29 Sep 2009 10:30
BioEnergy Africa Ltd / Index: AIM / Epic: BAL / Sector: Renewable Energy
29 September 2009
BioEnergy Africa Ltd ('BioEnergy Africa' or 'the Company')
Final Results
BioEnergy Africa Ltd, the AIM listed resource company, announces its results for the 23 month period ended 31 March 2009.
Chairman's Statement
Since listing on AIM in September 2008, the Company has made considerable progress at its Massingir Project in Mozambique ('Massingir') with the aim of fulfilling the conditions set out in the initial DUAT granted by the Government of Mozambique, to develop the 30,000 hectare site. These initiatives focussed primarily on satisfying various development requirements including land clearance, irrigation and initial nursery sugar cane planting, as well as infrastructural and social programmes.
The first phase of estate development has centred on site clearing, which has advanced well over the period. As of July, more than 500 hectares had been cleared and over 100 hectares planted. Additionally, we implemented family drip systems for the production of vegetables in 625 sq m blocks in accordance with our social responsibility mandate and planted maize on irrigated land for the local community. As part of our active social programme, we also initiated cattle dipping and veterinary services on the borders of the project for use by local people and the nomadic tribes who previously used the estate for grazing their livestock.
With the ability for companies in this sector to raise finance for highly capital intensive projects curtailed, the Board took the decision to reduce overheads in order to preserve cash whilst continuing to evaluate the various options available to us in order to maximise the value of the Company. With this in mind, the Board is reviewing its development plan to ensure the capital raised in August 2008 is preserved while at the same time promoting the requirements of the DUAT.
In line with this strategy of reducing overheads and safeguarding our remaining cash, we made the decision to restructure the Board. Nick Brooks and Jorge Neves stepped down from the Board, leaving the day-to-day operations of Massingir to Corne Holtzhausen, Development Director, who has been involved in the running of the Company since its inception.
Financial Performance
For the 23 month period under review, BioEnergy Africa is reporting a pre-tax loss of US$7.7 million. Cash balances at the period end were US$11.3 million.
Outlook
While we recognise the quality and significant inherent value of the Massingir Project we remain cognisant of the economic climate and prevailing market conditions and therefore continue to evaluate how best to create value for our shareholders.
We will of course keep in touch with our shareholders regarding progress, and thank all those invested in BioEnergy Africa or involved in its development throughout this challenging period.
Phil Edmonds
Chairman
29 September 2009
** ENDS **
For further information please visit www.bioenergy-ltd.com or contact:
| Jeremy Gray | BioEnergy Africa Ltd | Tel: 0854 108 6060 |
| Hugo de Salis | St Brides Media & Finance Ltd | Tel: 020 7236 1177 |
| Susie Callear | St Brides Media & Finance Ltd | Tel: 020 7236 1177 |
| Jonathan Wright | Seymour Pierce Ltd | Tel: 020 7107 8000 |
The report and accounts for the period ended 31 March 2009 are being posted to shareholders and will be available on the Company's website, www.bioenergyafrica-ltd.com.
Consolidated Income Statement
For the period ended 31 march 2009
| Unaudited Period to 31 March 2009 | ||||
| Note | $'000 | |||
| Operating expenses | (1,785) | |||
| Operating loss | (1,785) | |||
| Other gains and losses | 6 | (6,294) | ||
| Finance income | 7 | 441 | ||
| Finance costs | 7 | (104) | ||
| Loss before taxation | (7,742) | |||
| Income tax expense | - | |||
| Loss for the period | (7,742) | |||
| Loss for the period attributable to equity holders of the parent company | 12 | (7,683) | ||
| Loss for the period attributable to minority interests | 13 | (59) | ||
| Loss per share | ||||
| - Basic and diluted (cents) | 8 | (6.8 cents) |
All financial results presented are from continuing operations.
Consolidated Statement of Recognised Income and Expense
For the period ended 31 March 2009
| Unaudited Period to 31 March 2009 | |||
| $'000 | |||
| Foreign exchange translation differences | (5,414) | ||
| Net income recognised directly in equity | (5,414) | ||
| Loss for the period | (7,742) | ||
| Total recognised income and expense for the period | (13,156) | ||
| Attributable to the equity holders of the parent company | (12,772) | ||
| Attributable to minority interests | (384) | ||
| Total recognised income and expense for the period | (13,156) | ||
Consolidated Balance Sheet
As at 31 March 2009
| Unaudited At 31 March 2009 | ||||
| Note | $'000 | |||
| ASSETS | ||||
| Non-current assets | ||||
| Intangible assets | 43,146 | |||
| Property, plant and equipment | 6,822 | |||
| Total non-current assets | 49,968 | |||
| Current assets | ||||
| Inventories | 153 | |||
| Trade and other receivables | 1,951 | |||
| Cash and cash equivalents | 11,270 | |||
| Total current assets | 13,374 | |||
| TOTAL ASSETS | 63,342 | |||
| LIABILITIES | ||||
| Current liabilities | ||||
| Trade and other payables | (784) | |||
| NET ASSETS | 62,558 | |||
| EQUITY | ||||
| Issued capital | 9 | 72,199 | ||
| Share based payment reserve | 10 | 650 | ||
| Translation reserve | 11 | (5,089) | ||
| Retained earnings | 12 | (7,683) | ||
| Total equity attributable to the equity holders of the parent company | 60,077 | |||
| Minority interests | 13 | 2,481 | ||
| 62,558 | ||||
Consolidated Cash Flow Statement
For the period ended 31 March 2009
| Unaudited Period to 31 March 2009 | ||||
| $'000 | ||||
| OPERATING ACTIVITIES | ||||
| Loss before tax | (7,742) | |||
| Adjustments for: | ||||
| - Depreciation of property, plant and equipment | 98 | |||
| - Profit on foreign exchange | (26) | |||
| - Share based payment charge | 650 | |||
| -.Other gains and losses | 6,294 | |||
| - Net interest income | (337) | |||
| Operating cash flow before movements in working capital | (1,063) | |||
| Working capital adjustments: | ||||
| - Increase in inventories | (91) | |||
| - Increase in receivables | (13) | |||
| - Increase in payables | 651 | |||
| Cash used in operations | (516) | |||
| Finance cost | ||||
| Interest received | 337 | |||
| Net cash used in operating activities | (179) | |||
| INVESTING ACTIVITIES | ||||
| Purchase of property, plant and equipment | (3,865) | |||
| Net cash used in investing activities | (3,865) | |||
| FINANCING ACTIVITIES | ||||
| Proceeds from issue of share capital | 28,557 | |||
| Share issue costs | (2,065) | |||
| Repayment of debt acquired | (4,884) | |||
| Net cash flow from financing activities | 21,608 | |||
| Net increase in cash and cash equivalents | 17,564 | |||
| Cash and cash equivalents at start of the period | - | |||
| Effect of foreign exchange rate changes | (6,294) | |||
| Cash and cash equivalents at end of the period | 11,270 |
Notes to the Financial Statements
For the period ended 31 March 2009
| 1. | Basis of preparation of the preliminary announcement |
The financial information for the period ended 31 March 2009 has not been audited and does not constitute the Company's non-statutory financial statements. This preliminary announcement was approved by the Board on 28 September 2009.
The non-statutory financial statements for the period ended 31 March 2009 have not been reported on by the Company's auditors. They will be circulated to the shareholders in September 2009.
The non-statutory financial statements for the period ended 31 March 2009 will be prepared in accordance with International Financial Reporting Standards (IFRS) in issue and as adopted by the European Union (EU) that were effective at 31 March 2009.
The financial information has been prepared on the Going Concern basis. Management have carried out a detailed analysis of the Group's cash requirements and detail in note 4 certain critical accounting estimates and judgements. The financial statements have been prepared on the basis that the Group obtains a definitive DUAT for a fifty year period, replacing the provisional DUAT expiring in October 2009. The outcome of these matters cannot presently be determined, and the financial statements do not include any adjustments that might result if the Group's right to the intangible asset in Mozambique was rescinded. It is anticipated that the audit opinion on the final financial statements will include an emphasis of matter in regard to this issue.
| 2. | General Information |
BioEnergy Africa Limited is incorporated in the British Virgin Islands under the British Virgin Islands Business Companies Act 2004.
The Company was incorporated on 27 April 2007. Accordingly the financial statements are for the 23 month period ended 31 March 2009.
These financial statements have been presented in US Dollars because this is the currency of the primary economic environment in which the Group operates. Foreign operations are included in accordance with the policies set out in note 3.
The financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union.
At the date of authorisation of these financial statements, the following Standards and Interpretations that have not been applied in these financial statements were in issue but not yet effective or endorsed (unless otherwise stated):
| IAS 27 | Consolidated and Separate Financial Statements - Amendments arising from IFRS 3 |
| IAS 27 | Consolidated and Separate Financial Statements - Amendment; Cost of an investment in a subsidiary, jointly-controlled entity or associate (endorsed) |
| IAS 28 | Investments in Associates - Consequential amendments arising from amendments to IFRS 3 |
| IAS 31 | Interest in Joint Ventures - Consequential amendments arising from amendments to IFRS 3 |
| IAS 32 | Financial Instruments: Presentation - Amendments relating to Puttable Financial Instruments and obligations arising on liquidation (endorsed) |
| IAS 39 | Financial Instruments: Recognition and Measurement - Amendment; Reclassification of Financial Assets (endorsed) |
| IAS 39 | Financial Instruments: Recognition and Measurement - Amendment; Reclassification of Financial Assets - Effective date and transition |
| IAS 39 | Financial Instruments: Recognition and Measurement - Amendment; Eligible hedged items |
| IFRIC 15 | Agreements for the construction of real estate assets |
| IFRIC 16 | Hedges of net investment in a foreign operation |
| IFRIC 17 | Distributions of Non-cash Assets to Owners |
| IFRIC 18 | Transfers of Assets from Customers |
| IAS 27 | Consolidated and Separate Financial Statements - Amendments arising from IFRS 3 |
| IAS 27 | Consolidated and Separate Financial Statements - Amendment; Cost of an investment in a subsidiary, jointly-controlled entity or associate (endorsed) |
| IAS 28 | Investments in Associates - Consequential amendments arising from amendments to IFRS 3 |
| IAS 31 | Interest in Joint Ventures - Consequential amendments arising from amendments to IFRS 3 |
| IAS 32 | Financial Instruments: Presentation - Amendments relating to Puttable Financial Instruments and obligations arising on liquidation (endorsed) |
| IAS 39 | Financial Instruments: Recognition and Measurement - Amendment; Reclassification of Financial Assets (endorsed) |
| IAS 39 | Financial Instruments: Recognition and Measurement - Amendment; Reclassification of Financial Assets - Effective date and transition |
| IAS 39 | Financial Instruments: Recognition and Measurement - Amendment; Eligible hedged items |
| IFRIC 15 | Agreements for the construction of real estate assets |
| IFRIC 16 | Hedges of net investment in a foreign operation |
| IFRIC 17 | Distributions of Non-cash Assets to Owners |
| IFRIC 18 | Transfers of Assets from Customers |
The directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the financial statements of the Group, except for some additional segment disclosures when IFRS 8 comes into effect for periods commencing on or after 1 January 2009.
| 3. | Significant accounting policies |
Basis of accounting
The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are set out below.
Basis of consolidation
| (i) | Subsidiaries |
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 March each year. Control is recognised where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the period are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.
| (ii) | Transactions eliminated on consolidation |
Intra-group transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
Foreign currency translation
| (i) | Functional and presentational currency |
The individual financial statements of each Group company are presented in the currency of the primary economic environment in which it operates ('the functional currency'). The consolidated financial statements are presented in US Dollars.
| (ii) | Transactions and balances |
Foreign currency transactions are translated into the functional currency of the entity using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at period end exchange rates are recognised in the income statement.
| (iii) | Consolidation |
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing at the balance sheet date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during the period, in which case exchange rates at the date of the transactions are used. Exchange differences arising from the translation of the net investment in foreign operations are recognised in the Group's translation reserve, a separate component of equity. Such translation differences are recognised as income or expense in the period in which the operation is disposed of.
The following exchange rates have been used in preparing the consolidated financial statements:
| Average Rate | Closing Rate | |
| Mozambican Meticais: USD | 25.05 | 26.77 |
Revenue recognition
Revenue is recognised when revenue and associated costs can be measured reliably and future economic benefits are probable. Revenue is measured at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales related taxes.
Sales of goods are recognised when goods are delivered and title has passed. Delivery occurs when the products have arrived at the specified location, and the risks and rewards of ownership have been transferred to the customer.
Interest income is accrued on a time-apportioned basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.
Leasing
Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight line basis over the lease term.
Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of that asset until such time as the asset is ready for its intended use. The amount of borrowing costs capitalised is the:
Weighted average of the borrowing costs applicable to the entity on funds generally borrowed for the purpose of obtaining a qualifying asset. The borrowing costs capitalised shall not exceed the total borrowing costs incurred.
The capitalisation of borrowing costs commences when:
expenditures for the asset have occurred;
borrowing costs have been incurred; and
activities that are necessary to prepare the asset for its intended use or sale are in progress.
Capitalisation is suspended during extended periods in which active development is interrupted.
Capitalisation ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.
All other borrowing costs are recognised as an expense in the period in which they are incurred.
Taxation
The Company is resident for taxation purposes in the British Virgin Islands and its income is subject to British Virgin Island income tax, presently at a rate of zero. The income of overseas subsidiaries will be subject to tax at the prevailing rate in each jurisdiction.
The tax expense represents the sum of the current tax expense and deferred tax expense.
Tax currently payable is based on the taxable profit for the period. Taxable profit differs from accounting profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is measured using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction which affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based upon tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited in the income statement, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax relates to income tax levied by the same tax authorities on either: the same taxable entity or different taxable entities which intend to settle current tax assets and liabilities on a net basis or to realise and settle them simultaneously in each future period when the significant deferred tax assets and liabilities are expected to be realised or settled.
Intangible assets
Intangible assets are carried at cost and are amortised over the period of economic benefit up to 50 years. The value of intangible assets is reviewed for impairment whenever there are indications of circumstances which might give rise to an impairment. Any impairment is recognised immediately in the income statement.
Property, plant and equipment
All items of property, plant and equipment are stated at historical cost less depreciation (see below) and impairment. Historical cost includes expenditure that is directly attributable to the acquisition. Subsequent costs are included in the asset's carrying value when it is considered probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.
Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each item, as follows:
| Leasehold Land improvements | 2% or the period of the lease as appropriate |
| Buildings | 5% |
| Assets under construction | Not depreciated |
| Plant and equipment | 20% - 33.3% |
| Motor vehicles | 20% |
| Office furniture and equipment | 10% - 33.3% |
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in the income statement.
Impairment of property, plant and equipment
Whenever events or changes in circumstance indicate that the carrying amount of an asset may not be recoverable an asset is reviewed for impairment. An asset's carrying value is written down to its estimated recoverable amount (being the higher of the fair value less costs to sell and value in use) if that is less than the asset's carrying amount.
Inventories
Inventories relate to sugar cane seedlings and fertilizer stocks and are stated at cost including expenditure bringing them to their existing location and condition in the sugar cane nurseries.
Financial assets
Trade and other receivables
Trade and other receivables are not interest bearing and are initially recognised at their fair value and are subsequently stated at amortised cost using the effective interest method as reduced by appropriate allowances for estimated irrecoverable amounts.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less which are subject to an insignificant risk of changes in value.
Financial liabilities
Trade and other payables
Trade and other payables are initially measured at fair value and are subsequently measured at amortised cost, using the effective interest rate method.
Provisions
Provisions are recognised when the Group has a legal or constructive obligation as a result of past events, it is probable that an outflow of the resources will be required to settle the obligation and the amount can be reliably estimated.
Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.
Share-based payments
The Group issues equity-settled share-based payments to certain employees. These payments are measured at fair value (excluding the effect of non market based vesting conditions) at the date of grant and the value is expensed on a straight-line basis over the vesting period, based on the Group's estimate of the shares that will eventually vest and adjusted for non market based vesting conditions.
Fair value is measured by use of the Black Scholes model. The expected life used in the model is adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.
| 4. | Critical accounting estimates and judgements |
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the group's accounting policies. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
The Group has included in intangible assets the cost attributed to the Investment Agreement concluded with the Government of Mozambique pursuant to which the Group's subsidiary ProCana Limitada ("Procana"), is entitled to develop 30,000ha in Massingir district, encompassing 24,500ha of planted sugar cane, ethanol from sugar cane plant and related transport infrastructures. The Investment Agreement also provides that the Company is required to introduce $510m of investment over 15 years.
The ability of companies in the Bio-Energy sector to raise finance for highly capital intensive projects has been curtailed in the current market. Notwithstanding this and a volatile oil price, the Board continue to see value in the Massingir project over the medium term. In the Board's view the current valuation remains a reasonable estimate and it continues to evaluate the various options open to the Group to realise the value of the project over the long term. ProCana has been granted a provisional DUAT in respect of the estate land and is seeking a definitive DUAT for a fifty year period.
In accordance with the terms of the provisional DUAT, the full DUAT is conditional upon certain specific provisions of the investment agreement relating to the creation of favourable infrastructure and operating conditions in relation to the farming of cattle for the project's local community.
Sanctions for non compliance with the obligations under the Investment Agreement depend on the nature of the breach. In the event of non-fulfilment of the Company's obligations relating to provision of suitable favourable conditions for the local community, approval for the next phase of the project may be withheld by the Government of Mozambique.
In the event that the definitive DUAT is not issued, the Company's ability to raise the additional capital may be adversely affected. Such uncertainty could lead to an impairment of the Intangible Assets and those elements of Property, plant and equipment directly attributable to the project.
| 5. | Segment Reporting |
The directors consider that the Group's bioenergy activities in Africa are a single business and geographical segment.
| 6. | Other gains and losses |
| Unaudited Period to 31 March 2009 | |||
| $'000 | |||
| Foreign exchange loss | 6,294 |
The Company held the proceeds from the initial fundraising in sterling whilst it evaluated its investment opportunities.
| 7. | Finance income and costs |
| Unaudited Period to 31 March 2009 | |||
| $'000 | |||
| Finance income: | |||
| - Interest income on short-term bank deposits | 441 | ||
| Finance costs: | |||
| - Interest payable on borrowings from related parties | (104) | ||
| Net finance income | 337 |
| 8. | Loss per share |
The calculation of the basic and diluted loss per share is based on the following data:
| Unaudited Period to 31 March 2009 | |||
| $'000 | |||
| Loss for the purposes of basic earnings per share (loss for the period attributable to equity holders of the parent) | 7,683 | ||
| Number of shares | |||
| Weighted average number of ordinary shares for the purposes of basic and diluted loss per share | 112,643,383 | ||
| Loss per share | 6.8 cents |
Due to the loss incurred in the period, there is no dilutive effect of share options.
The directors consider that a more relevant measure of loss per share is based on the losses incurred post the IPO on 8th September 2008 and the weighted average number of shares in issue since that date. This is calculated as follows:
| Loss attributable to the equity holders of the parent | 6,816 | ||
| Weighted average number of ordinary | 312,431,200 | ||
| Loss per share post IPO | 2.2 cents |
| 9. | Share capital |
| Unaudited | |||
| Ordinary shares of no par value | |||
| Allotted and issued | |||
| Number | $'000 | ||
| At 27 April 2007 | 1,000 | - | |
| Issue of Shares | 312,430,200 | 72,199 | |
| At 31 March 2009 | 312,431,200 | 72,199 | |
On incorporation on 27 April 2007, the company had an authorised share capital of 500,000,000 ordinary shares of no par value.
Between incorporation and 18 February 2008 20,000,000 ordinary shares were issued for nil consideration to Ely Place Nominees Limited to be held in trust to be issued as incentives to employees or in connection with future transactions by the Company.
Between 21 February 2008 and 12 August 2008, a further 58,425,600 ordinary shares were issued fully paid for cash at a price of 12.5 pence per ordinary share constituting the pre IPO funding round.
On 21 July 2008 at an extraordinary general meeting the authorised share capital was increased to 1,000,000,000 ordinary shares of no par value.
On 12 August 2008, 185,180,000 ordinary shares were issued fully paid in consideration for the acquisition of 94% of the issued share capital of ProCana Limitada.
On 1 September 2008, 68,825,600 ordinary shares were issued fully paid for cash at 12.5 pence per ordinary share.
Share capital issued during the period is stated net of issue costs of $2,065,000
The Company has one class of ordinary share which carries no right to fixed income.
Share Options:
At 31 March 2009, the following options over ordinary shares of no par value have been granted to directors and employees and remain unexercised:
| Date of grant | Number of shares | Exercise price | Exercise period |
| 31 July 2008 | 6,000,000 | 30p | 31 July 2008 to 30 July 2013 |
| 01 December 2008 | 6,000,000 | 12.5p | 01 December 2008 to 30 November 2013 |
A further 20,000,000 options are held by Ely Place Nominees Limited to be distributed among the employees of, directors of and consultants to the Company, as instructed by the board.
Warrants
On 5 March 2008, as part of the broking agreement, Hayward Securities (UK) Limited were granted warrants over 2,785,536 ordinary shares with an exercise price of 12.5p per share. The option lapsed unexercised on 20 February 2009.
| 10. | Share based payment reserve |
| Unaudited 2009 | |||
| $'000 | |||
| Share based payment - employees | 650 | ||
| At 31 March 2009 | 650 | ||
The value attributed to share options during the period is credited to the share based payment reserve.
| 11. | Translation reserve |
| Unaudited 2009 | |||
| $'000 | |||
| Exchange difference on overseas operations | (5,414) | ||
| Attributable to minority interests | 325 | ||
| 31 March 2009 | (5,089) |
Movements in the value of the Group's net investment in overseas subsidiaries are taken to this reserve.
| 12. | Retained earnings |
| Unaudited 2009 | |||
| $'000 | |||
| Loss for the period | (7,683) | ||
| 31 March 2009 | (7,683) |
| 13. | Minority Interests |
| Unaudited 2009 | |||
| Additions (see note 14) | 2,865 | ||
| Loss for the period | (59) | ||
| Movements in translation reserve attributable to minority interests | (325) | ||
| 31 March 2009 | 2,481 | ||
| 14. | Acquisition of subsidiary |
On 20 March 2008, the company entered into a share exchange agreement in respect of the acquisition of 94% of the share capital in ProCana Limitada. Completion of this agreement was conditional upon consent to the transaction being given by the Government of Mozambique. The requisite consent was given on 15 July 2008, following which the Company acquired 94% of the share capital of ProCana Limitada in consideration for the issue by the Company of 185,180,000 ordinary shares on 12 August 2008.
The transaction has been accounted for as an acquisition of Assets.