Final Results

RNS Number : 7089J

Sunrise Diamonds PLC

08 December 2008

 



SUNRISE DIAMONDs PLC 

Announcement of audited Financial statements FOR THE PERIOD ENDED

 30 SEPTEMBER 2008

Chairman's Statement 

I am pleased to present the Company's audited Financial Statements for the year ended 30 September 2008.

The Company's diamond exploration in Finland has progressed satisfactorily for most of this past year and, in particular, pleasing progress has been made in the further grade evaluation of kimberlites under our control. On the claims where we are earning a joint venture interest from Nordic Diamonds Inc., sampling of Kimberlite 17 has indicated diamond grades of economic interest and drilling on Kimberlite 14 suggests that it has not yet been fully delineated and that it is more extensive than first thought.  

Through our exclusive access to the BHP Billiton exploration database for Finland we have also continued to delineate a number of very exciting kimberlite targets in the lake covered areas of Kaavi-Kuopio where only limited testing has taken place in the past.

Outside of Finland, our ambitions to expand the Company's diamond exploration activities have been frustrated by the extended application process in our target country but we maintain an application for diamond exploration rights which, if granted, could be an important future focus for the company.

In normal circumstances I would have expected the Company's exploration progress to translate to a rewarding year for shareholders, but our wings have been clipped, not only by recent global financial events, but also by a longer running and progressive deterioration of investor interest in the diamond exploration sector in general.

Before the recent financial crisis and market crash, the past few years have seen a mining boom driven by a seemingly unrequited appetite for commodities in China, India and other developing countries. This real demand has driven a speculative bubble in commodities that has now burst. However, diamond exploration companies were largely sidelined during the boom despite rough diamond prices rising by more than 70% since the year 2000. There are a number of reasons for this. Compared to base and precious metals, the diamond market is opaque, with fewer opportunities for price speculation. A commercial diamond discovery cannot be indicated without expensive bulk sampling, and the lead time to production can be long. Despite this, the potential rewards for a successful development in the diamond business are high and investor interest will undoubtedly return to the sector in the future.

When stock markets crash, as they have globally in the past few months, all companies are affected. Recognising the difficulties facing exploration companies in particular, the Board is now keeping all further exploration expenditure under review and we have reduced administration costs from an already low base. All directors are taking their remuneration in shares and warrants rather than in cash.  

In the immediate future the Company will, where possible, look to industry rather than the markets to help finance its diamond exploration ambitions and will seek further arrangements of the type struck earlier this year with Mantle Diamonds to capitalise on the value of its investment in Finland to date and the value of its databases.

Given the decline in investor interest in diamond exploration companies the Board will, in future, consider opportunities in a broader range of commodities.

In September 2008 the Company made a small placing of shares which means that the Company is, after its cost cuts, able to continue operating for the foreseeable future whilst maintaining its project interests and seeking new opportunities. 

During the year we have secured a trading platform on PLUS Markets and, whilst our AIM trading facility is unaffected, it gives investors further choice and will lead, we hope, to increased trading liquidity once markets recover.

Financials

The Group Financial Statements for 2008 have been prepared for the first time in full compliance with International Financial Reporting Standards (IFRS) as adopted by the European Union, and includes a greater level of disclosure. 

The Group is reporting a loss of £640,433 for the year (2007: £212,621).  

In Conclusion

Although the world economic outlook is stormy, the Company's directors have weathered such storms in the past and I am confident that we will do so again. I would like to thank my fellow directors and shareholders for their support in 2008. 

Patrick L Cheetham        

Executive Chairman

8 December 2008

Further Information:

Patrick Cheetham, Sunrise Diamonds plc.                Tel: [phone]. 

Brett Miller/Roxane Marffy, Ruegg & Co. Limited.     Tel: [phone]

Web-site: www.sunrisediamonds.com

   Sunrise Diamonds plc

         Consolidated Income Statement

for the year ended 30 September 2008

	2008 £	2007 £
Pre-licence exploration costs	15,153	43,305
Impairment of deferred exploration cost	447,627	-
Administrative expenses	197,756	191,335
Operating loss	(660,536)	(234,640)
Interest receivable	19,486	18,961
Loss on ordinary activities before taxation	(641,050)	(215,679)
Tax on loss on ordinary activities	-	-
Loss on ordinary activities after tax	(641,050)	(215,679)
Minority interests	617	3,058
Loss for the year attributable to equity holders of the parent	(640,433)	(212,621)
Loss per share - basic and diluted (pence)	(0.45)	(0.18)

All amounts relate to continuing activities.

  Sunrise Diamonds plc

Statements of Total Recognised Income and Expense

for the year ended 30 September 2008

	Group   2008	Company  2008	Group   2007	Company  2007
	£	£	£	£
Loss for the Year	(640,433)	(634,880)	(212,621)	(185,101)
Foreign exchange translation differences on foreign currency net investment in subsidiary	973	-	-	-
Total recognised expense since last accounts	(639,460)	(634,880)	(212,621)	(185,101)

  Sunrise Diamonds plc

Balance sheets

at 30 September 2008

	Group	Company	Group	Company
	2008	2008	2007	2007
	£	£	£	£
Non-current assets
Intangible assets	740,607	740,607	986,355	986,355
Investment in subsidiary	-	18,161	-	15,408
	740,607	758,768	986,355	1,001,763
Current assets
Receivables	29,017	29,017	309,042	309,042
Cash and cash equivalents	510,839	510,839	455,930	455,930
	539,856	539,856	764,972	764,972
Current liabilities
Trade and other payables	(92,206)	(74,599)	(206,019)	(190,856)
Net current assets	447,650	465,257	558,953	574,116
Net assets	1,188,257	1,224,025	1,545,308	1,575,879
Equity
Called up share capital	184,395	184,395	138,867	138,867
Share premium account	2,189,337	2,189,337	1,959,723	1,959,723
Share option reserves	39,797	39,797	82,636	82,636
Foreign currency reserve	973	-	-	-
Retained losses	(1,222,577)	(1,189,504)	(632,867)	(605,347)
Shareholders' funds	1,191,925	1,224,025	1,548,359	1,575,879
Equity minority interests	3,668	-	3,051	-
Total Equity	1,188,257	1,224,025	1,545,308	1,575,879

  Sunrise Diamonds plc

 Cash Flow Statements

for the year ended 30 September 2008

	Group	Company	Group	Company
	2008	2008	2007	2007
	£	£	£	£
Operating activities
Operating loss	(660,536)	(655,333)	(234,640)	(204,062)
Share based payment charge	7,884	7,884	13,235	13,235
Shares issued in lieu of net wages	11,939	11,939	-	-
Shares issued in lieu of payment to trade creditor	24,953	24,953	-	-
Impairment charge	447,627	447,627	-	-
Decrease/(increase) in debtors	30,025	30,025	(11,351)	(11,351)
(Decrease)/increase in creditors	(113,813)	(116,257)	105,704	90,541
Net cash outflow from operating activity	(251,921)	(249,162)	(127,052)	(111,637)
Investing activities
Interest received	19,486	20,453	18,961	18,961
Purchase of intangible fixed assets	(201,879)	(201,879)	(353,549)	(353,549)
Purchase of investments	-	(2,753)	-	(15,408)
Net cash outflow from investing activity	(182,393)	(184,179)	(334,588)	(349,996)
Financing activities
Issue of share capital (net of expenses)	488,250	488,250	533,373	533,373
Issue of shares in subsidiary to minority interests	-	-	7	-
Net cash inflow from financing activity	488,250	488,250	533,380	533,373
Net increase in cash and cash equivalents	53,936	54,909	71,740	71,740
Cash and cash equivalents at start of year	455,930	455,930	384,190	384,190
Exchange differences	973	-	-	-
Cash and cash equivalents at 30 September	510,839	510,839	455,930	455,930

  1.  Accounting Policies

The financial information set out in this announcement has been prepared on the basis of the recognition and measurement requirements of International Financial Reporting Standards (IFRSs), as adopted by the European Union, and their interpretations adopted by the International Accounting Standards Board (IASB). The Company has reviewed the accounting policies set out in the Company's financial statements for the year ended 30 September 2007, which were prepared in accordance with UK Generally Accepted Accounting Practice (UK GAAP). Consequently the opening IFRS balance sheet contains adjustments made to the amounts reported previously in financial statements prepared since the transition date to IFRS, 1 October 2006.

In common with many exploration companies, the Company raises finance for its exploration and appraisal activities in discrete tranches. Further funding is raised as and when required. When any of the Group's projects move to the development stage, specific project financing will be required.

The directors prepare annual budgets and cash flow projections that extend beyond 12 months from the date of this report. On the basis of these projections, which include the proceeds of future fundraising, the directors continue to adopt the 'going concern' basis for preparing the accounts.

2. Publication of Non-Statutory Accounts

The financial information set out in this announcement does not constitute the Company's Statutory Accounts for the period ended 30 September 2008 or 2007. The financial information for 2007 is derived from the Statutory Accounts for 2007 and amended by the adoption of IFRSs. Full audited accounts in respect of that financial period prior to the adoption of IFRSs have been delivered to the Registrar of Companies. 

The Statutory Accounts for 2008 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The auditors have reported on the 2008 and 2007 accounts. They did not contain a statement under Section 237(2) or (3) of the Companies Act 1985 and received an unqualified audit opinion. However there was an emphasis of matter in relation to a requirement that the Company raise funds in the future to continue as a going concern.

3.	Loss per share
	Loss per share has been calculated on the loss and the weighted average number of shares in issue during the year.
		Group 2008	Group 2007
	Loss (£)	(640,433)	(212,621)
	Weighted average shares in issue (No.)	142,169,110	115,389,993
	Basic and diluted loss per share (pence)	(0.45)	(0.18)
	The loss attributable to ordinary shareholders and weighted average number of ordinary shares for the purpose of calculating the diluted earnings per ordinary share are identical to those used for the basic earnings per ordinary share. This is because the exercise of share warrants would have the effect of reducing the loss per ordinary share and is therefore not dilutive under the terms of IAS33.

4.    Dividend

No dividend is proposed.

5.    Annual Report

The Company's 2008 Annual Report will be published and sent to shareholders in due course and copies will be available to the public, free of charge, from the Registered Office of the Company at Sunrise House, Hulley Road, Macclesfield, Cheshire, SK10 2LP and will be downloadable from the Company's website at www.sunrisediamonds.com. 

 

END

 

 

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