Adm Energy Regulatory News (ADME)

10 Apr 2007 16:32

Pan Pacific Aggregates PLC10 April 2007 Pan Pacific Aggregates Plc Final audited results for the year ended 31 December 2006 Pan Pacific Aggregates plc ("PPA" or "the Company"), the junior aggregatesdevelopment company operating in the Sechelt Peninsula in British Columbia,Canada, is pleased to report to its shareholders on its activities for the yearended 31 December 2006. Chief Executive Officer's Statement Pan Pacific Aggregates plc (AIM: PPA) ("PPA" or the "Company") has seen solidprogress on the development of the Sechelt project during 2006. Of particularnote, the Company has been successful in acquiring the waterfront propertyessential for the proposed ship loading facility. In June the Company raised a further £2m through convertible loan notes at aconversion rate of £0.80 per share. This fund raising allowed the Company toacquire the Wood Bay property, which had been identified as being an optimalsite for the proposed ship loading facility. The advantage to PPA of having adeep-water port facility is the potential cost savings resulting from directproduct loading into ocean going Panamax class ships; rather than barging theproduct to a nearby existing terminal entailing double handling the productbefore transportation to market. The remaining funds allowed PPA to complete itsdrilling and mapping programmes, thus providing sufficient information to enablethe required quarry design for the proposed Northern sector quarry development. The Company announced the preliminary results of the 2006 drilling campaignwhich confirms the quantities set out in the admission document but now to a NI43-101 compliant standard, as well as providing all the detailed geological datarequired for Environmental Certification and Large producer permit process ("permitting process"). Further announcements of drilling results will be madeonce the final analysis has been completed. In September PPA completed the 12 months monitoring cycle for most of theenvironmental baseline studies required for the permitting process. Otherbaseline studies are ongoing and are expected to be completed early in 2007.These studies have not identified any issues that were of sufficientenvironmental significance to make the Company reconsider its proposed quarrydevelopment plans at Sechelt. However, quarry design and adding theabove-mentioned load out facility at Wood Bay means the Company will now besubject to review by both the Federal and Provincial Governments under theCanada - British Columbia Agreement for Environmental Cooperation (the "harmonization agreement"). We expect that the additional review process willresult in a delay in the submission of the application for the environmentalcertificate of about 3 months, to July 2007. The Company restructured its management team to reflect its development stagestatus and moved its Canadian Corporate office from downtown Vancouver toRichmond; these measures have produced meaningful cost savings that have beendiverted to the drilling and permitting process. The Company is proposing to make certain permanent changes to the Board asfollows: • Don Nicholson, the Chief Executive Officer based in Canada, has recently been in poor health. Now recovered, he is to become the Executive Chairman, working on a part-time basis. Mr Nicholson will be responsible for developing the Group's strategy and its implementation, with special responsibility for aboriginal issues resolutions. • I, William Voaden, am to take on an executive role, on a part-time basis, and the title of Chief Executive Officer. My role in the United Kingdom will be extended but will continue to involve liaising with institutional investors and the Company's professional advisers. I am currently acting as Interim Chief Executive Officer until these proposed changes take effect. A further announcement will be made when these changes become effective. The Board has overseen substantial progress in the development and value of theproject assets, as well as completion of the investigatory work to allow thecompilation and submission of all the permitting documentation to the Provincialand Federal Authorities during 2007 for their consideration. On 10 April 2007 the Company entered into an agreement with RAB SpecialSituations (Master) Fund Limited ("RAB") under which RAB agreed to subscribe upto £4 million in principal amount of secured convertible loan notes. Theproceeds of the loan will be noted to fund development of the Sechelt project.Details of the agreement with RAB have been announced separately today. William Voaden Interim Chief Executive Officer Enquiries:PPAWilliam Voaden Tel: +44 207 628 3989Insinger de BeaufortPeter Ward Tel: +44 207 190 7000 CONSOLIDATED INCOME STATEMENTfor the year ended 31 December 2006 2006 2005 Note £'000 £'000 Revenue 35 28Cost of sales (27) ____(27) Gross profit 8 1 Administrative expenses (1,698) (1,556) ________ _______ Loss from operations (1,690) (1,555) ________ _______ Financial expense (49) - Financial income 7 272 Loss on ordinary activities before taxation (1,732) (1,283)Taxation - - ________ _______ Loss on ordinary activities after taxation (1,732) (1,283) ________ _______Attributable to:Equity holders of the parent (1,731) (1,282)Minority interest (1) (1) Loss for the period after taxation and deficit (1,732) (1,283)carried forward _______ _______Retained loss brought forward (1,283) - Retained loss carried forward (3,015) (1,283) _______ _______Loss per ordinary shareBasic and diluted (pence) 2 (2.7) (2.3) _______ _______ All amounts relate to continuing activities. STATEMENTS OF RECOGNIZED INCOME AND EXPENSESfor the year ended 31 December 2006 Group Group Company Company 2006 2005 2006 2005 £'000 £'000 £'000 £'000 Loss for the year (1,732) (1,283) (1,039) (29) Exchange differences arising on thetranslationof foreign subsidiaries (7) (300) - ______ ______ ______ ______Total recognized losses for the period (1,739) (1,583) (1,039) (29) ______ ______ ______ ______ Attributable to:Equity holders of the parent (1,738) (1,582) (1,039) (29)Minority interest (1) (1) - - ______ _____ ______ ______ (1,739) (1,583) (1,039) (29) ______ ______ ______ ______ CONSOLIDATED BALANCE SHEETat 31 December 2006 (Restated) 2006 2005 £'000 £'000 Assets: Non-current assetsIntangible assets 4,243 2,408Property, plant and equipment 176 87Total non current assets 4,419 2,495 Current assetsInventories 14 48Receivables 80 88Cash and cash equivalents 705 1,389Total current assets 799 1,525 _______ _______ Total assets 5,218 4,020 Liabilities:Current liabilitiesLoan Notes 2,077 -Trade payables 272 376 Other payables 103 90 Non-current liabilitiesOther payables ___119 ____166Total liabilities 2,571 632 _______ _______ Total net assets 2,647 3,388 _______ _______Capital and reserves attributable to equity holdersof the companyCalled up share capital 64 64Share premium account 5,144 4,708Foreign exchange reserve (307) (300)Reserve for options granted 562 -Reserve for warrants granted 198 198Retained earnings (3,015) (1,283) 2,646 3,387Minority Interest 1 1 Total equity 2,647 3,388 _______ _______ COMPANY BALANCE SHEETat 31 December 2006 (Restated) 2006 2005 £'000 £'000Assets: Non-current assetsInvestments and advances 6,308 3,909 _______ _______ Total non current assets 6,308 3,909 Current assetsReceivables 37 30Cash and cash equivalents 688 1,255 _______ _______Total current assets 725 1,285 _______ _______ Total assets 7,033 5,194 Liabilities:Current liabilitiesLoan Notes 2,077 -Trade Payables 56 253 _______ _______ Total liabilities 2,133 253 _______ _______ Total net assets 4,900 4,941 _______ _______ Capital and reserves attributable to equity holdersof the company Called up share capital 64 64Share premium account 5,144 4,708Reserve for options granted 562 -Reserve for warrants granted 198 198Retained earnings (1,068) (29) _______ _______ Total equity 4,900 4,941 _______ _______ GROUP AND COMPANY CASH FLOW STATEMENTfor the year ended 31 December 2006 Group Group Company Company 2006 2005 2006 2005 £'000 £'000 £'000 £'000Operating activities Loss from operations (1,690) (1,556) (997) (47) Adjustments forDepreciation 15 4 - -Foreign exchange gains (7) (44) - -Fair value of options granted 562 - 562 - ______ ______ _______ _______ 570 (40) 562 - _____ _______ ______ _______ Operating loss before changes in working capital (1,120) (1,596) 435 (47)and provisionsDecrease /(Increase) in trade and other receivables 8 (88) (7) (30)Decrease /(Increase) in inventories 34 (48) - -Increase in trade and other payables (61) 632 (120) 253 _______ _______ _______ _______ (19) 496 (127) 223 _______ _______ _______ _______ Cash (outflows)/inflows from operating activities (1,139) (1,100) (562) 176 _______ _______ _______ _______ Investing activitiesInterest paid (49) - (49) -Interest received 7 18 7 18Investment in group companies - - (2,399) (3,909)Purchase of tangible fixed assets (104) (91) - -Acquisition of intangible assets (1,835) (2,408) - - _______ _______ _______ _______ Cash flows from investing activities (1,981) (2,481) (2,441) (3,891) Financing activitiesIssue of ordinary share capital (net of issue costs) 436 4,970 436 4,970Issue of convertible loan notes 2,000 - 2,000 - _______ _______ _______ _______Cash flows from financing activities 2,436 4,970 2,436 4,970 _______ _______ _______ _______ (Decrease)/Increase in cash (684) 1,389 (567) 1,255 Cash and equivalents at beginning of the period 1,389 - 1,255 - _______ _______ _______ _______ Cash and equivalents at end of the period 705 1,389 688 1,255 _______ _______ _______ _______ NOTES FORMING PART OF THE FINANCIAL STATEMENTS for the year ended 31 December 2006 1 Accounting policies Basis of preparation The principal accounting policies adopted in the preparation of the financialstatements are set out below. The policies have been consistently appliedthroughout the current period presented, unless otherwise stated. Thesefinancial statements, for both Parent company and Group, have been prepared inaccordance with International Financial Reporting Standards (IFRSs and IFRICinterpretations) as adopted by the European Union issued by the InternationalAccounting Standards Board (IASB) and with those parts of the Companies Act 1985applicable to companies preparing their accounts under IFRSs. The financialstatements have been prepared on the going concern basis for the reasons notedin note 22 to the financial statements. Restatement The comparative figures presented have been restated as detailed in note 16. Basis of Consolidation Where the Company has the power, either directly or indirectly, to govern thefinancial and operating policies of another entity or business so as to obtainbenefits from its activities, it is classified as a subsidiary. The consolidatedfinancial statements present the results of the company and its subsidiaries("the group") as if they formed a single entity. Intercompany transactions andbalances between Group companies are therefore eliminated in full. The Company has taken advantage of the exemption allowed under section 230 ofthe Companies Act 1985 and has not presented its own profit and loss account inthese financial statements. The Group loss for the period includes a loss aftertax and before dividends paid and payable of £1,039,000 (£29,000 in 2005) inrespect of the Company. Business combinations The consolidated financial statements incorporate the results of businesscombinations using the acquisition method. In the consolidated balance sheet,the acquiree's identifiable assets, liabilities and contingent liabilities areinitially recognised at their fair values at the acquisition date. The resultsof acquired operations are included in the consolidated income statement fromthe date on which control is obtained. Foreign currency Transactions entered into by group entities in a currency other than thereporting currency of the parent company are recorded at the rates ruling whenthe transactions occur. Foreign currency monetary assets and liabilities aretranslated at the rates ruling at the balance sheet date. Exchange differencesarising on the retranslation of unsettled monetary assets and liabilities aresimilarly recognized immediately in the income statement. On consolidation, the results of overseas operations are translated into PoundsSterling at rates approximating to those ruling when the transactions tookplace. All assets and liabilities of overseas operations are translated at therate ruling at the balance sheet date. Exchange differences arising ontranslating the opening net assets at opening rate and the results of overseasoperations at actual rate are recognized directly in equity (the "foreignexchange reserve"). Exchange differences recognized in the income statement ofgroup entities' separate financial statements on the translation of long-termmonetary items forming part of the group's net investment in the overseasoperation concerned are reclassified to the foreign exchange reserve. On disposal of a foreign operation, the cumulative exchange differencesrecognised in the foreign exchange reserve relating to that operation up to thedate of disposal are transferred to the income statement as part of the profitor loss on disposal. The exchange rates applied in the financial statements are as follow: 2006 2005 £1: C$ £1: C$ Official rate as at 31 December 2006 2.2824 2.004Average rate for 2006 2.0827 2.174 Revenue Recognition Sales of mineral production are recognised at the time of delivery of theproduct to the purchaser. Share-based payments Where share options are awarded to employees, the fair value of the options atthe date of grant is charged to the income statement over the vesting period.Non-market vesting conditions are taken into account by adjusting the number ofequity instruments expected to vest at each balance sheet date so that,ultimately, the cumulative amount recognised over the vesting period is based onthe number of options that eventually vest. As long as all other vestingconditions are satisfied, a charge is made irrespective of whether the marketvesting conditions are satisfied. The cumulative expense is not adjusted forfailure to achieve a market vesting condition. Where equity instruments are granted to persons other than employees, the incomestatement is charged with the fair value of goods and services received. Mineral rights Mineral rights, included within intangible fixed assets, are recorded at costless any provision for diminution in value. Amortisation will be over theestimated life of the commercial ore reserves on a unit of production basis. Licences for the exploration of natural resources will be amortised over thelower of the life of the licence and the estimated life of the commercial orereserves on a unit of production basis. Unevaluated mineral properties In accordance with the full cost method, all costs associated with mineral property development and investment are capitalised on a project-by-project basis pending determination of the feasibility of the project. Costs incurred include appropriate technical and administrative expenses but not general overheads. If a mineral property development project is successful, the related expenditures will be amortised over the estimated life of the commercial ore reserves on a unit of production basis. Where a licence is relinquished, a project is abandoned, or is considered to be of no further commercial value to the company, the related costs will be written off. Unevaluated mineral properties are assessed at each year end and where there are indications of impairment the related costs will be written off. The recoverability of unevaluated mineral property costs is dependent upon the discovery of economically recoverable reserves, the ability of the group to obtain necessary financing to complete the development of reserves and future profitable production or proceeds from the disposition of recoverable reserves. Investments In individual company accounts investments in subsidiaries are stated at costless provision for diminution in value. Loans to group undertakings These balances represent cash advances to subsidiaries for the purpose offinancing the development of the mineral properties. No interest is charged onthese loans repayable on demand. Property, plant and equipment Items of property, plant and equipment are initially recognised at cost. As wellas the purchase price, cost includes directly attributable costs and theestimated present value of any future costs of dismantling and removing items.The corresponding liability is recognised within provisions. Depreciation is provided on all other items of property and equipment to writeoff the carrying value of items over their expected useful economic lives. It isapplied at the following rates: Building - 8.33% per annum straight lineElectronic equipment - 20% per annum straight lineLeasehold improvements - 16.67% per annum straight lineOther fixed assets - 10% per annum straight line Assets are subject to impairment tests whenever events or changes incircumstances indicate that their carrying amount may not be recoverable. Wherethe carrying value of an asset exceeds its recoverable amount (ie the higher ofvalue in use and fair value less costs to sell), the asset is written downaccordingly. Where it is not possible to estimate the recoverable amount of anindividual asset, the impairment test is carried out on the asset'scash-generating unit (ie the lowest group of assets in which the asset belongsfor which there are separately identifiable cash flows). Any impairment charge is included in the administrative expenses line item inthe income statement, except to the extent they reverse gains previously recognised in the statementof recognised income and expense. Inventories Inventories are initially recognized at cost, and subsequently carried at thelower of cost and net realisable value. Cost comprises all costs of purchase,costs of conversion and other costs incurred in bringing the inventories totheir present location and condition. Weighted average cost is used to determine the cost of ordinarilyinterchangeable items. Deferred taxation Deferred tax assets and liabilities are recognised where the carrying amount ofan asset or liability in the balance sheet differs to its tax base. This policyis followed except for where differences arise on the initial recognition ofgoodwill, goodwill for which amortisation is not tax deductible, the initialrecognition of an asset or liability in a transaction which is not a businesscombination and at the time of the transaction affects neither accounting ortaxable profit and investments in subsidiaries and jointly controlled entitieswhere the Group is able to control the timing of the reversal of the differenceand it is probable that the difference will not reverse in the foreseeablefuture. Recognition of deferred tax assets is restricted to those instances where it isprobable that taxable profit will be available against which the difference canbe utilised. The amount of the asset or liability is determined using tax ratesthat have been enacted or substantially enacted by the balance sheet date andare expected to apply when the deferred tax liabilities/(assets) are settled/(recovered). Deferred tax balances are not discounted. Deferred tax assets and liabilities are offset when the Group has a legallyenforceable right to offset current tax assets and liabilities and the deferredtax assets and liabilities relate to taxes levied by the same tax authority oneither the same taxable Group company or different Group entities which intendeither to settle current tax assets and liabilities on a net basis or to realisethe assets and settle the liabilities simultaneously, in each future period inwhich significant amounts of deferred tax assets or liabilities are expected tobe settled or recovered. Tax The major components of income tax on the profit or loss from ordinaryactivities include current and deferred tax. Current tax is based on the profit or loss from ordinary activities adjusted foritems that are non-assessable or disallowed and is calculated using tax rates that have been enacted orsubstantively enacted by the balance sheet date. Income tax is charged or credited to the income statement, except when the taxrelates to items credited or charged directly to equity, in which case the taxis also dealt with in equity. Provision for abandonment costs Provision for abandonment costs are recognised at the commencement of mining.The amount recognised is the present value of the estimated future expendituredetermined in accordance with local conditions and requirements. Acorresponding asset of an amount equivalent to the provision is also created.This is subsequently depreciated as part of the capital costs of production.Any change in the present value of the estimated expenditure is reflected as anadjustment to the provision and the asset. Financial instruments The Group's financial assets consist of current account or short term depositsat variable interest rates. Any interest earned is accrued monthly andclassified as interest. Trade, other receivables and loans to groupundertakings are stated at cost less impairment losses. The Group's financial liabilities consist of Convertible loan notes, trade andother payables. All are non derivative assets. The trade and other payables arestated at their cost. The Convertible loan notes are stated at the amountinitially advanced. Under the terms of the loan notes interest is capitalizedinto the instrument. Cash and cash equivalents For the purposes of the cash flow statement, liquid resources are defined ascurrent asset investments and short term deposits. Leased assets Where assets are financed by leasing agreements that do not give rightsapproximating ownership, these are treated as operating leases. A lease isclassified as an operating lease if it does not transfer substantially all therisks and rewards incidental to ownership. Critical accounting estimates and judgments The Group makes estimates and assumptions regarding the future. Estimates andjudgements are continually evaluated based on historical experiences and otherfactors, including expectations of future events that are believed to bereasonable under the circumstances. In the future, actual experience may deviatefrom these estimates and assumptions. The estimates and assumptions that have asignificant risk of causing a material adjustment to the carrying amounts ofassets and liabilities within the next financial year are as follows: Recoverability of exploration costs Under the full cost based method of accounting, the Group capitalises theexploration costs until it is capable of determining whether its explorationefforts were successful and, if they were successful, whether any impairmentcharges may be required to bring the net book values of assets in line withtheir economic values. Impairment review While conducting an impairment review of its assets, the Group makes certainjudgements in making assumptions about the future commodity prices, mineralreserves / resources, and future development and production costs. Changes inthe estimates used can result in significant charges to the income statement. New standards and interpretations New IFRS issued by the IASB effective from 1 January 2006 and applied in thesefinancial statements are as follows: Standard Change to Date of Impact on initial application accounting adoption by policy Pan Pacific Effective from 1 January 2006 Amendment to IAS19 ,' No change to 1 January 2006 This amendment introduces the option of an alternativeEmployee Benefits' current recognition approach for actuarial gains and losses. accounting Adoption of this amendment has no impact on the Group's policy results. IFRIC4, 'Determining No change to 1 January 2006 IFRIC4 provides guidance on determining whetherwhether an arrangement current arrangements that do not take legal form of a leasecontains a lease' accounting should, nonetheless, be accounted for in accordance policy with IAS17, 'Leases'. It specifies that an arrangement contains a lease if it depends on the use of a specific asset and conveys a right to control the use of that asset. Adoption of this standard has no impact on the Group's results. Amendment to IAS39, ' No change to 1 January 2006 This amendment changes the identification of financialThe Fair Value Option' current instruments classified at fair value through income accounting statement and restricts the ability to designate policy financial instruments as part of this category. Adoption of this amendment has no impact on the Group's results. Amendment to IAS21 ' No change to 1 January 2006 This amendment requires exchange differences arising onNet Investment in a current monetary item that forms part of a reporting entity'sForeign Operation' accounting net investment in a foreign operation to be recognised policy initially in a separate component of equity in the consolidate financial statements. This amendment has no impact on the results or net assets of the Group. 2 Loss per share Loss per ordinary share has been calculated using the weighted average number ofshares in issue during the relevant financial periods. The weighted averagenumber of equity shares in issue for the period is 63,913,066 (56,104,116 in2005) and the losses for the group for the year are £1,731,935 (£1,283,347 in2005). Due to the losses incurred during the period, a diluted loss per sharehas not been calculated as this would serve to reduce the basic loss per share. 3 Annual Accounts Printed copies of the Annual Report and Accounts for the year ended 31 December2006 have been distributed to shareholders together with the Notice of AnnualGeneral Meeting. This information is provided by RNS The company news service from the London Stock Exchange