Preliminary Announcement – six months ended 31 Dec 2018

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CSM Group Limited (NZAX: CSM)

Half year preliminary unaudited announcement for the 6 months ended 31 December 2018

Commentary
AUCKLAND, New Zealand, 14 March 2019 – The Board of CSM Group Limited (NZAX: CSM) is pleased
to announce the preliminary unaudited half year results of the business for the 6 months ended 31
December 2018.

Results for Announcement to the Market

Reporting Period 6 months to 31 December 2018
Previous reporting period 6 months to 31 December 2017

Amount (000s) Percentage change
Revenue from ordinary activities $NZ- -%
Profit (loss) from ordinary activities
after tax attributable to security
holder
$NZ(390) 14.1%
Net profit (loss) attributable to
shareholders
$NZ(1,022) 250.8%%

Interim/Final Dividend Amount per share Imputed amount per
share
The company does not propose to pay
a dividend at this time.
Not applicable Not applicable

Record Date Not applicable
Dividend Payment Date Not applicable

Comments: See below

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Half year preliminary unaudited announcement for the 6 months ended 31 December 2018

Following the decision to cease operations at its wholly owned subsidiary China Scrap Metal Resources
Pty Ltd (“CSM Pty”), the company has now completed the winding down of that business and its
subsidiary company (CSM Pty) was de-registered on 6 November 2018.

The financial results reflect the decision to minimise costs, wind down and exit the Australian
operation.

As cash has been 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. All funds
held in Australia are now held in CSM Group.

Transfer from foreign currency translation reserve on wind up of subsidiary
Included in the net loss attributable to shareholders is a classification adjustment of $697,000. IFRSs
require that on the wind up of a foreign subsidiary, the cumulative amount of exchange differences
recognised in equity (in the foreign currency translation reserve) be reclassified from equity to profit
or loss. This adjustment has no impact on net tangible asset backing or cash reserves.

Functional Currency
The Company advised in its 2018 Annual Report that the functional currency changed from USD to
NZD with effect from 1st April 2018.

Presentation Currency
Now that the Australian subsidiary, CSM Pty, has been fully disposed and the corporate entity de-
registered the Directors advise that the Company has adopted New Zealand Dollars as its presentation
currency.

The choice of presentation currency is an accounting policy and any change is applied retrospectively.
The effect is the financial statements are treated as if the new presentation currency has always been
the presentation currency, with the comparatives restated in the new presentation currency. The
effect of foreign currency movements that impact on the financial statements as a result of this
change in presentation currency, is shown in Other Comprehensive Income (Loss) and in the
Statement of Movements in Equity as exchange differences in change of presentation currency. As
noted above, these exchange differences have been reclassified and included in the net loss in the
current period.

Future Options
The Company is now 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 the directors are pursuing for CSM Group include:
• finding a business operation to invest in;
• undertaking a reverse listing of a business seeking a stock exchange listing.

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At this time the Company has no particular announcement to make regarding progress with those
options suffice to say they are being actively developed.

Result
The financial result for the Group for the six months ended 31st December 2018 is a loss of NZD
$1,022,000.

Earnings per Share and Net Tangible Asset per security
The earnings per share are shown below the Statement of Profit & Loss and Other Comprehensive
Income below. The net tangible asset backing per security is shown below the Statement of Position
below.

Subsidiary
As noted above, CSM Group’s 100% owned subsidiary, CSM Pty, has now been deregistered. The
financial impact of CSM Pty on the results for the six month period is shown in the segment reporting
below.

Audit
The financial statements shown below have not been audited nor reviewed by the company’s auditor.


Future Events

Event Date
Interim report due 30 April 2019


ENDS

Authority for this announcement
Roger Gower
Chair of board
Date of release: 14 March 2019

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Statement of Profit & Loss and Other Comprehensive Income
CSM Group Limited
For the six months ended 31 December 2018



6 mths ended6 mths ended
31 Dec 201831 Dec 2017
(unaudited)(unaudited)
NZD$'000NZD$'000
Revenue--
Other income--
Administrative expenses(323)(306)
Operating loss(323)(306)
Finance income1511
Exchange loss(82)(48)
Loss before income tax(390)(342)
Income tax expense--
Loss from continuing operations
(390)(342)
Discontinued operations
Gain (loss) from discontinued operations (net of tax)66(58)
Transfer from foreign currency translation reserve on wind up of subsidiary(697)-
Net loss attributable to shareholders(1,022)(400)
Other comprehensive income
Items that may be reclassified subsequently to profit of loss
Exchange differences on translation of overseas subsidiaries-2
Exchange difference on change in presentation currency-107
Other comprehensive income for the period, net of tax-109
Total comprehensive loss for the year attributable to shareholders(1,022)(291)
Total comprehensive loss for the year attributable to shareholders
Continuing operations(390)(235)
Discontinued operations(631)(57)
(1,022)(291)
Earnings (loss) per share from continuing operations:
- basic and diluted loss per share (cents)(0.094)(0.083)
Earnings (loss) per share from continuing and discontinued operations:
- basic and diluted loss per share (cents)(0.246)(0.097)

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Statement of Changes in Equity
CSM Group Limited
For the six months ended 31 December 2018




Share
Foreign
Accumulated
Total
capital
currency
losses
equity
translation
reserve
NZD$'000
NZD$'000
NZD$'000
NZD$'000
Balance at 1 July 2018 (audited)
47,998
(697)
(44,657)
2,644
Loss attributable to shareholders
-
697
(1,022)
(325)
Exchange differences on translating overseas operations
-
-
-
Exchange differences on change in presentation currency
-
-
-
-
Other comprehensive income
-
-
-
-
Total comprehensive loss for the period
-
697
(1,022)
(325)
Balance at 31 December 2018
47,998
-
(45,678)
2,319
Balance at 1 July 2017 (audited)
44,165
(647)
(40,125)
3,393
Loss attributable to shareholders
-
-
(400)
(400)
Foreign currency translation
-
1
-
1
Exchange differences on change in presentation currency
1,425
(21)
(1,297)
107
Other comprehensive income
-
-
-
-
Total comprehensive loss for the period
1,425
(19)
(1,697)
(291)
Balance at 31 December 2017
45,590
(667)
(41,822)
3,102

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Statement of Financial Position
CSM Group Limited
As at 31 December 2018



31 Dec 201830 Jun 2018
(unaudited)(audited)
NZD$'000NZD$'000
ASSETS
Current assets
Cash and cash equivalents2,1352,452
Trade and other receivables51120
Taxation receivable234246
Total current assets2,4202,818
Total assets2,4202,818
LIABILITIES
Current liabilities
Trade payables and other liabilities100174
Total current liabilities100174
Total liabilities100174
Net assets
2,3192,644
Equity
Share capital47,99847,998
Foreign currency translation reserve-(697)
Accumulated losses(45,678)(44,657)
Total equity
2,3192,644
Net tangible assets per share (cents per share):0.58 0.64

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Statement of Cash Flows
CSM Group Limited
For the six months ended 31 December 2018


6 mths ended6 mths ended
31 Dec 201831 Dec 2017
(unaudited)(unaudited)
$$
Cash flows from operating activities
Receipts of loan receivables
--
Receipts from customers
-582
interest received
1514
Payments to suppliers and employees
(289)(853)
Income tax refunded (paid)
40(3)
Net cash outflows from operating activities(235)(261)
Cash flow from investing activities
Disposal of property, plan and equipment
-508
Income taxes paid--
Net cash inflows (outflows) from investing activities-508
Net increase/(decrease) in cash and cash equivalents(235)247
Cash and cash equivalents at the beginning of the period2,4522,676
Effect of exchange rate changes(82)81
Cash and cash equivalents at the end of the year
2,1353,005
Reconciliation of Loss after Taxation with Cash Flow from Operating Activities
6 mths ended6 mths ended
31 Dec 201831 Dec 2017
(unaudited)(unaudited)
NZD$'000NZD$'000
Net loss after taxation(1,022)(400)
Adjustments for:
Income tax expense (benefit) in profit or loss-
Impairment reduction-(20)
Effect of foreign exchange rates8234
Transfer from foreign currency translation reserve on wind up of subsidiary697-
Other non-cash adjustments-(21)
Movements in working capital
Decrease / (increase) in trade and other receivables4269
Decrease / (increase) in inventories-321
Decrease / (increase) in trade and other payables(73)(241)
Income taxes received (paid)40(3)
Net cash outflows from operating activities(235)(261)

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Reporting of Segments
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 was previously organised into the following main operating segments:
• China Scrap Metals Resources Pty Limited (CSM Pty) 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.
Income has been allocated based on the country where the income 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.
Following the deregistration of its subsidiary, CSM Pty, the Company will only report as a single
segment. All assets and liabilities at balance date where held by the New Zealand company.


HoldingCSM PtyTotalHoldingCSM PtyTotal
Company NZCompany NZ
(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)
NZ$'000NZ$'000NZ$'000NZ$'000NZ$'000NZ$'000
Total inter-segment revenue------
Total external revenue-1212-554554
Total EBITDA(323)11(312)(306)(154)(460)
Finance income15-1511214
Impairment reduction----2020
-5454---
-(697)(697)---
Exchange gain/(loss)(82)(0)(82)(48)7325
Net loss for the period(390)(631)(1,022)(342)(58)(400)
Six month period ended 31 December 2018Six month period ended 31 December 2017
Gain (loss) from discontinued operations (net of
tax)
Transfer from foreign currency translation
reserve on wind up of subsidiary