bank. As before, shareholders are advised to exercise caution when dealing in
ZCI`s securities until detailed announcements are made.
ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these financial
statements for the year ended 31 March 2007 are in accordance with
International Financial Reporting Standards.
The consolidated balance sheet of Zambia Copper Investments Limited and its
subsidiaries (the "Group") for the year ended 31 March 2007 and the related
consolidated statements of income, cash flow and changes in shareholders`
equity for the period then ended, are in the process of being audited by KPMG
Audit S.a.r.l., Luxembourg. These consolidated financial statements are the
responsibility of the Board of Directors.
The Group`s shareholding in KCM was 28.4% during the year. While the financial
information on KCM has been subject to audit by an external auditor as at 31
March 2007, the signed audit report of the associated company (KCM) was not
received by the Company in sufficient time to allow KPMG to form an opinion at
this stage. The audit is expected to be completed shortly. The audit report
will be available for inspection at the registered office of ZCI once the audit
is completed.
ANNUAL GENERAL MEETING
Notice is hereby given that the annual general meeting of the Company will be
held at the Hotel Le Royal, 12 Boulevard Royal, Luxembourg, on Wednesday 12
September 2007 at 11h00, to transact the business as stated in the notice of
annual general meeting included in the annual report.
Thomas Kamwendo
Chairman
Bermuda
29 June 2006
Registered Office: Clarendon House 2, Church Street, Hamilton, Bermuda
Transfer Secretaries: Computershare Investor Services 2004 (Pty) Limited, 70
Marshall Street, Johannesburg, 2001
Website: www.zci.lu
Date: 02/07/2007 10:18:00 Produced by the JSE SENS Department.
