12th Jul 2006 17:24
UMC Energy PLC12 July 2006 UMC ENERGY PLC AUDITED RESULTS FOR THE PERIOD ENDED 31 JANUARY 2006 CHAIRMAN'S STATEMENT 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 interest. In the meanwhile, the Company had expanded its geographical focus and examinedpotentially prospective uranium properties in Kazakhstan, which the Boardconsidered has significant undeveloped and under-developed uranium resources.In the event, due to a variety of issues, the Board determined that it wouldtake longer than initially expected to acquire assets of the quality beingsought. As a result, and as it had been introduced to a number ofenergy-related projects in Kazakhstan, including oil and gas opportunities, theBoard resolved to expand its activities to the energy sector as a whole.Following extensive and at times very promising negotiations, the Company wasunfortunately unable to bring these discussions to a satisfactory conclusion. As a result of these events, the London Stock Exchange has determined that theCompany is an investing company within the meaning of the AIM Rules.Accordingly, the Company has called an extraordinary general meeting to be heldon 12 July 2006 to seek approval for its investing strategy as follows: "Thestrategy of the Company is to make investments in the mining and mineralssector. The likely focus within that sector is energy-related minerals. Theinvestments may be either quoted or unquoted and may be in companies,partnerships, joint ventures or direct interests in mining projects. Theinvestments may be made in exploration or development stage undertakings or inproducing assets. The Company intends to be an involved and active investor.It is likely that that the number of investments will be small. Accordingly,where necessary, the Company may seek participation in the management or boardof directors of a company in which the Company invests. The Directors areexperienced in the mining sector and intend that they will undertake initialassessments and due diligence on potential investments themselves and willretain appropriate professional advice if merited by the circumstances.Geographically, the Company intends to concentrate on Africa and/or Asia." The London Stock Exchange has informed us that we must implement our investingstrategy by 2 August 2006. Failure to do so will result in the Company's sharesbeing suspended from trading on AIM until such time as we have implemented ourstrategy. If the Company has not made its first investment in line with itsstated strategy by 31 December 2006, it will convene a general meeting of theCompany to determine the options for the Company, including the return of fundsto shareholders. Since incorporation, the Company has raised £3,342,663 in new equity and as aresult is well funded to pursue its investment strategy and I am pleased toadvise that the Directors are currently examining a potential acquisition inline with the above strategy. We look forward to being able to announce furtherdetails in due course. Bob Cleary 12 July 2006 PROFIT AND LOSS ACCOUNT Note Period 13 January 2005 to 31 January 2006 £ Administrative costs (362,878)___________________________________________________________________________ _______ ____________________ Operating lossBefore Exceptional Items 2 (362,878)___________________________________________________________________________ _______ ____________________ Exceptional Items: 3Project costs (191,880)___________________________________________________________________________ _______ ____________________Operating Loss (554,758) Bank interest 57,743___________________________________________________________________________ _______ ____________________ Loss on Ordinary Activities Before Taxation (497,015) Tax on loss on ordinary activities 6 -___________________________________________________________________________ _______ ____________________ Loss on Ordinary Activities After Taxation 13 (497,015)___________________________________________________________________________ _______ ____________________ Loss per share (pence) 7 (3.76p)Fully diluted loss per share (pence) 7 (2.36p) The company has no recognised gains or losses other than the results of theperiod as set out above. BALANCE SHEET Note 31 January 2006 £Fixed AssetsIntangibles 8 -__________________________________________________________________________ ______________ ____________________ Current AssetsDebtors 9 626,778Cash at bank 2,391,408__________________________________________________________________________ ______________ ____________________ 3,018,186 Creditors: Amounts falling due within one year 10 (172,538)__________________________________________________________________________ ______________ ____________________ Net Current Assets 2,845,648__________________________________________________________________________ ______________ ____________________ Total Assets Less Current Liabilities 2,845,648__________________________________________________________________________ ______________ ____________________ Capital and ReservesCalled-up equity share capital 11 920,450Share premium account 12 2,422,213Profit and loss account 13 (497,015)__________________________________________________________________________ ______________ ____________________ Shareholders' Funds 2,845,648__________________________________________________________________________ ______________ ____________________ CASH FLOW STATEMENT Period 13 January 2005 to 31 January 2006 £Reconciliation of operating loss to netcash outflow from operating activitiesOperating loss (554,758)Increase in debtors (626,778)Increase in creditors 172,538Write down of fixed asset investment 86,281____________________________________________________________________________ _____________________________ Net cash outflow from operating activities (922,717) CASH FLOW STATEMENTNet cash outflow from operating activities (922,717) Return on investments and servicing of financeInterest received 57,743 Capital expenditure and financial investmentsIntangible fixed assets (86,281) Cash outflow before financing (951,255) Financing:Issue of Share Capital 3,342,663____________________________________________________________________________ _____________________________Increase in Cash 2,391,408____________________________________________________________________________ _____________________________ Reconciliation of net cash flow to movement in net funds Increase in cash in the period 2,391,408 Net funds at 13 January 2005 -____________________________________________________________________________ _____________________________ Net funds at 31 January 2006 2,391,408_________________________________________________________________________ _____________________________ Analysis of changes in net funds At 31 January 2006 Cashflows At 13 January 2006 Cash at bank and in hand 2,391,408 2,391408 -____________________________________ __________________ ________________ __________________ NOTES TO THE FINANCIAL STATEMENTS 1. Accounting policies Basis of Accounting The financial statements have been prepared under the historical cost conventionand in accordance with applicable accounting standards. Foreign Currencies Transactions in foreign currencies are translated into sterling at the rate ofexchange ruling at the date of the transaction. Monetary assets and liabilitiesdenominated in foreign currencies are translated at the rate of exchange rulingat the balance sheet date. The resulting exchange gain or loss is dealt with inthe profit and loss account. Deferred tax asset No recognition has been made of the deferred tax asset in respect of currentlosses as the directors are of the opinion that this may not be realisable inthe foreseeable future. Intangible Assets - Exploration Expenditure Costs relating to the acquisition, exploration and development of miningprojects are capitalised under intangible assets. When it is determined thatsuch costs will be recouped through successful development and exploitation oralternatively by sale of such interests acquired, the expenditure will betransferred to tangible assets and depreciated over the expected productive lifeof the asset. Whenever a project is considered no longer viable, the associatedexploration expenditure is written off to the profit and loss account. 2. Operating loss Operating loss is stated after charging: Period 13 January 2005 to 31 January 2006 £ Investment write down 86,281 Auditors' remuneration- as auditors 24,000 - as accountants and advisors 7,655 Directors' Emoluments 92,208 3. 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 thisoption interest.. The cost of this project, including the option fee of £86,281,was £100,780. The Company also examined opportunities to acquire uranium and oil/gasproperties in Kazakhstan. Following extensive negotiations, the Company wasunable to conclude any acquisitions. The total cost incurred in relation tothese activities in the 2006 financial period was £91,100. 4. Particulars of employees The company had no employees during the period. 5. Directors' emoluments The group employed five directors during the period with aggregate emoluments inrespect of qualifying services as follows: Period 13 January 2005 to 31 January 2006 £ Directors' fees 9,250 Amounts paid to third parties for the provision of services 82,958 92,208 6. Taxation Analysis of tax charge in period Period 13 January 2005 to 31 January 2006 £ Corporation tax - Factors affecting tax charge for the period Loss on ordinary activities before tax (497,015) ========= Loss on ordinary activities before exceptional itemsmultiplied by standard rate of UK corporation tax 19% (57,976) ========= Exceptional items multiplied by standardrate of UK corporation tax 19%. (36,457) Effects of:Expenses not deductible for tax purposes 1,962 Increase in UK tax losses 92,471 ========= Tax charge - ========= UK losses carried forward at standard rate of corporation tax 19% 92,471 7. Loss per share Period 13 January 2005 to 31 January 2006 Loss per ordinary share (pence) 3.76p ========= Diluted loss per ordinary share (pence) 2.36p ========= The loss per share has been calculated on the net basis on the loss for theperiod, after taxation, of £497,015 using the weighted average number ofordinary shares in issue of 13,201,074. Diluted loss per share has been calculated using the weighted average number ofordinary shares in issue, diluted for the effect of share options and warrants,in existence at the period end of 7,874,500. 8. Intangible assets Exploration expenditure 31 January 2006Cost £ Additions - contract option payment 86,281Write down (86,281)_______________________________________________________________________________At 31st January 2006 -_______________________________________________________________________________ 9. Debtors 31 January 2006 £ Other debtors 5,000Called up share capital not paid 609,000Prepayments and accrued income 12,778_______________________________________________________________________________ 626,778_______________________________________________________________________________ 10. Creditors: Amounts falling due within one year 31 January 2006 £ Trade creditors 127,188Accruals 45,350_______________________________________________________________________________ 172,538_______________________________________________________________________________ 11. Share capital Authorised share capital: £ 200,000,000 Ordinary shares of 5p each 10,000,000 Allotted, called up share capital: Nominal No. Value £ Ordinary shares of 5p each 18,409,001 920,450 ========== ======= During the period the Company issued the following Ordinary shares of 5p each: Date Number Price per Share Total Proceeds Nominal Value Share Premium13 January 2006 2 10p £0.20 £0.10 £0.10Between 14 January 2005 and 28 February 2005 7,369,999 10p £737,000 £368,500 £368,500Between 1 March 2005 and 7 March 2005 450,000 10p £45,000 £22,500 £22,50018 July 2005 10,559,000 25p £2,639,750 £527,950 £2,023,713*15 September 2005 30,000 30p £9,000 £1,500 £7,500 * (After costs of £88,087) The subscribers to the share issue on 19 July 2005 also received 1/2 warrant foreach share exercisable within 18 months of the Company's admission to AIM (2February 2007) at an exercise price of 30p per share. Share options and warrants in existence at 31 January 2006 were as follows: No. Description Exercise Price Expiry Date 1,825,000 options Ordinary Shares 30p per share 2 August 2010 400,000 options Ordinary Shares 30p per share 19 January 2011 400,000 options Ordinary Shares 60p per share 19 January 2011 5,249,500 warrants Ordinary Shares 30p per share 2 February 2007 12. Share premium account Period 13 January 2005 to 31 January 2006 £ At 13 January 2005 -Premium on new issue - Ordinary shares 2,422,213_________________________________________________________________________At 31 January 2006 2,422,213_________________________________________________________________________ 13. Profit and loss account Period 13 January 2005 to 31 January 2006 £ At 13 January 2005 -Loss for the period (497,015)__________________________________________________________________________At 31 January 2006 (497,015)__________________________________________________________________________ 14. Reconciliation of movements in shareholders' funds Period 13 January 2005 to 31 January 2006 £ Loss for the financial period (497,015)Issue of ordinary shares - nominal value 920,450 - premium 2,422,213__________________________________________________________________________Net addition to funds 2,845,648Opening shareholders' funds -__________________________________________________________________________ Closing shareholders' funds 2,845,648__________________________________________________________________________ 15. Controlling Party There is no controlling party of the Company. 16. Related Party Transactions C Kyriakou and R Cleary are directors of Investika Ltd, an Australian companyand a shareholder in UMC Energy Plc. During the period, Investika Ltd paid expenses and provided management servicesto the Company at a cost of £16,531 of which £6,491 is outstanding at 31 January2006 and shown in trade creditors. Included in the £16,531 is £5,515 for theprovision of the consultancy services of R Cleary. C Kyriakou, R Cleary, M Roberts and G Bujtor are directors of Toledo MiningCorporation Plc. During the period, Toledo Mining Corporation Plc providedsupport services and staff to the Company at a cost of £58,397 of which £16,193is outstanding at 31 January 2006 and included in trade creditors. During the period, Capma Pty Limited paid expenses and provided managementservices of support staff to the Company at a cost of £45,396 of which £31,397is outstanding at 31 January 2006 and included in trade creditors. Included inthe £45,396 is £14,000 for the provision of consultancy services of C Kyriakou. During the period Resource Capital Partners Inc invoiced the Company £4,000 forthe provision of the consultancy services of C Kyriakou of which £4,000 isoutstanding at 31 January 2006 and included in trade creditors. During the period the Company was charged £8,093 by Accomplishments Pty Limitedfor the provision of the services of R Cleary of which £6,413 was for servicesas director and £1,680 was for consultancy services. During the period the company was charged £6,000 by Match Number Limited for theprovision of services of M Roberts as director, of which £3,000 is outstandingat 31 January 2006 and included in trade creditors. During the period the Company was charged £35,000 by Sarita Investments ServicesCorporation Limited for the provision of consultancy services of J Schoonbrood. During the period the company was charged £10,350 by Resource & ProjectCommercialisation Pty Limited for the provision of consultancy services of GBujtor of which £10,350 is outstanding at 31 January 2006 and included inaccruals. 17. Post Balance Sheet Events In March 2006, the Company resolved not to proceed with its 75% option interestover potentially uranium bearing blocks in the Labrador Trough, Canada. Otherthan this matter, there has not arisen in the interval between the end of thefinancial year and the date of this report any item, transaction or event of amaterial and unusual nature likely, in the opinion of the Directors, to affectsignificantly the operations of the Company, the results of those operations orthe state of affairs of the Company, in subsequent financial years. 18. Financial instruments The Company's principal financial instruments comprise cash and short termdeposits. Together with the issue of equity share capital, the main purpose ofthese is to finance the Company's operations and expansion. The Company hasother financial instruments such as debtors and trade creditors which arisedirectly from normal trading. The Company has not entered into any derivative or other hedging instruments. The disclosures below, with the exception of currency risk, exclude short termdebtors and creditors as permitted by Financial Reporting Standard 13. The main risks arising from the Company's financial instruments are interestrate risk and liquidity risk. The Board reviews and agrees policies formanaging each of these risks and these are summarised below. Interest rate risks The Company finances its operations through the use of cash deposits at variablerates of interest for a variety of short term periods, depending on cashrequirements. The rates are reviewed regularly and the best rate obtained inthe context of the Company's needs. Liquidity risks The Company's policy throughout the year has been to ensure that it has adequateliquidity by careful management of its working capital. The interest rateexposure of the Company's cash deposits and overdraft facility was as follows:- 31 January 2006 Cash deposit £2,391,408 =============== Currency risks The Company, wherever possible invoices in sterling, but in the rare instanceswhen the Company invoices in a foreign currency the Company does not hedge theasset and converts the currency received into sterling at the earliestopportunity. The Company's principal activities, being mineral exploration, are conducted inUS$. Funding permitting, it is the Company's policy to cover known expendituresor alternatively to put in place forward exchange contracts where the timing ofpayments is definite. At balance date, there were no such forward exchangecontracts utilised by the Company. Investment risks Fixed asset investments where held, are shown at cost, less provision for anypermanent diminution in value. Details of the Company's investments are givenin note 9. Fair values The directors have given serious consideration and have reached the conclusionthat there is no significant difference between the book values and thefair values of the assets and liabilities of the Company as at 31 January 2006. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
UEP.L