30th Mar 2005 07:35
Albidon Limited30 March 2005 ALBIDON LIMITED Financial Report 31 December 2004 Contents Page Directors' report 1 Consolidated income statement 4 Consolidated balance sheet 5 Consolidated statement of cash flows 6 Statement of changes in shareholders' equity 7 Notes to the financial statements 8 1 General information 2 Summary of significant accounting policies 3 Segment information 4 Revenues and expenses 5 Income tax expense 6 Earnings per share 7 Property plant and equipment 8 Exploration and evaluation expenditure 9 Trade and other receivables, and prepayments 10 Current tax receivable 11 Cash and cash equivalents 12 Trade and other payables 13 Provisions 14 Share capital 15 Interest in joint ventures 16 Investments in subsidiaries 17 Available for sale investments 18 Financial instruments 19 Commitments 20 Related party transactions 21 Events after the balance sheet date 22 Comparatives Directors' declaration 23 Independent audit report 24 Directors' report Your directors present their report on the consolidated entity consisting of Albidon Limited and the entities it controlled at the end of, or during, the fourteen months ended 31 December 2004. Directors The following persons were directors of Albidon Limited during the whole of the reporting period and up to the date of this report: Craig Burton Alasdair Cooke Donal Windrim Michael Brook Dick Potts was appointed as chairman on 1 January 2004 and continues in office at the date of this report. Christopher de Guingand was appointed as a director on 1 January 2004 and continues in office at the date of this report. Review of operations The principal activity of the consolidated entity during the period was exploration and evaluation of mineral interests.The operating loss after income tax for the fourteen months ended 31 December 2004 was $AUD 2,104,606 (31October 2003 $AUD 1,060,989). Highlights: O Drilling has confirmed and extended the zone of massive sulphide mineralization at the Munali nickel-copper-cobalt- platinum deposit in Zambia. The best drill intersections to date include: Hole ID Interval (m) Ni % Cu % Co % PGM g/t MAD048 10.5 1.34 0.13 0.07 0.76 MAD049 12.2 1.18 0.15 0.06 0.83 MAD050 31 2.29 0.35 0.11 1.19 MAD051 7.5 1.49 0.21 0.07 1.25 MAD052 19.8 1.07 0.13 0.04 0.91 MAD053 18.9 1.43 0.16 0.06 0.95 MAD056A 11 2.41 0.36 0.11 1.36 MAD059 10 1.77 0.22 0.09 1.21 MAD060 13.4 1.62 0.23 0.09 0.76 O The complete drilling database will be utilized to define a new resource estimate and this will form the basis for a Scoping Study for the development of the Munali nickel project. A positive Scoping Study in the next quarter would lead to a Feasibility Study. O A large number of new tenements were acquired in the Tati and Selebi-Pikwe nickel mining districts of Botswana, including the Lephale Ni-Cu deposit. At Tati, extensive geophysical surveys were carried out and it is expected that follow-up surveys in the next quarter will lead to drilling by mid-2005. O Airborne magnetic surveys and geochemical sampling programs were completed at Munali as well as on several early stage nickel-platinum exploration projects in Zambia, Tanzania and Malawi. These have highlighted new target areas for follow-up during the next period. O A new greenfields platinum discovery was made in a reconnaissance drill program on the Luwumbu Project in Tanzania. Drilling has continued through the year to follow up the discovery and this will continue in early 2005. O Geochemical sampling has resulted in a new gold discovery at Kef El Gheb on the Nefza project in Tunisia. Infill sampling is planned for the next quarter. O Geological mapping and sampling have confirmed the presence of high grade zinc sulphide zones at the Touila prospect in Tunisia. Drilling is scheduled for the first half of 2005. Corporate O Albidon and WMC Resources ('WMC') entered into a Co-operation Agreement on 25 October 2004 for the exploration and development of a number of Albidon's nickel projects in Africa. Under the agreement major geophysical and field programmes have commenced, with AUD$4 million to be spent by WMC over the subsequent 20 months. O In March 2004 the Company successfully raised $AUD15million on the Alternative Investment Market of the London Stock Exchange PLC ("AIM") and the Australian Stock Exchange Limited ("ASX"), the first simultaneous dual listing of its kind. O In November 2003, 200,000 options (exercisable at USD 20 cents on or before 30 June 2006) were allocated to executive consultants in consideration of service fees. O In February 2004, 2,300,000 options (exercisable at AUD 60 cents on or before 30 June 2007) were allocated to certain directors and executive consultants as part consideration of service fees and performance incentives. O In May 2004, 2,500,000 options were exercised at USD 15 cents each for total proceeds of USD$375,000 converted into $AUD 505,391. O In May 2004, 500,000 options (exercisable at AUD 60 cents on or before 30 June 2007) were allocated to executive consultants as a performance incentive. O In November 2004, 200,000 options were exercised at USD20cents each for total proceeds of USD$40,000 converted into $AUD 50,632. Capital structure The Current Capital Structure is summarized below: Issued shares 68,368,000 Unlisted options (expiring 30 June 2006 USD 20 cents) 5,000,000 Unlisted options (expiring 30 June 2007 AUD 60 cents) 2,800,000 Total options on issue 7,800,000 This report is made in accordance with a resolution of the directors. Donal WindrimDirectorPerth23 March 2005 Consolidated Income Statement From date of incorporation, 14 months 11 April 2000 to to 31 December 31 October 2004 2003 Notes $AUD $AUD Revenue 4a 273,757 117,917 Staff costs (417,748) - Depreciation and amortization (5,974) - Exploration & evaluation expenditure (1,882,628) (1,180,931) Other expenses (509,612) (128,777) Other operating income 4b 437,599 130,802 --------- --------- Loss from ordinary activities before income (2,104,606)(1,060,989) tax Income tax expense 5 - - --------- --------- Loss for the period (2,104,606) (1,060,989) ---------- ---------- Loss per share (expressed in $AUD per share) - basic 6 (0.04) (0.34) - diluted 6 (0.04) (0.34) --------- --------- Consolidated Balance Sheet 31 December 31 October 2004 2003 Notes $AUD $AUD ASSETS Non-current assets Plant and equipment 7 43,948 - Exploration & Evaluation Expenditure 8 4,060,475 1,363,941 ---------- ---------- Total non - current assets 4,104,423 1,363,941 ---------- ---------- Current assets Trade and other receivables 9 976,994 96,201 Prepayments 10 85,432 - Cash and cash equivalents 11 9,883,376 960,086 ---------- --------- Total current assets 10,945,802 1,056,287 ---------- ---------- Total assets 15,050,225 2,420,228 ---------- ---------- EQUITY AND LIABILITIES Capital and reserves attributable to the Company's equity holders Issued capital 14 875,673 506,382 Share premium 14 16,806,932 2,759,231 Capital raising costs (1,406,417) - ---------- --------- Share capital 16,276,188 3,265,613 Foreign currency translation reserve 350,889 142,150 Accumulated loss (3,165,595)(1,060,989) ---------- ---------- Total shareholders' equity 13,461,482 2,346,774 ---------- ---------- LIABILITIES Current liabilities Trade and other payables 12 1,509,966 73,454 Provisions 13 78,777 - --------- --------- Total liabilities 1,588,743 73,454 ---------- --------- Total equity and liabilities 15,050,225 2,420,228 ---------- ---------- Consolidated Statement of Cash Flows From date of incorporation, 14 months 11 April 2000 to to 31 December 31 October 2004 2003 Notes $AUD $AUD Cash flows from operating activities Net loss from operating activities before income (2,104,606) (1,060,989) taxes Adjustments for: - - Capitalized exploration and evaluation expenditure (2,696,534) (1,363,941) epreciation 5,974 - Net unrealized foreign exchange gains 213,628 142,150 Working capital changes: Increase in trade and other receivables (880,793) (96,201) Increase in trade and other payables 1,086,242 73,454 Increase in prepayments (85,432) - Increase in accrued expenses 350,270 - Increase in provisions 78,777 - --------- --------- Net cash used in operating activities (4,032,474) (2,305,527) ---------- ----------- Cash flows from investing activities Purchase of property, plant and equipment (49,922) - --------- --------- Net cash used in investing activities (49,922) - --------- --------- Cash flows from financing activities Proceeds from issue of ordinary shares 14,416,992 3,265,613 Share issue transaction costs (1,406,417) - - --------- --------- Net cash from financing activities 13,010,575 3,265,613 ---------- ---------- Effects of exchange rate changes (4,889) - --------- --------- Net increase in cash and cash equivalents 8,923,290 960,086 Cash and cash equivalents at beginning of period 960,086 - --------- --------- Cash and cash equivalents at end of period 11 9,883,376 960,086 ---------- --------- For the 14 months ended 31 December 2004 Issued Share Capital raising Foreign currency Accumulated Total capital premium cost translation (loss) $AUD $AUD $AUD $AUD $AUD $AUD At 1 November 2003 506,382 2,759,231 - 142,150 (1,060,989) 2,346,774 Issue of share capital 383,839 13,818,187 (1,406,417) - - 12,795,609 (30,000,000 shares at GBP 20 pence / AUD 50 cents) Exercise of options 34,611 497,372 - - - 531,983 Unrealized currency (49,159) (267,858) - 208,739 - (108,278) translation difference on translation to presentation currency Net loss from ordinary - - - - (2,104,606) (2,104,606) activities --------- --------- ------------ ------------- ------------ ----------At 31 December 2004 875,673 16,806,932 (1,406,417) 350,889 (3,165,595) 13,461,482 ========= ========= ============ ============ ============ ========== For the period from incorporation to 31 October 2003 Issued Share Capital raising Foreign currency Accumulated Total Capital premium cost translation profit/(loss) $AUD $AUD $AUD $AUD $AUD $AUD Unrealized currency - - - 142,150 - 142,150 translation difference on translation to presentation currency Net loss from ordinary - - - - (1,060,989) (1,060,989) activities Issue of Share Capital - - - - - - Share capital (35,668,000 506,382 2,759,231 - - - 3,265,613 shares at US$0.01) --------- --------- ------------ ------------- ------------ ---------- AT 31 OCTOBER 2003 506,382 2,759,231 - 142,150 (1,060,989) 2,346,774 --------- --------- ------------ ------------- ------------ ---------- Notes to the financial statements 1 General information The consolidated financial statements of Albidon Limited for the 14 month period ended 31 December 2004 were authorised for issue in accordance with a resolution of the Directors dated 23 March 2005. Prior to the listing the Company was not required to prepare and lodge financial statements. The directors have determined that the Company shall have a 31 December balance date. The comparative information is the period from incorporation to 31 October 2003, as disclosed in the Company's prospectus date 23 February 2004. The current financial statements are therefore the 14 month period from 1 November 2003 to 31 December 2004. Albidon Limited is a company incorporated in the British Virgin Islands, on 11 April 2000 whose shares are publicly traded. It's registered place of business is Suite 1, Hillway House, 141 Broadway, Nedlands, Western Australia 6009. The principal activities of the Group are described in note 3. The Company has three employees as at 31 December 2004. 2 Summary of significant accounting policies a) Basis of preparation The consolidated financial statements of Albidon Limited and all its subsidiaries contained in this report have been prepared in accordance with the International Financial Reporting Standards ("IFRS") in effect as at balance date. The consolidated financial statements have been prepared on a historical cost basis. Accounting policies are consistent with those set out in the prospectus dated 23 February 2004. During the period the Group early adopted IFRS 6 "Exploration for and Evaluation of Mineral Resources" which did not result in a change in accounting policy for the recognition and measurement of exploration and evaluation expenditures. b) Basis of consolidation The consolidated financial statements comprise the financial statements of Albidon Limited and its subsidiaries for the period from 1 November 2003 to 31 December 2004. The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist. All intercompany balances and transactions, including unrealized profits arising from intra-group transactions, have been eliminated in full. Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. All subsidiaries have been owned by the Group since their date of incorporation. c) Foreign currency translation The measurement currency of the Group is US dollars. This represents the currency of the primary economic environment inwhich the Group operates. The Directors have resolved to present the consolidated financial statements in Australian dollars ("the presentation currency"), since this represents the currency of the country in which the Company is currently tax resident. On initial recognition a foreign currency transaction is recorded in the measurement currency at the spot rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated to the measurement currency at the rate of exchange ruling at the balance sheet date. All differences are taken to the income statement. The assets, liabilities and equity of the Group are translated to the presentation currency of the Group at the rate of exchange ruling at the balance sheet date. The income statement of the Group is translated to the presentation currency at the weighted average exchange rate for the period. The exchange differences arising on the retranslation to the Group's presentation currency are taken directly to equity. d) Exploration and Evaluation Expenditure Costs carried forward Costs arising from exploration and evaluation activities are carried forward provided such costs are expected to be recouped through successful development, or by sale, or where exploration and evaluation activities have not, at reporting date, reached a stage to allow a reasonable assessment regarding the existence of economically recoverable reserves. Costs carried forward in respect of an area of interest that is abandoned are written off in the year in which the decision to abandon is made. Impairment Exploration and Evaluation Expenditure is assessed for impairment when facts and circumstances suggest that the carryingamount of Exploration and Evaluation Expenditure may exceed its recoverable amount. e) Cash and cash equivalents Cash and cash equivalents comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less. For the purposes of the Consolidated Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalentsas defined above, net of outstanding bank overdrafts. f) Trade and other receivables Trade receivables, which generally have 30-90 day terms, are recognized and carried at original invoice amount less an allowance for any uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when identified. g) Trade and other payables Liabilities for trade creditors and other payables are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the consolidated entity. h) Revenue Revenue is recognized to the extent that it is probable that the economic benefits of ownership will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue isrecognized: Interest Revenue is recognized as the interest accrues. i) Income tax Deferred income tax is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognized for all taxable temporary differences: • except where the deferred income tax liability arises from goodwill recognized or the initial recognition of an asset or liability on a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and • in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets are recognized for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carry-forward of unused tax assets and unused tax losses can be recognized: • except where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability on a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and • in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are only recognized to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be recognized The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be recognized. Deferred income tax assets and liabilities are measured at the tax rates that apply to the period when the asset is recognized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. j) Interest in joint ventures The Group's interest in its joint ventures is accounted for by proportionate consolidation, which involves recognizing aproportionate share of the joint ventures' assets, liabilities, income and expenses with similar items in the consolidated financial information on a line-by-line basis. k) Investments All investments are initially recognized at cost, being the fair value of the consideration given and including acquisition charges associated with the investment. l) Segment Information Revenues and expenses are attributable to geographical areas based on the location of the assets producing or incurring those revenues. m) Property, plant and equipment Plant and equipment is stated at cost less accumulated depreciation and any impairment in value. Depreciation is calculated on a straight line basis over the estimated useful life of the assets as follows: Plant and equipment - over 2.5 to 3 years The carrying value of plant and equipment are reviewed for impairment annually. When the carrying values exceed the estimated recoverable amount, the assets are written down to their recoverable amount. The recoverable amount of plant and equipment is the greater of net selling price and value in use. In assessing value in use, the estimated future cashflows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of thetime value of money and the risks specific to the asset. An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposals and the carrying amount of the item) is included in the statement of financial performance in the year the item is derecognized. n) Provisions Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain the expense relating to any provision is presented in the income statement net ofany reimbursement. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a borrowing cost. o) Contributed equity Issued and paid up capital is recognized at the fair value of the consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are recognized directly in equity as a reduction of the share proceeds received. P) Employee benefits Provision is made for employee benefits accumulated as a result of employees rendering services up to the reporting date. These benefits include wages and salaries and annual leave. Employee benefits expenses are recognized against profit on a net basis in their respective categories. The value of the equity based compensation scheme is not being recognized as an employee benefit expense. The consolidated entity has no defined benefits superannuation plan. -------------------------------------------------------------------------------------------------- 3 Segment information The Group operates in one principal area of activity, namely exploration of base metal tenements, and two principal geographical areas, namely Australia (head office) and Africa (operations). Geographical Segments Australia Africa Consolidated $AUD $AUD $AUD 14 months to 31 December 2004 Revenue Other 273,766 (9) 273,757 -------- -------- ---------- Result Segment result 580,353 (2,684,959) (2,104,606) -------- --------- ---------- -------- --------- ----------Profit/(loss) 580,353 (2,684,959) (2,104,606) before related income tax expense Income tax - - - expense -------- --------- ---------- Net profit/ 580,353 (2,684,959) (2,104,606) (loss) -------- --------- ---------- Assets and Liabilities Segment assets 10,520,468 4,529,756 15,050,225 --------- --------- ---------- Segment liabilities 233,372 1,355,371 1,588,743 --------- --------- ---------- Other segment information Capital expenditures Mining assets - 4,060,475 4,060,475 Other non-cash expenses: Depreciation (4,780) (1,194) (5,974) Unrealized/realized 1,151,148 (922,502) 228,646 foreign exchange gains/(losses) ========= ========= ========== 3 Segment information (cont.) Geographical Segments from Australia Africa Consolidatedincorporation to 31 $AUD $AUD $AUD October 2003 Revenue Other 137 117,780 117,917 --------- --------- ---------- Result Segment result 340,960 (1,401,949) (1,060,989) --------- --------- ---------- --------- --------- ----------Profit/(Loss) before 340,960 (1,401,949) (1,060,989) income tax Income tax expense - - - --------- --------- ---------- Net profit / (loss) 340,960 (1,401,949) (1,060,989) --------- --------- ---------- Assets and Liabilities Segments assets 957,794 1,462,434 2,420,228 --------- --------- ---------- Segment liabilities - (73,454) (73,454) --------- --------- ---------- Other Segment Information Capital expenditure Mining assets - 1,363,941 1,363,941 Other non-cash expenses Unrealized/realized (510,735) 379,933 (130,802) foreign exchange ========= ========= ========== (gains) / losses 4 Revenue and Expenses (a) Revenue - other From date of incorporation, 14 months 11 April 2000 to to 31 December 31 October 2004 2003 $AUD $AUD Interest received 273,757 137 Contract revenue - 117,780 --------- --------- 273,757 117,917 --------- --------- (b) Other operating income Foreign exchange gain 437,599 130,802 --------- --------- 5 Income tax expense From date of incorporation, 14 months 11 April 2000 to to 31 December 31 October 2004 2003 $AUD $AUD Major components of income tax for the period ended 31 December are: Current income tax change - - Deferred income tax Relating to origination and reversal - - of temporary differences --------- --------- Income tax expense reported in - - consolidated income statement --------- --------- A reconciliation of the income tax expense applicable to the loss from operating activities before income tax at the statutory income tax rate to income tax expense at the group's effective income tax rate is as follows: From date of incorporation, 14 months 11 April 2000 to to 31 December 31 October 2004 2003 $AUD $AUD Loss from operating activities before income tax (2,104,606) (1,060,989) At Albidon Limited's statutory (631,382) (318,297) income tax rate of 30% Higher effective tax rate of (16,573) (33,509) other countries Expenditure not deductible for 99,937 9,850 income tax purposes Unrecognized tax losses 548,018 341,956 --------- ---------At effective tax rate of nil% - - --------- --------- 6 Earnings per share Basic Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares on issue during the period. From date of incorporation, 14 months 11 April 2000 to to 31 December 31 October 2004 2003 $AUD $AUD Loss attributable to equity holders of the Company (2,104,606) (1,060,989) ---------- ---------- Weighted average number of ordinary shares in issue 56,739,429 3,108,819 Basic earnings per share ($AUD per share) (0.04) (0.34) --------- ---------Related Shares:
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