WRES.L Regulatory News (WRES)

12 Jun 2006 15:09

Caspian Holdings plc12 June 2006 12 June 2006 CASPIAN HOLDINGS PLC ("Caspian" or "The Company") Preliminary Results for the year to 31 December 2005 Caspian Holdings Plc (AIM:CSH) the London-based AIM-quoted Company whose primaryactivity is the exploration, development and operation of oil fields in thecountries around the Caspian Sea, and in particular Kazakhstan, announces itspreliminary results for the year ended 31 December 2005. Highlights * Workover programme delivered production from 8 out of 9 of all wells drilled in 2004/2005 * Loss per share of 1.4pence (2004: 2.33 pence), a 60% improvement * Total oil production from four main producing wells: 82 BBL/day * 34,516 BBL shipped and sold for an average price of $18 /BBL * Total revenue of $621,026 or £318,578 Post year end highlights * 9 wells producing a total of approximately 300 barrels per day * Exports have commenced increasing the net price received for oil sales from $17.50 per barrel to approximately $65.00 per barrel (Urals blend) * 7,207,000 Ordinary 0.1p shares were issued raising funds of £1,441,400 (February 2006) * 7,000,000 Ordinary 0.1p shares were issued raising funds of £1,890,000 (March 2006) * 100% success rate on new wells drilled and tested in 2006 (101, 103 and 105) Commenting on the results, Michael Masterman, Executive Chairman, said: "2005has been challenging a year for Caspian Holdings Plc from which we have emergedin a strong position and poised for further growth in 2006. Our low operatingand capital costs will allow us to drill 10 new production wells forapproximately $3m - about a quarter of the cost spent by our deeper drillingexploration competitors on one well alone and by shifting our focus to exportrather than domestic sales we have achieved an almost four-fold increase inrevenue per barrel. We are actively pursuing the opportunity to extend ourlicence area and look forward with confidence to the coming years." - Ends - Chairman's Statement, Operations Review and Financial Statements follow.......... For further information, please contact: Caspian Holdings Plc Hoodless Brennan Parkgreen Communications Michael Mastermann Luke Cairns Justine Howarth / Ana Ribeiro T: +447791288381 T: +44 (0) 20 7538 1166 T: +44 (0)20 7493 3713 CHAIRMAN'S STATEMENT Dear Fellow Shareholder 2005 has been a challenging year for Caspian Holdings Plc from which we haveemerged in a strong and growing position in 2006. The year started with oil discoveries and oil production in our first four wells- 111, 112, 113 and 114 and the confirmation of high quality export oil in ourflagship Zhengeldy oilfield. Initial success was then tempered by setbacks witha series of apparently dry wells or poorly performing wells - 115, 116, 106 and107 and overall lower production rates per well than previously estimated Mid year the Company management took stock of the situation and with theassistance of Slumberger Central Asia completed a comprehensive evaluation ofthe scope to increase production from the Zhengeldy field. The plan involved 6key steps * Refocus on the shallow 100m to 400m oil production levels where we consistently find and produce oil have very low drilling costs and drilling times * Upgrade the approach to operations management with improvements in cementation, logging and the introduction of sweet water wells and water disposal wells * Targeted workover of the dry or poorly performing wells * Identification of new well locations for 2006 drilling programme * Increase the price received by switching from domestic to export oil sales * Pursue increase in the Zhengeldy licence area from 1.5 km2 to over 30km2 Implementation of this plan began in November 2005 and while much remains to be done, the results achieved to date are significant * Workover programme has delivered production from 8 out of 9 of all the wells drilled in late 2005 and 2005 * 100% successful drilling and oil test rate on new wells drilled and tested in 2006 (101, 103 and 105) * Drilling times have been reduced from an average of 30 days to 20 days per new well * Discovery of multiple oil production zones in nearly every well * Exceptionally strong open flow production rates of 230 barrels per day achieved from well 103 - the first well drilled on the dry salt lake * Three fold increase in oil production from the field between December 2005 and May 2006 * Increase in oil price received from $17.50 per barrel to approximately $65.00 per barrel (Urals Blend) through exports Implementation of the programme is still in its early phase. Workovers continueto deliver improved results. The success of the initial 2006 wells will lead toan expanded drilling progam. Exploration well - 104 on the extents of thecurrent licence area is underway and the Company continues to pursue itsobjective to significantly increase the size of its licence area. Within thecurrent licence area the drill rig will remain running and we expect to drill,in addition to wells 101 to 105, 7-8 new wells in the remainder of 2006 for atotal of 12-13 for the year. Our low operating and capital costs allow us todrill 10 new production wells for approximately $3m - approximately a quarter ofthe cost of a only one new well for our deeper drilling exploration competitors. An expansion of the licence area would allow for a greatly expanded drillingprogramme and in particular the ability to target the flanks and sides of theZhengeldy salt dome. These target structures are in the range of 1000-2000metres and provide the potential for significantly larger oil pays andproduction rates. We suspect there are significant traps on the sides of thesalt dome and targeted seismic work later this year should assist us to identifytarget traps for drilling these deeper wells. Ideally we would have seen thelicence extension granted in 2005 but there have been unanticipated delays inregulatory clearance procedures. We will continue to patiently pursue thelicence area extension. Financially 2005 was a development or staging post year for the Company with areported loss of £1.2m reflecting the initial difficulties and setbacks withfield performance. In total 30,000 barrels of oil were produced from 4 mainproducing wells at an average rate of 82 barrels a day. During the year at totalof 34,516 barrels were shipped and sold for an average price of $18 per barrelfor total revenue of $621,026 or £318,578. The combination of higher production and higher prices is expected to result insignificantly higher revenue for Caspian in 2006 and is expected to continuegoing forward into 2007, The magnitude for improvement is best illustrated bythe change in performance since 2005 - the Company has gone from having 4 wellsproducing approximately in total 100 barrels per day and selling the oil at$17.50 per barrel for a daily revenue of $1,750 in December 2005 to in May 2006having 9 wells producing an a total of approximately 300 barrels per day andselling oil at approximately $65 per barrel for a daily revenue of $19,500. The Company's financial position has been strengthened since year end throughtwo share placements which raised in total £3.34m. These funds will be used toexpand drilling operations in Zhengeldy with the objective of increasingproduction rates and for general working capital. The 2006 drilling programme ofaround 12-13 wells should cost approximately $4m and has demonstrated thecapacity to significantly increase production and cashflows from the field. In closing I would like to thank the management, in particular Igor Borisov,Yevgeniy Semikov and Dietmar Greil for their efforts through the year. Turningaround the Company's performance from the mid year setbacks has required muchfocus and intense work. The non executive Directors have strongly supported theCompany through its challenging times and on behalf of the Board I would like tothank Malcolm James who retired in May 2006 for his contribution to the Company.I would also like to welcome Andrew Robinson who joined the board in May 2006 asNon Executive Technical Director. Yours faithfully Michael MastermanExecutive Chairman CASPIAN HOLDINGS Plc GROUP INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2005 Notes 2005 2004 REVENUE 2 318,578 - Cost of sales (428,497) (17,057) GROSS LOSS (109,919) (17,057) Administrative expenses 4 (1,137,979) (617,112) OPERATING LOSS (1,247,898) (634,169) Attributable to: Acquisitions - (173,934) Continuing operations (1,247,898) (460,235) (1,247,898) (634,169) Finance income 5 82,788 13,254 Finance costs 5 (18,766) (6,525) LOSS BEFORE TAX 6 (1,183,876) (627,440) Tax 7 - - LOSS FOR THE YEAR (1,183,876) (627,440) Minority equity interests - 29,948 RETAINED LOSS FOR THE FINANCIAL YEAR 21 £(1,183,876) £(597,492) Basic and diluted loss per share 9 1.4p 2.33p CASPIAN HOLDINGS Plc GROUP BALANCE SHEET 31 DECEMBER 2005 Notes 2005 2004 ASSETS NON-CURRENT ASSETS Goodwill 10 1,307,985 1,307,985 Intangible assets 11 662,146 458,977 Property, plant and equipment 12 2,135,393 784,006 4,105,524 2,550,968 CURRENT ASSETS Inventories 13 16,349 72,469 Trade and other receivables 14 425,168 302,503 Cash and cash equivalents 15 477,747 3,100,585 919,264 3,475,557 LIABILITIES 16 330,705 311,874 CURRENT LIABILITIES Trade and other payables 17 6,423 6,732 Financial liabilities - borrowings 18 29,859 Interest bearing loans and borrowings 4,097 Provisions 366,987 322,703 NET CURRENT ASSETS 552,277 3,152,854 NON CURRENT LIABILITIES 16 117,870 113,083 Trade and other payables Financial liabilities - borrowings 17 8,524 15,756 Interest bearing loans and borrowings 126,394 128,839 NET ASSETS £4,531,407 £5,574,983 SHAREHOLDERS EQUITY 20 84,492 83,882 Called up share capital Share premium account 21 6,227,445 6,087,755 Profit and loss account 21 (1,780,530) (596,654) TOTAL EQUITY £4,531,407 £5,574,983 CASPIAN HOLDINGS Plc COMPANY BALANCE SHEET 31 DECEMBER 2005 Notes 2005 2004 ASSETS NON CURRENT ASSETS Investments 10 1,145,146 1,145,146 CURRENT ASSETS Trade and other receivables 14 4,196,774 1,787,873 Cash and cash equivalents 15 453,677 3,025,695 4,650,451 4,813,568 LIABILITIES CURRENT LIABILITIES Trade and other payables 16 35,382 166,321 NET CURRENT ASSETS 4,615,069 4,647,247 NET ASSETS £5,760,215 £5,792,393 SHAREHOLDERS' EQUITY Called up share capital 20 84,492 83,882 Share premium account 21 6,227,445 6,087,755 Profit and loss account 21 (551,722) (379,244) TOTAL EQUITY £5,760,215 £5,792,393 CASPIAN HOLDINGS Plc GROUP CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2005 Notes 2005 2004 Cash flows from operating activities Cash generated from operations 1 (1,121,853) (914,619) Finance cost (18,766) (6,525) Net cash from operating activities (1,140,619) (921,144) Cash flows from investing activities Purchase of intangible fixed assets (188,430) (241,014) Purchase of tangible fixed assets (1,571,392) (795,132) Exchange differences (63,202) (5,476) Adjustment to the cost of tangible fixed assets 125,258 - Acquisition - (1,142,028) Finance income 82,788 13,254 Net cash from investing activities (1,614,978) (2,170,396) Cash flows from financing activities Share issue 140,300 6,169,637 Prepayment of financial liabilities - borrowings Interest bearing loans and borrowings (7,541) 22,488 Net cash from financing activities 132,759 6,192,125 (Decrease)/Increase in cash and cash equivalents (2,622,838) 3,100,585 Cash and cash equivalents at beginning of year 2 3,100,585 - Cash and cash equivalents at end of year 2 £477,747 £3,100,585 CASPIAN HOLDINGS Plc NOTES TO THE GROUP CASH FLOW STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2005 1. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES 2005 2004 Operating Loss (1,247,898) (634,169) Depreciation charges 143,210 36,901 Decrease/(increase) in inventories 56,120 (72,339) (Increase) in trade and other receivables (122,665) (235,899) Increase/(decrease) in trade and other payables 23,618 (11,908) Increase in provisions 25,762 2,795 Net cash outflow from operating activities £(1,121,853) £(914,619) 2. CASH AND CASH EQUIVALENTS The amounts disclosed on the cash flow in respect of cash and cash equivalentsare in respect of these balance sheet amounts. Year ended 31 December 2005 31.12.05 01.01.05 Cash and cash equivalents £477,747 £3,100,585 Year ended 31 December 2004 31.12.04 01.01.04 Cash and cash equivalents £3,100,585 £ - CASPIAN HOLDINGS Plc NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2005 1. ACCOUNTING POLICIES Basis of preparation These financial statements have been prepared in accordance with InternationalFinancial Reporting Standards and IFRIC interpretations and with those parts ofthe Companies Act 1985 applicable to companies reporting under IFRS. Thefinancial statements have been prepared under the historical cost convention. Basis of consolidation The consolidated financial statements include the accounts of subsidiaries made up to 31 December 2005. No income statement is presented for the Company as permitted by S230 (4) of the Companies Act 1985. Goodwill Goodwill arising on consolidation, which represents the excess of the purchaseprice over the fair value of net assets acquired, is shown in the balance sheetas an asset and will be amortised evenly over its estimated useful life. Inaddition to the systematic amortisation, the book value is written down torecoverable amount when any impairment is identified. The directors consider the estimated useful life of goodwill to be in line withthe contract between Taraz LLP and the Government of the Republic of Kazakhstanfor the exclusive right to use the subsurface on the Zhengeldy oil field whichterminates on 27 May 2024. Intangible assets Amortisation is calculated and provided in order to write off each asset overits estimated useful economic life, such amortisation to commence when the assetconcerned is initially used within the business. Royalty - 5% - 33% on costSoftware - 5% - 33% on cost Royalty Royalty costs represent payments to the Republic of Kazakhstan, which are paidquarterly until 25 January 2020. The associated liability is shown within current and non current trade and otherpayables and has been discounted at the rate of 9%. Exploration and evaluation costs The group has adopted IFRS 6 "Exploration for and evaluation of mineral resources". The group follows the successful efforts method of accounting for explorationand evaluation costs. All licence, acquisition, exploration and evaluation costsare initially capitalised as intangible fixed assets in cost centres by fieldpending determination of the commerciality of the relevant field. Directlyattributable costs not specific to any particular licence or prospect areexpensed as incurred. An exploration and evaluation asset is assessed for impairment when facts andcircumstances suggest that the carrying amount may exceed its recoverableamount. Such triggering events are defined in IFRS 6 and include the point atwhich a determination is made as to whether commercial reserves exist. If prospects are deemed to be impaired ("unsuccessful") on completion ofevaluation, the associated costs are charged to the income statement. If thefield is determined to be commercially viable, the attributable costs aretransferred to property, plant and equipment in single field cost centres. Thesecosts are then depreciated on a unit of production basis. Property, plant and equipment Depreciation is provided at the following annual rates in order to write offeach asset over its estimated useful life or, if held under finance lease, overthe lease term, whichever is the shorter. Bore holes 10% on cost Motor vehicles 20% on cost Plant and equipment 20% - 33% on cost Furniture and other equipment 10% - 33% on cost Deferred Tax The tax charge is based on the profit for the period and takes into accounttaxation deferred because of timing differences between the treatment of certainitems for taxation and accounting purposes. Deferred tax is recognised inrespect of all timing differences that have originated but not reversed at thebalance sheet date where transactions or events have occurred at that date thatwill result in an obligation to pay more, or a right to pay less or to receivemore, tax, in the future. In particular: • Provision is made for tax on gains arising from the revaluation (and similar fair value adjustments) of fixed assets, and gains on disposal of fixed assets that have been rolled over into replacement assets, only to the extent that, at the balance sheet date, there is a binding agreement to dispose of the assets concerned. However, no provision is made where, on the basis of all available evidence at the balance sheet date, it is more likely than not that the taxable gain will be rolled over into replacement assets and charged to tax only where the replacement assets are sold. • Provision is made for deferred tax that would arise on remittance of the retained earnings of overseas subsidiaries, associates and joint ventures only to the extent that, at the balance sheet date, dividends have been accrued as receivable. • Deferred tax assets are recognised only to the extent that the Directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Deferred tax is measured on an undiscounted basis at the tax rates that areexpected to apply in the periods in which timing differences reverse, based ontax rates and laws enacted or substantively enacted at the balance sheet date. Inventories Inventories are valued at the lower of cost and net realisable value, aftermaking due allowance for obsolete and slow moving items. Foreign currencies Transactions in foreign currencies are recorded at the rate ruling at the dateof the transaction or at the contracted rate. Monetary assets and liabilitiesdenominated in foreign currencies are retranslated at the rate of exchangeruling at the balance sheet date or, if appropriate, at the forward contractrate. All differences are taken to the income statement. Where the trade of a foreign enterprise is more dependent on the economicenvironment of the parent Company then the Financial Statements of theundertaking are consolidated using the Temporal method on the following basis: • Fixed assets are translated into sterling at the rates ruling on the date of acquisition. • Monetary assets and liabilities denominated in a foreign currency are translated into sterling at the foreign exchange rates ruling at the balance sheet date. • Revenue and expenses in foreign currencies are recorded in sterling at the rates ruling at the date of the transactions. • Any gains or losses arising on translation are reported in the income statement. Hire purchase and leasing commitments Assets held under finance leases, which are leases where substantially all therisks and rewards of ownership of the asset have passed to the Group, and hirepurchase contracts are capitalised in the balance sheet and are depreciated overtheir useful lives. The capital elements of future obligations under leases andhire purchase contracts are included as liabilities in the balance sheet. Theinterest elements of the rental obligations are charged in the income statementover the periods of the leases and hire purchase contracts and represent aconstant proportion of the balance of capital payments outstanding. Rentals payable under operating leases are charged in the income statement on astraight-line basis over the lease term. 2. REVENUE Revenue represents income derived from the extraction and sale of oil by the Company's subsidiary undertaking Taraz LLP. 3. EMPLOYEES AND DIRECTORS 2005 2004 Wages and salaries 462,652 316,996 Social security costs 48,058 34,825 £510,710 £351,821 The average monthly number of employees during the year was as follows: Management & administration 17 17 Production, technical & operations 23 18 40 35 Of these employees, all the Production, Technical and Operations Staff are employed in Kazakhstan. Directors' emolument's £273,817 £163,067 Directors' emolument's are as follows: £ £ D. Greil 112,909 88,265 M. Masterman 112,908 66,802 M. Garland 24,000 4,000 M.R.S. James 24,000 4,000 4. EXCEPTIONAL ITEM Included in administrative expenses is £180,201 (USD 310,000) relating to sumsheld by Kazcommerce Bank in a transit account. Caspian had requested a transferof these funds to its 100% owned subsidiary Taraz LLP, which held a bank accountwith Nauryz Bank Kazakhstan. Prior to receipt of the funds Naruz was put intoadministration and these funds were frozen in the Kazcommerce Bank transitaccount. In 2005 the Company received indications from the Kazakhstan NationalBank that the funds would be returned to Caspian. Despite Companyrepresentations the funds have not been returned and as a result, Caspian hascommenced legal action to effect recovery. The Directors have deemed itappropriate to write off the amount of USD 310,000. All efforts will continue tobe made to recover the funds. 5. NET FINANCE INCOME 2005 2004 £ £ Finance income: Bank interest received 82,272 13,254Other interest received 516 - £82,788 £13,254 Finance costs: Other interest 12,712 1,272Hire purchase 6,054 5,245 £18,766 £6,517 Net finance income £18,770 £6,737 6. LOSS BEFORE TAX The loss before tax is stated after charging : Cost of inventories recognised as expense 428,497 17,057Depreciation - owned assets 140,529 18,337Depreciation - assets held under finance leases and hire purchase contracts 2,682 1,565Auditors remuneration 20,293 14,688Auditors remuneration for non audit work 2,996 - 7. TAXATION Analysis of the tax charge No liability to corporation tax arose on ordinary activities for the year ended 31 December 2005 nor for the year ended 31 December 2004. The difference between the effective provision for tax and the statutory taxprovision at the statutory tax rate is reconciled as follows: 2005 2004 £ £ Loss on ordinary activities before tax 1,183,876) 627,440 Corporation Tax at 30% (355,163) (188,232)Permanent differences: non-deductible expenditure/(income) 138,158 (11,728)Timing differences: losses brought forward (199,960) - tax losses carried forward 416,965 199,960 Current tax on ordinary activities - -Deferred tax - - £- £- As at 31 December 2005, the Group had unrecognised tax losses arising inKazakhstan of £1,101,349 (2004 £372,441) and United Kingdom of £288,531(2004£294,091) that are available indefinitely for offset against future taxableprofits of those companies in which the losses arose, subject to the conditionsof deductibility under the relevant legislation. Deferred tax assets have not been recognised in respect of these losses. Theseassets will be recognised should it become more likely than not that taxableprofits or timing differences, against which they may be deducted, arise. 8. LOSS OF THE PARENT UNDERTAKING The parent undertaking's loss for the financial year before and after taxationamounted to £172,478 (2004 £380,082). 9. EARNINGS PER SHARE Basic earnings per share is calculated by dividing the earnings attributable toordinary shareholders by the weighted average number of ordinary sharesoutstanding during the period. Diluted earnings per share is calculated using the weighed average number ofshares adjusted to assume the conversion of all dilutive potential ordinaryshares. 2005 Earnings Weighted average Per share amount £ number of shares pence Reconciliations are set out below. Basic EPS Earnings attributable to ordinary (1,183,876) 84,339,184 1.40p shareholders Effect of dilutive securities - - - Diluted EPS Adjusted earnings (1,183,876) 84,339,184 1.40p 2004 Earnings Weighted average Per share amount £ number of shares pence Basic EPS Earnings attributable to ordinary (627,440) 26,929,102 2.33p shareholders Effect of dilutive securities - - - Diluted EPS Adjusted earnings (627,440) 26,929,102 2.33p 10. FIXED ASSET INVESTMENTS Held by parent undertaking: The Company holds more than 10% of the equity of the following companies: Country of Proportion Name of Company Registration Held Nature of Business Taraz LLP Kazakhstan 100% Oil Exploration Subsidiary Undertakings Company COST At 1 January 2005 1,145,146 At 31 December 2005 £1,145,146 Pre acquisition losses of Taraz LLP are £162,839 giving rise to goodwill of£1,307,985. Goodwill is to be written off evenly over the period 1 January 2006(start of year after which trading commenced) to 27th May 2024 (termination ofrights to Zhengeldy oil field). 11. INTANGIBLE FIXED ASSETS Exploration and Royalty Software evaluation Total Group Costs COST At 1 January 2005 334,080 314 324,482 658,876 Adjustments for IFRS (174,174) - 14,377 (159,797) Additions - 1,736 186,694 188,430 Exchange differences 8,130 16 17,229 25,375 At 31 December 2005 168,036 2,066 542,782 712,884 DEPRECIATION At 1 January 2005 88,010 124 - 88,134 Adjustments for IFRS (48,032) - - (48,032) Charge for the year 8,402 195 - 8,597 Exchange differences 2,033 6 - 2,039 At 31 December 2005 50,413 325 - 50,738 NET BOOK VALUE At 31 December 2005 £117,623 £1,741 £542,782 £662,146 At 31 December 2004 £119,928 £190 £338,859 £458,977 12. PROPERTY, PLANT AND EQUIPMENT Furniture Bore Motor Plant and & Other Holes Vehicles Equipment Equipment Total Group COST At 1 January 2005 626,430 29,067 104,754 51,282 811,533 Additions 1,374,686 - 193,299 3,407 1,571,392 Reduction in original cost (108,778) - (11,445) (5,035) (125,258) Exchange differences 31,853 1,479 5,326 2,608 41,266 At 31 December 2005 1,924,191 30,546 291,934 52,262 2,298,933 DEPRECIATION At 1 January 2005 9,594 4,023 9,367 4,543 27,527 Charge for year 107,414 3,424 17,720 6,055 134,613 Exchange differences 488 205 476 231 1,400 At 31 December 2005 117,496 7,652 27,563 10,829 163,540 NET BOOK VALUE At 31 December 2005 £1,806,695 £22,894 £264,371 £41,433 £2,135,393 At 31 December 2004 £616,836 £25,044 £95,387 £46,739 £784,006 12. PROPERTY, PLANT AND EQUIPMENT (Cont'd) Property, plant and equipment, included in the above, which are held under hirepurchase contracts or finance leases are as follows: Motor Vehicles Group COST At 1 January 2005 25,556Exchange differences 1,300 At 31 December 2005 £26,856 DEPRECIATION At 1 January 2005 1,565Charge for the year 2,682Exchange differences 80 At 31 December 2005 £4,327 NET BOOK VALUE At 31 December 2005 £22,529 At 31 December 2004 £23,991 13. INVENTORIES Group Company 2005 2004 2005 2004 Stock £16,349 £72,469 £ - £ - 14. TRADE AND OTHER RECEIVABLES Group Company 2005 2004 2005 2004 Current: Trade Debtors 130,499 128,373 - - Amounts due from subsidiary undertakings - - 4,176,905 1,532,752Unpaid share capital - 13,225 - 13,225Other debtors 265,912 160,905 - 160,905Prepayments and accrued income 28,757 - 19,869 80,991 £425,168 £302,503 £4,196,774 £1,787,873 15. CASH AND CASH EQUIVALENTS Group Company 2005 2004 2005 2004 Cash in hand 1,143 59,700 1,000 1,000Bank deposit account - 2,900,000 - 2,900,000Bank accounts 476,604 140,885 452,677 124,695 £477,747 £3,100,585 £453,677 £3,025,695 16. TRADE AND OTHER PAYABLES Group Company 2005 2004 2005 2004 Current: Trade creditors 232,184 23,227 21,153 - Royalty lease payments 41,651 46,698 - -Social security and other taxes 11,724 11,915 1,416 -Other creditors and accruals 45,146 230,034 12,81 3 166,321 £330,705 £311,874 £35,382 £166,321 Non Current: Royalty lease payments £117,870 £113,083 £ - £ - 17. FINANCIAL LIABILITIES - BORROWINGS Group Company 2005 2004 2005 2004 Current: Finance leases £6,423 £6,732 £ - £ - Non current: Finance lease £8,524 £15,756 £ - £ - Terms and debt repayment schedule 1 Year or 1-5 After 5 less Years Years Finance lease £6,423 £8,524 £ - 18. PROVISIONS Group Company 2005 2004 2005 2004 Current consequences of liquidation 13,163 4,097 - -Professional training 16,696 - - - £29,859 £4,097 £ - £ - 19. LEASING AGREEMENTS Minimum lease payments under finance leases fall due as follows: Group Company 2005 2004 2005 2004 Gross obligations repayable: 9,548 14,025 - - within one year between one and five years 10,329 18,915 - - £19,877 £32,940 £ - £ - Finance charges repayable: within one year 3,125 7,293 - - between one and five years 1,805 3,159 - - £4,930 £10,452 £ - £ - Net obligations: within one year 6,423 6,732 - - between one and five years 8,524 15,756 - - £14,947 £22,488 £ - £ - 20. SHARE CAPITAL Authorised 2005 2004 150,000,000 Ordinary shares of 0.1p each £150,000 £150,000 Allotted, issued and fully paid 84,491,685 (2004 83,881,685) Ordinary shares of 0.1p each £84,492 £83,882 On 28 March 2005 610,000 shares were issued at 23p each as payment for theremaining 30% interest in Taraz LLP. Stock Options: Stock Options Issued Option Price Exercise Period Michael Masterman 2,000,000 0.23p 4th November 2007 Dietmar Greil 2,000,000 0.23p 4th November 2007 Malcolm James 250,000 0.23p 4th November 2007 Michael Garland 250,000 0.23p 4th November 2007 Michael Garland 250,000 0.27p 4th November 2007 Andrew Robinson 500,000 0.27p 4th November 2007 Operations Manager 500,000 0.27p 4th November 2007 Other staff and consultants 585,000 0.23p 4th November 2007 21. RESERVES AND RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS Profit and TotalGroup Share Share Loss Shareholders Capital Premium Account Fund Loss for the financial year - - (1,183,876) (1,183,876)Shares issued 610 139,690 - 140,300 Net reduction in to 610 139,690 (1,183,876) (1,043,576)shareholders' funds Opening shareholders' funds 83,882 6,087,755 (596,654) 5,574,983 Closing shareholders' funds £84,492 £6,227,445 £(1,780,530) £4,531,407 Company Loss for the financial year - - (172,478) (172,478)Shares issued 610 139,690 - 140,300 Net additions to shareholders' funds 610 139,690 (172,478) (32,178) Opening shareholders' funds 83,882 6,087,755 (379,244) 5,792,393 Closing shareholders' funds £84,492 £6,227,445 £(551,722) £5,760,215 22. EVENTS SINCE THE BALANCE SHEET DATE In February 2006 7,207,000 Ordinary 0.1p shares were issued raising funds of£1,441,400. In March 2006 7,000,000 Ordinary 0.1p shares were issued raising funds of£1,890,000 23. RELATED PARTY TRANSACTIONS During the year, £15,181 (2004 £7,700) was paid to Northsun Italia SpA, aCompany of which M. Masterman and D. Griel are directors, for the re-charge ofcourier and telephone services. Re-charges were based on the cost from thirdparty service invoices. 24. TRANSITION TO IFRS This is the first year that the Group and Company has presented its financialstatements under IFRS. The last financial statements under UK GAAP were for theyear ended 31 December 2004. The date of transition to IFRS was therefore 1January 2005. The impact of the adoption of IFRS on equity and the results for the group, andthe Company, for the year ended 31 December 2004 is as outlined on the followingpages: RECONCILIATION OF EQUITY1ST JANUARY 2005(Date of Transition to IFRSs) Group Company Effect of Effect of UK transition UK transition GAAP to IFRSs IFRSs GAAP to IFRSs IFRSs ASSETS NON-CURRENT ASSETS Goodwill 1,306,448 1,537 1,307,985 - - - Intangible assets 570,742 (111,765) 458,977 - - - Property, plant and equipment 784,006 - 784,006 - - - Investments - - - 1,145,146 - 1,145,146 2,661,196 (110,228) 2,550,968 1,145,146 - 1,145,146 CURRENT ASSETS Inventories 90,112 (17,643) 72,469 - - - Trade and other receivables 302,503 - 302,503 1,787,873 - 1,787,873 Cash and cash equivalents 3,100,585 - 3,100,585 3,025,695 - 3,025,695 3,493,200 (17,643) 3,475,557 4,813,568 - 4,813,568 LIABILITIES CURRENT LIABILITIES Trade and other payables (315,587) 3,713 (311,874) (166,321) - (166,321) Financial liabilities - borrowings Interest bearing loans and borrowings (6,732) - (6,732) - - - Provisions (4,097) - (4,097) - - - (326,416) 3,713 (322,703) (166,321) - (166,321) NET CURRENT ASSETS 3,166,784 (13,930) 3,152,854 4,647,247 - 4,647,247 NON CURRENT LIABILITIES Trade and other payables (210,832) 97,749 (113,083) - - - Financial Liabilities - borrowings Interest bearing loans and borrowings (15,756) - (15,756) - - - (226,588) 97,749 (128,839) - - - NET ASSETS £5,601,392 £(26,409) £5,574,983 £5,792,393 - £5,792,393 SHAREHOLDERS' EQUITY Called up share capital 83,882 - 83,882 83,882 - 83,882 Share premium 6,087,755 - 6,087,755 6,087,755 - 6,087,755 Other reserve 2,775 (2,775) - - - - Profit and loss account (573,020) (23,634) (596,654) (379,244) - (379,244) TOTAL EQUITY £5,601,392 £(26,409) £5,574,983 £5,792,393 - £5,792,393 CASPIAN HOLDINGS PLCRECONCILIATION OF LOSSFOR THE YEAR ENDED 31ST DECEMBER 2005 Group Company Effect of Effect of UK transition UK transition GAAP to IFRSs IFRSs GAAP to IFRSs IFRSs Revenue - - - - - - Cost of sales - (17,057) (17,057) - - - Administrative expenses (610,302) (6,810) (617,112) (370,518) - (370,518) Finance costs (6,517) (8) (6,525) (102,971) - (102,971) Finance income 13,254 - 13,254 93,407 - 93,407 LOSS BEFORE TAX (603,565) (23,875) (627,440) (380,082) - (380,082) Minority interest 29,707 241 29,948 - - - LOSS FOR THE YEAR £(573,858) £(23,634) £(597,492) £(380,082) £ - £ (380,082) This information is provided by RNS The company news service from the London Stock Exchange