25 Sep 2012 15:24
Nova Resources Limited
("Nova" or "the Company")
Interim results for the period ended 30 June 2012
Nova Resources Limited (AIM), a logistics investing company pursuing investments in Mongolia, announces its interim results for the six months to 30 June 2012.
For further information, contact:
Nova Resources Limited |
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www.novaresourceslimited.com |
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Chan Fook Meng, Chief Executive Officer | +65 9630 7808 |
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Daniel Stewart & Company Plc |
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Nominated Adviser/Joint-Broker |
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David Hart/James Felix | +44 (0) 20 7776 6550 |
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Chairman's Statement
I have pleasure in presenting our interim report for the period to 30 June 2012.
The Group incurred a loss for the period of £869,000, which relates largely to the continued implementation of the Company's investing policy. The Group has been generating revenue from August 2012, due to the major transportation contract owned by the Company's sole investment, Nova Trans LLC ("Nova Trans"), which will operate for an initial period to 2014 (the " Contract").
On 14 February 2012, the Company consolidated its investment in Nova Trans by acquiring the outstanding 300 issued shares in Nova Mongolia Corp Pte Limited, the parent company of Nova Logistics Holdings Limited (formerly Salins Limited) and Nova Trans LLC (formerly ZHCH Mining LLC).
Since January 2012, we have raised £975,000 by way of subscriptions for newly issued share capital. Together with our credit facilities announced previously, this has provided capital to enable Nova Trans to commence operations and develop an infrastructure to service the Contract. Such commencement was announced on 24 May 2012, following the acquisition of 16 trucks and 32 trailers funded by the Group.
The Group is exploring further sources of finance to expand the number of trucks and trailers operated by Nova Trans, to enable more transportation contracts to be won. In addition, we are confident that further investment opportunities in the Mongolian region will become available, and we will keep shareholders updated on any new developments accordingly.
Chan Fook Meng
Chairman
Consolidated Comprehensive Income Statement
For the period to 30 June 2012
| Notes | 6 Months | Year to | 6 Months to |
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| 30 June 2012 | 31 December 2011 | 30 June 2011 |
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| Unaudited | Audited | Unaudited |
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| £'000s | £'000s | £'000s |
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Revenue |
| - | - | - |
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Cost of Sales |
| - | - | - |
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| ¾¾¾¾¾ | ¾¾¾¾¾ | ¾¾¾¾¾ |
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Administrative expenses |
| (786) | (275) | (134) |
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| ¾¾¾¾¾ | ¾¾¾¾¾ | ¾¾¾¾¾ |
Operating loss | 4 | (786) | (275) | (134) |
Unrealised Gains (Losses) on financial assets designated at fair value through profit or loss account |
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(21) |
118 |
128 |
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| ¾¾¾¾¾ | ¾¾¾¾¾ | ¾¾¾¾¾ |
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| (807) | (157) | (6) |
Finance income |
| 15 | 2 | - |
Finance expense |
| (78) | - | - |
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| ¾¾¾¾¾ | ¾¾¾¾¾ | ¾¾¾¾¾ |
Loss before tax |
| (870) | (155) | (6) |
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Income tax charges |
| - | - | - |
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| ¾¾¾¾¾ | ¾¾¾¾¾ | ¾¾¾¾¾ |
Loss for the period |
| (870) | (155) | (6) |
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Other comprehensive income |
| - | - | - |
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Minority interests |
| 1 | (1) | - |
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| ¾¾¾¾¾ | ¾¾¾¾¾ | ¾¾¾¾¾ |
Total comprehensive loss for the period |
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(869) |
(156) |
(6) |
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Attributable to: |
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- Owners of the parent |
| (869) | (156) | (6) |
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Loss per share |
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From continuing operations: |
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Basic and diluted | 6 | (0.89p) | (0.23p) | (0.009p) |
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Consolidated Statement of Financial Position
As at 30 June 2012
| Notes | 6 Months | Year to | 6 Months to |
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| 30 June 2012 | 31 December 2011 | 30 June 2011 |
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| Unaudited | Audited | Unaudited |
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| £'000s | £'000s | £'000s |
Assets |
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Non-current assets |
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Property, plant and equipment |
| 638 | - | - |
Goodwill |
| 2,255 | - | - |
Financial assets designated at fair value through profit or loss account |
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750 |
771 |
782 |
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| ¾¾¾¾¾ | ¾¾¾¾¾ | ¾¾¾¾¾ |
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| 3,643 | 771 | 782 |
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| ¾¾¾¾¾ | ¾¾¾¾¾ | ¾¾¾¾¾ |
Current assets |
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Cash and cash equivalents |
| 651 | 470 | 965 |
Trade and other receivables | 7 | 2,202 | 389 | 14 |
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| ¾¾¾¾¾ | ¾¾¾¾¾ | ¾¾¾¾¾ |
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| 2,853 | 859 | 979 |
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| ¾¾¾¾¾ | ¾¾¾¾¾ | ¾¾¾¾¾ |
Total assets |
| 6,496 | 1,630 | 1,761 |
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Equity and liabilities |
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Capital and reserves |
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Issued capital | 8 | 1,061 | 700 | 700 |
Share premium |
| 4,996 | 2,604 | 2,604 |
Equity to be issued | 9 | 487 |
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Loan note equity reserve |
| 13 | - | - |
Share based payment reserve |
| 17 | - | - |
Accumulated deficit |
| (2,610) | (1,741) | (1,590) |
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| ¾¾¾¾¾ | ¾¾¾¾¾ | ¾¾¾¾¾ |
Total equity |
| 3,964 | 1,563 | 1,714 |
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Non controlling interests |
| - | 1 | - |
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| ¾¾¾¾¾ | ¾¾¾¾¾ | ¾¾¾¾¾ |
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| 3,964 | 1,564 | 1,714 |
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| ¾¾¾¾¾ | ¾¾¾¾¾ | ¾¾¾¾¾ |
Non Current liabilities |
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Non interest bearing loans | 10 | 24 | - | - |
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| ¾¾¾¾¾ | ¾¾¾¾¾ | ¾¾¾¾¾ |
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| 24 | - | - |
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| ¾¾¾¾¾ | ¾¾¾¾¾ | ¾¾¾¾¾ |
Current liabilities |
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Trade and other payables |
| 168 | 66 | 47 |
Borrowings |
| 2,327 | - | - |
Convertible loan | 10 | 13 | - | - |
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| ¾¾¾¾¾ | ¾¾¾¾¾ | ¾¾¾¾¾ |
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| 2,508 | 66 | 47 |
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| ¾¾¾¾¾ | ¾¾¾¾¾ | ¾¾¾¾¾ |
Total equity and liabilities |
| 6,496 | 1,630 | 1,761 |
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Consolidated Statement of Cash Flows
For the period to 30 June 2012
| Period to 30 June 2012 Unaudited | Year to 31 December 2011 Audited | Period to 30 June 2011 Unaudited |
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| £'000s | £'000s | £'000's |
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Operating activities | (211) | (644) | (149) |
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Investing activities |
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Purchases of plant and equipment | (643) | - | - |
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Financing activities |
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Proceeds from issue of shares | 975 | 200 | 200 |
Proceeds of issue of loan note | 60 | - | - |
| ¾¾¾¾¾ | ¾¾¾¾¾ | ¾¾¾¾¾ |
Net cash inflow/(outflow) | 181 | (444) | 51 |
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Cash and cash equivalents at the beginning of the period |
470 |
914 |
914 |
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Bank balances and cash | 651 | 470 | 965 |
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Reconciliation of operating loss to net cash outflow from operating activities
| Period to 30 June 2012 Unaudited | Year to 31 December 2011 Audited | Period to 30 June 2011 Unaudited |
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| £'000s | £'000s | £'000's |
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Loss for the period before tax | (807) | (157) | (6) |
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Adjustments for: |
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Finance expense | (78) | - | - |
Finance Income | 15 | 2 | - |
Share based payment | 17 |
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Provision for quoted investments | 21 | (118) | (128) |
Minority interests | (1) | 1 | - |
Depreciation | 5 | - | - |
(Increase)/Decrease in receivables | (1,645) | (365) | 10 |
Increase/(decrease) in payables | 2,260 | (7) | (25) |
Tax paid | - | - | - |
| ¾¾¾¾¾ | ¾¾¾¾¾ | ¾¾¾¾¾ |
Net cash outflow from operating activities |
(211) |
(644) |
(149) |
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Consolidated statement of changes in equity
For period to 30 June 2012
Equity to be issued
| Option and warrant reserve | Loan note equity reserve | Share capital | Share premium | Accumulated deficit | Total | |
£000's | £'000s | £'000s | £'000s | £'000s | £'000s | £'000s | |
As at 1 January 2011 | - | - | - | 600 | 2,504 | (1,325) | 1,779 |
Loss after tax | - | - | - | - | - | (260) | (260) |
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Balance as at 31 December 2010 | - | - | - | 600 | 2,504 | (1,585) | 1,519 |
Shares issued in period | - | - | - | 100 | 100 | - | 200 |
Loss after tax | - | - | - | - | - | (156) | (156) |
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Balance as at 31 December 2011 | 700 | 2,604 | (1,741) | 1,563 | |||
Shares Issued in period | - | - | - | 361 | 2,392 | - | 2,753 |
Loss after tax | - | - | - | - | - | (869) | (869) |
Issue of convertible loan notes | - | - | 13 | - | - | - | 13 |
Share based payments | - | 17 | - | - | - | - | 17 |
Equity to be issued | 487 | - | - | - | - | - | 487 |
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As at 30 June 2012 | 487 | 17 | 13 | 1,061 | 4,996 | (2,610) | 3,964 |
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Notes to the Interim Financial Information
1. General Information
Nova Resources Limited is a public limited company incorporated in Bermuda with a company number 39768 and quoted on the AIM market of the London Stock Exchange Plc.
2. Basis of Preparation
This interim report, which incorporates the financial information of the company, has been prepared using the historical cost convention, on a going concern basis and in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, using accounting policies which are consistent with those set out in the financial statement for the year ended 31 December 2011. This interim financial information for the six months ended 30 June 2012, complies with IAS 34 'Interim Financial Reporting' and was approved by the Board on 25 September 2012.
Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of the group as at 30 June 2012 and the result of all entities for the period then ended. Nova Resources Limited and its subsidiaries together are referred to in this financial report as the group.
Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date the control ceases. All inter-group balances and transactions between entities in the group, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity.
Taxes
Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.
Standards and Interpretations adopted with no material effect on financial statements
The following new and revised Standards and Interpretations have been adopted in these financial statements. Their adoption has not had any significant impact on the amounts reported in these financial statements but may effect the accounting for future transactions and arrangements.
Title | Issued | Effective date
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IFRS 7 Financial instruments: disclosures (amendment) | Oct 10 | Accounting periods beginning on or after 1 July 2011 |
Standards and Interpretations issued but not effective on financial statements
The following new and revised Standards and Interpretations have not been adopted in these financial statements as they are not yet effective in the period being reported on.
Title | Issued | Effective date |
IFRS 9 Financial instruments: classification and measurement | Oct 10 | Accounting periods beginning on or after 1 January 2015 |
IFRS 11 joint Arrangements | May 11 | Accounting periods beginning on or after 1 January 2013 |
IFRS 12 Disclosures of Interests with Other Entities | May 11 | Accounting periods beginning on or after 1 January 2013 |
IFRS 13 Fair Value Measurement | May 11
| Accounting periods beginning on or after 1 January 2013 |
IFRS 10 Consolidated Financial Statements
| May 11 | Accounting periods beginning on or after 1 January 2013 |
IAS 1 Presentation of Items of Other Comprehensive Income - Amendments to IAS 1 | June 11 | Accounting periods beginning on or after 1 July 2012 |
IAS 19 Employee Benefits (Revised) | June 11 | Accounting periods beginning on or after 1 January 2013 |
3. Segmental Analysis
The group's primary reporting format is business segments and its secondary format is geographical segments. The group currently only operates in a single business and geographical segment. Accordingly no segmental information for business segment or geographical segment is required.
4. Operating loss for the period is stated after charging / (crediting)
| Period to 30 June 2012 Unaudited | Year to 31 December 2011 Audited | Period to 30 June 2011 Unaudited |
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| £'000s | £'000s | £'000's |
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Depreciation | 5 | - | - |
Share based payment | 17 |
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5. Remuneration of key management personnel
| Period to 30 June 2012 Unaudited | Year to 31 December 2011 Audited | Period to 30 June 2011 Unaudited |
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The fees paid in the period to 30 June 2012 were: | £'000s | £'000s | £'000's |
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Charles Green | 13 | - | - |
Park Ji Wong | 32 | - | - |
Lee Fer Ling | 6 | - | - |
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6. Loss per share
| Period to 30 June 2012 Unaudited | Year to 31 December 2011 Audited | Period to 30 June 2011 Unaudited |
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| £'000s | £'000s | £'000's |
Loss per ordinary share: |
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Basic - pence | (0.89p) | (0.23p) | (0.009p) |
Diluted - pence | (0.89p) | (0.23p) | (0.009p) |
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The loss per ordinary share is based on the company's loss for the period of £869,000 (31 December 2011 - £156,000; 30 June 2011 - £6,000) and a basic and diluted weighted average number of shares in issue of 97,428,422 (31 December 2011 - 68,000,000; 30 June 2011 - 60,000,000).
7. Trade and other receivables
Included in trade and other receivables was £1,520,389 in respect of deposits paid to suppliers for new trucks and trailers for which delivery had not been made as at the period end.
8. Called up Share Capital
On 10 February 2012, the company issued 10,200,000 new ordinary shares of par value of £0.01 each in the capital of the company at the subscription price of £0.075 each.
On 14 February 2012, the company purchased 300 shares in the capital of Nova Mongolia Corp Pte Ltd, to bring full ownership into the group. The total consideration of the acquisition was £1,767.857 which was fully paid by the allotment and issuance of 23,571,428 ordinary shares of par value of £0.01 each at the issue price of £0.075 each.
On 27 February 2012, the company issued 2,210,526 ordinary shares of par value of £0.01 each in the capital of the company at the subscription price of £0.095 each.
On 15 March 2012, £10,000 of convertible unsecure loan notes 2015 were converted into 133,333 ordinary shares of par value of £0.01 each at the subscriptions price of £0.075 each.
The issued share capital as at 30 June 2012 was 106,115,287 ordinary shares of £0.01p each.
8. Called up Share Capital (continued)
On 20 January 2012, the company granted 5,000,000 share options to subscribe for ordinary shares, exercisable at a subscription price of 8.25p per share at anytime in the period to 20 July 2012, 2013 and 2014, one third in each year, with an ultimate expiry date of 31 December 2016.
On 20 January 2012, the company cancelled 500,000 share options issued to Mr. Lai Seng Kwoon on 16 November 2011, following his resignation on 4 January 2012, bringing the total number of share options to 6,500,000.
Shares - based payments
None of the options above have been exercised and all remain outstanding at the period end. The fair value of the options granted during the period has been calculated using the Black Scholes model assuming the inputs shown below:
Grant date | January 2012 |
Share price at grant date | 8.5p |
Exercise price | 8.25p |
Expected option life in years | 5 |
Risk free interest rate | 4% |
Expected volatility | 25% |
Expected dividend yield | 0% |
Fair value of option | 1.01p |
Volatility has been estimated by taking the historic volatility in the company's share price over two years.
9. Equity to be issued
As part of the acquisition of Nova Mongolia Corp Pte Ltd, 12,857,143 warrants were granted. The warrants are not exercisable until Nova Resources Limited has acquired or invested in a company that qualifies as a reverse takeover under the AIM rules, are exercisable at a subscription price of £0.02 per ordinary share and will expire on 28 February 2013.
None of the warrants have been exercised and all remain outstanding at the period end. The fair value of the warrants granted during the period has been calculated using the Black Scholes model assuming the inputs shown below:
Grant date | February 2012 |
Share price at grant date | 8.0p |
Exercise price | 2p |
Expected warrant life in years | 1 |
Risk free interest rate | 4% |
Expected volatility | 25% |
Expected dividend yield | 0% |
Fair value of option | 3.79p |
Volatility has been estimated by taking the historic volatility in the company's share price over two years.
9. Equity to be issued (continued)
The number of shares to be issued as contingent consideration is based on the fair value of the warrants of 3.79p for each warrant.
10. Convertible Loans
On 10 February 2012, £60,000 convertible loan notes were issued with a final repayment date of 31 March 2015 (the "2015 Loan Notes"). The notes are interest free and unsecured. The note holders have the right to convert any amount of the principal amount of the 2015 Loan Notes into New Ordinary Shares at the exercise price of 7.5p per share. The ordinary shares to be issued on conversion (assuming full conversion) would amount to 800,000 ordinary shares. On 15 March 2012, £10,000 of the 2015 Loan Notes were converted into 133,333 ordinary shares.
| 2015 Loan Notes £'000s |
As at 1 July 2011 and 1 January 2012 | - |
Issue of loan notes | 60 |
Conversion of loan notes into shares | (10) |
| 50 |
Equity component | (13) |
As at 30 June 2012 | 37 |
11. Related-party transactions
Transactions between the group and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
During the period, the group paid £30,247 to Menora Trading Ltd, a company owned and controlled by Chan Fook Meng, for consultancy fees.
12. Events subsequent to 30 June 2012
There are no events to report.
13. The unaudited results for the period ended 30 June 2012 do not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The comparative figures for the period ended 31 December 2011 are extracted from the audited financial statements which contained an unqualified audit report and did not contain statements under Sections 498 to 502 ofthe Companies Act 2006.
14. This interim financial statement will be, in accordance with Rule 26 of the AIM Rules for Companies, available shortly on the company's website at www.novaresourceslimited.com.