| Mon 16 Jul 2007, 14:53 | | ZCI - Zambia Copper Investments Limited - Audited |
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ZCI
ZAKK
ZCI - Zambia Copper Investments Limited - Audited Consolidated Financial Results
ZAMBIA COPPER INVESTMENTS LIMITED
(Registered in Bermuda)
("ZCI" or "the Company")
JSE code: ZCI
ISIN: BMG988431240
Audited Consolidated Financial Results
CHAIRMAN`S REPORT
Following the unaudited results released on 2 July 2007, 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, were audited by KPMG Audit S.a.r.l., Luxembourg.
These consolidated financial statements are the responsibility of the Board of
Directors.
The audit report is available for inspection at the registered office of ZCI.
Consolidated Income Statement for the year ended 31 March 2007
expressed in thousands of US Dollars
Year ended 1 January 2005
31 March 2007 to 31 March
2006
Finance income 730 2,248
General and administration expenses (849) (1,359)
Income from associated company 85,577 37,640
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 67.67 30.47
US cents
Net profit per ordinary share in US 67.67 30.47
cents
Number of ordinary shares in issue 126,197,362 126,197,362
Consolidated Balance Sheet as at 31 March 2007
expressed in thousands of US Dollars
31 March 2007 31 March 2006
Non-current assets
Long term accounts receivable 4,890 9,477
Investment in associated company 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 (188) (260)
liabilities
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) (2 214,246)
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 Re- Hedging Accumu- Total
capital surplus valuation reserve lated equity
reserve deficit
Balance at
31 December 30,299 304,248 - - (252,699) 81,848
2004
Revaluation - - 42 - - 42
on available
for sale
investment
Hedging - - - (14,420) - (14,420)
reserve of
associated
company
Profit for - - - - 38,453 38,453
the period
Balance at 30,299 304,248 42 (14,420) (214,246) 105,923
31 March
2006
Revaluation - - 531 - - 531
on available
for sale
investment
Hedging - - - 1,862 - 1,862
reserve of
associated
company
Profit for - - - - 85,398 85,398
the year
Balance at 30,299 304,248 573 (12,558) (128,848) 193,714
31 March
2007
Consolidated statement of cash flows for the year ended 31 March 2007
expressed in thousands of US Dollars
Year ended 31 1 January
March 2007 2005
to 31 March
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 (838) (1,474)
activities
Cash flow from investing activities
Purchase of available for sale (7,220) (2,800)
investments
Dividends received from associated 1,628 -
company
Proceeds from partial disposal of 5,220 5,220
investment in subsidiary
Cash (absorbed) / generated by (372) 2,420
investing activities
Net (decrease) / increase in cash (1,210) 946
Net cash at the beginning of the year / 4,066 3,120
period
Net cash at the end of the year / 2,856 4,066
period
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, 16 July 2007
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: 16/07/2007 14:17:01 Produced by the JSE SENS Department.
