Steppe Cement Regulatory News (STCM)

5 Sep 2006 08:01

Steppe Cement Limited05 September 2006 Steppe Cement Limited Trading Results for the Half Year Ended 30 June 2006and 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 2006 of US$8.0 million. The restructure of Steppe in advance of its admission to AIM was completed on 29July 2005 and therefore at a consolidated level there is no direct comparisonwith profitability for the first six months of 2005. The trading results ofSteppe's core operating subsidiary, Central Asia Cement JSC, for the six monthsended have however shown a strong improvement over those experienced for the sixmonths ended 30 June 2005. These operating results are summarized below: -------------------- --------- ----------- -------- 6 months ended 6 months ended 30-Jun-06 30-Jun-05-------------------- --------- ----------- --------Sales (tonnes) 365,443 320,809 14%-------------------- --------- ----------- --------Exchange rate (tenge to the US$) 118.7 136.3-------------------- --------- ----------- --------Sales (thousand tenge) 3,330,461 2,639,744 26%-------------------- --------- ----------- --------Sales (US$'000) 28,605 19,690 45%-------------------- --------- ----------- --------Profit before tax (US$'000) 11,553 7,648 51%-------------------- --------- ----------- --------Profit after tax (US$'000) 8,087 5,354 51%-------------------- --------- ----------- -------- At the operational level, sales have increased by 26% in tenge with the averagesales price achieved rising from US$60/tonnes to US$75/tonne compared with thecorresponding period. On the cost side of the business, Steppe has noted that oil price increases haveled to an increase in utilities and transportation cost. Steppe is in theprocess of implementing cost containment measures to contain further increases. A copy of Central Asia Cement's financial statements for the six months ended 30June 2006 follows. These are also available at Steppe's web site:www.steppecement.com 2. Update on the Kazakh Cement Market The Kazakhstan cement market has grown by 30% over the first half of the yearand Steppe's directors expect it to grow by 20% by year end, taking its size to6 million tons. The main markets remain Almaty and Astana. Kazakhstan cement producers continue to struggle with the increased demand andas a result imports have nearly doubled such that they currently representapproximately 35% of the market. Due to this increasing demand both inKazakhstan in Russia, the overall market price of cement in Kazakhstan hasincreased by approximately 20% in US$ terms over the past year. Steppe's main competition remains the factories located in Southern Siberia andother producers in northern Kazakhstan. 3. Personnel Appointments Steppe is continuing to strengthen the management team on site with thefollowing appointments: - Stuart Elliot as chief operating officer with emphasis on the line 6start up. Until 2005, Stuart was chief operating officer of Cimenterie Nationalein Lebanon and he has held senior operation roles for Rugby Cement UK. - Ho Weng Keong - Mechanical engineer and maintenance manager of YTLCement (Malaysia) - Francis Teoh Boon Tee, electrical engineer before with Blue CircleUK and Malaysia - Lee Gee Seng - Civil engineer (C Eng UK). Together, these new managerial staff bring over 100 years experience in thecement industry. Steppe expects to add another three members to the senior management team in thesecond half of 2006. 4. Plant Development Steppe is continuing to successfully implement the improvements to the wetprocess lines that should see production capacity from the wet process linesreach 800,000 tonnes of cement for the 2006 (full year) and 850,000 tonnes ofcement for 2007. Steppe has awarded approximately 60% of the contracts for the dry linerefurbishments, with the main contractors so far being FL Smidth (Denmark), ABB(Switzerland), GE (Germany). It is estimated that the remaining contracts (apartfrom mechanical erection) will be awarded during the summer 2006. Mace has been appointed as project manager for the construction part of theproject and now has a team on site. Re-commissioning of the dry process lines remains on schedule for completionduring the summers of 2007 and 2008. 5. Financing The council of the Kazakhstan Stock Exchange approved Steppe's 2.7 billion tenge(US$21.6 million) bond listing and the first auction took place on the 18 August2006. As of the 29 August 2006 Steppe had accepted bids for 710 million tenge (US$5.7million) at an average APR of 9.8% and as of the 4th September 2006, Halik Bankhas agreed to subscribe the balance 1,990 million tenge at the same rate inthree equal tranches to be disbursed at the end of September, October andNovember 2006. Kazcommertz Bank has granted a credit line of US$46 million to open letters ofcredit. STEPPE CEMENT LTD (Incorporated in Labuan FT, Malaysia under the Offshore Companies Act, 1990) AND ITS SUBSIDIARY COMPANIES INTERIM FINANCIAL STATEMENTS CONTENTS PAGE(S) Chief Executive Officer's StatementGeneral Information Income Statement 1 Balance Sheet 2 - 3 Statement of Changes in Equity 4 - 5 Cash flow Statement 6 - 7 Notes to the Financial Statements 8 - 17 Appendix 18 - 20 GENERAL INFORMATION 1. Steppe Cement Ltd completed its restructuring exerciseinvolving the acquisition of Central Asia Cement JSC, the main operatingsubsidiary on 29 July 2005. 2. For purposes of interim reporting for the 6 months ended 30June 2006, the following condensed consolidated statements and notes (page 1-17)were provided in accordance with the requirement of IFRS: Comparative Period Ended Period EndedIncome Statement 30 June 2006 30 June 2005 As at As atBalance Sheet 30 June 2006 31 December 2005Cash Flow Statement 30 June 2006 30 June 2005Statement of Changes in Equity 30 June 2006 30 June 2005 3. To achieve a better understanding of the above InterimFinancial Statements, the following financial statements of the main operatingsubsidiary, Central Asia Cement JSC are provided in the Appendix (page 18-20): Comparative Period Ended Period Ended Income Statement 30 June 2006 30 June 2005 As at As atBalance Sheet 30 June 2006 30 June 2005 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 2006 The Group The Company As at As at As at As at 30.6.06 30.06.05 30.6.06 30.06.05 Note USD'000 USD'000 USD'000 USD'000 Revenue 5 28,605 - - - Cost of sales (12,401) - - - --------- --------- --------- -------- Gross profit 16,204 - - - Selling expenses (1,694) - - -General and administrative (3,588) (3) (221) (2)expenses --------- --------- --------- -------- Operating profit/(loss) 10,922 (3) (221) (2) Investment income 46 - -Finance costs (293) - -Other income, net 830 - 45 - --------- --------- --------- -------- Profit/(loss) before tax 11,505 (3) (176) (2) Income tax expense 6 (3,473) - - - --------- --------- --------- -------- Profit/(loss) for the period 8,032 (3) (176) (2) ========= ========= ========= ======== Attributable to:Shareholders of the Company 8,032 (3) (176) (2) ========= ========= ========= ======== Earnings/(loss) per share: Basic (cents) 7 0.07 (0.03) ========= ========= 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 2006 The Group The Company As at As at As at As at 30.6.06 31.12.05 30.6.06 31.12.05 Note USD'000 USD'000 USD'000 USD'000 Assets Non-current assets:Property, plant and equipment 8 42,129 29,955 - -Investment in subsidiary 9 - - 26,188 7,000companiesAdvances paid 12 - 131 - - -------- --------- -------- -------- 42,129 30,086 26,188 7,000 -------- --------- -------- -------- Current AssetsInventories, net 10 7,491 6,529 - -Trade receivable, net 11 32 731 - -Amount owing by subsidiary - - - 252companiesOther receivables, advances andprepaid 12 4,189 1,566 81 1expensesCash and bank balances 13,775 1,511 781 15 -------- --------- -------- -------- 25,487 10,337 862 268 -------- --------- -------- -------- Total assets 67,616 40,423 27,050 7,268 ======== ========= ======== ======== (Cont'd) The Group The Company As at As at As at As at 30.6.06 31.12.05 30.6.06 31.12.05 Note USD'000 USD'000 USD'000 USD'000 Equity and Liabilities Capital and reservesShare capital 13 1,140 1,000 1,140 1,000Share premium 14 26,657 6,300 26,657 6,300Translation reserve 14 3,110 (41) - -Unappropriated profit/ 14 24,695 16,663 (947) (771)(Accumulated loss) -------- --------- -------- -------- Total equity 55,602 23,922 26,850 6,529 -------- --------- -------- -------- Non-Current LiabilitiesDeferred tax liabilities, net 7,521 6,814 - - -------- --------- -------- -------- 7,521 6,814 - - -------- --------- -------- -------- Current LiabilitiesTrade payable 1,275 765 - -Other payables and accrued 1,848 928 200 110liabilitiesAmount owing to a corporate - 174 - 174shareholderAmount owing to subsidiary - - - 455companiesTaxes payable 15 1,370 738 - -Loans 16 - 7,082 - - -------- --------- -------- -------- 4,493 9,687 200 739 -------- --------- -------- -------- Total Equity and Liabilities 67,616 40,423 27,050 7,268 ======== ========= ======== ======== 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 2006 Non-distributable reserve Unappropriated profit/ Share Share Translation (Accumulated Total/ capital premium reserve loss) NetThe Group USD'000 USD'000 USD'000 USD'000 USD'000 Balance asat 1 Jan 05 1 - - (5) (4) Net lossfor - - - (3) (3)the period --------- --------- --------- ------------ --------- Balance asat 30 Jun 05 1 - - (8) (7) ========= ========= ========== ============ ========= Balance asat 1,000 6,300 (41) 16,663 23,9221 January2006Issue ofshares(Note 140 20,860 - - 21,00013)Utilisationof - (503) - - (503)share premiumExchangedifferencesarising ontranslationofforeignsubsidiary - - 3,151 - 3,151companiesNet profitfor - - - 8,032 8,032the period --------- -------- ---------- ---------- --------- Balance asof 1,140 26,657 3,110 24,695 55,60230 June ========= ========= ========== ============ =========2006 (Cont'd) Share Capital Share Premium Accumulated Loss Total/ NetThe Company USD'000 USD'000 USD'000 USD'000 -------- ----------Balance as at1 Jan 2005 1 - (2) (1) Net loss forthe period - - (2) (2) -------- --------- ---------- ---------- Balance as at30 June 2005 1 - (4) (3) ======== ========= ========== ========== Balance as at 1 January 2006 1,000 6,300 (771) 6,529Issue of shares (Note 13) 140 20,860 - 21,000Utilisation of share premium - (503) - (503)(Note 14)Net loss for the period - - (176) (176) --------- --------- ---------- ---------- Balance as of 30 June 2006 1,140 26,657 (947) 26,850 ========= ========= ========== ========== 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 2006 The Group The Company 6 months ended 6 months ended 30.6.06 30.6.05 30.6.06 30.6.05 USD'000 USD'000 USD'000 USD'000 OPERATING ACTIVITIES Profit/(loss) beforetax 11,505 (3) (176) (2) Adjustments for:Depreciation ofproperty, plant andequipment 945 - - -Finance costs 293 - - -Loss on disposal ofproperty, plant andequipment 20 - - - --------- --------- --------- -------- Operating Profit/(Loss) Before Movementin Working Capital 12,763 (3) (176) (2) (Increase)/ Decrease in:Inventories (137) - - -Trade receivables 1,654 - - -Amount owing by subsidiary companies - - (25) (23)Other receivable and prepaid expenses (932) - (79) - Increase/ (Decrease) in:Trade payables 1,387 - - -Other payables and accrued 149 2 89 2liabilities Amount owing to a corporate (174) 23 (174) 23shareholder --------- --------- --------- -------- Cash Generated From/ (Used In) 14,710 22 (365) -Operations(Cont'd) The Group The Company 6 months ended 6 months ended 30.6.06 30.6.05 30.6.06 30.6.05 USD'000 USD'000 USD'000 USD'000 Income tax paid (3,402) - - -Interest paid (293) - - - --------- --------- --------- --------Net Cash From/ (Used In)by Operating Activities 11,015 22 (365) - --------- --------- --------- -------- INVESTING ACTIVITIESProceeds from disposalofproperty, plant and 2,836 - - -equipmentPurchase of property,plant and equipment (14,207) - - - --------- --------- --------- --------Net Cash Used InInvesting (11,371) - - -Activities --------- --------- --------- -------- FINANCING ACTIVITIESProceeds from issuance of 21,000 - 21,000 -sharesCost of issuance of shares (503) - (369) -Interest received - - - -Deposits pledged with financial (7,700) - - -institutionsRepayment of loans (7,976) - - -Cash outflow from acquisitionof subsidiary company - - (19,500) -(Note 9) -------- --------- --------- --------Net Cash From by Financing 4,821 - 1,131 -Activities -------- --------- --------- -------- NET INCREASE IN CASH 4,465 22 766 -AND CASH EQUIVALENTSEFFECTS OF FOREIGN EXCHANGE 100 - - -RATE CHANGES -------- --------- --------- --------CASH AND CASH 903 - 15 -EQUIVALENTS AT BEGINNING OF THEPERIOD -------- --------- --------- -------- ======== ========= ========= ========CASH AND CASH 5,468 22 781 -EQUIVALENTS 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 should be read in conjunction withthe audited financial statements for the year ended 31 December 2005. Thecondensed interim financial statements were authorised for issue by the Board ofDirectors on 23 August 2006. 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 2005. The principal closing rates used in translation of foreign currency amounts areas follows: USD ---1 Ringgit Malaysia 0.272151 Euro Dollar 1.279001 Kazakhstan Tenge 0.00842 ======== 3. REVIEW ON RESULTS FOR THE PERIOD The Kazakhstan market has grown by 30% and CAC JSC's revenue have increased by26% over the first half of the year. The main markets remain Almaty and Astanawith high growth expected in the West as well. 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 inKaraganda region, Republic of Kazakhstan. 5. REVENUE The Group The Company As at As at As at As at 30.6.06 30.06.05 30.6.06 30.06.05 USD'000 USD'000 USD'000 USD'000 Sales-manufactured goods 28,060 - - -Other sales 545 - - - --------- -------- --------- -------- Total 28,605 - - - ========= ======== ========= ======== 6. INCOME TAX EXPENSE The Group The Company As at As at As at As at 30.6.06 30.06.05 30.6.06 30.06.05 USD'000 USD'000 USD'000 USD'000 Sales-manufactured goods 28,060 - - -Other sales 545 - - - --------- -------- --------- -------- Total 28,605 - - - ========= ======== ========= ======== Estimated current tax payable: - the Company - - - - - subsidiary companies 3,473 - - - -------- -------- --------- -------- 3,473 - - - ======== ======== ========= ======== The income tax expense is accrued based on the estimated annual effective taxrate of 3% and 30% for the subsidiary companies, incorporated in Labuan FT,Malaysia and the Republic of Kazakhstan, respectively. 7. EARNINGS/(LOSS) PER SHARE Basic The basic earnings/(loss) per share is calculated by dividing the consolidatednet profit/(loss) attributable to shareholders of the Company by the weightedaverage number of ordinary shares in issue during the financial period. The Group 6 months ended 6 months ended 30.6.06 30.6.05 USD'000 USD'000 Net profit/ (loss) attributable toordinary shareholders 8,032 (3) ========== ======== 6 months ended 6 months ended 30.6.06 30.6.05 '000 '000 Number of shares in issue at beginning of period 100,000 100 Issuance of shares during the period 14,000 - ---------- -------- Number of shares in issue at end of period 114,000 100 ---------- -------- Weighted average number of ordinary shares in issue 111,615 100 ========== ======== 6 months ended 6 months ended 30.6.06 30.6.05 USD USD Basic earnings/(loss) per share (cents) 0.07 (0.03) ========== ======== 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 3,240 24,309 3,684 1,637 3 1,935 34,8082006Additions 650 350 1,421 1,453 - 10,333 14,207Disposals/Tran (614) (146) (8) (127) - (2,124) (3,019)sfersExchangedifferences 409 1,894 465 206 (765) 2,209 ---------- -------- ----------- -------- --------- --------- --------- At 30 June 3,685 26,407 5,562 3,169 3 9,379 48,2052006 ---------- -------- ----------- -------- --------- --------- --------- AccumulateddepreciationAt 1 January - 3,850 549 453 2 - 4,8542006Additions - 597 107 240 944Disposals/ - (42) (3) (119) - - (164)TransfersExchange - 315 70 57 - - 442differences ---------- -------- ----------- -------- --------- --------- --------- At 30 June - 4,720 723 631 2 - 6,0762006 ---------- -------- ----------- -------- --------- --------- --------- Net BookValueAt 30 June 3,685 21,687 4,839 2,538 1 9,379 42,1292006 ========== ======== =========== ======== ========= ========= ========= 9. INVESTMENT IN SUBSIDIARY COMPANIES The Company As at As at 30.6.06 31.12.05 USD'000 USD'000 Unquoted shares, at cost 26,188 7,000 ========= ========= i) During the period, the Company subscribed for anadditional 73,748 ordinary shares of RM1 each in Steppe Cement (M) Sdn Bhd at anissue price of RM1,000 per ordinary share for a total cash consideration ofRM73,748,000 (equivalent to USD19.5 Million) . ii) During the period, its subsidiary company, Steppe Cement(M) Sdn Bhd ("SCM") acquired an additional 16,386,554 ordinary shares of EUR 1each in Steppe Cement Holdings B.V. for a total cash consideration of EUR16,386,554 (equivalent of USD19.5 Million). iii) During the period, Steppe Cement Holdings B.V. acquired anadditional 51,043 ordinary shares of KZT 50,000 each in Karcement JSC for atotal cash consideration of KZT 2,552,150,000 (equivalent of USD19.5 Million). 10. INVENTORIES The Group The Group The Company As at As at As at As at 30.6.06 31.12.05 30.6.06 31.12.05 USD'000 USD'000 USD'000 USD'000 --------- -------- --------- --------Work in progress 1,085 1494 - -Finished goods 750 961 - -Raw materials 296 413 - -Spare parts 340 281 - -Construction materials - 69 - -Other material 5,020 3,660 - - --------- -------- --------- -------- 7,491 6,878Less: Provision for obsolete - (349) - -inventories --------- -------- --------- -------- Net 7,491 6,529 - - ========= ======== ========= ======== 11. TRADE RECEIVABLE, NET The Group The Company As at As at As at As at 30.6.06 31.12.05 30.6.06 31.12.05 USD'000 USD'000 USD'000 USD'000 --------- -------- --------- --------Trade receivables from third parties 32 751 - -Accounts receivables from related - 73 - -parties --------- -------- --------- -------- 32 824 - - Less: Provision for doubtful - (93) - -receivables --------- -------- --------- -------- Net 32 731 - - ========= ======== ========= ======== 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 30.6.06 31.12.05 30.6.06 31.12.05 USD'000 USD'000 USD'000 USD'000Receivable from employees 86 97 - -Other receivables 1,266 268 81 -Prepaid expenses 32 176 - 1 --------- -------- --------- -------- 1,384 541 81 1Advances paid to third parties - 2,805 1,025 - -current portion --------- -------- --------- -------- 4,189 1,566 81 1Advances paid to third parties - - 131 - -non-current portion --------- -------- --------- -------- 4,189 1,697 81 1 ========= ======== ========= ======== 13. SHARE CAPITAL The Group and the Company As at As at 30.6.06 31.12.05 USD'000 USD'000 Authorised:Ordinary shares of USD0.01 eachAt beginning of period 5,000 10Created during the period - 4,990 --------- -------- At end of period 5,000 5,000 ========= ======== Issued and fully paid:Ordinary shares of USD0.01 eachAt beginning of period 1,000 1Issued during the period 140 999 --------- -------- At end of period 1,140 1,000 ========= ======== On January 30, 2006, the Company issued 14,000,000 new ordinary shares of USD0.01 each at a placement price of USD1.50 per share via private placement. 14. RESERVES The Group and the Company As at As at 30.6.06 31.12.05 USD'000 USD'000Non-distributable reserves: Share premium Balance at beginning of the period 6,300 -Shares issued at a premium 20,860 6,300 --------- --------- 27,160 6,300Less: Utilisation of share premium (503) - --------- ---------Balance at end of the period 26,657 6,300 ========= =========(Cont'd) The Group and the Company Translation adjustment account As at As at 30.6.06 31.12.05 USD'000 USD'000 Balance at beginning of the period (41) -Exchange differences on translation of foreignsubsidiary companies 3,151 (41) --------- --------- Balance at end of the period 3,110 (41) ========= ========= Share premium Share premium arose from the issuance of 14,000,000 ordinary shares of USD0.01at an issue price of USD1.50 per share via private placement during thefinancial period. Translation adjustment account Exchange differences arising from the translation of assets and liabilities offoreign subsidiary companies, are taken to the translation adjustment account. 15. TAXES PAYABLE The Group The Company As at As at As at As at 30.6.06 31.12.05 30.6.06 31.12.05 USD'000 USD'000 USD'000 USD'000 Corporate income tax 166 396 - -Property tax - 163 - -Personal income tax - 37 - -Other taxes 1,204 142 - - --------- -------- --------- -------- Total 1,370 738 - - ========= ======== ========= ======== 16. LOANS The Group The Company As at As at As at As at 30.6.06 31.12.05 30.6.06 31.12.05 USD'000 USD'000 USD'000 USD'000 JSC Kazkommertsbank - 7,005 - -Interest payable - 77 - - ---------- -------- --------- --------- Total - 7,082 - - ========== ======== ========= ========= The loan provided by JSC Kazkommertsbank was fully paid in March 2006. 17. RELATED PARTIES. Related parties include shareholder, 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 30.6.06 31.12.05 30.6.06 31.12.05 USD'000 USD'000 USD'000 USD'000 Remunerations 165 96 116 95Short-term benefit - 92 - -Post-employment benefit - 8 - - --------- -------- --------- -------- Total 165 196 116 95 ========= ======== ========= ======== The remuneration of directors and key executives is determined by theremuneration committees of the Company and subsidiary companies having regard tothe performance of individuals and market trends. 18. SIGNIFICANT EVENTS The liquidation of Stroy Invest, a subsidiary company of CAC JSC is in the finalstages. The liquidation was approved by the Board of Directors on 27 February2006. On 1 August 2006, the Kazakhstan Stock Exchange ("KASE") Council approvedCentral Asia Cement JSC's issuance and listing of 5 year 9% KZT 2.7 billionbonds on the KASE due on 7 August 2011. The interest is payable semi-annuallyand the repayment of principal is one bullet payment. APPENDIX CENTRAL ASIA CEMENT JSC AND ITS SUBSIDIARY CONSOLIDATED INCOME STATEMENT FOR THE PERIODENDED 30 JUNE 2006 (UNAUDITED) 6 months ended 30.6.06 30.6.05 USD'000 USD'000 Revenue 28,605 19,690 Cost of sales (12,689) (8,200) ---------- --------- Gross profit 15,916 11,490 Selling expenses (1,694) (1,029)General and administrative (3,162) (1,938)expenses ---------- --------- Operating profit 11,060 8,523 Investment income - 0Finance costs (293) (692)Other income, net 786 (183) ---------- --------- Profit before tax 11,553 7,648 Income tax expense (3,466) (2,294) ---------- --------- Profit for the period 8,087 5,354 ========== ========= APPENDIX CENTRAL ASIA CEMENT JSC AND ITS SUBSIDIARY CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2006 (UNAUDITED) As at As at 30.6.06 30.6.05 USD'000 USD'000 Assets Non-current assetsProperty, plant and equipment 33,839 15,624 --------- 33,839 15,624 --------- --------- Current AssetsInventories, net 7,491 5,576Trade receivable, net 487 189Other receivables, advances and prepaid expenses 3,121 1,114Cash and bank balances 4,745 6,222 --------- --------- 15,844 13,101 --------- --------- Total assets 49,683 28,725 ========= ========= (Cont'd) As at As at 30.6.06 30.6.05 USD'000 USD'000 Equity and Liabilities Capital and reservesShare capital 587 587Revaluation Reserve 15,081 11,737Foreign Exchange Reserve 2,900 -Unappropriated profit 17,142 3,644 --------- --------- Total equity 35,710 15,968 --------- --------- Non-Current LiabilitiesDeferred tax liabilities, net 7,521 -Loans - 6,000 --------- --------- 7,521 6,000 --------- --------- Current LiabilitiesTrade payable 1,275 397Other payables and accrued liabilities 1,543 1,379Taxes payable 1,361 981Amount due to related company 2,273 -Loans - 4,000 --------- --------- 6,452 6,757 --------- --------- Total Equity and Liabilities 49,683 28,725 ========= ========= This information is provided by RNS The company news service from the London Stock Exchange