Unaudited Interim Half Yearly Report to 31 Dec 2017

CSM Group Limited

Unaudited Interim Report

For the six month period ended 31 December 2017

CSM Group Limited Page 2 of 14
CSM Group Limited
Unaudited Interim Report
For the six month period ended 31 December 2017

Contents

Contents 2
Directors’ Report 3
Statement of Comprehensive Income 4
Statement of Changes in Equity 5
Statement of Financial Position 6
Statement of Cash Flows 7
Notes to the Financial Statements 8 – 13
Company Directory 14

CSM Group Limited Page 3 of 14
CSM Group Limited
Directors’ Report
For the six month period ended 31 December 2017

Dear Shareholders,

CSM Group Operations
Following the decision last financial year to cease operations at its wholly owned subsidiary China Scrap Metal Resources Pty Ltd (“CSM Pty”) the
company has continued to wind down that business and proceed to a voluntary winding up.
The financial results reflect the decision to wind down and exit the Australian operation.
The wind down has taken the following steps:
• CSM Pty entered into contractual arrangements to sell all of its scrap metal inventory.
• CSM Pty progressively sold property, plant and equipment as the operations wound down.
• CSM Pty employees’ service with CSM Pty ceased on 30 September 2017.
• Inventory, property, plant and equipment was either sold or otherwise disposed of.
• CSM Pty undertook a land reinstatement programme in respect of the site in Lara, to return the site to the state it was in as at the
commencement of the lease.
• The Lara site has been formally handed back to the landlord.
• As cash is realised from the sale of inventory, property, plant and equipment and local liabilities satisfied, surplus funds have been
transferred to the parent company, CSM Group.
Future Options
Following the winding up of CSM Pty, the Company will revert to operating as a listed shell, with considerable cash resources and no debt. The
Company has no term liabilities, and will have limited ongoing liabilities, most of which are associated with maintaining a listing on the NZAX
market.
The options available for CSM Group include:
• finding a business operation to invest in;
• undertaking a reverse listing of a business seeking a stock exchange listing;
• the voluntary liquidation of the Company, and the distribution of the net proceeds of the liquidation to the shareholders of the
Company.
No decision has yet been made as to which course of action the Company shall take in the future, and the Board will be seeking guidance on the
future path in consultation with the Company’s shareholders.

Result

The financial result for the Group for the interim six month period ended 31 December 2017 is a loss of USD $286,000.



Dated: 16
th
March 2018






_______________________________ _________________________________
Director Director

CSM Group Limited Page 4 of 14
CSM Group Limited
Statement of Comprehensive Income
For the six month period ended 31 December 2017

31.12.2017 31.12.2016 30.6.2017
6 months 6 months 12 months
unaudited unaudited audited
Note US$’000 US$’000 US$’000
Revenue - - -
Cost of goods sold - - -
Gross Profit - - -
Other income - - -
Administrative expenses (218) (197) (422)
Operating loss (218) (197) (422)
Finance income 8 8 14
Exchange loss (34) (55) 78
Loss before income tax (244) (244) (330)
Income tax expense - - -
Loss from continuing operations (244) (244) (330)
Discontinued Operation
Loss from discontinued operation (net of tax) (42) (300) (858)
Net loss for the period attributable to shareholders (286) (544) (1,188)

Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of overseas subsidiaries 1 (15) 17
Other comprehensive income for the period, net of tax 1 (15) 17

Total comprehensive loss for the period attributable to shareholders (285) (559) (1,171)


Total comprehensive loss for the year attributable to shareholders
arises from:

Continuing operations (244) (244) (330)
Discontinued operation (41) (315) (841)
(285) (559) (1,171)


Earnings per share for loss attributable to shareholders
for continuing operations:

- Basic loss per share (cents) 3 (0.0589) (0.0589) (0.0796)
- Diluted loss per share (cents) 3 (0.0589) (0.0589) (0.0796)















The above statement of comprehensive income should be read in conjunction with the accompanying notes

CSM Group Limited Page 5 of 14
CSM Group Limited
Statement of Changes in Equity
For the six month period ended 31 December 2017

Share Capital Foreign
Currency
Translation
Reserve
Accumulated
Losses
Total equity
US$’000 US$’000 US$’000 US$’000

Balance as at 1 July 2017 32,355 (474) (29,395) 2,486

Net loss attributable to shareholders - - (286) (286)
Other comprehensive income/(loss) - 1 - 1
Total comprehensive loss/(loss) - 1 (286) (285)

Balance as at 31 December 2017 32,355 (473) (29,681) 2,201


Balance as at 1 July 2016 32,355 (491) (28,207) 3,657

Net loss attributable to shareholders - - (544) (544)
Other comprehensive income/(loss) - (15) - (15)
Total comprehensive loss/(loss) - (15) (544) (559)

Balance as at 31 December 2016 32,355 (506) (28,751) 3,098


Balance as at 1 July 2016 32,355 (491) (28,207) 3,657

Net loss attributable to shareholders - - (1,188) (1,188)
Other comprehensive income/(loss) - 17 - 17
Total comprehensive income/(loss) - 17 (1,093) (1,171)

Balance as at 30 June 2017 32,355 (474) (29,395) 2,486






















The above statement of changes in equity should be read in conjunction with the accompanying notes

CSM Group Limited Page 6 of 14
CSM Group Limited
Statement of Financial Position
As at 31 December 2017

31.12.2017 31.12.2016 30.6.2017
unaudited unaudited audited
Note US$’000 US$’000 US$’000
ASSETS
Current Assets
Cash and cash equivalents 2,133 1,740 1,961
Trade and other receivables 48 81 97
Inventories - 491 228
Property, plant and equipment 4 - 742 348
Taxation receivable 171 164 174
Total current assets 2,352 2,476 2,808

Non-Current Assets
Property, plant and equipment 4 - 742 -
Intangible assets 5 - 8 -
Total non-current assets - 750 -
TOTAL ASSETS 2,352 3,226 2,808

LIABILITIES
Current Liabilities
Trade and other payables 151 128 322
Total current liabilities 151 128 322
TOTAL LIABILITIES 151 128 322

EQUITY
Share capital 2 32,355 32,355 32,355
Reserves (30,154) (29,257) (29,869)
Total Equity 2,201 3,098 2,486
TOTAL EQUITY AND LIABILITIES 2,352 3,226 2,808

For and on behalf of the Board:






Director Director

Dated: 16
th
March 2018












The above statement of financial position should be read in conjunction with the accompanying notes

CSM Group Limited Page 7 of 14
CSM Group Limited
Statement of Cash Flows
For the six month period ended 31 December 2017

31.12.2017 31.12.2016 30.6.2017
6 months 6 months 12 months
unaudited unaudited audited
Note US$’000 US$’000 US$’000
OPERATING ACTIVITIES
Receipts from customers 415 47 482
Interest received 10 11 19
Payments to suppliers and employees (609) (534) (920)
Income tax paid (2) (2) (3)
Net cash outflows from operating activities 6 (186) (478) (422)

INVESTING ACTIVITIES
Disposal of property, plant and equipment 363 2 128
Purchase of property, plant and equipment - (6) (7)
Purchase of intangible assets - (5) -
Net cash outflows from investing activities 363 (9) 121

Net decrease in cash and cash equivalents 177 (487) (301)
Cash and cash equivalents at beginning of the period 1,961 2,231 2,231
Effect of exchange rate changes (5) (5) 31
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 2,133 1,739 1,961

































The above statement of financial position should be read in conjunction with the accompanying notes

CSM Group Limited Page 8 of 14
CSM Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2017

A General Information
CSM Group Limited (the Company or Parent) and its subsidiary, China Scrap Metal Resources Pty Limited (CSM Pty) (together, the Group) was engaged in a
business operation in Australia of processing scrap metals for export sale to Chinese markets. The Company made the decision to cease the scrap metal operations
of CSM Pty during the year ended 30 June 2017.
The Company, CSM Group Limited, is a limited liability company incorporated and domiciled in New Zealand. The address of its registered office is 44a Orakei
Road, Remuera, Auckland 1050.
These interim financial statements have been approved for issue by the Board of Directors on 16
th
March 2018.
B Summary of Significant Accounting Policies
These general purpose financial statements for the interim six month reporting period ended 31 December 2017 have been prepared in accordance with New
Zealand generally accepted accounting practice (NZ GAAP), International Accounting Standard 34 and NZ IAS 34 Interim Financial Reporting.
Basis of preparation
The accounting policies have been applied on a basis consistent with those used in the audited financial statements for the year ended 30 June 2017. Those
accounting policies are set out in the 2017 Annual Report.
These interim financial statements do not include all of the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in
conjunction with the annual report for the year ended 30 June 2017.
The financial statements for the six month periods ending 31 December 2017 and 31 December 2016 are unaudited. The comparative information for the year
ending 30 June 2017 is audited.
The reporting currency used in the preparation of these consolidated financial statements is United States dollars, rounded where necessary to the nearest
thousand dollars.
Entities reporting
The consolidated financial statements are for the consolidated Group, which comprise of CSM Group Limited and its subsidiary, CSM Pty.

Statutory base
CSM Group Limited is a company registered under the Companies Act 1993 and is an FMC reporting entity under part 7 of the Financial Markets Conduct Act
2013. The Company is also listed on the New Zealand Alternative Market (“NZAX”). In accordance with the Financial Markets Conduct Act 2013, because the
Group financial statements are prepared and presented for CSM Group Limited and its subsidiary, separate financial statements of CSM Group Limited are no
longer required to be prepared and presented.
Measurement basis
These financial statements have been prepared under the historical cost convention.
Going concern
During the period the Directors continued to wind down the operations of its subsidiary CSM Pty Ltd, preserving value through maximising the sales recovery of
the scrap metal inventory and the sale of property, plant and equipment.
The close down process was effected from May 2017 with all staff terminated as at 30 September 2017. All inventory has been sold, all property, plant and
equipment sold or otherwise disposed, and the land leased at 300 Broderick Road, Lara has been remediated in accordance with the landlord’s requirements. The
final site remediation resulted in a contingent liability at period end, which has since been realised. Once CSM Pty’s obligations are met, the entity will be
voluntarily wound up and liquidated.
CSM Pty’s surplus cash will be repatriated to the Company and held on deposit.
The Company will revert to a listed shell, post the liquidation of the subsidiary, with cash resources and no debt. The Company has limited financial obligations and
these are composed largely of costs associated with maintaining a listing on the NZAX.
In adopting the going concern basis of accounting, the Directors have considered that the Company has sufficient cash funds to continue operations through the
next 12 months and in several accounting periods at the current and expected cash burn rate without recourse to shareholders or external funding.
There are several options for the Company and these will be investigated and discussed with the shareholders at the appropriate time. These options include
realistic alternatives of the business finding another operation to invest in or a reverse listing of a company seeking a stock exchange listing or following a special
resolution of shareholders the Company could also be voluntarily wound up and the net proceeds, post liquidation, returned to the shareholders. No decisions on
these options or any others have been made and they will follow discussions with shareholders. At the date of this Annual Report, the Directors have not made the
decision to liquidate the Company.
Having considered all the factors for the Company, in balance, the Directors have adopted the going concern basis in preparing its consolidated financial
statements. These consolidated financial statements do not include any adjustments that would result if the CSM Group Limited was unable to continue as going
concern.

CSM Group Limited Page 9 of 14
CSM Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2017
1 Segment Information
The Group has identified its operating segments based on the internal reports reviewed and used by the Board of Directors in assessing performance and in
determining the allocation of resources.
The Group is organised into the following main operating segments:
• China Scrap Metals Resources Pty Limited (CSM Ltd Australia) includes the business operation in Australia involved in the processing of scrap metal for
export sale to Chinese markets.
• Holding company New Zealand includes holding company costs and head office charges.
Revenue is allocated based on the country where the sale is generated. Expenses are allocated based on the country where the expense is incurred.
Total assets and liabilities are allocated based on where those assets and liabilities are located.

Six month period ended 31 December 2017 Six month period ended 31 December 2016

CSM Ltd
Australia
Holding
Company NZ
Total CSM Ltd
Australia
Holding
Company NZ
Total

unaudited unaudited unaudited unaudited unaudited unaudited

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Total inter-segment revenue
- -
-
- -
-
Total external sales revenue 395 - 395 30 - 30







Total EBITDA (111) (218) (329) (218) (197) (469)
Amortisation - - - - - -
Depreciation - - - (75) - (75)
Impairment reduction 15 - 15 - - -
Closedown costs - - - - - -
Finance income 2 8 10 3 8 11
Exchange gain/(loss) 52 (34) 18 (10) (55) (65)
Net loss for the period (42) (244) (286) (300) (244) (544)
Allocated non-current segment assets - - - 750 - 750
Additions to non-current assets - - - 11 - 11
Allocated segment liabilities 78 73 151 106 22 128

Year ended 30 June 2017



CSM Ltd
Australia
Holding
Company NZ
Total
audited audited audited
US$’000 US$’000 US$’000

Total inter-segment revenue - 72 72
Total external sales revenue 479 - 479



Total EBITDA (390) (422) (812)
Amortisation (3) - (3)
Depreciation (133) - (133)
Impairment (247) - (247)
Closedown costs (95) - (95)
Finance income 5 14 19
Exchange gain / (loss) 5 78 83
Net loss for the period (858) (330) (1,188)
Allocated non-current segment assets - - -
Additions to non-current assets 27 - 27
Allocated segment liabilities 233 89 322
The “Total EBITDA” measure above excludes foreign exchange gains / losses as well as net finance income and depreciation.

CSM Group Limited Page 10 of 14
CSM Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2017
2 Share Capital
31.12.2017 31.12.2016 30.6.2017 31.12.2017 31.12.2016 30.6.2017
unaudited unaudited audited unaudited unaudited audited
Number Number Number US$’000 US$’000 US$’000
Ordinary shares
Balance at beginning of the period 414,550,000 414,550,000 414,550,000 32,355 32,355 32,355
Shares issued - - - - - -
Balance at end of the period 414,550,000 414,550,000 414,550,000 32,355 32,355 32,355

Ordinary shares
As at 31 December 2017 there were 414,550,000 shares issued. All ordinary shares on issue are fully paid. All ordinary shares rank equally with one vote attached
to each share.
3 Earnings per share
Basic earnings per share is calculated by dividing the (loss) / profit by the weighted average number of ordinary shares on issue during the period.
31.12.2017 31.12.2016 30.6.2017
6 months 6 months 12 months
unaudited unaudited audited
000 000 000

Loss used in calculating earnings per share
Net loss attributable to shareholders from continuing operations (244) (244) (330)
Net loss attributable to shareholders from discontinued operations (373) (300) (858)
(617) (544) (1,188)

Number of shares used as the denominator
Number of ordinary shares on issue (thousands) 414,550 414,550 414,550
Weighted average number of ordinary shares on issue (thousands) 414,550 414,550 414,550
Weighted average number of diluted shares on issue (thousands) 414,550 414,550 414,550

Basic loss per share (cents)
Basic loss per share attributable to shareholders
From continuing operations (0.0589) (0.0589) (0.0796)
From discontinued operations (0.0100) (0.0724) (0.2070)
Total basic loss per share attributable to shareholders (cents) (0.0689) (0.1312) (0.2866)

Diluted loss per share (cents)
Diluted loss per share attributable to shareholders
From continuing operations (0.0589) (0.0589) (0.0796)
From discontinued operations (0.0100) (0.0724) (0.2070)
Total diluted loss per share attributable to shareholders (cents) (0.0689) (0.1312) (0.2866)

CSM Group Limited Page 11 of 14
CSM Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2017
4 Property, Plant and Equipment
Leasehold
improvements
Plant &
equipment
Motor
vehicles
Office
furniture &
equipment
Total
US$’000 US$’000 US$’000 US$’000 US$’000
Cost
Balance as at 1 July 2016 115 1,036 12 18 1,181
Additions - 6 - - 6
Disposals - (2) - - (2)
Exchange differences (3) (28) - (1) (32)
Balance as at 31 December 2016 112 1,012 12 17 1,153
Additions - - - 1 1
Disposals - (205) - (4) (209)
Exchange differences 7 57 1 1 66
Balance as at 30 June 2017 119 864 13 15 1,011
Additions - - - - -
Disposals (119) (864) (13) (15) (1,011)
Exchange differences - - - - -
Balance as at 31 December 2017 - - - - -

Accumulated depreciation
Balance as at 1 July 2016 27 307 4 9 347
Depreciation charge for the period 5 70 1 - 76
Disposals - - - - -
Exchange differences (1) (11) - - (12)
Balance as at 31 December 2016 31 366 5 9 411
Depreciation charge for the period 4 50 1 2 57
Impairment 77 156 7 7 247
Disposals - (79) - (4) (83)
Exchange differences 3 27 - 1 31
Balance as at 30 June 2017 115 520 13 15 663
Impairment reduction - (15) - - (15)
Disposals (115) (505) (13) (15) (648)
Exchange differences - - - - -
Balance as at 31 December 2017 - - - - -

Carrying amounts
At 31 December 2016 81 646 7 8 742
At 30 June 2017 4 344 - - 348
At 31 December 2017 - - - - -

CSM Group Limited Page 12 of 14
CSM Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2017
5 Intangible Assets
Permits Total
US$’000 US$’000
Cost
Balance as at 1 July 2016 8 8
Additions 5 5
Balance as at 31 December 2016 13 13
Disposals (5) (5)
Balance as at 30 June 2017 8 8
Disposals (8) (8)
Exchange differences - -
Balance as at 31 December 2017 - -

Accumulated amortisation
Balance as at 1 July 2016 5 5
Amortisation charge for the period - -
Exchange differences - -
Balance as at 31 December 2016 5 5
Amortisation charge for the period 3 3
Exchange differences - -
Balance as at 30 June 2017 8 8
Disposals (8) (8)
Exchange differences - -
Balance as at 31 December 2017 - -

Carrying amounts
At 31 December 2016 8 8
At 30 June 2017 - -
At 31 December 2017 - -
6 Reconciliation of Loss after Taxation with Cash Flow from Operating Activities
31.12.2017 31.12.2016 30.6.2017
6 months 6 months 12 months
unaudited unaudited audited
Reconciliation with Net Reported Loss US$’000 US$’000 US$’000

Reported net loss after taxation (286) (544) (1,188)

Items not involving cash flows:
Amortisation expense - - 3
Depreciation expense - 76 380
Impairment reduction (14) - -
Exchange loss on net cash 24 30 (35)

Changes in working capital items (excluding the effects of
exchange differences on consolidation):

Decrease / (increase) in trade and other receivables 49 3 (11)
Decrease/(Increase) in inventories 228 (23) 253
(Increase) / decrease in taxation receivable (2) 1 179
Increase / (decrease) in trade and other payables (171) (21) (3)
Net cash outflows from operating activities (172) (478) (422)

CSM Group Limited Page 13 of 14
CSM Group Limited
Notes to the Financial Statements
For the six month period ended 31 December 2017


7 Contingent Liabilities
There are no contingent liabilities as at 31 December 2017 (30 June 2017: nil; 31 December 2016: nil).
8 Commitments
(a) Capital commitments
The Group had no commitments for future capital expenditure as at 31 December 2017 (30 June 2017: nil; 31 December 2016: nil).
(b) Operating lease commitments
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:

31.12.2017 31.12.2016 30.6.2017

unaudited unaudited audited

US$’000 US$’000 US$’000

Within one year
- 107 -
Later than one year but not later than five years
- - -
Later than five years
- - -
Commitments not recognised in the financial statements
- 107 -
China Scrap Metals Resources Pty Limited had leased an industrial site under a non-cancellable operating lease agreement. This lease ceased on 19 October 2017
and has not been renewed. The lease reflects normal commercial arrangements with escalation clauses based on the CPI index and renewal rights.
9 Events Subsequent to Interim Balance Date
Subsequent to 31 December 2017, further site remediation costs of A$58,178 were incurred.

CSM Group Limited Page 14 of 14
CSM Group Limited
Company Directory
For the six month period ended 31 December 2017

Directors

R H Gower
S R Joyce
P Li
Y Shi
Z Shi

Registered Office

c/- Roger Gower & Associates
44A Orakei Road, Remuera 1050
New Zealand

Postal Address

c/- Roger Gower & Associates
44A Orakei Road, Remuera 1050
New Zealand

Bankers

ASB Bank Limited
PO Box 35
Shortland Street
Auckland 1140

Auditors

PricewaterhouseCoopers
188 Quay Street
Auckland
New Zealand

Share Registry

Link Market Services
Level 16, Brookfield House
19 Victoria Street West
Auckland 1010

PO Box 91976
Auckland 1142
New Zealand