31st Aug 2007 12:42
Namibian Resources PLC31 August 2007 31 August 2007 Namibian Resources Plc (the "Company") Annual Report and Accounts Further to the announcement regarding the posting of the Annual Report andAccounts, the Chairman's statement, profit and loss, balance sheet, and cashflow statements, with related notes, as extracted from the Annual Report andAccounts are set out below. The full text of the Annual Report and Accounts canbe found at the Company's website at http://www.namibianresources.com/investor.html. For further information, please contact: Namibian ResourcesTony Carlton +44 (0)20 8726 0900 Collins Stewart Europe LimitedAdrian Hadden +44 (0)20 7523 8350 Chairman's statement YEAR ENDED 28 FEBRUARY 2007 The year to 28 February 2007 was very satisfactory. An extensive explorationand sampling programme was embarked upon in October 2006 and has continued intothe new financial year. This will enable the company to identify and consolidatea number of resources into reserves to create an ongoing continuous miningprogramme. So far the results of this sampling programme are very encouragingparticularly in relation to diamond size. Ground water is still encounteredfrom the flood in April 2006, which slowed progress. However this valuable workwill reward us well in the future. Turnover to the 28 February 2007 was £504,542 against £484,030 to the end of the2006 Financial year, an operating loss of £8,486 against an operating loss of£73,837 for the year ended 2006. The profit on ordinary activities after interest receivable is £26,068 to theend of 28 February 2007 against a loss of £64,373 to the 28 February 2006. Cash at bank as at 28 February 2007 was £372,188 and the company has noborrowings. We look forward to announcing a favourable result of our sampling programmeprior to the AGM. The company's Annual General Meeting will be held on Wednesday 3 October. Lord Sheppard of Didgemere KCVO Kt Chairman 28 August 2007 Consolidated profit and loss account for the year ended 28 February 2007 Note 2007 2006 £ £Turnover 2 504,542 484,030Cost of sales (202,565) (352,178) ________ ________Gross profit 301,977 131,852 Administrative expenses (310,463) (205,689) ________ ________Operating loss 4 (8,486) (73,837) Other interest receivable and similar income 34,554 9,464 ________ ________Profit / (Loss) on ordinary activities £26,068 £(64,373)before and after taxation Earnings per share (pence) 6Basic 0.07 (0.19)Diluted 0.06 (0.17) All amounts relate to continuing activities. Consolidated statement of total recognised gains and losses for the year ended28 February 2007 2007 2006 £ £ 26,068 (64,373)Profit / (Loss) for the financial year Currency translation differences on foreigncurrency net investments (548,824) 147,655 ________ ________Total recognised gains and losses for the year £(522,756) £83,282 ________ ________ Consolidated balance sheet at 28 February 2007 Note 2007 2007 2006 2006 £ £ £ £Fixed assetsIntangible assets:Mining rights 8 652,878 755,093Tangible assets 9 1,172,047 1,506,284 ________ ________ 1,824,925 2,261,377Current assetsStock 11 35,948 34,644Debtors 12 23,518 31,375Cash at bank and in hand 372,188 488,755 ________ ________ 431,654 554,774Creditors: amounts fallingdue within one year 13 (37,847) (74,663) ________ ________Net current assets 393,807 480,111 ________ ________Total assets less currentliabilities £2,218,732 £2,741,488 ________ ________ Capital and reservesCalled up share capital 15 3,792,246 3,792,246Share premium account 16 359,384 359,384Profit and loss account 17 (1,932,898) (1,410,142) ________ ________ Shareholders' funds - equity £2,218,732 £2,741,488 ________ ________ Company balance sheet at 28 February 2007 Note 2007 2007 2006 2006 £ £ £ £Fixed assetsInvestments 10 2,887,489 2,802,763Tangible assets 9 - 494 2,887,489 2,803,257Current assetsDebtors 12 - 11,750Cash at bank and in hand 208,432 399,821 ________ ________ 208,432 411,571 Creditors: amounts falling duewithin one year 13 (19,357) (12,945) ________ ________Net current assets 189,075 398,626 ________ ________ Total assets less current £3,076,564 £3,201,883liabilities ________ ________ Capital and reservesCalled up share capital 15 3,792,246 3,792,246Share premium account 16 359,384 359,384Profit and loss account 17 (1,075,066) (949,747) ________ ________ Shareholders' funds -equity £3,076,564 £3,201,883 ________ ________ Consolidated cash flow statement for the year ended 28 February 2007 Note 2007 2006 £ £Net cash inflow from operating activities 19 60,992 69,607 Returns on investments and servicingof financeInterest received 34,554 9,464 Investing Activities Payments to acquire intangible assets (74,582) (28,387)Payments to acquire tangible fixed assets (137,531) (288,374) ________ ________Net cash outflow before managementof liquid resources and financing (116,567) (237,690) FinancingIssue of shares and exercise of warrants and options - 508,473 ________ ________ (Decrease) / Increase in cash in the year 21 £(116,567) £270,783 ________ ________ Notes forming part of the financial statements for the year ended 28 February2007 1 Accounting policies The financial statements have been prepared under the historical cost conventionand are in accordance with applicable accounting standards. The followingprincipal accounting policies have been applied: Basis of consolidation The consolidated profit and loss account and balance sheet include the financialstatements of the company and its subsidiary undertakings made up to 28 February2007. The results of subsidiaries sold or acquired are included in the profitand loss account up to, or from the date control passes. Intra-group sales andprofits are eliminated fully on consolidation. The results of a holding in Oletu Investments Holdings (see Note 10) have notbeen consolidated on account of it being immaterial. Going Concern The company's ability to continue as a going concern depends on the prospects offuture profitable trade. To date, the company and the group have accumulatedtrading losses since the commencement of mining activities and there areinherent uncertainties in the mining industry which make it impossible topredict when the company will achieve sustainable profits. Nevertheless, thedirectors remain confident that the company and the group will trade profitablyin the foreseeable future and will be able to continue to meet its liabilitiesas they fall due. Turnover Turnover represents sales to NAMDEB Diamond Corporation (Proprietary) Limited("NAMDEB") at invoiced amounts less sales tax and trade discounts. Turnover isrecognised when diamonds are delivered to NAMDEB. Mining rights Mining rights are carried at cost less accumulated amortisation. Amortisationis calculated to write off the cost in approximate equal annual instalments overthe period of the concession. Tangible fixed assets and depreciation Tangible fixed assets are stated at cost less depreciation. Depreciation isprovided at rates calculated to write off the costs less the estimated residualvalue of each asset over its expected useful life, as follows: Motor Vehicles - 8-10 yearsPlant and machinery - 10 -20 yearsOffice Equipment - 3 years Leasing Rentals payable under operating leases are charged against income on astraight-line basis over the lease term. Investments Fixed asset investments are stated at cost less provision fordiminution in value. Stock Stock represents inventories of consumable stores, held at the lower of cost andnet realisable value. Deferred taxation Deferred tax balances are recognised in respect of all timing differences thathave originated but not reversed by the balance sheet date except that therecognition of deferred tax assets is limited to the extent that the companyanticipates making sufficient taxable profits in the future to absorb thereversal of the underlying timing differences. Deferred tax balances are not discounted. Foreign currency translation Monetary assets and liabilities denominated in foreign currencies are translatedinto sterling at the rates of exchange ruling at the balance sheet date.Transactions in foreign currencies are recorded at the rate ruling at the dateof the transaction. The results of overseas operations and the balance sheets are translated at therates ruling at the balance sheet date. Exchange differences arising ontranslation of opening assets are reported in the statement of total recognisedgains and losses. All other exchange differences are included in the profit andloss account. 2 Turnover The total turnover of the group for the year has been derived from its principalactivity, mining, wholly undertaken by its subsidiary in Namibia, SonnbergDiamonds (Namibia) (Proprietary) Limited ("Sonnberg"). All sales are made inNamibia and the majority of assets are also located in Namibia. 3 Employees 2007 2006 £ £Staff costs consist of: Directors remuneration 55,000 55,000Wages and salaries 8,756 19,273Social security costs 7,040 6,768 ________ ________ The average monthly number of employees, (including directors),during the year was: Number NumberStaff of subsidiary 12 10Staff of head office 1 1Directors 4 5 ________ ________ 17 16 ________ ________ 4 Operating loss 2007 2006 £ £This has been arrived at after charging:Depreciation 112,571 126,534Amortisation 7,354 13,009Operating lease rentals - land and buildings 7,200 7,768Auditors' remuneration(company - £12,994 (2006 - £9,211)) 23,887 12,124 ________ ________ 5 Taxation on loss on ordinary activities There has been no tax payable in this or the previous year due to theavailability of losses. 2007 2006 £ £ Profit/(Loss)on ordinary activities before tax 26,068 (64,373) ________ ________ Profit/(Loss) on ordinary activities at the standard rateof corporation tax in the UK of 30% (2006 - 30%) 7,820 (19,312)Effects of:Tax losses (7,820) 19,312 ________ ________ Current tax charge for year - - ________ ________ A deferred tax asset of £458,231 (2006 - £711,728) relating to losses in thesubsidiary undertakings has not been recognised due to uncertainty regarding theavailability of suitable taxable profits against which the losses can berecovered. 6 Earnings per share Earnings per share has been calculated using the weighted average number ofshares in issue during the relevant financial periods. The weighted averagenumber of shares in issue is 37,922,460 (2006 - 34,264,560) and the profit,being the profit after tax, is £26,068 (2006 loss - £64,373). Diluted profit per share has been calculated using a weighted average number ofshares of 41,672,460 (2006 - 37,764,560), which includes the share options inissue at the start and end of the year. 7 Loss for the financial period As permitted by Section 230 of the Companies Act 1985, the holding company'sprofit and loss account has been included in these financial statements. Theloss for the financial year is made up as follows: 2007 2006Holding company's loss for the financial year £(125,319) £(158,410) ________ ________ 8 Intangible fixed assets Mining rights Group £CostAt 1 March 2006 1,383,417Additions 74,582Exchange adjustments (310,439) ________ At 28 February 2007 1,147,560 ________AmortisationAt 1 March 2006 628,324Charge for the year 7,354Exchange adjustments (140,996) ________ At 28 February 2007 494,682 ________ Net book valueAt 28 February 2007 £652,878 ________ At 28 February 2006 £755,093 ________ 9 Tangible fixed assets Office equipment Plant & machinery motor Total vehicle £ £ £ GroupCostAt 1 March 2006 4,857 2,514,126 2,518,983Additions - 137,531 137,531Exchange adjustments (1,616) (1,226,596) (1,228,212) ________ ________ ________ At 28 February 2007 3,241 1,425,061 1,428,302 ________ ________ ________ DepreciationAt 1 March 2006 1,528 1,011,171 1,012,699Charge for the year 912 111,659 112,571Exchange adjustments (741) (868,274) (869,015) ________ ________ ________ At 28 February 2007 1,699 254,556 256,255 ________ ________ ________ Net book ValueAt 28 February 2007 £1,542 £1,170,505 £1,172,047 ________ ________ ________ At 28 February 2006 £3,329 £1,502,955 £1,506,284 ________ ________ ________ Company Office equipment £ At 1 March 2006 and 28 February 2007 1,482 ________DepreciationAt 1 March 2006 988Charge for the year 494 ________At 28 February 2007 1,482 ________Net book valueAt 28 February 2007 £- ________ At 28 February 2006 £494 ________ 10 Fixed asset investments Group undertakings Loans to group Total undertakings £ £ £ CompanyAt 1 March 2006 2,064,225 1,867,074 3,931,299Additions - 84,726 84,726 ________ ________ ________At 28 February 2007 2,064,225 1,951,800 4,016,025 ________ ________ ________Provisions for diminution in valueAt 1 March 2006 and 28 February 2007 628,536 500,000 1,128,536 ________ ________ ________Net book valueAt 28 February 2007 £1,435,689 £1,451,800 £2,887,489 ________ ________ ________ At 28 February 2006 £1,435,689 £1,367,074 £2,802,763 ________ ________ ________ Investment in group undertakings includes • 100% holding in Sonnberg Diamonds (Namibia) (Proprietary) Limited, a mining company incorporated in Namibia. • 75% holding in Oletu Investment Holding (Propertary) Limited a company incorporated in Namibia. The company has yet to trade. 11 Stock Group Group 2007 2006 Consumable stores £35,948 £34,644 ________ ________ 12 Debtors Group Group Company Company 2007 2006 2007 2006 £ £ £ £Trade debtors 23,518 19,625 - -Prepayments - 11,750 - 11,750 ________ ________ ________ ________ £23,518 £31,375 £- £11,750 ________ ________ ________ ________ All amounts fall due for repayment within one year. 13 Creditors: amounts falling due within one year Group Group Company Company 2007 2006 2007 2006 £ £ £ £Trade creditors and accruals £37,847 £74,663 £19,357 £12,945 ________ ________ ________ ________ 14 Derivatives and other financial instruments Financial instruments policies and strategies During the period since its incorporation, the group has financed its businesswith the cash it has raised through the issue of shares. It has used thesefunds to acquire and develop business in Namibia. The main risk arising fromthe group's financial instruments is foreign currency risk. At 28 February 2007, the group's financial instruments comprised cash andshort-term debtors and creditors arising directly from its operations. Thegroup's primary treasury activity has been the management of cash. This hasbeen held so as to maximise interest earned without compromising the group'sneed for flexibility in meeting its cash needs. The group is not currentlyactively pursuing a strategy of acquiring investments. Although the group is based in the UK, it has a significant investment inNamibia. As a result, the group's sterling balance sheet can be significantlyaffected by movements in the Namibian Dollar/Sterling exchange rates. Sales of diamonds are denominated in Namibian Dollars but the price obtained isdependent on market prices set in US Dollars. The group incurs costs in bothSterling and Namibian Dollars. The group has not entered into any derivative transactions during the year. Short-term debtors and creditors have been excluded from the numericaldisclosures below. Interest rate risk profile of financial assets: Floating rate 2007 2006 £ £Sterling 163,756 459,821Namibian dollar 208,432 28,934 ________ ________ £372,188 £488,755 ________ ________ The financial assets comprise short-term cash deposits. The group does not haveany material interest bearing financial liabilities. As the group's principalfinancial instruments is cash, the directors do not consider there to be amaterial difference between the book and fair value of the group's financialassets. 15 Share capital Shares 2007 2006 2007 2006 Number Number £ £Authorised500,000,000 ordinary shares of 10p each 500,000,000 500,000,000 £50,000,000 £50,000,000 __________ _________ _________ __________Allotted, called up and fully paidOrdinary shares of 10p each 37,922,460 37,922,460 £3,792,246 £3,792,246 __________ _________ __________ __________ Options The company has in issue the following options to subscribe for ordinary shares: 2007 2006 Number NumberAt 1 March 2006 and 28 February 2007 3,750,000 3,750,000 _________ _________ These options are exercisable between 11 February 2004 and 11 February 2009 atan exercise price of £0.15. As at 28 February 2007 all options were stilloutstanding. 16 Share premium account Group and Company Share premium accountAt 1 March 2006 and 28 February 2007 £359,384 ________ 17 Profit and loss account Group £At 1 March 2006 (1,410,142)Profit for the year 26,068Foreign currency translation differences (548,824) ________At 28 February 2007 £(1,932,898) ________ Company £At 1 March 2006 (949,747)Loss for the year (125,319) ________At 28 February 2007 £(1,075,066) ________ 18 Reconciliation of movements in shareholders' funds 2007 2006 £ £ GroupProfit / (Loss) for the financial year 26,068 (64,373)Other recognised gains and losses (548,824) 147,655Issue of shares and exercise of warrants and options - 508,473 ________ ________ (522,756) 591,755Opening shareholders' funds 2,741,488 2,149,733 ________ ________Closing shareholders' funds £2,218,732 £2,741,488 ________ ________ 2007 2006 Company £ £ Loss for the financial year (125,319) (158,410)Issue of shares - 508,473 ________ ________ (125,319) 350,063Opening shareholders' funds 3,201,883 2,851,820 ________ ________ Closing shareholders' funds £3,076,564 £3,201,883 ________ ________ 19 Reconciliation of operating loss to net cash outflow from operatingactivities 2007 2006 £ £Operating loss (8,486) (73,837)Depreciation of tangible assets 112,571 126,534Amortisation of intangible assets 7,354 13,009(Increase) in stock (1,304) (34,644)Decrease/(increase) in debtors 7,857 (6,012)(Decrease)/increase in creditors (36,816) 26,405Net effect of foreign exchange differences (20,184) 18,152 Net cash inflow from operating activities £60,992 £69,607 ________ ________ 20 Analysis of net debt At 1 March 2006 Cash flow At 28 February 2007 £ £ £Net cash: Cash at bank and in hand £488,755 £(116,567) £372,188 ________ ________ ________ 21 Reconciliation of net cash flow to movement in net funds 2007 2006 £ £(Decrease) / Increase in cash for the year (116,567) 270,783 ________ ________ Movement in net funds in the year (116,567) 270,783Opening net funds 488,755 217,972 ________ ________ Closing net funds £372,188 £488,755 ________ ________ 22 Contingent liabilities The mining contract undertaken by the group requires the subsidiary, Sonnberg,to remove all equipment and installations and to rehabilitate all disturbedareas once mining activities have ceased. Sonnberg pay 1% of sales to a fund held by NAMDEB Diamond Corporation(Proprietary) Limited, to provide for the costs of environmental rehabilitation.The directors' best estimate is that there is no additional liability at thebalance sheet date to the contributions already made to this fund. Accordingly,no provision has been made. 23 Commitments under operating leases As at 28 February 2007, the company had annual commitments under non-cancellableoperating leases as set out below: 2007 2006 Land and buildings Land and buildings £ £ Expiring in less than one year 2,400 2,968 ________ ________ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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