4th Nov 2005 07:00
Asia Energy PLC04 November 2005 Asia Energy Plc (AIM: AEN) PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 30 JUNE 2005 Highlights •Phulbari deposit exploration completed with more than 100 drill holes bored •Resource modelled and calculated at 572 million tonnes, with 90% in Measured and Indicated categories to JORC standards •Coal basin remains open for more exploration to the south •Products defined by laboratory testing as low ash metallurgical, export thermal and domestic thermal •Mining activity is expected to start in late 2006 •Full production target 15 million saleable tonnes per annum by 2013 •Up to 12 Mtpa (million tonnes per annum) for export •Projected Life of Mine is 30 plus years •Environmental Clearance for open pit mine approved by Government of Bangladesh (GoB) in September 2005 •Feasibility Study and Scheme of Development for mine approval lodged with GoB in October 2005 •Power station proposal lodged with GoB in October 2005 •Definitive Feasibility Study due for completion end of Q4 2005 with the Banking Finance Process to fund the development of the Project to commence early 2006 •The Company has received numerous approaches from major coal producers, coal consumers and coal trading companies who have all expressed interest in participating in the development of the Project For further information: Michael Frayne, Joint Managing Director Justine Howarth, Cathy [email protected] Parkgreen CommunicationsDavid Lenigas, Joint Managing Director Tel: +44 (0) 20 7493 [email protected] [email protected] Energy PLC [email protected]: +44 (0) 20 7079 1798, Fax: +44 (0) 207491 [email protected]; www.asia-energy.com Chairman's Statement Asia Energy PLC ('the Company', 'Asia Energy') made significant progress overthe past 12 months towards achieving the goal of starting an open pit coal mineat Phulbari in Northwest Bangladesh in 2006. A year ago I reported that we hadembarked on a Definitive Feasibility Study (DFS) for the Project and I canconfirm that this is nearing completion and that all the major exploratory workfor the DFS is now completed. The past year was an exciting time for the Company, culminating in October 2005with the official presentation to the Government of Bangladesh (GoB) of theFeasibility Study and Scheme of Development for the mine and a proposal to builda mine-mouth power station. In August 2005 the Company issued an updated resource statement followingcompletion of an intensive programme of drilling, and gravity and seismicsurveying. The Phulbari basin now has a JORC estimated resource of 572 milliontonnes (more than 90% in the Measured and Indicated categories), with theprospect that further drilling at the southern end will reveal still more coal.A year ago we reported a JORC resource of 370 million tonnes (mostly in theIndicated and Inferred categories) and we said at the time we were confident theresource would increase during the course of the DFS work. The Company, meanwhile, maintained its commitment to meeting the higheststandards in environmental and social management. More than 300 specialist field workers and consultants were employed to completeEnvironmental and Social Impact Assessments. These were undertaken in accordancewith 'best practice', notably the Equator Principles of the World Bank'sInternational Finance Corporation (IFC), and the IFC's environmental and socialsafeguard policies with the World Bank's specific guidelines on coal mining. In September 2005, the Department of Environment of the GoB approved theEnvironmental Impact Assessment and granted the future mine EnvironmentalClearance. Management plans, focused on sustainable development, were produced with themeans to mitigate and handle all the environmental and social impacts of themine. A key component was a draft Resettlement Action Plan which will ensurethat all people who are relocated as a result of the mine are compensated fairlyand fully. The overarching objective is that no one is disadvantaged by themine. To this end, we modified the mine design to ensure that it avoided most ofPhulbari Township, the biggest urban centre in the area. The Company recruited several additional executives to meet its demandingschedules and to prepare for the upcoming mining operations. William McIntosh, amining engineer with extensive experience in open pit coal mining, was appointedto the Board as Executive Director for Project Development and Gary Lye, with astrong background in mine development, was promoted to CEO Bangladesh. I amconfident that we have the right team in place to carry the Project forward. More than 20 leading international and Bangladeshi organisations andconsultancies were deployed in putting together the major reports during theyear. These included SMEC International Pty Ltd, on environmental and social issues,GHD Pty Ltd, on coal resource evaluation and mine infrastructure, MineConsultPty Ltd, on mine design and economic modelling, QCC Resources Pty Ltd, on coalquality, Sandwell Engineering Inc, for port infrastructure design, and DemasDredging Consultants with Quay Marine Services and CANARAIL for the railtransport, navigation and maritime components. Barclays Capital continued to provide the lead in financing the Project. Theyhave identified numerous options to fund the development of the Project. Weanticipate finalising the optimal combination of these finance options in early2006. I wish to thank our Directors, employees, consultants and advisers for theirtremendous efforts in achieving so much in the past year. I would also like tothank all our shareholders for their continued confidence in the Company. ThePhulbari Coal Project is a major development opportunity both for Bangladesh andfor Asia Energy and I and my fellow Directors look forward to leading thisexciting Project through to coal production. Christopher EagerChairman ASIA ENERGY PLC GROUP PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDED 30 JUNE 2005 Notes 30 June 2005 30 June 2004(a) £ £ Administrative expenses (1,328,579) (497,171) ---------- ----------Group operating loss 3 (1,328,579) (497,171) ---------- ---------- Group operating loss and loss onordinary activities before interestand taxation (1,328,579) (497,171)Interest receivable 5 447,409 101,106 ---------- ----------Loss on ordinary activities beforetaxation (881,170) (396,065)Tax on loss on ordinary activities 6 - - ---------- ----------Loss on ordinary activities aftertaxation (881,170) (396,065) ---------- ----------Loss for the financial yearattributable to members of the parentcompany (881,170) (396,065) ---------- ----------Retained loss for the period 17 (881,170) (396,065) ========== ========== Basic and diluted loss per share(pence) 7 (2.3)p (2.2)p The above results relate solely to continuing operating activity of the Group. GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE PERIOD ENDED 30 JUNE 2005 30 June 2005 £ 30 June 2004(a) £Loss for the financial year attributable tomembers of the parent company (881,170) (396,065) --------- ---------Total recognised gains and losses relatingto the period (881,170) (396,065) ========= ========= ASIA ENERGY PLC GROUP BALANCE SHEET AS AT 30 JUNE 2005 Notes 30 June 2005 30 June 2004(a) £ £Fixed assetsIntangible assets 8 10,287,033 2,121,004Tangible assets 9 361,280 154,475 --------- --------- 10,648,313 2,275,479 --------- ---------Current assetsStocks 11 - 36,564 Debtors: Amounts falling due withinone year 12 221,886 107,561 Current asset investments 13 15,410 8,095Cash at bank and in hand 5,642,722 12,165,535 --------- --------- 5,880,018 12,317,755 Creditors: Amounts falling due withinone year 14 (1,180,337) (170,359) --------- ---------Net current assets 4,699,681 12,147,396 --------- --------- --------- ---------Total assets less current liabilities 15,347,994 14,422,875 --------- --------- --------- ---------Net assets 15,347,994 14,422,875 ========= ========= Capital and reservesCalled up share capital 16 4,001,103 3,760,264Share premium account 17 12,624,126 11,058,676Profit and loss account 17 (1,277,235) (396,065) --------- ---------Equity shareholders' funds 17 15,347,994 14,422,875 ========= ========= The Financial Statements were approved by the Board on the 2 November 2005 andsigned on its behalf. .............................. Michael Frayne Director ASIA ENERGY PLC COMPANY BALANCE SHEET AS AT 30 JUNE 2005 Notes 30 June 2005 30 June 2004(a) £ £Fixed assetsInvestments 10 1,350,000 1,350,000 --------- --------- 1,350,000 1,350,000 --------- ---------Current assets Debtors: Amounts falling due withinone year 12 9,283,772 1,282,333 Cash at bank and in hand 5,522,112 12,013,862 --------- --------- 14,805,884 13,296,195 Creditors: Amounts falling due withinone year 14 (113,727) (59,762) --------- ---------Net current assets 14,692,157 13,236,433 --------- --------- Total assets less current liabilities 16,042,157 14,586,433 --------- --------- --------- ---------Net assets 16,042,157 14,586,433 ========= ========= Capital and reservesCalled up share capital 16 4,001,103 3,760,264Share premium account 17 12,624,126 11,058,676Profit and loss account 17 (583,072) (232,507) --------- ---------Equity shareholders' funds 17 16,042,157 14,586,433 ========= ========= ASIA ENERGY PLC GROUP STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 30 JUNE 2005 Notes 30 June 2005 30 June 2004(a) £ £ Net cash (outflow) from operatingactivities 18(a) (1,273,929) (625,300) Returns on investment and servicing offinanceInterest received 492,936 55,579Interest paid - (5,317) Taxation - - Capital expenditure and financialinvestmentPayments to acquire intangible fixedassets (7,269,211) (466,155)Payments to acquire tangible fixedassets (256,583) (121,120)(Payments to)/receipts from securitydeposits (7,315) 5,480 Acquisitions and disposalsNet cash acquired with subsidiaryundertaking 10 - 33,014 -------- ---------Net cash (outflow) before managementof liquid resources and financing (8,314,102) (1,123,819) -------- --------- Management of liquid resourcesDecrease/(Increase) in short termdeposits 11,000,000 (11,000,000) FinancingIssue of ordinary share capital 1,806,289 14,726,977Share issue costs (15,000) (1,268,038)Repayment of borrowings onacquisition - (165,221) -------- --------- 1,791,289 13,293,718 -------- --------- -------- ---------Increase in cash 18(b) 4,477,187 1,169,899 ======== ========= RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Notes 30 June 2005 30 June 2004(a) £ £ Increase in funds 4,477,187 1,169,899Repayment of borrowings ofacquisitions 18(b) - (165,221)(Decrease)/Increase in short termdeposits (11,000,000) 11,000,000 --------- ---------Change in net funds resulting fromcash flows 18(b) (6,522,813) 12,004,678Other non cash movements - loanacquired on acquisition 18(b) - 165,221 --------- ---------Movement in net funds (6,522,813) 12,169,899Net funds at beginning of period 18(b) 12,165,535 -Exchange differences - (4,364) --------- ---------Net funds at 30 June 18(b) 5,642,722 12,165,535 ========= ========= 1. Accounting policies Accounting period The Company was incorporated on 26 September 2003. Previous year's resultsreflect the period from 26 September 2003 to 30 June 2004. Basis of preparation The Financial Statements are prepared under the historical cost convention andin accordance with applicable United Kingdom accounting standards. Fundamental Accounting Concept The Directors are of the opinion that the Group currently has sufficient fundsto meet its obligations as they fall due in the foreseeable future and tocomplete the pre-feasibility and feasibility studies, scheduled to be completedin late 2005. The Company is currently conducting exploration activities usingfunds from a capital raising in April 2004. Completion of these studies, shouldthey demonstrate the feasibility of the project, will take the Company to thenext stage of development, being the commencement of operations. This stage willrequire further funding and appropriate approval from the Bangladesh government.The Directors are confident that the Company's coal interests will be able to becommercially realised and are confident that further funding and necessarygovernment approvals will be obtained. The Directors have taken steps to ensurethis occurs and have appointed Barclays Capital to provide advice and servicesin evaluating options and sources of funding, including equity, project debt,debentures, convertible debentures, export credit agencies, multi and bi-lateralagencies, off-take agreements and joint venture partners. With completion of theBanking documents including the Independent Reviews on technical, environmentaland social studies, the Banking marketing process to determine the optimalcombination of these finance options should commence in early 2006. On thisbasis, the Directors believe that the adoption of the going concern basis isjustified. Basis of consolidation The Group Financial Statements consolidate the Financial Statements of AsiaEnergy Plc and all its subsidiary undertakings drawn up to 30 June each year. Asia Energy Corporation Proprietary Limited has been included in the GroupFinancial Statements using the acquisition method of accounting. Accordingly,the Group Profit and Loss Account and Statement of Cash Flows include theresults and cash flows of Asia Energy Corporation Proprietary Limited from itsacquisition on 18 December 2003. The purchase consideration has been allocatedto the assets and liabilities on the basis of fair value at the date ofacquisition. The parent company has taken advantage of section 230 of the Companies Act 1985and has not included its own Profit and Loss Account in these FinancialStatements. The parent company's loss for the year was £350,565 (2004: Loss of£232,507). Intangible assets Acquisitions Intangible assets acquired separately from a business are capitalised at cost.Intangible assets acquired as part of an acquisition of a business arecapitalised separately from goodwill if the fair value can be measured reliablyon initial recognition, subject to the constraint that, unless the asset has areadily ascertainable market value, the fair value is limited to an amount thatdoes not create or increase any negative goodwill arising on the acquisition.Intangible assets, excluding development costs, created within the business arenot capitalised and expenditure is charged against profits in the year in whichit is incurred. Intangible assets are amortised on a straight line basis over their estimateduseful lives up to a maximum of 20 years. The carrying value of intangibleassets is reviewed for impairment at the end of the first full year followingacquisition and in other periods if events or changes in circumstances indicatethe carrying value may not be recoverable. Note 1 Continued Exploration, evaluation and development Costs carried forward Exploration, evaluation and development expenditure incurred is accumulated inrespect of each identifiable area of interest. These costs are only carriedforward to the extent that they are expected to be recouped through thesuccessful development of the area or where activities in the area have not atbalance sheet date, reached a stage which permits reasonable assessment of theexistence of economically recoverable reserves. Accumulated costs in relation to an abandoned area are written off againstprofit in the period in which the decision to abandon the area is made. AmortisationCosts on productive areas are amortised over the life of the area of interest towhich such costs relate on a unit of production output basis. Fixed AssetsAll fixed assets are initially recorded at cost. DepreciationDepreciation is provided on all tangible fixed assets at rates calculated towrite off the cost, less estimated residual value of each asset evenly over itsexpected useful life as follows: Office furniture and equipment - over 3 to 15 yearsField Equipment - over 3 to 15 yearsVehicles - over 5 to 7 yearsBuildings - over 40 years The carrying values of tangible fixed assets are reviewed for impairment whenevents or changes in circumstances indicate the carrying value may not berecoverable. Deferred tax The tax charge is based on the profit for the period and takes into accounttaxation deferred because of timing differences between the treatment of certainitems for taxation and accounting purposes. Deferred tax is recognised inrespect of all timing differences that have originated but not reversed at thebalance sheet date where transactions or events have occurred at that date thatwill result in an obligation to pay more, or a right to pay less or to receivemore, tax in the future. In particular: •provision is made for tax on gains arising from the revaluation (and similar fair value adjustments) of fixed assets, and gains on disposal of fixed assets that have been rolled over into replacement assets, only to the extent that, at the balance sheet date, there is a binding agreement to dispose of the assets concerned. However, no provision is made where, on the basis of all available evidence at the balance sheet date, it is more likely than not that the taxable gain will be rolled over into replacement assets and charged to tax only where the replacement assets are sold; •provision is made for deferred tax that would arise on remittance of the retained earnings of overseas subsidiaries, associates and joint ventures only to the extent that, at the balance sheet date, dividends have been accrued as receivable; Note 1 Continued •Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date. •Deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Foreign currencies Transactions in foreign currencies are recorded at the rate ruling at the dateof the transaction or at the contracted rate. Monetary assets and liabilitiesdenominated in foreign currencies are retranslated at the rate of exchangeruling at the balance sheet date or if appropriate at the forward contractrate. All differences are taken to the profit and loss account.Where the trade of a foreign enterprise is more dependent on the economicenvironment of the parent company then the Financial Statements of theundertaking are consolidated using the Temporal method on the following basis: •Fixed assets are translated into sterling at the rates ruling on the date of acquisition. •Monetary assets and liabilities denominated in a foreign currency are translated into sterling at the foreign exchange rates ruling at the balance sheet date. •Revenue and expenses in foreign currencies are recorded in sterling at the rates ruling at the date of the transactions. •Any gains or losses arising on translation are reported in the Profit and Loss Accounts. Leasing and hire purchase commitments Assets held under finance leases, which are leases where substantially all the risks and rewards of ownership of the asset have passed to the Group, and hire purchase contracts are capitalised in the balance sheet and are depreciated over their useful lives. The capital elements of future obligations under leases and hire purchase contracts are included as liabilities in the balance sheet. The interest elements of the rental obligations are charged in the profit and loss account over the periods of the leases and hire purchase contracts and represent a constant proportion of the balance of capital payments outstanding. Rentals payable under operating leases are charged in the profit and lossaccount on a straight line basis over the lease term. Stock Stock is valued at the lower of cost or estimated realisable value. 2. Turnover and segmental analysis There was no turnover during the financial period. The administrative expensesrelate to the United Kingdom, Australian and Bangladesh offices. The Group operates in one principal area of activity being coal exploration. Theresults of Asia Energy Corporation Proprietary Limited, which was acquired on 18December 2003, all relate to mineral exploration and development activity. The Group operates within one geographical market, being Bangladesh, and issupported by management and administrative functions in Australia and the UnitedKingdom. United Kingdom Australia Bangladesh Total £ £ £ 30 June 2005 £Operating loss beforeinterest and taxation (797,974) (531,753) 1,148 (1,328,579) Net assets 16,042,157 (696,583) 2,420 15,347,994 United Kingdom Australia Bangladesh Total £ £ £ 30 June 2004 £Operating loss beforeinterest and taxation (333,613) (138,218) (25,340) (497,171) Net assets 14,586,433 (139,778) (23,780) 14,422,875 3. Operating loss Year to 30 June 2005 Period to 30 June 2004 £ £This is stated after charging:- Auditor's remuneration:- Audit services* 51,050 45,000- Other services - 24,634Director's remuneration 435,040 120,060Other staff costs 53,057 8,591Depreciation of owned assets 49,778 3,340Operating lease rentals - landand buildings 27,893 19,537 * £26,000 (2004: £23,000)relates to the Company 4. Directors' emoluments and staff costs Staff costs The Company employs no staff other than the Directors disclosed below. The Groupemploys 56 staff in the Bangladesh office (2004: 20). 11 employees are inaccounting and administration (2004: 5) and 45 employees are in exploration(2004: 15). Directors' emoluments Year to 30 June 2005 Period to 30 June 2004 £ £Directors' emoluments 383,704 120,060 ========= ========= M. Frayne (1) ** 88,000 54,000D. Lenigas ** 88,000 21,633W.McIntosh (appointed 20December 2004)(1) ** 159,704 -C. Eager 24,000 4,800J. Malins 24,000 4,800L. Reynolds (resigned 11February 2005) 53,336 34,827 --------- --------- 435,040 120,060 ========= =========** Executive Director (1) These include amounts for consulting services paid to Director-relatedentities. Refer to Note 22 for further information. Further breakdown of these amounts is provided in the Directors' Report. 5. Interest Year to 30 June 2005 Period to 30 June 2004 £ £Bank interest receivable 447,409 101,106 --------- --------- 447,409 101,106 ========= ========= 6. Tax Tax on profit on ordinary activities Year to 30 June 2005 Period to 30 June 2004 £ £The tax charge is made up asfollows: Current tax:UK Corporation Tax - -Overseas Tax - - --------- ---------Total current tax - - --------- --------- Deferred tax:Origination and reversal of - -timing differences --------- ---------Total deferred tax - - --------- ---------Tax on profit on ordinary - -activities ========= ========= The difference between the effective provision for income tax and the statutorytax provision at the statutory tax rate is reconciled as follows: Year to 30 June 2005 Period to 30 June 2004 £ £Loss on ordinary activitiesbefore tax (881,170) (396,065) --------- ---------UK Corporation Tax @ 30% (264,351) (118,820)Permanent differences :non-deductible expenditure 15,000 4,500: non-taxable foreign exchangetranslation 127,690 (21,728)Timing differences : other (87,425) (601): accelerated capitalallowances (2,409,244) (130,740): tax losses recognised 2,496,669 131,341Tax losses not recognised 121,661 136,048 --------- ---------Current tax on ordinary - -activities ========= ========= Deferred tax Deferred tax assets and liabilities are recognised as follows: Opening Balance Movement in period At 30 June 2005 1 July 2004 £ £ £Capitalisedexploration costs (203,759) (2,557,807) (2,761,566)Other 1,145 (91,915) (90,770)Tax losses 202,614 2,649,722 2,852,336 ------------ ---------- ---------- - - - ------------ ---------- ---------- As at 30 June 2005, the Group had unrecognised tax losses arising in Australiaof £660,000 (2004: £492,000), Bangladesh of £25,000 (2004: £24,000) and UnitedKingdom of £518,000 (2004: £218,000) that are available indefinitely for offsetagainst future taxable profits of those companies in which the losses arose,subject to the conditions of deductibility under the relevant legislation.Deferred tax assets have not been recognised in respect of these losses. Theseassets will be recognised should it become more likely than not that taxableprofits or timing differences, against which they may be deducted, arise. 7. Loss per share The calculation of the loss per ordinary share is based on a loss of £881,170 to30 June 2005 (2004: Loss of £396,065) and the weighted average number ofordinary shares outstanding of 38,325,572 in the year ended 30 June 2005 (2004:18,143,860 shares). There is no difference between the diluted loss per shareand the loss per share presented. 8. Intangible fixed assets Development expenditure Mineral rights Total £ £ £ Cost:Opening balance 974,200 1,146,804 2,121,004Increase during the year 8,166,029 - 8,166,029 ---------- ---------- ----------As at 30 June 2005 9,140,229 1,146,804 10,287,033 ---------- ---------- ---------- Amortisation:Opening balance - - -Provided during the - - -year ---------- ---------- ----------As at 30 June 2005 - - - ---------- ---------- ---------- ---------- ---------- ----------Net book value at 30 June2005 9,140,229 1,146,804 10,287,033 ---------- ---------- ---------- The exploration and evaluation activities in the area of interest are still inthe early stages and have not at balance sheet date reached a stage whichpermits a reasonable assessment of the existence or otherwise of economicallyrecoverable reserves. Active and significant operations in the area of interestare continuing. The ultimate recoupment of costs carried forward is dependent on the successfuldevelopment and commercial exploitation or sale of the respective mining areas. 9. Tangible fixed assets Group Field Equipment Buildings Office furniture and equipment Vehicles Total £ £ £ £ £Cost:Openingbalance 32,421 31,797 90,979 2,618 157,815Additions 64,724 23,249 76,334 92,276 256,583 --------- -------- -------- -------- --------At 30 June2005 97,145 55,046 167,313 94,894 414,398 --------- -------- -------- -------- -------- Depreciation: Openingbalance (750) - (2,566) (24) (3,340)Providedduring theperiod (17,076) (1,500) (19,844) (11,358) (49,778) --------- -------- -------- -------- --------At 30 June2005 (17,826) (1,500) (22,410) (11,382) (53,118) --------- -------- -------- -------- -------- --------- -------- -------- -------- --------Net bookvalue at 30 June 2005 79,319 53,546 144,903 83,512 361,280 ========= ======== ======== ======== ========Net book value at 30 June 2004 31,671 31,797 88,413 2,594 154,475 ========= ======== ======== ======== ======== Company The Company does not have any tangible fixed assets as at 30 June 2005. 10. Investments Details of the investments in which the Company holds 20% or more of the nominalvalue of any class of share capital are as follows: Name of Holding Proportion of voting Nature ofCompany rights and shares held business Asia Energy Ordinary 100% ExplorationCorporation SharesProprietaryLimited Cost : £Opening balance 1,350,000Additions -Disposals - ----------At 30 June 2005 1,350,000 ---------- Amounts provided:As at 30 June 2005 - ----------Net book value at 30 June 2005 1,350,000 ========== 11. Stocks Group At 30 June 2005 At 30 June 2004 £ £Consumables - 36,564 ----------- ------------ - 36,564 =========== ============ 12. Debtors At 30 June 2005 At 30 June 2005 At 30 June 2004 At 30 June 2004 Group Company Group Company £ £ £ £ Amounts duefromsubsidiaries - 9,195,991 - 1,236,806Other 128,371 16,481 52,471 45,527debtorsPrepayments 93,515 71,300 55,090 - ---------- ---------- ---------- ---------- 221,886 9,283,772 107,561 1,282,333 ---------- ---------- ---------- ---------- There were no debtors falling due after more than one year at 30 June 2005. Amounts due from subsidiary undertakings are non-interest bearing. 13. Current asset investments At 30 June 2005 At 30 June 2004 £ £Security deposits 15,410 8,095 ---------- ---------- 15,410 8,095 ---------- ---------- Security deposits represent rental deposits on premises in Bangladesh. 14. Creditors: Amounts falling due within one year At 30 June 2005 At 30 June 2005 At 30 June 2004 At 30 June 2004 Group Company Group Company £ £ £ £Tradecreditors 1,180,337 113,727 158,539 59,762Amountsdue to - - 11,820 -relatedparty --------- --------- --------- --------- 1,180,337 113,727 170,359 59,762 --------- --------- --------- --------- 15. Obligations under leases and hire purchase contracts Annual commitments under non-cancellable land and buildings operating leases areas follows : At 30 June 2005 At 30 June 2004 £ £Operating leases which expire:Within one year 31,219 27,400In two to five years 15,492 45,415In over five years - - ----------- ----------- 46,711 72,815 ----------- ----------- 16. Share capital At 30 June 2005 At 30 June 2004 £ £Called up share capitalAuthorised200,000,000 Ordinary Shares of 10p Each 20,000,000 20,000,000 =========== =========== Allotted Called Up and Fully Paid =========== ===========40,011,024 Ordinary Shares of 10p Each 4,001,103 3,760,264(2004: 37,602,638 shares) =========== =========== Ordinary shares have the right to receive dividends as declared and, in theevent of winding up the Company, to participate in the proceeds from sale of allsurplus assets in proportion to the number of and amounts paid up on sharesheld. Ordinary shares entitle their holder to one vote, either in person or by proxy,at a meeting of the Company. During the year, the Company issued 2,408,386 Ordinary Shares of 10p each forconsideration of £1,806,290 in respect of 1,855,000 options and 553,386 warrantsexercised. Total Share Options in Issue During the year 1,855,000 options were exercised. 3,870,000 options were issued during the year. As at 30 June 2005 there were 3,790,000 options on issue to subscribe forOrdinary Shares at 75p (2004: 1,775,000). All options have an exercise period being any time up to 18 April 2009. Note 16 Continued Total Warrants in Issue During the year 553,386 warrants were exercised. No warrants were issued during the year. As at 30 June 2005 there were 805,000 warrants on issue to subscribe forOrdinary Shares at 75p (2004: 1,358,386). 17. Reconciliation of shareholders' funds and movement of reserves Group Ordinary share capital Share Premium Account Profit and Loss Account Total share-holders' funds £ £ £ £Openingbalance 3,760,264 11,058,676 (396,065) 14,422,875 Arisingon shareissues 240,839 1,565,450 - 1,806,289Retainedloss for the year - - (881,170) (881,170) --------- --------- --------- ---------At 30 June 2005 4,001,103 12,624,126 (1,277,235) 15,347,994 --------- --------- --------- --------- Group Ordinary share capital Share Premium Account Profit and Loss Account Total share-holders' funds £ £ £ £ Opening balance - - - - Issued onincorporation 2 - - 2 Arising onshare issues 3,760,262 12,341,714 - 16,101,976Share issuecosts - (1,283,038) - (1,283,038)Retained lossfor the year - - (396,065) (396,065) --------- --------- --------- ---------At 30 June2004 3,760,264 11,058,676 (396,065) 14,422,875 --------- --------- --------- --------- Company Ordinary share capital Share Premium Account Profit and Loss Account Total share-holders' funds £ £ £ £Openingbalance 3,760,264 11,058,676 (232,507) 14,586,433 Arisingon share issues 240,839 1,565,450 - 1,806,289Retainedloss for the year - - (350,565) (350,565) --------- --------- --------- ---------At 30 June 2005 4,001,103 12,624,126 (583,072) 16,042,157 --------- --------- --------- --------- Note 17 Continued Company Ordinary share capital Share Premium Account Profit and Loss Account Total share-holders' funds £ £ £ £Opening balance - - - - Issued onincorporation 2 - - 2 Arising onshare issues 3,760,262 12,341,714 - 16,101,976Share issuecosts - (1,283,038) - ( 1,283,038)Retainedprofit/(loss)for the year - - (232,507) (232,507) -------- -------- -------- ---------At 30 June2004 3,760,264 11,058,676 (232,507) 14,586,433 -------- -------- -------- --------- 18. Notes to the statement of cash flows (a) Reconciliation of operating profit to net cash outflow from operatingactivities Year ended 30 June 2005 Period ended 30 June 2004 £ £ Operating loss (1,328,579) (497,171) Increase in debtors (159,852) (42,468)Decrease/(increase) ininventory 36,564 (36,564)Increase/(decrease) increditors 128,160 (49,097)Depreciation of fixedassets 49,778 - ------------ ------------Net cash outflow fromoperating activities (1,273,929) (625,300) ------------ ------------ (b) Analysis of net funds Opening Balance Cash Flow At 30 June 2005 £ £ £ Cash at bank and in hand 1,165,535 4,477,187 5,642,722 Short term deposits* 11,000,000 (11,000,000) - -------- --------- --------- 12,165,535 (6,522,813) 5,642,722 ======== ========= ========= * Short term deposits are included within cash at bank and in hand in thebalance sheet. 19. Derivatives and other financial instruments The Group holds cash as a liquid resource to fund the obligations of the Group.The Group's strategy for managing cash is to maximise interest income whilstensuring its availability to match the profile of the Group's expenditure. Thisis achieved by regular monitoring of interest rates and monthly review ofexpenditure forecasts. The Company has no formal policy in respect of foreign exchange risk, however itdoes review its currency exposures on an ad hoc basis. Currency exposuresrelating to monetary assets held by foreign operations are included within theGroup Profit and Loss Account. Note 19 Continued The Group has taken advantage of the exemption in FRS 13 'Derivatives and OtherFinancial Instruments' in respect of short-term debtors and creditors andconsequently those items are not included in the relevant analysis within thefollowing notes. Interest rate risk profile of financial assets: The financial assets of the Group are comprised of monies held in bank accountsand security deposits. The interest rate profile of the financial assets of the Group as at 30 June2005: Fixed rate Floating rate Non interest bearing Total £ £ £ £ Sterling - 5,522,112 - 5,522,112Australian dollars - 838 - 838United Statesdollars - - 57,308 57,308Bangladesh taka - - 77,874 77,874 --------- --------- --------- --------- - 5,522,950 135,182 5,658,132 --------- --------- --------- --------- The interest rate profile of the financial assets of the Group as at 30 June2004: Fixed rate Floating rate Non interest bearing Total £ £ £ £ Sterling 11,000,000 1,013,862 - 12,013,862Australian dollars - 3,078 - 3,078United Statesdollars - - 93,610 93,610Bangladesh taka - - 63,080 63,080 --------- --------- --------- --------- 11,000,000 1,016,940 156,690 12,173,630 --------- --------- --------- --------- Floating rate financial assets comprise cash balances on money market depositsat call at the Bank of England current base rate of interest.Non-interest bearing financial assets comprise cash deposits at call and do notreceive interest. Interest rate risk profile of financial liabilities All of the Group's financial liabilities are short term creditors. Currency exposures Currency exposures comprise the monetary assets and liabilities that are notdenominated in the operating currency of the operating unit. The currencyexposures of the Group as at 30 June 2005 are shown below: 2005: Currency exposures Net foreign currency Net foreign currency Net foreign currency monetary assets monetary assets monetary assets Functional currency United States Dollars Bangladesh Taka Total £ £ £ Sterling 57,308 165,564 222,872 ------------ ------------ ------------ 57,308 165,564 222,872 ------------ ------------ ------------Note 19 Continued 2004: Currency exposures Net foreign currency Net foreign currency Net foreign currency monetary assets monetary assets monetary assets Functional currency United States Dollars Bangladesh Taka Total £ £ £ Sterling 103,484 13,066 116,515 ------------ ------------ ------------ 103,484 13,066 116,515 ------------ ------------ ------------ Borrowing facilities The Group has no borrowing facilities in place at 30 June 2005 (2004: Nil). Derivative instruments The Group has no derivative instruments (2004: Nil). Fair values of financial assets and liabilities All financial assets and liabilities of the Group have been recorded at theirbook value, which equates to their fair value. 2005 2005 2004 2004 Book value Fair value Book value Fair value £ £ £ £Financial assets------------------Cash at bank and in hand 5,642,722 5,642,722 12,165,535 12,165,535Current asset investments 15,410 15,410 8,095 8,095 --------- --------- --------- --------- 5,658,132 5,658,132 12,173,630 12,173,630 --------- --------- --------- --------- 20. Capital commitments There are no material capital commitments for the Group as at 30 June 2005 whichhave not already been provided for in the financial statements. 21. Contingent Liabilities The Group is obliged to pay US$1 per tonne of coal produced to DeepgreenMinerals Corporation Limited. Under the investment agreement with the Government of Bangladesh, the Groupwill, on commencement of commercial production of coal, be obliged to pay to theGovernment of Bangladesh a royalty of 6 per cent of the sale value of all coalproduced and sold pursuant to a Mining Lease in US$. The financial impact of both of these contingent liabilities cannot be estimatedas the Company has not completed the exploration work. 22. Related party transactions A service agreement with Bowmaker Management Limited ("Bowmaker") for provisionof office space and associated services was entered into on 31 October 2003.This agreement was for 6 months with an automatic renewal for 6 months unlessterminated and requires the Company to pay £2,000 per month in advance. Bowmakeralso provides Company Secretarial work and general administrative assistance.Jonathan Malins, a Director of Asia Energy Plc, is the beneficial owner of 50per cent of the issued share capital of Bowmaker. Payments to Bowmaker in theperiod to 30 June 2005 amounted to £10,000 (2004 : £16,000). As at 30 June 2005,no amounts were owing (2004 : nil). On 30 March 2004, the Company entered into a service agreement with RCM Asia Ltd("RCM Asia") for the provision of consulting services, including the provisionof the services of Mr Michael Frayne, a director of Asia Energy Plc. MichaelFrayne had a beneficial interest in and was a consultant to RCM Asia until 31March 2005. Payments to RCM Asia in the period to 30 June 2005 amounted to £52,000 (2004 : £11,200) for consultancy services and £18,000 (2004: £14,088) fortravel and accommodation expenses. As at 30 June 2005 no amounts were owing(2004: £4,666). From 1 April 2004, the service agreement with RCM Asia wasassigned to Adelise Services Ltd ("Adelise"). Michael Frayne has abeneficial interest in and is a consultant to Adelise. Payments to Adelise inthe period to 30 June 2005 amounted to £22,000 for consulting services and£6,000 for travel and accommodation expenses. Payments for consulting services to the Company by Fingals Cave Pty Ltd,including the provision of the services of Mr W. McIntosh, a director of AsiaEnergy Plc, amounting to £146,929 were made in the period to 30 June 2005. As at30 June 2005, £3,495 was owing. Cambrian Mining Plc provided office space and associated services to the Companyduring the year and was paid £109,794. Mr J. Malins is a director andshareholder of both Cambrian Mining Plc and Asia Energy Plc. As at 30 June 2005,£71,300 related to prepaid office space and services. 23. Principal operating subsidiary undertakings Asia Energy Plc holds 100% of the equity share capital and controls 100% ofvoting rights of the following undertakings: • Asia Energy Corporation Pty Ltd - incorporated in Australia and operates in Australia • Asia Energy Corporation (Bangladesh) Pty Ltd - incorporated in Australia and operates in Bangladesh* • Asia Energy (Bangladesh) Private Limited (formerly Pan Asian Corporation Limited) - incorporated and operates in Bangladesh*. • Asia Mining (Bangladesh) Private Limited - incorporated and operates in Bangladesh**. * Indirectly held through Asia Energy Corporation Pty Ltd.** Indirectly held through Asia Energy Corporation (Bangladesh) Pty Ltd All subsidiary undertakings participate in mineral exploration and developmentactivity. 24. Operating commitments Under the terms of the Prospecting License agreement with the Bangladeshauthorities for contract license areas B, G and H respectively, an annual fee of100 Taka is payable for each hectare within the license area. The Companycurrently lease 5,480 hectares within these license areas. 25. Five year summary As the Group has only recently commenced trading, no five year summary has beenprepared. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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