CVM Minerals Limited 南亞礦業有限公司 - HKExnews

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Nov 20, 2013 (3 years and 11 months ago)

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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no
responsibility for the contents of this announcement,make no representation as to its accuracy or
completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in
reliance upon the whole or any part of the contents of this announcement.
CVM Minerals Limited
南亞礦業有限公司
(Incorporated in Hong Kong with limited liability)
(Stock Code:705)
DISCLOSEABLE TRANSACTION:
DISPOSAL OF THE ENTIRE ISSUED SHARE CAPITAL OF
CVM INTERNATIONAL LIMITED
Reference is made to the announcements (the ‘‘Announcements’’) of the Company dated 25
October 2013 and 15 November 2013 in relation to,among others,the Disposal of the entire
issued share capital of CVM International Limited.Unless the context requires otherwise,
capitalised terms used herein shall bear the same meanings as defined in the
Announcements.
Please find the attached Appendix I to this announcement the text extracted from the report
from Baker Tilly and the attached Appendix II to this announcement the text extracted from
the letter from the Board for your attention.
By order of the Board of
CVM Minerals Limited
Ji Kuang
Executive Chairman
Hong Kong,19 November 2013
As at the date of this announcement,the Executive Directors of the Company are Mr.Ji Kuang,Mr.Lim Ooi
Hong and Mr.Leung Wai Kwan and the Independent Non-executive Directors of the Company are Ms.Wong
Choi Kay,Mr.Chong Lee Chang and Mr.Tony Tan.
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APPENDIX I — TEXT EXTRACTED FROM THE REPORT FROM BAKER TILLY
Our Ref.:C976(comltr)/dc/rit/u13
PRIVATE & CONFIDENTIAL
T
he Board of Directors
CVM Minerals Limited
Flat B,21/F,Neich Tower
128 Gloucester Road
Wanchai,Hong Kong
Dear Sirs,
CVM Minerals Limited (the ‘‘Company’’)
Comfort letter on consistency of accounting policies and forecast calculations
underlying the valuation of 100% equity interest of CVM International Limited
(including subsidiaries of PT.Commerce Venture Coal and PT.Commerce Venture
Iron Ore) (‘‘the Proposed Disposal Group’’) as to be contained in the Company’s
announcement ‘‘Discloseable transaction — Disposal of the entire issued share capital
of CVM International Limited’’
We report on consistency of the accounting policies and calculations of the profit forecast
on which the business valuation (the ‘‘Valuation’’) dated 15 November 2013 prepared by GC
Appraisals Services Company Limited (the ‘‘Valuer’’) in respect of the valuation of the
Proposed Disposal Group in connection with the disposal of the entire issued share capital
of CVM International Limited and its subsidiaries.The Valuation which is determined based
on the discounted cash flows is regarded as a profit forecast under Rule 14.61 of the Rules
Governing the Main Board Listing of Securities on the Stock Exchange of Hong Kong
Limited (the ‘‘Listing Rules’’).
RESPECTIVE RESPONSIBILITIES OF THE DIRECTORS OF THE COMPANY AND
THE REPORTING ACCOUNTANTS
The directors of the Company are responsible for the preparation of the profit forecast for
the Valuation by using a set of underlying assumptions,the completeness,reasonableness
and validity of which are the sole responsibility of the directors of the Company.
It is our responsibility to report,as required by Rule 14.62(2) of the Listing Rules,on
reviewing the consistency of accounting policies adopted and the arithmetical correctness of
calculations of the profit forecast on which the Valuation is based.
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The profit forecast depends on future events and on a number of bases and assumptions
which cannot be confirmed and verified in the same way as past results and not all of which
may remain valid throughout the period.Consequently,we have not reviewed,considered or
conducted any work on the appropriateness and validity of the bases and assumptions and
express no opinion on the appropriateness and validity of the bases and assumptions on
which the profit forecast,and thus the Valuation,are based.Our work is more limited than
for a reasonable assurance engagement,and that therefore less assurance is obtained than in
a reasonable assurance engagement.
BASIS OF OPINION
We conducted our work in accordance with the procedures set out in Hong Kong Standards
on Assurance Engagements 3000 ‘‘Assurance Engagements Other Than Audits or Reviews
of Historical Financial Information’’ and with reference to the procedures under Auditing
Guideline 3.341 ‘‘Accountants’ Report on Profit Forecasts’’ issued by Hong Kong Institute
of Certified Public Accountants.We primarily (i) reviewed the accounting policies adopted
in the Valuation and compared those normally adopted by the Company;and (ii) examined
the arithmetical accuracy of the Valuation and compared the compilation of the profit
forecast with the underlying bases and assumptions.Our work has been undertaken solely to
assist the directors of the Company in evaluating whether the profit forecast,so far as the
consistency of accounting policies and arithmetical calculations are concerned,have been
consistently applied and properly compiled and for no other purposes.We accept no
responsibility to any other person in respect of,arising out of in connection with our work.
Our work does not constitute any valuation on the Proposed Disposal Group.
OPINION
Based on the foregoing,in our opinion,so far as the accounting policies and arithmetic
calculations are concerned,the profit forecast has been properly compiled in accordance
with the underlying bases and assumptions made by the directors and is presented on a basis
consistent in all material respects with the accounting policies normally adopted by the
Company,except for the matters as described below.
The forecast calculation prepared by the Valuer is prepared using an income-based approach
and based on the estimated reserves of the extractive sites from a technical report prepared
in 2010 (‘‘Technical Report 2010’’) with 14 years useful life and made under an assumption
that the Proposed Disposal Group will be able to continue to explore and extract for coal
resources.
Basis of our modified opinion has taken into consideration that the Proposed Disposal Group
has not yet incurred any exploration and evaluation expenditure on the two extractive
operations in order to allow up-to-date technical data such as estimates of extractable
reserves,contingent and/or prospective resources for the exploration and extractive
operations in the current period,we are unable to assess upon the reliability of the valuation
report prepared for financial reporting purpose.
Besides,the exploration permit for coal exploration in an area of 10,000 hectares in Beutong
and Tadu Raya Subdistrict,Nagan Raya Regency,Nanggroe Aceh Darussalam Province of
Indonesia,had expired on 7 October 2013.Another permit for coal exploration in an area of
9,825 hectares in Kuala and Tadu Raya Subdistrict,Nagan Raya Regency,Nanggroe Aceh
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Darussalam Province of Indonesia,will also be expiring on 5 March 2014.In the opinion of
the Company’s legal consultant in Indonesia,one year extension for the permits would
normally be granted,subject to fulfillment of certain prescribed activities,with sole
discretion and consideration of the relevant local authorities.Due to the hypothetical nature
of the above assumptions,we are unable to assess if successful renewal of these two
remaining coal exploration permits could be achieved in the forecast period.We also
consider that the relevant technical data in the Technical Report 2010 used to prepare the
valuation is not up-to-date.Consequently,we are unable to verify the Proposed Disposal
Group’s ability,both legally and technically,to undertake exploration for or exploitation of
any of the mineral resources under the relevant exploration permits as held by the Proposed
Disposal Group.
Yours sincerely,
For and on behalf of
Baker Tilly Hong Kong Limited
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APPENDIX II — LETTER FROM THE BOARD
Date:15 November 2013
Listing Division
The Stock Exchange of Hong Kong Limited
11/F.,One International Finance Centre
1 Harbour View Street,Central
Hong Kong
Dear Sirs
RE:DISCLOSEABLE TRANSACTION — DISPOSAL OF THE ENTIRE ISSUED
SHARE CAPITAL OF CVM INTERNATIONAL LIMITED
We refer to the announcement of the Company dated 25 October 2013 (the
‘‘Announcement’’) and also the valuation report dated 15 November 2013 (the ‘‘Valuation
Report’’) on the two sites for all the four mining permits issued by an independent
professional valuer,the valuation of which constitutes a profit forecast under Rule 14.60A of
the Listing Rules.
We have discussed with the independent valuer and reviewed the comfort letter issued by
Baker Tilly Hong Kong Limited in relation to the accounting policies and arithmetic
calculations of the profit forecast (including the disclaimer information contained in the
comfort letter,in particular,the discrepancy between the 14 years useful life and the
uncertainty as to the extension for the permits) and have reviewed the principal assumptions
upon which the valuation is based.We have also considered the impact of the Disposal on
the Group as a whole.
After such discussions and reviews,we are of the view that the profit forecast contained in
the Valuation Report has been made after due and careful enquiry.
Yours faithfully
For and on behalf of the Board of Directors of
CVM Minerals Limited
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