Altona Energy Regulatory News (ANR)

29 Sep 2006 16:33

Altona Resources PLC29 September 2006 Altona Resources plc ("the Company") Set out below are the audited financial results for the Company for the periodfrom incorporation on 2 February 2005 to 30 June 2006. CHAIRMAN'S STATEMENT The Board is pleased to report the results of the Company for the period fromincorporation on 2 February 2005 to 30 June 2006. Following listing on AIM in March 2005, the Company successfully completed theacquisition of the Arckaringa Coal Project ("the Project") in South Australia,in November 2005. The Arckaringa coal resource is covered by three exploration licences with acombined area of approximately 2,500 square kilometres in the northern portionof the Permian Arckaringa Basin in South Australia. These Licences includethree coal deposits, known as the Westfield Deposit, the Wintinna Deposit, andthe Murloocoppie Deposit, having a combined resource in excess of 7 billiontonnes. The deposits are also located close to the Adelaide to Darwin railroad,facilitating the transport of coal and value added products to domestic andexport markets. Project Strategic Focus The Company's strategy in respect to the Project has evolved from thedevelopment of a mine to supply on-site and/or off-site coal fired powergenerating plants, to the significant value added business model of anintegrated mine and Coal to Liquids ("CTL") plant with co-generation powerfacility. A key step in the progression of the Company's Project strategy was the outcomesof the report by Jacobs Consultancy on the feasibility of a CTL plant in April2006. This report established an initial scope for a co-generation facility witha capacity of up to 15,000 barrels per day ("bbl/d") of petroleum products andup to 1,000 MW of power. To quantify the benefits of increasing the scale of operation, both JacobsConsultancy and mine planning consultants, MineConsult, were subsequentlyengaged to expand their respective Phase 1 CTL plant and mine design studies andcostings to include a nominal 15 million tonnes per year coal mine providingfeed stock to a CTL plant producing a nominal 45,000 bbl/d of petroleumproducts. The results of these studies are expected to be available in October2006. Appointment of Royal Bank of Scotland In March 2006 the Company was pleased to announce the engagement of the RoyalBank of Scotland ("RBS") as the arranger of debt financing for the developmentof the Project. RBS are one of the leading banks in the global mining andproject finance sector, providing positive support and resources to the Companyin the progression of the Project. Memorandum of Understanding with BP Australia In another milestone, the Company entered into a Memorandum of Understanding ("MOU") in July 2006 with BP Australia Pty Ltd, to work together in evaluating thefuture potential of the Project. The non-binding MOU includes the evaluation ofpower generation and CTL development opportunities. The MOU represents anexciting opportunity for the Company to work with BP Australia and its highlyexperienced team of experts and considerable resources, in evaluating thedevelopment opportunities for the Project. Management Further to the MOU with BP Australia and the decision to base the Projectmanagement team in Australia, the Company was pleased to announce theappointment Mr Chris Schrape as Managing Director. Chris has many years ofexperience in the coal and energy industry and I am confident that he will leadthe Company successfully to its next stage of development. I believe that the Company has an exciting year ahead and the Board and I lookforward to reporting the Company's progress throughout the coming year. Christopher Lambert Chairman 29 September 2006 DIRECTORS' REPORT The Directors are pleased to present their annual report together with theconsolidated financial statements for the period 2 February 2005 to 30 June2006. COMPANY FORMATION The Company was formed and registered as Altona Resources Plc on 2 February2005, with registration number 05350512. PRINCIPAL ACTIVITIES The principal activities of the Group were the evaluation of the development ofthe Project. REVIEW OF OPERATIONS Following the acquisition of the Project, the Company has focussed on evaluatingthe most viable opportunities for unlocking the value inherent in the massiveenergy resource contained within these deposits. Against a background of risingenergy demand, particularly in Asia, and the growing pressure on the supply ofpetroleum based energy products from traditional sources, the Company haspursued several important initiatives including: • verifying the extensive coal quantity and quality data which already exists from previous work at the deposits; • assessing domestic and regional markets for power generation and supply; and • investigating the potential to add value to the coal through processes such as Coal to Liquids and the technologies available to achieve this conversion. This work programme has been carried out by the Company's expert consultants andadvisers under the direction of the Board and in-house management. Coal to Liquids (CTL) and Mine Sizing Study The Arckaringa bankable feasibility studies of the 1980's focussed on supplyingcoal to a new on site power station and feedstock to the existing power stationsat Port Augusta in South Australia. Whilst these extensive studies provided aninvaluable basis for future mine and infrastructure design, the Company decidedto commission new work studies based on providing coal feedstock to an on siteCoal to Liquids (CTL) plant, with an integrated power generation facility. The initial reports from Jacobs Consultancy (CTL/power generation) andMineConsult (mine design) were sufficiently encouraging to warrant examining thebenefits of increasing the scale of operation. Both Jacobs and MineConsult werethen contracted to expand their Phase 1 sizing and cost studies to include anominal 15 million tonnes per year coal mine providing feed stock to a CTLfacility producing a nominal 45,000 bbl/day of petroleum products. For the co-generation CTL and power plant, modelling has so far been based onthe Conoco Phillips gasification technology followed by the Fischer Tropschprocess. This model's output parameters are a nominal 12 million barrels peryear of ultra low sulphur diesel fuel and some 390MW of power for export. The intent of these studies is to establish the design criteria for a newbankable feasibility study and is expected to be finalised in October 2006. Coal Resource and Quality Evaluation Concurrently, the Company is continuing its gap analysis of the 1980's studies,chiefly to convert the geological model and resource calculations to the lateststandards. This work will pave the way for a field drilling programme and coalquality test programme which will ensure that the mine and CTL plant design andfeasibility studies are based on the best possible data and can commencesmoothly and as soon as possible in the coming year. During the year, the Company's mandated financier, RBS, appointed Hatch Ltd toprovide ongoing technical due diligence for the Project. The support andguidance of Hatch will assist the Company's team to deliver a bankable projectmeeting today's high technical and environmental standards. RESULTS AND DIVIDENDS Loss on consolidation ordinary activities of the Company after taxation amountedto £359,000. The Directors do not recommend payment of a dividend. DIRECTORS Christopher Walter Lambert, Executive Chairman Mr Lambert's financial background is predominantly commodity based in the Cityof London. Over a period of 17 years Mr Lambert headed up the London and globaltrading for Elders Finance Group, The Rural and Industries Bank of WesternAustralia, Barclays Bank and Prudential Securities (USA) During his time atthese companies his duties included managing global dealing operations in themajor financial centres around the world, the structuring of corporate andproject finance transactions for governments, central banks, industrialcompanies and mining houses. In 1997 Mr Lambert left the City to act as a consultant to mining housespredominantly in Australia. During this period he also worked closely with a fareastern government body whose investments included soft commodities, miningassets and substantial property portfolios. Mr Lambert is currently Chairman ofAltona Resources Plc and St James's Energy Plc and a director of Empyrean EnergyPlc. Christopher Schrape, Managing Director Mr Schrape is an Economics graduate from the University of Melbourne, with over25 years experience in the coal industry, including the position of ChiefExecutive Officer of Western Australian based Griffin Coal and 20 years with RioTinto in senior coal marketing and management roles. Norman Kennedy, Non-Executive Technical Director Mr Kennedy is a geologist with more than 25 years experience in explorationmanagement in both Australia and overseas and is a principal of Rank GeologicalServices Pty Ltd, a geological services consulting firm. He has been anexploration consultant for a number of resource companies, including WesternMining Corporation, Caltex, CRA, Meekatharra Minerals, NRG Flinders, Shell, BPand ABB Energy Ventures. He is currently a director of Australian StockExchange listed resource exploration company PepinNini Minerals Limited. Mr Kennedy has been associated with Arckaringa since the early 1980's asprincipally a consulting geologist and has extensive knowledge of its geologyand commercial aspects. He oversaw the extensive drilling programme whichprogressed Arckaringa from an early stage to a JORC compliant resource,including a significant Measured Resource component. Anthony John Samaha, Non-Executive Director Mr Samaha holds Bachelor of Commerce and Bachelor of Economics degrees. He is anAssociate of the Institute of Chartered Accountants of Australia and anAssociate of the Securities Institute of Australia. Mr Samaha has over 15 years'experience in providing accounting and corporate advice in a diverse range ofindustry sectors, including resource development. He is a director of AIM quotedresources companies Braemore Resources Plc, Nardina Resources Plc and IrvineEnergy Plc. Jeremy Edelman - resigned 4 July 2006 DIRECTORS' INTERESTS The beneficial interests of the serving directors in the shares of the Companyduring the period to the 30 June 2006 were as follows: Ordinary Shares of 0.1p each 30 June 2006 2 February 2005 Christopher Lambert (Appointed 11 February 2005) 5,000,000 -Christopher Schrape (Appointed 4 July 2006) - -Norman Kennedy (Appointed 18 November 2005) 17,712,693 -Anthony Samaha (Appointed 11 February 2005) 1,000,000 - EMPLOYMENT POLICIES The group is committed to promoting policies which ensure that high calibreemployees are attracted, retained and motivated, to ensure the ongoing successfor the business. Employees and those who seek to work with the Company aretreated equally regardless of sex, marital status, creed, colour, race or ethnicorigin. Details of the director emoluments and payments made for professional servicesrendered are set out in note 4 to the financial statements. HEALTH & SAFETY The group's aim is to maintain its record of workplace safety. In order toachieve this objective the group provides training and support to employees andsets demanding standards for workplace safety. SUBSTANTIAL SHAREHOLDINGS On the 14 September 2006 the following shareholdings were registered as beinginterested in 3% or more of the Company's issued share capital, other thanDirectors holdings as previously disclosed under Directors Interests above: Number of Shares % of issued capitalT Hoare Nominees Limited 28,500,000 12.28%Securities Services Nominees Limited 22,749,000 9.80%Fitel Nominees Limited 22,050,000 9.50%Hanover Nominees Limited 15,022,231 6.47%Credit Suisse Client Nominees Limited 12,925,000 5.57%Euroclear Nominees Limited 11,680,500 5.03%Pershing Keen Nominees Limited 8,349,000 3.60%Teawood Nominees Limited 7,675,000 3.31%Fitel Nominees Limited 7,447,436 3.21% POLITICAL CONTRIBUTIONS AND CHARITABLE DONATIONS During the period the group did not make any political contributions orcharitable donations. PAYMENT TO SUPPLIERS The group's policy is to agree terms and conditions with suppliers in advance;payment is then made in accordance with the agreement provided the supplier hasmet the terms and conditions. INSURANCE The group maintained insurance in respect of its Directors and Officers againstliabilities in relation to the Company. GOING CONCERN Notwithstanding the loss incurred during the period under review, the directorsare of the opinion that ongoing evaluations of the Company's interests indicatethat preparation of the group's accounts on a going concern basis isappropriate. AUDITORS A resolution to re-appoint Chapman Davis LLP and to authorise the Directors tofix their remuneration will be proposed to the Annual General meeting inaccordance with section 384 of the Companies Act 1985. CITY CODE ON TAKEOVERS AND MERGERS The Panel on takeovers and mergers confirmed that, at the date the ListingParticulars were issued, the Company was subject to the City Code on Takeoversand Mergers (the "code"). The Directors believe that, so far as is practicable,they have operated and will continue to operate the group so that it willcontinue to be subject to the code. CORPORATE GOVERNANCE The Directors are committed to maintaining high standards of corporategovernance. The Directors have established procedures, so far as is practicable,given the Company's size, to comply with the Combined Code as modified by therecommendations of the Quoted Companies Alliance. The Company has adopted andoperates a share dealing code for directors and senior employees onsubstantially the same terms as the Model Code appended to the Listing Rules ofthe UKLA. The Board The Board meets regularly throughout the year. To enable the Board to performits duties, each of the Directors has full access to all relevant informationand to the services of the Company Secretary. If necessary the non-executivedirectors may take independent professional advice at the Company's expense. TheBoard currently includes four non-executive directors. The Board has delegatedspecific responsibilities to the committees described below. The audit committee The audit committee comprises Anthony Samaha (Chairman), Christopher Lambert andNorman Kennedy, with no meetings held during the period ended 30 June 2006 asthe responsibilities of the committee were assumed by the Board as a wholeduring this period. The committee reviews the Company's annual and interimfinancial statements before submission to the Board for approval. The committeealso reviews regular reports from management and the external auditors onaccounting and internal control matters. When appropriate, the committeemonitors the progress of action taken in relation to such matters. The committeealso recommends the appointment of, and reviews the fees of, the externalauditors. The remuneration committee The remuneration committee is made up of Christopher Lambert (Chairman) andAnthony Samaha, with no meetings held during the period ended 30 June 2006 asthe responsibilities of the committee were assumed by the Board as a wholeduring this period. It is responsible for reviewing the performance of theExecutive Directors and for setting the scale and structure of theirremuneration, paying due regard to the interests of shareholders as a whole andthe performance of the Company. DIRECTORS' RESPONSIBILITIES Company law requires the Directors to prepare financial statements for eachfinancial period which give a true and fair view of the state of the affairs ofthe company and of the group as at the end of the financial period and of theprofit or loss of the group for that period. In preparing those financialstatements, the Directors are required to: - select suitable accounting policies and then apply them consistently; - make judgements and estimates that are reasonable and prudent; - state whether applicable Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company and group will continue in business for the foreseeable future. The Directors are responsible for keeping proper accounting records whichdisclose with reasonable accuracy at any time the financial position of thecompany and to enable them to ensure that the financial statements comply withthe Companies Act 1985. They are also responsible for safeguarding the assetsof the group and hence for taking reasonable steps for the prevention anddetection of fraud and other irregularities. By order of Board: Christopher LambertChairman29 September 2006 INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF ALTONA RESOURCES PLC We have audited the financial statements of Altona Resources Plc on pages 14 to25 for the period ended 30 June 2006. These financial statements have beenprepared under the accounting policies set out therein. This report is made solely to the company's members, as a body, in accordancewith section 235 of the Companies Act 1985. Our audit work has been undertakenso that we might state to the company's members those matters we are required tostate to them in an auditors report and for no other purpose. To the fullestextent permitted by law, we do not accept or assume responsibility to anyoneother than the company and the company's members as a body, for our audit work,for this report, or for the opinions we have formed. RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS As described in the Directors' Report the company's Directors are responsiblefor the preparation of financial statements in accordance with applicable lawand United Kingdom Accounting Standards (United Kingdom Generally AcceptedAccounting Practice). Our responsibility is to audit the financial statements in accordance withrelevant legal and regulatory requirements and International Standards onAuditing (UK and Ireland). We report to you our opinion as to whether the financial statements give a trueand fair view and are properly prepared in accordance with the Companies Act1985. We also report to you if, in our opinion, the Director's report is notconsistent with the financial statements, if the company has not kept properaccounting records, if we have not received all the information and explanationswe require for our audit, or if information specified by law regardingDirectors' remuneration and transactions with the company and the group is notdisclosed. We read the Director's report and the other information in the Annual Report andconsider the implications for our report if we become aware of any apparentmisstatements or material inconsistencies within the financial statements. BASIS OF AUDIT OPINION We conducted our audit in accordance with International Standards on Auditing(UK and Ireland) issued by the Auditing Practices Board. An audit includesexamination, on a test basis, of evidence relevant to the amounts anddisclosures in the financial statements. It also includes an assessment of thesignificant estimates and judgements made by the directors in the preparation ofthe financial statements, and of whether the accounting policies are appropriateto the company's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information andexplanations which we considered necessary in order to provide us withsufficient evidence to give reasonable assurance that the financial statementsare free from material misstatement, whether caused by fraud or otherirregularity or error. In forming our opinion we also evaluated the overalladequacy of the presentation of information in the financial statements. OPINION In our opinion the financial statements: - give a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice, of the state of the company's and the group's affairs as at 30 June 2006 and of its loss for the period then ended; and - have been properly prepared in accordance with the Companies Act 1985. Date: 29 September 2006 Chapman Davis LLP Registered Auditors Chartered Accountants CONSOLIDATED PROFIT AND LOSS ACCOUNT For the Period from Incorporation on 2 February 2005 to 30 June 2006 Notes £'000sNet operating expenses (394) OPERATING LOSS 3 (394) Investment income and interest receivable 5 35 LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (359) Taxation 6 - RETAINED LOSS FOR THE FINANCIAL PERIOD (359) Dividend - LOSS FOR THE FINANCIAL PERIOD (359) LOSS PER SHARE 7 (0.18p) - Basic, expressed in pence The profit and loss account has been prepared on the basis that all operationsare continuing operations. There was no difference between the reported loss forthe period and the historical cost loss for the period. BALANCE SHEETS At 30 June 2006 Notes Group Company £'000s £'000sFIXED ASSETSIntangible assets 8 2,361 -Tangible assets 9 2 2Investments 10 - 2,100 TOTAL FIXED ASSETS 2,363 2,102 CURRENT ASSETDebtors 11 42 302Cash at bank and in hand 454 450 CREDITORS: amounts falling due within one year 12 (150) (121) TOTAL CURRENT ASSETS 346 631 NET ASSETS 2,709 2,733 CAPITAL AND RESERVESCalled up share capital 13 231 231Share premium account 14 836 836Merger Reserve 14 2,001 2,001Profit and loss account 14 (359) (335) TOTAL SHAREHOLDERS' FUNDS 15 2,709 2,733 CONSOLIDATED CASH FLOW STATEMENT For the Period from Incorporation on 2 February 2005 to 30 June 2006 Notes £'000sNET CASH FLOW FROM:OPERATING ACTIVITIES 19 (285)RETURNS ON INVESTMENTS AND SERVICING OF FINANCEInterest received 35Net cash inflow from returns on investmentsand servicing of finance 35 INVESTING ACTIVITIESPayments to acquire tangible fixed assets (3)Payments to acquire intangible fixed assets (330)Net cash outflow from investing activities (333) FINANCING ACTIVITIESNet proceeds from issue of shares 1,037Net cash inflow from financing 1,037 INCREASE IN CASH IN PERIOD 20 454 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. ACCOUNTING POLICIES The principal accounting policies are summarised below. They have been applied consistently throughout the period. BASIS OF ACCOUNTING The financial statement has been prepared under the historical cost conventionas modified by the revaluation of certain fixed assets and in accordance withthe applicable accounting standards issued by United Kingdom accountancy bodies,and the requirement of the Companies Act 1985. The consolidated financial statements reflect the results and financial positionof the Company and its subsidiaries. BASIS OF CONSOLIDATION The group financial statements consolidate the accounts of the Company and itsinterest in its subsidiaries. The acquisition of Altona Australia Pty Limitedand its subsidiary Arckaringa Energy Pty Limited has been accounted for usingacquisition accounting principles. FIXED ASSETS Tangible fixed assets are stated at cost less depreciation. Depreciation of tangible fixed assets is provided at the following annual ratesin order to write off each asset over its useful life: Computer equipment 20% straight line Intangible assets represent the value of the group's wholly owned interest in acoal mining project in South Australia and have been accounted for in accordancewith Financial Reporting Standards 10 Goodwill and Intangible assets. OPERATING LEASES Operating lease rentals are charged to the profit and loss account as incurred. FOREIGN CURRENCIES Transactions denominated in currencies other than the functional currency of anoperation ("foreign currency") are recorded using the exchange rate at the dateof the transaction. Monetary assets and liabilities denominated in foreigncurrencies are translated into the functional currency at the balance sheet dateusing the exchange rate ruling at that date and the gains and losses arising onretranslation are included in the profit and loss account. On consolidation, the assets and liabilities of overseas subsidiaries aretranslated from their functional currencies into sterling using the exchangerates ruling at the balance sheet date. The results for the period of overseassubsidiaries are translated from their functional currencies using the averageexchange rate for the period. The exchange differences arising from theretranslation of the opening net assets of overseas subsidiaries are disclosedas movements on reserves. DEFERRED TAXATION The accounting policy in respect of the deferred tax reflects the requirementsunder FRS19 Deferred Tax. Deferred tax is provided in full in respect oftaxation deferred by timing differences between the treatment of certain itemsfor taxation and accounting purposes. The deferred tax balances are notdiscounted. HOLDING COMPANY PROFIT AND LOSS The holding company has taken advantage of the exemptions available to it underthe Companies Act 1985 and has not produced a separate Profit and Loss Account. SUBSIDIARIES The following subsidiaries have been consolidated in the financialstatements; Status Shareholding Altona Australia Pty Limited Non-trading 100% Arckaringa Energy Pty Limited Trading 100% SHARE BASED PAYMENTS The directors have decided against early adoption of the provisions of FRS 20Share Based Payments GOING CONCERN The financial statement have been prepare on a going concern basis. 2. TURNOVER AND SEGMENTAL INFORMATION The Company has no turnover during the period. Operating results and net assets are substantially attributable to activities inAustralia. The parent company operates a head office based in the United Kingdom whichincurs certain administration costs. 3. OPERATING LOSS £'000s Operating loss is arrived at after charging: Depreciation 1 Operating lease rentals: - land and buildings 36 Auditors' remuneration - audit services 8 - non audit services 3 Auditors remuneration for non-audit services provided during theperiod amounting to £3,000 relates to the provision of general accountingservices. A further charge of £7,500 relates to the provision of an accountantsreport for the purpose of the Company's AIM Admission Document and was chargedto the share premium account. Auditors remuneration for audit services above includes £3,000 chargedby William Buck, Chartered Accountants relating to the audit of the subsidiarycompanies. 4. DIRECTORS AND EMPLOYEES £'000sGroup employment costs, including Directors:Wages and salaries 148 Directors' emoluments: £'000s Directors Fees Consultancy Fees TotalNon-Executive DirectorsChristopher Lambert (1) 15 34 49Norman Kennedy (2) 14 - 14Anthony Samaha 15 25 40Executive DirectorsChristopher Schrape - - -Jeremy Edelman (3) 24 21 45 68 80 148 (1) Services provided by Walkerton Limited(2) Services provided by Rank Geologica Services Pty Limited(3) Jeremy Edelman - resigned from office on 4 July 2006 No pension benefits are provided for any Director. 5. INVESTMENT INCOME AND INTEREST £'000s Interest receivable: Short term deposits 35 6. TAX ON PROFIT ON ORDINARY ACTIVITIES £'000s No taxation has been provided due to losses in the period. Factors affecting the tax charge for the year Loss on ordinary activities before taxation (359) Loss on ordinary activities before taxation multiplied by the standard rate of UK corporation tax of 30% (108) Effects of: Non deductible expenses 5 Losses available for future relief 103 Current tax charge - 7. LOSS PER SHARE The loss for the period attributed to shareholders is £359,000. This is divided by the weighted average number of Ordinary shares outstandingcalculated to be 204.2 million to give a basic loss per share of 0.18p. As inclusion of the potential Ordinary shares would result in a decrease in theloss per share they are considered be to anti-dilutive and, as such, a dilutedloss per share is not included. 8. INTANGIBLE FIXED ASSETS £'000s Cost Additions 2,361 At 30 June 2006 2,361 The intangible asset represents the coal project held by the Company's whollyowned subsidiary, Arckaringa Energy Pty Limited. The costs is analysed as follows: £'000s Fair value uplift on acquisition 2,031 Associated costs of acquisition 69 Deferred evaluation expenditure 261 ______ 2,361 Exploration, evaluation and development expenditure incurred isaccumulated in respect of each identifiable area of interest. These costs areonly carried forward to the extent that they are expected to be recouped throughthe successful development of the area or where activities in the area have notyet reached a stage which permits reasonable assessment of the existence ofeconomically recoverable reserves. Accumulated costs in relation to an abandoned area are written off in fullagainst the profit in the year in which the decision to abandon the area ismade. A regular review is undertaken of each area of interest to determine theappropriateness of continuing to carry forward costs in relation to that area ofinterest. Restoration, rehabilitation and environmental costs necessitated byexploration and evaluation activities are expensed as incurred and treated asexploration and evaluation expenditure. Impairment Review The directors undertook an impairment review as at 30 June 2006 and as aresult of this review no provision was required. 9. TANGIBLE ASSETS Plant fixtures & fittings £'000sGROUPCost: Additions 3At 30 June 2006 3Depreciation:Provision for period 1At 30 June 2006 1Net book value:At 30 June 2006 2 Plant fixtures & fittings £'000sCOMPANYCost:Additions 3At 30 June 2006 3Depreciation:Provision for period 1At 30 June 2006 1Net book value:At 30 June 2006 2 10. FIXED ASSET INVESTMENTS COMPANY Shares in group undertakings £'000s Additions 2,100 Holdings of more than 20% The Company holds more than 20% of the share capital of the following companies; Country of Shares held Company Registration Class % Altona Australia Pty Limited Australia Ordinary 100 Arkaringa Energy Pty Limited Australia Ordinary 100 On 18 November 2005 the Company acquired 100 per cent of the issued sharecapital of Arckaringa Energy Pty Limited for the consideration of 30,000,000Ordinary 0.1p shares, with a deemed value of £2.031 million. The nominal value of the Ordinary shares amounted to £30,000. The transactionwas subject to the merger relief provisions of the Companies Act 1985 andaccordingly no share premium was set up. The difference between the fair valueof the acquisition and the nominal value of the shares allotted has beencredited to a merger reserve account. Fair Value of Arckaringa Energy Pty Limited assets at 18 November 2005: £000's Licenses and deferred evaluation and exploration costs 2,031 Net liabilities - Total 2,031 Fair value of consideration: 30 million Ordinary shares of 0.1p each issued at 6.77p per share 2 031 11. DEBTORS Group Company £'000s £'000s Due within one year: Trade debtors 26 26 Amounts owed by subsidiary undertakings - 269 Other debtors 9 - Prepayments and accrued income 7 7 42 302 12. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Group Company £'000s £'000s Trade creditors 119 93 Other taxes and social security costs 8 8 Accruals and deferred income 23 20 150 121 13. SHARE CAPITAL Authorised 1,000,000,000 Ordinary shares of 0.1p each 1,000 Allotted, called up and fully paid 230,500,000 Ordinary shares of 0.1p each 231 During the period the Company issued the following Ordinary 0.1 pence shares: Issue Price Number SharesIncorporation 0.10p 29 February 2005 0.10p 59,999,99816 February 2005 0.10p 40,000,0004 March 2005 1.00p 100,000,00017 November 2005 * 6.77p 30,000,00020 June 2006 1.0p 500,000 230,500,000 * These shares were issued as consideration for the acquisition of Arckaringa Energy Pty Limited referred to in note 10. Share options In addition to the above the following share options were grantedduring the period. Date Number Exercise price Expiry Date GrantedNabarro Wells & Co Limited * 10/3/05 3,000,000 1p 10/3/10 * During the period Nabarro Wells & Co Limited (advisors to the Company) exercised options on the following shares: Date of exercise Number Market Price at Date of Exercise 20/6/06 500,000 7.0p 03/7/06 250,000 6.6p 14. RESERVES Share Premium Merger Profit and Loss £'000s Reserve £'000sGROUP £'000sRetained loss for the period - - (359)Premium on shares issued during the period 836 - -On acquisition of subsidiary (refer below) - 2,001 -At 30 June 2006 836 2,001 (359) Share Premium Merger Profit and Loss £'000s Reserve £'000sCOMPANY £'000sRetained loss for the period - - (335)Premium on shares issued during the period 836 - -On acquisition of subsidiary (refer below) - 2,001 -At 30 June 2006 836 2,001 (335) Merger Reserve On 17 November 2005 the Company issued 30 million Ordinary 0.1 pence share at adeemed value of 6.77 pence per share to acquire 100% of Arckaringa Energy PtyLimited. This resulted in the following amount being credited to the mergerreserve: £'000sIssue of 30 million Ordinary shares at 6.77 pence per share 2,031Called up share capital at 0.1 pence per share (30) 2,001 15. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS FUNDS £'000sLoss for the period (359)Issue of shares 201Increase in share premium 836Fair and value adjustments - revaluation of intangible assets 2,031Net increase to shareholders' funds 2,709Shareholders' funds at 2 February 2005 -Shareholders' funds at 30 June 2006 2,709 Represented by:-Equity interests 2,709 16. REVENUE COMMITMENTS The group had no material commitments under either capital contracts or leaseagreements at 30 June 2006. 17. RELATED PARTY TRANSACTIONS During the period the subsidiary company Arckaringa Energy Pty Ltd paidgeological consultancy fees and expenses reimbursements of £53,000 to RankGeological Services Pty Ltd, a company related to Norman Kennedy, Director ofAltona Resources Plc. This amount was paid under a management agreement dated18 November 2005 forming part of an agreement to transfer Arckaringa coalfieldtenements EL 3360, 3362. At 30 June 2006 £8,000 of the total balance wasoutstanding. 18. POST BALANCE SHEET EVENTS On 3 July 2006 the Company issued 250,000 Ordinary shares under optionspreviously granted to the Company's advisors. On 11 September 2006 the Company issued 6,000,000 new Ordinary shares at 6.5pence per share to raise £390,000 in additional working capital. 19. RECONCILIATION OF OPERATING LOSS TO NET CASH FLOW FROMOPERATING ACTIVITIES £'000s Operating loss (394) Depreciation charge 1 (Increase) in debtors (42) Increase in creditors 150 NET CASH FLOW FROM OPERATING ACTIVITIES (285) 20. ANALYSIS OF CHANGES IN NET DEBT £'000s 2 February 2005 Cash Flows 30 June 2006Cash at bank and in hand - 454 454 21. MATERIAL NON-CASH TRANSACTION The acquisition of the wholly owned subsidiary, Arckaringa Energy Pty Limited,as described in note 10 constitutes a material non-cash transaction. 22. INTEREST RATE AND CURRENCY PROFILE OF GROSS FINANCIAL ASSETS The group has taken advantage of the exemption in FRS13 "Derivatives and OtherFinancial Instruments" in respect of short term debtors and creditors andconsequently these items are not included in the analysis above, nor are theredisclosures relating to the interest rate and currency profile of GrossFinancial Liabilities. 23. AVAILABILITY OF ACCOUNTS The financial information set out above does not constitute the Company'sstatutory accounts for the period from Incorporation on 2 February 2005 to 30June 2006, but is derived from those accounts. Statutory accounts for theperiod will be delivered to the Registrar of Companies shortly. Copies of the accounts will be posted to shareholders shortly and will also beavailable free of charge for collection at the following address: Third Floor 55 Gower Street London WC1E 6HQ -End- For further information please contact: Altona Resources plcChristopher Lambert, Chairman +44 (0) 207 016 5100Christopher Schrape, Managing Director +61 (0) 417 984 434 Nabarro Wells & Co LimitedHugh Oram, Director +44 (0) 207 710 7400 Parkgreen CommunicationsVictoria Thomas +44 (0) 207 493 3713 This information is provided by RNS The company news service from the London Stock Exchange