ADDITIONAL INFORMATION RELATED TO QUARTERLY REPORT
May 17 2017 - 10:05AM
15:00 London, 17:00 Helsinki, 17 May 2017 - Afarak
Group Plc ("Afarak" or "the Company") (LSE: AFRK, NASDAQ:
AFAGR)
ADDITIONAL
INFORMATION RELATED TO QUARTERLY REPORT
The company wishes to make
available to all shareholders certain clarifications discussed
and/or requested during the investor call, relating to the first
quarter results (published on May 12, 2017) and with respect to: 1)
currency movements that were being accounted for in equity and
moved to the income statement; and, 2) tax charge.
1.
Currency movements
The Company is simplifying and improving its corporate structures
and its balance sheet making it also more transparent in order to
pursue further investments in the development of its mining
operations in South Africa. This restructuring included the
repayment of the internal loans originated back in 2010 and 2011,
with the foreign exchange difference arising from the time
differences in South African rand against hard currencies,
calculated between the origination and repayment dates. This
cumulative unrealised exchange difference has been recorded in the
"Other Comprehensive Income" and "Translation reserve" in equity.
Following IFRS, when realised the accumulated exchange loss of EUR
3.2 million is recognised as a finance cost in the "Income
Statement", and the corresponding offsetting reduction in the
"Translation Reserve" is recognised within the change in the
Translation Reserve in "Other Comprehensive Income". This realised
exchange difference and the offsetting positive movement in the
Translation difference, has no net impact on the shareholders
equity and, as a result, the Group's total comprehensive income is
EUR 8.3 million.
2. Tax
charge
The reported tax charge of EUR 2.7 million during the first quarter
was higher than usual on the back of the significantly improved
result achieved during the period. The tax charge also included a
one-off write-off of deferred tax asset amounting to EUR 1.1
million on foreign exchange difference on the historical intragroup
loans that are unlikely to be utilised in the taxation of the
relevant subsidiary in the short to medium term. The effective tax
rate when excluding the write-off was 23.2%. The reported tax
charge is provisional for the period and will fluctuate going
forward, depending on Company's profitability in the coming
quarters.
The necessary charges and currency
movements, due to compliance with IFRS, have also not influenced
the proposed capital redemption of EUR 0.02, which is reflective of
strong operating cash flows, rather than the declared bottom line
profit figure, affected by these book entries.
Further the Company wishes to inform that the
Capital redemption proposed to the AGM will be paid, if accepted,
on 9 June and not on 10 June as previously communicated.
Guy Konsbruck
CEO
Afarak Group plc
www.afarak.com
For additional information, please contact:
Guy Konsbruck, CEO, +356 2122
1566, guy.konsbruck@afarak.com
Predrag Kovacevic, CFO, +356 2122
1566, pedja.kovacevic@afarak.com
Melvin Grima, Finance Director, +356 2122
1566, melvin.grima@afarak.com
Jean Paul Fabri, PR Manager, +356 2122
1566, jp.fabri@afarak.com
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Afarak Group via Globenewswire
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