Interim Report
Centamin Egypt Limited
05 March 2004
CENTAMIN EGYPT LIMITED
ABN 86 007 700 352
FINANCIAL REPORT
FOR THE HALF-YEAR ENDED 31 DECEMBER 2003
DIRECTORS' REPORT
________________________________________________________________________________
The Directors of Centamin Egypt Limited herewith submit the financial report for
the half-year ended 31 December 2003. In order to comply with the provisions of
the Corporations Act 2001, the Directors report as follows:
DIRECTORS
The names of the Directors and officers of the company during or since the end
of the half-year are:
Mr Sami El-Raghy - Chairman
Mr Josef El-Raghy - Managing Director
Mr Colin Cowden - Non Executive Director
Mr Gordon B Speechly - Non Executive Director
Dr Thomas Elder - Non Executive Director
COMPANY SECRETARY
Mrs Cecilia Tyndall
PROJECT MANAGER
Mr Harry Michael
EXPLORATION
Mr Michael Kriewaldt
FINANCIAL CONTROLLER
Ms Cecilia Tyndall
PERTH OFFICE MANAGER
Mr John Lynch
PRINCIPAL ACTIVITIES
The principal activity of the consolidated entity during the course of the
half-year was the exploration for precious and base metals.
CORPORATE GOVERNANCE
The Board of Directors of Centamin Egypt Limited is responsible for the
corporate governance of the Company. The Board monitors the business affairs of
Centamin Egypt Limited on behalf of the shareholders by whom they are elected
and to whom they are accountable.
REVIEW OF OPERATIONS
Discussions with the Egyptian Geological Survey and Mining Authority (EGSMA) and
the Ministry for Industry continued during the half-year in order to obtain the
renewal of security passes for Centamin's staff and contractors, so that work
may resume at the Sukari gold project. Shareholders are referred to the
Company's quarterly report for further details of Centamin's initiatives to seek
a resolution.
Signed in accordance with a resolution of the directors made pursuant to s.306
of the Corporations Act 2001.
On behalf of the Directors
Josef El-Raghy
Managing Director
Perth,
3 March 2004
INDEPENDENT REVIEW REPORT TO THE MEMBERS
OF CENTAMIN EGYPT LIMITED
Scope
We have reviewed the financial report of Centamin Egypt Limited for the
half-year ended 31 December 2003 as set out on pages 3 to 10. The financial
report includes the consolidated financial statements of the consolidated entity
comprising the disclosing entity and the entities it controlled at the end of
the half-year or from time to time during the half-year. The disclosing entity's
directors are responsible for the financial report. We have performed an
independent review of the financial report in order to state whether, on the
basis of the procedures described, anything has come to our attention that would
indicate that the financial report is not presented fairly in accordance with
Accounting Standard AASB 1029 'Interim Financial Reporting' and other mandatory
professional reporting requirements in Australia and statutory requirements, so
as to present a view which is consistent with our understanding of the
consolidated entity's financial position, and performance as represented by the
results of its operations and its cash flows, and in order for the disclosing
entity to lodge the financial report with the Australian Securities and
Investments Commission.
Our review has been conducted in accordance with Australian Auditing Standards
applicable to review engagements. A review is limited primarily to inquiries of
the entity's personnel and analytical procedures applied to the financial data.
These procedures do not provide all the evidence that would be required in an
audit, thus the level of assurance provided is less than given in an audit. We
have not performed an audit and, accordingly, we do not express an audit
opinion.
Statement
Based on our review, which is not an audit, we have not become aware of any
matter that makes us believe that the half-year financial report of Centamin
Egypt Limited is not in accordance with:
(a) the Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity's financial position
as at 31 December 2003 and of its performance for the half-year ended on that
date; and
(ii) complying with Accounting Standard AASB 1029 'Interim Financial Reporting'
and the Corporations Regulations 2001; and
(b) other mandatory professional reporting requirements in Australia.
DELOITTE TOUCHE TOHMATSU
Leanne Karamfiles
Partner
Chartered Accountants
Perth, 24 February 2004
DIRECTORS' DECLARATION
____________________________________________________________________________________
The directors declare that:
a) The attached financial statements and notes thereto comply with
Accounting Standards;
b) The attached financial statements and notes thereto give a true and
fair view of the financial position and performance of the consolidated entity;
c) In the directors' opinion, the attached financial statements and notes
thereto are in accordance with the Corporations Act 2001; and
d) In the directors' opinion, there are reasonable grounds to believe that
the Company will be able to pay its debts as and when they become due and
payable.
Signed in accordance with a resolution of the directors made pursuant to s. 303
(5) of the Corporations Act 2001.
On behalf of the Directors
Josef El-Raghy
Managing Director
Perth, 3 March 2004
CENTAMIN EGYPT LIMITED and its controlled entities
FINANCIAL STATEMENTS
for the half-year ended 31 December 2003
STATEMENT OF FINANCIAL PERFORMANCE
Consolidated
---------------------
------------ -----------
Half Year Half Year
Ended Ended
31 Dec 03 31 Dec 02
$ $
------------ -----------
Revenue from ordinary activities 531,694 204,824
Expenses
Salaries, Directors Fees & Superannuation 639,487 241,956
Foreign Exchange Loss 271,798 1,762
Accounting, Audit & Legal Fees 120,791 62,905
Consulting Fees 119,287 17,229
Promotional Expenses 99,487 58,535
Other Expenses From Ordinary Activities 97,590 54,264
Travelling Expenses 68,533 78,415
Listing & Share Registry Fees 34,800 50,078
Office Rent 25,319 20,000
Telephone Expenses 15,855 33,343
Annual Report Expenses 12,778 15,156
Secretarial Fees - 24,498
------------ -----------
Profit/(Loss) From Ordinary Activities Before
Income Tax Benefit (974,031) (453,317)
Income tax benefit relating to ordinary activities - -
------------ -----------
Net Profit/(Loss) (974,031) (453,317)
Net Profit/(Loss) attributable to outside equity
interests (221) (35)
------------ -----------
Net Profit/(Loss) Attributable to Members of the
Parent Entity (973,810) (453,282)
------------ -----------
Total Changes in Equity Other than those Resulting
from Transactions with Owners as Owners (973,810) (453,282)
============ ===========
Earnings Per Share - Basic (cents per share) (0.19) (0.13)
-Diluted (cents per share) (0.19) (0.13)
============ ===========
The statement of financial performance is to be read in conjunction with the
notes to and forming part of the half-yearly financial statements
STATEMENT OF FINANCIAL POSITION
Consolidated
--------------------
----------- -----------
31 December 30 June
2003 2003
----------- -----------
$ $
----------- -----------
CURRENT ASSETS
Cash Assets 22,525,653 24,626,319
Receivables 24,965 27,631
Prepayments 113,653 85,018
----------- -----------
Total current assets 22,664,271 24,738,968
----------- -----------
NON-CURRENT ASSETS
Plant and equipment 3 140,658 133,264
Exploration expenditure 26,062,526 25,262,458
----------- -----------
Total non-current assets 26,203,184 25,395,722
----------- -----------
Total assets 48,867,455 50,134,690
=========== ===========
CURRENT LIABILITIES
Accounts payable 230,421 534,110
Provisions 100,220 64,923
----------- -----------
Total current liabilities 330,641 599,033
----------- -----------
NON-CURRENT LIABILITIES
Accounts payable - 224,952
Non-Interest bearing liabilities 200,139 -
----------- -----------
Total non-current liabilities 200,139 224,952
----------- -----------
----------- -----------
Total liabilities 530,780 823,985
----------- -----------
----------- -----------
Net assets 48,336,675 49,310,705
=========== ===========
EQUITY
Contributed equity 68,568,240 68,568,240
Reserves 2,809,287 2,809,287
Accumulated losses (23,036,688) (22,062,879)
----------- -----------
Parent entity interest 48,340,839 49,314,648
Outside equity interest (4,164) (3,943)
----------- -----------
Total equity 48,336,675 49,310,705
=========== ===========
The statement of financial position is to be read in conjunction with the notes
to and forming part of the half-yearly financial statements.
STATEMENT OF CASH FLOWS
Consolidated
----------- -----------
Half-Year Half-Year
Ended Ended
31 Dec 03 31 Dec 02
$ $
----------- -----------
CASH FLOWS FROM OPERATING
ACTIVITIES
Cash receipts in the course of 2,400 -
operations ----------- -----------
Cash payments in the course of (1,513,632) (673,257)
operations
Interest received 497,945 54,978
----------- -----------
Net cash provided by/(used in)
operating (1,013,287) (618,279)
activities ----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES
Receipts from investing activities 6,000 -
Payment for purchases of property,
plant & (24,988) (54,671)
equipment
Payments for exploration (800,068) (1,606,806)
----------- -----------
Net cash (used in) investing (819,056) (1,661,477)
activities ----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from the issue of shares - 1,649,357
Repayment of borrowings - (325,449)
----------- -----------
Net cash provided by financing - 1,323,908
activities ----------- -----------
Net increase/(decrease) in cash (1,832,343) (955,848)
held
Effects of exchange rate changes on
the balance of (268,323) 148,084
cash held in foreign currencies
Cash at the beginning of the 24,626,319 3,954,083
half-year
----------- -----------
Cash at the end of the half-year 22,525,653 3,146,319
=========== ===========
The statement of cash flows is to
be read in conjunction with the
notes to and forming part of the
half-yearly financial statements.
NOTES TO THE FINANCIAL STATEMENTS
1. Statement of significant accounting policies
The significant policies, which have been adopted in the preparation of these
financial statements, are:
(A) BASIS OF PREPARATION
This financial report is denominated in Australian Dollars.
The half-year financial report is a general purpose financial report prepared in
accordance with the Corporations Act 2001 and AASB 1029 'Half-Year Accounts and
Consolidated Accounts'. The half-year financial report should be read in
conjunction with the 2003 Annual Financial Report together with any
announcements made by the company and its controlled entities during the
half-year in accordance with any continuous disclosure obligations arising under
the Corporations Act 2001.
The consolidated accounts have been prepared on the basis of historical costs
and do not take into account changing money values or, except where stated,
current valuations of non-current assets. The accounting policies have been
consistently applied by the entities in the economic entity and, except where
there is a note of a change in accounting policy, are consistent with those of
the previous year.
(B) PRINCIPLES OF CONSOLIDATION
The consolidated accounts of the economic entity include the accounts of the
company, being the chief entity, and its controlled entities. Where an entity
either began or ceased to be controlled during the year, the results are
included only from the date control commenced or up to the date control ceased.
The balances, and effects of transactions, between controlled entities included
in the consolidated accounts have been eliminated.
(C) TAXATION
The economic entity adopts the liability method of tax effect accounting. Income
tax benefit is calculated on the profit/(loss) from ordinary activities adjusted
for permanent differences between taxable and accounting income. The tax effect
of timing differences, which arise from items being brought to account in
different periods for income tax and accounting purposes, is carried forward in
the statement of financial position as a future income tax benefit or a
provision for deferred income tax.
Future income tax benefits are not brought to account unless realisation of the
asset is assured beyond reasonable doubt. Future income tax benefits relating to
tax losses are only brought to account when their realisation is virtually
certain.
(D) NON-CURRENT ASSETS
The carrying amounts of all non-current assets, except exploration expenditure,
are reviewed to determine whether they are in excess of their recoverable amount
at balance date. If the carrying amount of a non-current asset exceeds the
recoverable amount, the asset is written down to the lower amount. In assessing
recoverable amounts the relevant cash flows have not been discounted to their
present value.
(E) INVESTMENTS
Investments in controlled entities are carried in the company's accounts at
recoverable amount. Dividends and distributions are brought to account in the
statement of financial performance when they are proposed by the controlled
entities.
(F) EXPLORATION, EVALUATION AND DEVELOPMENT EXPENDITURE
Exploration, evaluation and development costs are accumulated in respect of each
separate area of interest where rights of tenure are current. These costs are
carried forward where they are expected to be recouped through sale or
successful development and exploitation of the area of interest, or, where
activities in the area of interest have not yet reached a stage that permits
reasonable assessment of the existence of economically recoverable reserves.
When an area of interest is abandoned or the directors decide that it is not
commercial, any accumulated costs in respect of that area are written off in the
year the decision is made. Each area of interest is also reviewed annually and
accumulated costs written off to the extent that they will not be recoverable in
the future.
As at balance date:
• The economic entity is still progressing exploration to delineate resources;
• An upgraded feasibility study with respect to the areas of interest is in the
process of being completed; and
• The realisable value is dependant upon the current and future commodity prices
As a consequence of the above, the ability of the economic entity to recover the
carrying amount of the exploration expenditure and areas of interest is
dependant upon the successful development and commercial exploitation and/or
sale of the relevant areas of interest.
Amortisation is not charged on costs carried forward in respect of areas of
interest in the development phase until production commences.
When production commences, carried forward exploration, evaluation and
development costs are amortised on units of production basis over the life of
the economically recoverable reserves.
Restoration costs are provided for at the time of the activities which give rise
to the need for restoration. If this occurs prior to commencement of production,
the costs are included in deferred exploration and development expenditure. If
it occurs after commencement of production, restoration costs are provided for
and charged to the statement of financial performance as an expense.
(G) PLANT AND EQUIPMENT
Items of plant and equipment are recorded at cost and depreciated from the date
of acquisition on a reducing balance method over their estimated useful lives.
The following estimated useful lives are used in the calculation of
depreciation:
Plant & Equipment & Office Furniture - 4-10 years
Motor Vehicles - 2 -8 years
(H) SUPERANNUATION FUND
The Company contributes to, but does not participate in, compulsory
superannuation funds on behalf of the directors in respect of directors' fees
paid. Contributions are charged against income as they are made.
(I) FOREIGN CURRENCY
All foreign currency transactions during the year have been brought to account
using the exchange rate in effect at the date of the transaction. Foreign
currency monetary items at balance date are translated at the exchange rate
existing at that date.
All exchange differences are brought to account in the statement of financial
performance in the financial period in which they arise.
The assets and liabilities of the controlled entity incorporated overseas (being
an integrated foreign operation) are translated using the temporal method.
Monetary items are translated using the exchange rate at balance date and
non-monetary items are translated at exchange rates current at the transaction
dates. The statement of financial performance is translated at the exchange rate
current at the transaction date, except that non-monetary items are translated
at the original rates. Exchange differences arising on translation are taken
directly to the statement of financial performance.
(J) RECEIVABLES
Trade receivables and other receivables are recorded at amounts due less any
provision for doubtful debts.
(K) ACCOUNTS PAYABLE
Trade payables and other accounts payable are recognised when the economic
entity becomes obliged to make future payments resulting from the purchase of
goods and services.
(L) DEBT AND EQUITY INSTRUMENTS ISSUED BY THE COMPANY
Debt and equity instruments are classified as either liabilities or as equity in
accordance with the substance of the contractual arrangement.
(M) GOODS AND SERVICES TAX
Revenues, expenses and assets are recognised net of the amount of goods and
services tax (GST), except:
i. Where the amount of GST incurred is not recoverable from the
taxation authority, it is recognised as part of the cost of acquisition of an
asset or as part of an item of expense; or
ii. For receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is
included as part of receivables or payables.
2. Segment reporting
Primary reporting - Business Segments
The economic entity is engaged in the business of exploration for precious and
base metals only, which is characterised as one business segment only. As the
economic entity has only one business segment, all the necessary reporting
disclosures are disclosed elsewhere in the notes to the financial statements.
Secondary reporting - Geographical Segments
The principal activity of the economic entity during the year was the
exploration for precious and base metals in Egypt and funding is sourced from
Australia.
3. Plant and Equipment
Consolidated
------------------------------
----------- -----------
Plant, Motor Total
Equipment & Vehicles
Office
Furniture
$ $ $
----------- ----------- -----------
Gross Carrying Amount
Balance at 30 June 2003 839,283 124,628 963,911
Additions 7,789 34,547 42,336
----------- ----------- -----------
Balance at 31 December 2003 843,984 140,675 984,659
----------- ----------- -----------
Accumulated Depreciation
Balance at 30 June 2003 (730,954) (99,693) (830,647)
Depreciation Expense (17,493) (14,730) (32,223)
Disposals 3,087 15,782 18,869
----------- ----------- -----------
Balance at 31 December 2003 (745,360) (98,641) (844,001)
----------- ----------- -----------
Net Book Value
----------- ----------- -----------
As at 30 June 2003 108,329 24,935 133,264
----------- ----------- -----------
As at 31 December 2003 98,624 42,034 140,658
----------- ----------- -----------
4. Events subsequent to balance date
The consolidated entity is not aware of any other matter or circumstance arising
since the end of the financial period, not otherwise dealt with in the financial
statements or the operations report, that has or may significantly affect the
operations of the consolidated entity, the results of those operations or the
state of affairs of the consolidated entity in subsequent financial periods.
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