TIDMPRL
RNS Number : 9496A
Polo Resources Limited
16 October 2009
Friday 16 October 2009
Polo Resources Limited
("Polo", "Polo Resources" or the "Company")
Results for the 12 Months Ended 30 June 2009
Polo Resources (AIM: PRL), the AIM listed mining company with uranium and coal
interests in Africa, Australia, Europe and Asia, announces results for the 12
months ended 30 June 2009.
Operational Highlights
* Entered into a 50-50 joint venture in Mongolia with Peabody Energy Corporation
(NYSE: BTU) ("Peabody"), the world's largest private-sector coal company, to
develop Polo's Mongolian assets.
o Completed NI 43-101 Technical Report for the Union Project.
o Announced a positive JORC compliant resource statement for the Erds Project,
with thermal coal resources estimated at 254 million tonnes in the Indicated
category and 553 million tonnes in the Inferred category.
*
* Strategic interest of 26.2% in Caledon Resources plc currently valued at US$52.1
million.* Additional interest though acquisition of GBP4.7 million 8.5%
unsecured 2010 Caledon convertible loans.
* Strategic interest of 29.8% in GCM Resources plc currently valued at US$21.4
million.*
* Working capital balance of US$16.9 million as at 14 October 2009.
* Entire listed equity investments valued at US$302.3 million*.
Neil Herbert, Managing Director of Polo Resources, said:
"In the past year Polo has concentrated its strategic focus on uranium and has
now invested substantially in several advanced-stage coal and uranium assets
around the world. Polo expanded its interests in the uranium sector by making a
number of investments in listed companies, the most significant being Extract
Resources, owner of the Rossing South uranium deposit in Namibia, which we
believe has the potential to achieve a total resource base of 500 million lbs
U3O8.
Polo has the potential to deliver substantial near-term production returns. Our
intention is to make further strategic value-adding investments in
advanced-stage commodity projects and, in so doing, to establish the Company as
a significant presence in this sector."
*Based on the closing prices on 14 October 2009
Contacts:
+--------------------------------------------------+------------------------+
| Polo Resources Limited | + 27 82 404 36 37 |
| Neil Herbert, Managing Director | |
| | |
+--------------------------------------------------+------------------------+
| Canaccord Adams Limited | + 44 (0) 20 7050 6500 |
| Mike Jones/Ryan Gaffney | |
| | |
+--------------------------------------------------+------------------------+
| Financial Dynamics | + 44 (0) 20 7831 3113 |
| Ben Brewerton / Ed Westropp | |
| | |
+--------------------------------------------------+------------------------+
About the Company
Polo is an emerging energy company currently focused on acquiring and developing
advanced stage uranium and coal projects. For complete details on Polo Resources
Limited, management encourages investors and interested parties to view its
public documents filed on AIM Exchange at www.poloresources.com.
CAUTIONARY STATEMENT
The AIM Market of London Stock Exchange plc does not accept responsibility for
the adequacy or accuracy of this release. No stock exchange, securities
commission or other regulatory authority has approved or disapproved the
information contained herein. All statements, other than statements of
historical fact, in this news release are forward-looking statements that
involve various risks and uncertainties, including, without limitation,
statements regarding potential values, the future plans and objectives of Polo
Resources Limited. There can be no assurance that such statements will prove to
be accurate, achievable or recognizable in the near term. Actual results and
future events could differ materially from those anticipated in such statements.
These and all subsequent written and oral forward-looking statements are based
on the estimates and opinions of management on the dates they are made and are
expressly qualified in their entirety by this notice. Polo Resources Limited
assumes no obligation to update forward-looking statements should circumstances
or management's estimates or opinions change.
Chairman's Statement
In just over two years since our formation, Polo Resources has sought to
establish an extensive portfolio of advanced stage energy assets, focusing on
uranium and coal. During this financial year Polo expanded its interests in the
uranium sector by making a number of acquisitions in listed companies. The most
significant was the investment in Extract Resources Limited ("Extract"), owner
of the Rossing South uranium deposit in Namibia, the largest and what we believe
to be, the most exciting uranium discovery in recent history.
In an extremely challenging economic period this bold strategic realignment
played to the strengths of the management team led by Neil Herbert and myself. I
am pleased to report that the results of this strategy have been extremely
encouraging with significant growth in the market value of these timely
investments.
In this respect, Extract Resources' recent discovery of a new zone of
mineralisation at Rossing South (announced in October 2009) has been
particularly encouraging. The Company believes that a total resource base of 500
million lbs U3O8 is achievable at Rossing South, which naturally adds
considerable value to Polo Resources' strategic investment.
Whilst uranium became the core focus area at Polo Resources in 2009, coal
remains an important part of our asset base. The Company's considerable stakes
in Caledon Resources plc and GCM Resources plc give Polo a substantial interest
in the development of major coal mining projects in both Australia and
Bangladesh. In addition, Polo entered into a 50-50 joint venture in Mongolia
with Peabody Energy Corporation (NYSE: BTU)("Peabody"), the world's largest
private-sector coal company, which empowered Peabody to manage and develop our
joint venture projects in this country with vast potential.
At the time of reporting, the Polo-Peabody JV has announced a very favourable
JORC compliant maiden resource statement for the Erds Project. Thermal coal
resources were estimated at 254 million tonnes in the Indicated category and at
553 million tonnes in the Inferred category. This announcement reaffirms the
potential value of our coal assets in Mongolia.
During the period we also strengthened the Board of Directors with Neil Herbert
assuming the role of Managing Director and James Mellon and Bryan Smith joining
the Board as Non-Executive Directors. Neil, James and I led the Board of
Directors at UraMin Inc., which we rapidly developed as a viable uranium mining
company before its sale to Areva in 2007 for US$2.5 billion. Bryan's experience
in the Canadian corporate finance and investment sector adds key experience to
the Board and should increase our exposure to the North American investor
market.
Polo has recently set up an Independent Investment Committee to oversee the
investments in Extract Resources, Caledon Resources and GCM Resources. Chaired
by Guy Elliott and including two further directors, Neil Herbert and Bryan
Smith, the committee will monitor the performance of these investments and
recommend potential investments and divestments to the Board.
The strategy remains one of expansion through active investment and acquisition,
using our resources - finance and expertise - to build a diversified portfolio
of mineral assets that we consider offer substantial growth potential, pursuing
both short and longer-term value-adding investments whenever and wherever they
arise. I look forward to an exciting and rewarding year ahead for the Company
and its shareholders.
Stephen R. Dattels
Executive Chairman
Managing Director's Report
Since listing on AIM in September 2007, Polo Resources has made rapid progress
with its stated objective, to build a diverse portfolio of attractive
advanced-stage assets. The year under review should be regarded as a period of
achievement for our company. It is our intention to press ahead with our
strategy of acquisition of value-adding opportunities and to use the technical
and operational knowledge at our disposal to develop assets in which Polo
Resources has an interest.
These interests include substantial value-added coal investments in Caledon
Resources plc and GCM Resources plc, a 50-50 joint venture with Peabody Energy
Corporation, which works to develop our fully-owned mineral resources in
Mongolia (a total of 54 coal and 25 uranium licenses, including the
under-developed South Gobi coalfield), and a holding of 22.4 million shares in
Extract Resources Limited - owner of the Rossing South Project - which gives the
Company a substantial stake in one of the world's largest near-term uranium
prospects. Our management and technical teams have recent experience in the
uranium sector, including the development of UraMin Inc. and its subsequent sale
to Areva for US$2.5 billion in July 2007. Taken together, this substantial asset
base offers significant near-term earning potential.
Extract Resources Limited
Polo Resources has become a significant shareholder in Extract Resources Limited
("Extract") and currently holds 22.4 million shares in the Company. Extract's
main asset is the Husab Uranium Project (incorporating the Rossing South
deposit), located near Walvis Bay in Western Namibia. Resource updates at the
site have demonstrated the value of the transaction and we can have confidence
that Rossing South will deliver a substantial return on investment.
The Rossing South deposit, which is at the most advanced stage of development
within the greater Husab Uranium Project license area, has progressed well since
the initial resource estimate was released to the market on 27 January 2009. A
great deal has happened on site since then; a feasibility study is underway and
the latest resource figures confirm the presence of 267 million lbs of uranium
oxide (U3O8) at a cut off of 487ppm U3O8. Rossing South therefore ranks as one
of the largest global uranium deposits.
More recently, Extract has announced the discovery of a new zone of
mineralisation at Rossing South. It is expected that infill drilling on
previously identified zones could result in a total resource base of as much as
500 million lbs U3O8 in the Measured and Indicated categories; the discovery of
a new high grade zone adds significant further value to the project, which is
being developed as one of the world's largest uranium mines.
On 6 July 2009, Polo Resources' Executive Chairman, Stephen Dattels, was
appointed to the board of Extract as Non-Executive Director. Polo Resources is
committed to supporting Extract as the Company develops the significant upside
potential at Rossing South.
Caledon Resources plc
Our major interest in the Australian dual-listed coking coal producer and coal
exploration company Caledon Resources plc ("Caledon") ensures that we have a
firm foothold in Queensland, Australia, one of the world's most important coking
coal export regions. Caledon operates the Cook Colliery, which is now at the
full production stage, and is developing the nearby Minyango exploration
concessions.
In May 2009, Caledon announced a significant JORC compliant resource upgrade at
both the Cook and Minyango properties. The resource estimate for the Cook
Colliery almost doubled; the increase of 230 million tonnes brought the total
resource estimate up to 406 million tonnes. A substantial increase was also
announced for Minyango, where the resource estimate rose by 50 million tonnes to
reach 342 million tonnes. These figures add value to our original investment,
particularly at a time when coal prices are recovering (led by much larger
Chinese import volumes) and are forecast to continue rising steadily in 2010 and
2011.
In addition to Polo Resources' 26.2% holding in Caledon, we announced in March
2009 the acquisition of a total of GBP4.7 million 8.5% unsecured 2010
convertible loan notes issued by Caledon. These investments demonstrate our
belief in the future of Caledon and in its ability to add considerable value to
shareholders in Polo Resources.
GCM Resources plc
The primary asset of GCM Resources plc ("GCM") is the Phulbari Coal Project in
Bangladesh, where it has completed a feasibility study for commercial
development. The Scheme of Development was submitted to the Government of
Bangladesh and is currently awaiting approval. This approval is the only
limiting factor. Phulbari has a JORC compliant resource of 572 million tonnes,
sufficient to support an estimated mine life of 30 years.
On 28 April 2009, GCM announced the appointment of Stephen Dattels to the board
of GCM as a Non-Executive Director. Stephen's appointment is in line with Polo's
stated strategy to ensure that we provide expertise and influence over our
investment portfolio so as to accelerate development and earning potential in
the near term.
Peabody Energy Corporation-Polo Resources Mongolia Joint Venture
On 27 January 2009 Polo Resources announced a proposed joint venture with
Peabody Energy Corporation (NYSE: BTU) ("Peabody"). The subscription of shares
in Peabody-Polo Resources B.V. was completed on 5 May 2009, after which Peabody
became a 50% shareholder in the JV Company. The objective is to develop the
Company's key coal and uranium assets in this vast territory.
Polo Resources' partnership with Peabody bolsters the Company's available mining
expertise and financial resources to a point at which we can develop the asset
base and unlock the value of the large-scale Mongolian interests in our
portfolio. Our appointment of the experienced coal mining group American Patriot
International, LLC (AmPat) to manage Polo Resources' interests in Mongolia
strengthens our operational capabilities in this respect.
At the time of reporting (October 2009), the Peabody-Polo Resources JV had
recently announced a positive JORC compliant resource statement for the Erds
Coal Project, located in Mongolia. Thermal coal resources were estimated at 254
million tonnes in the Indicated category and at 553 million tonnes in the
Inferred category. These results confirm that our Mongolian assets have great
potential for future value release.
Financial Review
The Group sustained a loss of $62.7 million for the year under review, which
includes a write down of $44.0 million in respect of the carrying value of our
investment in Mongolia. This follows a careful review by the Board and an
emphasis to err on the side of prudence, thus adopting a carrying value equal to
the investment contributed by our Joint Venture partner. Polo is fully committed
to the Joint Venture and excited by its ongoing prospects.
During the course of the year, Polo acquired a significant holding in Extract
Resources Ltd and several other junior listed companies. At the Balance Sheet
date, these investments achieved an increase in value of $56.5 million and
support the Board's decision to refocus its strategy and build a diversified
portfolio of mineral assets which the Board considers as offering substantial
growth potential.
As of 14 October 2009 Polo had a net cash position of US$16.9 million and listed
equity investments of US$302.3 million. The combined value of cash and listed
equity investments at 14 October was US$319.2 million, equivalent to 7p per Polo
share.
Summary
Polo Resources can look back at the year under review with considerable
satisfaction and a real sense of accomplishment. We have invested substantially
in several advanced-stage energy assets around the world and have progressed
well with our uranium and coal interests around the world.
I believe that Polo Resources has the potential to deliver substantial near-term
production returns. Our intention is to make further strategic value-adding
investments in advanced-stage commodity projects and, in so doing, to establish
the Company as a significant presence in this sector.
Neil Herbert
Managing Director
Group Income Statement
for the year ended 30 June 2009
+-----------------------------------+---------------+----------------+----------------+
| | | Year ended 30 | Period 23 May |
| | | June 2009 | 2007 to 30 |
| | | | June 2008 |
+ +---------------+----------------+----------------+
| | Notes | $ 000's | $ 000's |
+-----------------------------------+-----------------------------------+---------------+----------------+
| | | | |
+-----------------------------------+---------------+----------------+----------------+
| Turnover | | - | - |
+-----------------------------------+---------------+----------------+----------------+
| | | | |
+-----------------------------------+---------------+----------------+----------------+
| Exploration costs | | (8,012) | (2,234) |
+-----------------------------------+---------------+----------------+----------------+
| Administrative expenses | | (15,098) | (4,633) |
+-----------------------------------+---------------+----------------+----------------+
| Share options expensed | 8, 21 | (607) | (1,392) |
+-----------------------------------+---------------+----------------+----------------+
| Currency exchange gains/(losses) | | 11,200 | (57) |
+-----------------------------------+---------------+----------------+----------------+
| Impairment of investment in | 14 | (43,978) | - |
| Mongolia | | | |
+-----------------------------------+---------------+----------------+----------------+
| Investment income | 5 | 403 | - |
+-----------------------------------+---------------+----------------+----------------+
| Gains on sale of available for | | 1,211 | - |
| sale investments | | | |
+-----------------------------------+---------------+----------------+----------------+
| Group operating (loss) | 3 | (54,881) | (8,316) |
+-----------------------------------+---------------+----------------+----------------+
| | | | |
+-----------------------------------+---------------+----------------+----------------+
| Share of Joint Venture results | | (3,519) | - |
+-----------------------------------+---------------+----------------+----------------+
| Share of associates results | | (3,239) | (426) |
+-----------------------------------+---------------+----------------+----------------+
| Finance revenue | 7 | 2,421 | 2,000 |
+-----------------------------------+---------------+----------------+----------------+
| (Loss) on subsidiary disposal | 26 | (3,512) | - |
+-----------------------------------+---------------+----------------+----------------+
| (Loss) before taxation | 2 | (62,730) | (6,742) |
+-----------------------------------+---------------+----------------+----------------+
| | | | |
+-----------------------------------+---------------+----------------+----------------+
| Income tax expense | 9 | - | - |
+-----------------------------------+---------------+----------------+----------------+
| | | | |
+-----------------------------------+---------------+----------------+----------------+
| Retained (loss) for the period | | (62,730) | (6,742) |
| attributable to members of the | | | |
| parent Company | | | |
+-----------------------------------+---------------+----------------+----------------+
| | | | |
+-----------------------------------+---------------+----------------+----------------+
| (Loss) per share (US cents) | | | |
+-----------------------------------+---------------+----------------+----------------+
| Basic | 11 | (3.20) | (1.12) |
+-----------------------------------+---------------+----------------+----------------+
| Diluted | 11 | (3.20) | (1.12) |
+-----------------------------------+---------------+----------------+----------------+
| | | | |
+-----------------------------------+---------------+----------------+----------------+
| All of the operations are considered to be | | |
| continuing. | | |
+-----------------------------------+---------------+----------------+----------------+
Company Income Statement
for the year ended 30 June 2009
+-----------------------------------+---------------+----------------+----------------+
| | | Year ended 30 | Period 23 May |
| | | June 2009 | 2007 to 30 |
| | | | June 2008 |
+ +---------------+----------------+----------------+
| | Notes | $ 000's | $ 000's |
+-----------------------------------+-----------------------------------+---------------+----------------+
| | | | |
+-----------------------------------+---------------+----------------+----------------+
| Turnover | | - | - |
+-----------------------------------+---------------+----------------+----------------+
| | | | |
+-----------------------------------+---------------+----------------+----------------+
| Exploration costs | | (534) | (2,881) |
+-----------------------------------+---------------+----------------+----------------+
| Administrative expenses | | (13,339) | (4,043) |
+-----------------------------------+---------------+----------------+----------------+
| Share options expensed | 8, 21 | (607) | (1,392) |
+-----------------------------------+---------------+----------------+----------------+
| Currency exchange gains/(losses) | | 12,075 | (57) |
+-----------------------------------+---------------+----------------+----------------+
| Impairment of investment in | 14 | (43,978) | - |
| Mongolia | | | |
+-----------------------------------+---------------+----------------+----------------+
| Group operating (loss) | 3 | (46,383) | (8,373) |
+-----------------------------------+---------------+----------------+----------------+
| | | | |
+-----------------------------------+---------------+----------------+----------------+
| Other income | 6 | (2,470) | 3,099 |
+-----------------------------------+---------------+----------------+----------------+
| Finance revenue | 7 | 1,703 | 1,999 |
+-----------------------------------+---------------+----------------+----------------+
| (Loss) before taxation | | (47,150) | (3,275) |
+-----------------------------------+---------------+----------------+----------------+
| | | | |
+-----------------------------------+---------------+----------------+----------------+
| Income tax expense | 9 | | - |
+-----------------------------------+---------------+----------------+----------------+
| Retained (loss) after taxation | | (47,150) | (3,275) |
+-----------------------------------+---------------+----------------+----------------+
| | | | |
+-----------------------------------+---------------+----------------+----------------+
| All of the operations are considered to be | | |
| continuing. | | |
+---------------------------------------------------+----------------+----------------+
| | | |
+---------------------------------------------------+----------------+----------------+
| | | | |
+-----------------------------------+---------------+----------------+----------------+
| | | |
+-----------------------------------+---------------+----------------+----------------+
Group Balance Sheet
as at 30 June 2009
+-----------------------------+------+------+------+----------+------+------+----------+
| | | 30 June 2009 | 30 June 2008 |
+-----------------------------+------+------------------------+------------------------+
| | Note | $ 000's | $ 000's | $ 000's | $ 000's |
+-----------------------------+------+-------------+----------+-------------+----------+
| ASSETS | | | | | |
+-----------------------------+------+-------------+----------+-------------+----------+
| Non-current assets | | | | | |
+-----------------------------+------+-------------+----------+-------------+----------+
| Intangible assets | 12 | - | | 72,161 | |
+-----------------------------+------+-------------+----------+-------------+----------+
| Tangible assets | 13 | 6 | | 755 | |
+-----------------------------+------+-------------+----------+-------------+----------+
| Interest in joint venture | 15 | 19,505 | | - | |
+-----------------------------+------+-------------+----------+-------------+----------+
| Interest in associates | 16 | 132,596 | | 148,529 | |
+-----------------------------+------+-------------+----------+-------------+----------+
| Available for sale | 17 | 108,264 | | 285 | |
| investments | | | | | |
+-----------------------------+------+-------------+----------+-------------+----------+
| Trade and other receivables | 18 | 2,813 | | - | |
+-----------------------------+------+-------------+----------+-------------+----------+
| Total non-current assets | | | 263,184 | | 221,730 |
+-----------------------------+------+-------------+----------+-------------+----------+
| | | | | | |
+-----------------------------+------+-------------+----------+-------------+----------+
| Current assets | | | | | |
+-----------------------------+------+-------------+----------+-------------+----------+
| Trade and other receivables | 18 | 4,560 | | 4,356 | |
+-----------------------------+------+-------------+----------+-------------+----------+
| Available for sale | 17 | 32,395 | | - | |
| investments | | | | | |
+-----------------------------+------+-------------+----------+-------------+----------+
| Cash and cash equivalents | | 12,288 | | 115,974 | |
+-----------------------------+------+-------------+----------+-------------+----------+
| Total current assets | | | 49,243 | | 120,330 |
+-----------------------------+------+-------------+----------+-------------+----------+
| TOTAL ASSETS | | | 312,427 | | 342,060 |
+-----------------------------+------+-------------+----------+-------------+----------+
| | | | | | |
+-----------------------------+------+-------------+----------+-------------+----------+
| LIABILITIES | | | | | |
+-----------------------------+------+-------------+----------+-------------+----------+
| Current liabilities | | | | | |
+-----------------------------+------+-------------+----------+-------------+ +
| Trade and other payables | 19 | (8,821) | | (8,259) | |
+-----------------------------+------+-------------+----------+-------------+----------+
| TOTAL LIABILITIES | | | (8,821) | | (8,259) |
+-----------------------------+------+-------------+----------+-------------+----------+
| NET ASSETS | | | 303,606 | | 333,801 |
+-----------------------------+------+-------------+----------+-------------+----------+
| | | | | | |
+-----------------------------+------+-------------+----------+-------------+----------+
| EQUITY | | | | | |
+-----------------------------+------+-------------+----------+-------------+ +
| Ordinary shares | 20 | - | | - | |
+-----------------------------+------+-------------+----------+-------------+ +
| Share premium | | 305,359 | | 338,861 | |
+-----------------------------+------+-------------+----------+-------------+ +
| Retained earnings | | (69,472) | | (6,742) | |
+-----------------------------+------+-------------+----------+-------------+----------+
| Available for sale | | 56,553 | | (62) | |
| investment reserve | | | | | |
+-----------------------------+------+-------------+----------+-------------+----------+
| Foreign exchange reserve | | 8,037 | | (285) | |
+-----------------------------+------+-------------+----------+-------------+----------+
| Share based payments | 21 | 3,129 | | 2,029 | |
| reserve | | | | | |
+-----------------------------+------+-------------+----------+-------------+----------+
| | | | | | |
+-----------------------------+------+-------------+----------+-------------+----------+
| TOTAL EQUITY | | | 303,606 | | 333,801 |
+-----------------------------+------+-------------+----------+-------------+----------+
| These financial statements were approved by the Board of Directors on 14 October |
| 2009 and signed on its behalf by: |
| |
+--------------------------------------------------------------------------------------+
| Stephen Dattels | Neil Herbert | |
+-------------------------------------------+------------------------+-----------------+
| Director | Director | |
+-----------------------------+------+------+------+----------+------+------+----------+
Company Balance Sheet
as at 30 June 2009
+--------------------------+-------+----------+------------+----------+----------+
| | | 30 June 2009 | 30 June 2008 |
+--------------------------+-------+-----------------------+---------------------+
| |Notes | $ 000's | $ 000's | $ 000's | $ 000's |
+--------------------------+-------+----------+------------+----------+----------+
| ASSETS | | | | | |
+--------------------------+-------+----------+------------+----------+----------+
| Non-current assets | | | | | |
+--------------------------+-------+----------+------------+----------+----------+
| Tangible assets | 13 | 6 | | - | |
+--------------------------+-------+----------+------------+----------+----------+
| Investment in | 14 | 26,550 | | 24,842 | |
| subsidiaries | | | | | |
+--------------------------+-------+----------+------------+----------+----------+
| Trade and other | 18 | 221,914 | | 199,021 | |
| receivables | | | | | |
+--------------------------+-------+----------+------------+----------+----------+
| Total non-current assets | | | 248,470 | | 223,863 |
+--------------------------+-------+----------+------------+----------+----------+
| | | | | | |
+--------------------------+-------+----------+------------+----------+----------+
| Current assets | | | | | |
+--------------------------+-------+----------+------------+----------+ +
| Cash and cash | | 12,288 | | 113,674 | |
| equivalents | | | | | |
+--------------------------+-------+----------+------------+----------+ +
| Trade and other | 18 | 4,236 | | 3,833 | |
| receivables | | | | | |
+--------------------------+-------+----------+------------+----------+----------+
| Total Current Assets | | | 16,524 | | 117,507 |
+--------------------------+-------+----------+------------+----------+----------+
| TOTAL ASSETS | | | 264,994 | | 341,370 |
+--------------------------+-------+----------+------------+----------+----------+
| | | | | | |
+--------------------------+-------+----------+------------+----------+----------+
| LIABILITIES | | | | | |
+--------------------------+-------+----------+------------+----------+----------+
| Current Liabilities | | | | | |
+--------------------------+-------+----------+------------+----------+ +
| Trade and other payables | 19 | (8,821) | | (3,744) | |
+--------------------------+-------+----------+------------+----------+----------+
| TOTAL LIABILITIES | | | (8,821) | | (3,744) |
+--------------------------+-------+----------+------------+----------+----------+
| NET ASSETS | | | 256,173 | | 337,626 |
+--------------------------+-------+----------+------------+----------+----------+
| | | | | | |
+--------------------------+-------+----------+------------+----------+----------+
| EQUITY | | | | | |
+--------------------------+-------+----------+------------+----------+ +
| Ordinary shares | 20 | - | | - | |
+--------------------------+-------+----------+------------+----------+ +
| Share premium | | 305,359 | | 338,861 | |
+--------------------------+-------+----------+------------+----------+ +
| Retained earnings | | (50,425) | | (3,275) | |
+--------------------------+-------+----------+------------+----------+ +
| Foreign exchange reserve | | (1,890) | | 11 | |
+--------------------------+-------+----------+------------+----------+----------+
| Share based payments | 21 | 3,129 | | 2,029 | |
| reserve | | | | | |
+--------------------------+-------+----------+------------+----------+----------+
| | | | | | |
+--------------------------+-------+----------+------------+----------+----------+
| TOTAL EQUITY | | | 256,173 | | 337,626 |
+--------------------------+-------+----------+------------+----------+----------+
| These financial statements were approved by the Board of Directors on 14 |
| October 2009 and signed on its behalf by: |
+--------------------------+-------+----------+------------+----------+----------+
+---------------------------------+--+--+-----------------+----------+------------+
| | |
+---------------------------------------+-----------------------------------------+
| Stephen Dattels | | | Neil Herbert | | |
+---------------------------------+--+--+-----------------+----------+------------+
| Director | | | Director | | |
+---------------------------------+--+--+-----------------+----------+------------+
Group Cash Flow Statement
for the year ended 30 June 2009
+----------------------------------------+-------+---------------+---------------+
| | | Year ended 30 | For the |
| | | June 2009 | period ended |
| | | | 30 June 2008 |
+----------------------------------------+-------+---------------+---------------+
| |Notes | $ 000's | $ 000's |
+----------------------------------------+-------+---------------+---------------+
| Cash flows from operating activities | | | |
+----------------------------------------+-------+---------------+---------------+
| Operating Loss | | (54,881) | (8,316) |
+----------------------------------------+-------+---------------+---------------+
| (Increase) in trade and other | | (204) | (4,356) |
| receivables | | | |
+----------------------------------------+-------+---------------+---------------+
| Increase in trade and other payables | | 562 | 8,259 |
+----------------------------------------+-------+---------------+---------------+
| Foreign exchange (gain)/loss | | (11,200) | 57 |
+----------------------------------------+-------+---------------+---------------+
| Share options expensed | | 607 | 1,392 |
+----------------------------------------+-------+---------------+---------------+
| Share based payment charge - shares | | 8,021 | - |
| issued | | | |
+----------------------------------------+-------+---------------+---------------+
| Impairment of investment in Mongolia | | 43,978 | - |
+----------------------------------------+-------+---------------+---------------+
| Gains on sale of available for sale | | (1,211) | - |
| investments | | | |
+----------------------------------------+-------+---------------+---------------+
| Depreciation & impairment | | 5,844 | 46 |
+----------------------------------------+-------+---------------+---------------+
| Net cash outflow from operating | | (8,484) | (2,918) |
| activities | | | |
+----------------------------------------+-------+---------------+---------------+
| | | | |
+----------------------------------------+-------+---------------+---------------+
| Cash flows from investing activities | | | |
+----------------------------------------+-------+---------------+---------------+
| Interest Received | | 2,421 | 2,000 |
+----------------------------------------+-------+---------------+---------------+
| Investments in associates | | (6,113) | (135,968) |
+----------------------------------------+-------+---------------+---------------+
| Payments to acquire available for sale | | (83,908) | (347) |
| investments | | | |
+----------------------------------------+-------+---------------+---------------+
| Receipts on sale of available for sale | | 9,586 | - |
| investments | | | |
+----------------------------------------+-------+---------------+---------------+
| Payments to acquire intangible assets | | (2,798) | (33,142) |
+----------------------------------------+-------+---------------+---------------+
| Payments to acquire tangible assets | | (3,858) | (801) |
+----------------------------------------+-------+---------------+---------------+
| Loans to joint ventures | | (2,813) | - |
+----------------------------------------+-------+---------------+---------------+
| Net cash outflow from in investing | | (87,483) | (168,258) |
| activities | | | |
+----------------------------------------+-------+---------------+---------------+
| | | | |
+----------------------------------------+-------+---------------+---------------+
| Acquisitions and disposals | | | |
+----------------------------------------+-------+---------------+---------------+
| Cash (derecognised)/acquired with | | (231) | (58) |
| subsidiaries | | | |
+----------------------------------------+-------+---------------+---------------+
| Payments to acquire subsidiaries | | - | (17,389) |
+----------------------------------------+-------+---------------+---------------+
| Net cash outflow from acquisitions and | | (231) | (17,447) |
| disposals | | | |
+----------------------------------------+-------+---------------+---------------+
| | | | |
+----------------------------------------+-------+---------------+---------------+
| Cash flows from financing activities | | | |
+----------------------------------------+-------+---------------+---------------+
| Issue of ordinary share capital | | 10,172 | 325,586 |
+----------------------------------------+-------+---------------+---------------+
| Share issue costs | | (704) | (21,617) |
+----------------------------------------+-------+---------------+---------------+
| Net cash inflow from financing | | 9,468 | 303,969 |
| activities | | | |
+----------------------------------------+-------+---------------+---------------+
| | | | |
+----------------------------------------+-------+---------------+---------------+
| Net (decrease)/increase in cash and | | (86,730) | 115,346 |
| cash equivalents | | | |
+----------------------------------------+-------+---------------+---------------+
| Cash and cash equivalents at beginning | | 115,974 | - |
| of period | | | |
+----------------------------------------+-------+---------------+---------------+
| Exchange gain on cash and cash | | (16,956) | 628 |
| equivalents | | | |
+----------------------------------------+-------+---------------+---------------+
| Cash and cash equivalents at end of | 22 | 12,288 | 115,974 |
| period | | | |
+----------------------------------------+-------+---------------+---------------+
Company Cash Flow Statement
for the year ended 30 June 2009
+------------------------------------+-------+----------------+------------------+
| | | Year ended 30 | For the period |
| | | June 2009 | ended 30 June |
| | | | 2008 |
+------------------------------------+-------+----------------+------------------+
| |Notes | $ 000's | $ 000's |
+------------------------------------+-------+----------------+------------------+
| Cash flows from operating | | | |
| activities | | | |
+------------------------------------+-------+----------------+------------------+
| Operating Loss | | (46,383) | (8,373) |
+------------------------------------+-------+----------------+------------------+
| (Increase) in trade and other | | (403) | (3,833) |
| receivables | | | |
+------------------------------------+-------+----------------+------------------+
| Increase in trade and other | | 5,077 | 3,744 |
| payables | | | |
+------------------------------------+-------+----------------+------------------+
| Share options expensed | | 607 | 1,392 |
+------------------------------------+-------+----------------+------------------+
| Share based payment charge - | | 8,021 | - |
| shares issued | | | |
+------------------------------------+-------+----------------+------------------+
| Foreign exchange (gain)/loss | | (12,075) | 58 |
+------------------------------------+-------+----------------+------------------+
| Impairment of investment in | | 43,978 | - |
| Mongolia | | | |
+------------------------------------+-------+----------------+------------------+
| Depreciation | | 3 | - |
+------------------------------------+-------+----------------+------------------+
| Net cash outflow from operating | | (1,175) | (7,012) |
| activities | | | |
+------------------------------------+-------+----------------+------------------+
| | | | |
+------------------------------------+-------+----------------+------------------+
| Cash flows from investing | | | |
| activities | | | |
+------------------------------------+-------+----------------+------------------+
| Interest Received | | 1,703 | 1,999 |
+------------------------------------+-------+----------------+------------------+
| Purchases of tangible assets | | (9) | - |
+------------------------------------+-------+----------------+------------------+
| Loans to subsidiaries | | (82,280) | (185,785) |
+------------------------------------+-------+----------------+------------------+
| Loans to joint ventures | | (2,813) | - |
+------------------------------------+-------+----------------+------------------+
| Net cash outflow from investing | | (83,393) | (183,786) |
| activities | | | |
+------------------------------------+-------+----------------+------------------+
| | | | |
+------------------------------------+-------+----------------+------------------+
| Acquisitions and disposals | | | |
+------------------------------------+-------+----------------+------------------+
| Payments to acquire subsidiaries | | - | (2,000) |
+------------------------------------+-------+----------------+------------------+
| Net cash outflow from acquisitions | | - | (2,000) |
| and disposals | | | |
+------------------------------------+-------+----------------+------------------+
| | | | |
+------------------------------------+-------+----------------+------------------+
| Cash flows from financing | | | |
| activities | | | |
+------------------------------------+-------+----------------+------------------+
| Issue of ordinary share capital | | 10,172 | 325,586 |
+------------------------------------+-------+----------------+------------------+
| Share issue costs | | (704) | (21,617) |
+------------------------------------+-------+----------------+------------------+
| Net cash inflow from financing | | 9,468 | 303,969 |
| activities | | | |
+------------------------------------+-------+----------------+------------------+
| | | | |
+------------------------------------+-------+----------------+------------------+
| Net (decrease)/increase in cash | | (75,100) | 111,171 |
| and cash equivalents | | | |
+------------------------------------+-------+----------------+------------------+
| Cash and cash equivalents at | | 113,674 | - |
| beginning of period | | | |
+------------------------------------+-------+----------------+------------------+
| Exchange gain on cash and cash | | (26,286) | 2,503 |
| equivalents | | | |
+------------------------------------+-------+----------------+------------------+
| Cash and cash equivalents at end | 22 | 12,288 | 113,674 |
| of period | | | |
+------------------------------------+-------+----------------+------------------+
| | | | |
+------------------------------------+-------+----------------+------------------+
Group Statement of Changes in Equity
For the year ended 30 June 2009
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| | Called | Share | Available | Foreign | Share |Retained | Total |
| | up | premium | for sale | currency | based |earnings | equity |
| | share | reserve |investment |translation |payment | | |
| |capital | | reserve | reserve |reserve | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| Group | $ | $ 000's | $ 000's | $ 000's |$ 000's | $ 000's | $ 000's |
| | 000's | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| As at 23 | - | - | - | - | - | - | - |
| May 2007 | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| Loss for | - | - | - | - | - | (6,742) | (6,742) |
| the period | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| Loss on | - | - | (62) | - | - | - | (62) |
| revaluation | | | | | | | |
| of | | | | | | | |
| available | | | | | | | |
| for sale | | | | | | | |
| investments | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| Currency | - | - | - | (285) | - | - | (285) |
| translation | | | | | | | |
| differences | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| Total | - | - | (62) | (285) | - | (6,742) | (7,089) |
| recognised | | | | | | | |
| income and | | | | | | | |
| expense | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| Share | - | 361,120 | - | - | - | - | 361,120 |
| capital | | | | | | | |
| issued | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| Cost of | - | (22,259) | - | - | - | - | (22,259) |
| share | | | | | | | |
| issue | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| Share | - | - | - | - | 2,029 | - | 2,029 |
| based | | | | | | | |
| payments | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| As at 30 | - | 338,861 | (62) | (285) | 2,029 | (6,742) | 333,801 |
| June 2008 | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| Loss for | - | - | - | - | - | (62,730) | (62,730) |
| the year | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| Gain on | - | - | 56,841 | - | - | - | 56,841 |
| revaluation | | | | | | | |
| of | | | | | | | |
| available | | | | | | | |
| for sale | | | | | | | |
| investments | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| Currency | - | (57,394) | (226) | 8,322 | (299) | - | (49,597) |
| translation | | | | | | | |
| differences | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| Total | - | (57,394) | 56,615 | 8,322 | (299) | (62,730) | (55,486) |
| recognised | | | | | | | |
| income and | | | | | | | |
| expense | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| Share | - | 25,364 | - | - | - | - | 25,364 |
| capital | | | | | | | |
| issued | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| Cost of | - | (1,472) | - | - | - | - | (1,472) |
| share | | | | | | | |
| issue | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| Share | - | - | - | - | 1,399 | - | 1,399 |
| based | | | | | | | |
| payments | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
| As at 30 | - | 305,359 | 56,553 | 8,037 | 3,129 | (69,472) | 303,606 |
| June 2009 | | | | | | | |
+-------------+---------+----------+------------+-------------+---------+----------+----------+
Company Statement of Changes in Equity continued
For the period ended 30
June 2009
+---------------+---------+----------+----------+----------+----------+------------+
| | Called | Share | Foreign | Share |Retained | Total |
| | up | premium |exchange | based |earnings | equity |
| | share | reserve | reserve | payment | | |
| |capital | | | reserve | | |
+---------------+---------+----------+----------+----------+----------+------------+
| Company | $ 000's | $ 000's | $ 000's | $ 000's | $ 000's | $ 000's |
+---------------+---------+----------+----------+----------+----------+------------+
| As at 23 May | - | - | - | - | - | - |
| 2007 | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
| Loss for the | - | - | - | - | (3,275) | (3,275) |
| period | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
| Currency | - | - | 11 | - | - | 11 |
| translation | | | | | | |
| differences | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
| Total | - | - | 11 | - | (3,275) | (3,264) |
| recognised | | | | | | |
| income and | | | | | | |
| expense | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
| | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
| Share capital | - | 361,120 | - | - | - | 361,120 |
| issued | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
| Cost of share | - | (22,259) | - | - | - | (22,259) |
| issue | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
| Share based | - | - | - | 2,029 | - | 2,029 |
| payments | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
| | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
| As at 30 June | - | 338,861 | 11 | 2,029 | (3,275) | 337,626 |
| 2008 | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
| | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
| Loss for the | - | - | - | - | (47,150) | (47,150) |
| period | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
| Currency | - | (57,394) | (1,901) | (299) | - | (59,594) |
| translation | | | | | | |
| differences | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
| Total | - | (57,394) | (1,901) | (299) | (47,150) | (106,744) |
| recognised | | | | | | |
| income and | | | | | | |
| expense | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
| | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
| Share capital | - | 25,364 | - | - | - | 25,364 |
| issued | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
| Cost of share | - | (1,472) | - | - | - | (1,472) |
| issue | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
| Share based | - | - | - | 1,399 | - | 1,399 |
| payments | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
| | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
| As at 30 June | - | 305,359 | (1,890) | 3,129 | (50,425) | 256,173 |
| 2009 | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
| | | | | | | |
+---------------+---------+----------+----------+----------+----------+------------+
+-----+------------------------------------------------------------------------+
| Notes to the Financial Statements |
| for the year ended 30 June 2009 |
| |
+------------------------------------------------------------------------------+
| 1 | Summary of Significant Accounting Policies |
+-----+------------------------------------------------------------------------+
| (a) | Authorisation of financial statements |
| | |
+-----+------------------------------------------------------------------------+
| | The Group financial statements of Polo Resources Ltd for the year |
| | ended 30 June 2009 were authorised for issue by the Board on 14 |
| | October 2009 and the balance sheets signed on the Board's behalf by |
| | Stephen Dattels and Neil Herbert. The Company is registered in British |
| | Virgin Islands under the BVI Business Companies Act 2004 with |
| | registered number 1406187. The Company's ordinary shares are traded |
| | on the AIM Market operated by the London Stock Exchange. |
| | |
+-----+------------------------------------------------------------------------+
| (b) | Statement of compliance with IFRS |
+-----+------------------------------------------------------------------------+
| | The Group has not yet adopted certain new standards, amendments and |
| | interpretations to existing standards, which have been published but |
| | are only effective for our accounting periods beginning on or after 1 |
| | July 2009 or later periods. These new standards are listed below: |
| | - IFRS 8 "Operating Segments" (effective 1 January 2009) |
| | - IFRIC 17 "Distributions of Non Cash Assets to Owners" (effective 1 |
| | July 2009) |
| | - IFRIC 18 "Transfers of Assets to Customers" (effective 1 July 2009) |
| | - Revision to IAS 1 "Presentation of Financial Statements" (effective |
| | 1 January 2009) |
| | - Amendments to IAS 23 "Borrowing Costs" (effective 1 January 2009) |
| | - Revision to IFRS 3 "Business Combinations" (effective 1 July 2009) |
| | - Revision to IAS 27 "Consolidated and Separate Financial |
| | Statements" (effective 1 July 2009) |
| | - Amendment to IFRS 2 "Share-Based Payment" (effective 1 January 2009) |
| | - Amendment to IFRS 5 "Non-current Assets Held for Sale and |
| | Discontinued Operations" (effective 1 |
| | July 2009) |
| | - Amendments to IAS 28 "Investment in Associates" (effective 1 January |
| | 2009) |
| | - Amendment to IAS 32 "Financial Instruments: Presentation" (effective |
| | 1 January 2009) |
| | - Amendments to IAS 38 "Intangible Assets" (effective 1 January 2009) |
| | - Amendment to IAS 39 "Financial Instruments: Recognition and |
| | Measurement" (effective 1 January |
| | 2009) |
| | The Directors are currently evaluating the impact of the adoption of |
| | these standards, amendments and interpretations in future periods. |
| | |
+-----+------------------------------------------------------------------------+
| (c) | Basis of preparation |
+-----+------------------------------------------------------------------------+
| | The consolidated financial statements have been prepared on the |
| | historical cost basis, except for the measurement to fair value of |
| | assets and financial instruments as described in the accounting |
| | policies below, and on a going concern basis. |
| | The financial report is presented in US Dollars and all values are |
| | rounded to the nearest thousand dollars ($'000) unless otherwise |
| | stated. |
| | |
+-----+------------------------------------------------------------------------+
| (d) | Basis of consolidation |
+-----+------------------------------------------------------------------------+
| | The consolidated financial information incorporates the results of the |
| | Company and its subsidiaries (the "Group") using the purchase method. |
| | In the consolidated balance sheet, the acquiree's identifiable assets |
| | and liabilities are initially recognised at their fair values at the |
| | acquisition date. The results of acquired operations are included in |
| | the consolidated income statement from the date on which control is |
| | obtained. Inter-company transactions and balances between Group |
| | companies are eliminated in full. |
| | |
+-----+------------------------------------------------------------------------+
| | |
+-----+------------------------------------------------------------------------+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+-----+-----+------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----------------+
| (e) | Business combinations | | | |
+-----------+------------------------+-----------------+-----------------+-----------------+
| | The acquisition of subsidiaries in a business combination is accounted for |
| | using the purchase method. The cost of the acquisition is measured at the |
| | aggregate of the fair values, at the date of exchange, of assets given, |
| | liabilities incurred or assumed, and equity instruments issued by the Group |
| | in exchange for control of the acquiree, plus any costs directly |
| | attributable to the business combination. The acquiree's identifiable |
| | assets, liabilities and contingent liabilities that meet the conditions for |
| | recognition under IFRS 3 are recognised at their fair value at the |
| | acquisition date, except for non-current assets (or disposal groups) that |
| | are classified as held for sale in accordance with IFRS 5 'Non Current |
| | Assets Held for Sale and Discontinued Operations', which are recognised and |
| | measured at fair value less costs to sell. |
| | Where there is a difference between the Group's interest in the net fair |
| | value of the acquiree's identifiable assets, liabilities and contingent |
| | liabilities and the cost of the business combination, any excess cost is |
| | recognised in the balance sheet as goodwill and any excess net fair value |
| | is recognised immediately in the income statement as negative goodwill on |
| | acquisition of subsidiary. |
| | The interest of minority shareholders in the acquiree is initially measured |
| | at the minority's proportion of the net fair value of the assets, |
| | liabilities and contingent liabilities recognised. |
| | |
+-----------+------------------------------------------------------------------------------+
| (f) | Interest | | | |
| | in | | | |
| | associates | | | |
+-----------+------------+-----------------+-----------------+-----------------------------+
| | An associate is an entity over which the Group is in a position to exercise |
| | significant influence, but not control or joint control, through |
| | participation in the financial and operating policy decisions of the |
| | investee. Significant influence is the power to participate in the |
| | financial and operating policy decisions of the investee but is not control |
| | or joint control over those policies. |
| | The results and assets and liabilities of associates are incorporated in |
| | these financial statements using the equity method of accounting except |
| | when classified as held for sale. Investments in associates are carried in |
| | the balance sheet at cost as adjusted by post-acquisition changes in the |
| | Group's share of the net assets of the associates, less any impairment in |
| | the value of individual investments. Losses of the associates in excess of |
| | the Group's interest in those associates are not recognised unless the |
| | Group has an obligation to fund such losses. |
| | Where a Group company transacts with an associate of the Group, profits and |
| | losses are eliminated to the extent of the Group's interest in the relevant |
| | associate. Losses may provide evidence of an impairment of the asset |
| | transferred in which case appropriate provision is made for impairment. |
| | |
+-----------+------------------------------------------------------------------------------+
| (g) | Interest | | | |
| | in joint | | | |
| | ventures | | | |
+-----------+------------+-----------------+-----------------+-----------------------------+
| | A joint venture is a contractual arrangement whereby the group and other |
| | parties undertake an economic activity that is subject to joint control; |
| | that is when the strategic financial and operating policy decisions |
| | relating to the activities require the unanimous consent of the parties |
| | sharing control. |
| | These consolidated financial statements include the Group's share of the |
| | total recognised gains and losses of joint ventures using the equity |
| | method, from the date that significant influence or joint control commences |
| | to the date that it ceases, based on present ownership interests and |
| | excluding the possible exercise of potential voting rights, less any |
| | impairment losses. When the Group's interest in a joint venture has been |
| | reduced to nil because the Group's share of losses exceeds its interest in |
| | the joint venture, the Group only provides for additional losses to the |
| | extent that it has incurred legal or constructive obligations to fund such |
| | losses, or where the Group has made payments on behalf of the or joint |
| | venture. Where the disposal of an investment in a joint venture is |
| | considered to be highly probable, the investment ceases to be equity |
| | accounted and, instead, is classified as held for sale and stated at the |
| | lower of carrying amount and fair value less costs to sell. |
| | |
+-----------+------------------------------------------------------------------------------+
| (h) | Revenue | | | | |
+-----+------------+-----------+-----------------+-----------------+-----------------------+
| | The Group had no revenue during the year ending 30 June 2009. |
| | |
+-----+-----+------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----------------+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+-----+----------------------------+--------------+--------------+-----------------+
| (i) | Foreign currencies | | | |
+-----+----------------------------+--------------+--------------+-----------------+
| | The Company's functional currency is Sterling (GBP). Each entity in the |
| | Group determines its own functional currency and items included in the |
| | financial statements of each entity are measured using that functional |
| | currency. As at the reporting date the assets and liabilities of these |
| | subsidiaries are translated into the presentation currency of Polo |
| | Resources Ltd, which is US Dollar ($), at the rate of exchange ruling at |
| | the balance sheet date and their income statements are translated at the |
| | average exchange rate for the year. The exchange differences arising on |
| | the translation are taken directly to a separate component of equity. |
| | All other differences are taken to the income statement with the exception |
| | of differences on foreign currency borrowings, which, to the extent that |
| | they are used to finance or provide a hedge against foreign equity |
| | investments, are taken directly to reserves to the extent of the exchange |
| | difference arising on the net investment in these enterprises. Tax charges |
| | or credits that are directly and solely attributable to such exchange |
| | differences are also taken to reserves. |
| | |
+-----+----------------------------------------------------------------------------+
| (j) | Goodwill and intangible assets |
| | |
+-----+----------------------------------------------------------------------------+
| | Intangible assets are recorded at cost less eventual amortisation and |
| | provision for impairment in value. Goodwill on consolidation is |
| | capitalised and shown within fixed assets. Positive goodwill is subject to |
| | an annual impairment review, and negative goodwill is immediately |
| | written-off to the income statement when it arises. |
+-----+----------------------------------------------------------------------------+
| (k) | Exploration and development costs |
+-----+----------------------------------------------------------------------------+
| | Exploration and development costs are carried forward in respect of areas |
| | of interest where the consolidated entity's rights to tenure are current |
| | and where these costs are expected to be recouped through successful |
| | development and exploration, or by sale. Alternatively, these costs are |
| | carried forward while active and significant operations are continuing in |
| | relation to the areas of interest and it is too early to make reasonable |
| | assessment of the existence or otherwise of economically recoverable |
| | reserves. When the area of interest is abandoned, exploration and |
| | evaluation costs previously capitalised are written off to the Income |
| | Statement. |
| | |
+-----+----------------------------------------------------------------------------+
| | In accordance with the full cost method, all costs associated with mining |
| | development and investment are capitalised 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 development project is successful, the related |
| | expenditures will be written-off over the estimated life of the commercial |
| | ore reserves on a unit of production basis. Impairment reviews will be |
| | carried out regularly by the Directors of the Company. Where a project is |
| | abandoned, or is considered to be of no further commercial value to the |
| | Company, the related costs will be written off. |
+-----+----------------------------------------------------------------------------+
| | The recoverability of deferred mining costs and mining 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. |
+-----+----------------------------------------------------------------------------+
| (l) | Significant accounting judgments, estimates and assumptions |
+-----+----------------------------------------------------------------------------+
| | (i) Significant accounting estimates and assumptions |
+-----+----------------------------------------------------------------------------+
| | The carrying amounts of certain assets and liabilities are often |
| | determined based on estimates and assumptions of future events. The key |
| | estimates and assumptions that have a significant risk of causing a |
| | material adjustment to the carrying amounts of certain assets and |
| | liabilities within the next annual reporting period are: |
| | |
+-----+----------------------------------------------------------------------------+
| | (ii) Impairment of goodwill and intangibles with indefinite useful lives |
+-----+----------------------------------------------------------------------------+
| | The Group determines whether goodwill and intangibles with indefinite |
| | useful lives are impaired at least on an annual basis. This requires an |
| | estimation of the recoverable amount of the cash-generating units to which |
| | the goodwill and intangibles with indefinite useful lives are allocated. |
| | |
+-----+----------------------------------------------------------------------------+
| | (iii) Share-based payment transactions |
+-----+----------------------------------------------------------------------------+
| | The Group measures the cost of equity-settled transactions with employees |
| | by reference to the fair value of the equity instruments at the date at |
| | which they are granted. The fair value is determined using a Black-Scholes |
| | model. |
+-----+----------------------------------------------------------------------------+
| | |
+-----+----------------------------+--------------+--------------+-----------------+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+-----+--------------+--------------+--------------+--------------+------------------+
|(m) | Finance costs/revenue |
+-----+------------------------------------------------------------------------------+
| | Borrowing costs are recognised as an expense when incurred. |
+-----+------------------------------------------------------------------------------+
| | Finance revenue is recognised as interest accrues using the effective |
| | interest method. This is a method of calculating the amortised cost of a |
| | financial asset and allocating the interest income over the relevant period |
| | using the effective interest rate, which is the rate that exactly discounts |
| | estimated future cash receipts through the expected life of the financial |
| | asset to the net carrying amount of the financial asset. |
+-----+------------------------------------------------------------------------------+
| | |
+-----+------------------------------------------------------------------------------+
| (n) | Cash and cash equivalents |
+-----+------------------------------------------------------------------------------+
| | Cash and short-term deposits in the balance sheet comprise cash at bank and |
| | in hand and short-term deposits with an original maturity of three months or |
| | less. |
+-----+------------------------------------------------------------------------------+
| | For the purposes of the Cash Flow Statement, cash and cash equivalents |
| | consist of cash and cash equivalents as defined above, net of outstanding |
| | bank overdrafts. |
+-----+------------------------------------------------------------------------------+
| (o) | Trade and other receivables |
+-----+------------------------------------------------------------------------------+
| | Trade receivables, which generally have 30 day terms, are recognised and |
| | carried at original invoice amount less an allowance for any uncollectible |
| | amounts. |
+-----+------------------------------------------------------------------------------+
| | | | | | |
+-----+--------------+--------------+--------------+--------------+------------------+
| | An allowance for doubtful debts is made when there is objective evidence |
| | that the Group will not be able to collect the debts. Bad debts are written |
| | off when identified. |
+-----+------------------------------------------------------------------------------+
| | | | | | |
+-----+--------------+--------------+--------------+--------------+------------------+
|(p) | Available for sale Investments |
+-----+------------------------------------------------------------------------------+
| | Equity investments intended to be held for an indefinite period of time are |
| | classified as available-for-sale investments. They are carried at fair |
| | value, where this can be reliably measured, with movements in fair value |
| | recognised directly in the available-for-sale reserve. Where the fair value |
| | cannot be reliably measured, the investment is carried at cost. |
| | Any impairment losses in equity investments classified as available-for-sale |
| | investments are recognised in the income statement and are not reversible |
| | through the income statement, and are determined with reference to the |
| | closing market share price at the balance sheet date. Any subsequent |
| | increase in the fair value of the available-for-sale investment above the |
| | impaired value will be recognised within the available-for-sale reserve. |
| | Available-for-sale investments are included within non-current assets unless |
| | the carrying value is expected to be recovered principally through sale |
| | rather than continuing use, in which case they are included within current |
| | assets. On disposal, the difference between the carrying amount and the sum |
| | of the consideration received and any cumulative gain or loss that had |
| | previously been recognised directly in reserves is recognised in the income |
| | statement. |
| | Income from available for sale investments is accounted for in the income |
| | statement on a accruals basis. |
| | |
+-----+------------------------------------------------------------------------------+
| (q) | Financial instruments | | | |
+-----+-----------------------------+--------------+--------------+------------------+
| | The Group's financial instruments, other than its investments, comprise cash |
| | and items arising directly from its operation such as trade debtors and |
| | trade creditors. The Group has held overseas subsidiaries in BVI, Mongolia |
| | and Australia whose expenses are denominated in US Dollars, Mongolian |
| | Tugrik, and Australian Dollars respectively. Market price risk is inherent |
| | in the Group's activities and is accepted as such. |
| | |
+-----+------------------------------------------------------------------------------+
| | There is no material difference between the book value and fair value of the |
| | Group's cash. |
| | |
+-----+--------------+--------------+--------------+--------------+------------------+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+-----+---------------------------+--------------+--------------+------------------+
| (r) | Deferred taxation | | | |
+-----+---------------------------+--------------+--------------+------------------+
| | Deferred tax is the tax expected to be payable or recoverable on |
| | differences between the carrying amounts of assets and liabilities in the |
| | financial statements and the corresponding tax bases used in the tax |
| | computations, and is accounted for using the balance sheet liability |
| | method. Deferred tax liabilities are generally recognised for all taxable |
| | temporary differences and deferred tax assets are recognised to the extent |
| | that it is probable that taxable profits will be available against which |
| | deductible temporary differences can be utilised. |
+-----+----------------------------------------------------------------------------+
| | Deferred tax is calculated at the tax rates that are expected to apply in |
| | the period when the liability is settled or the asset is realised. |
| | Deferred tax is charged or credited in the income statement, except when |
| | it relates to items charged or credited directly to equity, in which case |
| | it is also dealt with in equity. |
+-----+----------------------------------------------------------------------------+
| (s) | Available for sale investment Reserve | | |
+-----+------------------------------------------+--------------+------------------+
| | This reserve is used to record the post-tax fair value movements in |
| | available for sale investments. |
+-----+----------------------------------------------------------------------------+
| (t) | Share Based payments Reserve |
+-----+----------------------------------------------------------------------------+
| | This reserve is used to record the value of equity benefits provided to |
| | employees and directors as part of their remuneration and provided to |
| | consultants and advisors hired by the Group from time to time as part of |
| | the consideration paid. |
+-----+----------------------------------------------------------------------------+
| (u) | Foreign Currency Translation Reserve |
+-----+----------------------------------------------------------------------------+
| | The foreign currency translation reserve is used to record exchange |
| | differences arising from the translation of the financial statements of |
| | foreign subsidiaries. |
+-----+----------------------------------------------------------------------------+
| (v) | Property, plant and equipment |
+-----+----------------------------------------------------------------------------+
| | Plant and equipment is stated at cost less accumulated depreciation and |
| | any accumulated impairment losses. Land is measured at fair value less any |
| | impairment losses recognised after the date of revaluation. |
| | Depreciation is provided on all tangible assets to write off the cost less |
| | estimated residual value of each asset over its expected useful economic |
| | life on a straight-line basis at the following annual rates:* |
| | Land (including option costs) - Nil* |
| | Plant and Equipment - between 5% and 25% |
| | All assets are subject to annual impairment reviews. |
| | |
+-----+----------------------------------------------------------------------------+
|(w) | Impairment of assets |
+-----+----------------------------------------------------------------------------+
| | The Group assesses at each reporting date whether there is an indication |
| | that an asset may be impaired. If any such indication exists, or when |
| | annual impairment testing for an asset is required, the Group makes an |
| | estimate of the asset's recoverable amount. An asset's recoverable amount |
| | is the higher of its fair value less costs to sell and its value in use |
| | and is determined for an individual asset, unless the asset does not |
| | generate cash inflows that are largely independent of those from other |
| | assets or Groups of assets and the asset's value in use cannot be |
| | estimated to be close to its fair value. In such cases the asset is tested |
| | for impairment as part of the cash-generating unit to which it belongs. |
| | When the carrying amount of an asset or cash-generating unit exceeds its |
| | recoverable amount, the asset or cash-generating unit is considered |
| | impaired and is written down to its recoverable amount. |
+-----+----------------------------------------------------------------------------+
| | In assessing value in use, the estimated future cash flows are discounted |
| | to their present value using a pre-tax discount rate that reflects current |
| | market assessments of the time value of money and the risks specific to |
| | the asset. Impairment losses relating to continuing operations are |
| | recognised in those expense categories consistent with the function of the |
| | impaired asset unless the asset is carried at revalued amount (in which |
| | case the impairment loss is treated as a revaluation decrease). |
| | |
+-----+----------------------------------------------------------------------------+
| | An assessment is also made at each reporting date as to whether there is |
| | any indication that previously recognised impairment losses may no longer |
| | exist or may have decreased. If such indication exists, the recoverable |
| | amount is estimated. A previously recognised impairment loss is reversed |
| | only if there has been a change in the estimates used to determine the |
| | asset's recoverable amount since the last impairment loss was recognised. |
| | If that is the case the carrying amount of the asset is increased to its |
| | recoverable amount. That increased amount cannot exceed the carrying |
| | amount that would have been determined, net of depreciation, had no |
| | impairment loss been recognised for the asset in prior years. Such |
| | reversal is recognised in the Income Statement unless the asset is carried |
| | at revalued amount, in which case the reversal is treated as a revaluation |
| | increase. After such a reversal the depreciation charge is adjusted in |
| | future periods to allocate the asset's revised carrying amount, less any |
| | residual value, on a systematic basis over its remaining useful life. |
+-----+---------------------------+--------------+--------------+------------------+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+------+------------------+--------------+--------------+-------------+-----------------+
| (x) | Trade and other payables |
+------+--------------------------------------------------------------------------------+
| | Trade payables and other payables are carried at amortised cost and represent |
| | liabilities for goods and services provided to the Group prior to the end of |
| | the financial year that are unpaid and arise when the Group becomes obliged to |
| | make future payments in respect of the purchase of these goods and services. |
+------+--------------------------------------------------------------------------------+
| (y) | Provisions | | | | |
+------+------------------+--------------+--------------+-------------+-----------------+
| | Provisions are recognised when the Group has a present obligation (legal or |
| | constructive) as a result of a past event, it is probable that an outflow of |
| | resources embodying economic benefits will be required to settle the |
| | obligation and a reliable estimate can be made of the amount of the |
| | obligation. |
+------+--------------------------------------------------------------------------------+
| | When the Group expects some or all of a provision to be reimbursed, for |
| | example under an insurance contract, the reimbursement is recognised as a |
| | separate asset but only when the reimbursement is virtually certain. The |
| | expense relating to any provision is presented in the income statement net of |
| | any reimbursement. |
+------+--------------------------------------------------------------------------------+
| (z) | Share-based payment transactions |
+------+--------------------------------------------------------------------------------+
| | (i) Equity settled transactions: |
+------+--------------------------------------------------------------------------------+
| | The Group provides benefits to employees (including senior executives) of the |
| | Group in the form of share-based payments, whereby employees render services |
| | in exchange for shares or rights over shares (equity-settled transactions). |
+------+--------------------------------------------------------------------------------+
| | The cost of these equity-settled transactions with employees is measured by |
| | reference to the fair value of the equity instruments at the date at which |
| | they are granted. The fair value is determined by using a Black-Scholes model. |
+------+--------------------------------------------------------------------------------+
| | In valuing equity-settled transactions, no account is taken of any performance |
| | conditions, other than conditions linked to the price of the shares of Polo |
| | Resources Ltd (market conditions) if applicable. |
+------+--------------------------------------------------------------------------------+
| | The cost of equity-settled transactions is recognised, together with a |
| | corresponding increase in equity, over the period in which the performance |
| | and/or service conditions are fulfilled, ending on the date on which the |
| | relevant employees become fully entitled to the award (the vesting period). |
+------+--------------------------------------------------------------------------------+
| | The cumulative expense recognised for equity-settled transactions at each |
| | reporting date until vesting date reflects (i) the extent to which the vesting |
| | period has expired and (ii) the Group's best estimate of the number of equity |
| | instruments that will ultimately vest. No adjustment is made for the |
| | likelihood of market performance conditions being met as the effect of these |
| | conditions is included in the determination of fair value at grant date. The |
| | Income Statement charge or credit for a period represents the movement in |
| | cumulative expense recognised as at the beginning and end of that period. |
+------+--------------------------------------------------------------------------------+
| | No expense is recognised for awards that do not ultimately vest, except for |
| | awards where vesting is only conditional upon a market condition. |
+------+--------------------------------------------------------------------------------+
| | If the terms of an equity-settled award are modified, as a minimum an expense |
| | is recognised as if the terms had not been modified. In addition, an expense |
| | is recognised for any modification that increases the total fair value of the |
| | share-based payment arrangement, or is otherwise beneficial to the employee, |
| | as measured at the date of modification. |
+------+--------------------------------------------------------------------------------+
| | If an equity-settled award is cancelled, it is treated as if it had vested on |
| | the date of cancellation, and any expense not yet recognised for the award is |
| | recognised immediately. However, if a new award is substituted for the |
| | cancelled award and designated as a replacement award on the date that it is |
| | granted, the cancelled and new award are treated as if they were a |
| | modification of the original award, as described in the previous paragraph. |
+------+--------------------------------------------------------------------------------+
| | The dilutive effect, if any, of outstanding options is reflected as additional |
| | share dilution in the computation of earnings per share (see Note 11). |
+------+--------------------------------------------------------------------------------+
|(aa) | Earnings per share |
+------+--------------------------------------------------------------------------------+
| | Basic earnings per share is calculated as net profit attributable to members |
| | of the parent, adjusted to exclude any costs of servicing equity (other than |
| | dividends) and preference share dividends, divided by the weighted average |
| | number of ordinary shares, adjusted for any bonus element. |
+------+--------------------------------------------------------------------------------+
| | Diluted earnings per share is calculated as net profit attributable to members |
| | of the parent, adjusted for: |
+------+--------------------------------------------------------------------------------+
| | - costs of servicing equity (other than dividends) and preference share |
| | dividends; |
+------+--------------------------------------------------------------------------------+
| | - the after tax effect of dividends and interest associated with dilutive |
| | potential ordinary shares that have been recognised as expenses; and |
+------+--------------------------------------------------------------------------------+
| | - other non-discretionary changes in revenues or expenses during the period |
| | that would result from the dilution of potential ordinary shares; divided by |
| | the weighted average number of ordinary shares and dilutive potential ordinary |
| | shares, adjusted for any bonus element. |
+------+------------------+--------------+--------------+-------------+-----------------+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+----+---------------------+---+-----+-----+------+-----+-----+-----+-----+-----+------------+
| 2 | Segmental analysis - Group | | | |
+----+--------------------------------------------+-----------+-----------+------------------+
| | The Group has not commenced production and therefore recorded no | |
| | revenue. | |
| | | |
+----+--------------------------------------------------------------------+------------------+
| | The analysis of the operating loss before taxation and the net assets employed by |
| | geographical segment of operations is shown below; |
+----+---------------------------------------------------------------------------------------+
| | | | | | |
+----+-------------------------------+------------+-----------+-----------+------------------+
| | By geographical area | | | | |
+----+-------------------------------+------------+-----------+-----------+------------------+
| | 2009 | | |BVI/Parent | Mongolia | Australia | Total |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | | | | $ 000's | $ 000's | $ 000's | $ 000's |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Result | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Operating loss | | | (48,251) | (6,582) | (248) | (54,881) |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Share of joint | | | | (3,519) | - | (3,519) |
| | venture results | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Share of associates | | | (3,239) | - | - | (3,239) |
| | results | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Investment revenue | | | 1,703 | 714 | - | 2,421 |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | (Loss) on disposal | | | (3,512) | - | - | (3,512) |
| | of subsidiary | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Loss before & after | | | | | | (62,730) |
| | tax | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Other information | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Depreciation | | | 3 | 105 | - | 108 |
| | and amortization | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Capital additions | | | 9 | 6,647 | - | 6,656 |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Assets | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Segment assets | | | 292,766 | - | - | 292,766 |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Financial assets | | | 7,373 | - | - | 7,373 |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Cash | | | | | | 12,288 |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Consolidated total | | | | | | 312,427 |
| | assets | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Liabilities | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Segment liabilities | | | - | - | - | - |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Financial | | | (8,821) | - | - | (8,821) |
| | liabilities | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Consolidated total | | | | | | (8,821) |
| | liabilities | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | | | | | | | |
+----+---------------------+---+-----+-----+------+-----+-----+-----+-----+-----+------------+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+----+---------------------+---+-----+-----+------+-----+-----+-----+-----+-----+------------+
| 2 | Segmental analysis - Group (continued) | | | |
+----+--------------------------------------------+-----------+-----------+------------------+
| | By geographical area | | | | |
+----+-------------------------------+------------+-----------+-----------+------------------+
| | 2008 | | |BVI/Parent | Mongolia | Australia | Total |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | | | | $ 000's | $ 000's | $ 000's | $ 000's |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Result | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Operating loss | | | (7,725) | (411) | (180) | (8,316) |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Share of associates | | | (426) | - | - | (426) |
| | results | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Investment revenue | | | 1,999 | 1 | - | 2,000 |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Loss before & after | | | | | | (6,742) |
| | tax | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Other information | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Depreciation and | | | - | 1,473 | - | 1,473 |
| | amortization | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Capital additions | | | - | 74,389 | - | 74,389 |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Assets | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Segment assets | | | 148,815 | 72,444 | 471 | 221,730 |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Financial assets | | | 745 | 3,550 | 61 | 4,356 |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Cash | | | | | | 115,974 |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Consolidated total | | | | | | 342,060 |
| | assets | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Liabilities | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Segment liabilities | | | - | - | - | - |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Financial | | | (3,744) | (4,456) | (59) | (8,259) |
| | liabilities | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | Consolidated total | | | | | | (8,259) |
| | liabilities | | | | | | |
+----+---------------------+---+-----------+------------+-----------+-----------+------------+
| | | | | | | | |
+----+---------------------+---+-----+-----+------+-----+-----+-----+-----+-----+------------+
+----+----------------------------+------------+----------+----------+----------+
| 3 | Operating loss | | | | |
+----+----------------------------+------------+----------+----------+----------+
| | | 2009 | 2009 | 2008 | 2008 |
+----+----------------------------+------------+----------+----------+----------+
| | | Group | Company | Group | Company |
+----+----------------------------+------------+----------+----------+----------+
| | Operating loss is arrived | $ 000's | $ 000's | $ 000's | $ 000's |
| | at after charging: | | | | |
+----+----------------------------+------------+----------+----------+----------+
| | | | | | |
+----+----------------------------+------------+----------+----------+----------+
| | Auditors' remuneration - | 109 | 42 | 64 | 50 |
| | audit | | | | |
+----+----------------------------+------------+----------+----------+----------+
| | Auditors' remuneration - | - | - | - | - |
| | non audit services | | | | |
+----+----------------------------+------------+----------+----------+----------+
| | Directors' emoluments - | 1,228 | 1,011 | 1,017 | 1,017 |
| | fees and salaries | | | | |
+----+----------------------------+------------+----------+----------+----------+
| | Directors' emoluments - | 3,721 | 3,721 | 1,890 | 1,890 |
| | share based payments | | | | |
+----+----------------------------+------------+----------+----------+----------+
| | Foreign exchange | (11,200) | (12,075) | 57 | 57 |
| | (gain)/loss | | | | |
+----+----------------------------+------------+----------+----------+----------+
| | Depreciation | 108 | 3 | 46 | - |
+----+----------------------------+------------+----------+----------+----------+
| Auditors remuneration for audit services above includes |
| $65,000 (2008: $13,420) charges by KPMG (Malaysia), |
| relating to the audit of the subsidiary companies. |
| |
+----+----------------------------+------------+----------+----------+----------+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+----+--------------------------------------------+--------------+--------------+
| 4 | Employee information - Group | 2009 | 2008 |
+----+--------------------------------------------+--------------+--------------+
| | Staff Costs comprised: | $ 000's | $ 000's |
+----+--------------------------------------------+--------------+--------------+
| | Wages and salaries | 643 | 37 |
+----+--------------------------------------------+--------------+--------------+
| | | | |
+----+--------------------------------------------+--------------+--------------+
| | Average Number of employees | Number | Number |
+----+--------------------------------------------+--------------+--------------+
| | Exploration | 125 | 9 |
+----+--------------------------------------------+--------------+--------------+
| | Administration | 10 | 2 |
+----+--------------------------------------------+--------------+--------------+
| | | 135 | 11 |
+----+--------------------------------------------+--------------+--------------+
| | | | |
+----+--------------------------------------------+--------------+--------------+
+----+----------------------------+------------+------------+------------+----------+
| 5 | Investment income | 2009 | 2009 | 2008 | 2008 |
| | | Group | Company | Group | Company |
+----+----------------------------+------------+------------+------------+----------+
| | | $ 000's | $ 000's | $ 000's | $ 000's |
+----+----------------------------+------------+------------+------------+----------+
| | Dividend income on | 90 | - | - | - |
| | investments | | | | |
+----+----------------------------+------------+------------+------------+----------+
| | Interest income on | 313 | - | - | - |
| | convertible loan notes | | | | |
+----+----------------------------+------------+------------+------------+----------+
| | | 403 | - | - | - |
+----+----------------------------+------------+------------+------------+----------+
| | | | | | |
+----+----------------------------+------------+------------+------------+----------+
+----+----------------------------+------------+------------+------------+----------+
| 6 | Other income | 2009 | 2009 | 2008 | 2008 |
| | | Group | Company | Group | Company |
+----+----------------------------+------------+------------+------------+----------+
| | | $ 000's | $ 000's | $ 000's | $ 000's |
+----+----------------------------+------------+------------+------------+----------+
| | Management fees | - | (2,470) | - | 3,099 |
| | (re-payable)/receivable | | | | |
+----+----------------------------+------------+------------+------------+----------+
| | | | | | |
+----+----------------------------+------------+------------+------------+----------+
| | The management fees originally charged in 2008 were cancelled and reversed |
| | in 2009, in conjunction with the terms of the Joint Venture agreement with |
| | Peabody. |
+----+----------------------------+------------+------------+------------+----------+
+----+----------------------------+------------+------------+------------+----------+
| 7 | Finance revenue | 2009 | 2009 | 2008 | 2008 |
| | | Group | Company | Group | Company |
+----+----------------------------+------------+------------+------------+----------+
| | | $ 000's | $ 000's | $ 000's | $ 000's |
+----+----------------------------+------------+------------+------------+----------+
| | Bank interest receivable | 2,421 | 1,703 | 2,000 | 1,999 |
+----+----------------------------+------------+------------+------------+----------+
| | | | | | |
+----+----------------------------+------------+------------+------------+----------+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+----+----------------------------+------------+-------------+------------+---------+
| 8 | Directors' emoluments | | | | |
+----+----------------------------+------------+-------------+------------+---------+
| | Group | | | 2009 | 2008 |
+----+----------------------------+------------+-------------+------------+---------+
| | | | | $ 000's | $ 000's |
+----+----------------------------+------------+-------------+------------+---------+
| | Directors' remuneration | | | 4,949 | 2,907 |
+----+----------------------------+------------+-------------+------------+---------+
| | | | | | |
+----+----------------------------+------------+-------------+------------+---------+
| | 2009 | Directors | Shares | Net | Total |
| | | Fees | issued | Options | |
| | | | | Issued (*) | |
+----+----------------------------+------------+-------------+------------+---------+
| | | $ 000's | $ 000's | $ 000's | $ 000's |
+----+----------------------------+------------+-------------+------------+---------+
| | Executive Directors | | | | |
+----+----------------------------+------------+-------------+------------+---------+
| | Stephen Dattels | 258 | 1,547 | (38) | 1,767 |
+----+----------------------------+------------+-------------+------------+---------+
| | Neil Herbert | 258 | 1,547 | (92) | 1,713 |
+----+----------------------------+------------+-------------+------------+---------+
| | Tony Bainbridge | 319 | 40 | 124 | 483 |
+----+----------------------------+------------+-------------+------------+---------+
| | Paul Ingram | 279 | 40 | (60) | 259 |
+----+----------------------------+------------+-------------+------------+---------+
| | Non-Executive Directors | | | | |
+----+----------------------------+------------+-------------+------------+---------+
| | Guy Elliott | 35 | 311 | (92) | 254 |
+----+----------------------------+------------+-------------+------------+---------+
| | Harald Van Hoeken (#) | 31 | 10 | - | 41 |
+----+----------------------------+------------+-------------+------------+---------+
| | Danny Sun (#) | 25 | 10 | 278 | 313 |
+----+----------------------------+------------+-------------+------------+---------+
| | Suresh Hiremath (#) | 17 | - | - | 17 |
+----+----------------------------+------------+-------------+------------+---------+
| | Bryan Smith (#) | 3 | - | 48 | 51 |
+----+----------------------------+------------+-------------+------------+---------+
| | James Mellon (#) | 3 | - | 48 | 51 |
+----+----------------------------+------------+-------------+------------+---------+
| | | 1,228 | 3,505 | 216 | 4,949 |
+----+----------------------------+------------+-------------+------------+---------+
| | | |
+----+--------------------------------------------------------------------+---------+
| | 2008 | Directors | Consultancy | Shares & | Total |
| | | Fees | Fees | Options | |
+----+----------------------------+------------+-------------+------------+---------+
| | | $ 000's | $ 000's | $ 000's | $ 000's |
+----+----------------------------+------------+-------------+------------+---------+
| | Executive Directors | | | | |
+----+----------------------------+------------+-------------+------------+---------+
| | Stephen Dattels (#) | 100 | 116 | 116 | 332 |
+----+----------------------------+------------+-------------+------------+---------+
| | Neil Herbert (#) | 195 | - | 855 | 1,050 |
+----+----------------------------+------------+-------------+------------+---------+
| | Tony Bainbridge (#) | 133 | - | 116 | 249 |
+----+----------------------------+------------+-------------+------------+---------+
| | Paul Ingram (#) | 167 | 102 | 279 | 548 |
+----+----------------------------+------------+-------------+------------+---------+
| | Non-Executive Directors | | | | |
+----+----------------------------+------------+-------------+------------+---------+
| | Guy Elliott | 33 | 76 | 182 | 291 |
+----+----------------------------+------------+-------------+------------+---------+
| | Harald Van Hoeken (#) | 33 | - | 113 | 146 |
+----+----------------------------+------------+-------------+------------+---------+
| | Danny Sun (#) | 21 | - | 116 | 137 |
+----+----------------------------+------------+-------------+------------+---------+
| | Suresh Hiremath (#) | 33 | 8 | 113 | 154 |
+----+----------------------------+------------+-------------+------------+---------+
| | | 715 | 302 | 1,890 | 2,907 |
+----+----------------------------+------------+-------------+------------+---------+
| | | |
+----+--------------------------------------------------------------------+---------+
| | (*) During the year, the company cancelled various options issued in 2008, |
| | and issued new options. The net charge to the income statement in respect |
| | of these directors options is highlighted here. (See Note 21 for full |
| | option details). |
+----+------------------------------------------------------------------------------+
| | (#): These Directors were not employed during the | | |
| | full financial period. | | |
| | No consultancy fees were paid in the year to 30 June | | |
| | 2009. | | |
+----+-------------------------------------------------------+------------+---------+
| | No pension benefits are provided for any Director. | | |
+----+----------------------------+------------+-------------+------------+---------+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+----+---------------------------------------------+--------------+----------------+
| 9 | Taxation | 2009 | 2008 |
+----+---------------------------------------------+--------------+----------------+
| | Analysis of charge in period | $ 000's | $ 000's |
+----+---------------------------------------------+--------------+----------------+
| | Tax on ordinary activities | - | - |
+----+---------------------------------------------+--------------+----------------+
| | | | |
+----+---------------------------------------------+--------------+----------------+
| | No taxation has been provided due to losses | | |
| | in the year. | | |
+----+---------------------------------------------+--------------+----------------+
| | | | |
+----+---------------------------------------------+--------------+----------------+
| | The British Virgin Islands under the IBC imposes no corporate taxes or |
| | capital gains. However the Company as a group may be liable for taxes in |
| | the jurisdictions where it is developing mining properties. |
+----+-----------------------------------------------------------------------------+
| | | | |
+----+---------------------------------------------+--------------+----------------+
| | In Mongolia, the Company provides for income taxes on the basis of its |
| | income for financial reporting purposes, adjusted for items which are not |
| | assessable or deductible for income tax purposes, in accordance with the |
| | regulations of the tax authorities. The tax rate is 10% for taxable profits |
| | up to MNT3 billion and 25% for taxable profits in excess of MNT3 billion |
+----+-----------------------------------------------------------------------------+
| | | | |
+----+---------------------------------------------+--------------+----------------+
| | No deferred tax asset has been recognised because there is insufficient |
| | evidence of the timing of suitable future profits against which they can be |
| | recovered. No deferred tax liability has been recognised as a result of the |
| | losses in the period. |
+----+-----------------------------------------------------------------------------+
| | |
+----+---------------------------------------------+--------------+----------------+
+----+--------------------------+--------------------------------+---------------+
| 10 | Dividends | | |
+----+--------------------------+--------------------------------+---------------+
| | No dividends were paid or proposed by the Directors. (2008: $Nil) |
+----+--------------------------+--------------------------------+---------------+
+----+---------------------------+---------+------------------+---------+-------------+
| 11 | Loss per share | | |
+----+---------------------------+--------------------------------------+-------------+
| | The calculation of loss per share is based on the loss after taxation divided |
| | by the weighted average number of share in issue during the period: |
+----+--------------------------------------------------------------------------------+
| | | 2009 | 2008 |
+----+-------------------------------------+------------------+-----------------------+
| | Net loss after taxation ($000's) | (62,730) | (6,740) |
+----+-------------------------------------+------------------+-----------------------+
| | | | |
+----+-------------------------------------+------------------+-----------------------+
| | Weighted average number of ordinary | 1,962.85 | 603.26 |
| | shares used in calculating basic | | |
| | loss per share (millions) | | |
+----+-------------------------------------+------------------+-----------------------+
| | | | |
+----+-------------------------------------+------------------+-----------------------+
| | Basic loss per share (expressed in | (3.20) | (1.12) |
| | US cents) | | |
+----+-------------------------------------+------------------+-----------------------+
| | Diluted loss per share (expressed | (3.20) | (1.12) |
| | in US cents) | | |
+----+-------------------------------------+------------------+-----------------------+
| | |
+----+--------------------------------------------------------------------------------+
| | As inclusion of the potential ordinary shares would result in a decrease in |
| | the loss per share they are considered to be anti-dilutive, as such, a diluted |
| | earnings per share is not included. |
+----+--------------------------------------------------------------------------------+
| | |
+----+---------------------------+---------+------------------+---------+-------------+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+----+--------------------------------------------+-------------+-----+--------------+
| 12 | Intangible assets | | |
+----+--------------------------------------------+-------------------+--------------+
| | Group | | $ 000's |
+----+--------------------------------------------+-------------------+--------------+
| | | | |
+----+--------------------------------------------+-------------------+--------------+
| | Cost | | |
+----+--------------------------------------------+-------------------+--------------+
| | At 1 July 2008 | | 73,588 |
+----+--------------------------------------------+-------------------+--------------+
| | Additions | | 2,798 |
+----+--------------------------------------------+-------------------+--------------+
| | Disposals on derecognition of subsidiary | | (80,975) |
+----+--------------------------------------------+-------------------+--------------+
| | Currency translation differences | | 4,589 |
+----+--------------------------------------------+-------------------+--------------+
| | | | |
+----+--------------------------------------------+-------------------+--------------+
| | As at 30 June 2009 | | - |
+----+--------------------------------------------+-------------------+--------------+
| | | | |
+----+--------------------------------------------+-------------------+--------------+
| | Amortisation | | |
+----+--------------------------------------------+-------------------+--------------+
| | At 1 July 2008 | | 1,427 |
+----+--------------------------------------------+-------------------+--------------+
| | Amortisation & write-off charges for the | | 5,736 |
| | period | | |
+----+--------------------------------------------+-------------------+--------------+
| | Eliminated on derecognition of subsidiary | | (9,181) |
+----+--------------------------------------------+-------------------+--------------+
| | Currency translation differences | | 2,018 |
+----+--------------------------------------------+-------------------+--------------+
| | | | |
+----+--------------------------------------------+-------------------+--------------+
| | At 30 June 2009 | | - |
+----+--------------------------------------------+-------------------+--------------+
| | | | |
+----+--------------------------------------------+-------------------+--------------+
| | Net book value | | |
+----+--------------------------------------------+-------------------+--------------+
| | At 30 June 2009 | | - |
+----+--------------------------------------------+-------------------+--------------+
| | At 30 June 2008 | | 72,161 |
+----+--------------------------------------------+-------------------+--------------+
| | | | |
+----+--------------------------------------------+-------------------+--------------+
| | The cost is analysed as follows; | 2009 | 2008 |
+----+--------------------------------------------+-------------------+--------------+
| | | $ 000's | $ 000's |
+----+--------------------------------------------+-------------------+--------------+
| | Deferred exploration expenditure | - | 6,044 |
+----+--------------------------------------------+-------------------+--------------+
| | Mining & exploration licences | - | 66,117 |
+----+--------------------------------------------+-------------------+--------------+
| | | - | 72,161 |
+----+--------------------------------------------+-------------------+--------------+
| | Impairment Review | | |
+----+--------------------------------------------+-------------+--------------------+
| | At 30 June 2009, no impairment review was required. During the year, a full |
| | impairment of operations in Mongolia was carried out and appropriate |
| | impairment provisions were made. |
+----+--------------------------------------------+-------------+-----+--------------+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+----+----------------------------------+-------+-------+-------+-------+---------------+
| | |
+----+----------------------------------------------------------------------------------+
| 13 | Tangible assets - Property, Plant & Equipment |
+----+----------------------------------------------------------------------------------+
| | | | Group | Company |
+----+----------------------------------+---------------+---------------+---------------+
| | | | Property, | Property, |
| | | | plant & | plant & |
| | | | equipment | equipment |
+----+----------------------------------+---------------+---------------+---------------+
| | | | $ 000's | $ 000's |
+----+----------------------------------+---------------+---------------+---------------+
| | Cost | | | |
+----+----------------------------------+---------------+---------------+---------------+
| | As at 1 July 2008 | | 801 | - |
+----+----------------------------------+---------------+---------------+---------------+
| | Additions | | 3,858 | 9 |
+----+----------------------------------+---------------+---------------+---------------+
| | Disposals on derecognition of | | (4,667) | - |
| | subsidiary | | | |
+----+----------------------------------+---------------+---------------+---------------+
| | Currency translation differences | | 17 | - |
+----+----------------------------------+---------------+---------------+---------------+
| | As at 30 June 2009 | | 9 | 9 |
+----+----------------------------------+---------------+---------------+---------------+
| | | | | |
+----+----------------------------------+---------------+---------------+---------------+
| | Depreciation | | | |
+----+----------------------------------+---------------+---------------+---------------+
| | As at 1 July 2008 | | 46 | - |
+----+----------------------------------+---------------+---------------+---------------+
| | Depreciation charge for the year | | 108 | 3 |
+----+----------------------------------+---------------+---------------+---------------+
| | Eliminated on derecognition of | | (151) | - |
| | subsidiary | | | |
+----+----------------------------------+---------------+---------------+---------------+
| | As at 30 June 2009 | | 3 | 3 |
+----+----------------------------------+---------------+---------------+---------------+
| | | | | |
+----+----------------------------------+---------------+---------------+---------------+
| | Net Book Value | | | |
+----+----------------------------------+---------------+---------------+---------------+
| | As at 30 June 2009 | | 6 | 6 |
+----+----------------------------------+---------------+---------------+---------------+
| | As at 30 June 2008 | | 755 | - |
+----+----------------------------------+---------------+---------------+---------------+
| | | | | |
+----+----------------------------------+---------------+---------------+---------------+
| | Impairment Review | | |
+----+------------------------------------------+---------------+-----------------------+
| | At 30 June 2009, the Directors have carried out an impairment review and |
| | concluded no impairment provision is currently required. |
+----+----------------------------------+-------+-------+-------+-------+---------------+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+----+-----------------------------------+----------+-----------------+--------------+
| | | | |
+----+-----------------------------------+----------------------------+--------------+
| 14 | Investment in subsidiaries | |
+----+----------------------------------------------------------------+--------------+
| | | 2009 | 2008 |
+----+----------------------------------------------+-----------------+--------------+
| | Shares in Group undertakings | $ 000's | $ 000's |
+----+----------------------------------------------+-----------------+--------------+
| | Company | | |
+----+----------------------------------------------+-----------------+--------------+
| | Cost | | |
+----+----------------------------------------------+-----------------+--------------+
| | At beginning of the period | 24,842 | - |
+----+----------------------------------------------+-----------------+--------------+
| | Additions | - | 24,842 |
+----+----------------------------------------------+-----------------+--------------+
| | Capitalisation of loans to subsidiaries | 12,178 | - |
+----+----------------------------------------------+-----------------+--------------+
| | Impairment of investment in subsidiaries | (7,360) | - |
+----+----------------------------------------------+-----------------+--------------+
| | Currency translation differences | (3,110) | - |
+----+----------------------------------------------+-----------------+--------------+
| | As at 30 June | 26,550 | 24,842 |
+----+----------------------------------------------+-----------------+--------------+
| | | | |
+----+----------------------------------------------+-----------------+--------------+
| | During the year, there was a major group re-organisation prior to the |
| | completion of the Joint Venture Agreement (see Note 15). In the course of the |
| | re-organisation, the directors assessed the carrying values of the group |
| | investments including investment carrying values and loans receivable from |
| | subsidiaries. |
| | The basis of the review was the valuation and terms being attached to the |
| | Joint Venture with Peabody Holland BV. This resulted in a total write down of |
| | $43,978,000 which has been charged to the income statement in the year. The |
| | Board of Directors considers that the ongoing carrying values of group |
| | investments and loans due from group companies as at 30 June 2009, represent |
| | their fair and recoverable values. |
+----+-----------------------------------+----------+-----------------+--------------+
+----+----------+----------+----------+----------+----------+----------+----------+----------+
| | | | | |
+----+---------------------+---------------------+---------------------+---------------------+
| | The parent company of the Group holds more than 50% of the share capital of the |
| | following companies: |
+----+---------------------------------------------------------------------------------------+
| Company | Country of | Proportion held | Nature of business |
| | Registration | | |
+---------------+---------------------+---------------------+---------------------+
| Direct | | | |
+---------------+---------------------+---------------------+---------------------+
| MUC Resources | BVI | 100% | Holding Company |
| Ltd | | | |
+---------------+---------------------+---------------------+---------------------+
| Polo | BVI | 100% | Holding Company |
| Australasia | | | |
| Ltd | | | |
+---------------+---------------------+---------------------+---------------------+
| Polo | BVI | 100% | Holding Company |
| Bangladesh | | | |
| Ltd | | | |
+---------------+---------------------+---------------------+---------------------+
| World Coal | BVI | 100% | Holding Company |
| Works | | | |
| Corporation | | | |
+---------------+---------------------+---------------------+---------------------+
| Polo | Dutch Antilles | 100% | Holding Company |
| Resources NV | | | |
+---------------+---------------------+---------------------+---------------------+
| | | | |
+---------------+---------------------+---------------------+---------------------+
| Indirect | | | |
+---------------+---------------------+---------------------+---------------------+
| Via Polo | | | |
| Resources NV | | | |
+---------------+---------------------+---------------------+---------------------+
| Polo | Netherlands | 50% | Holding Company |
| Resources | | | |
| Cooperatief | | | |
| U.A. | | | |
+---------------+---------------------+---------------------+---------------------+
| | | | |
+---------------+---------------------+---------------------+---------------------+
| Via Polo | | | |
| Australasia | | | |
| Ltd | | | |
+---------------+---------------------+---------------------+---------------------+
| Polo | Netherlands | 50% | Holding Company |
| Resources | | | |
| Cooperatief | | | |
| U.A. | | | |
+---------------+---------------------+---------------------+---------------------+
| | | | |
+----+----------+----------+----------+----------+----------+----------+----------+----------+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+----+--------------+---------------+------------+-------+-------+-------+-------+-------------+
| 15 | Investment in joint ventures | 2009 | 2008 |
+----+---------------------------------------------------+---------------+---------------------+
| | | $ 000's | $ 000's |
+----+---------------------------------------------------+---------------+---------------------+
| | Group | | |
+----+---------------------------------------------------+---------------+---------------------+
| | At beginning of the period | - | - |
+----+---------------------------------------------------+---------------+---------------------+
| | Transfer from Subsidiaries | 30,024 | - |
+----+---------------------------------------------------+---------------+---------------------+
| | Write down of Joint Venture value | (7,000) | - |
+----+---------------------------------------------------+---------------+---------------------+
| | Share of Joint Venture's results | (3,519) | - |
+----+---------------------------------------------------+---------------+---------------------+
| | As at 30 June | 19,505 | - |
+----+---------------------------------------------------+---------------+---------------------+
| | | | |
+----+---------------------------------------------------+---------------+---------------------+
| | The breakdown of the carrying values and fair values at the balance sheet date of |
| | the Group's investment in joint ventures is as follows: |
+----+-----------------------------------------------------------------------------------------+
| | | Carrying | Fair Value |
| | | Value | |
+----+---------------------------------------------------+---------------+---------------------+
| | | $ 000's | $ 000's |
+----+---------------------------------------------------+---------------+---------------------+
| | Peabody-Polo Resources BV | 19,505 | 19,505 |
+----+---------------------------------------------------+---------------+---------------------+
| | | | |
+----+---------------------------------------------------+---------------+---------------------+
| | On 4 May 2009, the group completed the Joint Venture Agreement with Peabody |
| | Holland B.V., resulting in Polo Resources Ltd Group, owning a 50% equity interest |
| | in the Peabody Polo resources BV, the Joint Venture company. |
| | Polo contributed to the Joint Venture company (prior to JV completion) its |
| | Mongolian subsidiaries, including the outstanding loans thereto, and Peabody |
| | subscribed for a 50% interest in the JV company for US$23million. |
| | |
+----+-----------------------------------------------------------------------------------------+
| | | | |
+----+---------------------------------------------------+---------------+---------------------+
| | Details of the Group's Joint Venture interests at 30 June 2009 are as follows: |
+----+-----------------------------------------------------------------------------------------+
| | Name | Place of |Proportion | Date | Reporting | Principal |
| | |Incorporation | held | associate | Date of JV | activities |
| | | | | interest | | |
| | | | | acquired | | |
+----+--------------+---------------+------------+---------------+---------------+-------------+
| | Peabody-Polo | Netherlands | 50% | 01/05/09 | 30/06/09 | Coal |
| | Resources BV | | | | |exploration |
+----+--------------+---------------+------------+---------------+---------------+-------------+
| | | | | | | |
+----+--------------+---------------+------------+-------+-------+-------+-------+-------------+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+----+------------+---------------+------------+-------+-------+-------+-------+-------------+
| 16 | Interest in associates | 2009 | 2008 |
+----+-------------------------------------------------+---------------+---------------------+
| | | $ 000's | $ 000's |
+----+-------------------------------------------------+---------------+---------------------+
| | Group | | |
+----+-------------------------------------------------+---------------+---------------------+
| | At beginning of the period | 148,529 | - |
+----+-------------------------------------------------+---------------+---------------------+
| | Investments in associates - equity purchases | 6,113 | 148,955 |
+----+-------------------------------------------------+---------------+---------------------+
| | Investments in associates - convertible loan | 7,763 | - |
| | notes | | |
+----+-------------------------------------------------+---------------+---------------------+
| | Share of associates loss for the period | (3,239) | (426) |
+----+-------------------------------------------------+---------------+---------------------+
| | Currency translation differences | (26,570) | - |
+----+-------------------------------------------------+---------------+---------------------+
| | As at 30 June | 132,596 | 148,529 |
+----+-------------------------------------------------+---------------+---------------------+
| | | | |
+----+-------------------------------------------------+---------------+---------------------+
| | The breakdown of the carrying values and fair values at the balance sheet date of |
| | the Group's interest in listed associates is as follows: |
+----+---------------------------------------------------------------------------------------+
| | | Carrying | Fair Value |
| | | Value | |
+----+-------------------------------------------------+---------------+---------------------+
| | | $ 000's | $ 000's |
+----+-------------------------------------------------+---------------+---------------------+
| | GCM Resources Plc - interest in equity | 35,332 | 23,764 |
| | shares | | |
+----+-------------------------------------------------+---------------+---------------------+
| | Caledon Resources Plc - interest in equity | 89,501 | 44,499 |
| | shares | | |
+----+-------------------------------------------------+---------------+---------------------+
| | Caledon Resources Plc - interest in | 7,763 | 7,763 |
| | convertible loan notes | | |
+----+-------------------------------------------------+---------------+---------------------+
| | | 132,596 | 76,026 |
+----+-------------------------------------------------+---------------+---------------------+
| | | | |
+----+-------------------------------------------------+---------------+---------------------+
| | Subsequent to 30 June 2009 the market value of the investment in associates, has |
| | increased marginally. It is considered that this increase is a subsequent event |
| | that does not require adjustment at 30 June 2009. The market value of the |
| | interests in associates was $84,389,029 at 9 October 2009. |
+----+---------------------------------------------------------------------------------------+
| | | | |
+----+-------------------------------------------------+---------------+---------------------+
| | Details of the Group associates at 30 June 2009 are as follows: |
+----+---------------------------------------------------------------------------------------+
| | Name | Place of |Proportion | Date | Reporting | Principal |
| | |Incorporation | held | associate | Date of | activities |
| | | | | interest | associate | |
| | | | | acquired | | |
+----+------------+---------------+------------+---------------+---------------+-------------+
| | GCM | UK | 29.84% | 01/02/08 | 30/06/09 | Coal |
| | Resources | | | | |exploration |
| | Plc | | | | | |
+----+------------+---------------+------------+---------------+---------------+-------------+
| | Caledon | UK | 26.19% | 05/06/08 | 31/12/08 | Coal |
| | Resources | | | | | Mining |
| | Plc | | | | | |
+----+------------+---------------+------------+-------+-------+-------+-------+-------------+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+----+---------------------------------------------+----------------+---------------+
| 17 | Available for sale investments | 2009 | 2008 |
+----+---------------------------------------------+----------------+---------------+
| | Group - Listed Investments | $ 000's | $ 000's |
+----+---------------------------------------------+----------------+---------------+
| | | | |
+----+---------------------------------------------+----------------+---------------+
| | At beginning of the period | 285 | - |
+----+---------------------------------------------+----------------+---------------+
| | Acquired during the year | 83,908 | 347 |
+----+---------------------------------------------+----------------+---------------+
| | Disposals during the year | (9,586) | - |
+----+---------------------------------------------+----------------+---------------+
| | Realised gains on disposals | 1,211 | - |
+----+---------------------------------------------+----------------+---------------+
| | Currency translation differences | 8,000 | - |
+----+---------------------------------------------+----------------+---------------+
| | Movement in market value | 56,841 | (62) |
+----+---------------------------------------------+----------------+---------------+
| | At 30 June | 140,659 | 285 |
+----+---------------------------------------------+----------------+---------------+
| | | | |
+----+---------------------------------------------+----------------+---------------+
| | The available for sale investments, are | | |
| | split as below; | | |
+----+---------------------------------------------+----------------+---------------+
| | Non-current assets | 108,264 | 285 |
+----+---------------------------------------------+----------------+---------------+
| | Current assets | 32,395 | - |
+----+---------------------------------------------+----------------+---------------+
| | | 140,659 | 285 |
+----+---------------------------------------------+----------------+---------------+
| | | | |
+----+---------------------------------------------+----------------+---------------+
Available for sale investments comprises investments in listed securities, which
are traded on Stock markets throughout the world, and, which are held by the
Group as a mix of strategic and short term investments. No unlisted available
for sale investments are held. The market value of the above listed investments
as at 9 October 2009 was $208,926,973.
+-----+------------------------------+------------+------------+----------+---------+
| 18 | Trade and other receivables | 2009 | 2008 |
+-----+------------------------------+-------------------------+--------------------+
| | | Group | Company | Group | Company |
| | | $ 000's | $ 000's | $ 000's | $ 000's |
+-----+------------------------------+------------+------------+----------+---------+
| | Current trade and other | | | | |
| | receivables | | | | |
+-----+------------------------------+------------+------------+----------+---------+
| | Other debtors | 4,097 | 4,097 | 1,049 | 73 |
+-----+------------------------------+------------+------------+----------+---------+
| | Prepayments | 139 | 139 | 2,708 | 73 |
+-----+------------------------------+------------+------------+----------+---------+
| | Accrued income | 324 | - | 599 | 3,687 |
+-----+------------------------------+------------+------------+----------+---------+
| | Total | 4,560 | 4,236 | 4,356 | 3,833 |
+-----+------------------------------+------------+------------+----------+---------+
| | Non Current trade and other receivables | | | |
| | | | | |
+-----+-------------------------------------------+------------+----------+---------+
| | Loans due from subsidiaries | - | 221,914 | - | 199,021 |
+-----+------------------------------+------------+------------+----------+---------+
| | Loans due from Joint | 2,813 | - | - | - |
| | Ventures | | | | |
+-----+------------------------------+------------+------------+----------+---------+
| | | 2,813 | 221,914 | - | 199,021 |
+-----+------------------------------+------------+------------+----------+---------+
| | The loans from subsidiaries, and Joint Ventures were interest free |
| | throughout the period and have no fixed repayment date. |
+-----+------------------------------+------------+------------+----------+---------+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+-----+------------------------------+------------+------+------+------+------+---------+
| | | | |
+-----+--------------------------------------------------+-------------+----------------+
| 19 | Trade and other payables | 2009 | 2008 |
+-----+------------------------------+--------------------------+-----------------------+
| | | Group | Company | Group | Company |
+-----+------------------------------+------------+-------------+-------------+---------+
| | | $ 000's | $ 000's | $ 000's | $ 000's |
+-----+------------------------------+------------+-------------+-------------+---------+
| | Current trade and other | | | | |
| | payables: | | | | |
+-----+------------------------------+------------+-------------+-------------+---------+
| | Trade creditors | 8,142 | 8,121 | 2,288 | 1,575 |
+-----+------------------------------+------------+-------------+-------------+---------+
| | Taxation liabilities | 271 | 271 | 2,085 | - |
+-----+------------------------------+------------+-------------+-------------+---------+
| | Other creditors | 85 | 85 | 1,797 | 83 |
+-----+------------------------------+------------+-------------+-------------+---------+
| | Accruals | 323 | 323 | 2,089 | 2,086 |
+-----+------------------------------+------------+-------------+-------------+---------+
| | | 8,821 | 8,821 | 8,259 | 3,744 |
+-----+------------------------------+------------+------+------+------+------+---------+
+------------------------------+------------------------------+---------+---------------+---------------+------------+
| 20 | Share capital | | | | |
+ +------------------------------+---------+---------------+---------------+------------+
| | | | | | |
+------------------------------+------------------------------+------------------------------+---------+---------------+---------------+
| | Authorised | | | | $ 000's |
+------------------------------+------------------------------+---------+---------------+---------------+------------+
| | Unlimited Ordinary shares of no par value | | - |
+------------------------------+--------------------------------------------------------+---------------+------------+
| | | | |
+------------------------------+--------------------------------------------------------+---------------+------------+
| | Called up, allotted, issued and fully paid | Nominal value | |
| | Number of shares | | |
| | | $000's | |
| | | | |
+------------------------------+--------------------------------------------------------+---------------+------------+
| Incorporation | 1 | - |
+-----------------------------------------------------------------------+---------------+---------------+
| 3 August 2007 for cash at 0.05p per share | 165,000,000 | - |
+-----------------------------------------------------------------------+---------------+---------------+
| 3 August 2007 original incorporation share cancelled | (1) | - |
+-----------------------------------------------------------------------+---------------+---------------+
| 24 August 2007 for cash at 5p per share | 132,880,000 | - |
+-----------------------------------------------------------------------+---------------+---------------+
| 4 September 2007 for non-cash consideration | 300,000 | - |
+-----------------------------------------------------------------------+---------------+---------------+
| 25 September 2007 for cash at 5p per share | 131,422,000 | - |
+-----------------------------------------------------------------------+---------------+---------------+
| 31 January 2008 for cash at 9p per share | 281,680,000 | - |
+-----------------------------------------------------------------------+---------------+---------------+
| 1 February 2008 for non-cash consideration | 72,340,425 | - |
+-----------------------------------------------------------------------+---------------+---------------+
| 3 March 2008 for non-cash consideration | 25,000,000 | - |
+-----------------------------------------------------------------------+---------------+---------------+
| 17 March 2008 for cash at 12p per share | 362,000,000 | - |
+-----------------------------------------------------------------------+---------------+---------------+
| 14 May 2008 for non-cash consideration | 2,500,000 | - |
+-----------------------------------------------------------------------+---------------+---------------+
| 15 May 2008 for non-cash consideration | 1,117,391 | - |
+-----------------------------------------------------------------------+---------------+---------------+
| 4 June 2008 for cash at 13p per share | 620,000,000 | - |
+-----------------------------------------------------------------------+---------------+---------------+
| 20 June 2008 for non-cash consideration | 80,000,000 | - |
+-----------------------------------------------------------------------+---------------+---------------+
| As at 30 June 2008 | 1,874,239,816 | - |
+-----------------------------------------------------------------------+---------------+---------------+
| 30 January 2009 for non-cash consideration | 33,776,057 | - |
+-----------------------------------------------------------------------+---------------+---------------+
| 3 March 2009 for non-cash consideration | 162,629,750 | - |
+-----------------------------------------------------------------------+---------------+---------------+
| 6 May 2009 for non-cash consideration | 66,000,000 | - |
+-----------------------------------------------------------------------+---------------+---------------+
| 11 May 2009 for non-cash consideration | 50,000,000 | - |
+-----------------------------------------------------------------------+---------------+---------------+
| 19 June 2009 for cash at 3.85p per share | 160,000,000 | - |
+-----------------------------------------------------------------------+---------------+---------------+
| | As at 30 June 2009 | 2,346,645,623 | - |
+------------------------------+------------------------------+---------+---------------+---------------+------------+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+-----+------------------------------+---------+--------+---------------+------------+
| 20 | Share capital (continued) | | | | |
+-----+------------------------------+---------+--------+---------------+------------+
Total share options in issue
During the period ended 30 June 2009, the company granted 120,750,000 options
over ordinary shares. (2008: 77million)
As at 30 June 2009 the unexercised options in issue were;
+---------------------------+---------------------+--------------------------+
| Exercise Price | Expiry Date | Options in Issue |
| | | 30 June 2009 |
+---------------------------+---------------------+--------------------------+
| 5p | 4 September 2012 | 4,000,000 |
+---------------------------+---------------------+--------------------------+
| 9p | 4 March 2018 | 21,000,000 |
+---------------------------+---------------------+--------------------------+
| 3.5p | 28 January 2019 | 105,750,000 |
+---------------------------+---------------------+--------------------------+
| 3.5p | 5 May 2019 | 5,000,000 |
+---------------------------+---------------------+--------------------------+
| 4.28p | 7 June 2019 | 10,000,000 |
+---------------------------+---------------------+--------------------------+
| | | 145,750,000 |
+---------------------------+---------------------+--------------------------+
No options lapsed or were exercised during the period to 30 June 2009.
52,000,000 options were cancelled during the year ended 30 June 2009. (2008:
Nil)
Total warrants in issue
During the period ended 30 June 2009, the company granted
415,455,111 warrants to subscribe for ordinary shares. (2008: 27,050,000)
As at 30 June 2009 the unexercised warrants in issue were;
+---------------------------+---------------------+--------------------------+
| Exercise Price | Expiry Date | Warrants in Issue |
| | | 30 June 2009 |
+---------------------------+---------------------+--------------------------+
| 4p | 5 November 2010 | 404,866,875 |
+---------------------------+---------------------+--------------------------+
| 3.775p | 30 November 2010 | 8,823,530 |
+---------------------------+---------------------+--------------------------+
| 4p | 30 November 2010 | 1,764,706 |
+---------------------------+---------------------+--------------------------+
| | | |
+---------------------------+---------------------+--------------------------+
| | | 415,455,111 |
+---------------------------+---------------------+--------------------------+
No warrants were exercised during the period to 30 June 2009. 27,050,000
warrants lapsed during the year ended 30 June 2009. (2008: Nil)
Notes to Financial Statements
for the year ended 30 June 2009, continued
+----+-------------+------+------+------+----------+-------------+----------+------------+---------+
| 21 | Share Based Payments | | | | |
+----+---------------------------------------------+-------------+----------+------------+---------+
| | | | | | | | |
+----+--------------------+-------------+----------+-------------+----------+------------+---------+
| | Under IFRS 2 'Share Based Payments', the Company determines the fair value of |
| | options issued to Directors and Employees as remuneration and recognises the |
| | amount as an expense in the income statement with a corresponding increase in |
| | equity. |
| | |
+----+---------------------------------------------------------------------------------------------+
| | The following options were issued during the year ended 30 June 2009: |
+----+---------------------------------------------------------------------------------------------+
| | | | | | | | |
+----+-------------+-------------+-----------------+-------------+----------+------------+---------+
| | Name | Date | Date Vested | Number |Exercise | Expiry | Fair |
| | | Granted | | | Price | Date | Value |
| | | | | | (pence) | | at |
| | | | | | | | Grant |
| | | | | | | | Date |
| | | | | | | |(pence) |
+----+-------------+-------------+-----------------+-------------+----------+------------+---------+
| | | | | | | | |
+----+-------------+-------------+-----------------+-------------+----------+------------+---------+
| | Stephen | 29/01/2009 | See 1 below | 5,000,000 | 3.5p |28/01/2019 | 2.22 |
| | Dattels | | | | | | |
+----+-------------+-------------+-----------------+-------------+----------+------------+---------+
| | Paul | 29/01/2009 | See 1 below | 15,000,000 | 3.5p |28/01/2019 | 2.22 |
| | Ingram | | | | | | |
+----+-------------+-------------+-----------------+-------------+----------+------------+---------+
| | Guy | 29/01/2009 | See 1 below | 5,000,000 | 3.5p |28/01/2019 | 2.22 |
| | Elliott | | | | | | |
+----+-------------+-------------+-----------------+-------------+----------+------------+---------+
| | Anthony | 29/01/2009 | See 1 below | 20,000,000 | 3.5p |28/01/2019 | 2.22 |
| | Bainbridge | | | | | | |
+----+-------------+-------------+-----------------+-------------+----------+------------+---------+
| | Neil | 29/01/2009 | See 1 below | 12,000,000 | 3.5p |28/01/2019 | 2.22 |
| | Herbert | | | | | | |
+----+-------------+-------------+-----------------+-------------+----------+------------+---------+
| | Consultants | 29/01/2009 | See 1 below | 31,000,000 | 3.5p |28/01/2019 | 2.22 |
+----+-------------+-------------+-----------------+-------------+----------+------------+---------+
| | Employees | 29/01/2009 | See 1 below | 17,750,000 | 3.5p |28/01/2019 | 2.22 |
+----+-------------+-------------+-----------------+-------------+----------+------------+---------+
| | Consultant | 06/05/2009 | See 1 below | 5,000,000 | 3.5p |05/05/2019 | 2.44 |
+----+-------------+-------------+-----------------+-------------+----------+------------+---------+
| | Bryan | 08/06/2009 | See 1 below | 5,000,000 | 4.28p |07/06/2019 | 3.09 |
| | Smith | | | | | | |
+----+-------------+-------------+-----------------+-------------+----------+------------+---------+
| | James | 08/06/2009 | See 1 below | 5,000,000 | 4.28p |07/06/2019 | 3.09 |
| | Mellon | | | | | | |
+----+-------------+-------------+-----------------+-------------+----------+------------+---------+
| | | | | | | | |
+----+-------------+-------------+-----------------+-------------+----------+------------+---------+
| | Totals | | | 120,750,000 | | | |
+----+-------------+-------------+-----------------+-------------+----------+------------+---------+
| | 1. The above share options vest equally over a 3 year period from the date of |
| | grant. The options are exercisable at any time after vesting during the Directors |
| | period as an eligible employee until the tenth anniversary of admission. |
+----+---------------------------------------------------------------------------------------------+
| | |
+----+---------------------------------------------------------------------------------------------+
| | During the year ended 30 June 2009, the company cancelled 52,000,000 options, and |
| | replaced these with new options as in the 29 January 2009 issues as above. |
+----+-------------+------+------+------+----------+-------------+----------+------------+---------+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+-----------------+-------------------+-------------------+------------+------------+
| 21 | Share Based Payments (continued) |
+-----------------+-----------------------------------------------------------------+
| The fair value of the options granted during the year ended 30 June 2009 amounted |
| to $2.489million, and the fair value of the cancelled options was $1.061million, |
| giving a net charge to the income statement of $0.607million, and net charge to |
| the share premium of $0.82million. The assessed fair value at grant date is |
| determined using the Black-Scholes Model that takes into account the exercise |
| price, the term of the option, the share price at grant date, the expected price |
| volatility of the underlying share, the expected dividend yield and the risk-free |
| interest rate for the term of the option. |
+-----------------------------------------------------------------------------------+
| The following table lists the inputs to the models used for the period ended 30 |
| June 2009: |
+-----------------------------------------------------------------------------------+
| | 29 January 2009 | 6 May 2009 issue | 8 June 2009 issue |
| | issue | | |
+-----------------+-------------------+-------------------+-------------------------+
| Dividend Yield | - | - | - |
| (%) | | | |
+-----------------+-------------------+-------------------+-------------------------+
| Expected | 60.0 | 60.0 | 60.0 |
| Volatility (%) | | | |
+-----------------+-------------------+-------------------+-------------------------+
| Risk-free | 3.66 | 3.66 | 3.66 |
| interest rate | | | |
| (%) | | | |
+-----------------+-------------------+-------------------+-------------------------+
| Share price at | 0.0317 | 0.0342 | 0.043 |
| grant date | | | |
| (GBP) | | | |
| | | | |
+-----------------+-------------------+-------------------+-------------------------+
| The expected volatility reflects the assumption that the historical volatility is |
| indicative of future trends, which may not necessarily be the actual outcome. |
+-----------------+-------------------+-------------------+------------+------------+
+----------------------------+----------------------------+------------+------------+------------+----------+
| 22 | Analysis of changes in net | 2009 | 2008 |
| | funds | | |
+ +----------------------------+-------------------------+-----------------------+
| | | Group | Company | Group | Company |
+ +----------------------------+----------------------------+------------+------------+------------+
| | | $ 000's | $ 000's | $ 000's | $ 000's |
| | | | | | |
+----------------------------+----------------------------+----------------------------+------------+------------+------------+
| | Balance at beginning of | 115,974 | 113,674 | - | - |
| | period | | | | |
+----------------------------+----------------------------+------------+------------+------------+----------+
| | Net change during the | (103,686) | (101,386) | 115,974 | 113,674 |
| | period | | | | |
+----------------------------+----------------------------+------------+------------+------------+----------+
| | Balance at the end of the | 12,288 | 12,288 | 115,974 | 113,674 |
| | period | | | | |
+----------------------------+----------------------------+------------+------------+------------+----------+
+-----+-----------------------------------------+--------------------+------------+
| 23 | Financial instruments | | |
+-----+-----------------------------------------+--------------------+------------+
| | The Group uses financial instruments comprising cash, liquid resources |
| | and debtors/creditors that arise from its operations. The Group holds |
| | cash as a liquid resource to fund the obligations of the Group. The |
| | Group's cash balances are held in Sterling, US Dollars, Canadian Dollars |
| | and in Australian Dollars. The Group's strategy for managing cash is to |
| | maximize interest income whilst ensuring its availability to match the |
| | profile of the Group's expenditure. This is achieved by regular |
| | monitoring of interest rates and monthly review of expenditure forecasts. |
| | The Company has a policy of not hedging and therefore takes market rates |
| | in respect of foreign exchange risk, however it does review its currency |
| | exposures on an ad hoc basis. Currency exposures relating to monetary |
| | assets held by foreign operations are included within the foreign |
| | exchange reserve in the Group Balance Sheet. |
| | The Group considers on an ongoing basis the credit ratings of banks in |
| | which it holds funds in order to reduce exposure to credit risk. |
| | To date the Group has relied upon equity funding to finance operations. |
| | The Directors are confident that adequate cash resources exist to finance |
| | operations to commercial exploitation but controls over expenditure are |
| | carefully managed. |
+-----+-----------------------------------------+--------------------+------------+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+-----+---------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----------+
| 23 | Financial instruments (continued) | | |
+-----+---------------------------------------+-----------------------+-----------------+
| | The net fair value of financial assets and liabilities approximates the |
| | carrying values disclosed in the financial statements. The currency and |
| | interest rate profile of the financial assets is as follows: |
+-----+---------------------------------------------------------------------------------+
| | Cash and short term | 2009 | 2008 |
| | deposits | | |
+-----+---------------------+-----------------------------+-----------------------------+
| | | Group | Company | Group | Company |
+-----+---------------------+-----------+-----------------+-----------------+-----------+
| | | $ 000's | $ 000's | $ 000's | $ 000's |
| | | | | | |
+-----+---------------------+-----------+-----------------+-----------------+-----------+
| | Sterling | 5,625 | 5,625 | 113,674 | 113,674 |
+-----+---------------------+-----------+-----------------+-----------------+-----------+
| | USD | 5,591 | 5,591 | 2,300 | - |
+-----+---------------------+-----------+-----------------+-----------------+-----------+
| | Australian Dollars | 1,072 | 1,072 | - | - |
+-----+---------------------+-----------+-----------------+-----------------+-----------+
| | At 30 June | 12,288 | 12,288 | 115,974 | 113,674 |
+-----+---------------------+-----------+-----------------+-----------------+-----------+
| | | | |
+-----+---------------------------------------------------+-----------------+-----------+
| | The financial assets comprise cash balances in current and interest earning |
| | bank accounts at call. The financial assets earn a range of interest rates |
| | throughout the period depending on rates available and ongoing cash commitments |
| | at any one point in time. |
+-----+---------------------------------------------------------------------------------+
| | |
+-----+---------------------------------------------------------------------------------+
| | Foreign currency risk |
+-----+---------------------------------------------------------------------------------+
| | The following table details the Group's sensitivity to a 10% increase and |
| | decrease in the US Dollar against the relevant foreign currency of Pound |
| | Sterling. 10% represents management's assessment of the reasonably possible |
| | change in foreign exchange rates. |
| | The sensitivity analysis includes only outstanding foreign currency denominated |
| | investments and other financial assets and liabilities and adjusts their |
| | translation at the period end for a 10% change in foreign currency rates. The |
| | following table sets out the potential exposure, where the 10% increase or |
| | decrease refers to a strengthening or weakening of the US Dollar: |
| | |
+-----+---------------------------------------------------------------------------------+
| | | Profit or loss sensitivity | Equity sensitivity |
+-----+---------------+-----------------------------+-----------------------------------+
| | | 10% | 10% decrease | 10% | 10% decrease |
| | | increase | | increase | |
+-----+---------------+-----------+-----------------+-----------+-----------------------+
| | | $ 000's | $ 000's | $ 000's | $ 000's |
+-----+---------------+-----------+-----------------+-----------+-----------------------+
| | Pound | (3,211) | 3,211 | (33,717) | 33,717 |
| | Sterling | | | | |
+-----+---------------+-----------+-----------------+-----------+-----------------------+
| | |
+-----+---------------------------------------------------------------------------------+
| | Rates of exchange to US$1 used in the financial statements were as follows: |
+-----+---------------------------------------------------------------------------------+
| | | As at 30 |Average for the | As at 30 | Average for the |
| | |June 2009 | relevant |June 2008 | period to 30 June |
| | | | consolidated | | 2008 |
| | | | period to 30 | | |
| | | | June 2009 | | |
+-----+---------------+-----------+-----------------+-----------+-----------------------+
| | | | | | |
+-----+---------------+-----------+-----------------+-----------+-----------------------+
| | Pound | 0.60546 | 0.62696 | 0.50140 | 0.50534 |
| | Sterling | | | | |
| | (GBP) | | | | |
+-----+---------------+-----+-----+-----+-----+-----+-----+-----+-----+-----+-----------+
+----+----------------------------------------------+--------+-----------------------+--+
| 24 | Material non-cash transactions | | | |
+----+----------------------------------------------+--------+-----------------------+--+
| | * On 30 January 2009, the company issued 33,776,057 shares as remuneration |
| | to directors as part of continuing remuneration for services.* |
| | On 3 March 2009, the company issued 162,629,750 shares in consideration for |
| | the acquisition of GBP4.7million of 8.5% Convertible Loan Notes in Caledon |
| | Resources Plc.* |
| | On 6 May 2009, the company issued 66,000,000 shares to consultants on |
| | completion of the Joint Venture Agreement, with Peabody Holland BV.* |
| | On 11 May 2009, the company issued 50,000,000 shares as remuneration to |
| | directors and consultants as part of continuing remuneration for services. |
| | |
+----+----------------------------------------------+--------+-----------------------+--+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+--------------------------------------+-------+-----+------------+-----+-----+-----+-----+
| 25 | Commitments | | |
+--------------------------------------+-------------+------------------------+-----------+
| | As at 30 June 2009, the Company had entered |
| | into the following material commitments: |
+--------------------------------------+--------------------------------------------------+
| | | | |
+--------------------------------------+-------------+------------------------+-----------+
| | Exploration commitments |
| | Ongoing exploration expenditure is required to |
| | maintain title to the Group's mineral |
| | exploration permits. No provision has been |
| | made in the financial statements for these |
| | amounts as the expenditure is expected to be |
| | fulfilled in the normal course of the |
| | operations of the Group. |
| | Other commitments |
| | Polo entered into a Venture Services Agreement |
| | on 3 April 2009, with American Patriot |
| | International, LLC (AmPat) for a 3 year term |
| | of the provision of services in respect of the |
| | Group's joint venture in Mongolia. Polo are |
| | committed to fees of US$300,000 per annum for |
| | the term of the agreement. |
+--------------------------------------+--------------------------------------------------+
| | | | |
+--------------------------------------+-------------+------------------------+-----------+
| 26 | Business | | |
| | combination | | |
| | - Group | | |
+--------------------------------------+-------------+------------------------+-----------+
| Disposal of Peabody-Polo Resources | | | |
| BV("PPR") | | | |
+--------------------------------------+-------------+------------+-----------+
| | | | |
+--------------------------------------+-------------+------------+-----------+
| On 4th May 2009 Polo Resources Ltd through its indirect subsidiary Polo |
| Resources Cooperatief U.A, was deemed to have disposed of 50% of PPR, a |
| company based in Dutch Antilles. This deemed disposal occurred through a |
| share subscription issue in PPR, subscribed to by Peabody Holland BV for |
| $23million, for a 50% share in the newly formed Joint Venture company. |
| The fair value of identifiable assets and liabilities of PPR as at the |
| date of disposal were: |
+-----------------------------------------------------------------------------+
| | | | Fair |
| | | | value |
+--------------------------------------+-------------+------------+-----------+
| | | | $'000 |
+--------------------------------------+-------------+------------+-----------+
| | | | |
+--------------------------------------+-------------+------------+-----------+
| Intangible assets | | | 68,052 |
+--------------------------------------+-------------+------------+-----------+
| Property, plant and equipment | | | 3,005 |
+--------------------------------------+-------------+------------+-----------+
| Cash and cash equivalents | | | 231 |
+--------------------------------------+-------------+------------+-----------+
| Trade and other receivables | | | 5,850 |
+--------------------------------------+-------------+------------+-----------+
| | | | 77,138 |
+--------------------------------------+-------------+------------+-----------+
| | | | |
+--------------------------------------+-------------+------------+-----------+
| Trade and other payables | | | (2,136) |
+--------------------------------------+-------------+------------+-----------+
| Other payables | | | (6,572) |
+--------------------------------------+-------------+------------+-----------+
| | | | |
+--------------------------------------+-------------+------------+-----------+
| Fair value of net assets | | | 68,430 |
+--------------------------------------+-------------+------------+-----------+
| | | | |
+--------------------------------------+-------------+------------+-----------+
| The cash outflow on disposal was as | | | |
| follows; | | | |
+--------------------------------------+-------------+------------+-----------+
| Net cash disposed with subsidiary | | | (231) |
+--------------------------------------+-------------+------------+-----------+
| Cash received | | | - |
+--------------------------------------+-------------+------------+-----------+
| Net cash (outflow) | | | (231) |
+--------------------------------------+-------------+------------+-----------+
| | | | |
+--------------------------------------+-------------+------------+-----------+
| The analysis of the net loss arising on the deemed disposal of PPR |
| recognised in the income statement is as follows: |
| |
+-----------------------------------------------------------------------------+
| Share of Net Assets disposed of | | | (22,715) |
| following share issue in PPR | | | |
+--------------------------------------+-------------+------------+-----------+
| Less: share of fair value uplift in | | | 19,203 |
| PPR's intangible assets disposed of | | | |
+--------------------------------------+-------------+------------+-----------+
| | | | |
+--------------------------------------+-------------+------------+-----------+
| (Loss) on deemed disposal recognised | | | (3,512) |
| in the income statement | | | |
+--------------------------------------+-------------+------------+-----------+
| | | | |
+--------------------------------------+-------+-----+------------+-----+-----+-----+-----+
Notes to Financial Statements
for the year ended 30 June 2009, continued
+-----+----------------------------------------+-------+-------+-------+-------------+
| 27 | Related party transactions | | |
+-----+------------------------------------------------+---------------+-------------+
| | Transactions between the company and its subsidiaries, which are related |
| | parties, have been eliminated on consolidation and are not disclosed in this |
| | note. Transactions between other related parties are discussed below. |
| | During the period, the Group paid costs of $Nil (2008: $423,338) to Asia |
| | Intercept Mongolia LLC, a Company related to Tony Bainbridge and Danny Sun, |
| | Directors' of Polo Resources Ltd. This amount was paid under a management |
| | services agreement dated 29 January 2008 and primarily related to the |
| | provision of labour, office and associated operational costs in Mongolia |
| | prior to Polo procuring its own facilities and resources. |
| | The Group also incurred costs of GBP254,250 (2008: GBP40,416) to Regent |
| | Mercantile Ltd during the period, a Company under the control of Mr. S |
| | Dattels, Chairman of Polo Resources Ltd. This was expended for the provision |
| | of administration and support services at cost and recharge of direct |
| | related expenses. |
| | During the period, the Group also paid US$107,000 (2008: GBP46,178) to its |
| | subsidiary Polo Australia Pty Ltd to meet costs due on a research project |
| | 'Pipeline' for the distribution of coal using a pipeline system. This |
| | research project belongs to an Australian based company in respect of which |
| | Mr. P Ingram, Director of Polo Resources Ltd is a shareholder. Polo |
| | terminated this project during the period to concentrate on other business |
| | opportunities.. |
| | The terms and conditions for the above transactions are based on normal |
| | trade terms. |
| | |
+-----+------------------------------------------------------------------------------+
| | Remuneration of Key Management Personnel |
| | The remuneration of the directors, and other key management personnel of the |
| | Group, is set out below in aggregate for each of the categories specified in |
| | IAS24 Related party Disclosures. |
| | |
+-----+------------------------------------------------------------------------------+
| | | 2009 | 2008 |
+-----+----------------------------------------+---------------+---------------------+
| | | $ 000's | $ 000's |
| | | | |
+-----+----------------------------------------+---------------+---------------------+
| | Short-term employee benefits | 1,228 | 1,017 |
+-----+----------------------------------------+---------------+---------------------+
| | Share-based payments | 3,721 | 1,890 |
+-----+----------------------------------------+---------------+---------------------+
| | | 4,949 | 2,907 |
+-----+----------------------------------------+---------------+---------------------+
| | | | |
+-----+----------------------------------------+-------+-------+-------+-------------+
+-----+-----------------------------------------+--------------------+-------------+
| 28 | Post balance sheet events | | |
+-----+-----------------------------------------+--------------------+-------------+
| | On 7 July 2009, Anthony Bainbridge resigned as a non-executive director of |
| | the company. |
+-----+----------------------------------------------------------------------------+
| | |
+-----+-----------------------------------------+--------------------+-------------+
Corporate Information
+-----------------------+------------------------------------------------+
| Registered number | 1406187 registered in British Virgin Islands |
| | |
+-----------------------+------------------------------------------------+
| Directors | Stephen Dattels - Executive Chairman |
| | Neil Herbert - Managing Director |
| | Paul Ingram -Chief Executive Officer for |
| | Australia |
| | Guy Elliott - Senior Non Executive Director |
| | Bryan Smith - Non Executive Director |
| | James Mellon - Non Executive Director |
| | |
+-----------------------+------------------------------------------------+
| | |
+-----------------------+------------------------------------------------+
| Registered Office | Craigmuir Chambers |
| | Road Town, Tortola |
| | British Virgin Islands VG 1110 |
| | |
+-----------------------+------------------------------------------------+
| | Email: info@poloresources.com |
| | Website: www.poloresources.com |
| | |
+-----------------------+------------------------------------------------+
| Auditors | Chapman Davis LLP |
| | 2 Chapel Court |
| | London SE1 1HH |
| | United Kingdom |
| | |
+-----------------------+------------------------------------------------+
| Solicitors | Charles Russell LLP |
| | 5 Fleet Place |
| | London EC4M 7RD |
| | United Kingdom |
+-----------------------+------------------------------------------------+
| | |
+-----------------------+------------------------------------------------+
| Nominated Advisor & | Canaccord Adams Limited |
| Broker | Cardinal Place, 7th Floor |
| | 80 Victoria Street |
| | London SW1E 5JL |
| | United Kingdom |
+-----------------------+------------------------------------------------+
| | |
+-----------------------+------------------------------------------------+
| | |
+-----------------------+------------------------------------------------+
| Registrars | Computershare Investor Services (Channel |
| | Islands) Ltd |
| | PO Box 83 |
| | Ordnance House, 31 Pier Road |
| | St Helier JE4 8PW |
| | Channel Islands |
+-----------------------+------------------------------------------------+
| | |
+-----------------------+------------------------------------------------+
| Principal Bankers | HSBC Bank Plc |
| | 91 High Street, |
| | Brentwood, |
| | Essex, CM14 4RU |
| | United Kingdom |
+-----------------------+------------------------------------------------+
| | |
+-----------------------+------------------------------------------------+
| | |
+-----------------------+------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UNOVRKVRRAAA
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