TIDMNBR
RNS Number : 2048Y
Namibian Resources PLC
28 August 2009
?
For immediate release
28 August 2009
Namibian Resources Plc ("the Company")
Annual Report and Accounts for the year ended 28 February 2009
The Company today announces its final results for the year ended 28 February
2009. The Annual Report and Accounts, together with the Notice of Annual General
Meeting, are being posted to shareholders today, and are also available on the
Company's website www.namibianresources.com. The Annual General Meeting will be
held at 36 Dover Street, London W1S 4NH on Tuesday 6 October 2009 at 11.00.
Chairman's statement
YEAR ENDED 28 February 2009
The year to 28th February 2009 was disappointing with turnover decreasing from
GBP140,622 to GBP127,580 resulting in a loss of GBP492,485. The most notable
event during the year was the near collapse of the international diamond market
in the latter part of 2008. Consequent on this, Namdeb imposed production
restrictions on all its contractor operations and in December 2008 Sonnberg
Diamonds ceased production. Total production of diamonds during the year was
1,815 ct, a decrease on the previous year's total of 2,126 ct. Because of the
halt to mining in December, the actual monthly rate of production was a slight
improvement on the previous year. For much of the year mining operations
experienced inflationary pressures, primarily due to fuel cost increases but
rationalisation of operations meant that monthly costs were slightly reduced up
till the close down in December. Since December staff has been reduced to a
small core group responsible for care and maintenance of the equipment.
Since the year-end Sonnberg's operations in Namibia have remained on a
care-and-maintenance basis and the Directors have continued to support the
company with unsecured, interest-free loans, which totalled GBP350,000 at 28
February 2009.
In recent weeks the price falls seen in the international diamond market in the
early part of the year have ceased and some price stability has returned to the
market albeit at lower price levels than in recent years. Renewed demand is
being experienced for good quality diamonds and Namibian Resources is currently
examining whether Sonnberg's operations can be restarted in the near future.
It was announced last year that the company would try and raise funds for
expansion but the downturn in the diamond market precluded this. After the year
end the company has changed brokers (to Keith, Bayley, Rogers) and Nominated
Advisors (to Beaumont Cornish). With continuing stability in the diamond market
the board intends to examine again the possibility of raising funds and will
make an announcement when appropriate.
I would like to thank all members of our staff here and in Namibia for their
efforts in the continuing difficult times.
Lord Sheppard of Didgemere KCVO Kt.
Enquiries: Tony Carlton, Namibian Resources Plc Tel: 020 8726 0900
Roland Cornish, Beaumont Cornish Limited Tel: 020 7628
3396
Namibian Resources Plc
Review of Operations
YEAR ENDED 28 February 2009
Review of Operations
The focus of the company's operations during the year continued to be the SW
corner of the Pomona concession and adjacent areas. This area is characterised
by large average sized diamonds and the historic sampling that has taken place
in the Pomona concession has been inadequate to identify or characterise all the
deposits in this area.
The major operational event in the year was the sudden downturn in the
international diamond market in late 2008. This severely impacted Namdeb, to
whom Sonnberg Diamonds is contracted, and as a consequence Sonnberg's active
operations were terminated in the second week of December 2008. The operations
year has therefore only been of 9½ months duration. Since that time equipment
has been maintained on a care-and-maintenance basis on site.
Total production for the year was 1,815 ct, derived from mining and prospecting
activities. This was only slightly below the previous year's level of production
despite the short operating year. However, compared with previous years the
level of production is down significantly reflecting the lower grade of the
deposits being mined and poor equipment availability.
The greatest part of the production (1,369 ct) came from the Salzpfanne deposit.
As mentioned in last year's report, mining at the southern end of this deposit
continues to be limited by a high water table. Mining has therefore progressed
northwards in an upslope direction although this has led to a corresponding
reduction in average diamond size from 0.45 ct/st at the beginning of the year
to 0.36 ct/st when mining was suspended. To date over 2,300 ct have been
produced from this deposit, leaving rather less than 2,000 ct from the original
resource estimate. However, not all of the deposit may be mined because of the
high water table.
A second screening plant was brought into operation at the small East Salztal
North deposit which was mined for part of the year producing 407 ct.
The screening plant in East Salztal North was also used for processing deposit
from prospecting operations. The East Salztal South deposit was prospected. The
initial trench sample results produced a number of +1 ct diamonds but subsequent
sampling established that only a small deposit is present albeit with an overall
average diamond size of 0.69 ct/st.
Sampling was completed in the main part of the Hannahtal North deposit, with
almost all samples being diamond positive. A small side valley remains to be
sampled to complete the sampling programme. The average size of diamonds
recovered to date is 0.54 ct/st.
A programme of bedrock cleaning on either side of a natural bedrock ridge that
crossed the floor of the Annatal SE valley was carried out. The volume of
deposit was very small and although a relatively elevated grade was encountered
actual production was only just over 4 ct.
A major factor for operations during the majority of the year was the steady
increase in the price of diesel, fuel accounting for over 25% of Sonnberg's
operating costs. Continuous efforts have been made to contain all costs and over
the year there had been no increase in total operating costs.
Since the year end all mining and prospecting operations have been at a
standstill and equipment is being maintained on site. Geological studies are
being carried out in order to refine the geological model of the Pomona area and
the diamond deposits. The objectives are to identify targets for future sampling
and to improve resource estimation.
Namibian Resources Plc
Consolidated income statement for the year ended 28 February 2009
+----------------------------------------------+------------+---------------------------+---------------------------+
| | Note | 2009 | 2008 |
+----------------------------------------------+------------+---------------------------+---------------------------+
| | | GBP | GBP |
+----------------------------------------------+------------+---------------------------+---------------------------+
| Revenue | 1.7 | 127,580 | 140,622 |
+----------------------------------------------+------------+---------------------------+---------------------------+
| Cost of sales | | (414,848) | (234,943) |
+----------------------------------------------+------------+---------------------------+---------------------------+
| | | ________ | ________ |
+----------------------------------------------+------------+---------------------------+---------------------------+
| Gross loss | | (287,268) | (94,321) |
+----------------------------------------------+------------+---------------------------+---------------------------+
| | | | |
+----------------------------------------------+------------+---------------------------+---------------------------+
| Administrative expenses | | (206,506) | (210,317) |
+----------------------------------------------+------------+---------------------------+---------------------------+
| | | ________ | ________ |
+----------------------------------------------+------------+---------------------------+---------------------------+
| Operating loss | 3 | (493,774) | (304,638) |
+----------------------------------------------+------------+---------------------------+---------------------------+
| | | | |
+----------------------------------------------+------------+---------------------------+---------------------------+
| Other interest receivable and similar income | | | |
| | | 1,289 | 6,470 |
+----------------------------------------------+------------+---------------------------+---------------------------+
| | | ________ | ________ |
+----------------------------------------------+------------+---------------------------+---------------------------+
| (Loss)/Profit before tax | | (492,485) | (298,168) |
+----------------------------------------------+------------+---------------------------+---------------------------+
| | | | |
+----------------------------------------------+------------+---------------------------+---------------------------+
| Income tax expense | 4 | - | - |
+----------------------------------------------+------------+---------------------------+---------------------------+
| | | ________ | ________ |
+----------------------------------------------+------------+---------------------------+---------------------------+
| | | | |
| (Loss)/Profit after tax | | GBP(492,485) | GBP(298,168) |
+----------------------------------------------+------------+---------------------------+---------------------------+
| | | | |
+----------------------------------------------+------------+---------------------------+---------------------------+
| Earnings per share (pence) | 5 | | |
+----------------------------------------------+------------+---------------------------+---------------------------+
| Basic | | (1.23) | (0.78) |
+----------------------------------------------+------------+---------------------------+---------------------------+
| Diluted | | (1.23) | (0.78) |
+----------------------------------------------+------------+---------------------------+---------------------------+
All amounts relate to continuing activities.
Consolidated statement of total recognised income and expense for the year ended
28 February 2009
+---------------------------------------------------------+---------------------------+-----------------------------+
| | 2009 | 2008 |
| | GBP | GBP |
| | | |
+---------------------------------------------------------+---------------------------+-----------------------------+
| Exchange difference on translation of foreign | | |
| operations | 76,945 | (178,543) |
+---------------------------------------------------------+---------------------------+-----------------------------+
| | ________ | ________ |
+---------------------------------------------------------+---------------------------+-----------------------------+
| Net income (expense) recognised directly in equity | 76,945 | (178,543) |
+---------------------------------------------------------+---------------------------+-----------------------------+
| (Loss)/Profit for the financial year | (492,485) | (298,168) |
+---------------------------------------------------------+---------------------------+-----------------------------+
| | ________ | ________ |
+---------------------------------------------------------+---------------------------+-----------------------------+
| Total recognised income and expense for the year | | |
| | GBP(415,540) | GBP(476,711) |
+---------------------------------------------------------+---------------------------+-----------------------------+
| | ________ | ________ |
+---------------------------------------------------------+---------------------------+-----------------------------+
| | | |
+---------------------------------------------------------+---------------------------+-----------------------------+
Namibian Resources Plc
Consolidated balance sheet at 28 February 2009
+---------------------------+------+------------+--------------+--------------+--------------+
| | Note | 2009 | 2009 | 2008 | 2008 |
| | | | | | |
+---------------------------+------+------------+--------------+--------------+--------------+
| Assets | | GBP | GBP | GBP | GBP |
+---------------------------+------+------------+--------------+--------------+--------------+
| Non current assets | | | | | |
+---------------------------+------+------------+--------------+--------------+--------------+
| Intangible assets: | | | | | |
+---------------------------+------+------------+--------------+--------------+--------------+
| Mining rights and | 7 | 914,571 | | 860,499 | |
| exploration costs | | | | | |
+---------------------------+------+------------+--------------+--------------+--------------+
| | | ________ | | ________ | |
+---------------------------+------+------------+--------------+--------------+--------------+
| | | | 914,571 | | 860,499 |
+---------------------------+------+------------+--------------+--------------+--------------+
| Property, Plant and | 8 | | 913,712 | | 970,106 |
| Equipment | | | | | |
+---------------------------+------+------------+--------------+--------------+--------------+
| | | | ________ | | ________ |
+---------------------------+------+------------+--------------+--------------+--------------+
| | | | 1,828,283 | | 1,830,605 |
+---------------------------+------+------------+--------------+--------------+--------------+
| Current assets | | | | | |
| Inventories | 10 | 31,967 | | 32,673 | |
+---------------------------+------+------------+--------------+--------------+--------------+
| Trade and other | 11 | 36,165 | | 26,363 | |
| receivables | | | | | |
+---------------------------+------+------------+--------------+--------------+--------------+
| Cash and cash equivalents | 13 | 36,739 | | 103,500 | |
+---------------------------+------+------------+--------------+--------------+--------------+
| | | ________ | | ________ | |
+---------------------------+------+------------+--------------+--------------+--------------+
| | | | 104,871 | | 162,536 |
+---------------------------+------+------------+--------------+--------------+--------------+
| | | | | | |
| Total Assets | | | GBP1,933,154 | | GBP1,993,141 |
+---------------------------+------+------------+--------------+--------------+--------------+
| | | | ________ | | ________ |
+---------------------------+------+------------+--------------+--------------+--------------+
| | | | | | |
+---------------------------+------+------------+--------------+--------------+--------------+
| Equity and Liabilities | | | | | |
+---------------------------+------+------------+--------------+--------------+--------------+
| | | | | | |
+---------------------------+------+------------+--------------+--------------+--------------+
| Share capital | 14 | | 3,992,246 | | 3,992,246 |
+---------------------------+------+------------+--------------+--------------+--------------+
| Share premium account | 15 | | 359,384 | | 359,384 |
+---------------------------+------+------------+--------------+--------------+--------------+
| Foreign exchange reserve | 17 | | 176,507 | | 99,562 |
+---------------------------+------+------------+--------------+--------------+--------------+
| Retained earnings | 16 | | (3,001,656) | | (2,509,171) |
+---------------------------+------+------------+--------------+--------------+--------------+
| | | | ________ | | ________ |
+---------------------------+------+------------+--------------+--------------+--------------+
| | | | | | |
+---------------------------+------+------------+--------------+--------------+--------------+
| Total equity | | | 1,526,481 | | 1,942,021 |
+---------------------------+------+------------+--------------+--------------+--------------+
+------------------------------------+--------+----------------+----------------+-------------------+-------------------+
| Current Liabilities | | | | | |
+------------------------------------+--------+----------------+----------------+-------------------+-------------------+
| Trade and other payables | 12 | | 406,673 | | 51,120 |
+------------------------------------+--------+----------------+----------------+-------------------+-------------------+
| | | | ________ | | ________ |
+------------------------------------+--------+----------------+----------------+-------------------+-------------------+
| | | | | | |
| Total Equity and liabilities | 18 | | GBP1,933,154 | | GBP1,993,141 |
+------------------------------------+--------+----------------+----------------+-------------------+-------------------+
| | | | ________ | | ________ |
+------------------------------------+--------+----------------+----------------+-------------------+-------------------+
Namibian Resources Plc
Company balance sheet at 28 February 2009
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| | Note | | 2009 | | 2008 |
| | | | | | |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| | | | GBP | | GBP |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| Assets | | | | | |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| Non-current assets | | | | | |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| Investments | 9 | | 4,392,108 | | 4,091,729 |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| | | | | | |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| Current assets | | | | | |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| Cash and cash equivalents | | | 25,681 | | 103,338 |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| | | | ________ | | ________ |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| | | | | | |
| Total Assets | | | 4,417,789 | | 4,195,067 |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| | | | ________ | | ________ |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| | | | | | |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| Equity | | | | | |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| Share capital | 14 | | 3,992,246 | | 3,992,246 |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| Share premium account | 15 | | 359,384 | | 359,384 |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| Retained earnings | 16 | | (308,394) | | (175,438) |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| | | | ________ | | ________ |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| | | | | | |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| Total Equity | 18 | | 4,043,236 | | 4,176,192 |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| | | | | | |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| Current Liabilities | | | | | |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| Trade and other payables | 12 | | 374,553 | | 18,875 |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| | | | ________ | | ________ |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| | | | | | |
| Total Liabilities | | | GBP4,417,789 | | GBP4,195,067 |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| | | | ________ | | ________ |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
| | | | | | |
+---------------------------------+--------+-----------------+-------------------+-------------------+------------------+
Namibian Resources Plc
Statement of changes in equity for the year ended 28 February 2009
+-------------------------------------------------------------+--------------------+----------------------------+
| | 2009 | 2008 |
+-------------------------------------------------------------+--------------------+----------------------------+
| | GBP | GBP |
+-------------------------------------------------------------+--------------------+----------------------------+
| Group | | |
+-------------------------------------------------------------+--------------------+----------------------------+
| Opening balance | 1,942,021 | 2,218,732 |
+-------------------------------------------------------------+--------------------+----------------------------+
| Loss for financial year | (492,485) | (298,168) |
+-------------------------------------------------------------+--------------------+----------------------------+
| Issue of shares | - | 200,000 |
+-------------------------------------------------------------+--------------------+----------------------------+
| Translation reserve | 76,945 | (178,543) |
+-------------------------------------------------------------+--------------------+----------------------------+
| | ________ | ________ |
+-------------------------------------------------------------+--------------------+----------------------------+
| Closing balance | GBP1,526,481 | GBP1,942,021 |
+-------------------------------------------------------------+--------------------+----------------------------+
| | ________ | ________ |
+-------------------------------------------------------------+--------------------+----------------------------+
+-------------------------------------------------------------+--------------------+----------------------------+
| | 2009 | 2008 |
+-------------------------------------------------------------+--------------------+----------------------------+
| | GBP | GBP |
+-------------------------------------------------------------+--------------------+----------------------------+
| Company | | |
+-------------------------------------------------------------+--------------------+----------------------------+
| Opening balance | 4,176,192 | 3,076,564 |
+-------------------------------------------------------------+--------------------+----------------------------+
| Loss for financial year | (132,956) | (411,991) |
+-------------------------------------------------------------+--------------------+----------------------------+
| Issue of shares | - | 200,000 |
+-------------------------------------------------------------+--------------------+----------------------------+
| Prior years adjustments | - | 1,311,619 |
+-------------------------------------------------------------+--------------------+----------------------------+
| | ________ | ________ |
+-------------------------------------------------------------+--------------------+----------------------------+
| Closing balance | GBP4,043,236 | GBP4,176,192 |
+-------------------------------------------------------------+--------------------+----------------------------+
| | ________ | ________ |
+-------------------------------------------------------------+--------------------+----------------------------+
Namibian Resources Plc
Consolidated cash flow statement for the year ended 28 February 2009
+----------------------------------------------------------+-----------------+--------------------+-----------------+
| | Note | 2009 | 2008 |
+----------------------------------------------------------+-----------------+--------------------+-----------------+
| | | GBP | GBP |
+----------------------------------------------------------+-----------------+--------------------+-----------------+
| | | | |
+----------------------------------------------------------+-----------------+--------------------+-----------------+
| Cash generated from operating activities | 20 | 15,454 | (70,548) |
+----------------------------------------------------------+-----------------+--------------------+-----------------+
| | | | |
+----------------------------------------------------------+-----------------+--------------------+-----------------+
| Cash flow from investing activities | | | |
+----------------------------------------------------------+-----------------+--------------------+-----------------+
| | | | |
+----------------------------------------------------------+-----------------+--------------------+-----------------+
| Purchase of intangible assets | | (47,809) | (279,457) |
+----------------------------------------------------------+-----------------+--------------------+-----------------+
| Purchase of property plant and equipment | | (35,695) | (125,003) |
+----------------------------------------------------------+-----------------+--------------------+-----------------+
| Interest Received | | 1,289 | 6,320 |
+----------------------------------------------------------+-----------------+--------------------+-----------------+
| | | ________ | ________ |
+----------------------------------------------------------+-----------------+--------------------+-----------------+
| | | | |
| Net cash used in investing activities | | (82,215) | (398,140) |
+----------------------------------------------------------+-----------------+--------------------+-----------------+
| | | | |
+----------------------------------------------------------+-----------------+--------------------+-----------------+
| Cash flow from financing activities | | | |
+----------------------------------------------------------+-----------------+--------------------+-----------------+
| Proceeds from issue of shares | | - | 200,000 |
+----------------------------------------------------------+-----------------+--------------------+-----------------+
| | | ________ | ________ |
+----------------------------------------------------------+-----------------+--------------------+-----------------+
| | | | |
+----------------------------------------------------------+-----------------+--------------------+-----------------+
| Net decrease in cash and cash equivalents | 22 | GBP(66,761) | GBP(268,688) |
+----------------------------------------------------------+-----------------+--------------------+-----------------+
| | | ________ | ________ |
+----------------------------------------------------------+-----------------+--------------------+-----------------+
| | | | |
+----------------------------------------------------------+-----------------+--------------------+-----------------+
Namibian Resources Plc
Notes forming part of the financial statements for the year ended 28
February 2009
1 Accounting policies
1. Presentation of Annual Financial Statements
The annual financial statements have been prepared for the first time in
accordance with International Financial Reporting Standards as adopted by the
European Union, and the Companies Act of 1985. The adoption of International
Financial Reporting Standards has resulted in the restatement of 2008 balances
to provide a like for like comparison. The financial impact of this change in
reporting is detailed after each of the above financial reports.
The annual financial statements have been prepared on the historical cost basis,
and incorporate the principal accounting policies set out below.
The group has not yet applied the following Accounting Standards and
Interpretations, which will be applicable to their annual financial statements,
that have been issued but are not yet effective:
+------------+-----------------------------------------------------------+---------------------------------------+
| IFRIC 15 | Arrangements for the Construction of Real Estate | (Effective 1 January 2009) |
+------------+-----------------------------------------------------------+---------------------------------------+
| IAS 1 | Presentation of Financial Statements - Comprehensive | (Effective 1 January 2009) |
| | revision including required a statements of comprehensive | |
| | income. | |
| | Amendments resulting from May 2009 Annual | |
| | Improvements to IFRSs | |
+------------+-----------------------------------------------------------+---------------------------------------+
| IAS 16 | Property, plant and equipment - Amendments resulting | (Effective 1 January 2009) |
+------------+-----------------------------------------------------------+---------------------------------------+
| | from May 2009 Annual Improvements to IFRSs | |
+------------+-----------------------------------------------------------+---------------------------------------+
| IAS 23 | Borrowing costs | (Effective 1 January 2009) |
+------------+-----------------------------------------------------------+---------------------------------------+
| IAS 32 | Financial Instruments: Presentation - Amendments relating | (Effective 1 January 2009) |
| | to puttable instruments and obligations arising on | |
| | liquidation | |
+------------+-----------------------------------------------------------+---------------------------------------+
| IAS 36 | Impairment of Assets - Amendments resulting from | (Effective 1 January 2009) |
| | May 2009 Annual Improvements to IFRSs | |
+------------+-----------------------------------------------------------+---------------------------------------+
| IAS 38 | Intangible Assets - amendments resulting from May 2009 | |
| | (Effective 1 January 2009) | |
| | Annual Improvements to IFRSs | |
+------------+-----------------------------------------------------------+---------------------------------------+
| IAS 39 | Financial Instruments: Recognition and Measurement | (Effective 1 January 2009) |
| | Amendments resulting from May 2009 Annual Improvements to | |
| | IFRSs. | |
+------------+-----------------------------------------------------------+---------------------------------------+
| IAS 40 | Investment Property | (Effective 1 January 2009) |
+------------+-----------------------------------------------------------+---------------------------------------+
| IAS 41 | Agriculture | (Effective 1 January 2009) |
+------------+-----------------------------------------------------------+---------------------------------------+
The directors anticipate that the adoption of these Standards and
Interpretations in future periods will have no material impact on the financial
statements of the company or the group.
1.1 Basis of Consolidation
The consolidated income statement account and balance sheet include the
financial statements of the company and its subsidiary undertakings made up to
28 February 2009. The results of subsidiaries sold or acquired are included in
the income statement up to, or from the date control passes. Intra-group sales
and profits are eliminated fully on consolidation.
The results of a holding in Oletu Investments Holdings (see Note 10) have not
been consolidated on account of it being immaterial.
1.2 Going Concern
Following the disruption and down turn in the Diamond Market in November 2008
the company has continued on a care and maintenance basis pending a resumption
of normal conditions. The company's ability to raise finance to expand
operations was curtailed by market conditions. However, the company will seek
additional finance to expand its operations when conditions in the Diamond
Market improve. To date, the company and the group have accumulated trading
losses since the commencement of mining activities and there are inherent
uncertainties in the mining industry, which make it impossible to predict when
the company will become profitable. Nevertheless, the directors remain confident
that the company and the group will trade profitably in the foreseeable future
and will be able to continue to meet its liabilities as they fall due.
We consider the company is a going concern because all equipment and services
are being maintained in order. All contracts and liabilities have been complied
with and met. Since February 28 2008 the Group has no outstanding liabilities
other than in the normal course of business and this will continue at least
until February 28 2010. There are no borrowings of any nature other than from
the Directors.
* Significant Judgements
In preparing the annual financial statements, management is required to make
estimates and assumptions that affect the amounts represented in the annual
financial statements and related disclosures. Use of available information and
the application of judgement is inherent in the formation of estimates. Actual
results in the future could differ from these estimates which may be material to
the annual financial statements. Significant judgements include:
Trade Receivables
The group assesses its trade receivables for impairment at each balance sheet
date. In determining whether an impairment loss should be recorded in the income
statement, the company makes judgements as to whether there is observable data
indicating a measurable decrease in the estimated future cash flows from a
financial asset.
Mining assets
The group assesses the proportion of exploration costs incurred which will
provide future economic benefits in identifying areas of interest where future
mining could be focused. These costs are capitalised and amortised over the
period of the mining licence.
Mining rights
The right of mining on the assigned area was initially valued by an independent
geologist. This right is yearly re-assessed for impairment by comparing the
value-in-use to the carrying value of the mining right.
1.4 Underlying concepts
The financial statements are prepared on the going concern basis using accrual
accounting.
Assets and liabilities and income and expenses are not offset unless
specifically permitted by an accounting standard.
Financial assets and financial liabilities are offset and the net amount
reported only when a currently legally enforceable right to set off the amounts
exists and the intention is either to settle on a net basis or to realise the
asset and settle the liability simultaneously.
The accounting policies adopted are consistent with those used in previous
financial periods except for
* Adoption of IFRS
Previously the company and its subsidiaries prepared the financial statements in
accordance with UK GAAP. The group elected to publish its first consolidated
interim financial statements to 31 August 2008 under IFRS with its transition
date to IFRS being 1st March 2006
* Introduction of IFRS - First time adoption
The rules for first time adoption of IFRS are set out in IFRS1, First-Time
Adoption of International Financial Reporting Standards. In general, selected
accounting policies must be applied retrospectively in determining the opening
balance sheet under IFRS. However, IFRS1 allows a number of exemptions to this
general principle.
Changes in accounting estimates are recognised in profit or loss.
Prior period errors are retrospectively restated unless it is impractical to do
so, in which case they are applied prospectively.
Accounting policies are not applied when the effect of applying them is
immaterial.
1.5 Recognition of Assets and Liabilities
Assets are only recognised if they meet the definition of an asset, it is
probable that future economic benefits associated with the asset will flow to
the company and the cost or fair value can be measured reliably.
Liabilities are only recognised if they meet the definition of a liability, it
is probable that future economic benefits associated with the liability will
flow from the company and the cost or fair value can be measured reliably.
Financial instruments are recognised when the company becomes a party to the
contractual provisions of the instrument.
Financial assets and liabilities as a result of firm commitments are only
recognised when one of the parties has performed under the contract.
Regular purchases and sales are recognised using trade date accounting.
1.6 Derecognition of Assets and Liabilities
Financial assets or parts thereof are derecognised when the contractual rights
to receive cash flows have been transferred or have expired or if substantially
all the risks and rewards of ownership have passed. Where substantially all the
risks and rewards of ownership have not been transferred or retained, the
financial assets are derecognised if they are no longer controlled. However, if
control in this situation is retained, the financial assets are recognised only
to the extent of the continuing involvement in those assets.
All other assets are derecognised on disposal or when no future economic
benefits are expected from their use or on disposal.
Financial liabilities are derecognised when the relevant obligation has either
been discharged or cancelled or has expired.
* Revenue
The total revenue of the group for the year has been derived from its principal
activity, mining, wholly undertaken by its subsidiary in Namibia, Sonnberg
Diamonds (Namibia) (Proprietary) Limited ("Sonnberg"). All sales are made in
Namibia and the majority of assets are also located in Namibia.
Turnover comprises of sales to customers and services rendered to customers.
Turnover is stated at the invoice amount and is exclusive of value added
taxation.
Revenue from the sale of goods is recognised when all the following conditions
have been satisfied:
* the company has transferred to the buyer the significant risks and rewards of
ownership of the goods;
* the company retains neither continuing managerial involvement to the degree
usually associated with ownership nor effective control over the goods sold;
* the amount of revenue can be measured reliably;
* it is probable that the economic benefits associated with the transaction will
flow to the company; and
* the costs incurred or to be incurred in respect of the transaction can be
measured reliably.
Revenue is measured at the fair value of the consideration received or
receivable and represents the amounts receivable for goods provided in the
normal course of business, net of trade discounts and volume rebates, and value
added tax.
Interest is recognised, in profit or loss, using the effective interest rate
method.
* Tax
Current tax assets and liabilities
Current tax for current and prior periods is, to the extent unpaid, recognised
as a liability. If the amount already paid in respect of current and prior
periods exceeds the amount due for those periods, the excess is recognised as an
asset.
Current tax liabilities (assets) for the current and prior periods are measured
at the amount expected to be paid to (recovered from) the tax authorities, using
the tax rates (and tax laws) that have been enacted or substantively enacted by
the balance sheet date.
Deferred tax assets and liabilities
A deferred tax liability is recognised for all taxable temporary differences,
except to the extent that the deferred tax liability arises from the initial
recognition of an asset or liability in a transaction which at the time of the
transaction, affects neither accounting profit nor taxable profit (tax loss).
A deferred tax asset is recognised for all deductible temporary differences to
the extent that it is probable that taxable profit will be available against
which the deductible temporary difference can be utilised. A deferred tax asset
is not recognised when it arises from the initial recognition of an asset or
liability in a transaction at the time of the transaction and affects neither
accounting profit nor taxable profit (tax loss).
A deferred tax asset is recognised for the carry forward of unused tax losses to
the extent that it is probable that future taxable profit will be available
against which the unused tax losses can be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply to the period when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the balance sheet date.
Tax expenses
Current and deferred taxes are recognised as income or an expense and included
in profit or loss for the period, except to the extent that the tax arises from:
* a transaction or event which is recognised, in the same or a different period,
directly in equity, or
* a business combination.
Current tax and deferred taxes are charged or credited directly to equity if the
tax relates to items that are credited or charged, in the same or a different
period, directly to equity.
1.9 Leases
A lease is classified as a finance lease if it transfers substantially all the
risks and rewards incidental to ownership. A lease is classified as an operating
lease if it does not transfer substantially all the risks and rewards incidental
to ownership.
Rentals payable under operating leases are charged against income on a
straight-line basis over the lease term.
1.10 Foreign Currency Translation
Monetary assets and liabilities denominated in foreign currencies are translated
into sterling at the rates of exchange ruling at the balance sheet date.
Transactions in foreign currencies are recorded at the rate ruling at the date
of the transaction.
The results of overseas operations are translated at the rate ruling at the date
of the transaction. However the balance sheet is translated at the rate ruling
at the date of the balance sheet. Exchange differences arising on translation of
opening assets are reported in the consolidated statement of recognised income
and expense.
1.11 Mining Assets
Exploration and evaluation costs other than future site identification costs are
expensed as incurred. Site identification costs related to areas of interest are
capitalised and carried forward to the extent that they are expected to be
recoverable.
Any changes in the estimates for the costs are accounted on a prospective basis.
In determining the costs of site restoration, there is uncertainty regarding the
nature and extent of
the restoration due to community expectations and future legislation.
Accordingly, the costs have been determined on the basis that the restoration
will be completed within one year of abandoning the site.
Mining assets are reviewed for impairment when facts and circumstances suggest
that the carrying amount of an exploration and evaluation asset may exceed its
recoverable amount. When facts and circumstances suggest that the carrying
amount exceeds the recoverable amount, the mining asset is written down to their
recoverable amount.
1.12 Rehabilitation Costs
Costs of site restoration are recognised when incurred. Site restoration costs
include the dismantling and removal and rehabilitation of the site in accordance
with the clauses of the mining permits. Such costs are charged to direct costs.
1.13 Intangible Assets
An intangible asset is recognised when:
* it is probable that the expected future economic benefits that are attributable
to the asset will flow to the entity; and
* the cost of the asset can be measured reliably.
Intangible assets are initially recognised at cost.
Intangible assets are carried at cost less any accumulated amortisation and any
impairment losses. Expenditure on acquired intangible assets are capitalised and
amortised using the straight-line method over their useful lives. Intangible
assets are not revalued. The carrying amount of each intangible asset is
reviewed annually and adjusted for impairment where it is considered necessary.
An intangible asset is regarded as having an indefinite useful life when, based
on all relevant factors, there is no foreseeable limit to the period over which
the asset is expected to generate net cash inflows. Amortisation is not provided
for these intangible assets. For all other intangible assets amortisation is
provided on a straight line basis over their useful life.
The amortisation period and the amortisation method for intangible assets are
reviewed every period-end.
Amortisation is provided to write down the intangible assets, on a straight line
basis, to their residual values as follows:
Items Useful life
Mining Rights 20 Years
Exploration Costs 10 Years
1.14 Investments
Fixed assets investments are stated at cost less provision for diminution in
value.
1.15 Property, Plant and Equipment
The cost of an item of property, plant and equipment is recognised as an asset
when:
* it is probable that future economic benefits associated with the item will flow
to the company;
* and the cost of the item can be measured reliably.
Costs include costs incurred initially to acquire or construct an item of
property, plant and equipment and costs incurred subsequently to add to, replace
part of, or service it. If a replacement cost is recognised in the carrying
amount of an item of property, plant and equipment, the carrying amount of the
replaced part is derecognised.
The initial estimate of the costs of dismantling and removing the item and
restoring the site on which it is located is also included in the cost of
property, plant and equipment.
Property, plant and equipment is carried at cost less accumulated depreciation
and any impairment losses. Depreciation is calculated on the straight-line
method to write off the cost of each asset to their residual values over their
estimated useful lives. Depreciation begins when an item of property, plant and
equipment is available for use and ends when the item is
derecognised, even if during that period the item was idle. The depreciation
rates applicable to each category of property, plant and equipment are as
follows:
Item Average useful Life
Plant and Machinery 10 years
Motor Vehicles 8 years
Office Equipment 5 years
The residual value and the useful life of each asset are reviewed at each
financial period-end.
Each part of an item of property, plant and equipment with a cost that is
significant in relation to the total cost of the item shall be depreciated
separately.
The depreciation charge for each period is recognised in profit or loss unless
it is included in the carrying amount of another asset.
The gain or loss arising from the derecognition of an item of property, plant
and equipment is included in profit or loss when the item is derecognised. The
gain or loss arising from the derecognition of an item of property, plant and
equipment is determined as the difference between the net disposal proceeds, if
any, and the carrying amount of the item.
* Impairment of Assets
The company assesses at each balance sheet date whether there is any indication
that an asset may be impaired. If any such indication exists, the group
estimates the recoverable amount of the asset.
Irrespective of whether there is any indication of impairment, the company also:
* tests intangible assets with an indefinite useful life or intangible assets not
yet available for use for impairment annually by comparing its carrying amount
with its recoverable amount. This impairment test is performed during the annual
period and at the same time every period.
* tests goodwill acquired in a business combination for impairment annually.
If there is any indication that an asset may be impaired, the recoverable amount
is estimated for the individual asset. If it is not possible to estimate the
recoverable amount of the individual asset, the recoverable amount of the
cash-generating unit to which the asset belongs is determined.
The recoverable amount of an asset or a cash-generating unit is the higher of
its fair value less costs to sell and its value in use.
If the recoverable amount of an asset is less than its carrying amount, the
carrying amount of the asset is reduced to its recoverable amount. That
reduction is an impairment loss.
An impairment loss of assets carried at cost less any accumulated depreciation
or amortisation is recognised immediately in profit or loss. Any impairment loss
of a revalued asset is treated as a revaluation decrease.
A reversal of an impairment loss of assets carried at cost less accumulated
depreciation or amortisation other than goodwill is recognised immediately in
profit or loss. Any reversal of an impairment loss of a revalued asset is
treated as a revaluation increase.
* Inventories
This represents inventories of consumable stores, held at the lower of cost and
net realisable value.
1.18 Financial Instruments
Initial Recognition
The group classifies financial instruments, or their component parts, on initial
recognition as a financial asset, a financial liability or an equity instrument
in accordance with the substance of the contractual arrangement.
Financial assets and financial liabilities are recognised on the group's balance
sheet when the company becomes party to the contractual provisions of the
instrument.
Loans to (from) Group Companies
These include loans to the subsidiary company and are recognised initially at
fair value plus direct transaction costs.
Subsequently these loans, where it is practicable to do so and it would have a
material effect on consolidated reporting, are measured at amortised cost using
the effective interest rate method, less any impairment loss recognised to
reflect irrecoverable amounts on loans receivable an impairment loss is
recognised in profit or loss when there is objective evidence that it is
impaired. The impairment is measured as the difference between the investment's
carrying amount and the present value of estimated future cash flows discounted
at the effective interest rate computed at initial recognition.
Impairment losses are reversed in subsequent periods when an increase in the
investment's recoverable amount can be related objectively to an event occurring
after the impairment was recognised, subject to the restriction that the
carrying amount of the investment at the date the impairment is reversed shall
not exceed what the amortised cost would have been had the impairment not been
recognised.
Trade and other Receivables
Trade receivables are measured at initial recognition at fair value, and are
subsequently measured at amortised cost using the effective interest rate
method. Appropriate allowances for estimated irrecoverable amounts are
recognised in profit or loss when there is objective evidence that the asset is
impaired. The allowance recognised is measured as the difference
between the asset's carrying amount and the present value of estimated future
cash flows discounted at the effective interest rate computed at initial
recognition.
Trade and other Payables
Trade payables are initially measured at fair value, and are subsequently
measured at amortised cost, using the effective interest rate method.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other
short-term highly liquid investments that are readily convertible to a known
amount of cash and are subject to an insignificant risk of changes in value.
These are initially and subsequently recorded at fair value.
1.19 Provisions and Contingencies
Provisions are recognised when:
* the company has a present obligation 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 obligation.
Where some or all of the expenditure required to settle a provision is expected
to be reimbursed by another party, the reimbursement shall be recognised when,
and only when, it is virtually certain that reimbursement will be received if
the entity settles the obligation. The reimbursement shall be treated as a
separate asset. The amount recognised for the reimbursement shall not exceed the
amount of the provision.
Provisions are not recognised for future operating losses.
If an entity has a contract that is onerous, the present obligation under the
contract shall be recognised and measured as a provision.
Contingent assets and contingent liabilities are not recognised.
* Executive Share Options
For equity-settled share-based payment transactions the group, in accordance
with IFRS2 (effective from 1st January 2006), measures their value, and the
corresponding increase in equity, indirectly, by reference to the fair value of
the equity instruments granted. The fair value of those equity instruments is
measured at grant date using the trinomial method. Where the expense is
material, it is apportioned over the vesting period of the financial instrument
and is based on the numbers which are expected to vest and the fair value of
those financial instruments at the date of the grant. If the equity instruments
granted vest immediately, the expense is recognised in full.
2. Employees
+---------------------------------------------------------------------+------------------------+--------------------+
| | | |
| | 2009 | 2008 |
| The average monthly number of employees, (including directors), | Number | Number |
| during the year was: | | |
+---------------------------------------------------------------------+------------------------+--------------------+
| | | |
| Staff of subsidiary | 16 | 17 |
+---------------------------------------------------------------------+------------------------+--------------------+
| Staff of head office | 1 | 1 |
+---------------------------------------------------------------------+------------------------+--------------------+
| Directors | 5 | 4 |
+---------------------------------------------------------------------+------------------------+--------------------+
| | ________ | ________ |
+---------------------------------------------------------------------+------------------------+--------------------+
| | 22 | 22 |
+---------------------------------------------------------------------+------------------------+--------------------+
| | ________ | ________ |
+---------------------------------------------------------------------+------------------------+--------------------+
| | | |
+---------------------------------------------------------------------+------------------------+--------------------+
3 Operating loss
+-------------------------------------------------------------+------------------------------+----------------------+
| | 2009 | 2008 |
+-------------------------------------------------------------+------------------------------+----------------------+
| | GBP | GBP |
+-------------------------------------------------------------+------------------------------+----------------------+
| This has been arrived at after charging: | | |
+-------------------------------------------------------------+------------------------------+----------------------+
| Depreciation | 169,662 | 127,010 |
+-------------------------------------------------------------+------------------------------+----------------------+
| Amortisation | 39,734 | 12,955 |
+-------------------------------------------------------------+------------------------------+----------------------+
| | | |
+-------------------------------------------------------------+------------------------------+----------------------+
| Operating lease rentals - land and buildings | 7,200 | 7,108 |
+-------------------------------------------------------------+------------------------------+----------------------+
| Auditors' remuneration - audit | | |
+-------------------------------------------------------------+------------------------------+----------------------+
| (company - GBP11,500 (2008 - GBP13,290)) | 16,110 | 16,631 |
+-------------------------------------------------------------+------------------------------+----------------------+
| Directors Remuneration | 28,200 | 65,391 |
+-------------------------------------------------------------+------------------------------+----------------------+
| | | |
+-------------------------------------------------------------+------------------------------+----------------------+
| | ________ | ________ |
+-------------------------------------------------------------+------------------------------+----------------------+
The remuneration of the highest paid director is GBP28,200 (2008 GBP33,840).
4 Taxation on loss on ordinary activities
There has been no tax payable in this or the previous year due to the
availability of losses.
+------------------------------------------------------------+--------------------------------+------------------------+
| | 2009 | 2008 |
+------------------------------------------------------------+--------------------------------+------------------------+
| | GBP | GBP |
+------------------------------------------------------------+--------------------------------+------------------------+
| | | |
+------------------------------------------------------------+--------------------------------+------------------------+
| (Loss)/Profit on ordinary activities before tax | (492,485) | (298,168) |
+------------------------------------------------------------+--------------------------------+------------------------+
| | ________ | ________ |
+------------------------------------------------------------+--------------------------------+------------------------+
| | | |
+------------------------------------------------------------+--------------------------------+------------------------+
| (Loss)/Profit on ordinary activities at the standard rate | | |
| of corporation tax in the UK of 28% (2008 - 30%) | | |
+------------------------------------------------------------+--------------------------------+------------------------+
| | (137,896) | (89,450) |
+------------------------------------------------------------+--------------------------------+------------------------+
| Effects of: | | |
+------------------------------------------------------------+--------------------------------+------------------------+
| Tax losses | 137,896 | 89,450 |
+------------------------------------------------------------+--------------------------------+------------------------+
| | ________ | ________ |
+------------------------------------------------------------+--------------------------------+------------------------+
| | | |
+------------------------------------------------------------+--------------------------------+------------------------+
| Current tax charge for year | - | - |
+------------------------------------------------------------+--------------------------------+------------------------+
| | ________ | ________ |
+------------------------------------------------------------+--------------------------------+------------------------+
A deferred tax asset of GBP718,299 (2008 - GBP548,980) relating to losses in the
subsidiary undertakings has not been recognised due to inherent uncertainty
regarding the availability of suitable taxable profits against which the losses
can be recovered within the foreseeable future.
5Loss per share
Loss per share has been calculated using the weighted average number of shares
in issue during the relevant financial periods. The weighted average number of
shares in issue is 39,922,460 (2008 - 38,272,187) and the loss, being the loss
after tax, is GBP492,485 (2008 loss ? GBP298,168).
Diluted Loss per share has been calculated using a weighted average number of
shares of 39,922,460 (2008 - 38,272,187), which includes the share options in
issue at the start and end of the year.
6 Loss for the financial period
As permitted by Section 230 of the Companies Act 1985, the holding company's
profit and loss account has been included in these financial statements. The
loss for the financial year is made up as follows:
+--------------------------------------------------------------------------------+----------------+----------------+
| | 2009 | 2008 |
| | | |
+--------------------------------------------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------------------------------------------+----------------+----------------+
| Holding company's (loss)/profit for the financial year | GBP(132,956) | GBP(411,991) |
+--------------------------------------------------------------------------------+----------------+----------------+
| | ________ | ________ |
+--------------------------------------------------------------------------------+----------------+----------------+
7 Intangible fixed assets
+--------------------------------------------------------+--------------------------------------------------------+
| | Mining rights and |
+--------------------------------------------------------+--------------------------------------------------------+
| | exploration costs |
+--------------------------------------------------------+--------------------------------------------------------+
| Group | GBP |
+--------------------------------------------------------+--------------------------------------------------------+
| | |
+--------------------------------------------------------+--------------------------------------------------------+
| Cost | |
+--------------------------------------------------------+--------------------------------------------------------+
| At 1 March 2008 | 1,322,486 |
+--------------------------------------------------------+--------------------------------------------------------+
| Additions | 47,809 |
+--------------------------------------------------------+--------------------------------------------------------+
| Exchange difference | 73,102 |
+--------------------------------------------------------+--------------------------------------------------------+
| | ________ |
+--------------------------------------------------------+--------------------------------------------------------+
| | |
+--------------------------------------------------------+--------------------------------------------------------+
| At 28 February 2009 | 1,443,397 |
+--------------------------------------------------------+--------------------------------------------------------+
| | ________ |
+--------------------------------------------------------+--------------------------------------------------------+
| Amortisation | |
+--------------------------------------------------------+--------------------------------------------------------+
| At 1 March 2008 | 461,987 |
+--------------------------------------------------------+--------------------------------------------------------+
| Charge for the year | 39,734 |
+--------------------------------------------------------+--------------------------------------------------------+
| Exchange differences | 27,105 |
+--------------------------------------------------------+--------------------------------------------------------+
| | ________ |
+--------------------------------------------------------+--------------------------------------------------------+
| | |
| At 28 February 2009 | 528,826 |
+--------------------------------------------------------+--------------------------------------------------------+
| | ________ |
+--------------------------------------------------------+--------------------------------------------------------+
| Net book values | |
+--------------------------------------------------------+--------------------------------------------------------+
| At 28 February 2009 | GBP914,571 |
+--------------------------------------------------------+--------------------------------------------------------+
| | ________ |
+--------------------------------------------------------+--------------------------------------------------------+
| At 28 February 2008 | GBP860,499 |
+--------------------------------------------------------+--------------------------------------------------------+
| | ________ |
+--------------------------------------------------------+--------------------------------------------------------+
8 Tangible fixed assets
+------------------------------------+-------------------------+---------------------------+-------------------------+
| | Office Equipment | Property, Plant | Total |
| | | And Equipment | |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| | GBP | GBP | GBP |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| Group | | | |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| Cost | | | |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| At 1 March 2008 | 3,861 | 1,330,927 | 1,334,788 |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| Additions | - | 35,695 | 35,695 |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| Exchange difference | (1,357) | 72,724 | 71,367 |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| | ________ | ________ | ________ |
| | | | |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| At 28 February 2009 | 2,504 | 1,439,346 | 1,441,850 |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| | ________ | ________ | ________ |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| | | | |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| Depreciation | | | |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| At 1 March 2008 | 2,624 | 362,058 | 364,682 |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| Charge for the year | 394 | 169,268 | 169,662 |
| Exchange difference | (1,395) | (4,811) | (6,206) |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| | ________ | ________ | ________ |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| | | | |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| At 28 February 2009 | 1,623 | 526,515 | 528,138 |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| | ________ | ________ | ________ |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| | | | |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| Net book Value | | | |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| At 28 February 2009 | GBP881 | GBP912,831 | GBP913,712 |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| | ________ | ________ | ________ |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| | | | |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| At 29 February 2008 | GBP1,237 | GBP968,869 | GBP970,106 |
+------------------------------------+-------------------------+---------------------------+-------------------------+
| | ________ | ________ | ________ |
+------------------------------------+-------------------------+---------------------------+-------------------------+
9 Fixed asset investments
+---------------------------------------------+--------------------+----------------------+------------------------+
| | Group undertakings | Loans to group | Total |
| | | undertakings | |
+---------------------------------------------+--------------------+----------------------+------------------------+
| | GBP | GBP | GBP |
+---------------------------------------------+--------------------+----------------------+------------------------+
| Company | | | |
+---------------------------------------------+--------------------+----------------------+------------------------+
| At 1 March 2008 | 2,110,430 | 2,609,835 | 4,720,265 |
+---------------------------------------------+--------------------+----------------------+------------------------+
| Additions | - | 300,379 | 300,379 |
+---------------------------------------------+--------------------+----------------------+------------------------+
| Exchange differences | - | - | - |
+---------------------------------------------+--------------------+----------------------+------------------------+
| | ________ | ________ | ________ |
+---------------------------------------------+--------------------+----------------------+------------------------+
| At 28 February 2009 | 2,110,430 | 2,910,214 | 5,020,644 |
+---------------------------------------------+--------------------+----------------------+------------------------+
| | ________ | ________ | ________ |
+---------------------------------------------+--------------------+----------------------+------------------------+
| Provisions for diminution in value | | | |
+---------------------------------------------+--------------------+----------------------+------------------------+
| At 1 March 2008 and at 28 February 2009 | | | |
| | 628,536 | - | 628,536 |
+---------------------------------------------+--------------------+----------------------+------------------------+
| | ________ | ________ | ________ |
+---------------------------------------------+--------------------+----------------------+------------------------+
| | | | |
+---------------------------------------------+--------------------+----------------------+------------------------+
| Net book value | | | |
+---------------------------------------------+--------------------+----------------------+------------------------+
| At 28 February 2009 | GBP1,481,894 | GBP2,910,214 | GBP4,392,108 |
+---------------------------------------------+--------------------+----------------------+------------------------+
| | ________ | ________ | ________ |
+---------------------------------------------+--------------------+----------------------+------------------------+
| | | | |
+---------------------------------------------+--------------------+----------------------+------------------------+
| At 28 February 2008 | GBP1,481,894 | GBP2,609,835 | GBP4,091,729 |
+---------------------------------------------+--------------------+----------------------+------------------------+
Investment in group undertakings includes
* 100% holding in Sonnberg Diamonds (Namibia) (Proprietary) Limited, a mining
company incorporated in Namibia.
* 75% holding in Oletu Investment Holding (Proprietary) Limited a company
incorporated in Namibia. The company has yet to trade.
The loans to group undertakings are denominated in Namibian Dollars, are
interest free and are subordinated in favour of other creditors of the
subsidiary undertakings. See note 19 for details of the Prior Year Adjustment
resulting in the restatement of the opening balances.
The directors are of the opinion that it is impractical to measure the loans to
subsidiaries at amortised cost using the effective interest rate method and that
to do so would have no benefit to the consolidated position of the company and
its subsidiaries as the balances due to and from each company eliminate on
consolidation.
10 Inventories
+--------------------------------------------------------------------------------+----------------+----------------+
| | Group | Group |
+--------------------------------------------------------------------------------+----------------+----------------+
| | 2009 | 2008 |
| | | |
+--------------------------------------------------------------------------------+----------------+----------------+
| Consumable stores | GBP31,967 | GBP32,673 |
+--------------------------------------------------------------------------------+----------------+----------------+
| | ________ | ________ |
+--------------------------------------------------------------------------------+----------------+----------------+
11 Trade and Other Receivables
+----------------------------------+--------------------+----------------------+-------------------+-----------------+
| | Group | Group | Company | Company |
+----------------------------------+--------------------+----------------------+-------------------+-----------------+
| | 2009 | 2008 | 2009 | 2008 |
+----------------------------------+--------------------+----------------------+-------------------+-----------------+
| | GBP | GBP | GBP | GBP |
+----------------------------------+--------------------+----------------------+-------------------+-----------------+
| | | | | |
| Trade receivables | 36,165 | 26,363 | - | - |
+----------------------------------+--------------------+----------------------+-------------------+-----------------+
| | ________ | ________ | ________ | ________ |
+----------------------------------+--------------------+----------------------+-------------------+-----------------+
All amounts fall due for repayment within one year.
12Trade and other payables
+---------------------------------------+-------------------+--------------------+-------------------+----------------+
| | Group | Group | Company | Company |
+---------------------------------------+-------------------+--------------------+-------------------+----------------+
| | 2009 | 2008 | 2009 | 2008 |
+---------------------------------------+-------------------+--------------------+-------------------+----------------+
| | GBP | GBP | GBP | GBP |
+---------------------------------------+-------------------+--------------------+-------------------+----------------+
| | | | | |
+---------------------------------------+-------------------+--------------------+-------------------+----------------+
| Trade Payables and Accruals | | | | |
| | 56,673 | 51,120 | 24,553 | 18,875 |
+---------------------------------------+-------------------+--------------------+-------------------+----------------+
| Loans from Directors | 350,000 | - | 350,000 | - |
+---------------------------------------+-------------------+--------------------+-------------------+----------------+
| | ________ | ________ | ________ | ________ |
+---------------------------------------+-------------------+--------------------+-------------------+----------------+
| | | | | |
+---------------------------------------+-------------------+--------------------+-------------------+----------------+
| | 406,673 | 51,120 | 374,553 | 18,875 |
+---------------------------------------+-------------------+--------------------+-------------------+----------------+
| | ________ | ________ | ________ | ________ |
+---------------------------------------+-------------------+--------------------+-------------------+----------------+
There are no terms of repayment for the directors' loans which are interest
free.
13 Derivatives and other financial instruments
Financial instruments policies and strategies
During the period since its incorporation, the group has financed its business
with the cash it has raised through the issue of shares. It has used these funds
to acquire and develop business in Namibia. The main risk arising from the
group's financial instruments is foreign currency risk.
At 28 February 2009, the group's financial instruments comprised cash and
short-term receivables and payables arising directly from its operations. The
group's primary treasury activity has been the management of cash. This has been
held so as to maximise interest earned without compromising the group's need for
flexibility in meeting its cash needs. The group is not currently actively
pursuing a strategy of acquiring investments.
Although the group is based in the UK, it has a significant investment in
Namibia. As a result, the group's sterling balance sheet can be significantly
affected by movements in the Namibian Dollar/Sterling exchange rates.
Sales of diamonds are denominated in Namibian Dollars but the price obtained is
dependent on market prices set in US Dollars. The group incurs costs in both
Sterling and Namibian Dollars.
The group has not entered into any derivative transactions during the year.
Short-term receivables and payables have been excluded from the numerical
disclosures below.
+---------------------------------------------------------------------+----------------------+----------------------+
| | |
| Interest rate risk profile of financial assets: | Floating rate |
+---------------------------------------------------------------------+---------------------------------------------+
| | 2009 | 2008 |
+---------------------------------------------------------------------+----------------------+----------------------+
| | GBP | GBP |
| | | |
+---------------------------------------------------------------------+----------------------+----------------------+
| Sterling | 25,681 | 103,338 |
+---------------------------------------------------------------------+----------------------+----------------------+
| Namibian dollar | 11,058 | 162 |
+---------------------------------------------------------------------+----------------------+----------------------+
| | ________ | ________ |
+---------------------------------------------------------------------+----------------------+----------------------+
| | GBP36,739 | GBP103,500 |
+---------------------------------------------------------------------+----------------------+----------------------+
| | ________ | ________ |
+---------------------------------------------------------------------+----------------------+----------------------+
The financial assets comprise short-term cash deposits. The group does not have
any material interest bearing financial liabilities. As the group's principal
financial instruments is cash, the directors do not consider there to be a
material difference between the book and fair value of the group's financial
assets.
14 Share capital
+----------+------------------------------------------------+----------------+----------------+---------------+----------------+
| | Shares | 2009 | 2008 | 2009 | 2008 |
+----------+------------------------------------------------+----------------+----------------+---------------+----------------+
| | | Number | Number | GBP | GBP |
+----------+------------------------------------------------+----------------+----------------+---------------+----------------+
| | Authorised | | | | |
+----------+------------------------------------------------+----------------+----------------+---------------+----------------+
| | Ordinary shares of 10p each | | 50,000,000 | | 50,000,000 |
+----------+------------------------------------------------+----------------+----------------+---------------+----------------+
| | Ordinary shares of 1p each | 440,697,860 | | 4,406,979 | |
+----------+------------------------------------------------+----------------+----------------+---------------+----------------+
| | Deferred shares of 9p each | 39,922,460 | | 3,593,021 | |
+----------+------------------------------------------------+----------------+----------------+---------------+----------------+
| | | ________ | ________ | ________ | ________ |
+----------+------------------------------------------------+----------------+----------------+---------------+----------------+
| | Total | 480,620,320 | 50,000,000 | 8,000,000 | 50,000,000 |
+----------+------------------------------------------------+----------------+----------------+---------------+----------------+
| | | __________ | __________ | _________ | __________ |
+----------+------------------------------------------------+----------------+----------------+---------------+----------------+
| | Allotted, called up and fully paid | | | | |
+----------+------------------------------------------------+----------------+----------------+---------------+----------------+
| | Ordinary shares of 10p each | | 39,922,460 | | 3,992,246 |
+----------+------------------------------------------------+----------------+----------------+---------------+----------------+
| | Ordinary shares of 1p each | 39,922,460 | | 399,225 | |
+----------+------------------------------------------------+----------------+----------------+---------------+----------------+
| | Ordinary shares of 9p each | 39,922,460 | | 3,593,021 | |
+----------+------------------------------------------------+----------------+----------------+---------------+----------------+
| | | ________ | ________ | ________ | ________ |
+----------+------------------------------------------------+----------------+----------------+---------------+----------------+
| | 79,844,920 | 39,922,460 | 3,992,246 | 3,992,246 |
+-----------------------------------------------------------+----------------+----------------+---------------+----------------+
| | __________79 | __________ | __________ | __________ |
+----------+------------------------------------------------+----------------+----------------+---------------+----------------+
During the year a capital reorganisation took place. The existing ordinary
shares of 10p each
were subdivided into:-
39,922,460 ordinary shares of 1p each and 39,922,460 deferred shares
of 9p each
The holders of the deferred shares shall not be entitled to receive any dividend
out of the profits of the company available for distribution and they are
non-voting
Options
The company has in issue the following options to subscribe for ordinary
shares:
+-----------------------------------------------------------------------------+--------------------+----------------+
| | 2009 | 2008 |
+-----------------------------------------------------------------------------+--------------------+----------------+
| | | |
+-----------------------------------------------------------------------------+--------------------+----------------+
| Number | 750,000 | 4,500,000 |
+-----------------------------------------------------------------------------+--------------------+----------------+
Options are exercisable between 9 January 2008 and 9 January 2013 at an exercise
price of GBP0.12p. As at 28 February 2009 these options were still outstanding.
The directors estimate, by reference to formal valuations of options issued in
prior periods and consideration of movements in component factors of those
valuations, that the expense to be recognised under IFRS2 in respect of options
issued during the year is not material in the context of group results. They
consider that the expense of commissioning a separate valuation would be
disproportionate to the benefits obtained. Accordingly no adjustments have been
made to reflect the issue of options as an expense of the business and the
corresponding increase in equity of the business.
15Share Premium Account
+--------------------------------------------------------+--------------------------------------------------------+
| Group and Company | Share Premium account |
+--------------------------------------------------------+--------------------------------------------------------+
| | |
+--------------------------------------------------------+--------------------------------------------------------+
| At 1 March 2008 and 28 February 2009 | GBP359,384 |
+--------------------------------------------------------+--------------------------------------------------------+
16 Profit and Loss Account
+--------------------------------------------------------+--------------------------------------------------------+
| | |
+--------------------------------------------------------+--------------------------------------------------------+
| Group | GBP |
+--------------------------------------------------------+--------------------------------------------------------+
| At 1 March 2008 | (2,509,171) |
+--------------------------------------------------------+--------------------------------------------------------+
| Loss for the year | (492,485) |
+--------------------------------------------------------+--------------------------------------------------------+
| | ________ |
+--------------------------------------------------------+--------------------------------------------------------+
| At 28 February 2009 | GBP(3,001,656) |
+--------------------------------------------------------+--------------------------------------------------------+
| | ________ |
+--------------------------------------------------------+--------------------------------------------------------+
| | |
+--------------------------------------------------------+--------------------------------------------------------+
| Company | GBP |
+--------------------------------------------------------+--------------------------------------------------------+
| At 1 March 2008 | (175,438) |
+--------------------------------------------------------+--------------------------------------------------------+
| Loss for the year | (132,956) |
+--------------------------------------------------------+--------------------------------------------------------+
| | ________ |
+--------------------------------------------------------+--------------------------------------------------------+
| At 28 February 2009 | GBP(308,394) |
+--------------------------------------------------------+--------------------------------------------------------+
| | ________ |
+--------------------------------------------------------+--------------------------------------------------------+
17 Foreign Exchange Reserve
+--------------------------------------------------------+--------------------------------------------------------+
| | |
+--------------------------------------------------------+--------------------------------------------------------+
| Group | GBP |
+--------------------------------------------------------+--------------------------------------------------------+
| At 1 March 2008 | 99,562 |
+--------------------------------------------------------+--------------------------------------------------------+
| Gain on foreign translation | 76,945 |
+--------------------------------------------------------+--------------------------------------------------------+
| | ________ |
+--------------------------------------------------------+--------------------------------------------------------+
| At 28 February 2009 | GBP176,507 |
+--------------------------------------------------------+--------------------------------------------------------+
| | ________ |
+--------------------------------------------------------+--------------------------------------------------------+
| | |
+--------------------------------------------------------+--------------------------------------------------------+
18 Reconciliation of movements in shareholders' funds
+-------------------------------------------------------------+--------------------+----------------------------+
| | 2009 | 2008 |
+-------------------------------------------------------------+--------------------+----------------------------+
| | GBP | GBP |
+-------------------------------------------------------------+--------------------+----------------------------+
| Group | | |
+-------------------------------------------------------------+--------------------+----------------------------+
| (Loss) for the financial year | (492,485) | (298,168) |
+-------------------------------------------------------------+--------------------+----------------------------+
| Other recognised gains and losses | 76,945 | (178,543) |
+-------------------------------------------------------------+--------------------+----------------------------+
| Issue of shares | - | 200,000 |
+-------------------------------------------------------------+--------------------+----------------------------+
| | ________ | ________ |
+-------------------------------------------------------------+--------------------+----------------------------+
| | (415,540) | (276,711) |
+-------------------------------------------------------------+--------------------+----------------------------+
| Opening shareholders' funds | 1,942,021 | 2,218,732 |
+-------------------------------------------------------------+--------------------+----------------------------+
| | ________ | ________ |
+-------------------------------------------------------------+--------------------+----------------------------+
| Closing shareholders' funds | GBP1,526,481 | GBP1,942,021 |
+-------------------------------------------------------------+--------------------+----------------------------+
| | ________ | ________ |
+-------------------------------------------------------------+--------------------+----------------------------+
The conversion from United Kingdom Generally Accepted Accounting Practice to
International Financial Reporting Standards has caused no effect on the equity
of the group.
+-------------------------------------------------------------+--------------------+----------------------------+
| | 2009 | 2008 |
+-------------------------------------------------------------+--------------------+----------------------------+
| Company | GBP | GBP |
+-------------------------------------------------------------+--------------------+----------------------------+
| | | |
+-------------------------------------------------------------+--------------------+----------------------------+
| (Loss)/Profit for the financial year | (132,956) | (411,991) |
+-------------------------------------------------------------+--------------------+----------------------------+
| Issue of shares | - | 200,000 |
+-------------------------------------------------------------+--------------------+----------------------------+
| | ________ | ________ |
+-------------------------------------------------------------+--------------------+----------------------------+
| | | |
+-------------------------------------------------------------+--------------------+----------------------------+
| | (132,956) | (211,991) |
+-------------------------------------------------------------+--------------------+----------------------------+
| Opening shareholders' funds | 4,176,192 | 3,076,564 |
+-------------------------------------------------------------+--------------------+----------------------------+
| Prior year adjustment | - | 1,311,619 |
+-------------------------------------------------------------+--------------------+----------------------------+
| | ________ | ________ |
+-------------------------------------------------------------+--------------------+----------------------------+
| | | |
+-------------------------------------------------------------+--------------------+----------------------------+
| Closing shareholders funds | GBP4,043,236 | GBP4,176,192 |
+-------------------------------------------------------------+--------------------+----------------------------+
| | ________ | ________ |
+-------------------------------------------------------------+--------------------+----------------------------+
19 Prior year adjustment
+-------------------------------------------------------------+----------------------------+------------------------+
| | Group | Company |
+-------------------------------------------------------------+----------------------------+------------------------+
| | GBP | GBP |
+-------------------------------------------------------------+----------------------------+------------------------+
| a. Arising from reclassification of inter-company loan | | |
| indebtedness as a Namibian Dollar liability | | 811,619 |
| | | |
+-------------------------------------------------------------+----------------------------+------------------------+
| b. Release of provision for impairment on revaluation | | 500,000 |
| of loan | | |
| | | |
+-------------------------------------------------------------+----------------------------+------------------------+
| c. Arising from first time introduction of IFRS and | | |
| creation of Foreign Exchange Reserve | 278,105 | |
+-------------------------------------------------------------+----------------------------+------------------------+
| | ________ | |
+-------------------------------------------------------------+----------------------------+------------------------+
| | | ________ |
+-------------------------------------------------------------+----------------------------+------------------------+
| | | 1,311,619 |
+-------------------------------------------------------------+----------------------------+------------------------+
| | | ________ |
+-------------------------------------------------------------+----------------------------+------------------------+
20 Reconciliation of operating loss to net cash outflow from operating
activities
+----------------------------------------------------------+--------------------------+--------------------------+
| | 2009 | 2008 |
+----------------------------------------------------------+--------------------------+--------------------------+
| | GBP | GBP |
| | | |
+----------------------------------------------------------+--------------------------+--------------------------+
| Operating loss | (493,774) | (304,638) |
+----------------------------------------------------------+--------------------------+--------------------------+
| Depreciation of plant, property and equipment | | |
| | 169,662 | 121,225 |
+----------------------------------------------------------+--------------------------+--------------------------+
| Amortisation of intangible assets | 39,734 | 12,365 |
+----------------------------------------------------------+--------------------------+--------------------------+
| Decrease/(Increase) in inventories | 706 | 3,275 |
+----------------------------------------------------------+--------------------------+--------------------------+
| (Increase)/decrease in trade and other receivables | | |
| | (9,802) | (2,845) |
+----------------------------------------------------------+--------------------------+--------------------------+
| Increase/(decrease) in trade and other payables | | |
| | 355,553 | 13,273 |
+----------------------------------------------------------+--------------------------+--------------------------+
| Net effect of foreign exchange differences | (46,625) | 86,797 |
+----------------------------------------------------------+--------------------------+--------------------------+
| | | |
+----------------------------------------------------------+--------------------------+--------------------------+
| Net cash (outflow)/inflow from operating activities | | |
| | GBP15,454 | GBP(70,548) |
+----------------------------------------------------------+--------------------------+--------------------------+
| | ________ | ________ |
+----------------------------------------------------------+--------------------------+--------------------------+
21 Analysis of net debt
+---------------------------------------------+--------------------------+--------------+----------------------------+
| | At 1 March 2008 | Cash flow | At 28 February 2009 |
+---------------------------------------------+--------------------------+--------------+----------------------------+
| | GBP | GBP | GBP |
+---------------------------------------------+--------------------------+--------------+----------------------------+
| Net cash: | | | |
+---------------------------------------------+--------------------------+--------------+----------------------------+
| | | | |
+---------------------------------------------+--------------------------+--------------+----------------------------+
| Cash at bank and in hand | GBP103,500 | GBP(66,761) | GBP36,739 |
+---------------------------------------------+--------------------------+--------------+----------------------------+
| | ________ | ________ | ________ |
+---------------------------------------------+--------------------------+--------------+----------------------------+
22 Reconciliation of net cash flow to movement in net funds
+---------------------------------------------+------------------------------+--------------------------------------+
| | 2009 | 2008 |
+---------------------------------------------+------------------------------+--------------------------------------+
| | GBP | GBP |
| | | |
+---------------------------------------------+------------------------------+--------------------------------------+
| (Decrease) in cash for the year | (66,761) | (268,688) |
+---------------------------------------------+------------------------------+--------------------------------------+
| | ________ | ________ |
+---------------------------------------------+------------------------------+--------------------------------------+
| | | |
+---------------------------------------------+------------------------------+--------------------------------------+
| Movement in net funds in the year | (66,761) | (268,688) |
+---------------------------------------------+------------------------------+--------------------------------------+
| Opening net funds | 103,500 | 372,188 |
+---------------------------------------------+------------------------------+--------------------------------------+
| | ________ | ________ |
+---------------------------------------------+------------------------------+--------------------------------------+
| | | |
+---------------------------------------------+------------------------------+--------------------------------------+
| Closing net funds | GBP36,739 | GBP103,500 |
+---------------------------------------------+------------------------------+--------------------------------------+
| | ________ | ________ |
+---------------------------------------------+------------------------------+--------------------------------------+
23 Contingent liabilities
The mining contract undertaken by the group requires the subsidiary, Sonnberg,
to remove all equipment and installations and to rehabilitate all disturbed
areas once mining activities have ceased.
Sonnberg pay 1% of sales to a fund held by NAMDEB Diamond Corporation
(Proprietary) Limited, to provide for the costs of environmental rehabilitation.
The directors' best estimate is that there is no additional liability at the
balance sheet date to the contributions already made to this fund. Accordingly,
no provision has been made.
24 Commitments under operating leases
As at 28 February 2009, the company had annual commitments under non-cancellable
operating leases as set out below:
+---------------------------------------------+------------------------------+--------------------------------------+
| | 2009 | 2008 |
| | Land and buildings | Land and buildings |
+---------------------------------------------+------------------------------+--------------------------------------+
| | GBP | GBP |
+---------------------------------------------+------------------------------+--------------------------------------+
| Expiring in less than one year | | 2,400 |
| | 2,400 | |
+---------------------------------------------+------------------------------+--------------------------------------+
| | ________ | ________ |
+---------------------------------------------+------------------------------+--------------------------------------+
25 Related party transactions
During the year the company received loans from Lord Sheppard of Didgemere of
GBP200,000 (2008 Nil), B M Moritz GBP145,000 (2008 Nil) and ACA Carlton GBP5,000
(2008 Nil). The loans are interest free and with no repayment terms.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UWSARKRRWUAR
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