19 May 2011 07:00
Embargoed: 0700hrs, 19 May 2011
Crosby Asset Management Inc.
("CAM" or the "Company")
Preliminary Results for the Year Ended 31 December 2010
Crosby Asset Management Inc. (AIM:CSB.L), the natural resources focused investment company, is pleased to announce its preliminary results, for the year ended 31 December 2010.
Highlights
·; Disposed of its previous operating businesses, cleaned up its balance sheet, and has been reconstituted as an investing company;
·; Adopted a new strategy to invest in natural resources opportunities with the support of major shareholders;
·; Welcomed Arkadiy Abramovich as a new substantial (circa 26 per cent) shareholder in April 2011;
·; Proposed name change to Zoltav Resources Inc.; and
·; Cash reserves bolstered by £2.25 million (before expenses) fundraising post year-end.
Robert Owen, Chairman, commented:
"The Company has focused its investment activities on the natural resources sector, leveraging the experience and relationships of the Board of CAM (the "Board") and the Company's strategic investors, in order to focus on creating maximum value for shareholders."
For further information please contact:
Crosby Asset Management Inc.
Trevor Wells / Peter Moss
Tel. +44 (0)20 7399 4384
Strand Hanson Limited
Stuart Faulkner / James Spinney / Rory Chichester
Tel. +44 (0) 207 409 3494
Renaissance Capital Limited
Ed Johnson / Simon Matthews
Tel. +44 (0) 20 7367-8257
M: Communications
Ben Simons / Maria Souvorov
Tel. +44 (0)20 7920 2340/2327
Chairman's and Chief Executive's Report
During the year significant steps were taken to transform the direction and strategy of the Company:
In October 2010, the Company disposed of its operating businesses, allowing the Company to use the proceeds to clear outstanding loans and to clean up its balance sheet. CAM subsequently re-designated itself as an investing company, as defined in the AIM Rules, and adopted an investment strategy to acquire holdings in the natural resources sector, which, the Board believes, are undervalued and where one or more such transactions have the potential to create value for shareholders. Under the investing strategy there is no limit to the number of projects in which the Company may invest and the Board will consider possible opportunities anywhere in the world with a particular focus on Africa, South America, Australasia and central and eastern Europe.
The Board is confident that CAM has obtained a number of influential shareholders during, and after, the period under review, who are supportive of the Company's new strategy:
·; In December 2010, ECK Partners Holdings Limited ("ECK") acquired the 89.35 per cent shareholding in the Company held by our previous parent company. ECK is an investment holding company owned as to 88.86 per cent by TW Indus Limited ("TW Indus"), a company wholly-owned by Ilyas Khan, and 11.14 per cent by CAM's Chairman, Robert Owen, at the date of the transaction.
·; In January 2011, Old Church Street Holdings Limited acquired a c.54 per cent shareholding in CAM via a strategic sale of shares to it by ECK. Old Church Street Holdings Limited is a privately owned investment holding company, which predominately invests in the natural resources sector and counts John McKeon as its primary discretionary beneficiary.
·; In April 2011, ECK and Old Church Street Holdings Limited each sold part of their stakes to ARA Capital Limited ("ARA"), a company beneficially owned by Arkadiy Abramovich, who, as a result has become the Company's largest shareholder with 25.4 per cent. Old Church Street Holdings Limited and ECK remain 24.4 per cent and 17.8 per cent shareholders today respectively.
In January and February 2011, the Company raised gross funds £2.25 million, in support of its new strategy, from institutional and professional investors. The Board believes that these funds have provided CAM with sufficient resources to meet its working capital requirements and pursue the investment strategy.
The Board has proposed a name change to Zoltav Resources Inc. more appropriately to reflect the new direction of the Company. The necessary resolutions to implement this name change will be proposed for shareholder approval at the upcoming general meeting of the Company to be held on 21 June 2011 at Le Meridien Beach Plaza Hotel, 22 Avenue Princesse Grace, 98000 Monte Carlo, Monaco at 2.00 p.m. (local time).
Outlook
The Company is focusing its investment activities on the natural resources sector, leveraging the experience and relationships of the Board and the Company's strategic investors, in order to focus on creating maximum value for shareholders and look forward to reporting progress on these activities.
Robert Owen, Chairman
Johnny Chan, Chief Executive Officer
19 May 2011
Consolidated Income Statement
For the year ended 31 December 2010
(Restated) | |||
2010 | 2009 | ||
Notes | US$'000 | US$'000 | |
Continuing Operations | |||
Other income | 175 | 17 | |
Administrative expenses | (763) | (1,654) | |
Other operating expenses | (329) | (29) | |
Loss from operations | 2 | (917) | (1,666) |
Finance costs | (24) | - | |
Loss before taxation | (941) | (1,666) | |
Taxation | 3 | - | - |
Loss for the year from continuing operations | (941) | (1,666) | |
Discontinued Operations | |||
Profit/(Loss) for the year from discontinued operations | 4 | 2,667 | (9,922) |
Profit/(Loss) for the year | 1,726 | (11,588) | |
(Restated) | |||
2010 | 2009 | ||
Note | US$'000 | US$'000 | |
Attributable to: | |||
Owners of the Company | |||
Loss for the year from continuing operations | (941) | (1,666) | |
Profit/(Loss) for the year from discontinued operations | 1,752 | (9,275) | |
811 | (10,941) | ||
Non-controlling interests | |||
Profit/(Loss) for the year from discontinued operations | 915 | (647) | |
915 | (647) | ||
Profit/(Loss) for the year | 1,726 | (11,588) | |
Dividend | - | - | |
Profit/(Loss) per share attributable to owners of the Company during the year |
US cents |
US cents | |
Basic | 5 | ||
Continuing operations | (0.36) | (0.68) | |
Discontinued operations | 0.67 | (3.81) | |
0.31 | (4.49) | ||
| |||
Diluted | |||
Continuing operations | (0.36) | (0.68) | |
Discontinued operations | 0.67 | (3.81) | |
0.31 | (4.49) | ||
|
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2010
2010 | 2009 | |||
US$'000 | US$'000 | |||
Profit/(Loss) for the year | 1,726 | (11,588) | ||
Other comprehensive income: | ||||
Available-for-sale investments Gain/(deficit) on revaluation Recycle to income statement: Provision for impairment Upon disposal of subsidiaries |
|
322
6 (322) |
(810)
1,536 362 | |
Exchange differences on translating foreign operations | 175 | 46 | ||
Exchange differences recycle to income statement upon disposal of subsidiaries |
(743) |
- | ||
Share of other comprehensive income of associates | - | (52) | ||
Share of other comprehensive income of jointly controlled entities | - | 11 | ||
Other comprehensive income for the year, before and net of tax | (562) | 1,093 | ||
| ||||
Total comprehensive income for the year, before and net of tax | 1,164 | (10,495) | ||
Attributable to: | ||||
Owners of the Company | 249 | (9,848) | ||
Non-controlling interests | 915 | (647) | ||
Total comprehensive income for the year, before and net of tax | 1,164 | (10,495) |
Consolidated Statement of Financial Position
As at 31 December 2010
2010 | 2009 | ||
US$'000 | US$'000 | ||
ASSETS | |||
Non-current assets | |||
Property, plant and equipment | 38 | 373 | |
Interests in jointly controlled entities | - | 16 | |
Available-for-sale investments | - | 291 | |
Note receivable | - | 508 | |
Intangible assets | - | 21 | |
38 | 1,209 | ||
Current assets | |||
Amounts due from parent and related companies | - | 4 | |
Trade and other receivables | 17 | 1,121 | |
Tax recoverable | - | 74 | |
Financial assets at fair value through profit or loss | - | 115 | |
Cash and cash equivalents | 73 | 6,723 | |
90 | 8,037 | ||
Total assets | 128 | 9,246 | |
LIABILITIES | |||
Current liabilities | |||
Amounts due to parent and related companies | - | (2) | |
Other payables | (386) | (2,425) | |
Deferred income | - | (26) | |
Obligations under finance leases | - | (348) | |
Provision for liabilities | - | (6,209) | |
(386) | (9,010) | ||
Non-current liabilities | |||
Loan payable | - | (54) | |
Obligations under finance leases | - | (144) | |
- | (198) | ||
Total liabilities | (386) | (9,208) | |
EQUITY | |||
| Share capital | 3,098 | 2,435 | |
Reserves | (3,356) | (3,427) | |
Capital deficiency attributable to owners of the Company |
(258) |
(992) | |
Non-controlling interests | - | 1,030 | |
(Capital deficiency)/Total equity | (258) | 38 | |
Total equity and liabilities | 128 | 9,246 |
Consolidated Statement of Changes in Equity
For the year ended 31 December 2010
(Capital deficiency) / Equity attributable to owners of the Company | Non-controlling interests |
Total Equity (Capital deficiency) | ||||||||
Share capital |
Share premium |
Capital reserve | Employee share-based compensation reserve |
Foreign exchange reserve |
Investment revaluation reserve |
Profit and loss account |
Total | |||
US$'000 |
US$'000 |
US$'000 |
US$'000 |
US$'000 |
US$'000 |
US$'000 |
US$'000 |
US$'000 |
US$'000 | |
At 1 January 2009 |
2,435 |
6,344 |
23,455 |
3,597 |
20 |
(1,088) |
(26,579) |
8,184 |
1,648 |
9,832 |
Employee share-based compensation |
- |
- |
- |
672 |
- |
- |
- |
672 |
29 |
701 |
Lapse of share options | - | - | - | (1,015) | - | - | 1,015 | - | - | - |
Transactions with owners |
- |
- |
- |
(343) |
- |
- |
1,015 |
672 |
29 |
701 |
|
|
|
|
|
|
|
|
| ||
Loss for the year | - | - | - | - | - | - | (10,941) | (10,941) | (647) | (11,588) |
Other comprehensive income: | ||||||||||
Available-for-sale investments Deficit on revaluation |
- |
- |
- |
- |
- |
(810) |
- |
(810) |
- |
(810) |
Recycle to income statement: | ||||||||||
Provision for impairment | - | - | - | - | - | 1,536 | - | 1,536 | - | 1,536 |
Upon disposal of subsidiaries | - | - | - | - | - | 362 | - | 362 | - | 362 |
Exchange difference on translating foreign exchange operations |
- |
- |
- |
- |
46 |
- |
- |
46 |
- |
46 |
Share of other comprehensive income of associates |
- |
- |
- |
- |
(52) |
- |
- |
(52) |
- |
(52) |
Share of other comprehensive income of jointly controlled entities |
- |
- |
- |
- |
11 |
- |
- |
11 |
- |
11 |
Total comprehensive income for the year |
- |
- |
- |
- |
5 |
1,088 |
(10,941) |
(9,848) |
(647) |
(10,495) |
At 31 December 2009 |
2,435 |
6,344 |
23,455 |
3,254 |
25 |
- |
(36,505) |
(992) |
1,030 |
38 |
Consolidated Statement of Cash Flows
For the year ended 31 December 2010
(Restated) | |||
2010 | 2009 | ||
US$'000 | US$'000 | ||
Operating activities | |||
Continuing operations | |||
Loss before taxation | (941) | (1,666) | |
Adjustments for: | |||
Finance costs | 24 | - | |
Employee share-based compensation | 101 | 276 | |
Depreciation of property, plant and equipment | 22 | 1 | |
Waiver of amounts due to former fellow subsidiaries | (157) | - | |
Foreign exchange gains, net | (5) | (17) | |
Operating cash flow before working capital changes | (956) | (1,406) | |
Increase in trade and other receivables | (4) | (4) | |
Increase/(Decrease) in trade and other payables | 42 | (126) | |
Increase in amounts due to parent company and related company | - | 1,515 | |
Net cash outflow used in operating activities from continuing operations |
(918) |
(21) | |
Discontinued operations | |||
Net cash outflow used in operating activities from discontinued operations |
(2,296) |
(8,168) | |
Net cash outflow used in operating activities | (3,214) | (8,189) |
Consolidated Statement of Cash Flows (Continued)
For the year ended 31 December 2010
(Restated) | |||
2010 | 2009 | ||
US$'000 | US$'000 | ||
Investing activities | |||
Continuing operations | |||
Net cash outflow used in investing activities from continuing operations |
- |
- | |
Discontinued operations | |||
Net cash outflow used in investing activities from discontinued operations |
(3,856) |
(311) | |
Net cash outflow used in investing activities | (3,856) | (311) | |
Financing activities | |||
Continuing operations | |||
Loan from a related company | 1,000 | - | |
Net cash inflow generated from financing activities from continuing operations |
1,000 |
- | |
Discontinued operations | |||
Net cash outflow used in financing activities from discontinued operations |
(564) |
(319) | |
Net cash inflow generated from /(outflow) used in financing activities | 436 | (319) | |
Net decrease in cash and cash equivalents | (6,634) | (8,819) | |
Cash and cash equivalents as at 1 January | 6,723 | 15,526 | |
Effect of exchange rate fluctuations | (16) | 16 | |
Cash and cash equivalents as at 31 December | 73 | 6,723 | |
Analysed into: | |||
- Continuing operations | 73 | - | |
- Discontinued operations | - | 6,723 | |
Total | 73 | 6,723 |
Notes to the Consolidated Financial Information
1. Basis of preparation
The Company was incorporated in the Cayman Islands, which does not prescribe the adoption of any particular accounting framework. The Board has therefore adopted International Financial Reporting Standards ("IFRSs") issued by the International Accounting Standards Board. The Company's shares are listed on the AIM of London Stock Exchange.
The consolidated financial statements are prepared under historical cost convention except for financial instruments classified as available-for-sale and at fair value through profit or loss, which are measured at fair value. The measurement bases are fully described in the accounting policies detailed in the Group's 2010 annual report and consolidated financial statements.
It should be noted that accounting estimates and assumptions are used in preparation of the consolidated financial statements. Although these estimates are based on management's best knowledge and judgement of current events and actions, actual results may ultimately differ from those estimates. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are set out in the Group's 2010 annual report and consolidated financial statements.
The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries(together referred to as "the Group") made up to 31 December each year. Material intra-group balances and transactions, and any unrealised gains arising from intra-group transactions, are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
The principal accounting policies are detailed in the Group's 2010annual report and consolidated financial statements.
2. Segmental Information
In identifying the Group's operating segments, the management generally followed the Group's service lines which represented the main service lines provided by the Group.
The Group identified the following reportable operating segments:
i) Asset Management - provision of fund management, asset management and wealth management services.
ii) Direct Investment - the remaining investments held which arose from the discontinued merchant banking segment which was disposed of in 2008 and were managed on a passive basis.
Upon the disposal of all the subsidiaries to its holding company, both the Asset Management and Direct Investment businesses have been shown as discontinued operations.
The revenues generated, losses incurred from operations and total assets by each of the Group's operating segments are summarised as follows:
Direct Investment | Asset Management | Total | ||||
(Restated) | (Restated) | (Restated) | ||||
2010 | 2009 | 2010 | 2009 | 2010 | 2009 | |
US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | |
Continuing operations | ||||||
Revenue from external customers | - | - | - | - | - | - |
Inter-segment revenues | - | - | - | - | - | - |
Total revenue | - | - | - | - | - | - |
Segment loss from continuing operations | - | - | - | - | - | - |
Discontinued operations | ||||||
Revenue from external customers | - | - | 1,630 | 3,505 | 1,630 | 3,505 |
Inter-segment revenues | - | 57 | - | 1,139 | - | 1,196 |
Total revenue | - | 57 | 1,630 | 4,644 | 1,630 | 4,701 |
Segment (loss)/profit from discontinued operations |
(276) |
(2,085) |
1,840 |
(5,785) |
1,564 |
(7,870) |
Continuing operations | ||||||
Segment total assets | - | - | - | - | - | - |
Discontinued operations | ||||||
Segment total assets | - | 645 | - | 8,567 | - | 9,212 |
Segment (loss)/profit from operations can be reconciled to consolidated loss from operations as follows:
Continuing operations | Discontinued operations | Total | |||||||
(Restated) | (Restated) | (Restated) | |||||||
2010 | 2009 | 2010 | 2009 | 2010 | 2009 | ||||
US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | ||||
Segment (loss)/profit from operations | - | - | 1,564 | (7,870) | 1,564 | (7,870) | |||
Reconciling items: | |||||||||
Other income not allocated | 170 | 17 | - | 2 | 170 | 19 | |||
Restructuring credit/(expenses) | - | - | 23 | (2,622) | 23 | (2,622) | |||
Other credit/( expenses) not allocated | (1,087) | (1,683) | (1) | 523 | (1,088) | (1,160) | |||
Elimination of inter-segment revenue/ expenses |
- |
- |
- |
12 |
- |
12 | |||
(Loss)/Profit from operations | (917) | (1,666) | 1,586 | (9,955) | 669 | (11,621) | |||
Finance costs | (24) | - | (65) | (112) | (89) | (112) | |||
Share of losses of associates | - | - | - | (42) | - | (42) | |||
Share of profits of jointly controlled entities | - | - | 70 | 128 | 70 | 128 | |||
(Loss)/Profit before taxation | (941) | (1,666) | 1,591 | (9,981) | 650 | (11,647) | |||
Segment total assets can be reconciled to consolidated total assets as follows:
(Restated) | |||||||
2010 | 2009 | ||||||
US$'000 | US$'000 | ||||||
Segment total assets | - | 9,212 | |||||
Other assets not allocated | 128 | 34 | |||||
Total assets | 128 | 9,246 | |||||
Direct investment | Asset Management | Other | Total | |||||
(Restated) | (Restated) | (Restated) | (Restated) | |||||
2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | |
US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | |
Other information | ||||||||
Continuing operations | ||||||||
Depreciation | - | - | - | - | 22 | 1 | 22 | 1 |
Share-based compensation | - | - | - | - | 101 | 276 | 101 | 276 |
Discontinued operations | ||||||||
Interest income | (9) | (23) | (15) | (31) | - | - | (24) | (54) |
Depreciation | - | - | 144 | 222 | - | - | 144 | 222 |
Impairment of available-for-sale investments |
- |
- |
6 |
1,536 |
- |
- |
6 |
1,536 |
Impairment of associates | - | - | - | 389 | - | - | - | 389 |
Impairment of a jointly controlled entity |
- |
- |
- |
128 |
- |
- |
- |
128 |
Impairment of other receivable | - | - | 3 | 71 | - | - | 3 | 71 |
Share-based compensation | - | 4 | 76 | 421 | - | - | 76 | 425 |
The Group definedgeographical locations with reference to those revenue producing assets and transactions that arise from customers domiciled worldwide. Due to the nature of the business, precise segregation of geographical activities would be arbitrary and therefore considered not appropriate.
3. Taxation
2010 | 2009 | |
US$'000 | US$'000 | |
Current tax credit | ||
United Kingdom: | ||
- Over provision in prior years | 35 | 32 |
Overseas: | ||
- Under provision in prior years | (32) | - |
- Over provision in prior years | - | 27 |
(32) | 27 | |
Total | 3 | 59 |
Analysed into | ||
Continuing operations | - | - |
Discontinued operations | 3 | 59 |
Total | 3 | 59 |
United Kingdom and overseas income tax for the year have been calculated at the rates prevailing in the relevant jurisdictions.
A reconciliation of the tax credit applicable to the profit/(loss)before taxation using the statutory rates for the countries in which the Company and its subsidiaries are domiciled to the tax credit at the effective tax rates, and a reconciliation of the statutory tax rates to the effective tax rates, are as follows :
2010 | 2009 | |||
US$'000 | % | US$'000 | % | |
(Loss)/Profit before taxation | ||||
Continuing operations | (941) | (1,666) | ||
Discontinued operations | 1,591 | (9,981) | ||
650 | (11,647) | |||
Less: Adjustments | ||||
Share of profits of jointly controlled entities |
(70) |
(128) | ||
Share of losses of associates | - | 42 | ||
580 | (11,733) | |||
Tax at the domestic income tax rates | 96 | 16.50 | (1,936) | 16.50 |
Tax effect of prior year's tax losses utilised this year |
- |
- |
(136) |
1.16 |
Income not subject to tax | (96) | (16.50) | (1,213) | 10.34 |
Expenses not deductible for tax | - | - | 2,457 | (20.94) |
Tax effect of unrecognised temporary differences |
- |
- |
(108) |
0.92 |
Tax effect of unrecognised tax losses |
- |
- |
936 |
(7.98) |
Under provision in prior years | 32 | 5.50 | - | - |
Over provision in prior years | (35) | (6.02) | (59) | 0.51 |
Tax credit for the year | (3) | (0.52) | (59) | 0.51 |
No recognition of potential deferred tax assets of the Group has been made as the recoverability of the potential assets is uncertain.
4. Discontinued operations
(Restated) | |||
2010 | 2009 | ||
Note | US$'000 | US$'000 | |
Revenue | 1,630 | 3,505 | |
Cost of sales | (291) | (451) | |
Gross profit | 1,339 | 3,054 | |
Profit/(Loss) on financial assets at fair value through profit or loss | 3 | (2,003) | |
Other income | 3,801 | 600 | |
Administrative expenses | |||
Restructuring credit/(expenses) | (i) | 23 | (2,622) |
Other administrative expenses | (3,353) | (5,345) | |
(3,330) | (7,967) | ||
Distribution expenses | - | (3) | |
Impairment of available-for-sale investments | (6) | (1,536) | |
Impairment of associates | - | (389) | |
Impairment of a jointly controlled entity | - | (128) | |
Other operating expenses | (221) | (1,583) | |
Profit/(Loss) from operations | 1,586 | (9,955) | |
Finance costs | (65) | (112) | |
Share of losses of associates | - | (42) | |
Share of profits of jointly controlled entities | 70 | 128 | |
Profit/(Loss) before taxation | 1,591 | (9,981) | |
Taxation | 3 | 59 | |
Profit/(Loss) after taxation | 1,594 | (9,922) | |
Gain on disposal of discontinued operations | 1,073 | - | |
Profit/(Loss) for the year from discontinued operations | 2,667 | (9,922) | |
Notes:
(i) The amounts include the additional provision for onerous contract of US$106,000 (2009: US$2,685,000) representing the discounted net present value of the future property operating lease rental payments under the operating lease on the basis that no sublet of the property is achieved for the remaining term of the lease. As at 31 December 2010, the provision for the onerous contract was US$Nil (2009: US$2,963,000) following the disposal of subsidiaries.
(ii) For the purpose of presenting discontinued operations, the comparative consolidated income statement and consolidated statement of comprehensive income, the consolidated statement of cash flowsand the related notes have been re-presented as if the operations discontinued during the year had been discontinued at the beginning of the comparative period.
5. Profit/(Loss) per Share
(a) Basic
Basic profit/(loss) per share is calculated by dividing consolidated loss attributable to owners of the Company by the weighted average number of ordinary shares in issue during the year.
2010 | 2009 | |
US$'000 | US$'000 | |
Profit/(Loss) attributable to owners of the Company | ||
- Continuing operations | (941) | (1,666) |
- Discontinued operations | 1,752 | (9,275) |
811 | (10,941) |
2010 | 2009 | |
Weighted average number of shares for calculating basic loss per share |
259,475,821 |
243,475,000 |
2010 | 2009 | |
US cents | US cents | |
Basic (loss)/profit per share | ||
- Continuing operations | (0.36) | (0.68) |
- Discontinued operations | 0.67 | (3.81) |
0.31 | (4.49) |
(b) Diluted
The diluted profit per share for 2010 is the same as the basic profit per share as the outstanding share options were all exercisable at a price significantly in excess of the share price throughout 2010.
The diluted loss per share for 2009 is the same as the basic loss per share as the outstanding share options were anti-dilutive.
6. Publication
The financial information set out in this preliminary announcement does not constitute statutory accounts.
The consolidated statement of financial position at 31 December 2010 and the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated statement of cash flows and enclosed notes for the year then ended have been extracted from the Group's 2010 statutory financial statements upon which the auditors opinion is unqualified.
7. Copies of This Announcement
Copies of this announcement are available for collection from the Company's offices at 4 Old Park Lane, London W1K 1QW.