Bos Glb Hldgs Regulatory News (BOS)

9 Mar 2006 09:23

Murchison United NL09 March 2006 ABN 59 009 087 852 HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2005 Murchison United NL Ground Floor 1121 Hay Street WEST PERTH WA 6005 Australia MURCHISON UNITED NL (ABN 59 009 087 852) CONTENTS Directors' Report 3 Condensed Income Statement 4 Condensed Balance Sheet 5 Condensed Cash Flow Statement 6 Condensed Statement of Changes in Equity 7 Notes to the Half-Year Financial Report 8 Directors' Declaration 20 Independent Review Report to the Members of Murchison United NL 21 Auditor's Independence Declaration 22 MURCHISON UNITED NL (ABN 59 009 087 852) DIRECTORS' REPORT Your Directors submit their report for the half-year ended 31 December 2005. Directors The names of the Company's Directors in office during the half-year and untilthe date of this report are as below. Directors were in office for this entireperiod unless otherwise stated. Glenn Robert FeatherbyMark David ReillyChristopher David GrannellDavid Hutchins (Resigned on 29 November 2005) Review and Results of Operations The Company reported a loss for the half-year of $1,356,988 (2004: $335,756). The Company continues to investigate resource opportunities in Australia andinternationally to assess their appropriateness for the Company. Currently theseare focused on the Company's mining interests in the Cloncurry area inQueensland, Australia and uranium exploration. Uranium exploration will befocussed on the newly acquired prospecting licenses in the Republic of Guinea.In addition the Company is confident of the successful conclusion of theapplication for prospecting licences in the Republic of Mauritania. Dividends No dividend has been paid during the period (2004: $ nil). AUDITOR'S INDEPENDENCE DECLARATION A copy of the Auditor's Independence Declaration as required under section 307Cof the Corporations Act is set out on page 22. Signed in accordance with a resolution of the directors. Mark ReillyManaging Director Perth 9 March 2006 MURCHISON UNITED NL (ABN 59 009 087 852) CONDENSED INCOME STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 2005 2005 2004 Note $ $ Continuing operationsRevenue 2 43,044 5,002Other expenses (1,400,032) (340,758)Loss from continuing operations before tax and financingcosts (1,356,988) (335,756)Finance costs - -Loss before income tax (1,356,988) (335,756)Income tax expense - - Loss after tax from continuing operations (1,356,988) (335,756) Net loss attributable to members (1,356,988) (335,756) Earnings per share (cents per share)- basic for loss for the half year (0.0050) (0.0017)- diluted for loss for the half year (0.0048) (0.0012) MURCHISON UNITED NL (ABN 59 009 087 852) CONDENSED BALANCE SHEET AS AT 31 DECEMBER 2005 As at As at 31 December 2005 30 June 2005 $ $ASSETSCurrent AssetsCash and cash equivalents 1,210,758 1,988,141Trade and other receivables 7,950 7,950Prepayments 2,489 7,466Total Current Assets 1,221,197 2,003,557 Non-current assetsAvailable for sale financial assets 23,480 23,480Property, plant and equipment 2,072 2,650Total Non-Current Assets 25,552 26,130 TOTAL ASSETS 1,246,749 2,029,687 LIABILITIESCurrent LiabilitiesTrade payables 225,506 35,783Provisions 317,664 277,726Total Current Liabilities 543,170 313,509 TOTAL LIABILITIES 543,170 313,509 NET ASSETS 703,579 1,716,178 EQUITYIssued capital 41,380,905 41,380,905Reserves 446,250 101,861Accumulated losses (41,123,576) (39,766,588) TOTAL EQUITY 703,579 1,716,178 MURCHISON UNITED NL (ABN 59 009 087 852) CONDENSED CASH FLOW STATEMENT FOR THE HALF -YEAR ENDED 31 DECEMBER 2005 2005 2004 $ $ Cash flows from operating activities Payments to suppliers and employees (818,842) (111,589) Net cash flows used in operating activities (818,842) (111,589) Cash flows from investing activities Interest received 43,044 3,198Other - 1,804Purchase of equipment (1,585) - Net cash flows from investing activities 41,459 5,002 Net decrease in cash and cash equivalents (777,383) (106,587)Cash and cash equivalents at the beginning of the financialperiod 1,988,141 148,025 Cash and cash equivalents at the end of period 1,210,758 41,438 MURCHISON UNITED NL (ABN 59 009 087 852) CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE HALF -YEAR ENDED 31 DECEMBER 2005 Attributable to equity holders of the Total equity parent Issued Accumulated Employee capital losses Equity Benefits Reserve Total $ $ $ $ At 1 July 2004 37,554,895 (38,003,539) - (448,644) Total income and expense for the periodrecognised directly in equity - - - - Loss for the period - (335,756) - (335,756) Total income/(expense) for the period - (335,756) - (335,756) At 31 December 2004 37,554,895 (38,339,295) - (784,400) Issued Accumulated Employee capital losses Equity Benefits Reserve Total $ $ $ $ At 1 July 2005 41,380,905 (39,766,588) 101,861 1,716,178 Total income and expense for the periodrecognised directly in equity Loss for the period - (1,356,988) - (1,356,988) Total income/(expense) for the period - (1,356,988) - (1,356,988) Cost of share-based payment - - 344,389 344,389 At 31 December 2005 41,380,905 (41,123,576) 446,250 703,579 MURCHISON UNITED NL (ABN 59 009 087 852) NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2005 1. BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT The half-year financial report does not include all notes of the type normallyincluded within the annual financial report and therefore cannot be expected toprovide as full an understanding of the financial performance, financialposition and financing and investing activities of the entity as the fullfinancial report. The half-year financial report should be read in conjunction with the AnnualFinancial Report of Murchison United NL as at 30 June 2005, which was preparedbased on Australian Accounting Standards applicable before 1 January 2005('AGAAP'). It is also recommended that the half-year financial report be consideredtogether with any public announcements made by Murchison United NL during thehalf-year ended 31 December 2005 in accordance with the continuous disclosureobligations arising under the Corporation s Act 2001. (a) Basis of Accounting The half-year financial report is a general-purpose financialreport, which has been prepared in accordance with the requirements of theCorporations Act 2001, applicable Accounting Standards including AASB 134"Interim Financial Reporting" and other mandatory professional reportingrequirements. The half-year financial report has been prepared in accordance withthe historical cost basis, except for available for sale financial assts, whichhave been measured at fair value. For the purpose of preparing the half-year financial report, the half-year hasbeen treated as a discrete reporting period. (b) Statement of Compliance The half-year financial report complies with Australian Accounting Standards,which include Australian equivalents to International Financial ReportingStandards ('AIFRS'). Compliance with AASB134 ensures that the half-yearfinancial report, comprising the financial statements and notes thereto,complies with IAS34 "Interim Financial Reporting". This is the first half-year financial report prepared based on AIFRS andcomparatives for the half-year ended 31 December 2004 and full-year ended 30June 2005 have been restated accordingly. A summary of the significantaccounting policies of the Company under AIFRS are disclosed in Note 1(c) below. Reconciliations of: • AIFRS equity as at 1 July 2004, 31 December 2004 and 30 June 2005; and • AIFRS loss for the half-year 31 December 2004 and full year 30 June 2005, to the balances reported in the 31 December 2004 half-year report and 30 June2005 full-year financial report prepared under AGAAF are detailed in note 1(e)below. From 1 July 2005, the Company elected to take the exemption under AASB1 "FirstTime Adoption of Australian Equivalents to International Financial ReportingStandards" to apply AASB 139 "Financial Instruments: Recognition andMeasurement" from 1 July 2005. Accordingly, comparatives have not beenrestated. For information on previous accounting policies, refer to the 2005Annual Financial Report prepared under previous AGAAP. MURCHISON UNITED NL (ABN 59 009 087 852) NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2005 1. BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT (Continued) (c) Summary of Significant Accounting Policies (i) Property, plant and equipment Plant and equipment is stated at cost less accumulated depreciation and anyaccumulated impairment losses. Depreciation is calculated on a straight-line basis over the estimated usefullife of the asset as follows: Plant and equipment - over 3 to 10 years. Impairment The carrying values of plant and equipment are reviewed for impairment withrecoverable amount being estimated when events or changes in circumstancesindicate the carrying value may be impaired. If any such indication exists andwhere the carrying values exceed the estimated recoverable amount, the assetsare written down to their recoverable amount. The recoverable amount of an asset is the higher of its fair valueless costs to sell and its value in use and is determined for an individualasset, unless the asset does not generate cash in flows that are largelydependant of those from other assets or group of assets and the assets' value inuse cannot be estimated to be close to its fair value. In such cases the assetis tested for impairment as part of the cash-generating unit to which itbelongs. Where the carrying amount of an asset on cash generating unit exceedsits recoverable amount, the asset on cash generating unit is considered impairedand is written down to its recoverable amount. (ii) Recoverable amount of assets At each reporting date, the Company assesses whether there is anyindication that an asset may be impaired. Where an indicator of impairmentexists, the Company makes a formal estimate of recoverable amount. An asset'srecoverable amount is the higher of its fair value less costs to sell and valuein use. It is determined for an individual asset, unless the asset's value inuse cannot be estimated to be close to its fair value less costs to sell and itdoes not generate cash flows that are largely independent of those from otherassets or group of assets, in which case, the recoverable amount is determinedfor the cash-generating unit to which the asset belongs. Where the carryingamount of an asset or cash-generating unit exceeds its recoverable amount theasset or cash-generating unit is considered impaired and is written down to itsrecoverable amount. In assessing value in use, the estimated future cash flows are discounted totheir present value using a pre-tax discount rate that reflects current marketassessments of the time value of money and the risks specific to the asset. MURCHISON UNITED NL (ABN 59 009 087 852) NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2005 1. BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT (Continued) (c) Summary of Significant Accounting Policies (continued) (iii) Investments and Other Financial Assets Financial assets in the scope of AASB 139 Financial instruments:Recognition and Measurement are classified as either financial assets at fairvalue through profit or loss, or available-for-sale investments, as appropriate.When financial assets are recognised initially, they are measured at fairvalue, plus, in the case of investments not at fair value though profit or loss,directly attributable transactions costs. The Company determines theclassification of its financial assets after initial recognition and, whenallowed and appropriate, re-evaluates this designation at each financialyear-end. All regular way purchases and sales of financial assets are recognised on thetrade date i.e. the date that the Company commits to purchase the asset. Regularway purchases or sales are purchases or sales of financial assets undercontracts that require delivery of the assets within the period establishedgenerally by regulation or convention in the marketplace. Financial assets at fair value through profit or loss Financial assets classified as held for trading are included in the category'financial assets at fair value though profit or loss'. Financial assets areclassified as held for trading if they are acquired for the purpose of sellingin the near term. Derivatives are also classified as held for trading unlessthey are designated as effective hedging instruments. Gains or losses oninvestments held for trading are recognised in profit or loss. Available-for-sale investments Available-for-sale investments are those non-derivative financial assets thatare designated as available-for-sale or are not classified as the precedingcategory. After initial recognition available-for-sale investments are measuredat fair value with gains or losses being recognised as a separate component ofequity until the investment is derecognised or until the investment isdetermined to be impaired, at which time the cumulative gain or loss previouslyreported in equity is recognised in profit or loss. The fair value of investments that are actively traded in organised financialmarkets is determined by reference to quoted market bid prices at the close ofbusiness on the balance sheet date. For investments with no active market, fairvalue is determined using valuation techniques. Such techniques include usingrecent arm's length market transactions; reference to the current market valueof another instrument that is substantially the same; discounted cash flowanalysis and option pricing models. MURCHISON UNITED NL (ABN 59 009 087 852) NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2005 1. BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT (Continued) (c) Summary of Significant Accounting Policies (continued) (iv) Trade and other receivables Trade receivables, which generally have 30-90 day terms, are recognised andcarried at original invoice amount less an allowance for any uncollectibleamounts. An allowance for doubtful debts is made when there is objective evidence thatthe Company will not be able to collect the debts. Bad debts are written offwhen identified. (v) Cash and cash equivalents Cash and short-term deposits in the balance sheet comprise cash at bank and inhand and short-term deposits with an original maturity of three months or less. For the purposes of the Cash Flow Statement, cash and cash equivalents consistof cash and equivalents as defined above, net of outstanding bank overdrafts. (vi) Impairment of financial assets The Company assesses at each balance sheet date whether a financial asset orgroup of financial assets is impaired. Financial assets carried at amortised cost If there is objective evidence that an impairment loss on loans and receivablescarried at amortised cost has been incurred, the amount of the loss is measuredas the difference between the asset's carrying amount and the present value ofthe estimated future cash flows (excluding future credit losses that have notbeen incurred) discounted at the financial asset's original effective interestrate (ie the effective interest rate computed at initial recognition). Thecarrying amount of the asset is reduced either directly or through use of anallowance account. The amount of the loss is recognised in profit or loss. The Company first assesses whether objective evidence of impairment existsindividually for financial assets that are individually significant, andindividually or collectively for financial assets that are not individuallysignificant. If it is determined that no objective evidence of impairmentexists for an individually assessed financial asset, whether significant or not,the asset is included in a group of financial assets with similar credit riskcharacteristics and that group of financial assets is collectively assessed forimpairment. Assets that are individually assessed for impairment and for whichan impairment loss is or continues to be recognised are not included in acollective assessment of impairment. If, in a subsequent period, the amount of the impairment loss decreases and thedecrease can be related objectively to an event occurring after the impairmentwas recognised, the previously recognised impairment loss is reversed. Anysubsequent reversal of an impairment loss is recognised in profit or loss, tothe extent that the carrying value of the asset does not exceed its amortisedcost at the reversal date. MURCHISON UNITED NL (ABN 59 009 087 852) NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2005 1. BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT (Continued) (c) Summary of Significant Accounting Policies (continued) (vi) Impairment of financial assets (continued) Financial assets carried at cost If there is objective evidence that an impairment loss has been incurred on anunquoted equity instrument that is not carried at fair value (because its fairvalue cannot be reliably measured), or on a derivative asset that is linked toand must be settled by delivery of such an unquoted equity instrument, theamount of the loss is measured as the difference between the asset's carryingamount and the present value of estimated future cash flows, discounted at thecurrent market rate of return for a similar financial asset. Available-for-sale investments If there is objective evidence that an available-for-sale investment isimpaired, an amount comprising the difference between its cost (net of anyprincipal repayment and amortisation) and its current fair value, less anyimpairment loss previously recognised in profit or loss, is transferred fromequity to the income statement. Reversals of impairment losses for equityinstruments classified as available-for-sale are not recognised in profit.Reversals of impairment losses for debt instruments are reversed through profitor loss if the increase in an instrument's fair value can be objectively relatedto an event occurring after the impairment loss was recognised in profit orloss. (vii) Provisions Provisions are recognised when the Company has a present obligation (legal orconstructive) as a result of a past event, it is probable that an outflow ofresources embodying economic benefits will be required to settle the obligationand a reliable estimate can be made of the amount of the obligation. Where the Company expects some or all of a provision to be reimbursed, forexample under an insurance contract, the reimbursement is recognised as aseparate asset but only when the reimbursement is virtually certain. Theexpense relating to any provision is presented in the income statement net ofany reimbursement. If the effect of the time value of money is material, provisions are determinedby discounting the expected future cash flows at a pre-tax rate that reflectscurrent market assessments of the time value of money, and, where appropriate,the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage oftime is recognised as a finance cost. (viii) Trade and Other Payables Trade payables and other payables are carried at amortised costs and representliabilities for goods and services provided to the Company prior to the end ofthe financial year that are unpaid and arise when the Company becomes obliged tomake future payments in respect of the purchase of these goods and services. (ix) Contributed Equity Ordinary shares are classified as equity. Incremental costs directlyattributable to the issue of new shares or options are shown in equity as adeduction, net of tax, from the proceeds. MURCHISON UNITED NL (ABN 59 009 087 852) NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2005 1. BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT (Continued) (c) Summary of Significant Accounting Policies (continued) (x) Earnings per share Basic earnings per share is calculated as net profit attributable to members,adjusted to exclude any costs of servicing equity (other than dividends) andpreference share dividends, divided by the weighted average number of ordinaryshares, adjusted for any bonus element. Diluted earnings per share is calculated as net profit attributable to membersadjusted for: • Costs of servicing equity (other than dividends) and preference share dividends; • The after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and • Other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutivepotential ordinary shares, adjusted for any bonus element. (xi) Share-based payment transactions The Company provides benefits to employees (including directors) of the Companyin the form of share-based payment transactions, whereby employees are providedwith long-term incentives in exchange for shares or rights over shares('equity-settled transactions'). There is currently one plan in place to provide these benefits being theEmployee Share Option Plan (ESOP), which provides benefits to directors andsenior executives. The cost of these equity-settled transactions with employees is measured byreference to the fair value at the date at which they are granted. The fairvalue is determined by an external valuer using a binomial model. In valuing equity-settled transactions, no account is taken of any performanceconditions, other than conditions linked to the price of the shares of MurchisonUnited NL ('market conditions'). The cost of equity-settled transactions is recognised, together with acorresponding increase in equity, over the period in which the performanceconditions are fulfilled, ending on the date on which the relevant employeesbecome fully entitled to the award ('vesting date'). The cumulative expense recognised for equity-settled transactions at eachreporting date until vesting date reflects (i) the extent to which the vestingperiod has expired and (ii) the number of awards that, in the opinion of thedirectors of the Company, will ultimately vest. This opinion is formed based onthe best available information at balance date. No adjustment is made for thelikelihood of market performance conditions being met, as the effect of theseconditions is included in the determination of fair value at grant date. No expense is recognised for awards that do not ultimately vest, except forawards where vesting is conditional upon a market condition. The dilutive effect, if any, of outstanding options is reflected as additionalshare dilution in the computation of earnings per share. MURCHISON UNITED NL (ABN 59 009 087 852) NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2005 1. BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT (Continued) (c) Summary of Significant Accounting Policies (continued) (xii) Foreign currency translation Both the functional and presentation currency of Murchison United NL isAustralian Dollars (A$). Transactions in foreign currencies are initiallyrecorded in the functional currency at the exchange rates ruling at the date ofthe transaction. Monetary assets and liabilities denominated in foreigncurrencies are retranslated at the rate of exchange ruling at the balance sheetdate. Resulting exchange differences are recognised in determining the profitor loss for the year. Non-monetary items that are measured in terms of historical cost in a foreigncurrency are translated using the exchange rate as at the date of the initialtransaction. (xiii) Leases The determination of whether an arrangement is or contains a lease is based onthe substance of the arrangement and requires an assessment of whether thefulfilment of the arrangement is dependent on the use of a specific asset orassets, and the arrangement conveys a right to use the asset. Leases where the lessor retains substantively all the risks and benefits ofownership of the asset are classified as operating leases. Operating lease payments are recognised as an expense in the income statement ona straight- line basis over the lease term. (xiv) Revenue Recognition Revenue is recognised to the extent that it is probable that the economicbenefits will flow to the Company and the revenue can be reliably measured. Thefollowing specific recognition criteria must all be met before revenue isrecognised: Interest Revenue is recognised as the interest accrues (using the effective interestmethod, which is the rate that exactly discounts estimated future cash receptsthrough the expected life of the financial instrument) to the net carryingamount of the financial asset. Dividends Revenue is recognised when the shareholders' right to receive payment isestablished. MURCHISON UNITED NL (ABN 59 009 087 852) NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2005 1. BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT (Continued) (c) Summary of Significant Accounting Policies (continued) (xv) Income tax Deferred income tax is provided on all temporary differences at the balancesheet date between the tax bases of assets and liabilities and their carryingamounts for financial reporting purposes. Deferred income tax liabilities are recognised for all taxable temporarydifferences except: • When the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or • When the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets are recognised for all deductible temporarydifferences, carry-forward of unused tax assets and unused tax losses, to theextent that it is probable that taxable profit will be available against whichthe deductible differences, and the carry-forward of unused tax assets andunused tax losses can be utilised except: • When the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or • When the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised. The carrying amount of deferred income tax assets is reviewed at each balancesheet date and reduced to the extent that it is no longer probable thatsufficient taxable profit will be available to allow all or part of the deferredincome tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheetdate and are recognised to the extent that it has become probable that futuretaxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are measured at the tax rates thatare expected to apply to the year when the asset is realised or the liability issettled, based on tax rates (and tax laws) that have been enacted orsubstantively enacted at the balance sheet date. Income taxes relating to items recognised directly in equity are recognised inequity and not in the income statement. MURCHISON UNITED NL (ABN 59 009 087 852) NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2005 1. BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT (Continued) (c) Summary of Significant Accounting Policies (continued) (xvi) Other Taxes Revenues, expenses and assets are recognised net of the amount of GST except: • where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and • receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority isincluded as part of receivables or payables in the balance sheet. Cash flows are included in the Cash Flow Statement on a gross basis and the GSTcomponent of cash flows arising from investing and financing activities, whichis recoverable from, or payable to, the taxation authority are classified asoperating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverablefrom, or payable to, the taxation authority. (d) AASB 1 Transitional exemptions The Group has made its election in relation to the transitional exemptionsallowed by AASB 1 'First-time Adoption of Australian Equivalents toInternational Financial Reporting Standards' as follows: Share-based payment transactions AASB 2 'Share-Based Payments' is applied only to equity instruments grantedafter 7 November 2002 that had not vested on or before 1 January 2005. Exemption from the requirement to restate comparative information for AASB132"Financial Instruments: Presentation and Disclosure" and AASB139 "FinancialInstruments: Recognition and Measurement". The Company has elected to adopt this exemption. MURCHISON UNITED NL (ABN 59 009 087 852) NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2005 1. BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT (Continued) (e) Impact of adoption of AIFRS The impacts of adopting AIFRS on the total equity and loss after tax as reportedunder Australian Accounting Standards applicable before 1 January 2005 ("AGAAP")are illustrated below. (i) Reconciliation of total equity as presented under AGAAP to that under AIFRS 30/06/05 31/12/04 01/07/04 $ $ $Total equity under AGAAP 1,716,178 (784,400) (448,644)Adjustments to accumulated losses (net of tax)Recognition of share-based payment expense (a) (101,891) - - Adjustments to other reserves (net of tax)Recognition of share-based payment expense (a) 101,861 - - Total equity under AIFRS 1,716,178 (784,400) (448,644) (ii) Reconciliation of loss after tax under AGAAP to that under AIFRS Year ended Half-year ended 30/06/05 31/12/04 $ $Net loss as reported under AGAAP (1,661,188) (355,756)Share-based payment expense (a) (101,861) - Net loss under AIFRS (1,763,049) (355,756) (a) Share-based payment costs are charged to the income statement under AASB 2 "Share-based Payments", but not under AGAAP (f) Explanation of material adjustments to the cash flow statements There are no material differences between the cash flow statements presentedunder AIFRS and those presented under AGAAP. MURCHISON UNITED NL (ABN 59 009 087 852) NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2005 2 REVENUE AND EXPENSES (a) Specific Items Loss before income tax expense includes the following revenues and expenseswhose disclosure is relevant in explaining the performance of the entity: 2005 2004 $ $ (i) Revenue Interest revenue 43,044 3,198 Other - 1,804 43,044 5,002 (ii) Expenses Depreciation 2,163 2,665 Employee benefits 262,486 - Evaluation and review costs 596,291 36,989 Expense of share-based payments 344,389 - Operating lease expenses 35,114 - Settlement of Renison Bell creditors 37,727 225,805 3. ISSUED CAPITAL Dec-05 Jun-05 $ $ Ordinary shares 271,132,594 (2005: 271,132,594)ordinary shares, fully paid 41,358,405 41,358,405 2,250,000 (2005: 2,250,000) 25 centvalue ordinary shares, paid to 1 cent 22,500 22,500 41,380,905 41,380,905 There were no movements in ordinary shares during the period. Options7,500,000 options exercisable at $0.055 on or before the 19.05.2010These options were vested on 19 November 2005.350,000 options exercisable at $0.46 on or before the 1.7.2007These options were vested on 5 July 2002 MURCHISON UNITED NL (ABN 59 009 087 852) NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2005 4. SEGMENT INFORMATION Murchison United NL operates in one business segment, being the base metalmining industry and within one geographical segment, being Australia. 5. CONTINGENT ASSETS AND LIABILITIES Since the last annual reporting date, there has been no material change of anycontingent liabilities or contingent assets. 6. EVENTS AFTER THE BALANCE SHEET DATE No significant or material events have occurred since Balance Sheet date. 7. DIVIDENDS No dividend has been paid or proposed during the period. 8. ADDITIONAL INFORMATION Reconciliation of Cash For the purposes of the Condensed Cash Flow Statement, cash and cash equivalentscomprise the following at 31 December: 2005 2004 Cash at bank and in hand 1,210,758 41,438 MURCHISON UNITED NL (ABN 59 009 087 852) DIRECTORS' DECLARATION In accordance with a resolution of the Directors of Murchison United NL, I statethat: In the opinion of the directors: 1. the financial statements and notes of the Company: (a) give a true and fair view of the financial position as at 31 December 2005 and the performance for the half-year ended on that date of the Company; and (b) comply with Accounting Standard AASB 134 "Interim Financial Reporting" and the Corporations Regulations 2001; and 2. there are reasonable grounds to believe that the Company will be ableto pay its debts as and when they become due and payable. On behalf of the Board Mark D ReillyManaging Director Dated at Perth this 9th day of March 2006 INDEPENDENT REVIEW REPORT TO MEMBERS OF MURCHISON UNITED NL Scope The financial report and directors' responsibilityThe financial report comprises the balance sheet, income statement, cash flowstatement, statement of changes in equity and accompanying notes to thefinancial statements for Murchison United NL (the company), and the directors'declaration for the company, for the half-year ended 31 December 2005. The directors of the company are responsible for preparing a financial reportthat gives a true and fair view of the financial position and performance of thecompany, and that complies with Accounting Standard AASB 134 "Interim FinancialReporting", in accordance with the Corporations Act 2001. This includesresponsibility for the maintenance of adequate accounting records and internalcontrols that are designed to prevent and detect fraud and error, and for theaccounting policies and accounting estimates inherent in the financial report. Review approach We conducted an independent review of the financial report in order to make astatement about it to the members of the company, and in order for the companyto lodge the financial report with the Australian Stock Exchange and theAustralian Securities and Investments Commission. Our review was conducted in accordance with Australian Auditing Standardsapplicable to review engagements, in order to state whether, on the basis of theprocedures described, anything has come to our attention that would indicatethat the financial report is not presented fairly in accordance with theCorporations Act 2001, Accounting Standard AASB 134 "Interim Financial Reporting" and other mandatory financial reporting requirements in Australia, so as topresent a view which is consistent with our understanding of the company'sfinancial position, and of its performance as represented by the results of itsoperations and cash flows. A review is limited primarily to inquiries of company personnel and analyticalprocedures applied to the financial data. These procedures do not provide allthe evidence that would be required in an audit, thus the level of assurance isless than given in an audit. We have not performed an audit and, accordingly,we do not express an audit opinion. Independence We are independent of the company, and have met the independence requirements ofAustralian professional ethical pronouncements and the Corporations Act 2001.We have given to the directors of the company a written Auditor's IndependenceDeclaration, a copy of which is included in the Directors' Report. Statement Based upon our review, which is not an audit, we have not become aware of anymatter that makes us believe that the financial report of Murchison United NLduring the half-year is not in accordance with: (a) the Corporations Act 2001, including: (i) giving a true and fair view of the financial position of the company at 31 December 2005 and of its performance for half-year ended on that date; and (ii) complying with Accounting Standard AASB 134 "Interim Financial Reporting" and the Corporations Regulations 2001; and (b) other mandatory financial reporting requirements in Australia. Ernst & YoungJ P DowlingPartnerPerth9 March 2006 Liability limited by a scheme approved under Professional Standards Legislation. Auditor's Independence Declaration to the Directors of Murchison United NL In relation to our review of the financial report of Murchison United NL for thehalf-year ended 31 December 2005, to the best of my knowledge and belief, therehave been no contraventions of the auditor independence requirements of theCorporations Act 2001 or any applicable code of professional conduct. Ernst & Young J P DowlingPartnerPerth9 March 2006 Liability limited by a scheme approved under Professional Standards Legislation. This information is provided by RNS The company news service from the London Stock Exchange