Final Results
For immediate release: Wednesday, 8 July 2009, 07.00AM
Emerging Metals Limited
("EML", "Emerging Metals" or "the Company")
AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2009
Emerging Metals Limited (AIM: EML), the mining company focused on minor and
emerging metals, today announces its final results for the year ended 31 March
2009.
Financial and Operational Highlights:
* Equity shareholder funds increased by 93% to £26,652,271 (2008: £
13,836,941)
* Acquired 8.04% of Kalahari Minerals Plc
* Acquired 0.17% of Extract Resources Limited
* Holdings in Kalahari Minerals and Extract Resources valued at £17,627,774
against a purchase price of £7,368,281 - a rise of 139%
* Non-current assets valuation increased to £5,319,860 (2008: £4,818,455)
* Current assets valuation increased to £21,392,111 (2008: £9,092,516)
* Tsumeb option remains valued at £4,818,455
* Cash reserves have remained healthy at £3,757,960 (2008: £9,056,161) - a
decrease of 59%
* Net profit for the year was £10,005,933 (2008: Loss of £1,498,576)
* Interest income of £266,423 (2008: £174,031) - an increase of 53%
* Operating expenses are in line with budget at £973,230 (2008: £1,684,688)
Stephen Dattels, Co Chairman of Emerging Metals, commented:
"Our maiden year of operations as an AIM listed company has been exceptionally
good and we are confident of further growth. In particular, the acquisition of
interest in Kalahari Minerals has opened up a world class uranium resource that
the Company can leverage with its existing platform and operations at Tsumeb in
Namibia. Furthermore, the Board believes that the year ahead will provide
additional opportunities to acquire holdings at unprecedented low cost with
outstanding prospects for the future. To this end, post period the Company
amended its business strategy giving it greater flexibility to acquire
strategic stakes in publicly traded companies that have a focus on investment
metals in addition to its original remit of just investing in minor metals and
minor metal projects."
-- Ends --
Contact details
Emerging Metals Blomfield Corporate Fox-Davies Capital GTH
Limited Finance Limited Limited
Communications
Mitch Alland Toby Howell Daniel Fox-Davies Toby Hall
Peter
Trevelyan-Clark
+44 (0) 1624 639396 +44 (0) 20 7489 +44 (0) 20 7936 +44 (0) 20 7153
4500 5200 8035
Chairmen's statement
Since admission to the AIM on 11 July 2008, Emerging Metals Limited has
continued studies and test work on the Tsumeb Slag stockpiles to determine the
viability of extracting the contained metals, principally germanium but also
zinc and gallium. Specifically, the continuing work involves the completion of
drilling and trenching of the stockpiles and metallurgical testing designed to
determine the optimum processing method for the contained metals. As the
current market conditions for these metals are still weak, the Company is
seeking to minimise the evaluation and test work costs on the Tsumeb Slag
stockpiles whilst these conditions continue and is reassessing on an ongoing
basis the timing, scope and viability of this project in the light of market
conditions.
In the buoyant economic environment before the crash in world equity markets in
the autumn of 2008, the Company was active in reviewing numerous possible
opportunities in a wide range of minor metals, in Africa, Asia, Europe, and
North and South America. The opportunities considered by the Company included
exposure to both physical quantities of minor metals and to additional minor
metals projects. The Company's prudent approach to investment proved to be
fortuitous, as the values of share prices in the natural resources sector are
at a fraction of their former levels and many companies are trading well below
their net asset value.
The current economic climate provided the Company with attractive opportunities
to gain exposure to additional minor metals projects by way of acquiring stakes
in certain other quoted companies. To enable it to take advantage of such
opportunities the Company amended its business strategy at an Extraordinary
General Meeting held on 10 April 2009. This was in order to gain greater
flexibility in utilising its cash reserves for potential investments in not
just physical minor metals and additional minor metals projects, the strategy
outlined in the Admission Document, but also to permit different types of
investment in other non-minor metals. Further, the business strategy gives the
Company explicit capacity to acquire strategic stakes in publicly traded
companies with a focus on investment metals, being all metals other than base
metals (excluding for these purposes zinc) and bulk commodities metals as part
of the Company's ordinary course of business.
It is in this spirit and in the period under review the Company invested £7.1
million, at an average cost of 45.04 pence per share, in acquiring 8.04% of
Kalahari Minerals Plc, and £198,935, at an average cost of A$1.1945 per share,
in acquiring 0.17% of Extract Resources Limited. Kalahari Minerals is an AIM
traded exploration and development company whose principal asset is a 39.02%
interest in Extract Resources, an ASX listed uranium exploration and
development company with significant uranium assets in Namibia, namely the
Husab uranium project comprising the Rössing South, Ida Dome and Hildenhof
deposits.
Recent exploration results reinforce the Company's belief that the area has the
strong potential to host an economic uranium deposit of major size, as Rössing
South, of which Extract Resources owns 100 percent, is expected to contain over
200 million pounds of triuranium octoxide (U3O8). The newly published Zone 1
resource of 145 million pounds of U3O8 at a grade of 449 parts per million, as
well as the recent stream of high grade drilling results from Zone 2, establish
Rössing South as a truly exceptional uranium discovery where grades exceed the
average grade of the resources remaining at the existing Rössing uranium mine,
operated by Rio Tinto Zinc six kilometers to the north.
Demand for uranium is expanding rapidly across the developing world, as China,
India, Russia and Brazil look to nuclear power plants to foster infrastructural
and industrial development, while the developed world needs to increase base
load electricity capacity to meet increasing demand whilst minimizing
atmospheric emissions. As a result of this confluence of demand for nuclear
power plants across a range of countries, despite the current state of the
world economy, the fundamentals for uranium demand and price remain sound.
The acquisition of this interest in Kalahari Minerals gives Emerging Metals
exposure to a world class uranium resource, an emerging metal with a very
favourable supply-demand outlook. It also leverages on Emerging Metals existing
platform and operations at Tsumeb in Namibia.
Our maiden results following our listing on AIM to 31 March 2009 are
consequently extremely pleasing, with a positive net profit for the year of £
10,005,933 (2008: loss of £1,498,576), including an investment gain of £
10,259,493 (2008: £nil), interest income of £266,423 (2008: £174,031) and an
exchange gain of £798,146 (2008: £78,222). Operating expenses are in line with
budget at £973,230 (2008: £1,684,688) with the majority of costs incurred in
connection with professional fees relating to the Tsumeb project.
As a result, equity shareholder funds have increased to £26,652,271 (2008: £
13,836,941), a rise of 93%. Fixed assets stand at £5,319,860 (2008: £
4,818,455), current assets at £21,392,111 (2008: £9,092,516). Our cash reserves
stood at £3,757,960 (2008: £9,056,161).
Our share premium has increased to £14,560,530 (2008: £11,831,373) following a
small funding round prior to the AIM listing.
The coming year should provide excellent opportunities for the Company to
acquire holdings at unprecedented low cost with outstanding prospects for the
future. With the extensive industry knowledge and contacts of the Board and of
major shareholders EML is well placed to capitalize on the current situation
and to build the basis for the future of the Company. Also we are pleased to
report that the Company's holdings in Kalahari Minerals and Extract Resources
continue to gain in value. Our maiden year of operations as an AIM listed
company has been exceptionally good and we are confident of further growth.
We would like to express our appreciation to the shareholders for their
continued support.
Stephen Dattels
Co-chairman
James Mellon
Co-chairman
Income statementfor the year ended 31 March 2009
Notes 2009 (Note 14)
2008
£ £
Income 1(g) - -
Other income
Exchange gains 798,146 78,222
Investment gains 10,259,493 -
────── ──────
11,057,639 78,222
Operating expenses
Directors fees 7 (344,899) (66,141)
Other costs 3 (973,230) (1,684,688)
────── ──────
(1,318,129) (1,750,829)
────── ──────
Net profit / (loss) before 9,739,510 (1,672,607)
interest
Interest received 1(g) 266,423 174,031
────── ──────
Profit / (loss) before 10,005,933 (1,498,576)
taxation
Taxation 8 - -
******* *******
Net profit / (loss) for 10,005,933 (1,498,576)
the period
******* *******
Earnings/(loss) per share 15 0.0306 (0.0269)
******* *******
Diluted earnings/(loss) 15 0.0285 (0.0269)
per share
******* *******
The Directors consider that the Company's activities are continuing.
Balance sheetas at 31 March 2009
Notes 2009 2008
£ £
Assets
Non-current assets
Land options 1 4,818,455 4,818,455
(c),4
Intangible Fixed Assets 1(d) 501,405 -
────── ──────
5,319,860 4,818,455
Current assets
Investments 1(e) 17,627,774 -
Trade and other receivables 1(h) 6,377 36,355
Cash and cash equivalents 1(h) 3,757,960 9,056,161
────── ──────
21,392,111 9,092,516
────── ──────
Total assets 26,711,971 13,910,971
â•â•â•â•â•â• â•â•â•â•â•â•
Equity and liabilities
Capital and reserves
Share capital 5 - -
Share premium 5 14,560,530 11,831,373
Share Option Reserve 6 3,504,144 3,504,144
Equity Share Based Payment 1(l) 80,240 -
Reserve
Accumulated profit / (loss) 8,507,357 (1,498,576)
────── ──────
Total equity 26,652,271 13,836,941
Current liabilities
Trade and other payables 59,700 74,030
────── ──────
Total equity and 26,711,971 13,910,971
liabilities
â•â•â•â•â•â• â•â•â•â•â•â•
Statement of changes in equityfor the year ended 31 March 2009
Share Share Share Share Accumulated Total
Based
Premium Option Capital Profits /
Reserves Option (Losses)
Payments
£ £ £ £ £ £
Balance at 1 - - - - - -
April 2007
Net Loss for the - - - - (1,498,576) (1,498,576)
year
Shares issued 11,831,373 - - - - 11,831,373
Fair value of - 3,504,144 - - - 3,504,144
share options
Share based - - - - - -
payment reserve
────── ─────── ─────── ────── ─────── ───────
Balance at 31 11,831,373 3,504,144 - - (1,498,576) 13,836,941
March 2008
â•â•â•â•â•â• â•â•â•â•â•â•â• â•â•â•â•â•â•â• â•â•â•â•â•â• â•â•â•â•â•â•â• â•â•â•â•â•â•â•
Share Share Share Share Accumulated Total
Based
Premium Option Capital Profits /
Option (Losses)
Reserves
Payments
£ £ £ £ £ £
Balance at 1 April 11,831,373 3,504,144 - - (1,498,576) 13,836,941
2008
Net profit for the - - - - 10,005,933 10,005,933
year
Shares issued 2,729,157 - - - - 2,729,157
Fair value of - - - - - -
share options
Share based - - 80,240 - - 80,240
payment reserve
────── ─────── ─────── ────── ─────── ───────
Balance at 31 14,560,530 3,504,144 80,240 - 8,507,357 26,652,271
March 2009
â•â•â•â•â•â• â•â•â•â•â•â•â• â•â•â•â•â•â•â• â•â•â•â•â•â• â•â•â•â•â•â•â• â•â•â•â•â•â•â•
Cash flow statementfor the year ended 31 March 2009
Notes 2009 (Note 14)
2008
£ £
Cash flows from operating activities 9 (157,672) (259,227)
Cash flows from investing activities
Amount paid in cash for mineral options 4 - (1,421,000)
Amount paid in cash for intangible fixed assets (501,405) -
Amount paid in cash for investments (7,368,281) -
Cash flows from financing activities
Issue of shares 2,729,157 10,736,388
────── ──────
(Decrease) / increase in cash and cash (5,298,201) 9,056,161
equivalents
Cash and cash equivalents at beginning of period 9,056,161 -
******* *******
Cash and cash equivalents at the end of period 3,757,960 9,056,161
â•â•â•â•â•â• â•â•â•â•â•â•
Notes (forming part of the financial statements for the year ended 31 March
2009)
1 Accounting policies
Emerging Metals Limited is a company domiciled in the British Virgin Islands.
The financial statements incorporate the principal accounting policies set out
below.
a) Statement of compliance
The financial statements are prepared in accordance with International
Financial Reporting Standards (IFRS) and the interpretations adopted by the
International Accounting Standards Board (IASB).
The directors' do not expect the adoption of the other current upcoming and new
IFRS standards and interpretations to have a material impact on the Company's
financial statements in the period of initial application.
b) Basis of preparation
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision only affects that period or in the period
of the revision and future periods if the revision affects both current and
future periods. The key estimate and judgement made by the Directors is the
fair value of the land option.
c) Land options
Land options are stated at fair value, as estimated by the Directors. This is
estimated to be the current market value of the options. There will be no
amortisation of the premium paid.
d. Intangible assets
Exploration rights and associated survey costs are capitalised as incurred and
reviewed annually for impairment and are carried at cost less accumulated
impairment losses.
e) Investments
Investments are acquired to realise gains from fluctuations in the prices or
margins of traders. These assets are valued at fair value based on quoted bid
prices. Any realised and unrealised gains and losses are presented within
`Operating Expenses'.
f) Impairment
The carrying amounts of the Company's assets are reviewed at each balance sheet
date to determine whether there is any indication of impairment. If there is
any indication that an asset may be impaired, its recoverable amount is
estimated. The recoverable amount is the higher of its net selling price and
its value in use.
In assessing value in use, the expected future cash flows from the asset are
discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to
the asset.
An impairment loss is recognised whenever the carrying amount of an asset
exceeds its recoverable amount.
For an asset that does not generate cash inflows that are largely independent
of those from other assets, the recoverable amount is determined for the
cash-generating unit to which the asset belongs. An impairment loss is
recognised in the income statement whenever the carrying amount of the
cash-generating unit exceeds its recoverable amount.
A previously recognised impairment loss is reversed if the recoverable amount
increases as a result of a change in the estimates used to determine the
recoverable amount, but not to an amount higher than the carrying amount that
would have been determined (net of depreciation) had no impairment loss been
recognised in prior years.
g. Revenue
Interest income has been earned during the period, which is accrued on a time
apportion basis, by reference to the principal outstanding and the effective
interest rate applicable.
h) Financial instruments
Measurement
Financial instruments are initially measured at cost, which includes
transaction costs. Subsequent to initial recognition these instruments are
measured as set out below.
Land options
Land options are stated at fair value, as estimated by the Directors. This is
estimated to be the current market value of the options. There will be no
amortisation of the premium paid.
Trade and other receivables
Trade and other receivables originated by the Company are stated at amortised
cost less impairment losses.
Cash and cash equivalents
Cash and cash equivalents are measured at fair value and due on demand.
Financial liabilities
Non-derivative financial liabilities are recognised at amortised cost.
i) Provisions
Provisions are recognised when the Company has a present legal or constructive
obligation as a result of past events, for which it is probable that an outflow
of economic benefits will occur, and where a reliable estimate can be made of
the amount of the obligation.
Where the effect of discounting is material, provisions are discounted. The
discount rate used is a pre-tax rate that reflects current market assessments
of the time value of money and, where appropriate, the risks specific to the
liability.
j) Foreign currencies
Transactions in foreign currencies are recorded at the rate ruling at the date
of the transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated at the rate of exchange ruling at the balance sheet
date. All differences are taken to the income statement.
Non-monetary assets and liabilities that are measured in terms of historical
cost in a foreign currency are translated using the exchange rate at the date
of the transaction.
k) Share based payments
Under IFRS 2 `Share Based Payments', the Company determines the fair value of
options issued to Weatherly International plc as part consideration of the land
option (as per the Tsumeb Option Agreement (note 4)) share option reserves in
the balance sheet.
The Company determines the fair value of options issued to Directors
remuneration and recognises the amount as an expense in the income statement
with a corresponding increase in equity.
l) Directors equity share based payments
The Company has granted equity share-based payments following a resolution
passed in November 2008 for the directors of the company to accept 50% of their
remuneration in the form of new shares issued at mid-market prices. The fair
value of the incentive granted is recognised as an expense with a corresponding
increase in equity. The fair value is measured at the grant date and spread
over the period during which the directors become unconditionally entitled to
the incentives.
To date no shares have been issued to the directors under this scheme and as
such is accounted for in a share based payment reserve at the year end.
2 Operating Segments
It is the Directors' opinion that the company operates within a single segment.
3 Other costs
(Note 14)
2009 2008
£ £
Share option charge (note 6) - 1,201,674
Professional fees 824,854 431,496
Audit fee 15,000 6,500
Travel and transport 43,618 37,020
Office expenses 89,758 7,998
──────── ────────
973,230 1,684,688
â•â•â•â•â•â•â•â• â•â•â•â•â•â•â•â•
4 Land option
The land option comprises the Tsumeb Option as described below and is stated at
fair value.
On 28 January 2008, the Company entered into an amended and restated option
agreement with Ongopolo Mining Limited (OML), a company incorporated in Namibia
(the "Tsumeb Option Agreement") under which the Company was granted an option
to acquire all right, title and interest in and to the Tsumeb Slag Stockpiles
(the "Tsumeb Option") in consideration of:
i. the payment by the Company to OML, or as it directs, of £1,421,000 in cash;
ii. the issue and allotment of 21,899,698 Ordinary Shares credited as fully
paid to Weatherly International plc (Weatherly); and
iii. the grant to Weatherly of an option over 13,705,179 Ordinary Shares.
The consideration paid for the Tsumeb Option comprised £1,421,000 in cash,
21,899,698 ordinary shares issued as at zero par value to Weatherly at a cost
of £0.05 per share. An option was also granted to Weatherly to subscribe for up
to 13,705,179 ordinary shares at £0.05 per share, exercisable at any time for
five years from the date of completion of the Tsumeb Option Agreement. A
summary is as follows:
Land option consideration 2009 2008
£ £
Cash consideration 1,421,000 1,421,000
Shares issued at £0.05 per share 1,094,985 1,094,985
Fair value of share options 2,302,470 2,302,470
─────── ───────
4,818,455 4,818,455
â•â•â•â•â•â•â• â•â•â•â•â•â•â•
4 Land option (continued)
The grant of the Tsumeb Option was subject to a number of conditions, which
were satisfied on 29 January 2008. The exercise term of the Tsumeb Option (the
"Tsumeb Option Period") shall expire on the 30 month anniversary of the date of
the satisfaction of the conditions, such period comprising a total of 24 months
for completion of an initial programme of work, plus six months for a decision
by the Company to proceed with commercial production from any portion of the
Tsumeb Slag Stockpiles and announcement of that decision to AIM.
Under the Tsumeb Option Agreement, OML provides the Company with a number of
warranties regarding the Tsumeb Slag Stockpiles. In particular, OML warrants to
the Company that:
* it has the requisite power and authority to enter into and perform the
Tsumeb Option Agreement;
* it is, and will remain during the Tsumeb Option Period, the legal and
beneficial owner of 100 per cent of the Tsumeb Slag Stockpiles; and
* no further consent, approval or authorisation of any governmental agency or
other person is required by it for the entry into and performance of its
obligations under the Tsumeb Option Agreement.
Under the Tsumeb Option Agreement, OML was required to provide the Company with
a legal opinion from counsel duly qualified to practice in Namibia, confirming
OML's 100 per cent. ownership of the Tsumeb Slag Stockpiles (the "OML Legal
Opinion"). Under the Tsumeb Option Agreement, if OML was unable to supply the
OML Legal Opinion, OML and the Company would enter a new agreement, agreed in
good faith between the parties, establishing a contractual relationship between
OML and the Company that would ensure that the Company was placed in the same
economic position as was the intention under the Tsumeb Option Agreement - with
the Company bearing the cost incurred and receiving the profit or other benefit
arising out of the Tsumeb Slag Stockpiles. Under the Tsumeb Option Agreement,
OML and the Company agreed that, in the event of termination of the Tsumeb
Option Agreement, and in circumstances where the parties could not legally
enter or enforce the Toll Gate Agreement for whatever reason, the parties
agreed to take all such steps as necessary to return each other to the legal
and financial position each was in prior to the execution of the Tsumeb Option
Agreement. In particular, under the Tsumeb Option Agreement it is agreed that:
* Weatherly and/or OML shall return to the Company all consideration paid
under the Tsumeb Option Agreement together with interest at 2 per cent
above the base rate from time to time of Barclays Bank PLC per annum
accruing monthly;
* Weatherly and/or OML shall return, transfer or cancel as directed by the
Company all Ordinary Shares issued and allotted to Weatherly or OML under
the Tsumeb Option Agreement;
* Weatherly and/or OML shall return, cancel and/or extinguish all and any
options over Ordinary Shares granted to Weatherly or OML pursuant to the
Tsumeb Option Agreement; and
* OML shall pay the reasonable costs of the Company incurred in the
preparation, negotiation and completion of the obligations under the Tsumeb
Option Agreement.
5 Share capital and share premium
2009 2008
£ £
Authorised
The Company is authorised to issue an - -
unlimited number of no par value shares of a
single class
Issued
330,759,300 ordinary shares of £0.00 each - -
Share premium
1 share at incorporation - -
71,528,234 shares at £0.0001 per share 7,153 7,153
214,584,704 shares at £0.0500 per share 10,729,235 10,729,235
21,899,698 shares at £0.0500 per share 1,094,985 1,094,985
22,746,663 shares at £0.1200 per share 2,729,157 -
──────── ────────
Total 14,560,530 11,831,373
â•â•â•â•â•â•â•â• â•â•â•â•â•â•â•â•
6 Share based payments
A number of share options are in issue as at 31 March 2009:
Option to subscribe for
* 13,705,179 shares at £0.05 per share to Weatherly International plc for
acquisition of the land option (note 4) issued on 21 January 2008
Option to subscribe for
* 21,899,698 shares at £0.05 per share to the Founders issued on 28 January
2008
The following table lists the inputs to the models used for the year ended 31
March 2009:
31 March 2009 31 March 2008
Dividend yield (%) - -
Expected volatility (%) 65 65
Risk-free interest rate (%) 5 5
Share price at grant date 0.05 0.05
Share price (market value) 0.20 0.20
Exercise price 0.05 0.05
All options were issued during the prior period. No options lapsed or were
cancelled and no options were exercised during the period to 31 March 2009.
6 Share based payments (continued)
In summary, as at 31 March 2009, the value of the share options in issue is:
Name Options in Date Granted Vesting Option Value
issue Period Valuation
(Years) Per Share
£ £
Founders 7,152,823 21 January - 0.168 1,201,674
2008
Weatherly 13,705,179 28 January - 0.168 2,302,470
International 2008
Limited
──────
Total 3,504,144
â•â•â•â•â•â•
7 Directors Remuneration
(Note 14)
2009 2008
£ £
Directors Fees 344,899 66,141
────── ──────
344,899 66,141
â•â•â•â•â•â• â•â•â•â•â•â•
The Company has no employees other than the Directors.
8 Taxation
The Company is exempt from the provisions of the Income Tax Ordinance of the
British Virgin Islands.
9 Notes to the cash flow statement
Reconciliation of operating profit / (loss) to net (outflow) from operating
activities
(Note 14)
2009 2008
£ £
Operating profit / (loss) 10,005,933 (1,498,576)
Adjustment for:
Increase / (decrease) in trade and other 29,978 (36,355)
receivables
(Decrease) / increase in trade and other (14,330) 74,030
payables
Share option charge - 1,201,674
Share based payment charge 80,240 -
Unrealised gains on investments (10,259,493)
────── ──────
Net cash (outflow) from operating activities (157,672) (259,227)
â•â•â•â•â•â• â•â•â•â•â•â•
10 Financial instruments
The Company's financial instruments are exposed to a number of risks as
detailed below:
Credit risk
The carrying amount of financial assets represents the maximum credit exposure.
The maximum exposure to credit risk at the reporting date was:
Carrying amount
2009 2008
£ £
Cash and cash equivalents 3,757,960 9,056,161
The Company invests available cash and cash equivalents with an Isle of Man
licensed bank, which has a strong history on the Island.
The Company has a nominal level of debtors, and as such the Company is able to
determine that credit risk is considered minimal in relation to debtors.
Liquidity risk
Liquidity risk is managed by the Company by means of cash flow planning to
ensure that future cash requirements are anticipated. All liabilities are due
within one month.
Market price risk
The Company is exposed to market price risk to the extent that it holds a land
option for which no developed market exists. Therefore the Company might not be
able to sell such a stake quickly at close to estimated fair value.
All investments present a risk of loss of capital due to unexpected and
unforeseen events in the financial markets, and these can have a material and
unpredictable impact on the portfolio value. The maximum risk resulting from
the portfolio is equivalent to their fair value.
Carrying amount
2009 2008
£ £
Land option 4,818,455 4,818,455
Intangible fixed assets 501,405 -
Investments 17,627,774 -
Interest rate risk
The majority of the Company's current assets are cash held at bank. As a
result, the Company is subject to risk due to fluctuations in the prevailing
level of market interest rates. The weighted average interest rate at the year
end was 1.922% and all balances are held on demand.
The directors do not regard that interest income is a core revenue stream of
the Company and therefore fluctuations in interest rates will not adversely
impact the continuing operations of the company.
Fair values of financial instruments
At 31 March 2009 the carrying amounts of cash resources, trade and other
receivables, and trade and other payables approximate their fair values due to
their short-term maturities.
11 Interest in shares
Except for the interests disclosed in this note, the Directors are not aware of
any holding of Ordinary Shares as at the date of these accounts representing 3%
or more of the issued share capital of the Company:
Number of Ordinary Percentage of
Shares Issued Capital
Vidacos Nominees Limited 103,256,500 31.22%
Roy Nominees Limited 54,087,204 16.35%
HSBC Global Custody Nominee (UK) 36,420,833 11.01%
Limited
Weatherley International Plc 21,899,698 6.62%
Lynchwood Nominees Limited 13,375,000 4.04%
Directors interests
Stephen Dattels1 20,492,504 6.20%
James Mellon2 28,205,684 8.53%
Notes to Directors' Interests:
1 Stephen Dattels' shareholding includes 20,242,504 Ordinary Shares held by
Belstone Investments Limited, which is beneficially owned by Stephen Dattels,
and 250,000 Ordinary Shares held by Graham Dattels, a Connected Person.
2 Jim Mellon's entire shareholding is held by Galloway Limited, a company which
is indirectly wholly owned by the trustee of a settlement under which Jim
Mellon has a life interest.
12 Related Party Transaction
The Company has entered into a service agreement with Burnbrae Limited for the
provision of administrative and general office services. Mr J Mellon and Mr D
Eke are both directors of Burnbrae Limited and the Company. During the year the
Company paid £24,609 (2008: £nil) under this agreement and as at 31 March 2009
an amount of £nil (2008: £nil) was owed to Burnbrae Limited.
13 Subsequent events
None identified at date of signing.
14 Comparative period
The comparative period is the period from 4 July 2007 (date of incorporation)
to 31 March 2008.
15 Earnings per share
The calculation of basic earnings per share of the Group is based on the net
profit attributable to shareholders for the year of £10,005,933 (2008: loss of
£1,498,576) and the weighted average number of shares of 326,833,164 (2008:
55,692,323) in issue during the year.
The calculation of diluted earnings per share of the Company includes the
weighted average number of share options and shares to be issued in respect of
share based payments (see note 1(l)) for the year.
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