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. This information is provided by RNS The company news service from the London Stock Exchange ND MSCQKPKNCBKKNNK

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