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Afarak Group — Regulatory Filings 2017
May 17, 2017
3302_rns_2017-05-17_9755e560-e65b-42d0-a33c-a5a233c1ae9b.html
Regulatory Filings
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ADDITIONAL INFORMATION RELATED TO QUARTERLY REPORT
ADDITIONAL INFORMATION RELATED TO QUARTERLY REPORT
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, [email protected]
Predrag Kovacevic, CFO, +356 2122 1566, [email protected]
Melvin Grima, Finance Director, +356 2122 1566, [email protected]
Jean Paul Fabri, PR Manager, +356 2122 1566, [email protected]
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