Steppe Cement Regulatory News (STCM)

5 Sep 2007 11:46

Steppe Cement Limited05 September 2007 Steppe Cement Limited Trading Results for the Half Year Ended 30 June 2007 and General Market Update 1. Interim Results Steppe Cement Limited ("Steppe") is pleased to announce a consolidated profitafter tax for the six months ended 30 June 2007 of US$10.6 million. These operating results are summarized below: ------------- ------------- -------- 6 months ended 6 months ended 30-Jun-07 30-Jun-06 ------------- ------------- --------Sales (tonnes) 382,080 365,443 +5%-------------------- ------------- ------------- --------Average exchange rate Tenge US$ 123.1 118.7-------------------- ------------- ------------- --------Sales (thousand tenge) 4,722,034 3,330,461 +42%-------------------- ------------- ------------- --------Sales (US$'000) 38,671 28,605 +35%-------------------- ------------- ------------- --------Profit before tax (US$'000) 15,594 11,553 +35%-------------------- ------------- ------------- --------Profit after tax (US$'000) 10,585 8,087 +31%-------------------- ------------- ------------- --------Earnings per share (cents) 9.3 7.1-------------------- ------------- ------------- -------- At the operational level, sales have increased by 42% in Tenge with the averagesales price achieved rising from US$78/ton to US$101/ton compared with thecorresponding period last year. Production costs have been held to 2006 levels as increased utility, transportand labour costs were offset by increased productivity due to the increasedefficiency of the wet lines. The refurbishment of the wet lines was completed inApril 2007 and the full effect will be reflected in the second half of the year. 2. Update on the Kazakh Cement Market The Kazakhstan cement market grew by 16% during the first half of the year. Theaverage price per ton increased significantly towards the end of the secondquarter as the factories struggled to satisfy the demand at the beginning of thehigh season. The increase in supply has come mainly from local companiesde-bottlenecking their facilities while cement imports remained flat during thefirst half as neighbouring countries struggled to meet internal domestic demand.The deficit in the market will continue, at least until Steppe commissions its 2lines. The credit tightening in the world markets started to spread to Kazakhstan inAugust and the portion of the construction sector financed by the local banks islikely to slow down in the coming months. Public works will represent anincreasing share of the market as investment in infrastructure by the governmentis accelerating. 3. Refurbishment progress The refurbishment of the kilns in the wet lines was completed in April and theircapacity is now 860,000 tons in a full year of operation. We expect to increasetheir capacity further in 2008 with additional investment in the chain systems,coolers and probably filters. Cement mill number 7 is also scheduled to berestarted during September 2007. The refurbishment project for dry lines 5 and 6 is gathering pace with 80% ofthe contracts for the project now awarded and most of the required materialseither on site or on the way. The construction site now employs over 700 workersand 25 engineers in the project team. The company has also started to engage the operators for line number 6 with amix of experienced overseas engineers and existing workers from the wet lines.Recommissioning of the dry process lines is expected to commence with theintroduction of Line 6 in the last quarter followed by Line 5 in 2008. 4. Financing There will not be an interim dividend as the cash flow was applied to therefurbishment programmes and the same policy will apply to the second half ofthe year. The improved cash flow from the wet lines since May has allowed deferring thedrawdown of the loan from EBRD until August 2007. EBRD has committed to provideup to US$ 42m and Kazcommertz Bank up to US$ 23 m of which US$8 m had been drawndown by the end of June. The full interim accounts of the company follow. A formatted pdf version ofthe accounts is also available on the company's website at www.steppecement.com. STEPPE CEMENT LTD (Incorporated in Labuan FT, Malaysia under the Offshore Companies Act, 1990) AND ITS SUBSIDIARY COMPANIES INTERIM FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 2007 (in US Dollars) CONTENTS PAGE(S) Condensed Consolidated Income Statement 1 Condensed Consolidated Balance Sheet 2 - 3 Condensed Consolidated Statement of Changes in Equity 4 - 6 Condensed Consolidated Cash Flow Statement 7 - 8 Notes to the Interim Financial Statements 9 - 20 STEPPE CEMENT LTD (Incorporated in Labuan FT, Malaysia under the Offshore Companies Act, 1990) AND ITS SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED INCOME STATEMENT FOR THE PERIOD ENDED 30 JUNE 2007 The Group The Company 6 months ended 6 months ended 30.6.07 30.6.06 30.6.07 30.6.06 Note USD'000 USD'000 USD'000 USD'000 Revenue 5 38,671 28,605 50 - Cost of sales (5,130) (12,401) - - -------- --------- --------- -------- Gross profit 23,541 16,204 50 - Selling expenses (2,335) (1,694) - -General and administrative (4,167) (3,588) (297) (221)expenses -------- --------- --------- -------- Operating profit/(loss) 17,039 10,922 (247) (221) Investment income 45 46 4 -Finance costs (1,238) (293) - -Other income/(loss), net (252) 830 - 45 -------- --------- --------- -------- Profit/(loss) before tax 15,594 11,505 (243) (176) Income tax expense 6 (5,009) (3,473) - - -------- --------- --------- -------- Profit/(loss) for the 10,585 8,032 (243) (176)period ======== ========= ========= ======== Attributable to:Shareholders of the 10,585 8,032 (243) (176)Company ======== ========= ========= ======== Earnings per share: Basic (cents) 7 0.09 0.07 ========= ========= The accompanying notes form an integral part of the Condensed FinancialStatements. STEPPE CEMENT LTD (Incorporated in Labuan FT, Malaysia under the Offshore Companies Act, 1990) AND ITS SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2007 The Group The Company As at As at As at As at 30.6.07 31.12.06 30.6.07 31.12.06 Note USD'000 USD'000 USD'000 USD'000 Assets Non-current assets:Property, plant and equipment 8 84,934 55,937 - -Investment in subsidiary - - 26,500 26,500companiesAdvances paid 12 22,637 10,046 - -Other assets 9 7,102 1,098 -------- --------- -------- -------- 114,673 67,081 26,500 26,500 -------- --------- -------- -------- Current AssetsInventories, net 10 8,211 8,538 - -Trade receivable, net 11 998 1,151 - -Amount owing by subsidiary - - 438 358companiesOther receivables, advances andprepaid expenses 12 3,188 2,198 42 1Short-term investments 13 - 16,763Cash and bank balances 5,384 8,864 351 630 -------- --------- -------- -------- 17,781 37,514 831 989 -------- --------- -------- -------- Total assets 132,454 104,595 27,331 27,489 ======== ========= ======== ======== (Cont'd) The Group The Company As at As at As at As at 30.6.07 31.12.06 30.6.07 31.12.06 Note USD'000 USD'000 USD'000 USD'000 Equity and Liabilities Capital and reservesShare capital 14 1,140 1,140 1,140 1,140Share premium 15 26,647 26,647 26,647 26,647Revaluation reserve 15 5,595 6,492 - -Translation reserve 15 4,266 1,531 - -Unappropriated profit/(Accumulated 44,857 33,375 (1,517) (1,274)loss) -------- --------- -------- -------- Total equity 82,505 69,185 26,270 26,513 -------- --------- -------- -------- Non-Current LiabilitiesBonds 16 22,414 21,577 - -Deferred tax liabilities, net 11,198 10,782 - - -------- --------- -------- -------- 33,612 32,359 - - -------- --------- -------- -------- Current LiabilitiesTrade payable 1,111 1,293 - -Other payables and accruedliabilities 17 4,475 1,514 411 363Amount owing to subsidiary - - 650 613companiesTaxes payable 18 2,621 244 - -Loans 19 8,130 - - - -------- --------- -------- -------- 16,337 3,051 1,061 976 -------- --------- -------- --------Total liabilities 49,949 35,411 1,061 976 -------- --------- -------- -------- Total Equity and Liabilities 132,454 104,595 27,331 27,489 ======== ========= ======== ======== The accompanying notes form an integral part of the Condensed FinancialStatements. STEPPE CEMENT LTD (Incorporated in Labuan FT, Malaysia under the Offshore Companies Act, 1990) AND ITS SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30 JUNE 2007 Non-distributable Distributable Share Share Translation Unappropriated Total/ capital premium reserve profit/ NetThe Group USD'000 USD'000 USD'000 USD'000 USD'000 Balance as at1 January 2006 1,000 6,300 (41) 16,663 23,922Issue of shares 140 20,860 - - 21,000Utilisation ofshare premium - (503) - - (503)Exchangedifferencesarising ontranslation offoreignsubsidiarycompanies - - 3,151 - 3,151Profit for theperiod - - - 8,032 8,032 --------- --------- --------- ------------ --------- Balance as of30 June 2006 1,140 26,657 3,110 24,695 55,602 ========= ========= ========= ============ ========= (Cont'd) ----------------Non-distributable---------------- -Distributable- Share Share Revaluation Translation Unappropriated Total/Net capital premium reserve reserve profitThe Group USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 Balance asat 1,140 26,647 6,492 1,531 33,375 69,1851 January2007Exchangedifferencesarising on - - - 2,735 - 2,735translationof foreignsubsidiarycompaniesProfit forthe - - - - 10,585 10,585periodDepreciationtransfer ofrevaluationreserve - - (897) - 897 - --------- ---------- ----------- ---------- ------------ --------- Balance asat 1,140 26,647 5,595 4,266 44,857 82,50530 June 2007 ========= ========== =========== ========== ============ ========= (Cont'd) Share Share Accumulated Total/ Capital Premium Loss NetThe Company USD'000 USD'000 USD'000 USD'000 Balance as at1 January 2006 1,000 6,300 (771) 6,529Issue of shares 140 20,860 - 21,000Utilisation ofshare premium - (503) - (503)Net loss forthe period - - (176) (176) --------- --------- ---------- ---------- Balance as of30 June 2006 1,140 26,657 (947) 26,850 ========= ========= ========== ========== Balance as at1 January 2007 1,140 26,647 (1,274) 26,513Net loss forthe period - - (243) (243) --------- --------- ---------- ---------- Balance as of30 June 2007 1,140 26,647 (1,517) 26,270 ========= ========= ========== ========== The accompanying notes form an integral part of the Condensed FinancialStatements. STEPPE CEMENT LTD (Incorporated in Labuan FT, Malaysia under the Offshore Companies Act, 1990) AND ITS SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD ENDED 30 JUNE 2007 The Group The Company 6 months ended 6 months ended 30.6.07 30.6.06 30.6.07 30.6.06 USD'000 USD'000 USD'000 USD'000 OPERATING ACTIVITIES Profit/(loss) beforetax 15,594 11,505 (244) (176)Adjustments fornon-cash items 3,203 1,258 - - --------- --------- --------- -------- Operating Profit/(Loss) BeforeMovement in WorkingCapital 18,797 12,763 (244) (176)(Increase)/ Decreasein Working Capital 2,405 1,947 (35) (189) --------- --------- --------- -------- Cash Generated From/(Used In) Operations 21,202 14,710 (279) (365)Income tax paid (2,627) (3,402) - -Interest paid (28) (293) - - --------- --------- --------- --------Net Cash From/ (UsedIn) by OperatingActivities 18,547 11,015 (279) (365) --------- --------- --------- -------- INVESTING ACTIVITIESProceeds fromdisposal ofproperty, plant andequipment 2,811 2,836 - -Purchase ofproperty, plant andequipment (31,207) (14,207) - -Proceeds fromshort-terminvestments 16,843 - - -Advance fornon-current assets (6,470) - - -Purchase ofnon-current assets (12,594) - - -Interest received 103 - - -Cash outflow fromacquisition ofsubsidiary company - - - (19,500) --------- --------- --------- --------Net Cash Used InInvesting Activities (30,514) (11,371) - (19,500) --------- --------- --------- -------- (Cont'd) The Group The Company 6 months ended 6 months ended 30.6.07 30.6.06 30.6.07 30.6.06 USD'000 USD'000 USD'000 USD'000 FINANCING ACTIVITIESProceeds from issuanceof shares - 21,000 - 21,000Cost of issuance ofshares - (503) - (369)Deposits pledged withfinancial institutions - (7,700) - -Proceeds from loans 8,130 - - -Repayment of loans - (7,976) - - -------- --------- --------- --------Net Cash From byFinancing Activities 8,130 4,821 - 20,631 -------- --------- --------- -------- NET INCREASE/(DECREASE)IN CASH AND CASHEQUIVALENTS (3,837) 4,465 (279) 766EFFECTS OF FOREIGNEXCHANGE RATE CHANGES 301 100 - - -------- --------- --------- --------CASH AND CASH 8,864 903 630 15EQUIVALENTS AT BEGINNINGOF THE PERIOD -------- --------- --------- -------- ======== ========= ========= ========CASH AND CASH 5,328 5,468 351 781EQUIVALENTS AT ENDPERIOD ======== ========= ========= ======== The accompanying notes form an integral part of the Condensed FinancialStatements. STEPPE CEMENT LTD (Incorporated in Labuan FT, Malaysia under the Offshore Companies Act, 1990) AND ITS SUBSIDIARY COMPANIES NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS 1. BASIS OF PREPARATION OF CONDENSED INTERIM FINANCIAL STATEMENTS Basis of presentation The condensed interim financial statements of the Group and the Company areunaudited and have been prepared in accordance with International FinancialReporting Standards ("IFRS"). The condensed interim financial statements do not include all the informationand disclosures required in the annual financial statements and should be readin conjunction with the audited financial statements for the year ended 31December 2006. The condensed interim financial statements were authorised forissue by the Board of Directors on 3 September 2007. Use of estimates and assumptions The preparation of financial statements in conformity with IFRS requiresmanagement to make estimates and assumptions that affect the reported amounts ofassets and liabilities, revenues and expenses and the disclosure of contingentassets and liabilities. Due to the inherent uncertainty in making thoseestimates, actual results reported in future periods could differ from suchestimates. 2. SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The financial statements of the Group and the Company have been prepared underthe historical cost convention. The accounting policies adopted are consistent with those followed in thepreparation of the Group's annual financial statements for the year ended 31December 2006. The principal closing rates used in translation of foreign currency amounts areas follows: USD ---1 Sterling Pound 2.00881 Ringgit Malaysia 0.28961 Euro Dollar 1.32971 Kazakhstan Tenge 0.0082* ========= * 1 USD is equivalent to KZT122.085 3. REVIEW OF RESULTS FOR THE PERIOD During the period, Group's revenue increased by 35% to USD38.6 Million fromUSD28.6 Million in the preceding year corresponding period. The Group's profitbefore and after taxation rose by 35% and 31% to USD15.6 and USD10.6 Millionfrom USD11.5 and USD8 Million respectively in the preceding year correspondingperiod. 4. SEGMENTAL REPORTING No industry and geographical segmental reporting are presented as the Group'sprimary business is in the production and sale of cement which is located in theRepublic of Kazakhstan. 5. REVENUE The Group The Company 6 months ended 6 months ended 30.6.07 30.6.06 30.6.07 30.6.06 USD'000 USD'000 USD'000 USD'000 Sales-manufactured goods 38,366 28,060 - -Others 305 545 50 - --------- -------- --------- -------- Total 38,671 28,605 50 - ========= ======== ========= ======== 6. INCOME TAX EXPENSE The Group The Company 6 months ended 6 months ended 30.6.07 30.6.06 30.6.07 30.6.06 USD'000 USD'000 USD'000 USD'000 Estimated current tax payable: - the Company - - - - - subsidiary companies 5,009 3,473 - - -------- -------- --------- -------- 5,009 3,473 - - ======== ======== ========= ======== Income tax expense for the subsidiary company incorporated in Labuan FT,Malaysia carrying on offshore trading activities is accrued based on the lowerof RM20,000 (USD5,793) or at an estimated annual effective tax rate of 3% on thechargeable profits No income tax is accrued for the parent company which isengaged in offshore non-trading activity. The profits earned by the subsidiary companies incorporated in the Republic ofKazakhstan are subject to a statutory tax rate of 30%. 7. EARNINGS PER SHARE Basic The basic earnings per share is calculated by dividing the consolidated netprofit attributable to shareholders of the Company by the weighted averagenumber of ordinary shares in issue during the financial period. The Group 6 months 6 months ended ended 30.6.07 30.6.06 USD'000 USD'000 Net profit attributable to ordinaryshareholders 10,585 8,032 ========== ======== 6 months 6 months ended ended 30.6.07 30.6.06 '000 '000 Number of shares in issue at beginning of period 114,000 100,000 Issuance of shares during the period - 14,000 ---------- -------- Number of shares in issue at end of period 114,000 114,000 ---------- -------- Weighted average number of ordinary shares in issue 114,000 111,615 ========== ======== 6 months 6 months ended ended 30.6.07 30.6.06 USD USD Basic earnings per share (cents) 0.09 0.07 ========== ======== 8. PROPERTY, PLANT AND EQUIPMENT, NET The Group Freehold Buildings Machinery Other Computer Construction Total land and and software land equipment improvement assets in progress USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000Cost(unlessotherwiseindicated)At 1January 2007 3,464 43,500 10,270 2,170 2 9,380 68,786Additions 1 378 3,157 195 12 27,465 31,208Disposals/Transfers - (37) (231) (11) - (2,630) (2,909)Exchangedifferences 134 1,650 396 84 - 362 2,626 ---------- -------- ----------- -------- --------- --------- --------- At 30 June 3,599 45,491 13,592 2,438 14 34,577 99,7112007 ---------- -------- ----------- -------- --------- --------- --------- AccumulateddepreciationAt 1 January 2007 - 11,233 898 717 1 - 12,849Additions - 945 436 147 1 1,529Disposals/ - (3) (77) (2) - - (82)TransfersExchange - 424 28 29 - - 481differences ---------- -------- ----------- -------- --------- --------- --------- At 30 June - 12,599 1,285 891 2 - 14,7772007 ---------- -------- ----------- -------- --------- --------- --------- Net BookValueAt 30 June 3,599 32,892 12,307 1,547 12 34,577 84,9342007 ========== ======== =========== ======== ========= ========= ========= 9. OTHER ASSETS The Group The Company As at As at As at As at 30.6.07 31.12.06 30.6.07 31.12.06 USD'000 USD'000 USD'000 USD'000 VAT (reimbursable) 4,864 1,121 - -VAT deposit 2,402 - - -Spare parts - 158 - -Prepaid insurance 326 74 - - --------- -------- --------- -------- 7,592 1,353 - -Less: Discount on VAT (reimbursable) (490) (255) - - --------- -------- --------- -------- 7,102 1,098 - - ========= ======== ========= ======== VAT (reimbursable) resulted from capital expenditure incurred and is expected tobe recovered in future financial years. 10. INVENTORIES The Group The Company As at As at As at As at 30.6.07 31.12.06 30.6.07 31.12.06 USD'000 USD'000 USD'000 USD'000 --------- -------- --------- --------Work in progress 1,679 1,833 - -Finished goods 463 1,753 - -Raw materials 2,206 2,141 - -Spare parts 3,644 2,167 - -Construction materials 48 75 - -Other material 319 711 - - --------- -------- --------- -------- 8,359 8,680Less: Provision for obsolete (148) (143) - -inventories --------- -------- --------- -------- Net 8,211 8,537 - - ========= ======== ========= ======== 11. TRADE RECEIVABLE, NET The Group The Company As at As at As at As at 30.6.07 31.12.06 30.6.07 31.12.06 USD'000 USD'000 USD'000 USD'000 Trade receivables from third parties 1,005 1,158 - - Less: Provision for doubtful (7) (7) - -receivables --------- -------- --------- -------- Net 998 1,151 - - ========= ======== ========= ======== The standard credit period granted to trade receivables ranges from 1 to 30days. The receivables are denominated in Kazakhstan Tenge. 12. OTHER RECEIVABLES, ADVANCES AND PREPAID EXPENSES The Group The Company As at As at As at As at 30.6.07 31.12.06 30.6.07 31.12.06 USD'000 USD'000 USD'000 USD'000 Receivable from employees 127 91 - -Other receivables 562 711 42 -Prepaid expenses 364 423 - 1 --------- -------- --------- -------- 1,053 1,225 42 1Advances paid to third parties 24,772 11,019 - - --------- -------- --------- -------- 25,825 12,244 42 1Advances paid to third parties -non-current (22,637) (10,046) - -portion --------- -------- --------- -------- 3,188 2,198 42 1 ========= ======== ========= ======== Advances paid are mainly those advances incurred by subsidiaries for thepurchase of machinery, equipment and construction work for the cement plant.Short-term advances are those incurred for the purchase of materials and otherservices by subsidiaries for cement production. 13. SHORT-TERM INVESTMENTS During the period, the Group uplifted short-term investments of USD16.7 Millionwhich include deposits placed in JSC Kazkommertsbank to finance the cost ofrefurbishment. 14. SHARE CAPITAL The Group and the Company As at 30.6.07 USD'000 Authorised: Ordinary shares of USD0.01 each 5,000 ========= Issued and fully paid:Ordinary shares of USD0.01 eachAt beginning of period 1,140Issued during the period - --------- At end of period 1,140 ========= 15. RESERVES The Group and the Company As at 30.6.07 USD'000 Non-distributable reserves: Share premium Balance at beginning of the period 26,647Shares issued at a premium - --------- 26,647Less: Utilisation of share premium - --------- Balance at end of the period 26,647 ========= (Cont'd) The Group and the Company As at 30.6.07 USD'000 Revaluation reserve Balance at beginning of the period 6,492Depreciation transfer of (897)revaluation reserve --------- Balance at end of the period 5,595 ========= The Group As at 30.6.07 USD'000Translation reserve account Balance at beginning of the period 1,531Exchange differences on translationof foreign 2,735subsidiary companies --------- Balance at end of the period 4,266 ========= Share premium Share premium arose from the issuance of ordinary shares at prices above the parvalue of USD0.01 each. Translation reserve account Exchange differences arising from the translation of assets and liabilities offoreign subsidiary companies, are taken to the translation reserve account. 16. BONDS The Group As at As at 30.6.07 31.12.06 USD'000 USD'000Bonds issued at price of: 97.1895% 5,601 5,601 98.3230% 5,231 5,231 99.0574% 2,366 2,366 99.0574% 2,865 2,865 100.0096% 5,231 5,231 ---------- --------- 21,294 21,294Exchange differences 822 -Discount on bonds issued (496) (478)Amounts of accrued interest on bonds issued 794 761 ---------- ----------Total 22,414 21,577 ========== ========== The 5-year KZT2.7 billion bonds issued in August 2006 carries a coupon rate of9% per annum and matures in August 2011. The interest is payable semi-annuallyand the repayment of principal is in one bullet payment. The bonds are listed onthe Kazakhstan Stock Exchange. The interest paid is included in the financecost. 17. OTHER PAYABLES AND ACCRUED LIABILITIES The Group The Company As at As at As at As at 30.6.07 31.12.06 30.6.07 31.12.06 USD'000 USD'000 USD'000 USD'000 Liquidation fund accruals 30 29 - -Accruals 2,723 1,006 411 363Advances received 1,722 479 -- - --------- -------- --------- -------- 4,475 1,514 411 363 ========= ======== ========= ======== In accordance with the Subsurface Use Contracts requirements, the subsidiarycompany, Central Asia Cement JSC, shall contribute on an annual basis 0.5% fromthe amount of actual expenditures for limestone and loam extraction to theliquidation fund, which shall be used for site restoration and abandonment ofthe Group mining operations. 18. TAXES PAYABLE The Group The Company As at As at As at As at 30.6.07 31.12.06 30.6.07 31.12.06 USD'000 USD'000 USD'000 USD'000 Corporate income tax 1,179 6 - -Property tax 77 48 - -Personal income tax 27 58 - -Other taxes 1,338 132 - - --------- -------- --------- -------- Total 2,621 244 - - ========= ======== ========= ======== 19. LOANS The Group The Company As at As at As at As at Interest 30.6.07 31.12.06 30.6.07 31.12.06 Rate (p.a.) USD'000 USD'000 USD'000 USD'000 JSC Kazkommertsbank 12% 8,130 - - - ---------- -------- --------- -------- 8,130 - - - ========== ======== ========= ======== The loan balance of USD 8.1 Million as at 30 June 2007 is provided by JSCKazkommertsbank on a non-revolving basis and is disbursed in three tranches.Each tranche is repayable in full in 3 months with the final repayment of USD4Million due in September 2007. The final tranche is secured against thereceivable due from a major customer. 20. RELATED PARTIES Related parties include shareholders, directors, affiliates and entities undercommon ownership over which the Group has the ability to exercise a significantinfluence. Compensation of key management personnel Included in the staff costs are remuneration of directors and other members ofkey management during the financial period as follows: The Group The Company As at As at As at As at 30.6.07 31.12.06 30.6.07 31.12.06 USD'000 USD'000 USD'000 USD'000 Remunerations 184 277 148 243Short-term benefit - 97 - -Post-employment benefit - - - - --------- -------- --------- -------- Total 184 374 148 243 ========= ======== ========= ======== The remuneration of directors and key executives is determined by the Board ofDirectors of the Company and subsidiary companies having regard to theperformance of individuals and market trends. 21. SIGNIFICANT EVENT On 12 July 2007, the Company and the Group's subsidiaries, Karcement JSC,Central Asia Cement JSC, Central Asia Cement Holding B.V., Steppe CementHoldings B.V. and Steppe Cement (M) Sdn Bhd, the sponsors and European Bank forReconstruction and Development ("EBRD") entered into the Amended Agreement tothe existing Guarantee and Support Undertaking Agreement and Loan Agreementconcluded between Karcement JSC and EBRD dated 13 December 2005. The loanfacility limit has been revised to USD 42 Million. This information is provided by RNS The company news service from the London Stock Exchange