Final Results
African Consolidated Resources plc / Ticker: AFCR / Index: AIM / Sector: Mining
18 August 2010
African Consolidated Resources plc ('ACR' or 'the Company')
Final Results
African Consolidated is pleased to announce its final results for the year ended
31 March 2010.
The Company's Annual Report is also available for download from the Company's
website www.acrplc.com. Copies will be distributed to shareholders shortly.
Enquiries
Andrew Cranswick African Consolidated Resources plc +44 7920 189010
Roy Tucker African Consolidated Resources plc +44 1622 816918
+44 7920 189012
Richard Greenfield Ambrian Partners +44 20 7634 4700
Susie Callear St Brides Media & Finance +44 20 7236 1177
Chief Executive Officer's report
Introduction
Another financial year passes with no less volatility and adventure than
expected. From fickle markets to uncertain politics, ACR presses forward with
our original vision, regardless of short term distractions. The successful
fund-raising completed in late 2009 has provided a solid cash reserve which is
being carefully husbanded and clearly demonstrated the trust our shareholders
place in this Board. Operationally, we have made strong progress and achieved
some exciting results, particularly on the gold front where our JORC compliant
resource now exceeds 1 million ounces, and we expect more good news in this
regard over the coming year.
Zimbabwe and the region
As always, we should acknowledge early the elephant in the room. This company
was established from day one to begin by operating primarily in Zimbabwe,
recognising our advantages while knowing the potential risks. Our extraordinary
successes on the discovery front have, perhaps inevitably, led to some
controversial attention in other forms. Most recently these strange
contradictions, of opportunity for success versus the potential dangers of that
success, materialised by way of the unlawful and aggressive arrest of a company
officer. Unfortunate and perhaps predictable as this may have been, it has been
handled professionally from a personal, a legal and a public relations
viewpoint. We continue to develop positive relationships within the Zimbabwean
Government. In tandem with this, we continue our effort to bring investment to
Zimbabwe, especially in the resource sector which offers the best hope for an
early and sustained recovery within this, one of the world's most battered
economies. Our interests are inextricably aligned with those of the people of
Zimbabwe who wish to break the cycle of impoverishment and instead foster free
and unfettered economic development. Only a competitive and transparent
investment climate can achieve this. Patience, professionalism and a steady eye
on the long-term future will remain our philosophy and strategy. Uncertainty has
provided the opportunity and we will rise to the challenges which must emanate
from that same uncertainty.
Having addressed the trying elements of the status quo, I would like to commend
the current Government of Zimbabwe for their modernisation and deregulation of
the gold pricing and export regime. Coupled with the complete dollarization of
the economy, the scope for expansion and development of the gold mining sector
is extremely exciting although it will take time to show the full benefit of
these enlightened policies.
Without minimising the importance of our Zimbabwean portfolio, I am pleased to
report that we have activated a strong exploration programme with appropriate
alliances on our rare-earth (REEs) and phosphate prospects in Isoka, Zambia.
Shortly to be expanded into second phase planning of our gold, copper and
diamond prospects (Isoka and Kasempa), Zambia provides an interesting extension
prospect for ACR's asset base and we expect to publish on-going information in
this regard. It also provides another step along the road to becoming a more
significant regional player in the sector.
Marange
The solution to the "diamond problem" of Zimbabwe is one that can so easily be
turned into the "diamond windfall" for Zimbabwe. The solution is apparent and
may be easily guided by the nation's own laws which have been clear on this
issue. ACR has not wavered from its willingness to compromise and settle the
issue without further litigation and our efforts to achieve this continue on
several fronts. As always there are clearly strong voices in Government which
demand adherence to the rule of law and push for a positive, win-win outcome to
the matter including a settlement with ACR. The quagmire of confusion that has
been cultivated around the issue can only serve corrupt interests. We welcome
and concur with the voices of reason and legality in Government who speak for
the national interest.
The diamond industry as a whole has suffered from this ordeal and it needs to
recognise the reputational importance of legitimacy, the essential and absolute
respect for law, rights and ethics without which a consumer revolt against this
product seems as inevitable as it would be disastrous for all involved. Again,
ACR has striven towards a responsible and ethical approach with the ever-present
threat of international litigation a course of last resort but one in which our
rights remain entirely reserved. We have stayed the course and the majority of
our shareholders have been unequivocal in their support for the Board's stance,
which is guided not only by the obvious value of the asset but also the
implications for the region and therefore our entire project portfolio. The
geo-political dangers and regional economic considerations of a further
deterioration of the status quo cannot be underestimated and I am somewhat
relieved to note that the obvious urgency implied is now far better understood
than before. I reiterate once again our desire for a legal, honest and ethical
outcome in this matter.
ACR Strategy - Elephants notwithstanding
First-mover advantage in Zimbabwe coupled with excellent science, latest
techniques and great personal energy in staff and management have served us
well. We have established and continue to develop an asset base the envy of many
resources companies. I have often heard from investors and analysts the opinion
that ACR has by far the best footprint in Zimbabwe and hence is best poised for
the classic turnaround revaluation paradigm. Indeed I believe this to be true
and that we are very well positioned in that regard. However, we are not by any
means a mineral property speculator. To the contrary, we continue to advance our
portfolio of assets while remaining on the look-out for further acquisitions, be
it for consolidation on existing ground or for the discovery and definition of
new prospects. Excellent technical facilities and skills, extraordinary
discoveries and an outstanding, well-knitted team of committed individuals have
built a foundation of human and intellectual capital that will continue to
generate more shareholder value. Essentially, nothing in our grand vision and
strategy has changed. Besides the continuing work pattern and value development,
all that now remains is the turn-around itself.
Project Synopses
Gold
Our gold assets continue to live up to the higher end of our ambitions with a
belated but better-than-expected maiden resource declared along the Blue Rock
structures in the Gadzema greenstone belt of Zimbabwe's northern midlands.
Consolidation of claims along strike continues and the exploratory drilling
still underway will define the extent of mineralisation along this felsic
porphyry belt. Airborne radiometric survey has provided an excellent guide for
the identification of the proven host rock, and all that remains is the science
to establish the extent of mineralisation therein. ACR controls several square
kilometres of highly prospective ground predicted to contain the favourable host
rock and I hope to be bringing a continued stream of good news to the market in
this regard. The project provides good expectations of a broad pittable
structure with wide, low-cost open-cast mining potential. In such a model, it is
commonly economic to mine at a low cut-off grade and this again provides scope
for a large resource. I regard this area as the highest priority of all our
asset development plans and we intend to accelerate towards a pre-feasibility on
our Gadzema suite (Blue Rock and Giant).
The immediate neighbour to the Blue Rock project, and within the Gadzema belt is
the Giant Mine resource (already JORC compliant, pittable resources over
300,000 tr oz Au) and this close proximity provides additional impetus to the
critical mass of a large prospect. Just completed is a combination of diamond
and Reverse Circulation drilling totalling 3,500 metres on the Giant mine
extensions. This was primarily to penetrate the dioritic portion of the southern
end of the previously defined deposit. The diorite is known to be mineralised in
the upper region but has until now never been fully tested to the extent of its
width due to rock hardness. In addition, deeper drilling was completed beneath
parts of the entire known ore body to an approximate vertical depth of 200
metres. I look forward to updating the market as assay results are received.
The on-going drilling along the greater Gadzema area and subsequent resource
upgrades will eventually allow us to provide a specific timetable to take the
project to production.
Some thirty kilometres to the west of the Gadzema belt lies the highly
prospective northern Chakari greenstone belt. This trend holds promise for gold
mineralisation where felsics, granitoids and quartz veins cross-cut
tremolite/talc schists and banded iron formations. Artisanal mining activities
are notably active revealing interesting mineralised structures. Detailed
geochemistry was completed in 2009 and mapping covering 9 sq km of identified,
positive anomalies has now been completed. This will immediately be followed by
trenching and pitting across the prospective lithologies and followed by
exploratory drilling subject to budget and drilling availability.
ACR has recently announced to the market the signing of an MOU with a group of
mining professionals who have created a corporate structure for the purpose of
building operating mines in Zimbabwe (currently referred to as SSSB). A more
substantive agreement is likely to be signed in the near future and in summary
this provides demonstration of our value-extraction strategy in respect of the
more mature gold assets. In particular, the agreement will address the Pickstone
/ Peerless sites and the Gadzema projects. It is expected that a preliminary
feasibility study will commence shortly on the Peerless trend with a view to
mining the oxide and sulphides in an open-pit model. This strategy fits our
progression of these assets towards production and we expect to bring further
news to the market as this plan unfolds.
The Pickstone sulphide tailings dump project was expected by now to be in
positive cash flow but has been delayed due to the unilateral withdrawal of
ACR's equity partner in the project, TWP. Their withdrawal, following a
corporate takeover and a new Board, was attributed solely to investment risk
associated with Zimbabwe's sovereign risk. ACR has dealt with this disruption
carefully and methodically with regard to technical and legal considerations.
Most importantly, and mindful of the importance of husbanding cash reserves in
light of current risks and market climate, we have been studying the
alternatives of funding the entire capital investment internally, seeking a
financial partner, or delaying the project until the overall Pickstone Peerless
project is more advanced. While we do remain strongly positive on the
profitability of the project there are clearly longer term priorities that must
be recognised and a final decision will be made with due regard to the imminent
conclusion of the agreement with the SSSB group. The overriding mining strategy
to govern ACR's northern midlands gold resources must also be considered as do
cash reserve issues in the current, uncertain climate.
The anticipated cash flow from the tailings dumps may therefore be delayed but
the current gold price levels remain healthy. The newly deregulated gold selling
regime in Zimbabwe provides an added incentive to bring all possible production
prospects closer to fruition. Worthy of note is that as a matter of prudence,
large-scale exploration and resource drilling programmes on most projects have
been somewhat scaled back until a final decision has been reached on investment
in the dump.
Expansion plans to agglomerate other mature gold assets on a wider, national
level remain an ambition that has been frustrated at least partially by
political distractions revolving around diamond litigation and other issues such
as unclear indigenisation legislation. Nevertheless, as mentioned above,
consolidation on a more local scale around our projects has achieved good
success and remains on-going.
Nickel
Perseverance nickel sulphide prospect
A deep-looking electromagnetic survey (VTEM) over 30km of strike length of the
Perseverance nickel belt will be complete this year whereafter drilling will
commence on specific conductive targets. This step has suffered technical and
planning delays but we are now on track to complete this geophysics stage which
is essential to fine-tune an informed drilling programme.
Horseshoe saprolitic nickel oxide deposit
Pitting continues to investigate the saprolitic nickel accumulation in the top
2-3m of weathered serpentinites on the Great Dyke. Grades are generally around
1% nickel. Additional specialist mapping has been carried out to better
understand the weathering profile and its effect on nickel distribution as some
grades seem higher and weathering deeper. It is envisaged that a track-mounted
drilling unit may be deployed before the rains to test deeper oxides for grade
and chemistry. This remains a prospect with potential for a significant metal
content and low-cost mining profile. As previously stated, metallurgy appears to
be very conducive to atmospheric leaching and we remain intent on defining and
declaring a resource from this deposit in the future.
Phosphate
In my opinion, phosphates and other mineral feed-stocks to the fertiliser
industry must surely remain in a long-term bull trend. This belief stems from
the direct link to food production and bio-fuel production from cultivated
crops. These off-take sectors are linked in turn to continued population growth,
the drive for energy security and the drive for clean, renewable energy.
ACR's primary phosphate project lies within the Chishanya carbonatite complex in
southern Buhera district, Zimbabwe. One of the several hills comprising the
complex has shown to be phosphate-rich in historic and modern prospecting,
mostly at surface (4% to 26%) with an anticipated average grade of 10%+ P2O5.
Metallurgical test work is in progress to establish a flotation methodology to
upgrade the phosphate ore (in the form of apatite) to a rock phosphate
concentrate (of approx 30% P2O5) and has proved positive to date. Mineralogy
studies using a scanning electron microscope have indicated that most of the
apatite crystals should be amenable to flotation, but samples to date are solely
from the surface, where flotation tests are complicated by iron oxide present in
the weathered mineral. Prior to further flotation tests, it is planned to drill
two diamond core drill holes this month in order to obtain fresh rock samples
upon which additional test work will be completed and so develop a comfort level
on eventual mine-scale flotation processes. In addition, these core results will
provide valuable data on the subsurface deposit thickness, grade and
distribution of mineralisation. Subject to positive results on these two steps,
ACR intends conducting a resource-definition phase of drilling.
In Zambia, ACR also controls the Nkombwa Hills carbonatite (see REEs below).
Somewhat similar in genealogy to the Chishanya complex, Nkombwa contains what
has been historically reported as a potentially significant phosphate deposit
with estimates as high as 200 million tonnes of possibly economic grades in
earlier studies. The mineralogy is unique to the deposit and ACR intends
conducting test-work once the Chishanya work is complete to ascertain the
amenability to flotation and acid treatment for phosphoric and super-phosphate
production.
PGMs (Snakes Head)
Detailed, on-site mapping and analysis of surface geology by world-renowned
expert, Dr. Martin Prendergast, has resulted in the siting of four important
holes which are specifically designed to test the hypothesis of the higher grade
facies of the MSZ platinum reef in the extreme Northern escarpment of the Great
Dyke. Man-portable rigs are now being sought to commence this exploratory
drilling programme, which if successful, will be followed by a resource
definition drilling programme. At that stage, ACR may pursue previously
initiated discussions in connection with offshore funding and development
partnerships on feasibility work and eventual production.
Diamonds - regional
In Zimbabwe most of ACR's extensive exploration has resulted in the discovery of
several kimberlites and related anomalies. Until the clarification of government
policy, the Kimberly Process Certification Scheme and the recently mooted new
diamond laws, much of the budget for this activity has been reserved. An
exploration plan for ACR's diamond-prospective Isoka region in Zambia is being
formulated and we are hopeful of commencing that programme in the future.
Copper
On-going mapping has identified approximately 1,400m strike of surface copper
mineralisation over old mine workings in the Makonde district. The area, last
explored in the 1960s, lies in the Proterozoic Makonde Copperbelt, a belt which
has remarkable similarities to the Congo Copperbelt. Five diamond drillholes
totalling approximately 950m have been completed to test the down dip extensions
to a depth of 150m.
As reported in May of this year, the drilling covered a strike length of 300m
and intersected thick zones of mineralisation including both oxides (malachite
and minor chrysocolla) and sulphides (pyrite, chalcopyrite and bornite). The
sulphides are found disseminated throughout the dolomitic siltstone and shale
and appear stratiform. The oxides occur preferentially along a major shear zone
and along fracture zones via supergene enrichment and are up to 50m thick.
Independent assays are still awaited (having suffered some unforeseen logistic
delays) and if grades are encouraging, further drilling will be planned to
explore strike and depth extensions followed by metallurgy tests. The
Perseverance VTEM survey is planned to extend over this copper trend as the two
areas are reasonably proximal and that survey may highlight additional target
zones for sulphidic copper mineralisation in the area.
Rare Earth Elements (REEs)
As described above, the Nkombwa Hill project lies in North Eastern Zambia, near
the town of Isoka, within ACR's 720 sq km Large Scale Prospecting Licence No
12198-HQ-LPL which was granted on 16 January 2010. This licence covers
Proterozoic metasediments and basement gneisses, intruded by the Nkombwa Hill
carbonatite. The carbonatite has historically been explored for phosphate, rare
earths, and niobium. In June we announced that a joint venture heads of
agreement had been signed with Australian-based private exploration company,
Rare Earth International Ltd, to explore the project specifically for rare earth
minerals. REEs reported from the carbonatite include cerium, lanthanum,
neodymium, praseodymium and gadolinium. A compilation of historical work has
been successfully completed and has highlighted the prospectivity of the area
for these minerals. It has also revealed the existence of historical drill-core
from drilling in the 1970s. That core has been located and discussions are under
way with the Geological Survey department to release these for assay. In
addition, recent site-visits have provided surface samples which are awaiting
export to Johannesburg for assay.
As stated above, this Nkombwa project complements ACR's Chishanya Hill project
in Zimbabwe, where considerable expertise has already been developed
investigating the geology and metallurgy of that similar intrusion. ACR will be
exploring the REE potential of Chishanya as a 100% owned project.
Conclusion
Speed of recovery and stabilisation of world markets can be frustratingly slow
and likewise the trend towards normalisation of governance and law enforcement
in Zimbabwe. But as always we must remain focused on the various jobs at hand be
they technical, financial, PR, lobbying or legal. Some investors consider ACR as
something of a gamble, structured on one basic premise, but the truth is far
more complex and robust than that view. Meanwhile I urge our shareholders, the
Board and staff to continue our persistence towards achieving the long term
targets we have set and maintain our positive and optimistic energy. I once
again express my gratitude and admiration for the unswerving dedication this
team has displayed in trying circumstances and exciting times.
This report has been reviewed by Mike Kellow BSc, a member of the Australian
Institute of Geologists and Technical Director of ACR. Mr Kellow meets the
definition of a "qualified person" as defined in the AIM Note for Mining, Oil
and Gas Companies.
The directors present their report together with the audited financial
statements for the year ended 31 March 2010.
Results and dividends
    The Group statement of comprehensive income is set out on below and shows
the loss for the year.
    The directors do not recommend the payment of a dividend.
Principal activities, review of business and future developments
    The Group is engaged in the exploration for and development of mineral
projects in Sub- Saharan Africa. Since incorporation the Group has built an
interesting portfolio of projects in Zimbabwe and Zambia. The Chief Executive
Officer's report provides additional information on the Group's projects and a
review of the business.
    The directors consider the Group's key performance indicators to be the
rate of utilisation of the Group's cash resources and the on-going evaluation of
its exploration assets. These are detailed below.
Cash Resources
    As can be seen from the balance sheet, cash resources for the Group at 31
March 2010 were approximately $15.4 million (2009: $2.1 million), as a result of
two equity placements which raised $20.2 million (2009: $0.5 million) net of
issue costs. During the year the cash outflows from operations were $1,669,158
(2009: $1,652,624) and from investing activities was $5,372,159 (2009:
$3,733,919). There was expenditure of some $5.4 million on capital assets the
major part of which consisted of deferred exploration costs. The net monthly
cash expenditure in the year to March 2010 was approximately $587,000. This
figure reflects some increased drilling activity on the prior year as well as
on-going geochemical and geophysical work.
    On the basis of a monthly cash overhead cost of $140,000, the cash balance
of the Group at the beginning of March 2010, allows significant head room for
discretionary expenditure on exploration in the coming year.
Evaluation of Exploration Areas
    The Group has licences or claims over a significant number of discrete
areas of exploration. It is the Group's policy for the Board to review progress
every quarter on each area in order to approve the timing and amount of further
expenditure or to decide that no further expenditure is warranted. If no further
expenditure is warranted for any area then the related costs will be written
off. The board measures progression in each of its claim areas based on a number
of factors including specific technical results, international commodity
markets, claim holding costs and economic considerations.
Risks
    The principal risks and uncertainties facing the Group are the normal ones
inherent in carrying out exploration. Exploration for natural resources is
speculative and involves significant risk. Drilling and operating risks include
geological, geotechnical, seismic factors, industrial and mechanical incidents,
technical failures, labour disputes and environmental hazards. In addition the
Group faces particular country risks due to the fact that almost all of its
operations are currently in Zimbabwe where there is political and economic
uncertainty. These country risks are further addressed in Note 1 to the
Financial Statements.
Financial instruments
    Details of the use of financial instruments by the Company and its
subsidiary undertakings are contained in note 20 of the financial statements.
Purchase of own shares
    During the year the Company, through African Consolidated Resources (PTC)
Limited, acquired 12 million shares in the Company. The shares are held in trust
by African Consolidated Resources (PTC) Limited for the purposes of an Employee
Benefit Trust.
Charitable and political contributions
    During the year the Group made charitable contributions of $57,545 (2009 -
$36,835).
    The Group made no political contributions during the current year or prior
year.
Policy and practice on the payment of creditors
    The Group's policy is to settle terms of payment with suppliers when
agreeing terms of business, to ensure that suppliers are aware of the terms of
payment and to abide by them. It is usual for suppliers to be paid within 30
days of receipt of invoice.
    The number of average days purchases of the Company represented by trade
creditors at 31 March 2010 was 39 days (2009 - 19 days).
Directors
    The directors who served during the year and up to the date hereof were as
follows:-
Date of Appointment Date of Resignation
Stuart Bottomley 27.05.05 -
Andrew Cranswick 12.04.05 -
Michael Kellow 22.03.06 -
Roy Tucker 05.04.05 -
Directors' interests
    The interests in the shares of the Company of the Directors who served
during the year were as follows:-
Ordinary Shares Share Options Ordinary Share Options
held at 31 held at 31 Shares held at held at 31
March 2010 March 2010 31 March 2009
March 2009
of 1p each of 1p each
Stuart 2,376,000 3,650,000 1,376,000 4,650,000
Bottomley
Andrew 8,920,727 9,115,000 7,450,000 9,115,000
Cranswick
Michael Kellow 200,000 5,150,000 - 5,150,000
Roy Tucker 2,485,859 1,000,000 1,122,223 6,695,000
There were no post year-end acquisitions to date.
+----------+------------+------------+-----------+--------+-----------+--------+
|Share | | Exercised| | Granted| | |
|options | Outstanding| during|Transferred| during|Outstanding| Final|
| | at| | | | at|exercise|
|Exercise | | last| last| last| | date|
|price | | | | | | |
+----------+------------+------------+-----------+--------+-----------+--------+
| | 31 March| 12 months| 12 months| 12 | 31 March| |
| | 2009| | | months| 2010| |
+----------+------------+------------+-----------+--------+-----------+--------+
|Stuart | | | | | | |
|Bottomley | | | | | | |
+----------+------------+------------+-----------+--------+-----------+--------+
|4.5p | 2,000,000| (1,000,000)| -| -| 1,000,000| Jun-11|
+----------+------------+------------+-----------+--------+-----------+--------+
|12.0p | 550,000| -| -| -| 550,000| Jun-11|
+----------+------------+------------+-----------+--------+-----------+--------+
|15.0p | 550,000| -| -| -| 550,000| Jun-11|
+----------+------------+------------+-----------+--------+-----------+--------+
|18.0p | 550,000| -| -| -| 550,000| Jun-11|
+----------+------------+------------+-----------+--------+-----------+--------+
|18.0p | 1,000,000| -| -| -| 1,000,000| Jun-11|
+----------+------------+------------+-----------+--------+-----------+--------+
| | 4,650,000| (1,000,000)| -| -| 3,650,000| |
+----------+------------+------------+-----------+--------+-----------+--------+
+----------+------------+------------+-----------+--------+-----------+--------+
|Andrew | | | | | | |
|Cranswick | | | | | | |
+----------+------------+------------+-----------+--------+-----------+--------+
|4.5p | 1,000,000| -| -| -| 1,000,000| Jun-11|
+----------+------------+------------+-----------+--------+-----------+--------+
|12.0p | 1,705,000| -| -| -| 1,705,000| Jun-11|
+----------+------------+------------+-----------+--------+-----------+--------+
|15.0p | 1,705,000| -| -| -| 1,705,000| Jun-11|
+----------+------------+------------+-----------+--------+-----------+--------+
|18.0p | 1,705,000| -| -| -| 1,705,000| Jun-11|
+----------+------------+------------+-----------+--------+-----------+--------+
|18.0p | 3,000,000| -| -| -| 3,000,000| Jun-11|
+----------+------------+------------+-----------+--------+-----------+--------+
| | 9,115,000| -| -| -| 9,115,000| |
+----------+------------+------------+-----------+--------+-----------+--------+
+----------+------------+------------+-----------+--------+-----------+--------+
|Michael | | | | | | |
|Kellow | | | | | | |
+----------+------------+------------+-----------+--------+-----------+--------+
|4.5p | 2,500,000| -| -| -| 2,500,000| Jun-11|
+----------+------------+------------+-----------+--------+-----------+--------+
|12.0p | 550,000| -| -| -| 550,000| Jun-11|
+----------+------------+------------+-----------+--------+-----------+--------+
|15.0p | 550,000| -| -| -| 550,000| Jun-11|
+----------+------------+------------+-----------+--------+-----------+--------+
|18.0p | 550,000| -| -| -| 550,000| Jun-11|
+----------+------------+------------+-----------+--------+-----------+--------+
|18.0p | 1,000,000| -| -| -| 1,000,000| Jun-11|
+----------+------------+------------+-----------+--------+-----------+--------+
| | 5,150,000| -| -| -| 5,150,000| |
+----------+------------+------------+-----------+--------+-----------+--------+
+----------+------------+------------+-----------+--------+-----------+--------+
|Roy Tucker| | | | | | |
+----------+------------+------------+-----------+--------+-----------+--------+
|4.5p | 2,000,000| (1,000,000)| -| -| 1,000,000| Jun-11|
+----------+------------+------------+-----------+--------+-----------+--------+
|12.0p | 898,334| -| (898,334)| -| -| Jun-11|
+----------+------------+------------+-----------+--------+-----------+--------+
|15.0p | 898,334| -| (898,334)| -| -| Jun-11|
+----------+------------+------------+-----------+--------+-----------+--------+
|18.0p | 898,332| -| (898,332)| -| -| Jun-11|
+----------+------------+------------+-----------+--------+-----------+--------+
|18.0p | 2,000,000| -|(2,000,000)| -| -| Jun-11|
+----------+------------+------------+-----------+--------+-----------+--------+
| | 6,695,000| (1,000,000)|(4,695,000)| -| 1,000,000| |
+----------+------------+------------+-----------+--------+-----------+--------+
|Total | 25,610,000| (2,000,000)|(4,695,000)| -| 18,915,000| |
+----------+------------+------------+-----------+--------+-----------+--------+
R. C. Tucker sold to adult members of his family the option to acquire
4,695,000 shares, all exercisable at any time up to 29 June 2011, for an
aggregate sum of £9,000. The value of £9,000 was assessed as a market value
based on the review of an independent valuer.
+----------+---------+------------+----------+----------+------------+---------+
|Employee | | | Exercised| Granted| | |
|Benefit | Exercise| Outstanding| during| during| Outstanding| Exercise|
|Trust | price| at| | | at| date|
| | | | last| last| | |
+----------+---------+------------+----------+----------+------------+---------+
| | | 31 March| 12 months| 12 months| 31 March| |
| | | 2009| | | 2010| |
+----------+---------+------------+----------+----------+------------+---------+
| | | | | | | 50% |
|Stuart | 1p| -| -| 1,500,000| 1,500,000| Jul-10|
|Bottomley | | | | | | and 50% |
| | | | | | | Jul-11|
+----------+---------+------------+----------+----------+------------+---------+
| | | | | | | 50% |
|Andrew | 1p| -| -| 3,000,000| 3,000,000| Jul-10|
|Cranswick | | | | | | and 50% |
| | | | | | | Jul-11|
+----------+---------+------------+----------+----------+------------+---------+
| | | | | | | 50% |
|Michael | 1p| -| -| 2,000,000| 2,000,000| Jul-10|
|Kellow | | | | | | and 50% |
| | | | | | | Jul-11|
+----------+---------+------------+----------+----------+------------+---------+
| | | | | | | 50% |
|Roy Tucker| 1p| -| -| 1,500,000| 1,500,000| Jul-10|
| | | | | | | and 50% |
| | | | | | | Jul-11|
+----------+---------+------------+----------+----------+------------+---------+
|Total | | -| -| 8,000,000| 8,000,000| |
+----------+---------+------------+----------+----------+------------+---------+
See note 22 for further details of the EBT
Directors' remuneration
+----------------+-----------------+-------+-----------+-------+--------+
| |Basic salary/fees|Pension|Medical aid| Total| Total|
+----------------+-----------------+-------+-----------+-------+--------+
| | | | | 2010| 2009|
+----------------+-----------------+-------+-----------+-------+--------+
| | $| $| $| $| $|
| | | | | |Restated|
+----------------+-----------------+-------+-----------+-------+--------+
+----------------+-----------------+-------+-----------+-------+--------+
|Stuart Bottomley| 34,280| -| -| 34,280| 40,389|
+----------------+-----------------+-------+-----------+-------+--------+
|Andrew Cranswick| 119,400| -| 3,332|122,732| 157,978|
+----------------+-----------------+-------+-----------+-------+--------+
|Ian Fisher | -| -| -| -| 14,499|
+----------------+-----------------+-------+-----------+-------+--------+
|Michael Kellow | 109,150| 10,428| 3,545|123,123| 173,342|
+----------------+-----------------+-------+-----------+-------+--------+
|Roy Tucker | 132,608| -| -|132,608| 163,284|
+----------------+-----------------+-------+-----------+-------+--------+
+----------------+-----------------+-------+-----------+-------+--------+
| | 395,438| 10,428| 6,877|412,743| 549,492|
+----------------+-----------------+-------+-----------+-------+--------+
All the interests were beneficial and no director has any interest in the shares
of any of the subsidiary companies.
Auditors
All of the current directors have taken all the steps that they ought to have
taken to make themselves aware of any information needed by the Company's
auditors for the purposes of their audit and to establish that the auditors are
aware of that information. The directors are not aware of any relevant audit
information of which the auditors are unaware.
BDO LLP have expressed their willingness to continue in office and a resolution
to re appoint them will be proposed at the annual general meeting.
Post balance sheet events
There were no other material post balance sheet events.
By order of the Board
Roy Tucker
Secretary
17 August 2010
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial
statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each
financial year. Under that law the directors have elected to prepare the Group
and Company financial statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union. Under company law
the directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the
Group and company and of the profit or loss of the Group for that year. The
directors are also required to prepare financial statements in accordance with
the rules of the London Stock Exchange for companies trading securities on the
Alternative Investment Market.
In preparing these financial statements, the directors are required to:
* select suitable accounting policies and then apply them consistently;
* make judgements and accounting estimates that are reasonable and
prudent;
* state whether they have been prepared in accordance with IFRSs as
adopted by the European Union, subject to any material departures
disclosed and explained in the financial statements;
* prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the company and enable
them to ensure that the financial statements comply with the requirements of the
Companies Act 2006. They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
Website publication
The directors are responsible for ensuring the annual report and the financial
statements are made available on a website. Financial statements are published
on the Company's website in accordance with legislation in the United Kingdom
governing the preparation and dissemination of financial statements, which may
vary from legislation in other jurisdictions. The maintenance and integrity of
the Company's website is the responsibility of the directors. The directors'
responsibility also extends to the ongoing integrity of the financial statements
contained therein.
Report of the independent auditors
We have audited the financial statements of African Consolidated Resources plc
for the year ended 31 March 2010 which comprise the Group statement of
comprehensive income, the Group and Company statements of changes in equity, the
Group and Company statements of financial position and the Group and Company
statements of cash flows and the related notes. The financial reporting
framework that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European
Union.
This report is made solely to the Company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company's members those matters we are
required to state to them in an auditor's report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other 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 explained more fully in the statement of directors' responsibilities, the
directors are responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view. Our responsibility is
to audit the financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those standards require us
to comply with the Auditing Practices Board's (APB's) Ethical Standards for
Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the
financial statements sufficient to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether the accounting policies are
appropriate to the Group's and the parent company's circumstances and have been
consistently applied and adequately disclosed; the reasonableness of significant
accounting estimates made by the directors; and the overall presentation of the
financial statements.
Opinion on financial statements
In our opinion:
* Â Â Â Â Â Â the financial statements give a true and fair view of the state of
the Group's and the parent company's affairs as at 31 March 2010 and of the
Group's and the parent company's loss for the year then ended;
* Â Â Â Â Â Â the financial statements have been properly prepared in accordance
with IFRSs as adopted by the European Union;
* Â Â Â Â Â Â the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the directors' report for the financial
year for which the financial statements are prepared is consistent with the
financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the
Companies Act 2006 requires us to report to you if, in our opinion:
* Â Â Â Â Â Â adequate accounting records have not been kept by the parent company,
or returns adequate for our audit have not been received from branches not
visited by us; or
* Â Â Â Â Â Â the parent company financial statements are not in agreement with the
accounting records and returns; or
* Â Â Â Â Â Â certain disclosures of directors' remuneration specified by law are
not made; or
* Â Â Â Â Â Â we have not received all the information and explanations we require
for our audit.
Scott Knight (senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
55 Baker Street
London
W1U 7EU
United Kingdom
17 August 2010
BDO LLP is a limited liability partnership registered in England and Wales (with
registered number OC305127).
Group statement of comprehensive income
for the year ended 31 March 2010
+--------------------------------------+-----+-------------++------------------+
| | | ||13-month period to|
| | | || 31 March 2009|
| | | || Group|
| | |31 March 2010|| |
| | | Group|| $|
| |Notes| $|| |
| | | || Restated|
+--------------------------------------+-----+-------------++------------------+
|Revenue | | -|| -|
+--------------------------------------+-----+-------------++------------------+
|Share options expenses | 22 | (214,673)|| (969,777)|
+--------------------------------------+-----+-------------++------------------+
|Other administrative expenses | | (2,343,570)|| (1,377,127)|
+--------------------------------------+-----+-------------++------------------+
|Administrative expenses | | (2,558,243)|| (2,346,904)|
+--------------------------------------+-----+-------------++------------------+
|Operating loss | 3 | (2,558,243)|| (2,346,904)|
+--------------------------------------+-----+-------------++------------------+
|Finance income | 5 | 22,240|| 188,294|
+--------------------------------------+-----+-------------++------------------+
|Loss before and after taxation | | || |
|attributable to the equity holders of | | (2,536,003)|| (2,158,610)|
|the parent company | | || |
+--------------------------------------+-----+-------------++------------------+
+--------------------------------------+-----+-------------++------------------+
|Other comprehensive income | | || |
+--------------------------------------+-----+-------------++------------------+
|Gain/(loss) on available for sale | | 10,787|| (36,812)|
|financial assets | | || |
+--------------------------------------+-----+-------------++------------------+
|Foreign exchange adjustment on | | -|| (1,729,939)|
|retranslation to US Dollars | | || |
+--------------------------------------+-----+-------------++------------------+
|Total other comprehensive income / | | 10,787|| (1,766,751)|
|(loss) | | || |
+--------------------------------------+-----+-------------++------------------+
+--------------------------------------+-----+-------------++------------------+
|Total comprehensive loss attributable | | || |
|to the equity holders of the parent | | (2,525,216)|| (3,925,361)|
|company | | || |
+--------------------------------------+-----+-------------++------------------+
|Loss per share - basic and diluted | 9 | (0.87) cents|| (0.97) cents|
+--------------------------------------+-----+-------------++------------------+
All amounts above relate to continuing operations.
The accompanying accounting policies and notes below form an integral part of
these financial statements.
Group Statement of Changes in Equity
for the year ended 31 March 2010
+-------------+---------+----------+---------+-----------+---------+-----------+------------+-----------+
| | Share| Share| Share| Foreign|Available| | Retained| |
| | capital| premium| option| currency| for sale|EBT reserve| earnings/| |
|Group | account| account| reserve|translation| reserve| | (losses)| Total|
| | | | | reserve| | | | |
+-------------+---------+----------+---------+-----------+---------+-----------+------------+-----------+
| | $| $| $| $| $| | $| $|
+-------------+---------+----------+---------+-----------+---------+-----------+------------+-----------+
|At 29 | | | | | | | | |
|February |4,083,043|19,981,679|1,380,231| (124,952)| 7,518| | (5,728,450)| 19,599,069|
|2008 - | | | | | | | | |
|Restated | | | | | | | | |
+-------------+---------+----------+---------+-----------+---------+-----------+------------+-----------+
|Total | | | | | | | | |
|comprehensive| -| -| -|(1,729,939)| (36,812)| -| (2,158,610)|(3,925,361)|
|loss for the | | | | | | | | |
|period | | | | | | | | |
+-------------+---------+----------+---------+-----------+---------+-----------+------------+-----------+
|Credit in | | | | | | | | |
|respect of | -| -| 969,777| -| -| | -| 969,777|
|share option | | | | | | | | |
|charges | | | | | | | | |
+-------------+---------+----------+---------+-----------+---------+-----------+------------+-----------+
|Share options| -| -| (19,516)| -| -| | 19,516| -|
|exercised | | | | | | | | |
+-------------+---------+----------+---------+-----------+---------+-----------+------------+-----------+
|Shares | | | | | | | | |
|issued: | | | | | | | | |
+-------------+---------+----------+---------+-----------+---------+-----------+------------+-----------+
|Â - in | | | | | | | | |
|respect of | 55,215| 501,808| -| -| -| | -| 557,023|
|share options| | | | | | | | |
+-------------+---------+----------+---------+-----------+---------+-----------+------------+-----------+
|At 31 March | | | | | | | | |
|2009 - |4,138,258|20,483,487|2,330,492|(1,854,891)| (29,294)| | (7,867,544)| 17,200,508|
|Restated | | | | | | | | |
+-------------+---------+----------+---------+-----------+---------+-----------+------------+-----------+
|Total | | | | | | | | |
|comprehensive| -| -| -| | 10,787| | (2,536,003)|(2,525,216)|
|loss for the | | | | | | | | |
|year | | | | | | | | |
+-------------+---------+----------+---------+-----------+---------+-----------+------------+-----------+
|Credit in | | | | | | | | |
|respect of | -| -| 40,883| -| -| | -| 40,883|
|share option | | | | | | | | |
|charges | | | | | | | | |
+-------------+---------+----------+---------+-----------+---------+-----------+------------+-----------+
|Share options| -| -|(104,777)| | -| | 104,777| -|
|exercised | | | | | | | | |
+-------------+---------+----------+---------+-----------+---------+-----------+------------+-----------+
|Shares | | | | | | | | |
|issued: | | | | | | | | |
+-------------+---------+----------+---------+-----------+---------+-----------+------------+-----------+
|- for cash |1,863,263|18,704,404| -| -| -| | -| 20,567,667|
|consideration| | | | | | | | |
+-------------+---------+----------+---------+-----------+---------+-----------+------------+-----------+
|- in respect | | | | | | | | |
|of share | 79,762| 279,168| -| -| -| | -| 358,930|
|options | | | | | | | | |
+-------------+---------+----------+---------+-----------+---------+-----------+------------+-----------+
|- to the EBT | 198,206| 1,536,099| -| -| -|(1,734,305)| -| -|
+-------------+---------+----------+---------+-----------+---------+-----------+------------+-----------+
|- share issue| -| (710,567)| -| -| -| | -| (710,567)|
|costs | | | | | | | | |
+-------------+---------+----------+---------+-----------+---------+-----------+------------+-----------+
|At 31 March |6,279,489|40,292,591|2,266,598|(1,854,891)| (18,507)|(1,734,305)|(10,298,770)| 34,932,205|
|2010 | | | | | | | | |
+-------------+---------+----------+---------+-----------+---------+-----------+------------+-----------+
The accompanying accounting policies and notes below form an integral part of
these financial statements.
Company Statement of Changes in Equity
for the year ended 31 March 2010
+-------------+---------+----------+---------+-----------+-----------+-----------+-----------+
| | Share| Share| Share| Foreign| | Retained| |
| | capital| premium| option| currency|EBT reserve| earnings/| |
|Company | account| account| reserve|translation| | (losses)| Total|
| | | | | reserve| | | |
+-------------+---------+----------+---------+-----------+-----------+-----------+-----------+
| | $| $| $| $| | $| $|
+-------------+---------+----------+---------+-----------+-----------+-----------+-----------+
|At 29 | | | | | | | |
|February |4,083,043|19,981,679|1,380,231| 871,568| -|(4,517,310)| 21,799,211|
|2008 - | | | | | | | |
|Restated | | | | | | | |
+-------------+---------+----------+---------+-----------+-----------+-----------+-----------+
|Total | | | | | | | |
|comprehensive| -| -| -|(5,825,345)| -|(1,439,353)|(7,264,698)|
|loss for the | | | | | | | |
|period | | | | | | | |
+-------------+---------+----------+---------+-----------+-----------+-----------+-----------+
|Credit in | | | | | | | |
|respect of | -| -| 969,777| -| -| -| 969,777|
|share options| | | | | | | |
|charges | | | | | | | |
+-------------+---------+----------+---------+-----------+-----------+-----------+-----------+
|Share options| -| -| (19,516)| -| -| 19,516| -|
|exercised | | | | | | | |
+-------------+---------+----------+---------+-----------+-----------+-----------+-----------+
|Shares | | | | | | | |
|issued: | | | | | | | |
+-------------+---------+----------+---------+-----------+-----------+-----------+-----------+
|- for cash | -| -| -| -| -| -| -|
|consideration| | | | | | | |
+-------------+---------+----------+---------+-----------+-----------+-----------+-----------+
|- in respect | | | | | | | |
|of share | 55,215| 501,808| -| -| -| -| 557,023|
|options | | | | | | | |
+-------------+---------+----------+---------+-----------+-----------+-----------+-----------+
|At 31 March | | | | | | | |
|2009 - |4,138,258|20,483,487|2,330,492|(4,953,777)| -|(5,937,147)| 16,061,313|
|Restated | | | | | | | |
+-------------+---------+----------+---------+-----------+-----------+-----------+-----------+
|Total | | | | | | | |
|comprehensive| -| -| -| -| -| (903,568)| (903,568)|
|loss for the | | | | | | | |
|year | | | | | | | |
+-------------+---------+----------+---------+-----------+-----------+-----------+-----------+
|Credit in | | | | | | | |
|respect of | -| -| 40,883| -| -| -| 40,883|
|share option | | | | | | | |
|charges | | | | | | | |
+-------------+---------+----------+---------+-----------+-----------+-----------+-----------+
|Share options| -| -|(104,777)| -| -| 104,777| -|
|exercised | | | | | | | |
+-------------+---------+----------+---------+-----------+-----------+-----------+-----------+
|Shares | | | | | | | |
|issued: | | | | | | | |
+-------------+---------+----------+---------+-----------+-----------+-----------+-----------+
|- for cash |1,863,263|18,704,404| -| -| -| -| 20,567,667|
|consideration| | | | | | | |
+-------------+---------+----------+---------+-----------+-----------+-----------+-----------+
|- in respect | | | | | | | |
|of share | 79,762| 279,168| -| -| -| -| 358,930|
|options | | | | | | | |
+-------------+---------+----------+---------+-----------+-----------+-----------+-----------+
|- to the EBT | 198,206| 1,536,099| -| -|(1,734,305)| -| -|
+-------------+---------+----------+---------+-----------+-----------+-----------+-----------+
|- share issue| -| (710,567)| -| -| -| -| (710,567)|
|costs | | | | | | | |
+-------------+---------+----------+---------+-----------+-----------+-----------+-----------+
|At 31 March |6,279,489|40,292,591|2,266,598|(4,953,777)|(1,734,305)|(6,735,938)| 35,414,658|
|2010 | | | | | | | |
+-------------+---------+----------+---------+-----------+-----------+-----------+-----------+
The accompanying accounting policies and notes below form an integral part of
these financial statements.
Group and Company statements of financial position
As at 31 March 2010
+------------+----+------------+-----------+-----------+-----------+-----------+-----------+
| | | 31 March| 31 March|29 February| 31 March| 31 March|29 February|
| | | 2010| 2009| 2008| 2010| 2009| 2008|
| |Note| Group| Group| Group| Company| Company| Company|
| | | $| $| $| $| $| $|
| | | | Restated| Restated| | Restated| Restated|
+------------+----+------------+-----------+-----------+-----------+-----------+-----------+
|Assets | | | | | | | |
| | | | | | | | |
|Non-current | | | | | | | |
|assets | | | | | | | |
| | | | | | | | |
|Intangible | | | | | | | |
|assets | | | | | | | |
| | | | | | | | |
|Property, | 11 | 19,017,852| 14,328,741| 10,646,377| 3,332,387| 1,912,770| 996,546|
|plant and| | | | | | | |
|equipment | 12 | 1,114,945| 809,836| 753,900| 77,271| 82,523| 59,130|
| | | | | | | | |
|Available | 13 | 24,417| 24,417| 49,810| 566| 566| 566|
|for sale| | | | | | | |
|investments | 14 | -| -| -| 219,104| 1,316| 1,316|
| | | | | | | | |
|Investment | 15 | -| -| -| 17,546,296| 12,317,701| 12,707,639|
|in | | | | | | | |
|subsidiaries| | | | | | | |
| | | | | | | | |
|Advance to| | | | | | | |
|group | | | | | | | |
|companies | | | | | | | |
+------------+----+------------+-----------+-----------+-----------+-----------+-----------+
| | | 20,157,214| 15,162,994| 11,450,087| 21,175,624| 14,314,876| 13,765,197|
+------------+----+------------+-----------+-----------+-----------+-----------+-----------+
|Current | | | | | | | |
|assets | | | | | | | |
| | | | | | | | |
|Inventory | | | | | | | |
| | | 19,744| 21,863| 50,603| -| -| -|
|Receivables | 16 | | | | | | |
| | | 509,447| 121,074| 323,362| 170,096| 82,624| 281,898|
|Available | 17 | | | | | | |
|for sale| | 16,469| 5,682| 52,627| -| -| -|
|investments | 18 | | | | | | |
| | | 15,398,926| 2,144,390| 8,220,007| 14,983,099| 1,825,716| 8,203,475|
|Cash and| | | | | | | |
|cash | | | | | | | |
|equivalents | | | | | | | |
+------------+----+------------+-----------+-----------+-----------+-----------+-----------+
|Total | | | | | | | |
|current | | 15,944,586| 2,293,009| 8,646,599| 15,153,195| 1,908,340| 8,485,373|
|assets | | | | | | | |
+------------+----+------------+-----------+-----------+-----------+-----------+-----------+
|Total Assets| | 36,101,800| 17,456,003| 20,096,686| 36,328,819| 16,223,216| 22,250,570|
+------------+----+------------+-----------+-----------+-----------+-----------+-----------+
+------------+----+------------+-----------+-----------+-----------+-----------+-----------+
|Equity and| | | | | | | |
|Liabilities | | | | | | | |
| | | | | | | | |
|Capital and| | | | | | | |
|reserves | | | | | | | |
|attributable| | | | | | | |
|to equity| | | | | | | |
|holders of| | | | | | | |
|the Company | | | | | | | |
| | | | | | | | |
|Called-up | | | | | | | |
|share | | | | | | | |
|capital | 21 | 6,279,489| 4,138,258| 4,083,043| 6,279,489| 4,138,258| 4,083,043|
| | | | | | | | |
|Share | 21 | 40,292,591| 20,483,487| 19,981,679| 40,292,591| 20,483,487| 19,981,679|
|premium | | | | | | | |
|account | 23 | (18,507)| (29,294)| 7,518| -| -| -|
| | | | | | | | |
|Available | 23 | 2,266,598| 2,330,492| 1,380,231| 2,266,598| 2,330,492| 1,380,231|
|for sale| | | | | | | |
|reserve | 23 | (1,854,891)|(1,854,891)| (124,952)|(4,953,777)|(4,953,777)| 871,568|
| | | | | | | | |
|Share option| 23 | (1,734,305)| -| -|(1,734,305)| -| -|
|reserve | | | | | | | |
| | 23 |(10,298,770)|(7,867,544)|(5,728,450)|(6,735,938)|(5,937,147)|(4,517,310)|
|Foreign | | | | | | | |
|currency | | | | | | | |
|translation | | | | | | | |
|reserve | | | | | | | |
| | | | | | | | |
|EBT reserve | | | | | | | |
| | | | | | | | |
|Retained | | | | | | | |
|earnings | | | | | | | |
+------------+----+------------+-----------+-----------+-----------+-----------+-----------+
|Total equity| | 34,932,205| 17,200,508| 19,599,069| 35,414,658| 16,061,313| 21,799,211|
+------------+----+------------+-----------+-----------+-----------+-----------+-----------+
|Current | | | | | | | |
|liabilities | | | | | | | |
| | | | | | | | |
|Trade and | 19 | 1,169,595| 255,495| 497,617| 914,161| 161,903| 451,359|
|other | | | | | | | |
|payables | | | | | | | |
+------------+----+------------+-----------+-----------+-----------+-----------+-----------+
|Total | | | | | | | |
|current | | 1,169,595| 255,495| 497,617| 914,161| 161,903| 451,359|
|liabilities | | | | | | | |
+------------+----+------------+-----------+-----------+-----------+-----------+-----------+
|Total Equity| | | | | | | |
|and | | 36,101,800| 17,456,003| 20,096,686| 36,328,819| 16,223,216| 22,250,570|
|Liabilities | | | | | | | |
+------------+----+------------+-----------+-----------+-----------+-----------+-----------+
The accompanying accounting policies and notes below form an integral part of
these financial statements.
The accounts were approved and authorised for issue by the Board of Directors on
17 August 2010 and were signed on its behalf by:
Roy C Tucker Registered number 05414325
Director
Group and Company statements of cash flow
for the year ended 31 March 2010
+------------------------------+-----------+-----------+-----------+-----------+
| | 2010| 2009| | 2009|
| | Group| Group| 2010| Company $|
| | $| $| Company $| Restated|
| | | Restated| | |
+------------------------------+-----------+-----------+-----------+-----------+
|CASH FLOW FROM OPERATING | | | | |
|ACTIVITES | | | | |
+------------------------------+-----------+-----------+-----------+-----------+
|Loss for the year |(2,536,003)|(2,158,610)| (903,568)|(1,439,353)|
+------------------------------+-----------+-----------+-----------+-----------+
|Adjustments for: | | | | |
++-----------------------------+-----------+-----------+-----------+-----------+
||Depreciation | 88,410| 97,041| 10,106| 13,379|
++-----------------------------+-----------+-----------+-----------+-----------+
||Unrealised exchange gain on| (78,033)| (518,958)| (154,091)| (432,978)|
||cash and cash equivalents | | | | |
++-----------------------------+-----------+-----------+-----------+-----------+
||Finance income | (22,240)| (188,294)| (536,422)| (709,981)|
++-----------------------------+-----------+-----------+-----------+-----------+
||Profit on sale of available| -| (34,229)| -| -|
||for sale investments | | | | |
++-----------------------------+-----------+-----------+-----------+-----------+
||Loss/(Profit) on sale of| 25,935| (64,565)| 3,333| (4,201)|
||property, plant and equipment| | | | |
++-----------------------------+-----------+-----------+-----------+-----------+
||Share option charges | 214,673| 969,777| 214,673| 969,777|
++-----------------------------+-----------+-----------+-----------+-----------+
| | 228,745| 260,772| (462,401)| (164,004)|
+------------------------------+-----------+-----------+-----------+-----------+
|Changes in working capital: | | | | |
++-----------------------------+-----------+-----------+-----------+-----------+
||(Increase)/Decrease in| (373,455)| 136,742| (72,554)| 119,212|
||receivables | | | | |
++-----------------------------+-----------+-----------+-----------+-----------+
||Decrease in inventories | 2,119| 14,368| -| -|
++-----------------------------+-----------+-----------+-----------+-----------+
||Increase /(Decrease) in| 740,310| (127,086)| 361,680| (161,264)|
||payables | | | | |
++-----------------------------+-----------+-----------+-----------+-----------+
| | 368,974| 24,024| 289,126| (42,052)|
+------------------------------+-----------+-----------+-----------+-----------+
|Cash generated from operations|(1,938,284)|(1,873,814)|(1,076,843)|(1,645,409)|
+------------------------------+-----------+-----------+-----------+-----------+
|Investing activities: | | | | |
++-----------------------------+-----------+-----------+-----------+-----------+
||Payments to acquire|(4,395,777)|(3,461,173)|(1,411,013)|(1,227,457)|
||intangible assets | | | | |
++-----------------------------+-----------+-----------+-----------+-----------+
||Payments to acquire property,| (760,192)| (442,278)| (36,791)| (60,222)|
||plant and equipment | | | | |
++-----------------------------+-----------+-----------+-----------+-----------+
||Payments to acquire| -| -| (1,000)| -|
||investment in subsidiaries | | | | |
++-----------------------------+-----------+-----------+-----------+-----------+
||Proceeds on disposal of| 47,404| 132,675| -| 8,700|
||property, plant and equipment| | | | |
++-----------------------------+-----------+-----------+-----------+-----------+
||Proceeds on disposal of | | | | |
||available for sale | -| 69,753| -| -|
||investments | | | | |
++-----------------------------+-----------+-----------+-----------+-----------+
||Increase in advance to group| -| -|(4,691,399)|(2,888,999)|
||companies | | | | |
++-----------------------------+-----------+-----------+-----------+-----------+
||Interest received | 7,322| 188,294| 4,308| 709,981|
++-----------------------------+-----------+-----------+-----------+-----------+
| |(5,101,243)|(3,512,729)|(6,135,895)|(3,457,997)|
+------------------------------+-----------+-----------+-----------+-----------+
|Financing Activities: | | | | |
++-----------------------------+-----------+-----------+-----------+-----------+
||Proceeds from the issue of| | | | |
||ordinary shares, net of issue| 20,216,030| 557,023| 20,216,030| 557,023|
||costs | | | | |
++-----------------------------+-----------+-----------+-----------+-----------+
|Increase /(Decrease) in cash | 13,176,503|(4,829,520)| 13,003,292|(4,546,383)|
|and cash equivalents | | | | |
+------------------------------+-----------+-----------+-----------+-----------+
|Cash and cash equivalents at | 2,144,390| 8,220,007| 1,825,716| 8,203,475|
|beginning of year | | | | |
++-----------------------------+-----------+-----------+-----------+-----------+
||Exchange loss arising on| -|(1,765,055)| -|(2,264,354)|
||presentation in US$ | | | | |
++-----------------------------+-----------+-----------+-----------+-----------+
||Exchange gain on cash and| 78,033| 518,958| 154,091| 432,978|
||cash equivalents | | | | |
++-----------------------------+-----------+-----------+-----------+-----------+
|Cash and cash equivalents at| 15,398,926| 2,144,390| 14,983,099| 1,825,716|
|end of year | | | | |
+------------------------------+-----------+-----------+-----------+-----------+
The accompanying notes and accounting policies below form an integral part of
these financial statements.
Statement of accounting policies
for the year ended 31 March 2010
1 Accounting Policies
Basis of preparation
The principal accounting policies adopted in the preparation of the financial
information are set out below. The policies have been consistently applied
throughout the current year and prior year presented, unless otherwise stated.
These financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRSs and IFRIC interpretations) issued by the
International Accounting Standards Board (IASB) as adopted by the European Union
and with those parts of the Companies Act 2006 applicable to companies preparing
their accounts under IFRS.
The consolidated financial statements incorporate the results of African
Consolidated Resources plc and its subsidiary undertakings as at 31 March 2010.
The Company changed its financial year end in March 2009 for administration
purposes from 28 February to 31 March giving rise to a 13 month comparative
period. As a result comparatives for the statements of comprehensive income and
of cash flow movements for the period ended 31 March 2009 are not directly
comparable to the year ended 31 March 2010. The statement of financial position
as at 29 February 2008 and related notes are included as required by IAS 1
Presentation of financial statements - a revised approach. This is required as a
results of the restatement of the prior year financial statements from Pounds
Sterling to United States Dollars (as explained below).
The Group has sufficient cash resources to support minimum spend requirements
and general overheads. The directors may, subject to market conditions, seek to
raise additional funds to accelerate exploration and capital development work.
As a result the going concern basis has been adopted in preparing the financial
statements and the directors have no reason to believe that the Group will not
be a going concern in the foreseeable future based on forecasts and available
cash resources.
In the preparation of the financial statements the directors have considered the
current political and economic uncertainty in Zimbabwe and the impact on the
Group and Company.
The formation of a Government of National Unity in 2008, followed by the
introduction of a multi-currency system in February 2009, went a long way to
alleviate the hyper-inflation and difficult trading conditions which preceded
it. Whilst divisions remain in the Unity Government, progress has been made on
several fronts, particularly the economic front. The policy on Indigenisation
remains unclear with several conflicting statements being made by both sides
within the Unity Government. The Government intends to clarify its
Indigenisation policy sector by sector, in the forthcoming parliamentary period.
The related issues pertaining to the mining sector remain under debate between
Government and the Chamber of Mines. There have been no actions of
nationalisation to date that the Directors are aware of.
The Minister of Finance presented his mid-year fiscal policy review in July
2010, in which changes to certain mining tax legislation was proposed, including
an increase in royalties on precious metals from 3.5% to 4%. In addition, he
referred to a material review of mining tax legislation in general, the details
of which are awaited in his main budget proposal speech in November 2010. He
also made mention of the importance of retaining and attracting foreign
investment in Zimbabwe
The directors have further considered the quality of the assets held by the
Company through its investment in its subsidiary undertakings in Zimbabwe. They
have concluded that whilst the current political and economic uncertainty gives
rise to uncertainty over the ability of the Group and Company to realise the
value of the Group's assets and the Company's investment in Zimbabwe for the
benefit of the Company's shareholders, the directors remain confident that in
the longer term, it will not materially impact the Company's ability to realise
the value of its investments for its shareholders.
Change in functional and presentational currency
Effective 1 October 2009, the Company and all subsidiaries changed their
functional currency from pounds sterling to the United States dollar ('$'). This
change was made following the adoption of a multi-currency system in Zimbabwe
and due to the level of expenditure across all Group companies in $, as well as
the anticipation that all future revenues will be generated in $. The directors
consider the $ to most faithfully represent the economic effects of the
underlying transactions, events and conditions in the Company. In accordance
with International Financial Reporting Standards, this change in functional
currency has been accounted for prospectively and from 1 October 2009, the books
and records of all Group companies have been maintained in $, with transactions
arising in currencies other than $ being translated at the rate of exchange on
the date of the transaction and monetary assets and liabilities held in
currencies other than $ being translated at each reporting date at the exchange
rate applicable on the date.
Concurrent with this change in functional currency, the Group and Company
adopted the $ as its presentational currency and consequently the financial
information for the 13-month period ended 31 March 2009, and at 29 February
2008 and 1 March 2007 (where applicable) has been retranslated to $ and
presented as 'restated'.
In order to retranslate the information for the 13-month period ending 31 March
2009 and the years ended 29 February 2008 and 28 February 2007 (as applicable)
the following was applied:
   <li> Statement of financial position items were translated at the exchange
rates on the 31 March 2009, 29 February 2008 and 28 February 2007 (as
applicable) of $1.420878:£1, $1.9845:£1 and $1.9642:£1 respectively, except for
those specific items listed below.
   <li> The statement of comprehensive income for the 13-month period to 31
March 2009 was translated at an average exchange rate of $1.657:£1.
   <li> All historical issues of share capital (including the exercise of share
options) were translated at the rate on the date of the share issue.
   <li> Other movements in reserves e.g. retained losses, credit in respect of
share option charges, were translated at the average rates for each reporting
period from the date of inception of the Company.
   <li> Fixed assets were re-translated at the historical exchange rates on the
dates of the transactions, or where applicable were stated at their original $
values.
   <li> Deferred exploration costs were re-translated into US$ at the average
annual exchange rates since inception.
   <li> All balances for the year-ending 31 March 2010 were kept in $ in
anticipation of a change in functional currency and therefore in the 6-month
period to 30 September 2009, a complete set of data in $ was available and used
in the preparation of the financial statements in $.
As a result of retranslating the historical financial information for the
purposes of the change in presentational currency, management used the
retranslated financial information as at 1 October 2009 for the purposes of the
opening balances for the change in functional currency for all Group companies.
Changes in Accounting Policies
New standards, amendments to published standards and interpretations to existing
standards effective on 1 April 2009 adopted by the Group and Company. The impact
of the new and amended standards and interpretations was an increase in the
level of disclosure, particularly in respect of the disclosure of operating
segment information; there was no impact on the balances reported.
+----------------------------+--------------------------+----------------------+
|New and revised standards| |Effective for annual|
|effective for 31 March 2010 |Standard |periods beginning on|
|period-ends | |or after |
+----------------------------+--------------------------+----------------------+
|New Standard |IFRS 8 - Operating|1 January 2009 |
| |Segments | |
+----------------------------+--------------------------+----------------------+
| |IFRS 1 - First time| |
| |adoption of International| |
| |Financial Reporting| |
| |Standards | |
| |IFRS 1 and IAS 27 - Cost| |
| |of an Investment in a| |
| |subsidiary, jointly|1 January 2009 |
| |controlled entity or| |
| |associate |1 January 2009 |
| |IFRS 7 - Improving| |
| |disclosures about|1 January 2009 |
| |financial instruments | |
|Amendments |Improvements to IFRSs|1 January 2009 |
| |(2009) |1 January 2009 |
| |IFRS 2 - Share-based| |
| |Payment - Vesting|1 January 2009 |
| |Conditions and| |
| |Cancellations |1 January 2009 |
| |IAS 1 - Presentation of|1 January 2009 |
| |Financial Statements - A| |
| |revised Approach | |
| |IAS 23 - Borrowing Costs | |
| |IAS 32 and 1 - Puttable| |
| |Financial Instruments and| |
| |Obligations Arising on| |
| |Liquidation | |
+----------------------------+--------------------------+----------------------+
| |IFRIC 15 - Agreements for| |
|Interpretations |the Construction of Real|1 January 2009 |
| |Estate | |
+----------------------------+--------------------------+----------------------+
New standards, amendments to published standards and interpretations to existing
standards in issue but not yet effective, that will be applicable to the Group
and Company in the future.
+----------------------------+---------------------------+---------------------+
|New and revised standards| |Effective for annual|
|issued but not effective for|Standard |periods beginning on|
|31 March 2010 period-ends | |or after |
+----------------------------+---------------------------+---------------------+
|New Standard |IFRS 9 Financial|1 January 2013 |
| |Instruments | |
+----------------------------+---------------------------+---------------------+
| |Embedded Derivatives| |
| |(Amendments to IFRIC 9 and| |
| |IAS 39) | |
| |Amendments to IAS 27 | |
| |Consolidated and Separate| |
| |Financial Statements | |
| |Amendment to IAS 39 | |
| |Financial Instruments:| |
| |Recognition and| |
| |Measurement: Eligible|30 June 2009 |
| |Hedged Items |(1 January 2009) |
| |Improvements to IFRSs|1 July 2009 |
| |(2009) | |
| |Group Cash-settled|1 July 2009 |
| |Share-based Payment|1 January 2010 |
| |Transactions (Amendments to|1 January 2010 |
| |IFRS 2) | |
| |Additional Exemptions for|1 January 2010 |
|Amendment |First-time Adopters | |
| |(Amendments to IFRS 1) |1 February 2010 |
| |Classification of Rights| |
| |Issues (Amendment to IAS|1 July 2010 |
| |32) | |
| |Amendment to IFRS 1 |1 January 2011 |
| |First-time Adoption of|1 July 2009 |
| |International Financial|1 January 2011 |
| |Reporting Standards | |
| |Revised IAS 24 Related| |
| |Party Disclosures |1 January 2011 |
| |IFRS 3 Revised - Business| |
| |Combinations | |
| |Amendments to IFRIC 14 IAS| |
| |19 - Limit on a Defined| |
| |Benefit Asset, Minimum| |
| |Funding Requirements and| |
| |their Interaction | |
| |Improvements to IFRSs| |
| |(2010) * | |
+----------------------------+---------------------------+---------------------+
| |IFRIC 17 - Distribution of| |
| |non-cash assets to owners | |
| |IFRIC 18 - Transfer of|1 July 2009 |
|Interpretations |assets from customers | |
| |IFRIC 19 Extinguishing|1 July 2009 |
| |Financial Liabilities with|1 April 2010 |
| |Equity Instruments | |
| |(Issued 26 November 2009) *| |
+----------------------------+---------------------------+---------------------+
Items marked* had not yet been endorsed by European Union at the date that these
financial statements were approved and authorised for issue by the Board. The
standards listed above are not yet effective and are not expected to have a
significant impact on the Group.
The preparation of the Group financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Although these estimates are based on management's best knowledge of current
events and actions, actual results may ultimately differ from those estimates.
The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities in the next
financial year are discussed below:
   a) Useful lives of property, plant & equipment
Property, plant and equipment are depreciated over their useful economic lives.
Useful economic lives are based on management's estimates of the period that the
assets will be in operational use, which are periodically reviewed for continued
appropriateness. Due to the long life of certain assets, changes to estimates
used can result in significant variations in the carrying value. More details,
including carrying values, are included in note 12 to the financial statements.
   b) Impairment of intangibles
The Group reviews, on an annual basis, whether deferred exploration costs,
mining options and licence acquisition costs have suffered any impairment. The
recoverable amounts are determined based on an assessment of the economically
recoverable mineral reserves, the ability of the Group to obtain the necessary
financing to complete the development of the reserves and future profitable
production or proceeds from the disposition of recoverable reserves. Actual
outcomes may vary. More details, including carrying values, are included in note
11 to the financial statements.
   c) Share based payments
The Group operates an equity settled share based remuneration scheme for key
employees. Employee services received, and the corresponding increase in equity,
are measured by reference to the fair value of equity instruments at the date of
grant. The fair value of the share options is estimated by using the Black
Scholes model on the date of grant based on certain assumptions. Those
assumptions are described in note 22 and include, among others, the expected
volatility and expected life of the options.
Basis of consolidation
Where the Company has the power, either directly or indirectly, to govern the
financial and operating policies of another entity or business so as to obtain
benefits from its activities, it is classified as a subsidiary. The financial
information presents the results of the Company and its subsidiaries (the
"Group") as if they formed a single entity. Inter-company transactions and
balances between Group companies are therefore eliminated in full.
Business combinations
The financial information incorporate the results of business combinations using
the purchase method. In the consolidated balance sheet, the acquiree's
identifiable assets, liabilities and contingent liabilities are initially
recognised at their fair values at the acquisition date. The results of acquired
operations are included in the Group statement of comprehensive income from the
date on which control is obtained. The licences acquired have been valued at
their fair value using appropriate valuation techniques and posted to intangible
assets.
Revenue
The Group and Company had no revenue during the year.
Foreign currency
The functional currency of the Company and all of its subsidiaries is United
States Dollars, which is the currency of the primary economic environment in
which the Company and all of its subsidiaries operate. This is a change to
previous years where the functional currency was in Pounds Sterling
Transactions entered into by the Group entities in a currency other than the
currency of the primary economic environment in which it operates (the
"functional currency") are recorded at the rates ruling when the transactions
occur. Foreign currency monetary assets and liabilities are translated at the
rates ruling at the date of the statement of financial position. Exchange
differences arising on the retranslation of unsettled monetary assets and
liabilities are similarly recognised immediately in profit or loss, except for
foreign currency borrowings qualifying as a hedge of a net investment in a
foreign operation.
In accordance with the UK Registrar of companies requirement the exchange rates
applied at each reporting date were as follows:
   <li> 31 March 2010 $1.5067:£1
   <li> 31 March 2009 $1.4209:£1
   <li> 29 February 2008 $1.9845:£1
   <li> 28 February 2007 $1.9642:£1
Provision for abandonment costs
Provision for abandonment costs are recognised at the commencement of mining.
The amount recognised is the present value of the estimated future expenditure
determined in accordance with local conditions and requirements. The present
value is calculated by discounting the future cash flows at a pre tax rate that
reflects current market assessments of the time value of money at that time. A
corresponding property, plant and equipment asset of an amount equivalent to the
provision is also created. This is subsequently depreciated as part of the
capital costs of production. Any change in the present value of the estimated
expenditure is reflected as an adjustment to the provision and the property,
plant and equipment assets. As at the reporting date the Group had no such
provision.
Share based payments
Equity-settled share based payments
Where share options are awarded to employees, the fair value of the options at
the date of grant is charged to profit or loss over the vesting period.
Non-market vesting conditions are taken into account by adjusting the number of
equity instruments expected to vest at each reporting date so that, ultimately,
the cumulative amount recognised over the vesting period is based on the number
of options that eventually vest. Market vesting conditions are factored into the
fair value of the options granted. As long as all other vesting conditions are
satisfied, a charge is made irrespective of whether the market vesting
conditions are satisfied. The cumulative expense is not adjusted for failure to
achieve a market vesting condition.
Where the terms and conditions of options are modified before they vest, the
increase in the fair value of the options, measured immediately before and after
the modification, is also charged to profit or loss over the remaining vesting
period.
Where equity instruments are granted to persons other than employees, the fair
value of goods and services received is charged to profit or loss, except where
it is in respect to costs associated with the issue of shares, in which case, it
is charged to the share premium account.
Cash-settled share based payments
The Company also has cash-settled share based payments arising in respect of the
EBT set up during the year (see below and Note 22). A liability is recognised in
respect of the fair-value of the benefit received under the EBT and charged to
profit or loss over the vesting period. The fair-value is re-measured at each
reporting date with any changes taken to profit or loss.
Employee Benefit Trust ("EBT")
The Company has established an Employee Benefit Trust. The assets and
liabilities of this trust comprise shares in the Company and loan balances due
to the Company. The Company includes the EBT within its accounts and therefore
recognises an EBT reserve in respect of the amounts loaned to the EBT and used
to purchase shares in the Company. Any cash received by the EBT on disposal of
the shares it holds will be recognised directly in equity. Any shares held by
the EBT are treated as cancelled for the purposes of calculating earnings per
share.
Tax
The major components of income tax on the profit or loss include current and
deferred tax.
Current tax
Current tax is based on the profit or loss adjusted for items that are
non-assessable or disallowed and is calculated using tax rates that have been
enacted or substantively enacted by the balance sheet date.
Income tax is charged or credited to the statement of comprehensive income,
except when the tax relates to items credited or charged directly to equity, in
which case the tax is also dealt with in equity.
Deferred tax
Deferred tax assets and liabilities are recognised where the carrying amount of
an asset or liability in the balance sheet differs to its tax base, except for
differences arising on:
   · The initial recognition of goodwill;
   · Goodwill for which amortisation is not tax deductible:
   · The initial recognition of an asset or liability in a transaction which is
not a business combination and at the time of the transaction affects neither
accounting or taxable profit; and
   · Investments in subsidiaries and jointly controlled entities where the
Group is able to control the timing of the reversal of the difference and it is
probable that the differences will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it is
probable that taxable profit will be available against which the difference can
be utilised.
The amount of the asset or liability is determined using tax rates that have
been enacted or substantively enacted by the reporting date and are expected to
apply when deferred tax liabilities/(assets) are settled/(recovered). Deferred
tax balances are not discounted.
Intangible assets
Deferred development and exploration costs
Once a licence has been obtained, all costs associated with mining property
development and investment are capitalized on a project-by-project basis pending
determination of the feasibility of the project. Costs incurred include
appropriate technical and administrative expenses but not general overheads. If
a mining property development project is successful, the related expenditures
will be amortised over the estimated life of the commercial ore reserves on a
unit of production basis. Where a licence is relinquished, a project is
abandoned, or is considered to be of no further commercial value to the Group,
the related costs will be written off.
Unevaluated mining properties are assessed at each year end and where there are
indications of impairment these costs are written off to the income statement.
The recoverability of deferred mining property costs and interests is dependent
upon the discovery of economically recoverable reserves, the ability of the
Group to obtain necessary financing to complete the development of reserves and
future profitable production or proceeds from the disposition of recoverable
reserves.
If commercial reserves are developed, the related deferred development and
exploration costs are then reclassified as development and production assets
within property, plant and equipment.
Proved mining properties
Depletion and amortisation of the full-cost pools is computed using the
units-of-production method based on proved reserves as determined annually by
management.
Mineral rights
Mineral rights are recorded at cost less amortisation and provision for
diminution in value. Amortisation will be over the estimated life of the
commercial ore reserves on a unit of production basis.
Licences for the exploration of natural resources will be amortised over the
lower of the life of the licence and the estimated life of the commercial ore
reserves on a unit of production basis.
Property, plant and equipment
Items of property, plant and equipment are initially recognised at cost and are
subsequently carried at depreciated cost. As well as the purchase price, cost
includes directly attributable costs and the estimated present value of any
future costs of dismantling and removing items. The corresponding liability is
recognised within provisions.
PROOF 6: DATED 26.05.06
Depreciation is provided on all other items of property and equipment is to
write off the carrying value of items over their expected useful economic lives.
It is applied at the following rates:
Plant and machinery - 25% per annum, straight line
Fixtures and fittings - 25% per annum, straight line
Computer equipment - 33% per annum, straight line
Motor vehicles - 20% per annum, straight line
Financial assets
The Group's financial assets consist of cash and cash equivalents, other
receivables and available for sale investments. The Group's accounting policy
for each category of financial asset is as follows:
Loans and receivables: These assets are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active market. They are
initially recognised at fair value plus transaction costs that are directly
attributable to their acquisition or issue, and are subsequently carried at
amortised cost using the effective interest rate method, less provision for
impairment.
Impairment provisions are recognised when there is objective evidence (such as
significant financial difficulties on the part of the counterparty or default or
significant delay in payment) that the Group will be unable to collect all of
the amounts due under the terms receivable, the amount of such a provision being
the difference between the net carrying amount and the present value of the
future expected cash flows associated with the impaired receivable. For
receivables, which are reported net, such provisions are recorded in a separate
allowance account with the loss being recognised within administrative expenses
in the statement of comprehensive income. On confirmation that the receivable
will not be collectable, the gross carrying value of the asset is written off
against the associated provision.
The Group's loans and receivables comprise other receivables and cash and cash
equivalents in the statement of financial position.
Cash and cash equivalents comprises cash in hand and balances with banks. Cash
equivalents are short term, highly liquid accounts that are readily converted to
known amounts of cash. They include short term bank deposits originally
purchased with maturities of less than three months.
There is no significant difference between the carrying value and fair value of
receivables.
Available for sale: Non-derivative financial assets not included in the
categories above are classified as available-for-sale and comprise the Group's
strategic investments in entities not qualifying as subsidiaries, associates or
jointly controlled entities. They are carried at fair value with changes in fair
value recognised directly in equity. Where a decline in the fair value of an
available-for-sale financial asset constitutes evidence of impairment, for
example if the decline is significant or prolonged, the amount of the loss is
removed from equity and recognised in the profit or loss for the year.
Financial liabilities
The Group's financial liabilities consist of trade and other payables, which are
initially recognised at fair value and subsequently carried at amortised cost,
using the effective interest method.
Inventories
Inventories are initially recognised at cost, and subsequently at the lower of
cost and net realisable value. Cost comprises all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories to their present
location and condition. Weighted average cost is used to determine the cost of
ordinarily inter-changeable items.
Leased assets
Where assets are financed by leasing agreements that do not give rights
approximating ownership, these are treated as operating leases. The annual
rentals are charged to profit or loss on a straight line basis over the term of
the lease.
Pension costs
Contributions to defined contribution pension schemes are charged to profit or
loss in the year to which they relate.
2 Segmental analysis
The Group operates in one business segment, the exploration and development for
mineral assets and only has interests in one geographical segment being Southern
Africa, primarily Zimbabwe. The Group has not generated any revenue to date and
therefore no disclosures are provided with respect to revenues.
The Group's operations are reviewed by the Board (which is considered to be the
Chief Operating Decision Maker ('CODM')) on a project by project basis and split
between exploration and development and administration and corporate costs.
Exploration and development is reported to the CODM only on the basis of those
costs incurred directly on projects, once incurred. All costs incurred on the
projects are capitalised in accordance with IFRS 6, including depreciation
charges in respect of tangible assets used on the projects.
Administration and corporate costs are further reviewed on the basis of where
they are incurred, being either Southern Africa or the UK.
Decisions are made about where to allocate cash resources based on the status of
each project and according to the Group's strategy to develop the projects. Each
project, if taken into commercial development, has the potential to be a
separate operating segment. Operating segments are disclosed below on the basis
of the split between exploration and development and administration and
corporate. Further information is provided on the non-current intangible assets
attributable to exploration and development on a project by project basis as
this is the primary basis for reviewing operating segments.
Exploration and Administration and Total
2010 development corporate
$
$ $
Depreciation 293,334 88,410 381,744
Share based payments - 214,673 214,673
Interest revenues - 22,240 22,240
Loss for the period - 2,536,003 2,536,003
Total assets 35,016,385 1,085,415 36,101,800
Total non-current 19,208,928 948,286 20,157,214
assets
Additions to 5,406,244 43,059 5,449,303
non-current assets
Total current assets 15,807,457 137,129 15,944,586
Total liabilities 355,300 814,215 1,169,515
2009
Depreciation 221,191 97,041 318,232
Share based payments - 969,777 969,777
Interest revenues - 188,294 188,294
Loss for the period - 2,158,610 2,158,610
Total assets 16,795,165 660,838 17,456,003
Additions to non-current assets 14,565,167 597,827 15,162,994
Additions to intangible assets in the year 3,731,826 392,816 4,124,642
Total current assets 2,229,998 63,011 2,293,009
Total liabilities 27,023 228,472 255,495
There are no non-current assets held in the Company's country of domicile, being
the UK (2009: $nil).
++------------------------------------------+------------+------------+
|| | | 2009 |
|| | 2010 | |
|| | | Group |
|| Non-current intangible assets by project | Group | |
|| | | $ |
|| | $ | |
|| | | Restated |
++------------------------------------------+------------+------------+
|| Gold | | |
|| | | 3,076,465 |
|| Giant | 3,367,489 | |
|| | | 392,556 |
|| Blue Rock | 2,061,732 | |
|| | | 39,669 |
|| Chakari Gold | 83,347 | |
|| | | 6,021,345 |
|| Pickstone Peerless | 6,655,210 | |
|| | | - |
|| Pickstone Dump Project | 346,339 | |
|| | | 402,435 |
|| One Step | 446,959 | |
|| | | Â Â Â Â Â Â |
|| Copper | | |
|| | 279,052 | 20,000 |
|| Cedric | | |
|| | Â Â Â Â Â Â | |
|| Diamonds | | 1,749,919 |
|| | 2,343,860 | |
|| Diamond Regional | | 699,047 |
|| | 1,144,207 | |
|| Marange | | Â Â Â Â Â Â |
|| | | |
|| Phosphates | 146,377 | 947 |
|| Chishanya | | |
|| | Â Â Â Â Â Â | Â Â Â Â Â Â |
|| Nickel | | |
|| Perseverance | 1,028,400 | 954,061 |
|| | | |
|| Platinum Group Elements | | |
|| Snake's Head | 821,492 | 807,212 |
|| | | |
|| Various | | |
|| | 293,388 | 165,085 |
|| Other | | |
++------------------------------------------+------------+------------+
|| | 19,017,852 | 14,328,741 |
++------------------------------------------+------------+------------+
+-+----------------------------------------------------+-----------+-----------+
|3|Group loss from operations | | |
+-+----------------------------------------------------+-----------+-----------+
| | | | 2009|
| | | 2010| |
| | | | Group|
| |Operating loss is stated after charging/(crediting):| Group| |
| | | | $|
| | | $| |
| | | | Restated|
+-+----------------------------------------------------+-----------+-----------+
| |Annual Return Fees | 56,848| 37,300|
| | | | |
| |Auditors' remuneration | 149,449| 7,470|
| | | | |
| |Charitable contributions | 57,545| 36,835|
| | | | |
| |Depreciation | 88,410| 97,041|
| | | | |
| |Computer Expenses | 58,773| 30,592|
| | | | |
| |Consulting Fees | 468,823| 553,483|
| | | | |
| |Employee pension costs | 10,428| 13,981|
| | | | |
| |Employee share option expense | 214,673| 969,777|
| | | | |
| |Foreign exchange gains | (78,033)| (518,958)|
| | | | |
| |Insurance | 42,194| 32,305|
| | | | |
| |Legal & Secretarial Fees | 147,505| 42,328|
| | | | |
| |Marketing | 114,307| 76,094|
| | | | |
| |Office lease | 96,077| 72,376|
| | | | |
| |Repairs and Maintenance | 49,159| 44,998|
| | | | |
| |Telephone & Fax | 63,959| 70,588|
| | | | |
| |Transport, Oils and Fuel Costs | 73,809| 70,968|
| | | | |
| |Travel & Accommodation | 175,756| 244,999|
| | | | |
| |Wages and salaries (note 7) | 415,849| 358,956|
| | | | |
| |Other administration costs | 326,777| 204,565|
| | | | |
| |(Profit)/Loss on disposal of financial assets | -| (34,229)|
| | | | |
| |Loss/(Profit) on disposal of property, plant and| 25,935| (64,565)|
| |equipment | | |
+-+----------------------------------------------------+-----------+-----------+
| | |(2,558,243)|(2,346,904)|
+-+----------------------------------------------------+-----------+-----------+
$40,883 (2009: $969,777) of the employee share option expense arises on
equity-settled share based payment transactions and $173,790 (2009: $Nil) arises
on cash-settled share based payment transactions.
+---+----------------------------------------+---------+----------+
| | | | 2009 |
| | | 2010 | |
| | | | Group |
| 4 | Auditors' remuneration | Group | |
| | | | $ |
| | | $ | |
| | | | Restated |
+---+----------------------------------------+---------+----------+
| | Audit services | | |
| | | | |
| | Statutory audit of the Company - 2010 | 52,735 | - |
| | | | |
| | Statutory audit of subsidiaries - 2010 | 13,630 | - |
| | | | |
| | Statutory audit of the Company - 2009 | 55,235 | 7,470 |
| | | | |
| | Statutory audit of subsidiaries - 2009 | 19,588 | - |
| | | | |
| | Non-audit services | | |
| | | 8,261 | - |
| | For tax valuation on EBT | | |
+---+----------------------------------------+---------+----------+
| | | 149,449 | 7,470 |
+---+----------------------------------------+---------+----------+
+---+------------------------------------+--------+---------+
| 5 | Finance income | | |
+---+------------------------------------+--------+---------+
| | Interest received on bank deposits | 22,240 | 188,294 |
+---+------------------------------------+--------+---------+
+-+----------------------------------+---------+-------------------------------+
| | | | 2009|
| | | 2010| |
| | | | Group|
|6|Taxation | Group| |
| | | | $|
| | | $| |
| | | | Restated|
+-+----------------------------------+---------+-------------------------------+
| |There is no tax charge arising for| | |
| |the Group for the year. | | |
| |The tax assessed for the year is| | |
| |lower than the standard rate of| | |
| |corporation tax in the UK. The| | |
| |differences are explained | | |
+-+----------------------------------+---------+-------------------------------+
| |Loss before taxation |2,536,003| 2,158,609|
+-+----------------------------------+---------+-------------------------------+
| |Loss before taxation at the| | |
| |standard rate of corporation tax| | |
| |in the UK of 28% (2009: 28%) |(701,081)| (604,410)|
| | | | |
| |Expenses disallowed for tax | 60,108| 355,178|
| |Deduction on exercise of share|(122,907)| -|
| |options | | |
+-+----------------------------------+---------+-------------------------------+
| |Loss carried forward | 772,880| 249,232|
+-+----------------------------------+---------+-------------------------------+
| |Tax charge for the year | -| -|
+-+----------------------------------+---------+-------------------------------+
| |Factors that may affect future tax charges: |
| | |
| |At the 31 March 2010, the Company had UK tax losses of approximately|
| |$3,234,276 (2009: $2,130,644) carried forward which can be utilised against|
| |future profits. However these losses are only recoverable against future|
| |profits, the timing of which is uncertain and as a result no deferred tax|
| |asset is being recognised in respect of these losses. |
+-+----------------------------------------------------------------------------+
+-+----------------------------------------------------------------------------+
|7|Employees |
+-+----------------------------------------+---------+--------+-------+--------+
| | | | Group| | Company|
| | | Group| |Company| |
| |Staff costs (including directors)| | 2009| | 2009|
| |consist of: | 2010| | 2010| |
| | | | $| | $|
| | | $| | $| |
| | | |Restated| |Restated|
+-+----------------------------------------+---------+--------+-------+--------+
+-+----------------------------------------+---------+--------+-------+--------+
| |Wages and Salaries - management | 254,610| 310,522|206,559| 293,602|
+-+----------------------------------------+---------+--------+-------+--------+
| |Wages and Salaries - other | 161,239| 48,434| -| -|
+-+----------------------------------------+---------+--------+-------+--------+
| | | 415,849| 358,956|206,559| 293,602|
+-+----------------------------------------+---------+--------+-------+--------+
| |Consultancy fees | 711,419| 607,207|663,751| 595,494|
+-+----------------------------------------+---------+--------+-------+--------+
| |Social Security costs | 48,970| 7,465| 2,488| 3,616|
+-+----------------------------------------+---------+--------+-------+--------+
| |Healthcare costs | 17,147| 8,028| 17,147| 8,028|
+-+----------------------------------------+---------+--------+-------+--------+
| |Pension costs | 10,428| 13,982| 10,428| 13,982|
+-+----------------------------------------+---------+--------+-------+--------+
+-+----------------------------------------+---------+--------+-------+--------+
| | |1,203,813| 995,638|900,373| 914,722|
+-+----------------------------------------+---------+--------+-------+--------+
++-----------------------------------------------------------------------------+
||The average number of employees (including directors) during the year was as |
||follows: |
++----------------+------+------+-------+--------------------------------------+
|| |Group |Group |Company| Company |
|| | 2010 | 2009 | 2010 | 2009 |
|| |Number|Number|Number | Number |
++----------------+------+------+-------+--------------------------------------+
++----------------+------+------+-------+--------------------------------------+
||Management | 7| 7| 7| 7|
++----------------+------+------+-------+--------------------------------------+
||Other operations| 61| 48| -| -|
++----------------+------+------+-------+--------------------------------------+
|| | 68| 55| 7| 7|
++----------------+------+------+-------+--------------------------------------+
+-+----------------------------------------------------------+-------+---------+
| | | 2010| 2009|
|8|Directors' remuneration | | |
| | | $| $|
| | | | Restated|
+-+----------------------------------------------------------+-------+---------+
+-+----------------------------------------------------------+-------+---------+
| |Directors' emoluments |206,559| 293,602|
+-+----------------------------------------------------------+-------+---------+
| |Company contributions to pension schemes | 10,428| 13,982|
+-+----------------------------------------------------------+-------+---------+
| |Healthcare costs | 6,877| 8,028|
+-+----------------------------------------------------------+-------+---------+
| |Amounts paid to third parties in respect of directors' |188,879| 233,880|
| |services | | |
+-+----------------------------------------------------------+-------+---------+
| |Share based payment charges |120,530| 686,664|
+-+----------------------------------------------------------+-------+---------+
+-+----------------------------------------------------------+-------+---------+
| |Directors and key management remuneration |533,273|1,236,156|
+-+----------------------------------------------------------+-------+---------+
+-+----------------------------------------------------------+-------+---------+
| |Gain on share options exercised by directors (not charged |135,295| 214,656|
| |to profit or loss as explained below) | | |
+-+----------------------------------------------------------+-------+---------+
The directors are considered to be the key management of the Group and Company.
Emoluments paid to the highest paid director, including amounts paid to third
parties in respect of directors services and including share based payment
charges is $163,847 (2009: $163,284).
One director (2009: one) accrued benefits under a defined contribution pension
scheme during the year. Two directors (2009: one) exercised 1,000,000 share
options each during the year (refer note 22). The gain on exercise of the
options amounted to $135,295 (2009: $214,656). This is not charged to profit or
loss as the fair value of the options issued is reflected in the share based
payment charges. All four directors have share options receivable under long
term incentive schemes.
2009
2010
9 Loss per share Group
Group
Restated
Loss per Ordinary Share has been calculated using the
weighted average number of Ordinary Shares in issue
during the relevant financial year.
The weighted average number of Ordinary Shares in 291,512,289 222,816,217
issue for the year is.
Losses for the Group for the year are ($) (2,536,003) (2,158,610)
Loss per share basic and diluted (0.87c) (0.97c)
The effect of all potentially dilutive share options
is anti-dilutive. Details of the share options which
may dilute the loss per share are disclosed in note
22 in the financial statements
10 Loss for the financial year
The Company has taken advantage of the exemption allowed under Section
408(1b) of the Companies Act 2006 and has not presented its own income
statement in these financial statements. The Group loss for the year includes
a loss after taxation of $903,568 (2009: $1,439,353), which is dealt with in
the financial statements of the parent company.
+--+--------------------+---------------+------------+--------------+----------+
| |Intangible assets | Deferred| Mining| Licence| |
|11| | exploration| options| acquisition| Total|
| |Group | costs| | costs| |
+--+--------------------+---------------+------------+--------------+----------+
| | | $| $| $| $|
+--+--------------------+---------------+------------+--------------+----------+
| |Cost at 31 March| 10,266,321| -| 4,062,420|14,328,741|
| |2009 | | | | |
+--+--------------------+---------------+------------+--------------+----------+
| |Additions during the| 3,906,285| | 782,826| 4,689,111|
| |year | | | | |
+--+--------------------+---------------+------------+--------------+----------+
| |Disposals during the| -| -| -| -|
| |year | | | | |
+--+--------------------+---------------+------------+--------------+----------+
| |Cost at 31 March| 14,172,606| -| 4,845,246|19,017,852|
| |2010 | | | | |
+--+--------------------+---------------+------------+--------------+----------+
+--+--------------------+---------------+------------+--------------+----------+
| |Cost at 29 February| 7,057,255| 31,186| 3,557,936|10,646,377|
| |2008 | | | | |
+--+--------------------+---------------+------------+--------------+----------+
| |Additions during the| 3,209,066| -| 473,298| 3,682,364|
| |period | | | | |
+--+--------------------+---------------+------------+--------------+----------+
| |Reclassification | -| (31,186)| 31,186| -|
| |during the period | | | | |
+--+--------------------+---------------+------------+--------------+----------+
| |Disposals during the| -| -| -| -|
| |period | | | | |
+--+--------------------+---------------+------------+--------------+----------+
| |Cost at 31 March| 10,266,321| -| 4,062,420|14,328,741|
| |2009 - Restated | | | | |
+--+--------------------+---------------+------------+--------------+----------+
+--+--------------------+---------------+------------+--------------+----------+
| |Cost at 28 February | 5,303,259| 86,186| 3,522,493| 8,911,938|
| |2007 | | | | |
+--+--------------------+---------------+------------+--------------+----------+
| |Additions during the| 1,757,691| | 35,443| 1,793,134|
| |period | | | | |
+--+--------------------+---------------+------------+--------------+----------+
| |Disposals during the| (3,695)| (55,000)| -| (58,695)|
| |period | | | | |
+--+--------------------+---------------+------------+--------------+----------+
| |Cost at 29 February | 7,057,255| 31,186| 3,557,936|10,646,377|
| |2008 - Restated | | | | |
+--+--------------------+---------------+------------+--------------+----------+
++-----------------------------------+---------+--------+---------+---------+
|| | | | | |
||Company | | | | |
++-----------------------------------+---------+--------+---------+---------+
||Cost at 31 March 2009 |1,458,321| -| 454,449|1,912,770|
++-----------------------------------+---------+--------+---------+---------+
||Additions during the year | 724,291| -| 715,326|1,439,617|
++-----------------------------------+---------+--------+---------+---------+
||Disposals during the year | -| -| (20,000)| (20,000)|
++-----------------------------------+---------+--------+---------+---------+
||Cost at 31 March 2010 |2,182,612| -|1,149,775|3,332,387|
++-----------------------------------+---------+--------+---------+---------+
++-----------------------------------+---------+--------+---------+---------+
||Cost at 29 February 2008 | 880,270| 31,186| 85,090| 996,546|
++-----------------------------------+---------+--------+---------+---------+
||Additions during the period | 908,234| | 338,173|1,246,407|
++-----------------------------------+---------+--------+---------+---------+
||Reclassification during the period | -|(31,186)| 31,186| -|
++-----------------------------------+---------+--------+---------+---------+
||Disposals during the period |(330,183)| -| -|(330,183)|
++-----------------------------------+---------+--------+---------+---------+
||Cost at 31 March 2009 - Restated |1,458,321| -| 454,449|1,912,770|
++-----------------------------------+---------+--------+---------+---------+
++-----------------------------------+---------+--------+---------+---------+
||Cost at 28 February 2007 | 204,295| 86,186| 60,090| 350,571|
++-----------------------------------+---------+--------+---------+---------+
||Additions during the period | 676,257| | 25,000| 701,257|
++-----------------------------------+---------+--------+---------+---------+
||Disposals during the period | (282)|(55,000)| | (55,282)|
++-----------------------------------+---------+--------+---------+---------+
||Cost at 29 February 2008 - Restated| 880,270| 31,186| 85,090| 996,546|
++-----------------------------------+---------+--------+---------+---------+
See note 2 for an analysis of deferred expenditure by project and note 26 in
respect of the Marange licence, the carrying value of which is $1,144,207 (2009:
$699,047) in the Group and $374,836 (2009: $250,193) in respect of the Company.
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Property, | | Fixtures,| | | | |
| |plant and | Plant and| fittings| Computer| Motor| | |
|12|equipment | machinery| and| assets| vehicles|Buildings| Total|
| | | | equipment| | | | |
| |Group | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| | | $| $| $| $| $| $|
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Cost at 31 | 596,376| 79,498| 110,300| 626,120| -|1,412,294|
| |March 2009 | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Additions | | | | | | |
| |during the | 464,975| 19,046| 49,683| 181,952| 44,536| 760,192|
| |year | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Disposals | | | | | | |
| |during the | -| -| -|(143,852)| -|(143,852)|
| |year | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Cost at 31 | 1,061,351| 98,544| 159,983| 664,220| 44,536|2,028,634|
| |March 2010 | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Depreciation | | | | | | |
| |at 31 March | 253,174| 38,316| 66,645| 244,323| -| 602,458|
| |2009 | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Charge for | 184,907| 21,357| 24,098| 151,382| -| 381,744|
| |the year | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Disposals | | | | | | |
| |during the | -| -| -| (70,513)| -| (70,513)|
| |year | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Depreciation | | | | | | |
| |at 31 March | 438,081| 59,673| 90,743| 325,192| -| 913,689|
| |2010 | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Net book | | | | | | |
| |amount at 31 | 623,270| 38,871| 69,240| 339,028| 44,536|1,114,945|
| |March 2010 | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Cost at 29 | 462,920| 61,735| 78,601| 490,612| -|1,093,868|
| |February 2008| | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Additions | | | | | | |
| |during the | 181,270| 17,763| 31,699| 211,546| -| 442,278|
| |period | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Disposals | | | | | | |
| |during the | (47,814)| -| -| (76,038)| -|(123,852)|
| |period | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Cost at 31 | 596,376| 79,498| 110,300| 626,120| -|1,412,294|
| |March 2009 | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Depreciation | | | | | | |
| |at 29 | 123,662| 18,106| 42,523| 155,677| -| 339,968|
| |February 2008| | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Charge for| 143,458| 20,210| 24,122| 130,442| -| 318,232|
| |the period | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Disposals | | | | | | |
| |during the| (13,946)| -| -| (41,796)| -| (55,742)|
| |period | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Depreciation | | | | | | |
| |at 31 March| 253,174| 38,316| 66,645| 244,323| -| 602,458|
| |2009 | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Net book| | | | | | |
| |amount at 31 | 343,202| 41,182| 43,655| 381,797| -| 809,836|
| |March 2009 -| | | | | | |
| |Restated | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Cost at 28 | 338,916| 34,189| 57,210| 375,809| -| 806,124|
| |February 2007| | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Additions | | | | | | |
| |during the | 128,004| 27,546| 21,391| 121,090| -| 298,031|
| |year | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Disposals | | | | | | |
| |during the | (4,000)| -| -| (6,287)| -| (10,287)|
| |year | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Cost at 29 | 462,920| 61,735| 78,601| 490,612| -|1,093,868|
| |February 2008| | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Depreciation | | | | | | |
| |at 28 | 39,178| 6,986| 19,643| 88,371| -| 154,178|
| |February 2007| | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Charge for | 85,401| 11,120| 22,880| 68,033| -| 187,434|
| |the year | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Disposals | | | | | | |
| |during the | (917)| -| -| (727)| -| (1,644)|
| |year | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Depreciation | | | | | | |
| |at 29 | 123,662| 18,106| 42,523| 155,677| -| 339,968|
| |February 2008| | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Net book | | | | | | |
| |amount at 29 | | | | | | |
| |February | 339,258| 43,629| 36,078| 334,935| -| 753,900|
| |2008 - | | | | | | |
| |Restated | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
| |Net book | | | | | | |
| |amount at 28 | | | | | | |
| |February | 299,738| 27,203| 37,567| 287,438| | 631,947|
| |2007 - | | | | | | |
| |Restated | | | | | | |
+--+-------------+----------+----------+---------+---------+---------+---------+
The depreciation on assets utilised directly for exploration activities is
capitalised as deferred exploration costs amounting to $293,334 (2009:$221,191).
Depreciation in respect of all other assets is charged to administrative
expenses in the statement of comprehensive income amounting to $88,410 (2009:
$97,041).
+--+----------------+------------+------------+-----------+-----------+--------+
| |Property, plant | | Fixtures,| | | |
|12|and equipment | Plant and|fittings and| Computer| Motor| Total|
| | | machinery| equipment| assets| vehicles| |
| |Company | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| | | $| $| $| $| $|
+--+----------------+------------+------------+-----------+-----------+--------+
| |Cost at 31 March| 66,933| 17,890| 63,054| 20,500| 168,377|
| |2009 | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Additions during| 36,086| 705| -| -| 36,791|
| |the year | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Disposals during| -| -| -| (10,000)|(10,000)|
| |the year | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Cost at 31 March| 103,019| 18,595| 63,054| 10,500| 195,168|
| |2010 | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Depreciation at | 25,213| 8,515| 45,005| 7,121| 85,854|
| |31 March 2009 | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Charge for the | 25,003| 4,648| 4,959| 4,100| 38,710|
| |year | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Disposals during| -| -| -| (6,667)| (6,667)|
| |the year | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Depreciation at | 50,216| 13,163| 49,964| 4,554| 117,897|
| |31 March 2010 | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Net book amount | 52,803| 5,432| 13,090| 5,946| 77,271|
| |at 31 March 2010| | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
+--+----------------+------------+------------+-----------+-----------+--------+
| |Cost at 29 | 23,541| 14,816| 55,298| 23,500| 117,155|
| |February 2008 | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Additions during| 43,392| 3,074| 7,756| 6,000| 60,222|
| |the period | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Disposals during| -| -| -| (9,000)| (9,000)|
| |the period | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Cost at 31 March| 66,933| 17,890| 63,054| 20,500| 168,377|
| |2009 | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Depreciation at| 12,058| 4,102| 34,685| 7,180| 58,025|
| |31 March 2009 | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Charge for the| 13,155| 4,413| 10,320| 4,441| 32,329|
| |period | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Disposals during| -| -| -| (4,500)| (4,500)|
| |the period | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Depreciation at| 25,213| 8,515| 45,005| 7,121| 85,854|
| |31 March 2009 | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Net book amount| | | | | |
| |at 31 March| 41,720| 9,375| 18,049| 13,379| 82,523|
| |2009 - Restated | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
+--+----------------+------------+------------+-----------+-----------+--------+
| |Cost at 28 | 18,495| 7,933| 50,190| 17,500| 94,118|
| |February 2007 | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Additions during| 5,046| 6,883| 5,108| 6,000| 23,037|
| |the year | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Disposals during| -| -| -| -| -|
| |the year | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Cost at 29 | 23,541| 14,816| 55,298| 23,500| 117,155|
| |February 2008 | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Depreciation at | 6,791| 2,230| 18,403| 5,000| 32,424|
| |28 February 2007| | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Charge for the | 5,267| 1,872| 16,282| 2,180| 25,601|
| |year | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Disposals during| -| -| -| -| -|
| |the year | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Depreciation at | 12,058| 4,102| 34,685| 7,180| 58,025|
| |29 February 2008| | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Net book amount | | | | | |
| |at 29 February | 11,483| 10,714| 20,613| 16,320| 59,130|
| |2008 - Restated | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
| |Net book amount | | | | | |
| |at 28 February | 11,704| 5,703| 31,787| 12,500| 61,694|
| |2007 - Restated | | | | | |
+--+----------------+------------+------------+-----------+-----------+--------+
The depreciation on assets utilised directly for exploration activities is
capitalised as deferred exploration costs amounting to $28,604 (2009:$18,950).
Depreciation in respect of all other assets is charged to administrative
expenses in the statement of comprehensive income amounting to $10,106 (2009:
$13,379).
+--+------------------------+------+--------+--------+-------+--------+--------+
| |Available for sale | 2010| 2009| 2008| 2010| 2009| 2008|
| |investments | Group| Group| Group|Company| Company| Company|
|13| | | | | | | |
| |(Non current) | $| $| $| $| $| $|
| | | |Restated|Restated| |Restated|Restated|
+--+------------------------+------+--------+--------+-------+--------+--------+
| |Fair value at the |24,417| 49,810| 12,976| 566| 566| 774|
| |beginning of the year | | | | | | |
+--+------------------------+------+--------+--------+-------+--------+--------+
| |Movement in fair value | -|(25,393)| 36,834| -| -| (208)|
+--+------------------------+------+--------+--------+-------+--------+--------+
| |Fair value at the end of|24,417| 24,417| 49,810| 566| 566| 566|
| |the year | | | | | | |
+--+------------------------+------+--------+--------+-------+--------+--------+
The available for sale investments represents investments in quoted companies.
The fair value of available for sale investments is based on the quoted market
price of those investments. The face value of the Company's available for sale
investments is not materially different to the market value at either the
current or previous year end.
+----+-----------------------------------+---------+----------+----------+
| | | 2010 | 2009 | 2008 |
| | | Company | Company | Company |
| 14 | Investment in subsidiaries | | | |
| | | $ | $ | $ |
| | | | Restated | Restated |
+----+-----------------------------------+---------+----------+----------+
| | Cost at the beginning of the year | 1,316 | 1,316 | 6 |
+----+-----------------------------------+---------+----------+----------+
| | Additions during the year | 217,788 | - | 1310 |
+----+-----------------------------------+---------+----------+----------+
| | Cost at the end of the year | 219,104 | 1,316 | 1,316 |
+----+-----------------------------------+---------+----------+----------+
The principal subsidiaries of African Consolidated Resources plc, all of
which are included in these consolidated Annual Financial Statements are as
follows:
Country of Proportion Proportion Nature of
Company registration Class held by held by business
group group
2010 2009
African
** Consolidated BVI -% -% Nominee
Resources PTC company
Ltd
Millwall Mining
International BVI Ordinary 100% 100% exploration
Investments and
Limited development
Mimic Mining UK United Ordinary 100% 100% Holding
Limited Kingdom company
African Mining
Consolidated exploration
Resources Zambia Ordinary 100% 100% and
(Zambia) development
Limited
ACR Mauritius Mauritius Ordinary 100% 100% Holding
Limited company
Mining
Moorestown BVI Ordinary 100% 100% exploration
Limited and
development
Canape Mining
Investments Zimbabwe Ordinary 100% 100% exploration
(Private) and
Limited development
Breckridge Mining
* Investments Zimbabwe Ordinary 100% 100% exploration
(Private) and
Limited development
Lescaut
Investments Mining
* (Private) Zimbabwe Ordinary 100% 100% exploration
Limited and
development.
* Entire shareholding is held indirectly through a subsidiary company
** Previously 'Touzel Holdings Limited'. The Company has effective control of
this entity.
The voting rights are equal to the proportion of the shares held.
+--+--------------+-----+--------+--------+----------+----------+--------------+
| | | 2010| 2009| 2008| 2010| 2009| 2008|
| |Advance to |Group| Group| Group| Company| Company| Company|
|15|Group | | | | | | |
| |Companies | $| $| $| $| $| $|
| | | |Restated|Restated| | Restated| Restated|
+--+--------------+-----+--------+--------+----------+----------+--------------+
| | | | | | | | |
| |Advance to | | | | | | |
| |Group | -| -| -|17,546,296|12,317,701| 12,707,639|
| |Companies | | | | | | |
+--+--------------+-----+--------+--------+----------+----------+--------------+
| | |
| |Advances to Group companies are repayable on demand, subject to relevant |
| |exchange control approvals being obtained. The treatment of this balance as|
| |non-current reflects the Company's expectation of the timing of receipt. |
+--+---------------------------------------------------------------------------+
+--+---------------------+------+------+------+-+-+----------------------------+
|16|Inventory | | | | | | |
+--+---------------------+------+------+------+-+-+----------------------------+
| | | | | | | | |
| |Material and supplies|19,744|21,863|50,603|-|-| -|
+--+---------------------+------+------+------+-+-+----------------------------+
| | |
| |There is no material difference between the replacement cost of stocks and |
| |the amount stated above. The amount of inventory recognized as an expense |
| |during the year was $313,729 (2009 - $342,918). |
+--+---------------------------------------------------------------------------+
+--+-----------------+---------------------------------------------------------+
|17|Receivables | |
+--+-----------------+-------+-------+-------+-------+------+------------------+
| | | | | | | | |
| |Other receivables|100,356| 41,116| 35,490| 51,734|24,654| 9,037|
+--+-----------------+-------+-------+-------+-------+------+------------------+
| | | | | | | | |
| |Prepayments |181,921| 74,663| 26,211| 61,201|52,675| 14,675|
+--+-----------------+-------+-------+-------+-------+------+------------------+
| | | | | | | | |
| |VAT |227,170| 5,295|261,661| 57,161| 5,295| 258,186|
+--+-----------------+-------+-------+-------+-------+------+------------------+
| | | | | | | | |
| | |509,447|121,074|323,362|170,096|82,624| 281,898|
+--+-----------------+-------+-------+-------+-------+------+------------------+
| | |
| |All amounts are due for payment within one year. No receivable are past due|
| |or impaired. |
+--+---------------------------------------------------------------------------+
+--+----------------------------+----------------------------------------------+
| |Available for sale | |
|18|investments | |
| | | |
| |(Current) | |
+--+----------------------------+------+--------+--------+-+-+-----------------+
| |Fair value at the beginning | 5,682| 52,625| 41,034|-|-| -|
| |of the year | | | | | | |
+--+----------------------------+------+--------+--------+-+-+-----------------+
| | | | | | | | |
| |Additions during the year | -| -| 117,943|-|-| -|
+--+----------------------------+------+--------+--------+-+-+-----------------+
| | | | | | | | |
| |Disposals | -|(35,524)|(62,300)|-|-| -|
+--+----------------------------+------+--------+--------+-+-+-----------------+
| | | | | | | | |
| |Movement in fair value |10,787|(11,419)|(44,050)|-|-| -|
+--+----------------------------+------+--------+--------+-+-+-----------------+
| | | | | | | | |
| |Fair value at the end of the|16,469| 5,682| 52,627|-|-| -|
| |year | | | | | | |
+--+----------------------------+------+--------+--------+-+-+-----------------+
| | |
| |Available for sale investments comprise shares in quoted companies. The|
| |face value of the Group's available for sale investments was not materially|
| |different to the market value at the previous year end. |
+--+---------------------------------------------------------------------------+
+--+---------------------+---------+--------+--------+-------+--------+--------+
| | | 2010| 2009| 2008| 2010| 2009| 2008|
| |Trade and other | Group| Group| Group|Company| Company| Company|
|19|payables | | | | | | |
| | | $| $| $| $| $| $|
| | | |Restated|Restated| |Restated|Restated|
+--+---------------------+---------+--------+--------+-------+--------+--------+
| | | | | | | | |
| |Trade payables | 355,300| 27,023| 76,877| 64,934| 20,986| 66,442|
+--+---------------------+---------+--------+--------+-------+--------+--------+
| | | | | | | | |
| |Other payables | 20,079| 16,854| 218,541|218,577| -| 182,915|
+--+---------------------+---------+--------+--------+-------+--------+--------+
| | | | | | | | |
| |Other taxes and | 26,840| 16,938| 4,148| 4,507| 5,801| 3,951|
| |social security taxes| | | | | | |
+--+---------------------+---------+--------+--------+-------+--------+--------+
| | | | | | | | |
| |Share based payment -| 173,790| -| -|173,790| -| -|
| |EBT | | | | | | |
+--+---------------------+---------+--------+--------+-------+--------+--------+
| | | | | | | | |
| |Accrued expenses | 593,586| 194,680| 198,051|452,353| 135,116| 198,051|
+--+---------------------+---------+--------+--------+-------+--------+--------+
| | | | | | | | |
| | |1,169,595| 255,495| 497,617|914,161| 161,903| 451,359|
+--+---------------------+---------+--------+--------+-------+--------+--------+
All amounts fall due for payment within 45 days with the exception of the
liability in respect of share based payments which will fall due after 30 July
2010 and 30 July 2011 upon exercise of the share appreciation rights, as set
out in Note 22 under Cash-settled share based payments.
Financial instruments - risk management
Significant accounting policies
Details of the significant accounting policies in respect of financial
instruments are disclosed in Note 1 to the financial statements. The Group's
financial instruments, comprise available for sale investments (notes 13 and
18), cash and items arising directly from its operations such as other
receivables and trade payables.
Financial risk management
The Board seeks to minimise its exposure to financial risk by reviewing and
agreeing policies for managing each financial risk and monitoring them on a
regular basis. No formal policies have been put in place in order to hedge
the Group and Company's activities to the exposure to currency risk or
interest risk, however this will be considered periodically by the Board. No
derivatives or hedges were entered into during the year.
The Group and Company is exposed through its operations to the following
20 financial risks:
<li> Credit risk
<li> Cash flow interest rate risk
<li> Liquidity risk
<li> Foreign currency risk
The policy for each of the above risks is described in more detail below.
The principal financial instruments used by the Group, from which financial
instruments risk arises are as follow:
<li> Receivables
<li> Cash and cash equivalents
<li> Trade and other payables (excluding other taxes and social security)
<li> Available for sale investments
The table below sets out the carrying value of all financial instruments by
category and where applicable shows the valuation level used to determine the
fair value at each reporting date. The fair value of all financial assets and
financial liabilities is not materially different to the book value.
2010 Â 2009 2010 Â 2009
 Group  Group  Company  Company
$ $ Â $ Â $
Restated  Restated
Loans and receivables
Cash and cash equivalents 15,398,926 2,144,390 Â 14,983,099 Â 1,825,716
Receivables 509,447 121,074 Â 170,096 Â 24,654
Advances to Group Companies - - Â 17,546,296 Â 12,317,701
Available for sale financial
assets
Available for sale investments
(valuation level 1) 40,886 30,099
 566  566
Other liabilities
Trade and other payables 968,965 238,557 Â 735,864 Â 156,102
Credit risk
Financial assets which potentially subject the Group and the Company to
concentrations of credit risk consist principally of cash, short term deposits
and other receivables. Cash balances are all held at recognised financial
institutions. Other receivables are presented net of allowances for doubtful
receivables. Other receivables currently form an insignificant part of the
Group's and the Company's business and therefore the credit risk associated with
them is also insignificant to the Group and the Company as a whole.
The Company has a credit risk in respect to inter-company loans to subsidiaries.
The recoverability of these balances in dependent on the commercial viability of
the exploration activities undertaken by the respective subsidiary companies.
The credit risk of these loans is managed as the directors constantly monitor
and assess the viability and quality of the respective subsidiary's investments
in intangible mining assets.
Inter-company loan amounts between the holding company and its Zimbabwean
subsidiary Canape Investments, are subject to credit risk in so far as the
Zimbabwe's exchange control regulations, which change from time to time, prevent
timeous settlement.
Maximum exposure to credit risk
The Group's maximum exposure to credit risk by category of financial instrument
is shown in the table below:
2010 Â 2010 2009 Â 2009
 Carrying  Maximum  Carrying  Maximum
value exposure value exposure
Loans and $ $ Â $ Â $
receivables  Restated  Restated
Cash and cash 15,398,926 15,398,926 Â 2,144,390 Â 2,144,390
equivalents
Receivables 509,447 509,447 Â 121,074 Â 121,074
The Company's maximum exposure to credit risk by class of financial instrument
is shown in the table below :
Loans and receivables
Cash and cash 14,983,099 14,983,099 Â 1,825,716 Â 1,825,716
equivalents
Receivables 170,096 170,096 Â 82,624 Â 82,624
Advances to Group 17,546,296 17,546,296
Companies  12,317,701  12,317,701
++-----------------------------------------------------------------------------+
||Cash flow interest rate risk |
||The Group has adopted a non speculative policy on managing interest rate|
||risk. Only approved financial institutions with sound capital bases are used|
||to borrow funds and to invest surplus funds in. The Group and the Company had|
||no borrowing facilities at either the current year end or previous period|
||end. |
|| |
||The Group and the Company seeks to obtain a favourable interest rate on its|
||cash balances through the use of bank deposits. At the year end the Group had|
||a cash balance of $15,398,926 (2009: $2,144,390) which was made up as|
||follows: |
++---------------------+------------+------------------------------------------+
|| | 2010| 2009|
|| | Group| Group|
|| | | |
|| | Â $| Â $|
|| | | Â Restated|
++---------------------+------------+------------------------------------------+
||British pounds | Â 4,308,974| Â 1,098,537|
++---------------------+------------+------------------------------------------+
||United States dollars|Â 11,089,952| Â 1,040,730|
++---------------------+------------+------------------------------------------+
||Zimbabwean dollars | Â -| Â -|
++---------------------+------------+------------------------------------------+
||Zambian Kwacha | Â -| Â 5,123|
++---------------------+------------+------------------------------------------+
|| |Â 15,398,926| Â 2,144,390|
++---------------------+------------+------------------------------------------+
Included within the above are amounts of £1,505,112 ($2,267,759) and
US$5,005,218 (2009: £101,553 ($144,453) and US$972,777) held within fixed and
floating rate deposit accounts. Interest rates are 1% to 2% based on bank
interest rates.
The Group received interest for the year on bank deposits of $22,240 (2009:
$188,294).
The effect of a 10% reduction in interest rates during the year would, all
other variables held constant have resulted in reduced interest income of
$2,240 (2009: $18,829). Conversely the effect of a 10% increase in interest
rates during the year would, on the same basis, have increased interest income
by $2,240 (2009: $18,829).
++-----------------------------------------------------------------------------+
||Â At the year end, the Company had a cash balance of $14,983,099 (2009 : |
||$1,825,716) which was made up as follows: |
++---------------------+------------+------------------------------------------+
|| | Â 2010| Â 2009|
++---------------------+------------+------------------------------------------+
|| | Â Company| Â Company|
++---------------------+------------+------------------------------------------+
|| | Â $| Â $|
|| | | Â Restated|
++---------------------+------------+------------------------------------------+
||Pounds Sterling | Â 4,308,974| Â 1,098,536|
++---------------------+------------+------------------------------------------+
||United States dollars|Â 10,674,125| Â 727,180|
++---------------------+------------+------------------------------------------+
|| |Â 14,983,099| Â 1,825,716|
++---------------------+------------+------------------------------------------+
The Group and the Company has no interest bearing debts at either the current
year end or previous period end.
Liquidity risk
Borrowing facilities are negotiated with approved financial institutions at
acceptable interest rates. All assets and liabilities are at fixed and floating
interest rate. The Group and the Company seeks to manage its financial risk to
ensure that sufficient liquidity is available to meet the foreseeable needs
both in the short and long term.
As set out in Note 19 the consolidated trade and other payables balance of
$1,169,595 (2009: $255,495) is all due for payment within 45 days of the
reporting date, except for $173,790 (2009: $nil) in respect of the share based
payment liability. The Company has sufficient cash resources to settle these
outstanding liabilities as they fall due.
Foreign currency risk
Foreign exchange risk is inherent in the Group's and the Company's activities
and is accepted as such. The majority of the Group's expenses are denominated
in United States Dollars and therefore foreign currency exchange risk arises
where any balance are held or costs incurred, in currencies other than the
United States Dollars. This foreign exchange risk differs from the risk
reported in prior years where the functional and presentational currency of the
Group was UK Pounds Sterling.
At 31 March 2010 and 31 March 2009, the currency exposure of the Group was as
follows:
++------------------+-------------+--------------+----------------+------------+
|| |Â UK Sterling| | Â Other| Â Total|
||At 31 March 2010 | Â $|Â US Dollars $| Currencies| Â $|
|| | | | Â $| |
++------------------+-------------+--------------+----------------+------------+
||Cash and cash| 4,308,974| Â 11,089,952| Â -|Â 15,398,926|
||equivalents | | | | |
++------------------+-------------+--------------+----------------+------------+
||Other receivables | 112,186| Â 397,261| Â -| Â 509,447|
++------------------+-------------+--------------+----------------+------------+
||Trade and other| (157,423)| Â (811,541)| Â -| Â (968,965)|
||payables | | | | |
++------------------+-------------+--------------+----------------+------------+
||Available for sale| -| Â 40,886| Â -| Â 40,886|
||investments | | | | |
++------------------+-------------+--------------+----------------+------------+
++------------------------------+---------+-----------+-------+-----------+
||At 31 March 2009 - Restated | Â | Â | Â | Â |
++------------------------------+---------+-----------+-------+-----------+
||Cash and cash equivalents |1,098,537|Â 1,040,730|Â 5,123|Â 2,144,390|
++------------------------------+---------+-----------+-------+-----------+
||Other receivables | 94,862| Â 20,590|Â 5,622| Â 121,074|
++------------------------------+---------+-----------+-------+-----------+
||Trade and other payables |(136,667)|Â (118,828)| Â -|Â (255,495)|
++------------------------------+---------+-----------+-------+-----------+
||Available for sale investments| -| Â 30,099| Â -| Â 30,099|
++------------------------------+---------+-----------+-------+-----------+
The effect of a 10% strengthening of Sterling against the US dollar at the
balance sheet date, all other variables held constant, would have resulted in
increasing post tax losses by $596,751 (2009 : $105,673). Conversely the effect
of a 10% weakening of Sterling against the US dollar at the balance sheet date,
all other variables held constant, would have resulted in decreasing post tax
losses by $596,751 (2009 : $105,673).
At 31 March 2010 and 31 March 2009, the currency exposure of the Company was as
follows:
++--------------------------------+--------------+--------------+--------------+
|| | Â UK | Â US | Â Total |
|| At 31 March 2010 | Â Sterling | Â Dollars | Â |
|| | Â $ | Â $ | |
|| | | | Â $ |
++--------------------------------+--------------+--------------+--------------+
|| Cash and cash equivalents | Â 4,308,974 | Â 10,674,125 | Â 14,983,099 |
++--------------------------------+--------------+--------------+--------------+
|| Other receivables | Â 114,059 | Â 56,037 | Â 170,096 |
++--------------------------------+--------------+--------------+--------------+
|| Advances to Group companies | Â 17,546,296 | Â - | Â 17,546,296 |
++--------------------------------+--------------+--------------+--------------+
|| Trade and other payables | Â (376,001) | Â (359,863) | Â (735,864) |
++--------------------------------+--------------+--------------+--------------+
|| Available for sale investments | Â - | Â 566 | Â 566 |
++--------------------------------+--------------+--------------+--------------+
|| | Â | Â | Â |
++--------------------------------+--------------+--------------+--------------+
|| At 31 March 2009 - Restated | Â | Â | Â |
++--------------------------------+--------------+--------------+--------------+
|| Cash and cash equivalents | Â 1,098,536 | Â 727,180 | Â 1,825,716 |
++--------------------------------+--------------+--------------+--------------+
|| Other receivables | Â 78,397 | Â 4,227 | Â 82,624 |
++--------------------------------+--------------+--------------+--------------+
|| Advances to Group companies | Â 12,317,701 | Â - | Â 12,317,701 |
++--------------------------------+--------------+--------------+--------------+
|| Trade and other payables | Â (112,399) | Â (49,504) | Â (161,903) |
++--------------------------------+--------------+--------------+--------------+
|| Available for sale investments | Â - | Â 566 | Â 566 |
++--------------------------------+--------------+--------------+--------------+
Capital
The objective of the directors is to maximise shareholder returns and minimise
risks by keeping a reasonable balance between debt and equity. To date the
Company and Group has minimised risk by being purely equity financed. The
capital employed by the Group and Company is comprised of equity attributable
to shareholders.
+--+------------------------+------------------+---------------+---------------+
|21|Share capital |Â Number of shares|Â Nominal value|Â Share premium|
+--+------------------------+------------------+---------------+---------------+
| | | | £| £|
+--+------------------------+------------------+---------------+---------------+
| |Authorised | | | |
+--+------------------------+------------------+---------------+---------------+
| |Ordinary shares of £0.01| 1,000,000,000| 10,000,000| -|
| |each | | | |
+--+------------------------+------------------+---------------+---------------+
| |Issued | | $| $|
+--+------------------------+------------------+---------------+---------------+
| |Called up, allotted and| | | |
| |fully paid | | | |
+--+------------------------+------------------+---------------+---------------+
| |As at 28 February 2007 -| 189,994,098| 3,442,988| 11,619,358|
| |Restated | | | |
+--+------------------------+------------------+---------------+---------------+
| |Issued during the year | 31,034,482| 640,055| 8,362,321|
+--+------------------------+------------------+---------------+---------------+
| |As at 29 February 2008 -| 221,028,580| 4,083,043| 19,981,679|
| |Restated | | | |
+--+------------------------+------------------+---------------+---------------+
| |Issued during the period| 2,974,549| 55,215| 501,808|
+--+------------------------+------------------+---------------+---------------+
| | | | | |
| |As at 31 March 2009 - | 224,003,129| 4,138,258| 20,483,487|
| |Restated | | | |
+--+------------------------+------------------+---------------+---------------+
| | | | | |
| |Issued during the year | 134,099,322| 2,141,231| 19,809,104|
+--+------------------------+------------------+---------------+---------------+
| | | | | |
| |As at 31 March 2010 | 358,102,451| 6,279,489| 40,292,591|
+--+------------------------+------------------+---------------+---------------+
The number of shares reserved for issue under share options at 31 March 2010 was
39,848,611 (2009: 44,765,278). The number of shares held by the EBT at 31 March
2010 was 12,000,000 (2009: nil), see note 22 for additional details about the
EBT.
+--+----------------------------------------------------------------------------+
|22|Share based payments |
+--+----------------------------------------------------------------------------+
| |Equity-settled share based payments |
+--+----------------------------------------------------------------------------+
| |The Company operates an unapproved share option plan for directors, senior |
| |management and staff consultants. The tables below reconcile the opening and|
| |closing number of share options in issue at each reporting date: |
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |Share | | Exercised| Lapsed| Granted| | |
| |options |Outstanding| during| during| during|Outstanding| Final|
| | | at| | | | at|exercise|
| |Exercise| | last| last| last| | date|
| |price | | | | | | |
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| | | 31 March| 12 months| 12 months| 12 months| 31 March| |
| | | 2009| | | | 2010| |
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |4.5p | 2,500,000| -| -| -| 2,500,000|Dec 2010|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |4.5p | 1,111,111| -| -| -| 1,111,111| June|
| | | | | | | | 2010|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |4.5p | 10,000,000|(4,750,000)| -| -| 5,250,000| June|
| | | | | | | | 2011|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |7.0p | 37,500| -| -| -| 37,500| June|
| | | | | | | | 2011|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |12.0p | 666,667| -| (666,667)| -| -| June|
| | | | | | | | 2009|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |12.0p | 5,500,000| -| -| -| 5,500,000| June|
| | | | | | | | 2011|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |12.0p | 1,965,000| -| -| -| 1,965,000|Dec 2010|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |14.5p | 1,945,000| -| -| -| 1,945,000| June|
| | | | | | | | 2011|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |15.0p | 5,500,002| -| -| -| 5,500,002| June|
| | | | | | | | 2011|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |18.0p | 5,499,998| -| -| -| 5,499,998| June|
| | | | | | | | 2011|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |14.5p | 2,040,000| -| -| -| 2,040,000| June|
| | | | | | | | 2011|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |18.0p | 8,000,000| -| -| -| 8,000,000| June|
| | | | | | | | 2011|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |12.0p | -| -| -| 500,000| 500,000| June|
| | | | | | | | 2013|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| | | 44,765,278|(4,750,000)| (666,667)| 500,000| 39,848,611| |
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| | |29 February| 13 months| 13 months| 13 months| 31 March| |
| | | 2008| | | | 2009| |
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |4.5p | 2,500,000| -| -| -| 2,500,000|Dec 2010|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |4.5p | 1,111,111| -| -| -| 1,111,111| June|
| | | | | | | | 2010|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |4.5p | 11,000,000|(1,000,000)| -| -| 10,000,000| June|
| | | | | | | | 2011|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |7.0p | 1,500,000| -|(1,500,000)| -| -| March|
| | | | | | | | 2009|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |7.0p | 37,500| -| -| -| 37,500| June|
| | | | | | | | 2011|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |12.0p | 666,667| -| -| -| 666,667| June|
| | | | | | | | 2009|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |12.0p | 5,500,000| -| -| -| 5,500,000| June|
| | | | | | | | 2011|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |12.0p | 1,965,000| -| -| -| 1,965,000|Dec 2010|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |14.5p | 1,945,000| -| -| -| 1,945,000| June|
| | | | | | | | 2011|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |15.0p | 5,500,002| -| -| -| 5,500,002| June|
| | | | | | | | 2011|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |18.0p | 5,499,998| -| -| -| 5,499,998| June|
| | | | | | | | 2011|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |14.5p | -| -| -| 2,040,000| 2,040,000| June|
| | | | | | | | 2011|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| |18.0p | -| -| -| 8,000,000| 8,000,000| June|
| | | | | | | | 2011|
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
| | | 37,225,278|(1,000,000)|(1,500,000)|10,040,000| 44,765,278| |
+--+--------+-----------+-----------+-----------+----------+-----------+--------+
2010 weighted 2009 weighted
average exercise 2010 number average exercise 2009 number
price (pence) price (pence)
Outstanding at the
beginning of the 12.1 44,765,278 10.3 37,225,278
year
Granted during the 12.0 500,000 17.3 10,040,000
year
Lapsed during the 12.0 (666,667) 7.0 (1,500,000)
year
Exercised during the 4.5 (4,750,000) 4.5 (1,000,000)
year
Outstanding at the 13.0 39,848,611 12.1 44,765,278
end of the year
Exercisable at the 12.9 39,348,611 12.1 34,725,278
end of the year
The weighted average remaining lives of the options outstanding at the end of
the period is 14.29 months (2009: 25.75 months). The weighted average market
price of the shares in the Company was 12.1p (2009: 22.9p) as at the date that
the options were exercised. Of the 39,848,611 (2009: 34,725,278) options
outstanding at 31 March 2010, 500 000 (2009: 10,040,000) are not yet
exercisable at 31 March 2009.
Fair value of share options
The fair values of awards granted under the Employee Share Option Plan have
been calculated using the Black Scholes pricing model that takes into account
factors specific to share incentive plans such as the vesting periods of the
Plan, the expected dividend yield of ACR's shares and the estimated volatility
of those shares. Based on the above assumptions, the fair values of the options
granted are estimated to be:
12p options 14.5p 18p options 14.5p 12p options
options options
Grant date March 2007 Jan 2008 April 2008 July March 2010
2008
Dec July
Vesting Dec 2008- April 2009- March
periods 2007-Dec 2010 June 2009-June 2011 June 2011-April 2011/12
2011 2011
Share price
at date of 7.7p 14.5p 19p 13p 9.6p
grant
Exercise 12p 14.5p 18p 14.5p 12p
price
Volatility 50% 50% 41% 42% 60%
Option life 3 years 2.5 2.25 years 2 years 1.1 & 2.1 years
years
Dividend Nil Nil Nil Nil Nil
yield
Risk free
investment 4.86% 4.86% 3.8% 5.13% 0.5%
rate
Fair value 2.6c 8.9c 9.8c 5.8c 2.5/3.9c
The fair value were previously disclosed in Pound Sterling (pence per option)
and have been translated to United States Dollars (cents per option) using the
exchange rates at the date of the option granted. Volatility has been based on
the volatility of comparable listed companies in the mining, oil and gas sector
and on historical share price information.
Based on the above fair values and ACR's expectations of employee turnover, the
expense arising from equity-settled share options and share awards made to
employees was $40,883 (2009 : $969,777).
Cash-settled share based payments
During the year the directors of the Company set up an Employee Benefit Trust
(EBT) in which a number of employees and directors are participants. The EBT
holds shares on behalf of each participant until such time as the participant
exercises their right to require the EBT to sell the shares. On the sale of the
shares the participant receives the appreciation of the value in the shares
above the market price on the date that the shares were purchased by the EBT,
subject to the first 5% in growth in the share price, on an annual compound
basis, being retained by the EBT. The participant pays £0.01 per share to
acquire their rights. The shares were purchased by the EBT at a market price of
8.75p per share on 21 August 2009. The table below sets out the rights
exercisable in respect of the EBT. There was no EBT in the prior year and
therefore no comparative table is shown:
The Company funded (directly and indirectly through another subsidiary) an
amount of $1,734,305 to the EBT in order to enable the purchase of shares in
the Company. At the year end, the Company had an outstanding loan to African
Consolidated Resources (PTC) Limited (under the effective control of African
Consolidated Resources plc and trustee of the EBT) of $1,516,527 (2009: $nil)
and Millwall International Investments Limited had an outstanding loan to the
same entity for $217,778 (2009: $nil). As set out in the EBT accounting policy
note, the EBT has been included as part of the Company financial statements and
consolidated as part of the Group financial statements.
++---------+------------+----------+-------+-----------+-----------+-----------+
||EBT | | Exercised| Lapsed| Granted| | Date|
|| | Outstanding| during| during| during|Outstanding|exercisable|
||Exercise | at| | | | at| from|
||price | | last| last| last| | |
++---------+------------+----------+-------+-----------+-----------+-----------+
|| | 31 March| 12 months| 12 | 12 months| 31 March| |
|| | 2009| | months| | 2010| |
++---------+------------+----------+-------+-----------+-----------+-----------+
||8.75p | -| -| -| 6,000,000| 6,000,000| July 2010|
++---------+------------+----------+-------+-----------+-----------+-----------+
||8.75p | -| -| -| 6,000,000| 6,000,000| July 2011|
++---------+------------+----------+-------+-----------+-----------+-----------+
|| | -| -| -| 12,000,000| 12,000,000| |
++---------+------------+----------+-------+-----------+-----------+-----------+
|| |
||As at 31 March 2010 none of the EBT participation rights were exercisable. |
++-----------------------------------------------------------------------------+
|| |
||Fair value of EBT participant rights |
|| |
||The fair values of the rights granted to participants under the EBT have been|
||calculated using a Monte Carlo valuation model. Based on the assumptions set|
||out in the table below, as well as the limitation on the growth in share|
||price attributable to the participants (as set out in the table above) the|
||fair-values are estimated to be: |
++-----------------------------------------------------+-----------+-----------+
|| |July 2010 |July 2011 |
|| | rights | rights |
|+-----------------------------------------------------+-----------+-----------+
||Grant date |August 2009|August 2009|
|+-----------------------------------------------------+-----------+-----------+
||Vesting periods |August 2009|August 2009|
|| |- July 2010|- July 2011|
|+-----------------------------------------------------+-----------+-----------+
||Share price at date of grant | 8.75p | 8.75p |
|+-----------------------------------------------------+-----------+-----------+
||Exercise price | 1p | 1p |
|+-----------------------------------------------------+-----------+-----------+
||Volatility | 60% | 60% |
|+-----------------------------------------------------+-----------+-----------+
||Option life | 0.9 years | 1.9 years |
|+-----------------------------------------------------+-----------+-----------+
||Dividend yield | Nil | Nil |
|+-----------------------------------------------------+-----------+-----------+
||Risk free investment rate | 0.3744% | 0.8948% |
|+-----------------------------------------------------+-----------+-----------+
|+-----------------------------------------------------+-----------+-----------+
||Fair value | 2.46c | 3.77c |
++-----------------------------------------------------+-----------+-----------+
|| |
||The fair values were translated from Pound Sterling (pence per right) to |
||United States Dollars (cents per right) using the exchange rates at the date |
||that the EBT acquired the shares and the EBT agreements were put in place on |
||21 August 2009; the rate on that date was 1.652. Volatility has been based on|
||the volatility of comparable listed companies in the mining, oil and gas |
||sector and on historical share price information. |
++-----------------------------------------------------------------------------+
23 Reserves
Details of the nature and purpose of each reserve within owners' equity are
provided below:
 · The share premium account holds the balance of consideration received net
of fund raising costs in excess of the par value of the shares.
 · The share options reserve represents the accumulated balance of share
benefit charges recognised in respect of share options granted by the
Company, less transfers to retained losses in respect of options exercised or
lapsed.
 · The foreign currency translation reserve comprises amounts arising on the
translation of the Group and Company financial statements from Pound Sterling
to United States Dollars, as set out in Note 1, prior to the change in
functional currency to US$.
 · The available for sale reserve holds the gains/(losses) arising on
recognising financial assets classified as available for sale at fair value.
 · The EBT reserve has been recognised in respect of the shares purchased in
the Company by the EBT; the reserve serves to offset against the increased in
share capital and share premium arising from the Company effectively
purchasing its own shares.
 · The retained earnings reserve represents the cumulative net gains and
losses recognised in the Group statement of comprehensive income.
24 Related party transactions
Group
There were no related party transactions during the year in the Group other
than directors and key management emoluments which are disclosed in note 8
and the following :
         à Andrew Cranswick held a 50% (2009 : 50%) indirect equity stake in
the property from which Canape Investments (Private) Limited incurred $36,000
(2009 : $30,263) rental expense in the current financial year until he
disposed of his interest in January 2010.
         à Andrew Cranswick and Michael Kellow each hold a 20% equity stake
in Aeromags.com from which African Consolidated Resources plc incurred
$47,947 (2009 : $59,309) aeromagnetic survey expense in the current financial
year. In September 2009 Andrew Cranswick disposed of his interest in this
company.
Company
The Company emoluments to directors and key management are disclosed in note
8 to the financial statements.
At the year end, the Company had an outstanding loan to Canape Investments
(Private) Limited (a wholly owned subsidiary) of $10,461,075 (2009:
$6,141,337). During the year, interest of $287,466 (2009: $256,823) was
accrued on this loan. This is included in the balance payable by Canape
Investments (Private) Limited at the year end.
At the year end, the Company had an outstanding loan to Millwall
International Investments Limited (a wholly owned subsidiary) of $5,343,441
(2009: $4,885,140). During the year, interest of $184,729 (2009: $216,025)
was accrued on this loan. This is included in the balance payable by Millwall
International Investments Limited at the year end.
At the year end, the Company had an outstanding loan to Mimic Mining (UK)
Limited (a wholly owned subsidiary) of $516,975 (2009: $493,483). During the
year, interest of $19,007 (2009: $22,567) was accrued on this loan. This is
included in the balance payable by Mimic Mining Limited at the year end.
At the year end, the Company had an outstanding loan to African Consolidated
Resources (Mauritius) Limited (a wholly owned subsidiary) of $250,000 (2009:
$178,952). This is included in the balance payable by African Consolidated
Resources (Mauritius) Limited at the year end.
At the year end, the Company had an outstanding loan to Moorestown Limited (a
wholly owned subsidiary) of $828,297 (2009 : $531,459). During the year,
interest of $25,994 (2009: $13,405) was accrued on this loan. This is
included in the balance payable by Moorestown Limited at the year end.
At the year end, the Company had an outstanding loan to African Consolidated
Resources (Zambia) Limited (a wholly owned subsidiary) of $146,508 (2009:
$87,331).
At the year end, the Company had an outstanding loan to ACR Nominees Limited
(a wholly owned subsidiary) of $4 (2009: $4).
These receivables totalled $17,546,296 (2009: $12,317,701) at the year end.
The Company also charged a management fee to Canape Investments (Private)
Limited of $15,067 (2009: $15,393) during the year.
Also see the transactions between the Company and African Consolidated
Resources (PTC) Limited (the Trustee of the EBT set up in the year) as set
out in Note 22, Cash-settled share based payments.
Contingent liabilities and capital commitments
25
There is a contingent liability, which in the opinion of the directors is not
likely to exceed $95,900, in respect of the Giant acquisition made in the
period to 28 February 2006 relating to resource ounces still in the process
of being quantified.
26 Litigation
Amongst intangible assets for the Group is included $1,144,207 (2009:
$699,047) representing costs of title acquisition and of exploration over a
diamond deposit near Marange. On 28 September 2006, the Group received
notification from the Zimbabwe Minister of Mines that he intended to
challenge the Group's legal title with respect to Marange. The Group
initiated proceedings in the Zimbabwe High Court in order to confirm its
title which resulted in a judgement in the Group's favour on 24 September
2009. The Court ordered that the Group's title to the Marange claims was
valid and had been since the claims were pegged; and that all diamonds mined
from the claims should be returned to the Group. The Ministry of Mines has
lodged an appeal against the High Court judgement to the Supreme Court. No
date has yet been fixed for a hearing on the substantive issue on the appeal
(the Substantive Appeal) but there has been an interim Order of the Supreme
Court on 16 February 2010 that all mining at Marange should cease and that
the diamonds ordered to be returned to the Group pursuant to the High Court
Order should be surrendered to the Reserve Bank of Zimbabwe pending
determination of the Substantive Appeal.
Although the diamonds seized from the Group's offices in January 2007 have,
it is understood, been deposited at the Reserve Bank, other diamonds mined
since then have not been and, contrary to the Order of the Supreme Court,
mining is still continuing at Marange. The Group has filed an application to
the High Court for contempt against those now mining at Marange. It has also
filed a further application to the High Court to bring all diamonds mined at
Marange (not just those mined up to the date of the High Court Order) within
the ambit of the Supreme Court Order. If successful this would have the
effect that all diamonds mined would have to be surrendered to the Reserve
Bank for safe keeping pending the resolution of the Substantive Appeal.
Subsequent to the High Court Order and apart from the Substantive Appeal the
Ministry of Mines has commenced other proceedings with a view either to
undermine or to terminate the Group's title to the Marange claim (the Other
Proceedings) all of which are being vigorously resisted.
Counsel has advised that in his opinion neither the Substantive Appeal by the
Ministry of Mines nor the actions by the Ministry of Mines in the Other
Proceedings have any merit, and therefore no provision against loss of this
asset has been made.
There is no other litigation involving any group company.
27 Post balance sheet event
On 6 August 2010 5,300,000 of ordinary shares were issued to Kipling Stone
Investments Limited for a cash sum of $700,000. The subscription proceeds
have been used to acquire property assets from the subscriber.
[HUG#1438519]
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
All reproduction for further distribution is prohibited.
Source: African Consolidated Resources Plc via Thomson Reuters ONE
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