25th Jul 2007 16:57
UMC Energy PLC25 July 2007 UMC Energy Plc "UMC Energy" or the "Company") Financial Statements for the year ended 31 January 2007 CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 31 JANUARY 2007 The Company was originally established to earn a 75% interest in potentiallyeconomic uranium bearing blocks in the Labrador Trough in Canada. Followingreceipt of the results of airborne magnetic, radiometric and ground gravityprograms and following analysis of those results by the Company's independentconsulting geologist, the Directors resolved on 31 March 2006 not to pursue thisoption. During the year under review, the Company also examined a number ofenergy-related projects in Kazakhstan, none of which have come to fruition. In September 2006, the Company entered into a conditional agreement to acquirefrom Cline Mining Corporation (Cline) of Canada all of the shares in Uramad UKLtd and thereby an 80% interest in Uramad SA (Uramad) of Madagascar. Allconditions relating to the acquisition were fulfilled by 22 December 2006 andthe transaction closed on that date. As a result Uramad UK Ltd and Uramad becamesubsidiaries of the Company on that date; the Company allotted 12,272,667 fullypaid ordinary shares to Cline being the consideration for the acquisition; andthe Company acquired the loan amounts due from Uramad to Cline for considerationof US$339,938. Uramad is owned 80% by Uramad UK Ltd and 20% by OMNIS, the Malagasy state miningbody. Uramad holds eight exploration permits issued by the government ofMadagascar covering approximately 9,994 km2. The permits, which have beengranted for 10 years, expiring 2015 and 2016, are located in the MorondavaBasin, which is infilled and layered with sediments, most notably the Karooformation that hosts uranium mineralisation. The areas were previouslyidentified and explored during the uranium cycles of 1956 to 1963 and 1979 to1982 by the United Nations (PUND) and OMNIS respectively. Later, the Frenchuranium company Cogema took on large permits and continued regional explorationthat terminated in the late 1990s with the down turn in uranium prices anddemand. Uramad owns the data base for the Morondava Basin that includes theresults of earlier airborne geophysical/radiometric surveys, drill logs for 790drill holes (approximately 83,000 metres of drilling) with indicated uraniumvalues and visible uranium mineralization associated with targets picked from7,000 radioactive anomalies, recorded and plotted. The Company has entered into a shareholders agreement with OMNIS whereby OMNIShas obtained a 'free carry' of 20% in Uramad and the Company has agreed tofinance the exploration phase up to US$1 million. In June 2007, the Company was able to report the receipt of the first assayresults from its Folokara District exploration leases in the Morondava basin.These are preliminary values from the initial batch of 36 samples which weresubmitted, in mid-May 2007, to Activation Laboratories in Canada for analysis.Final values are awaited. The samples were prepared from the diamond drillcores obtained from two, of a total of six, initial vertical scout holes drilledjust before the onset of the Madagascan rainy season, during which these leasesare inaccessible. Samples were selected using radiometric scanning of corematerial. The holes were drilled as an exploratory measure to verify thepresence of uranium mineralisation indicated in the historical explorationdatabase which was acquired by the Company in late 2006 and as an indication ofthe type of ground conditions that could be expected for the 2007 drillingprogramme. Hole FOL06-1 intersected 4.26m @ 0.019% U3O8 below 13.70m, and 3.42m@ 0.036% U3O8 below 17.43m. Core recovery was over 88%. Hole FOL06-2, located100m north of FOL06-1, intersected 7.60m @ 0.039% U3O8 below 23.70m, including1.10m @ 0.251% U3O8 below 27.70m. The latter zone contained visible secondaryuranium minerals in an oxidised sandstone, and core recovery was over 99%. The Company's 2007 exploration program entails an airborne survey of 19,000 linekm for the detection of uranium, thorium and potassium radioactive anomalies onthe Company's exploration permits located in the Makay District and a 3,000 mdrilling program on the Company's exploration permits located in the FolakaraDistrict. Both the Makay District and the Folakara Distict are located in theMorondava Basin of Madagascar. Both these programs are underway at present andresults will be released as they become available. Uramad's accounting reference date is, as required by Malagasy law, 31 December.In order to bring the entire Group's reporting timetable into congruency, theDirectors have resolved to change the Company's accounting reference date to 31December with the result that the Company will be presenting its next interimfinancial statements for the period ended 30 June 2007 and its next annualfinancial statements for the period ended 31 December 2007. RA Cleary23 July 2007 REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 JANUARY 2007 The directors present their report with the audited Group financial statementsfor the year ended 31 January 2007. Principal activities and review of business The principal activity of the Group is investment directly and indirectly in,and operation of, mining exploration and development projects. During the year the Company successfully acquired an 80% interest in Uramad SA,which company holds uranium exploration permits covering approximately 9,994km2. The permits, which have been granted for 10 years, expiring 2015 and 2016,are located in the Morondava Basin of Madagascar, which is infilled and layeredwith sediments, most notably the Karoo formation that hosts uraniummineralisation. Further details are set out in the Chairman's Statement. Future developments The directors anticipate the Company's major future developments will revolvearound further investment in and development of the Morondava uranium project. Principal risks and Uncertainties facing the Group The principal risks faced by the Company are as follows: • The Permits are located in remote parts of Madagascar where power andcommunications infrastructure is rudimentary. • The operations of the Group are in foreign jurisdictions where theremay be a number of associated risks over which it will have no control. Thesemay include economic, social or political instability or change, terrorism,hyperinflation, currency non-convertibility or instability, changes of lawsaffecting foreign ownership, government participation, taxation, workingconditions, rates of exchange, exchange control, and exploration licensing. • Madagascar may have less developed legal systems than more establishedeconomies. • Some or all of the exploration licences issued in respect of theprojects may be subject to conditions which, if not satisfied, may lead to therevocation of such licences. • The exploration for and development of mineral deposits involvessignificant risks, which even a combination of careful evaluation, experienceand knowledge may not eliminate. Few properties, which are explored, areultimately developed into producing mines. There can be no guarantee that theestimates of quantities and grades of minerals disclosed will be available toextract. With all mining operations there is uncertainty and, therefore, riskassociated with operating parameters and costs resulting from the scaling up ofextraction methods tested in pilot conditions. Mineral exploration isspeculative in nature and there can be no assurance that any mineralisation willbe discovered or if discovered that it will prove to be economic. Results and dividends The loss for the year on ordinary activities before tax amounted to £934,161(2006 revised loss: £1,088,786). The directors do not recommend the payment ofa dividend. Share capital Details of the share capital are given in note 20 to the financial statements. Events since the balance sheet date In February 2007, the Company granted options over 1.5 million shares to adirector of the Company. 500,000 of the options are exercisable at 30p each;500,000 at 60p each and 500,000 at 90p each. The options expire on 28 February2010. In June 2007, the Company granted options over 50,000 shares to aconsultant of the Company. The options have an exercise price of 90p each andexpire on 31 December 2010. In March 2007, the Company raised £37,500 and allotted 125,000 new ordinaryshares following the exercise of options with an exercise price of 30p each. Risk management See note 30 to the financial statements Directors and their interests The directors who served during the year and their interests in the Company'sOrdinary Shares were as follows: 5p Ordinary shares Appointed Resigned At 31 January 2007 At date of appointment/ 1 February 2006 R Cleary - -G Bujtor - -C Kyriakou* 3,800,000 2,900,000M Roberts 10 October 2006 100,000 100,000J Schoonbrood 23 August 2006 - -M Smith 30 October 2006 - -K Bates 22 December 2006 - -W McKnight 22 December 2006 - - * C Kyriakou is a director of Investika Ltd (a substantial shareholder). CKyriakou's family trust holds shares and executive share options in InvestikaLtd. The shares owned by Investika Ltd in the Company's share capital have beenincluded in C Kyriakou's interests. During the year the following options were granted to the directors: Date Granted Number Exercise Price Expiry Date M Smith 1 November 2006 300,000 50p 31 August 2011*R Cleary 1 November 2006 200,000 30p 31 August 2011*W McKnight 14 December 2006 200,000 30p 30 October 2011*K Bates 14 December 2006 300,000 30p 30 October 2011* Options held by directors at 31 January 2007 are as follows: Number Exercise Price Expiry Date R Cleary 300,000 30p 2 August 2010*R Cleary 200,000 50p 31 August 2011*G Bujtor 300,000 30p 2 August 2010*C Kyriakou 300,000 30p 2 August 2010*K Bates 300,000 30p 31 August 2011*W McKnight 200,000 30p 31 August 2011*M Smith 300,000 30p 31 August 2011* * Or 90 days after the director ceases to be engaged by the Company if earlier. Warrants held by directors at 31 January 2007 are as follows: Number Exercise Price Expiry DateC Kyriakou* (Investika Ltd) 600,000 30p 2 February 2007 Substantial shareholdings On 31 January 2007 the following shareholders held 3% or more of the issuedshare capital of the Company: Number of Percentage issued Ordinary Shares Ordinary Shares Cline Mining Corporation 12,272,667 40.00%Investika Limited 3,600,000 11.73%Fitel Nominees Limited 3,585,500 11.68%Pershing Keen Nominees Limited 3,569,348 11.63%HSBC Global Custody Nominee (UK) Limited 1,020,000 3.32%Securities Services Nominees 1,600,000 5.21%W B Nominees Limited 1,066,800 3.28%BBHISL Nominees Limited 1,000,000 3.25%Credit Suisse First Client Nominees Limited 1,000,000 3.25% Corporate Governance As UMC Energy Plc is not a fully listed Company, it is not required to complywith the Code of Best Practice published by the Committee on the FinancialAspects of Corporate Governance ("the Combined Code"). However, the directorsdo place a high degree of importance on ensuring that high standards ofcorporate governance are maintained. As a result, most of the relevantprinciples set out in the Combined Code have been adopted during the period andthese are summarised below. Directors The Company supports the concept of an effective Board leading and controllingthe Company. The Board is responsible for approving the Company's policies andstrategies. It meets frequently and receives and reviews on a timely basisfinancial and operating information appropriate to being able to discharge itsduties. Directors are free to seek any further information they considernecessary. All directors submit themselves for re-election every three years byrotation in accordance with the Articles of Association. Given the size of theCompany it is not considered appropriate that there should be a separatenomination committee. It is the view of the Board that the appointment of newdirectors should be a matter for consideration by the Board as a whole. Allappointments to the Board are subject to confirmation by shareholders at thefollowing AGM. Relations with Shareholders The Company values the views of its shareholders and recognises their interestin the Company's strategy and performance. The Board is available to discusscurrent events with its institutional and private shareholders and positivelyencourages attendance at General Meetings. Audit Committee The Company has established an audit committee comprised of the non-executivedirectors. It is responsible for making recommendations to the Board on theappointment of auditors and the audit fee, is responsible for ensuring that thefinancial performance of the Company is properly monitored and reported on andreceives and reviews reports from management and the auditors relating to theinterim report, the annual report and accounts and the internal control systemsof the Company. Remuneration Committee The Company has established a remuneration committee comprised of thenon-executive directors. It is responsible for the review and recommendation ofthe scale and structure of remuneration for key management personnel, includingany bonus arrangements or the award of share options. Details of the directors'emoluments are set out in the financial statements. However, there is noseparate Report of the Remuneration Committee. It is the Company's policy thatthe remuneration of directors should be commensurate with services provided bythem to the Company. Internal Financial Control and Risk Management The directors are responsible for the Company's system of internal financialcontrol and also for identifying the major business risks faced by the Company.The system of internal financial control is designed to provide reasonable, butnot absolute, assurance against material misstatement or loss. In fulfillingthese responsibilities, the Board has reviewed the effectiveness of the systemof internal financial control. The directors have established procedures forplanning, budgeting and for monitoring, on a regular basis, the performance ofthe Company and for determining the appropriate course of action to manage anymajor business risks. The Board has considered the need for an internal auditfunction but has decided the size of the Company does not justify it at present.This decision will be reviewed annually. Supplier Payment Policy It is the Company's policy to agree terms of payment with all suppliers at thetime of the transaction and to pay suppliers as and when they fall due forpayment or alternatively to agree revised terms of payment. No distinction ismade between different classes of suppliers. At the year end trade creditorsamounted to 70 days (2006: 40 days). Political and charitable donations No political or charitable donations were made during the period. Auditors Sawin & Edwards have indicated their willingness to continue in office. Aresolution to reappoint Sawin & Edwards for the ensuing year will be proposed atthe Annual General Meeting in accordance with Section 385 of the Companies Act1985. By order of the board. J ReynoldsCompany Secretary23 July 2007 STATEMENT OF DIRECTORS' RESPONSIBILITIES FOR THE YEAR ENDED 31 JANUARY 2007 The directors are responsible for preparing the Annual Report and the financialstatements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for eachfinancial year. Under that law the directors have elected to prepare thefinancial statements in accordance with International Financial ReportingStandards and applicable law. The financial statements are required by law togive a true and fair view of the state of affairs of the Company and Group andof the profit or loss of the Group for that period. In preparing thosefinancial statements, the directors are required to: a) select suitable accounting policies and then apply them consistently b) make judgements and estimates that are reasonable and prudent c) state whether applicable accounting standards have been followed,subject to any material departures disclosed and explained in the financialstatements d) prepare the financial statements on the going concern basis unless it isinappropriate to presume that the Company and Group will continue in business The directors are responsible for keeping proper accounting records thatdisclose with reasonable accuracy at any time the financial position of theCompany and of the Group and to enable them to ensure that the financialstatements comply with the Companies Act 1985. They are also responsible forsafeguarding the assets of the Company and Group and hence for takingreasonable steps for the prevention and detection of fraud and otherirregularities. The directors are responsible for the maintenance and integrity of the corporateand financial information included on the Company website. Legislation in theUnited Kingdom governing the preparation and dissemination of financialstatements may differ from legislation in other jurisdictions. The directors confirm that so far as they are aware, there is no relevant auditinformation (as defined by section 234ZA of the Companies Act 1985) of which theCompany's auditors are unaware. They have taken all the steps that they ought tohave taken as directors in order to make themselves aware of any relevant auditinformation and to establish that the Company's auditors are aware of thatinformation. INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF UMC ENERGY PLC We have audited the Group and parent Company financial statements of UMC EnergyPlc for the year ended 31 January 2007 which comprise the Consolidated IncomeStatement, the Consolidated and Company Balance Sheets, the Statements ofChanges in Equity, the Consolidated and Company Cash Flow Statements and therelated notes numbered 1 to 33. These financial statements have been preparedunder the accounting policies set out therein. This report is made solely to the Company's members, as a body, in accordancewith Section 235 of the Companies Act 1985. Our audit work has been undertakenso that we might state to the Company's members those matters we are required tostate to them in an auditor's report and for no other purpose. To the fullestextent permitted by law, we do not accept or assume responsibility to anyoneother than the Company and the Company's members as a body, for our audit work,for this report, or for the opinions we have formed. Respective responsibilities of directors and auditors As described in the Statement of Directors' Responsibilities the Company'sdirectors are responsible for the preparation of the financial statements inaccordance with applicable law and International Financial Reporting Standards(IFRSs) as adopted for use in the European Union. Our responsibility is to audit the financial statements in accordance withrelevant legal and regulatory requirements and International Standards onAuditing (UK and Ireland). We report to you our opinion as to whether the financial statements give a trueand fair view and are properly prepared in accordance with the Companies Act1985. We also report to you if, in our opinion, the Company has not kept properaccounting records, if we have not received all of the information andexplanations we require for our audit, or if information specified by lawregarding directors' remuneration and transactions with the Company is notdisclosed. We report to you whether in our opinion the information given in the Directors'Report is consistent with the Financial Statements. We read other information contained in the Annual Report, and consider whetherit is consistent with the audited financial statements. This other informationcomprises only the Chairman's Statement. We consider the implications for ourreport if we become aware of any apparent misstatements or materialinconsistencies with the financial statements. Our responsibilities do notextend to any other information. Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing(UK and Ireland) issued by the Auditing Practices Board. An audit includes anexamination on a test basis, of evidence relevant to the amounts and disclosuresin the financial statements. It also includes an assessment of the significantestimates and judgements made by the directors in the preparation of thefinancial statements, and of whether the accounting policies are appropriate tothe Company's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information andexplanations which we considered necessary in order to provide us withsufficient evidence to give reasonable assurance that the financial statementsare free from material misstatement, whether caused by fraud or otherirregularity or error. In forming our opinion we also evaluated the overalladequacy of the presentation of information in the financial statements. Opinion In our opinion the financial statements: • give a true and fair view, in accordance with IFRSs as adopted for usein the European Union, of the state of the Group and the Company's affairs as at31 January 2007 and of its loss for the year then ended; and • have been properly prepared in accordance with the Companies Act 1985;and • the information given in the Directors' Report is consistent with thefinancial statements. Emphasis of matter - Going concern In forming our opinion on the financial statements, which is not qualified, wehave considered the adequacy of the disclosure made in note 2 to the financialstatements concerning the Company's ability to continue as a going concern. TheGroup incurred a net loss of £934,161 during the year ended 31 January 2007. Asexplained in note 2 the Company will require to raise additional capital in thenext 12 months in order to meet its projected exploration expenditure. Thisindicates the existence of a material uncertainty which may cast significantdoubt about the company's ability to continue as a going concern. The financialstatements do not include the adjustments that would result if the company wasunable to continue as a going concern. Sawin & Edwards 15 Southampton PlaceChartered Accountants London& Registered Auditors WC1A 2AJ 23 July 2007 CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 JANUARY 2007 Year Period Ended 13 January 2005 to 31 January 2007 31 January 2006 Notes £ £ Administrative expenses (913,425) (954,649) Exceptional costs 4 (75,019) (191,880) Other operating income 9,392 - Loss from operations 5 (979,052) (1,146,529) Investment income 6 95,584 57,743 Finance costs 7 (50,693) - Loss before taxation (934,161) (1,088,786) Income tax expense 8 - - Loss for the year/period (934,161) (1,088,786) Attributable to:Equity holders of the parent (936,672) (1,088,786)Minority interest 2,511 - 934,161 (1,088,786) Loss per share (pence) Basic 10 (4.73) (8.24) Diluted 10 (1.84) (5.16) The Company has taken advantage of section 230 of the Companies Act 1985 not topublish its own income statement account CONSOLIDATED BALANCE SHEET AS AT 31 JANUARY 2007 Notes 31 January 2007 31 January 2006 £ £ASSETSNon-current assetsIntangible assets 11 3,775,407 -Property, plant and equipment 12 21,282 -Trade and other receivables 15 57,278 -Total non-current assets 3,853,967 - Current assetsTrade and other receivables 16 12,275 626,778Cash and cash equivalents 17 1,865,222 2,391,408Total current assets 1,877,497 3,018,186 ________ ________TOTAL ASSETS 5,731,464 3,018,186 EQUITY AND LIABILITIESCurrent liabilitiesTrade and other payables 18 142,935 172,538Total current liabilities 142,935 172,538 Non-current liabilitiesLong term provision 19 50,693 -Total non-current liabilities 50,693 - ______ ______Total liabilities 193,628 172,538 EquityShare capital 20 1,534,083 920,450Share premium accounts 21 4,447,203 2,422,213Share based payments reserve 22 916,590 591,771Translation reserve 23 (48) -Retained loss (2,025,458) (1,088,786)Equity attributable to equity holders of the parent 4,872,370 2,845,648 Minority Interest 32 665,466 -Total equity 5,537,836 2,845,648 ________ ________TOTAL EQUITY AND LIABILITIES 5,731,464 3,018,186 The financial statements were approved by the Board of directors on 23 July 2007and signed on their behalf by: RA ClearyChairman COMPANY BALANCE SHEET AS AT 31 JANUARY 2007 Notes 31 January 2007 31 January 2006 £ £ASSETS Non-current assetsInvestments in group undertakings 13 2,651,818 -Loan and receivables 14 506,934 -Total non-current assets 3,158,752 - Current assetsTrade and other receivables 16 2,586 626,778Cash and cash equivalents 17 1,842,377 2,391,408Total current assets 1,844,963 3,018,186 TOTAL ASSETS 5,003,715 3,018,186 EQUITY AND LIABILITIES Current liabilitiesTrade and other payables 18 90,696 172,538Total current liabilities 90,696 172,538 Non-current liabilitiesLong term provision 19 50,693 -Total non-current liabilities 50,693 - Total liabilities 141,389 172,538 EquityShare capital 20 1,534,083 920,450Share premium account 21 4,447,203 2,422,213Share based payments reserve 22 916,590 591,771Retained loss (2,035,550) (1,088,786)Equity attributable to equity holders of the parent 4,862,326 2,845,648 Total equity 4,862,326 2,845,648 ________ ________TOTAL EQUITY AND LIABILITIES 5,003,715 3,018,186 The financial statements were approved by the Board of directors on 23 July 2007and signed on their behalf by: RA ClearyChairman STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 JANUARY 2007 Share based Share Share Payment Retained Translation Total Capital Premium Reserve Loss Reserve £ £ £ £ £GroupBalance at 1 February 2006 920,450 2,422,213 - (497,015) - 2,845,648IFRS Transition adjustment - 591,771 (591,771) -to comply with IFRS 2 - -Restated balances 920,450 2,422,213 591,771 (1,088,786) - 2,845,648Share issue 613,633 2,024,990 - - - 2,638,623Loss for the period (936,672) (936,672)Share based payment - - 324,819 - - 324,819Translation loss on - (48)consolidation - - - (48)Balance at 31 January 2007 1,534,083 4,447,203 916,590 (2,025,458) (48) 4,872,370 Share based Share Share Payment Retained Total Capital Premium Reserve Loss £ £ £ £ £CompanyBalance at 1 February 2006 920,450 2,422,213 - (497,015) 2,845,648IFRS Transition adjustment 591,771 (591,771)to comply with IFRS - - -Restated balances 920,450 2,422,213 591,771 (1,088,786) 2,845,648Share issue 613,633 2,024,990 - - 2,638,623Loss for the period (946,764) (946,764)Share based payment 324,819 324,819 - - -Balance at 31 January 2007 1,534,083 4,447,203 916,590 (2,035,550) 4,862,326 Share Share Retained Total Capital Premium Loss £ £ £ £CompanyBalance at 13 January 2005 - - - -Share issue 920,450 2,422,213 - 3,342,663Loss for the period - (497,015) (497,015) -Balance at 31 January 2006 920,450 2,422,213 (497,015) 2,845,648 CONSOLIDATED CASHFLOW STATEMENT FOR THE YEAR ENDED 31 JANUARY 2007 Notes Period Year ended 13 January 2005 to 31 January 2007 31 January 2006 £ £ Net cash outflow from operating activities 24 (125,658) (922,717) Investing activitiesInvestment income 95,584 57,743Intangible assets (474,356) (86,281)Property, plant and equipment acquired (21,756) -Net cash outflow from investing activities (400,528) (28,538) Financing activitiesIssue of equity share capital 25 - 3,342,663Net cash inflow from operating activities - 3,342,663 Net cash (decrease) / increase in cash and cash (526,186) 2,391,408equivalents Cash and cash equivalents at beginning of year/ 2,391,408 -periodCash and cash equivalents at end of year/ period 17 1,865,222 2,391,408 COMPANY CASHFLOW STATEMENT FOR THE YEAR ENDED 31 JANUARY 2007 Notes Period Year ended 13 January 2005 to 31 January 2007 31 January 2006 £ £ Net cash outflow from operating activities 24 (111,162) (922,717) Investing activitiesInvestment income 82,260 57,743Subsidiary undertaking acquired 25 - -Loan investments (506,934) -Intangible assets acquired - (86,281)Net cash outflow from investing activities (424,674) (28,538) Financing activitiesIssue of equity share capital 25 - 3,342,663Stamp duty 25 (13,195) -Net cash inflow from operating activities (13,195) 3,342,663 Net cash (decrease) / increase in cash and cash (549,031) 2,391,408equivalentsCash and cash equivalents at beginning of year/ 2,391,408 -periodCash and cash equivalents at end of year/ period 17 1,842,377 2,391,408 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JANUARY 2007 1. General information UMC Energy Plc is a company incorporated in England and Wales under theCompanies Act 1985. The Company's registered office is 11 Albemarle Street,London, W1S 4HH. The principal activity of the Group is the investment in and exploration anddevelopment of uranium mining projects, specifically in a uranium explorationproject in Madagascar. The Group's principal activity is carried out in US dollars. The financialstatements are presented in pounds sterling as this is the currency of thecountry (the UK) from which the Group operates. The Board of directors has authorised the issue of these financial statements onthe date of the statement as set out on page 13. 2. Accounting policies Basis of accounting The financial statements have been prepared in accordance with InternationalFinancial Reporting Standards (IFRSs) for the first time. The disclosuresrequired by IFRS 1 concerning the transition from UK GAAP to IFRSs are given innote 33. The financial statements have been prepared on the historical cost basisexcept that certain financial instruments are accounted for at fair values. Theprincipal accounting policies adopted are set out below. Going Concern The financial statements have been prepared on a going concern basis,which contemplates continuity of normal business activities and the realisationof assets and settlement of liabilities in the ordinary course of business. The directors believe that it is appropriate to prepare the financialreport on a going concern basis as they are confident that the Company will beable to raise additional funds through capital raisings when required. Thedirectors are of the opinion that the proposed equity raising measures and theexisting cash resources will provide sufficient funds to enable the Company tocontinue its operations for at least the next 12 months. Basis of consolidation The consolidated financial statements incorporate the financialstatements of the Company and all Group undertakings. Control is achieved whenthe Company has the power to govern the financial and operating policies on aninvestee entity so as to obtain benefits from its activities. On acquisition, the assets and liabilities and contingent liabilities ofa subsidiary are measured at their fair values at the date of acquisition. Anyexcess of the cost of acquisition over the fair values of the identifiable netassets acquired is recognised as goodwill. Any deficiency of the cost ofacquisition below the fair value of the identifiable net assets acquired (iediscount on acquisition) is credited to profit and loss in the period ofacquisition. The interest of minority shareholders is stated at the minority'sproportion of the fair values of the assets and liabilities recognised.Subsequently, any losses applicable to the minority interest in excess theminority interest are allocated against the interests of the parent. The results of subsidiaries acquired or disposed of during the year areincluded in the consolidated income statement from the effective date ofacquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements ofsubsidiaries to bring the accounting policies used into line with those used bythe Group. All intra-group transactions, balances, income and expenses areeliminated on consolidation. Revenue recognition Interest income is accrued on a time basis, by reference to the principaloutstanding and at the effective interest rate applicable, which is the ratethat exactly discounts estimated future cash receipts through the expected lifeof the financial asset to that asset's net carrying amount. Foreign currencies Transactions in currencies other than pounds sterling are recorded at the ratesof exchange prevailing on the dates of the individual transactions. Forpractical reasons, a rate that approximates the actual rate at the date of thetransaction is often used. At each balance sheet date, monetary assets andliabilities that are denominated in foreign currencies are retranslated at therates prevailing on the balance sheet date. Non-monetary assets and liabilitiesthat are denominated in foreign currencies are retranslated at the ratesprevailing at the balance sheet date. Gains and losses arising on retranslationare included in net profit or loss for the period. On consolidation, the assetsand liabilities of the Group's overseas operations are translated at exchangerates prevailing on the balance sheet date. Income and expense items aretranslated at the average exchange rates for the period unless exchange ratesfluctuate significantly. Exchange differences arising, if any, are classifiedas equity and transferred to the Group's translation reserve. Such translationdifferences are recognised as income or as expenses in the period in which theoperation is disposed of. Long term provision A provision is recognised for future withholding tax payable on any remittancesmade from Madagascar on the loan investments made to the subsidiary Uramad SA. Deferred taxation Deferred tax is the tax expected to be payable or recoverable on differencesbetween the carrying amounts of assets and liabilities in the financialstatements and the corresponding tax bases used in the computation of taxableprofit, and is accounted for using the balance sheet liability method. Deferredtax liabilities are generally recognised for all taxable temporary differencesand deferred tax assets are recognised to the extent that it is probable thattaxable profits will be available against which deductible temporary differencescan be utilised. Such assets and liabilities are not recognised if the temporarydifference arises from the original recognition of other assets and liabilitiesin a transaction that affects neither the tax profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each balance sheetdate and reduced to the extent that it is no longer probable that sufficienttaxable profits will be available to allow all or part of the asset to berecovered. Deferred tax is calculated at the tax rates that are expected to apply in theperiod when the liability is settled or the asset is realised. Deferred tax ischarged or credited in the income statement, except when it relates to itemscharged or credited directly to equity, in which case the deferred tax is alsodealt with in equity. No recognition has been made for the deferred tax asset arising in respect ofcurrent losses as the directors are of the opinion that this may not berealisable in the foreseeable future. Financial instruments Financial assets and financial liabilities are recognised on the balance sheetwhen the Company becomes a party to the contractual provisions of theinstrument. Non-current intangible assets Non-current intangible assets are shown at cost less any provisions made inrespect of impairment. Asset impairments Non-current intangible assets are reviewed for impairments if events or changesin circumstances indicate that the carrying amount may not be recoverable. Whena review is conducted, the recoverable amount is assessed by reference to thenet present value of expected future cash flows of the relevant incomegenerating unit or disposal value, if higher. If an asset is impaired, a provision is made to reduce the carrying amount toits estimated recoverable amount. Non-current asset investments Loan investments are shown at cost less provision for any permanent diminutionin value. Loan investments are recognised as an asset when sums are advanced. Property, plant and equipment Office equipment and furniture are shown at cost less accumulated depreciationand any recognised impairment loss. Depreciation is charged so as to write offthe cost of assets over their estimated useful lives, using the straight linemethod on the following basis: Equipment 25%Furniture 25% Cash and cash equivalents Cash and cash equivalents comprise cash held at bank and on short term deposits. Financial liabilities and equity Financial liabilities and equity instruments are classified according to thesubstance of the contractual arrangement entered into. An equity instrument isany contract that evidences a residual interest in the assets of the Companyafter deducting all of its liabilities. Trade payables Trade payables are not interest bearing and are stated at their nominal value. Trade receivables Trade receivables do not carry any interest and are stated at their nominalvalue as reduced by appropriate allowances for estimated irrecoverable amounts. Equity instruments Equity instruments issued by the Company are recorded at the proceeds receivedexcept where those proceeds appear to be less than the fair value of the equityinstruments issued, in which case the equity instruments are recorded at fairvalue. The difference between the proceeds received and the fair value isreflected in the share based payments reserve. The costs of issuing new equity are charged against the share premium account. Share based payments The Group has applied the requirements of IFRS 2 Share-based Payments The Group issues equity-settled based payments to directors and certainprofessional advisors of the Group. Equity-settled share-based payments aremeasured at fair value at the date of grant. The fair value determined at thegrant date of the equity-settled share-based payments is expensed on astraight-line basis over the vesting period, based on the Group's estimate ofshares that will eventually vest. Fair value is measured by use of a Black Scholes model. The expected life usedin the model has been adjusted, based on management's best estimate, for theeffects of non-transferability, exercise restrictions, and behaviouralconsiderations. The Company has issued equity in consideration for the acquisition of thesubsidiary undertaking, Uramad UK Ltd. The Company recognises the cost of these transactions at the fair value of theinstruments issued less any cash consideration subscribed. 3. Segmental analysis The Group's operational activities are wholly focused in Madagascar. TheCompany's registered office is in London, UK. Turnover The Group has not yet commenced commercial mining production and has no turnoverin the period. Year ended 31 January 2007 UK Madagascar Total £ £ £(Loss)/profit for the year (946,716) 12,555 (934,161) Net assets segmental analysis Total non-current assets - 3,853,967 3,853,967 Total current assets 1,844,963 32,534 1,877,497 Total current liabilities 90,696 52,239 142,935 Total non-current liabilities 50,693 - 50,693 1,703,574 3,834,262 5,537,836 Period 13 January 2005 to 31 January 2006 UK Madagascar Total £ £ £Revised loss for the period (1,088,786) - (1,088,786) Net assets segmental analysis Total non-current assets - - - Total current assets 3,018,186 - 3,018,186 Total current liabilities 172,538 - 172,538 Total non-current liabilities - - - 2,845,648 - 2,845,648 4. Exceptional items The Company was originally established to earn a 75% interest in potentiallyeconomic uranium bearing blocks in the Labrador Trough in Canada. Followingreceipt of the results of airborne magnetic, radiometric and ground gravityprograms and following analysis of those results by the Company's independentconsulting geologist, the Directors resolved on 31 March 2006 not to pursue thisproject. The cost of this project was £100,780 in 2006. The Company also examined opportunities to acquire uranium and oil/gas projectsin Kazakhstan. Following extensive negotiations, the Company was unable toconclude any acquisitions. The total cost incurred in relation to theseactivities was £75,019 (2006: £91,100). 5. Net loss from operations Net loss before taxation is stated after charging: Year ended Period 13 January 2005 31 January 2007 to 31 January 2006 £ £ Auditors remuneration: as auditors 26,000 21,000 as reporting accountants 27,896 10,655 tax compliance 1,500 -Impairment write down - 86,281Depreciation 474 - 6. Investment income Year ended Period 13 January 2005 31 January 2007 to 31 January 2006 Group Company Group Company 2007 2007 2006 2006 £ £ £ £ Interest on bank deposits 95,584 82,260 57,743 57,743 7. Finance costs Company and Group Year ended Period 13 January 2005 31 January 2007 to 31 January 2006 £ £ Withholding tax 50,693 - Under Madagascan law there is a 10% withholding tax on remittances abroad and aprovision has been provided for this tax on the amount owing to the Company fromUramad SA. 8. Income tax expense Year ended Period 13 January 2005 31 January 2007 to 31 January 2006 £ £ Taxation charge - - Due to the taxable losses arising there is no charge to UK corporation tax Current tax reconciliationLoss for the year/period before taxation (934,161) (1,088,786) Loss for the year/period multiplied by standardrate of UK corporation tax 19% (177,491) (206,869) Effects of:Expenses not deductible for tax purposes 62,959 114,398Overseas profits (2,384) -Increase in potential tax credits 116,916 92,471Tax charge - - No recognition has been made of the deferred tax asset in respect of the losses shown above as thedirectors are of the opinion that this may not be realisable in the foreseeable future. 9. Particulars of employees and directors The Group has no employees during the year or previous period. The Group employed 6 (2006: 5) directors during the year with aggregateemoluments in respect of qualifying services as follows: Year ended Period 13 January 2005 31 January 2007 to 31 January 2006 £ £ Directors' fees 26,112 9,250Amounts paid to third parties for the provision of 123,233 82,958services 149,345 92,208 10. Loss per share Loss per share has been calculated by dividing the loss for the year aftertaxation attributable to the equity holders of the parent company of £936,672(2006: £1,088,786) by the weighted average number of shares in issue at the yearend of 19,787,575 (2006: 13,201,074). Diluted loss per share has been calculated using the weighted average number ofshares in issue at the year end, diluted for the effect of share options andwarrants in existence at the year end of 31,185,150 (2006: 7,874,500). The loss and diluted loss per share for 2006 have been restated following IFRStransition adjustment in relation to the recognition of share based payments of£591,771 as follows: 2006 restated 2006 Pence PenceLoss per share 8.24 3.76 Diluted loss per share 5.16 2.36 11. Intangible assets Company 2007 2006Exploration expenditure cost £ £ Balance brought forward - -Additions - contract option payment - 86,281Write down - (86,281)Balance carried forward - - Group 2007 2006Development expenditure £ £ Balance brought forward - -Additions 18,556 -Balance carried forward 18,556 - Group 2007 2006Exploration licences at fair value £ £ Balance brought forward - -Additions 3,756,851 -Balance carried forward 3,756,851 - ________ _______Total 3,775,407 - The development expenditure relates to development of the uranium mining projectin the Morondava basin of Madagascar The licences relate to uranium exploration licences over approximately 10,000square kilometres in the Morondava basin of Madagascar. 12. Property, plant and equipment Group Office equipment & furniture £Cost Balance at 1 February 2006 -Additions 22,763Balance at 31 January 2007 22,763 Depreciation Balance at 1 February 2006 -Charge for the year 1,481Balance at 31 January 2007 1,481 Net book value 31 January 2007 21,282 31 January 2006 - 13. Investment in group undertakings Company Subsidiary undertakings £Balance at 1 February 2006 -Additions 2,651,818Balance at 31 January 2007 2,651,818 Subsidiary Country of Holding Proportion of Nature ofUndertaking incorporation voting shares held Business Uramad UK Ltd UK Ordinary shares 100% Holding company Uramad SA Madagascar Ordinary shares 80% Uranium exploration and mining During the year the Company acquired 100% of the issued share capital of UramadUK Limited. Uramad UK Limited holds 80% of the issued share capital of UramadSA, a Malagasy company which owns uranium exploration licences in Madagascar. 14. Loan investment Company £Balance at 1 February 2006 -Amounts advanced 506,934Balance at 31 January 2007 506,934 The loan investment relates to amounts advanced to Uramad SA, an 80% subsidiaryof the Company. The loan is interest free, unsecured and has no fixed terms ofrepayment. The directors have considered whether an adjustment is required toreflect the fair value of this receivable by discounting likely future cashflows. As the repayments are linked to successful commercial exploitation ofthe licences held (see note 11) the directors are of the opinion that it wouldbe impractical to predict when these events might occur. The receivable istherefore shown at historical cost. 15. Trade and other receivables - non-current Group 2007 2006 £ £Value added tax - Madagascar 57,278 - The value added tax will be recoverable upon commencement of production of themining project in Madagascar. 16. Trade and other receivables - current Group Company Group Company 2007 2007 2006 2006 £ £ £ £ Value added tax 2,586 2,586 - -Other receivables 9,689 - 5,000 5,000Called up share capital not paid - - 609,000 609,000Prepayments and accrued income - - 12,778 12,778 12,275 2,586 626,778 626,778 17. Cash and cash equivalents Group Company Group Company 2007 2007 2006 2006 £ £ £ £ Cash at bank and in hand 1,865,222 1,842,377 2,391,408 2,391,408 The carrying amount of these approximates to their fair values. 18. Trade and other payables Group Company Group Company 2007 2007 2006 2006 £ £ £ £ Trade payables 42,161 12,853 127,188 127,188Taxation 25 - - -Value added tax 22,906 - - -Accruals 77,843 77,843 45,350 45,350 142,935 90,696 172,538 172,538 19. Provisions Group Company Group Company 2007 2007 2006 2006 £ £ £ £ Withholding tax 50,693 50,693 - - The provision relates to a 10% withholding tax which is chargeable onremittances made abroad from Madagascar. The provision relates to thewithholding tax that will be payable on repayment by Uramad SA of the loanamount advanced to it by the Company (see note 14). 20. Called up share capitalAuthorised Number £ Number £ 2007 2007 2006 2006 Ordinary shares of 5p each 200,000,000 10,000,000 200,000,000 10,000,000 Allotted and fully paid 30,681,668 1,534,083 18,409,001 920,450 In December 2006 the Company issued 12,272,667 ordinary 5p shares at a price of21.5p per share, the consideration being the acquisition of 100% of the issuedshare capital of Uramad UK Limited, and hence of 80% of Uramad SA. The Company has one class of ordinary shares which carry no right to fixedincome. Share options and warrants over ordinary shares in existence at 31 January 2007are as follows: Number Exercise price Expiry date Warrants 8,749,167 30p per share 2 February 2007 Options 125,000 30p per share 11 March 2007 1,100,000 30p per share 2 August 2010* 100,000 30p per share 2 August 2010 970,000 30p per share 31 August 2011* 200,000 50p per share 31 August 2011* 153,408 30p per share 22 December 2011 In February 2007 the Company issued further options as follows: 500,000 30p per share 28 February 2010* 500,000 60p per share 28 February 2010* 500,000 90p per share 28 February 2010* In June 2007 the Company issued further options as follows: 50,000 90p per share 31 December 2010* * or 90 days after the option holder ceases to be engaged by the Company ifearlier. 21. Share premium accountCompany and Group 2007 2006 £ £Balance brought forward 2,422,213 -Premium arising on issue of equity shares 2,024,990 2,422,213Balance carried forwards 4,447,203 2,422,213 22. Share based payment reserveCompany and Group £Balance at 1 February 2006 -IFRS transition adjustment - IFRS 2Options previously issued to directors/professional advisors and charged to the income 591,771statementRevised balance at 1 February 2006 591,771Options issued to directors/professional advisors and charged to the income statement 324,819Balance at 31 January 2007 916,590 23. Translation reserveGroup £Balance at 1 February 2006 -Translation difference arising on consolidation (48)Balance at 31 January 2007 (48) 24. Cash flows from operating activities Group 2007 2006 £ £Net loss before taxation (979,052) (1,146,529)Adjustments for:Decrease/(increase) in trade and other receivables 557,752 (626,778)(Decrease)/increase in trade and other payables (29,603) 172,538Write down of non-current investment - 86,281Share based payments 324,819 591,771Translation movement (48) -Depreciation 474 -Net cash outflow from operating activities (125,658) (922,717) Company 2007 2006 £ £Net loss before taxation (978,331) (1,146,529)Adjustments for:Decrease/(increase) in trade and other receivables 624,192 (626,778)(Decrease)/increase in trade and other payables (81,842) 172,538Write down of non-current investment - 86,281Share based payments 324,819 591,771Net cash outflow from operating activities (111,162) (922,717) 25. Non cash transaction Of the purchase consideration of the subsidiary undertaking £2,651,818,£2,638,623 was settled by the issue of ordinary shares in the Company, theremainder being stamp duty of £13,195 was settled in cash. (See note 31 foracquisition of subsidiary undertakings). 26. Controlling party There is no ultimate controlling party of the Company. 27. Related party transactions R Cleary and C Kyriakou are directors of Investika Ltd, an Australian companyand a shareholder in UMC Energy Plc. Investika Ltd paid expenses and provided management services to the Company at acost of £2,512 (2006: £16,531) of which £nil (2006: £6,491) is outstanding atthe year end. Included in the £2,512 (2006: £16,531) is £nil (2006: £5,515) forthe provision of the consultancy services of R Cleary. G Bujtor, R Cleary and C Kyriakou are directors of Toledo Mining CorporationPlc. Toledo Mining Corporation Plc provided support services and staff to theCompany at a cost of £74,730 (2006: £58,397) of which £6,084 (2006: £16,193) isoutstanding at the year end. The Company provided support services and staff toToledo Mining Corporation Plc for £4,696 (2006: £nil) Capma Pty Limited paid expenses and provided management services to the Companyat a cost of £66,468 (2006: £45,396) of which £nil (2006: £31,397) isoutstanding at the year end. Included in the £66,468 (2006: £45,396) is £nil(2006: £14,000) for the provision of consultancy services of C Kyriakou. Resource Capital Partners Inc invoiced the Company £39,000 (2006: £4,000) forthe provision of the consultancy services of C Kyriakou of which £nil (2006:£4,000) is outstanding at the year end. The Company was charged £35,602 (2006: £8,093) by Accomplishments Pty Limitedfor the provision of the services of R Cleary of which £18,000 (2006: £6,413)was for services as director and £17,602 (2006: £1,680) was for consultancyservices. The Company was charged £8,000 (2006: £6,000) by Match Number Limited for theprovision of services of M Roberts as director, of which £nil (2006: £3,000) isoutstanding at the year end. The Company was charged £30,500 (2006:£35,000) by Sarita Investments ServicesCorporation Limited for the provision of consultancy services of J Schoonbrood. The Company was charged £10,031 (2006: £10,350) by Resource & ProjectCommercialisation Pty Limited for the provision of consultancy services of GBujtor of which £nil (2006: £10,350) is outstanding at the year end. G Bujtor, C Kyriakou and M Smith are directors of Belitung Zinc Corporation Plc.Belitung Zinc Corporation Plc provided support services and staff to the Companyat a cost of £2,348 (2006: £nil). The Company provided support staff andservices to Belitung Zinc Corporation Plc for £2,348 (2006: £nil). R Cleary, C Kyriakou and M Smith are directors of Tarquin Resources plc. TarquinResources Plc provided support services and staff to the Company at a cost of£8,277. The Company provided support services and staff to Tarquin Resources Plcfor £2,348 (2006: £nil). M Smith charged the Company £26,112 (2006: £nil) for the provision ofconsultancy services. The Company made advances to and acquired a debt owed by its subsidiary UramadSA such that at the year end there was an amount owing to the Company of£506,934 (See note 14). The Company issued share options to directors. The fair value of these options,£286,993 has been charged to the income statement and is also included reflectedin the share based payments reserve in the balance sheet. 28. Commitments The Company has undertaken to fund at least US$1 million of explorationexpenditure on the permit areas held by Uramad SA. 29. Post balance sheet events In February 2007, the Company granted options over 1.5 million shares to adirector of the Company. 500,000 of the options are exercisable at 30p each;500,000 at 60p each and 500,000 at 90p each. The options expire on 28 February2010. In June 2007, the Company granted options over 50,000 shares to aconsultant of the Company. The options have an exercise price of 90p each andexpire on 31 December 2010. In March 2007, the Company raised £37,500 and allotted 125,000 new ordinaryshares following the exercise of options with an exercise price of 30p each. 30. Financial assets and liabilities The Group's financial instruments comprise cash and cash equivalents,intangible assets, loan investments and financial assets and various items suchas trade receivables, trade payables, accruals and prepayments that arisedirectly from its operations. The main purpose of these financial instruments is to finance the Group'soperations. The Board regularly reviews and agrees policies for managing the level ofrisk arising from the Group's financial instruments. These are summarisedbelow: Foreign currency risk - The Group undertakes transactions principally inSterling and US Dollars. While the Group continually monitors its exposure tomovements in currency rates, it does not utilise hedging instruments to protectagainst currency risks. The main currency exposure risk to the Company is inrelation to the US Dollar loan investments which are repayable in US Dollars. Interest rate risk - The Group utilises cash deposits at variable ratesof interest for a variety of short term periods, depending on cash requirements.The rates are reviewed regularly and the best rate obtained in the context ofthe Group's needs. Liquidity risk - The Group's policy throughout the period has been toensure that it has adequate liquidity by careful management of its workingcapital. Credit risk - The Group's credit risk is primarily attributable to itsloan investments. The amounts presented in the balance sheet are considered bythe Group's management to be recoverable in full. Extent and nature of financial instruments The Group held the following financial assets at the year end: 2007 2006 £ £ Intangible assets 3,775,407 -Tangible assets 21,282 -Trade and other receivables 69,553 626,778Short-term deposits 1,800,000 2,375,000Cash at bank and in hand 65,222 16,408Total 5,731,464 3,018,186 Short-term deposits are held on Call Money Market accounts. The weightedaverage rate of interest earned on these deposits was 4%. No funds are held onfixed rate terms. The Company held the following financial liabilities at the year end: 2007 2006 £ £ Trade and other payables 120,004 172,538Tax liabilities 27,932 -Long term provision 50,693 - 198,629 172.538 31. Acquisition of subsidiary undertakings Under a share purchase agreement the Company acquired from Cline MiningCorporation the entire issued share capital of Uramad UK Limited which owns 80%of the issued share capital of Uramad SA, a company incorporated in Madagascarand which owns uranium exploration permits in Madagascar. The consideration for the acquisition was settled by the issue of12,272,667 ordinary 5p shares in the Company to Cline Mining Corporation at aprice of 21.5p per share for a total consideration of £2,638,623. Assets and liabilities acquired at fair value £ Property, plant and equipment 22,162Intangible assets 3,756,851Trade and other receivables 49,692Cash and cash equivalents 709 3,829,414 Liabilities Trade and other payables 153,146Loan advances payable 361,495 514,641 ________Net assets 3,314,773 ________80% acquired 2,651,818 Consideration Issue of ordinary shares 2,638,623Stamp duty 13,195 2,651,818 32. Minority Interest The minority interest is in relation to a 20% share in Uramad SA. £Share of tangible assets 3,038Share of intangible assets 662,428 665,466 33. First time adoption of IFRS The financial statements have been prepared in accordance with InternationalFinancial Reporting Standards (IFRSs) for the first time. A reconciliation between the 2006 Income Statement and Balance Sheet as shownunder UK GAAP and IFRSs is shown below. INCOME STATEMENT Period 13 January 2005 Reconciling Period 13 January 2005 to 31 January 2006 Item to 31 January 2006 IFRS UK GAAP £ £ £ Administration expenses (954,649) (591,771) (362,878) Exceptional costs (191,880) (191,880) Loss from operations (1,146,529) (554,758) Bank interest 57,743 57,743 Loss before taxation (1,088,786) (497,015) Income tax expense - - Loss for the period (1,088,786) (497,015) BALANCE SHEET 31 January 2007 Reconciling 31 January 2006 IFRS Item UK GAAP £ £ £ASSETS Current assetsTrade and other receivables 626,778 626,778Cash and cash equivalents 2,391,408 2,391,408Total current assets 3,018,186 3,018,186 ________ ________TOTAL ASSETS 3,018,186 3,018,186 EQUITY AND LIABILITIES Current liabilitiesTrade and other payables 172,538 172,538Total current liabilities 172,538 172,538 ______ ______Total liabilities 172,538 172,538 EquityShare capital 920,450 920,450Share premium account 2,422,213 2,422,213Share based payments reserve 591,771 591,771 -Retained loss (1,088,786) (591,771) (497,015)Total equity 2,845,648 2,845,648 _________ ________Total equity and liabilities 3,018,186 3,018,186 Reconciling item The reconciling item of £591,771 relates to the recognition of share basedpayments as required under IFRS 2. 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