11th Jun 2007 09:00
Summit Resources plc11 June 2007 11 June 2007 Summit Resources plc ("Summit" or "the Company") Final Results For the Year ended 31 December 2006 Chairman's statement I am pleased to announce that in the period since our admission to AIM, Summit Resources plc (the "Company" or "Summit Resources") has made progress with its investment strategy. Since September 2006 the Company has provided Coal Contractors (1991) Inc withbridging finance facilities totalling £1,150,000 in order to enable thecompletion of the purchase of an anthracite washing plant and associated civilengineering works at the Stockton Colliery in Pennsylvania, USA. The bridgingfinance facilities have been extended to 30 June and may become payable at 20days notice thereafter. Coal Contractors (1991) Inc is part of the Stockton Coal Group which owns andoperates the Stockton Mine. Located approximately one mile east from the town ofHazelton, in the Hazel Creek Valley, Pennsylvania, the mine encompasses about900 land acres and is accessible by both road and rail. The Stockton Coal Grouphas used the bridging finance facilities provided by the Company to complete arecently commissioned anthracite preparation plant. The anthracite preparationplant has been designed to produce a variety of sizes of clean coal products forsale to the domestic and industrial markets. Results During the twelve months to 31 December 2006, the Company made a loss before and after tax of £202,947. While the Company has made progress in a short period of time, the Company intends to further accelerate its efforts going forward. The management and employees remain dedicated to growing the Company in the mining sector and creating value for shareholders. Summit Resources looks forward to reporting on the progress of new investment opportunities in line with its investment strategy throughout the coming year. Christopher LambertChairman11 June 2007 INCOME STATEMENTfor the year ended 31 December 2006 2006 2005 Note £ £ Administrative expenses (246,037) - Operating loss 2 (246,037) - Finance Revenue 3 43,090 - Loss on ordinary activities before (202,947) -taxation Income tax expense 4 - - Loss for the financial year & (202,947) -retained loss attributable to membersof the company Loss per share expressed in pence pershare - Basic 7 (0.13)p - There are no recognised gains or losses other than the loss for the year asshown above. BALANCE SHEETas at 31 December 2006 2006 2005 Note £ £AssetsNon current assets Tangible assets 8 2,911 - Total non current assets 2,911 - Current assets Trade and other receivables 9 1,345,005 -Cash and cash equivalents 14 2,200,675 -Total current assets 3,545,680 - Total assets 3,548,591 - LiabilitiesCurrent liabilitiesTrade and other payables 10 12,640 -Total liabilities 12,640 - Net Assets 3,535,951 Shareholders EquityShare Capital 11 187,508 -Share premium 3,544,739 -Other Reserve 6,651 -Retained Losses (202,947) -Total equity 3,535,951 - STATEMENT OF CHANGES IN EQUITYFor the year ended 31 December 2006 +--------------------+--------+---------+--------+---------+---------+ | | Called | Share | Share |Retained | Total | | |up share| premium | based |earnings | equity | | |capital | reserve |payment | | | | | | |reserve | | | +--------------------+--------+---------+--------+---------+---------+ | | £ | £ | £ | £ | £ | +--------------------+--------+---------+--------+---------+---------+ |As at 1 January 2006| -| -| -| -| -| +--------------------+--------+---------+--------+---------+---------+ |Share capital issued| 187,508|3,737,842| -| -|3,925,350| +--------------------+--------+---------+--------+---------+---------+ |Cost of share issue | -|(193,103)| -| -|(193,103)| +--------------------+--------+---------+--------+---------+---------+ |Loss for the year | -| -| -|(202,947)|(202,947)| +--------------------+--------+---------+--------+---------+---------+ |Share based payments| -| -| 6,651| -| 6,651| +--------------------+--------+---------+--------+---------+---------+ |As at 31 December | 187,508|3,544,739| 6,651|(202,947)|3,535,951| |2006 | | | | | | +--------------------+--------+---------+--------+---------+---------+ | | | | | | | +--------------------+--------+---------+--------+---------+---------+ CASH FLOW STATEMENTfor the year ended 31 December 2006 2006 2005 Note £ £ Cash flows from operating activities Operating (loss) (246,037) - Depreciation 576 - Share options expensed 6,651 - Increase in deposits paid (49,938) - Increase in VAT due (34,051) - Increase in prepayments (111,016) - Increase in operating creditors 4,640 - Increase in accruals 8,000 - Net cash used in operating activities (421,175) - Cash flows from investing activitiesInterest received 43,090 - Payments to acquire tangible assets (3,487) -Increase in short term loan (1,150,000) - Net cash used in investing activities (1,110,397) - Cash inflows from financing activitiesProceeds from issue of shares 3,925,350 -Transaction costs of issue of shares (193,103) -Net cash flow from financing activities 3,732,247 - Net increase in cash and cash equivalents 2,200,675 - Cash and cash equivalents at 1 January - - Cash and cash equivalents at 31 December 14 2,200,675 - STATEMENT OF ACCOUNTING POLICIESfor the year ended 31 December 2006 1. Principal accounting policies a) Authorisation of financial statements and statement of compliance with IFRS The financial statements of Summit Resources plc for the year ended 31 December2006 were authorised for issue by the board on 11 June 2007 and the balancesheets signed on the board's behalf by Ms Jade Styants and Mr Toby Howell.Summit Resources plc is a public limited company incorporated and domiciled inEngland and Wales. The Company's ordinary shares are traded on the AlternativeInvestment Market operated by the London Stock Exchange. The Company's financial statements have been prepared in accordance withInternational Financial Reporting Standards ("IFRS"). The principal accountingpolicies adopted by the group are set out below. b) Basis of preparation The financial statements have been prepared on the historical cost basis, exceptfor the measurement to fair value of assets and financial instruments asdescribed in the accounting policies below, and on a going concern basis. The financial report is presented in Sterling and all values are in pounds (£)unless otherwise stated. c) Revenue The Company had no revenue during the year ended 31 December 2006. d) Finance revenue Finance revenue is recognised as interest accrues. e) Cash and cash equivalents Cash and short-term deposits in the balance sheet comprise cash at bank and inhand and short-term deposits with an original maturity of three months or less. For the purposes of the Cash Flow Statement, cash and cash equivalents consistof cash and cash equivalents as defined above, net of outstanding bankoverdrafts. f) Income tax and deferred taxation Current tax assets and liabilities for the current and prior periods aremeasured at the amount expected to be recovered from or paid to the taxationauthorities. The tax rates and tax laws used to compute the amount are thosethat are enacted or substantially enacted by the balance sheet date. No deferred tax asset has been recognised because there is insufficient evidenceof the timing of suitable future profits against which they can be recovered. g) Foreign currencies Both the functional and presentational currency of Summit Resources plc issterling (£). Transactions in foreign currencies are recorded at the rate rulingat the date of the transaction. Monetary assets and liabilities denominated inforeign currencies are translated at the rate of exchange ruling at the balancesheet date. All differences are taken to the income statement. h) Significant accounting judgements, estimates and assumptions Share based payment transaction The Company measures the cost of equity-settled transactions with employees byreference to the fair value of the equity instruments at the date at which theywere granted. The fair value is determined using a Black-Scholes model. i) Tangible assets - Plant and equipment Plant and equipment is stated at cost less accumulated depreciation and anyaccumulated impairment losses. Depreciation is provided on all tangible assets to write off the cost lessestimated residual value of each asset over its expected useful economic life ona straight line basis at the following annual rates: Computer equipment - 40% All assets are subject to annual impairment reviews. j) Trade and other receivables Trade receivables, which generally have 30 day terms, are recognised and carriedat original invoice amount less any allowance for any uncollectible amounts. k) Trade and other payables Trade payables and other payables are carried at amortised cost and representliabilities for goods and services provided to the Company prior to the end ofthe financial year that are unpaid and arise when the Company becomes obliged tomake future payments in respect of the purchase of these goods and services. l) Financial Instruments The Company's financial instruments comprise cash and items arising directlyfrom its operation such as trade debtors and trade creditors. There is no material difference between the book value and fair value of theCompany's cash. m) Share-based payment transactions (i) Equity settled transactions The Company provides benefits to employees (including senior executives) of theCompany in the form of share-based payments, whereby employees render servicesin exchange for shares or rights over shares (equity-settled transactions). The cost of these equity-settled transactions is measured by reference to thefair value of the equity instruments at the date at which they are granted. Thefair value is determined using a Black-Scholes model. In valuing equity-settled transactions, no account is taken of any performanceconditions, other than conditions linked to the price of the shares of SummitResources Plc (market conditions) if applicable. The cost of equity-settled transactions is recognised, together with acorresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevantemployees become fully entitled to the award (the vesting period). The cumulative expense recognised for equity-settled transactions at eachreporting date until vesting date reflects (i) the extent to which the vestingperiod has expired and (ii) the Company's best estimate of the number of equityinstruments that will ultimately vest. No adjustment is made for the likelihoodof market performance conditions being met as the effect of these conditions isincluded in the determination of fair value at grant date. The Income Statementcharge or credit for a period represents the movement in cumulative expenserecognised as at the beginning and end of that period. No expense is recognised for awards that do not ultimately vest, except forawards where vesting is only conditional upon a market condition. If the terms of an equity-settled award are modified, as a minimum an expense isrecognised as if the terms had not been modified. In addition, an expense isrecognised for any modification that increases the total fair value of theshare-based payment arrangement, or is otherwise beneficial to the employee, asmeasured at the date of modification. If an equity-settled award is cancelled, it is treated as if it had vested onthe date of cancellation, and any expense not yet recognised for the award isrecognised immediately. However, if a new award is substituted for the cancelledaward and designated as a replacement award on the date that it is granted, thecancelled and new award are treated as if they were a modification of theoriginal award, as described in the previous paragraph. The dilutive effect, if any, of outstanding options is reflected as additionalshare dilution in the computation of earnings per share (see Note 7). n) Earnings per share Basic earnings per share is calculated as net profit attributable to members ofthe Company, adjusted to exclude any costs of servicing equity (other thandividends) and preference share dividends, divided by the weighted averagenumber of ordinary shares, adjusted for any bonus element. Diluted earnings per share is calculated as net profit attributable to membersof the Company, adjusted for: • costs of servicing equity (other than dividends) and preference share dividends; • the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and • other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element. Notes to financial statementsfor the year ended 31 December 2006 1. Turnover & Segmental analysis The Company had no turnover during the year. All of the Company's losses, and net assets arose in the United Kingdom. 2. Operating loss The operating loss is stated after charging: 2006 2005 £ £ Auditors' remuneration - audit services 8,000 -Directors' emoluments 48,950 -Depreciation 576 -Share options expenses 6,651 - Auditors' remuneration for non-audit services provided during the periodamounting to £5,875 relates to the provision of an accountant's report for thepurpose of the Company's AIM admission document and was charged to the sharepremium reserve, as part of share issue expenses 3. Finance Revenue 2006 2005 £ £ Bank interest receivable 43,090 - 4. Taxation 2006 2005 £ £Current year taxationUK corporation tax at 30% on profits for - -the period Factors affecting the tax charge for theperiodLoss on ordinary activities before tax (202,947) - Loss on ordinary activities at the UK (60,884) -standard rate of 30% Effect of tax benefit of loss carried 60,884 -forward Current period taxation - - 5. Staff Costs The Company had no full time employees during the year. The directors providedprofessional services as required on a part-time basis. 6. Directors' remuneration 2006 2005 £ £Non Executive Directors:Malcolm James 10,150 -Chris Lambert 10,150 -Jade Styants 10,150 - Executive Directors:Toby Howell 18,500 - Total 48,950 - No pension benefits are provided for any Director. Directors' share options At admission to AIM, the Company granted Directors options to subscribe for thefollowing numbers of new ordinary shares, exercisable at 2p per share in theperiod 8 June 2006 to 7 June 2011. The fair value of these options has beenfully expensed during the year, based on a Black-Scholes model, assuming a riskfree rate of 4.6 % and expected volatility of 15% for the period of trading.There are no performance measures attached to the options. Number of optionsMalcolm James 1,339,241Christopher Lambert 1,339,241Jade Styants 1,339,241Toby Howell 2,678,683 7. Loss per share The basic earnings per share is derived by dividing the loss for theperiod attributable to ordinary shareholders by the weighted averagenumber of shares in issue. For diluted earnings per share the weighted average number of ordinaryshares in issue is adjusted to assume conversion of all potentialordinary shares. Loss for the period £(202,947)Weighted average number of ordinary shares of £0.07 155,450,081in issueLoss per share - basic (0.13) p Weighted average number of ordinary shares of £0.07 169,191,775in issue inclusive of outstanding optionsLoss per share - fully diluted (0.12) p 8. Tangible assets Computer Equipment £CostAt 1 January 2006 -Additions 3,487At 31 December 2006 3,487 DepreciationAt 1 January 2006 -Charge for the year 576At 31 December 2006 576 Net Book ValueAt 31 December 2006 2,911 9. Trade and other receivables 2006 2005 Current trade and other receivables £ £Prepayments 111,016 -Short term Loan * 1,150,000 -Deposits 49,938 -Vat due 34,051 - 1,345,005 - * The Company entered into two separate agreements with Coal Contractors (1991)Inc. ("Coal Contractors"), dated 12 September 2006 and 10 October 2006 toprovide a bridging finance facility. The finance facility in place has been secured over assets of Coal Contractors.Additionally the obligations and liabilities of Coal Contractors to SummitResources have been guaranteed by Stockton Mine Associates I L.P., Stockton MineAssociates II L.P., and Stockton Anthracite L.P. (the "Guarantors"), who owncertain contiguous tracts of land in Pennsylvania in USA. The facility was made available to finance the purchase and installation of ananthracite washing plant and associated civil engineering works at CoalContractors' Stockton Colliery in Pennsylvania, USA. The facility has been madeavailable to Coal Contractors until 30 June 2007 when the principal amount andinterest will be due. 10. Trade and other payables 2006 2005 Current trade and other payables £ £Trade Creditors 4,640 -Accruals 8,000 - 12,640 - 11. Share Capital 2006 £Authorised20,000,000,000 ordinary shares of 0.07 p each 14,000,000 Issued and fully paid267,868,264 ordinary shares of 0.07 p each 187,508 The Company was incorporated on 17 December 2004 with an authorised sharecapital of £2,000,000 divided into 200,000,000 ordinary shares of 0.1p each, ofwhich 2 shares were issued fully paid to the subscribers to the Memorandum ofAssociation of the Company. On 6 April 2006, 12 ordinary shares of 1p each were issued at par. At the Company's first annual general meeting on 7 April 2006 the authorisedshare capital of the Company was increased from £2,000,000 to £14,000,000 bycreation of 1,200,000,000 new ordinary shares of 1p each ranking equally withexisting shareholders of 1p each. The authorised share capital was sub-dividedfrom 1,400,000,000 ordinary shares of 1p each into 140,000,000,000 ordinaryshares of 0.01p each and further consolidated from 140,000,000,000 ordinaryshares of 0.01p each into 20,000,000,000 ordinary shares of 0.07p each. Following the re-organisation, 200 ordinary shares were transferred by theinitial subscribers to Black Ivory Limited on 18 May 2006. On 20 May 2006, the Company issued and allotted 65,681,065 ordinary shares tocertain founder subscribers, fully paid, at par value. On 22nd May 2006, 18,262,999 ordinary shares were issued and fully paid at 1.1peach On 8 June 2006, on admission to AIM 183,924,000 ordinary shares were placed at aprice of 2p per share. Under IFRS 2 'Share Based Payments', the Company determines the fairvalue of options issued to Directors and Employees as remuneration andrecognises the amount as an expense in the Income Statement with acorresponding increase in equity. Name Date Granted Number Exercise Expiry Fair Value / Vested Price Date at Grant (pence) Date (pence)Malcolm James 8 June 2006 1,339,341 2 7 June 0.10 2011Chris Lambert 8 June 2006 1,339,341 2 7 June 0.10 2011Jade Styants 8 June 2006 1,339,341 2 7 June 0.10 2011Toby Howell 8 June 2006 2,678,683 2 7 June 0.10 2011 Totals 6,696,706 11. Share Capital (continued) The fair value of the options vested during the year was £6,651. Theassessed fair value at grant date is determined using the Black-ScholesModel that takes into account the exercise price, the term of theoption, the share price at grant date, the expected price volatility ofthe underlying share, the expected dividend yield and the risk-freeinterest rate for the term of the option. The following table lists the inputs to the model used for the yearended 31 December 2006: Dividend Yield (%) -Expected Volatility (%) 15Risk-free interest rate (%) 4.60Share price at grant date (£) 0.02 The expected volatility reflects the assumption that the historicalvolatility is indicative of future trends, which may, not necessarilybe the actual outcome. 12. Commitments As at 31 December 2006, the Company had no material capital commitments. 13. Related party transactions Claridge House Services Limited (CHS) was a company set up for the purpose ofadministering the serviced office for a number of companies, including SummitResources. The directors of CHS are Jade Styants, Toby Howell and Malcolm James,with Greg Kuenzel being the beneficial owner. Summit Resources has entered intoan agreement with CHS for the provision of services and accommodation inrelation to Suite 4, 32 Davies Street, London W1K 4ND, for a monthly fee of£5,000 plus VAT payable 3 months in advance. During the year CHS invoiced theCompany £45,200 in respect of serviced office costs. 14. Analysis of changes in net funds 2006 £Balance at 1 January 2006 -Increase in the year 2,200,675 Balance at 31 December 2006 2,200,675 15. Financial instruments Summit Resources plc uses financial instruments comprising cash, liquidresources and debtors/creditors that arise from its operations. The Company's exposure to currency and liquidity risk is not consideredsignificant. 15. Financial instruments continued... The Company's cash balances are held in pound sterling. To date Summit Resourceshas relied upon equity funding to finance operations. The Directors areconfident that adequate cash resources exist to finance operations to commercialexploitation but controls over expenditure are carefully managed. 16. Post balance sheet events Since September 2006 the Company has provided Coal Contractors (1991) Inc withbridging finance facilities totalling £1,150,000 in order to enable thecompletion of the purchase of the anthracite washing plant and associated civilengineering works at the Stockton Colliery in Pennsylvania, USA. The Directors of Summit Resources have extended the above mentioned bridging finance facilities to 30 June 2007, at which point the loans plus interest may become payable at 20 days notice thereafter. Contacts: Summit Resources plc: Toby Howell - 020 7182 1741 Ruegg & Co Limited: Gavin Burnell - 020 7584 3663 Hichens, Harrison & Co plc: Daniel Briggs - 020 7382 4450 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Atlantic Coal