Management s Responsibility for Financial Reporting

Transcription

1 Management s Responsibility for Financial Reporting The consolidated financial statements of and the information contained in the annual report have been prepared by and are the responsibility of the Company s management. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) in Canada and, where appropriate, reflect management s best estimates and judgements based on currently available information. Management has developed and is maintaining a system of internal controls to obtain reasonable assurance that the Company s assets are safeguarded, transactions are authorized and financial information is reliable. The Company s independent auditors, PricewaterhouseCoopers LLP, who are appointed by the shareholders, conduct an audit in accordance with Canadian generally accepted auditing standards. Their report outlines the scope of their audit and gives their opinion on the consolidated financial statements. The Audit Committee of the Board of Directors meets periodically with management and the independent auditors to review the scope and results of the annual audit, and to review the consolidated financial statements and related financial reporting matters prior to approval of the consolidated financial statements. Philip K.R. Pascall Chairman and Chief Executive Officer Juliet Wall Acting Chief Financial Officer March 6, Annual Report Management s Responsibility for Financial Reporting 49

2 Independent Auditors Report To the Shareholders of We have audited the accompanying consolidated financial statements of and its subsidiaries, which comprise the consolidated balance sheets as at December 31, 2011, December 31, 2010 and January 1, 2010 and the consolidated statements of earnings, comprehensive income, cash flows and changes in shareholders equity for the years ended December 31, 2011 and December 31, 2010, and the related notes, which comprise a summary of significant accounting policies and other explanatory information. Management s responsibility for the consolidated financial statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor s responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of First Quantum Minerals Ltd. and its subsidiaries as at December 31, 2011, December 31, 2010 and January 1, 2010 and its financial performance and its cash flows for the years ended December 31, 2011 and December 31, 2010 in accordance with International Financial Reporting Standards. PricewaterhouseCoopers LLP Chartered Accountants Vancouver, B.C. March 6, Independent Auditors Report 2011 Annual Report

3 Consolidated Statements of Earnings (expressed in millions of U.S. dollars, except where indicated and share and per share amounts) Sales revenues 18 2, ,393.2 Cost of sales 19 (1,275.5) (1,181.5) Gross profit 1, ,211.7 Exploration (73.0) (47.5) General and administrative (73.8) (44.6) Acquisition transaction costs (18.5) Bond inducement costs 10 (48.4) Impairment of assets 26 (609.1) Gain on sale of investments 6a Other income Operating profit 1, ,004.6 Finance income Finance costs 22 (9.9) (24.8) Earnings before income taxes 1, Income taxes 14 (460.7) (611.2) Net earnings for the year Net earnings for the year attributable to: Non-controlling interests Shareholders of the Company Earnings per common share Basic Diluted Weighted average shares outstanding (000 s) Basic , ,322 Diluted , ,723 Total shares issued and outstanding (000 s) , , Annual Report Consolidated Financial Statements

4 Consolidated Statements of Comprehensive Income Net earnings for the year Other comprehensive income (loss) Unrealized gain on available-for-sale investments Tax on unrealized gain on available-for-sale investments (25.8) Realized gain on available-for-sale investments 6a (510.8) Tax on realized gain on available-for-sale investments 35.7 Comprehensive income for the year Total comprehensive income for the year attributable to: Non-controlling interests Shareholders of the Company Consolidated Financial Statements Annual Report

5 Consolidated Statements of Cash Flows Cash flows from operating activities Net earnings for the year Items not affecting cash Depletion and amortization Assets impaired Unrealized foreign exchange (gain) loss (2.1) 2.1 Deferred income tax (13.1) 47.9 Share-based compensation expense Bond inducement costs Finance costs Gain on sale of investments 6a (510.8) Other Change in non-cash operating working capital (Increase) decrease in trade, other receivables and derivatives 92.3 (79.9) Increase in inventories (241.1) (97.7) Decrease in trade and other payables (118.9) (25.3) Increase (decrease) in current taxes payable (124.6) Long-term incentive plan contributions (20.9) (15.1) Cash flows from financing activities Proceeds from debt 49.4 Repayments of debt (98.2) (86.0) Proceeds on issuance of common shares Cash paid on bond inducement 10 (48.4) Restricted cash 40.4 Dividends paid (79.3) (55.7) Dividends paid to non-controlling interests (10.8) (20.0) Finance lease payments (3.7) (2.5) Interest paid (22.4) (41.6) (206.3) (151.6) Cash flows from investing activities Purchase of property, plant and equipment (1,049.5) (357.6) Deposits on property, plant and equipment (59.2) Acquisitions, net of cash acquired (514.9) Proceeds from disposal of property, plant and equipment and investments (1,098.8) (225.6) Increase (decrease) in cash and cash equivalents (892.8) Cash and cash equivalents beginning of year 1, Cash and cash equivalents end of year , Annual Report Consolidated Financial Statements

6 Consolidated Balance Sheets As at December 31, 2011 and 2010 and January 1, 2010 Assets Current assets December 31, December 31, January 1, 2010 Cash and cash equivalents , Restricted cash Trade and other receivables Inventories Current portion of other assets , , ,844.0 Investments Property, plant and equipment 7 3, , ,580.4 Deposits on property, plant and equipment 59.2 Other assets Total assets 5, , ,974.7 Liabilities Current liabilities Trade and other payables Current taxes payable Current portion of debt Current portion of provisions and other liabilities Debt Convertible bonds Provisions and other liabilities Deferred income tax liabilities Total liabilities 1, , ,516.6 Equity Share capital 15 1, , Retained earnings 1, , ,024.5 Accumulated other comprehensive income Total equity attributable to shareholders of the Company 3, , ,066.7 Non-controlling interests Total equity 4, , ,458.1 Total liabilities and equity 5, , ,974.7 Commitments 27 Approved by the Board of Directors and authorised for issue on March 6, Andrew Adams, Director Peter St. George, Director 54 Consolidated Financial Statements Annual Report

7 Consolidated Statements of Changes in Shareholders Equity Share capital Common shares Balance beginning of year 1, Shares issued and share options exercised Acquisitions Conversion of convertible bonds Balance end of year 2, ,479.3 Equity portion of convertible bonds Balance beginning of year Conversion of convertible bonds 10 (48.3) Balance end of year 48.3 Treasury shares Balance beginning of year (57.0) (47.2) Restricted and performance stock units vested Shares purchased 15b (20.9) (15.1) Balance end of year (68.0) (57.0) Contributed surplus Balance beginning of year Share-based compensation expense for the year 17a Transfers upon exercise of share options (1.6) Restricted and performance stock units vested 17a (9.9) (5.3) Balance end of year Total share capital 1, ,486.5 Retained earnings Balance beginning of year 1, ,024.5 Earnings for the year attributable to shareholders of the Company Acquisition of Mauritanian Copper Mines SARL (0.4) Dividends (79.3) (55.7) Balance end of year 1, ,274.2 Accumulated other comprehensive income Balance beginning of year Other comprehensive income (loss) for the year 0.2 (296.2) Balance end of year Non-controlling interests Balance beginning of year Earnings attributable to non-controlling interests Dividends (10.8) (20.0) Acquisition of Mauritanian Copper Mines SARL (62.6) Balance end of year Annual Report Consolidated Financial Statements