13th Sep 2005 11:50
Albidon Limited13 September 2005 ALBIDON LIMITED Interim Report for 6 months ended 30 June 2005 Contents Page Directors' report 1 Condensed Consolidated income statement 3 Condensed Consolidated balance sheet 4 Condensed Consolidated statement of cash flows 5 Condensed Statement of changes in shareholders' equity 6 Notes to the financial statements 7 1 General information 2 Basis of preparation 3 Segment information 4 Revenues and expenses 5 Earnings per share 6 Share capital 7 Commitments 8 Interest in joint ventures 9 Related Party Transactions 10 Events after the balance sheet date 11 Contingent assets and liabilities Directors' declaration 17 Independent review statement 18 Directors' report Your directors present their report on the consolidated entity consisting of Albidon Limited and the entities it controlled at the end of, or during, the six months ended 30 June 2005. Directors The following persons were directors of Albidon Limited during the whole of the reporting period and up to the date of this report: Dick Potts (Chairman) Donal Windrim (Managing Director) Craig Burton (Non - Executive Director) Alasdair Cooke (Executive Director) Michael Brook (Non - Executive Director) Christopher De Guingand (Non - Executive Director) Review of operations The principal activity of the consolidated entity during the period wasexploration and evaluation of mineral interests. The operating loss after incometax for the six months ended 30 June 2005 was $AUD (1,728,884) (for the eightmonths ended 30 June 2004 $AUD (971,620) - restated for adoption of IFRS "ShareBased Payment") Highlights: O Feasibility Study commenced on the Munali Nickel Project in Zambia. O The Feasibility Study is based on an Inferred Resource of 4.1Mt @ 1.35% Ni, 0.17% Cu, 0.07% Co and 0.95g/ t PGM. This resource has twice the nickel grade and more than 25% more contained nickel metal than the previous estimate. O Infill drilling is confirming the nickel grade and thickness distribution within the resource. O Nickel sulphide flotation testwork is under way as the first stage of the Munali metallurgical test program. O A step-out drill program is being fast-tracked with the aim of extending the deposit, which remains open along strike and down dip. O An additional drill rig has been secured for the term of the Munali Feasibility Study to ensure drilling is completed on schedule. Two drill rigs are currently working on site. O Priority exploration targets have been confirmed throughout the Munali district with two new Prospecting Licences granted. O In Tunisia, the Kef El Agueb prospect has been extended, with up to 1.7g/t Au and 2.4% Cu in rock samples. Joint Venture Activity: O Drill targets have been confirmed at Tati in Botswana, with drilling commenced in August. O Extensive target zones have been delineated for airborne electromagnetic surveying adjacent to the Selebi-Phikwe nickel mining district in Botswana. O High grade zinc sulphide mineralization has been drilled at Touila in Tunisia (3m at 8.2% Zn, 1.3% Pb). Corporate Highlights: O BHP Billiton ("BHPB") has confirmed it will continue the planned exploration program and budget commitment under the Exploration Cooperation Agreement operated by WMC prior to the takeover by BHPB. O Appointment of Mr Valentine Chitalu as Chairman of the board of Albidon Zambia Limited (100% owned subsidiary of Albidon Limited). O In May 2005, 1,000,000 unlisted options (exercisable at AUD$0.60 on or before 30 June 2008) were issued to employees and executive consultants as performance incentives. O In July 2005, 300,000 unlisted options (exercisable at AUD$0.60 on or before 30 April 2008) were issued to Valentine Chitalu as Chairman of the board of Albidon Zambia Limited. Capital structure The Capital Structure as at the date of this report is summarized below: Issued shares 68,368,000 Unlisted options (expiring 30 June 2006 USD 20 cents) 5,000,000Unlisted options (expiring 30 June 2007 AUD 60 cents) 2,800,000Unlisted options (expiring 30 June 2008 AUD 60 cents) 1,000,000Unlisted options (expiring 30 April 2008 AUD 60 cents) 300,000Total options on issue 9,100,000 This report is made in accordance with a resolution of the directors. Donal WindrimDirector Perth13 September 2005 6 month period 8 month period ended ended 30 June 30 June 2005 2004 Notes $AUD $AUD Revenue 4(a) 151,805 126,695 Staff costs (417,553) (301,832) Depreciation and amortisation (9,476) (1,298) Exploration & evaluation expenditure written off (916,520) (528,920) Other expenses (537,140) (266,265) Loss from ordinary activities before income tax (1,728,884) (971,620) Income tax expense - - Loss for the period (1,728,884) (971,620) Loss per share (expressed in $AUD per share) - basic 5 (0.0253) (0.0202) - diluted 5 (0.0253) (0.0202) 30 June 31 December 2005 2004 Notes $AUD $AUD ASSETS Non-current assets Plant and equipment 73,566 43,948 Exploration & Evaluation Expenditure 6,688,708 4,060,475 Total non - current assets 6,762,274 4,104,423 Current assets Trade and other receivables 174,507 976,994 Loans to other entities 1,285,250 - Prepayments 95,799 85,432 Cash and cash equivalents 5,406,369 9,883,376 Total current assets 6,961,925 10,945,802 Total assets 13,724,199 15,050,225 EQUITY AND LIABILITIES Capital and reserves attributable to the Company's equity holders Issued capital 6 896,473 875,673 Share premium reserve 6 17,206,152 16,806,932 Option premium reserve 6 382,601 244,955 Capital raising costs (1,472,310) (1,431,374) Share capital 17,012,916 16,496,186 Foreign currency translation reserve 258,757 350,889 Accumulated loss (5,114,477) (3,385,593) Total shareholders' equity 12,157,196 13,461,482 LIABILITIES Current liabilities Trade and other payables 1,507,592 1,509,966 Provisions 59,411 78,777 Total liabilities 1,567,003 1,588,743 13,724,199 15,050,225 Total equity and liabilities 6 months 8 months to to 30 June 30 June 2005 2004 $AUD $AUDCash flows from operating activitiesPayments to suppliers (exploration) (2,581,471) (1,000,571)Payments to suppliers (administration) (822,497) (453,450)Interest received 131,744 126,695Net cash used in operating activities (3,272,224) (1,327,326) Cash flows from investing activitiesPurchase of property, plant and equipment (40,894) (20,360)Loan to Capital Drilling (1,261,484) -Net cash used in investing activities (1,302,378) (20,360) Cash flows from financing activities Proceeds from issue of ordinary shares - 16,659,347Share issue transaction costs - (1,566,710) Net cash from financing activities - 15,092,637 Effects of exchange rate changes 97,595 (78,328)Net (decrease)/ increase in cash and cash equivalents (4,477,007) 13,666,623 Cash and cash equivalents at beginning of period 9,883,376 960,086Cash and cash equivalents at end of period 5,406,369 14,626,709 For the 6 months ended 30 June 2005 Issued Share Option Capital Foreign Accumulated Total capital premium Premium raising cost currency (loss) translation $AUD $AUD $AUD $AUD $AUD $AUD $AUD At 1 January 875,673 16,806,932 (1,406,417) 350,889 (3,165,595) 13,461,482 2005 Adjustment - - 244,955 (24,957) - (219,998) - upon adoption of IFRS 2 "Share Based Payments" - Issue of options to employees and contractors Adjusted 1 875,673 16,806,932 244,955 (1,431,374) 350,889 (3,385,593) 13,461,482 January 2005 Unrealized 20,800 399,220 - (33,409) (92,132) - 294,479 currency translation difference on translation to presentation currency Issue of - - 137,646 (7,527) - - 130,119 options to employees and contractors Net loss from ordinary - - - - (1,728,884) (1,728,884) activities At 30 June 896,473 17,206,152 382,601 (1,472,310) 258,757 (5,114,477) 12,157,196 2005 For the 8 months ended 30 June 2004 Issued Share Option Capital Foreign Accumulated Total capital premium Premium raising cost currency (loss) translation $AUD $AUD $AUD $AUD $AUD $AUD $AUD At 1 November 506,382 2,759,231 - - 142,150 (1,060,989) 2,346,774 2003 Issue of share 433,771 15,615,773 - (1,566,710) - - 14,482,834 capital (30,000,000 shares at GBP 20 pence / AUD 50 cents) Exercise of 36,216 507,026 - - - - 543,242 Options Difference on 10,321 56,240 - - (78,328) - (11,767) translation to presentation currency Net loss from - - - - - (876,265) (876,265) ordinary activities At 30 June 986,690 18,938,270 - (1,566,710) 63,822 (1,937,254) 16,484,818 2004 Adjustment upon adoption - - 100,795 (5,439) - (95,355) - of IFRS 2 "Share Based Payments" - Issue of options to employees and contractors Adjusted 30 June 2004 986,690 18,938,270 100,795 (1,572,149) 63,822 (2,032,609) 16,484,818 1 General information The interim financial report of Albidon Limited for the 6 month period ended 30June 2005 was authorised for issue in accordance with a resolution of theDirectors dated 13 September 2005. Albidon Limited is a company incorporated in the British Virgin Islands, on 11April 2000 whose shares are publicly traded. It's registered place of businessis Suite 1, Hillway House, 141 Broadway, Nedlands, Western Australia 6009. The principal activities of the Group are described in note 3. The Company has four employees as at 30 June 2005. 2 Basis of Preparation The interim financial report does not include all notes of the type normallyincluded within the annual financial report and therefore cannot be expected toprovide as full an understanding of the financial performance, financialposition and financing and investing activities of the group as the fullfinancial report. This interim financial report should be read in conjunction with the annualfinancial report of Albidon Limited as at 31 December 2004. It is alsorecommended that the interim financial report be considered together with anyannouncements made by Albidon Limited and its controlled entities during thehalf year ended 30 June 2005. The consolidated financial statements of Albidon Limited and all itssubsidiaries contained in this report have been prepared in accordance with IAS34 "Interim Financial Reporting" in effect as at balance date. The consolidated financial statements have been prepared on a historical costbasis. The comparative financial information is for the 8 month period ended 30 June2004. This period represented the first reported interim period following thepreparation of a prospectus, pursuant to the company's ASX/AIM listing, for theperiod from incorporation to 31 October 2003. Accounting policies are consistent with those used in Albidon Limited's annualfinancial report. Changes in accounting policies Albidon has adopted the following standards designed to form the 'stableplatform' of International Financial Reporting Standards ("IFRS"). Thesestandards are intended to be mandatory for all companies reporting under IFRSfor financial years beginning on or after 1 January 2005. The principal effects of the adoption of these standards are discussed below. IFRS 2 'Share-Based Payment' IFRS 2 'Share-based Payment' requires an expense to be recognised where theGroup buys goods or services in exchange for shares or rights over shares('equity-settled transactions'), or in exchange for other assets equivalent invalue to a given number of shares or rights over shares ('cash-settledtransactions'). The main impact of IFRS 2 on the Group is the expensing ofemployees' and directors' share options and other share based incentives byusing an option-pricing model, further details of which are given in note 6. Options granted have been valued using a Black Scholes option pricing model,which takes into account factors including the option exercise price, thevolatility of the underlying share price, the risk-free interest rate, expecteddividends on the underlying share, current market price of the underlying shareand the expected life of the option. Each option is valued based on thesefactors using the information existing as at grant date. Albidon has taken advantage of the transitional provisions of IFRS 2 in respectof equity-settled awards and has applied IFRS 2 only to equity settled awardsgranted after 7 November 2002 that had not vested on or before 1 January 2005. The effect of the revised policy has been to increase consolidated retainedlosses as at 1 January 2005 by A$219,998. In addition, the current year loss hasincreased by A$130,119 (2004: A$95,355) due to an increase in the employeebenefits expense. IFRS 2 'Share-Based Payment' (continued) The effect of the revised policy due to the adoption of IFRS 2 on basic and diluted EPS is as follows: - For the 2005 interim period increase in basic loss per share by A$(0.0019) (2004: A$(0.002) impact) to A$(0.0234); - For the 2005 interim period increase in diluted loss per share by A$(0.0019) (2004: A$(0.002) impact) to A$(0.0234). Adoption of other International Financial Reporting Standards In addition to the standards referred to above, Albidon has reviewed thefollowing new and revised standards in light of the group's existing accountingpolicies: IAS 1 'Presentation of Financial Statements (amended 2004)'; IAS 2 'Inventories (revised 2003)'; IFRS 3 'Business Combinations'; IAS 7 'Cash Flow Statements' (amended 2003)'; IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors (revised 2003)'; IAS 10 'Events after the Balance Sheet Date (amended 2004)'; IAS 16 'Property, Plant and Equipment' IAS 17 'Leases (amended 2004)'; IAS 21 'The Effects of Changes in Foreign Exchange Rates' (revised 2003) IAS 24 'Related Party Disclosures (revised 2003)'; IAS 27 'Consolidated and Separate Financial Statements (amended 2004)'; IAS 28 'Investments in Associates (amended 2004)'; IAS 31' Interests in Joint Ventures (amended 2004)'; IAS 33 'Earnings per Share (amended 2004)'; IAS 32 'Financial Instruments: Disclosure and Presentation (amended 2004)'; IFRS 5 'Non-Current Assets Held For Sale and Discontinued Operations'; IAS 36 'Impairment of Assets'; IAS 38 'Intangible Assets'; IAS 39 'Financial Instruments: Recognition and Measurement (amended 2004)'; and IAS 40 'Investment Property (amended 2004)'. No material differences arose between the above standards and Albidon's existing accounting policies. With the exception of the above, all other accounting policies are consistent with those of the previous financial year. 3 Segment information The Group operates in one principal area of activity, namely exploration of basemetal tenements, and two principal geographical areas, namely Australia (headoffice) and Africa (operations). Geographical Segments 6 months to 30 June 2005 Australia Africa Consolidated $AUD $AUD $AUDRevenueOther 151,805 - 151,805 ResultSegment result (1,087,922) (640,962) (1,728,884) Loss before related income (1,087,922) (640,962) (1,728,884)tax expenseIncome tax expense - - -Net loss (1,087,922) (640,962) (1,728,884) Assets and Liabilities Segment assets 5,148,164 8,576,035 13,724,199 Segment liabilities 110,706 1,456,297 1,567,003 Other segment informationCapital expenditures Mining assets - 2,628,233 2,628,233 Other non-cash expenses:Depreciation 4,120 5,356 9,476Options issued to employee/ 130,119 - 130,119contractorsUnrealized/realized foreign (368,117) 325,654 (42,463)exchange gains /(losses) 3 Segment information (cont.) Geographical Segments from 1November 2003 to 30 June 2004 Australia Africa Consolidated $AUD $AUD $AUDRevenueOther 126,695 - 126,695 ResultSegment result (556,349) (415,271) (971,620) Loss before income tax (556,349) (415,271) (971,620)Income tax expense - - -Net loss (556,349) (415,271) (971,620) Assets and Liabilities Segments assets 14,662,908 2,084,018 16,746,926 Segment liabilities 262,108 - 262,108 Other Segment InformationCapital expenditure Mining assets 504,953 - 504,953 Other non-cash expenses Depreciation 1,298 - 1,298 Options issued toemployee/contractors 95,355 - 95,355Unrealized/realized foreignexchange gains / (losses) 222,881 (92,055) 130,826 4 Revenue and Expenses (a) Revenue - other 6 months 8 months to to 30 June 30 June 2005 2004 $AUD $AUD Interest receivable 151,805 126,695 151,805 126,695 5 Loss per share BasicBasic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares on issue during the period. 6 months 8 months to to 30 June 30 June 2005 2004 $AUD $AUD Loss attributable to equity holders of the Company (1,728,884) (971,620) Weighted average number of ordinary shares in issue 68,368,000 48,034,803Basic loss per share ($AUD per share) (0.0253) (0.0202) DilutedLoss used to determine diluted loss per share (1,728 884) (971,620) Weighted average number of ordinary share for diluted loss per share 71,336,938 48,034,803Diluted loss per share ($AUD per share) (a) (0.0253) (0.0202) (a) The effect of the potential ordinary shares is anti-dilutive in that their inclusion in this calculationwould decrease the loss per share. The potential ordinary shares are therefore not taken into account indetermining diluted loss per share. Post reporting date in July 2005, 300,000 unlisted options (exercisable at AUD$0.60 on or before 30 April2008) were issued to Valentine Chitalu as Chairman of the board of Albidon Zambia Limited. 6 Share capital 6 (a) Ordinary Shares Issued, called up and fully paid Authorized Number $AUD Number $AUD Ordinary shares of US$0.01 each 5,000,000,000 70,985,420 68,368,000 18,485,226 Number $AUD Issued on incorporation (i) 9,000 128Issued to directors (i) 9,991,000 141,843Issued to directors (i) 10,000,000 141,971Issued to African Lion 15,000,000 2,839,416Issued to unrelated parties (i) 668,000 142,255Capital raising on AIM and ASX (i) 30,000,000 14,202,025Issued to African Lion on exercise of options (i) 2,500,000 480,708Issued to Squadron Holdings Limited on exercise of options (i) 200,000 51,275Foreign exchange loss on translation from measurement currency (317,016)Adjustment upon adoption of IFRS 2 "Share Based Payments" 244,955 - Issue of options to employees and contractorsBalance 31 December 2004 68,368,000 17,927,560Adjustment upon adoption of IFRS 2 "Share Based Payments" 137,646 - Issue of options to employees and contractorsForeign exchange gain on translation from measurement currency 420,020Balance 30 June 2005 68,368,000 18,485,226 6 Share capital (continued) 6 (a) Ordinary Shares (continued) Represented by: Share Option Share Premium Premium Total Capital Reserve Reserve $AUD $AUD $AUD $AUD 896,473 17,206,152 382,601 18,485,226 (i) Issued prior to 1 January 2005. * Details of options exercised see below Ordinary shares have the right to receive dividends as declared and in the eventof winding up the Company, to participate in the proceeds from the sale of allsurplus assets in proportion to the number of and amounts paid up on sharesheld. 6 (b) Options Granted Exercised Lapsed Exercise as of during during price 30 June 2005 the period the period TotalOptions No. No. No. No. US$0.20(i) 5,000,000 - - 5,000,000 AUD $0.60(ii) 2,300,000 - - 2,300,000 AUD $0.60(iii) 500,000 - - 500,000 AUD $0.60(iv) 1,000,000 - - 1,000,000 - - 8,800,000 (i) Granted 23 October 2003, expire 30 June 2006. (ii) Granted 12 February 2004, expire 30 June 2007. (iii) Granted 11 May 2004, expire 30 June 2007. (iv) Granted 25 March 2005, expire 30 June 2008. All options vest in three equal tranches, each subject to completion of a fullyear of service with the Company, except for (i) which vested at grant date. 6 (c) Foreign currency translation reserve 30 June 2005 31 December 2004 $AUD $AUD Opening balance 350,889 142,150 Currency translation differences (92,132) 208,739 At 30 June 2005 / 31 December 2004 258,757 350,889 The foreign currency translation reserve is used to record exchange differencesarising from the translation of the financial statements to the presentationcurrency. 7 Commitments As at 30 June 2005 the Group had the following commitments: (a) Albidon Tenement Commitments: Exploration: Not later than 1 year: Tanzania $ 386,345 Botswana $ 12,035 Within 3 years: Malawi $ 84,916 * $ 483,296 (b) The following exploration commitments are covered by WMC ResourcesExploration Pty Ltd ('WMCE') under the Cooperation Agreement: Exploration: Not later than 1 year: Tanzania $ 562,787 * Botswana $ 240,707 * (c) Other: Drilling Commitments: Later than 5 years: Zambia $ 812,755 + * Further details of joint venture commitments are provided in note 8 to theaccounts. + Further details of drilling commitment in note 9 to the accounts, RelatedParty Transactions 8 Interest in joint ventures Albidon and WMC Resources Exploration Cooperation Agreement on Projects inAfrica Albidon and WMC Resources Exploration Pty Ltd ('WMCE'), a subsidiary of WMCResources Ltd (ASX Code, 'WMR'), entered into an agreement on 25 October 2004,for the exploration and development of a number of Albidon's nickel andcopper-gold projects in Malawi, Tanzania, Zambia, Botswana and Tunisia. Of the AU$4 million to be spent on major geophysical and field programmes byJune 2006, AU$1,302,558 has been spent to 30 June 2005. Following these programmes WMCE may earn a 30% interest in each project selectedby it for farm-in by expending US$5M on the selected project, inclusive of anyamounts expended on the project area during the field programmes. WMCE may complete a Pre-feasibility Study (including a JORC Measured Resource)on each selected project to earn a 70% interest. Tati Joint Venture, Botswana The Company entered into an agreement with Gallery Gold Botswana Pty Ltd on the18 February 2004 in relation to Gallery's Tati tenements. There are two components to this joint venture, the Tekwane Project, and theTati Regional Project: Tati Regional Project - Albidon has picked up four of the five project areaswithin the Tati Regional tenements option agreement with Gallery Gold. Albidonmust now spend A$500,000 on base metals exploration on the farm-in area withinthree years to earn the 50% interest. A$250,000 of this should be spent within18 months after the commencement of the farm-in agreement. 8 Interest in joint ventures (continued) Tekwane Project - Albidon may earn a 65% interest in nickel, other base metalsand platinum group metals in the Tekwane Project Area by spending A$750,000 on base metals exploration withinthree years, A$300,000 of which must be spent within 18 months of thecommencement of the agreement. A minimum of A$100,000 is to be spent beforeAlbidon can withdraw. Trozza Joint Venture, Tunisia Albidon can earn up to 100% interest in the Trozza joint venture in Tunisia bysole-funding an agreed exploration program. BHP Billiton ("BHPB") owns theproject tenement. Albidon has advised BHPB that it has earned a 100% interest inthe project (with BHPB retaining a 2.5% NSR royalty), a response from BHPB ispending. 9 Related Party Transactions Directors' interests Mitchell River Group Pty Ltd, an entity associated with Messrs Cooke, Burton andWindrim provides office space and administrative staff, facilities and servicesto the Company, the costs of which are then reimbursed by the Group. For theperiod ended 30 June 2005, these costs totalled $126,353. Hartree Pty Ltd, a mining consulting firm of which Mr Alasdair Cooke is adirector, has received fees of $23,720 in respect of database access, fieldequipment rental and office cost recovery provided to the Company in theordinary course of business. The Company has lent Mr Brian Rudd $1,261,484 for the purchase of a Schramm 685drilling rig. The rig is to be owned and operated by Brian Rudd and held undertrust by Albidon Zambia Limited. Rudd is an experienced operator of drillingservices in Africa. The rig is used at the Company's Munali site in Zambia. The loan bears an interest rate of 7%. Until the loan is repaid, Albidon willdeduct against the loan 28% of the amounts payable for Rudd's drilling servicesusing the Rig. The intention of all parties is to move the loan into a companycalled Capital Drilling Zambia Ltd in which Mr C Burton will have a 25% indirectinterest. Mr C Burton is a director of the parent company of Capital DrillingZambia Ltd. All of the above transactions were entered into on normal commercial terms. Directors The directors of the Group during the period to the date of this report, were as follows: Craig Burton Alasdair Cooke Donal Windrim Michael Brook Richard Anthony Potts Christopher de Guingand Ordinary Shares As set out in note 8, the Group has issued 20,000,000 ordinary shares at anissue price of US$0.01 to US$0.15 per share to the Directors including theirrelated parties. The shares held by current Directors as at 30 June 2005 and up to the date ofthis report (directly and indirectly) are as follows: No. of shares held Craig Burton (i) 5,000,000Alasdair Cooke (ii) 5,000,000Donal Windrim (iii) 7,000,000Christopher De Guingand (iv) 50,000Richard Potts (v) 10,000 (i) Craig Burton through director related entities, beneficially owned 5,000,000 shares. (ii) Alasdair Cooke directly and through director related entities, owned 5,000,000 shares. (iii) Donal Windrim directly and through director related entities, owned 7,000,000 shares. (iv) Christopher De Guingand directly and through director related entities, owned 50,000 shares. (v) Richard Potts directly owned 10,000 shares. 10 Events after the balance sheet date There has not arisen in the interval between the end of financial period and the date of these financial statements anyitem, transaction or event of a material and unusual nature likely, in the opinion of the directors of the company, toaffect significantly the operations of the entity, the results of these operations, or the state of affairs of theentity, in future financial periods. 11 Contingent Assets & Liabilities There are no identified contingent assets or liabilities as at balance date orup to the date of this report. Directors' Declaration In accordance with a resolution of the board of directors of Albidon Limited, Istate that: In the opinion of the directors: a) the financial statements and notes of the consolidated entity: i. give a true and fair view of the financial position as at 30 June 2005 and the performance for the six month period ended on that date of the consolidated entity; and ii. comply with IAS 34 "Interim Financial Reporting" b) there are reasonable grounds to believe that the Company will be ableto pay its debts as and when they become due and payable. On behalf of the Board Director13 September 2005 Independent review report to members of Albidon Limited Scope The financial report and directors' responsibility The financial report comprises the condensed balance sheet, income statement,cash flow statement, statement of changes in equity and accompanying notes tothe financial statements, and the directors' declaration, for the consolidatedentity comprising Albidon Limited (the company) and the entities it controlledduring the half-year ended 30 June 2005. The directors of the company are responsible for preparing a financial reportthat gives a true and fair view of the financial position and performance of theconsolidated entity, and that complies with International Accounting Standard 34"Interim Financial Reporting". This includes responsibility for the maintenanceof adequate accounting records and internal controls that are designed toprevent and detect fraud and error, and for the accounting policies andaccounting estimates inherent in the financial report. Review approach We conducted an independent review of the financial report in order to make astatement about it to the members of the company, and in order for the companyto lodge the financial report with the ASX. Our review was conducted in accordance with Australian Auditing Standards andInternational Standards on Auditing applicable to review engagements, in orderto state whether, on the basis of the procedures described, anything has come toour attention that would indicate that the financial report is not presentedfairly in accordance with , International Accounting Standard 34 "InterimFinancial Reporting", so as to present a view which is consistent with ourunderstanding of the consolidated entity's financial position, and of itsperformance as represented by the results of its operations and cash flows. A review is limited primarily to inquiries of company personnel and analyticalprocedures applied to the financial data. These procedures do not provide allthe evidence that would be required in an audit, thus the level of assurance isless than given in an audit. We have not performed an audit and, accordingly,we do not express an audit opinion. Independence We are independent of the company, and have met the independence requirements ofAustralian and International professional ethical pronouncements. Statement Based on our review, which is not an audit, nothing has come to our attentionthat causes us to believe that the financial report for Albidon Limited does notgive a true and fair view of the financial position of the consolidated entitycomprising the company and its controlled entities as at 30 June 2005, and ofits results of operations and cash flows for the period then ended in accordancewith International Financial Reporting Standards. Ernst & Young V W TidyPartnerPerthDate: 13 September 2005 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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