Financial Express (Holdings) Limited (“we”, “our”, “us” and derivatives) are committed to protecting and respecting your privacy. This Privacy Policy, together with our Terms of Use, sets out the basis on which any personal data that we collect from you, or that you provide to us, will be processed by us relating to your use of any of the below websites (“sites”).

  • FEAnalytics.com
  • FEInvest.net
  • FETransmission.com
  • Investegate.co.uk
  • Trustnet.hk
  • Trustnetoffshore.com
  • Trustnetmiddleeast.com

For the purposes of the Data Protection Act 1998, the data controller is Trustnet Limited of 2nd Floor, Golden House, 30 Great Pulteney Street, London, W1F 9NN. Our nominated representative for the purpose of this Act is Kirsty Witter.

WHAT INFORMATION DO WE COLLECT ABOUT YOU?

We collect information about you when you register with us or use any of our websites / services. Part of the registration process may include entering personal details & details of your investments.

We may collect information about your computer, including where available your operating system, browser version, domain name and IP address and details of the website that you came from, in order to improve this site.

You confirm that all information you supply is accurate.

COOKIES

In order to provide personalised services to and analyse site traffic, we may use a cookie file which is stored on your browser or the hard drive of your computer. Some of the cookies we use are essential for the sites to operate and may be used to deliver you different content, depending on the type of investor you are.

You can block cookies by activating the setting on your browser which allows you to refuse the setting of all or some cookies. However, if you use your browser settings to block all cookies (including essential cookies) you may not be able to access all or part of our sites. Unless you have adjusted your browser setting so that it will refuse cookies, our system will issue cookies as soon as you visit our sites.

HOW WE USE INFORMATION

We store and use information you provide as follows:

  • to present content effectively;
  • to provide you with information, products or services that you request from us or which may interest you, tailored to your specific interests, where you have consented to be contacted for such purposes;
  • to carry out our obligations arising from any contracts between you and us;
  • to enable you to participate in interactive features of our service, when you choose to do so;
  • to notify you about changes to our service;
  • to improve our content by tracking group information that describes the habits, usage, patterns and demographics of our customers.

We may also send you emails to provide information and keep you up to date with developments on our sites. It is our policy to have instructions on how to unsubscribe so that you will not receive any future e-mails. You can change your e-mail address at any time.

In order to provide support on the usage of our tools, our support team need access to all information provided in relation to the tool.

We will not disclose your name, email address or postal address or any data that could identify you to any third party without first receiving your permission.

However, you agree that we may disclose to any regulatory authority to which we are subject and to any investment exchange on which we may deal or to its related clearing house (or to investigators, inspectors or agents appointed by them), or to any person empowered to require such information by or under any legal enactment, any information they may request or require relating to you, or if relevant, any of your clients.

You agree that we may pass on information obtained under Money Laundering legislation as we consider necessary to comply with reporting requirements under such legislation.

ACCESS TO YOUR INFORMATION AND CORRECTION

We want to ensure that the personal information we hold about you is accurate and up to date. You may ask us to correct or remove information that is inaccurate.

You have the right under data protection legislation to access information held about you. If you wish to receive a copy of any personal information we hold, please write to us at 3rd Floor, Hollywood House, Church Street East, Woking, GU21 6HJ. Any access request may be subject to a fee of £10 to meet our costs in providing you with details of the information we hold about you.

WHERE WE STORE YOUR PERSONAL DATA

The data that we collect from you may be transferred to, and stored at, a destination outside the European Economic Area (“EEA”). It may be processed by staff operating outside the EEA who work for us or for one of our suppliers. Such staff may be engaged in, amongst other things, the provision of support services. By submitting your personal data, you agree to this transfer, storing and processing. We will take all steps reasonably necessary, including the use of encryption, to ensure that your data is treated securely and in accordance with this privacy policy.

Unfortunately, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our sites; any transmission is at your own risk. You will not hold us responsible for any breach of security unless we have been negligent or in wilful default.

CHANGES TO OUR PRIVACY POLICY

Any changes we make to our privacy policy in the future will be posted on this page and, where appropriate, notified to you by e-mail.

OTHER WEBSITES

Our sites contain links to other websites. If you follow a link to any of these websites, please note that these websites have their own privacy policies and that we do not accept any responsibility or liability for these policies. Please check these policies before you submit any personal data to these websites.

CONTACT

If you want more information or have any questions or comments relating to our privacy policy please email publishing@financialexpress.net in the first instance.

 Information  X 
Enter a valid email address

Creat Resources Hld (CRHL)

  Print      Mail a friend

Friday 12 March, 2010

Creat Resources Hld

Interim Results for six month

RNS Number : 5048I
Creat Resources Holdings Ltd
12 March 2010
 



CREAT RESOURCES HOLDINGS LIMITED
('Creat Resources' or the 'Company')

Interim Results for the six months ended 31 December 2009

12 March 2010 - Creat Resources Holdings Limited, the exploration and development company with assets in Western Tasmania, Australia, announces its interim results for the six months ended 31 December 2009 ("Interim Results").

Highlights:

·      The consolidated loss for the half-year after providing for income tax amounted to $1,633,256 (2008 loss: $5,076,606);

·      Net assets of $9,793,370 (30 June 2009: $251,071); 

·      Net cash outflows from operating activities of $1,080,441 (2008: $4,166,912);

·      Galaxy Transaction - acquisition of a 4.6% interest (with further transaction announced to increase to 19.9%) in Galaxy Resources Limited ("Galaxy"), an ASX listed, emerging mining and materials company focusing on lithium and tantalum production; and

·      Capital Raising - completion of first round fundraising of $10,179,108 (before expenses).

Post Balance Date Events

·      Galaxy and Creat Group Co. Limited (the Company's major shareholder) are currently at an advanced stage of discussions with financiers regarding the entry into a facility agreement, which will involve the Company providing security and whereby the financiers will provide a project finance facility to Galaxy. 

·      The Company announced that the Minister for Resources in Tasmania (the "Minister") has indicated his refusal to renew two of the Company's exploration licences, namely EL20/2002 and EL 30/2002 (the "Licences"), both which were pending renewal for another term of one year.  The Company is part way through its exploration programs and would like to complete them.  As such, the Company will make an appeal to the Mining Tribunal by mid-March 2010. The directors of the Company believe that the Company has reasonable grounds to appeal the Minister's decision. Until the appeal process is completed, both Licences remain in force.

Management Comment and Outlook

Mr Xiaojian Ren, Managing Director, commented:

"The Company is now actively progressing a dual focus of continuing its exploration activities at the same time expanding its mining operations and resource interests. The Company's interest in Galaxy (and its plans to become one of the world's leading producers of lithium) will facilitate Company growth and provide a strong platform for further expansion.

Funding of the Galaxy transaction will be finalised once the share placement, which is currently under negotiation with a number of potential equity investors, is completed. 

In addition the Creat Group Corp. Ltd., a significant stakeholder to the Company has indicated its continued financial and human resources support in executing the strategy."

The Company's Half-Year Financial Report will be available on the Company's website at www.creatresources.com.

For further information, please contact:

Creat Resources Holdings Limited 
Yasmine Healy


Tel: +61 (03) 6216 2705

Nominated Adviser, Grant Thornton Corporate Finance
Philip Secrett, Maureen Tai


Tel:+44 (0) 20 7383 5100

Broker, Westhouse Securities Limited
Tim Metcalfe, Richard Baty


Tel: +44 (0) 20 7601 6100

First City (China) Limited             
 Public Relations Advisor
Lei Jiang
Jane Absolom

Tel: +852 2854 2666

Tel: +44 (0) 20 7920 3150



 

DIRECTORS' REPORT

 

The directors of Creat Resources Holdings Limited submit herewith the financial report of Creat Resources Holdings Limited and its subsidiaries (the 'Company') for the half-year ended 31 December 2009. The Registered Office and principal place of business is Level 2, 116 Bathurst Street, Hobart, Tasmania 7000 Australia. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

 

Information about the directors and senior management

 

The names of the directors and company secretary in office during or since the end of the half-year and up to the date of this report are:

 

Current Directors and Company Secretary

 

Name

Role


Dr Yuewen Zheng

Chairman and Non-Executive Director


Mr Xiaojian Ren

Managing Director and Acting CEO


Mr Tad Ballantyne

Deputy Chairman and Non-Executive Director


Mr Stephen Powell          

Non-Executive Director


Mr Philip Simpson          

Non-Executive Director


Ms Yasmine Healy

Company Secretary


 

The above named directors and company secretary have been in office since the start of the half-year.

 

Review of Operations

 

The consolidated loss of the Company for the half-year after providing for income tax amounted to $1,633,256 (2008 loss: $5,076,606).

 

Galaxy Subscription

 

The Company announced during the half-year reporting period the acquisition of an interest in Galaxy Resources Limited ("Galaxy"), an ASX listed, emerging mining and materials company focusing on lithium and tantalum production.  This acquisition is in line with the Company's revised strategy of exploring acquisitions or other transactions that would result in the expansion of its mining operations within and outside Australia, and the diversification of its resources, as approved by Shareholders in July 2009.

 

On 21 August 2009, Creat Group Co. Ltd ("Creat Group") (the controlling shareholder of Creat Resources Holdings Ltd) entered into a Share Subscription and Debt Facility Agreement with Galaxy ("the Galaxy Subscription agreement") pursuant to which Creat Group received the right to nominate a subscriber to acquire shares in Galaxy representing approximately 19.99% of the enlarged issued share capital of Galaxy.  On 17 November 2009, the Company announced that Creat Group intended to nominate the Company as the subscriber under the Galaxy Subscription Agreement and on 16 December 2009, the Company subscribed for the Initial Galaxy Subscription (defined below) for a purchase price of approximately $6,000,000.

 

As announced on 16 December 2009, the Company took the first step in the direction of its revised strategy by acquiring 6,818,182 ordinary shares in Galaxy representing approximately 4.6% of Galaxy's enlarged ordinary share capital (the "Initial Galaxy Subscription") after having been nominated by Creat Group, to complete the subscription with Galaxy.  The Company intends to subscribe for additional ordinary shares of Galaxy which shall equal the lower of the number which, together with the Initial Galaxy Subscription, represents 19.99% of Galaxy's enlarged share capital or 31 million Galaxy shares (the "Further Galaxy Subscription" and together with the "Initial Galaxy Subscription", the "Galaxy Transaction").

 

 

The Further Galaxy Subscription will be funded through the following means:

·      funds remaining from the First Round Placing and/or any other working capital; and

·      funds raised from the Second Round Placing (as defined below).

 

If the above sources of funding do not provide sufficient funds to make the Further Galaxy Subscription, Create Group (HK) Limited (or another subsidiary of Creat Group) will enter into a convertible note agreement pursuant to which Create Group (HK) Limited will subscribe for a convertible note in an amount equal to that required by the Company to complete the Further Galaxy Subscription.

 

Capital Raising

 

In order to fund the Galaxy Transaction, the Company conducted a placement (the "First Round Placing") to a small number of investors ("First Round Subscribers") and is undertaking a second round of fundraising (the "Second Round Placing") to be conducted by the company's broker, Westhouse Securities, to institutional and other investors (the "Second Round Subscribers"). 

 

Creat Group has agreed to grant a put option to each of the First Round Subscribers ("Put Options") under which each of the First Round Subscribers can, subject to shareholder approval, require Creat Group to purchase all of the shares issued to each of them under the First Round Placing if during the relevant exercise period the market price of shares is less than 6 pence.

 

Re-admission to AIM and Shareholder approval

 

Due to the size of the Galaxy Transaction in comparison to the Company, the Further Galaxy Subscription constitutes a reverse takeover for the purposes of the AIM Rules for Companies. Accordingly, the Further Galaxy Subscription requires the approval of the Company's Shareholders and the production of an Admission Document, which was signed on 10 February 2010.

 

Shareholder approval will be sought at the Annual General Meeting scheduled for 29 March 2010.

 

Following the approval of the Further Galaxy Subscription, the Company will seek re-admission to AIM. The Directors believe the Company will be well placed to continue its revised strategy to make further acquisitions or conduct other transactions to expand the Company's operations and work alongside Creat Group to support Galaxy as it develops the Mt Cattlin Project and the Jiangsu Project.

 

Mining Properties

 

  New Exploration Licence - Dundas

The Board announced in August 2009 that, in accordance with its strategy of expansion and resource diversification, the Company had entered into an agreement to purchase Exploration Licence 21/2004 and its related exploration/mining information known as the Dundas Nickel Project from Stellar Resources Limited and its subsidiary for a consideration of $250,000, and an obligation to provide the previous owner with a 2% net smelter royalty as required for the transfer. The agreement received Ministerial consent in December 2009.

 

 

Events Subsequent to Balance Sheet Date

 

On 10 February 2010, the Company's shares were restored to trading on AIM.

 

Further Galaxy Resources Limited share subscription

 

On 21 August 2009, Creat Group, the controlling shareholder of the Company, entered into an agreement with Galaxy pursuant to which it agreed to subscribe for an interest of approximately 19.99% of the share capital of Galaxy and to provide a project finance facility to Galaxy.  On 17 November 2009, the Company announced that Creat Group intended to nominate the Company as the acquirer of the Galaxy shares pursuant to the agreement. The Company took the decision to proceed with the Galaxy subscription in two separate stages, an initial subscription of $6,000,000 and a second subscription of approximately $27,000,000. The first share subscription was completed on 15 December 2009. The proposed second subscription of shares in Galaxy constitutes a reverse takeover for the purposes of the AIM Rules for Companies. Accordingly, acquisition of further shares in Galaxy requires the approval of the Company's shareholders to occur at the Annual General Meeting, which is to be held on 29 March 2010.

Galaxy and Creat Group are currently at an advanced stage of discussions with financiers regarding the entry into a facility agreement whereby the financiers will provide a project finance facility to Galaxy.  As part of the facility agreement, the financiers have indicated that they will require the Company to enter into a Share Mortgage and the Facility Put Option. Under the terms of the Share Mortgage, the Company will, if the Share Mortgage is executed, agree to grant security at all times, up to a maximum aggregate of 19.9% of its shares in Galaxy in favour of the financiers. The amount secured by the Share Mortgage is limited to the proceeds realised from the sale of the shares pledged in favour of the financiers. The Facility Put Option will, if executed, entitle the financiers to require the Company to purchase from the financers the debt outstanding under the facility agreement at the time the option is exercised. The purchase price for the debt outstanding under the facility agreement will be an amount equal to the principal, accrued interest and fees outstanding under the facility agreement at that time. In exercising this option, the financers would also transfer their rights under the facility agreement to the Company. The Facility Put Option will only be exercisable by the financers during the period from four years from initial drawdown until 10 December 2016.

 

On 24 February 2010, the Company announced that the Minister for Resources in Tasmania (the "Minister") has indicated his refusal to renew two of the Company's exploration licences, namely EL20/2002 and EL 30/2002 (the "Licences"), both which were pending renewal for another term of one year.  The Company is part way through its exploration programs and would like to complete them.  As such, the Company will make an appeal to the Mining Tribunal by mid-March 2010. The directors of the Company believe that the Company has reasonable grounds to appeal the Minister's decision. Until the appeal process is completed, both Licences remain in force.

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE HALF-YEAR ENDED 31 DECEMBER 2009


Half Year Ended


Half Year Ended


31 Dec 2009


31 Dec 2008


$


$







Revenue

255,909



122,134


Other Income                                                            3(a)

725,036



49,984








Exploration and Evaluation Costs Expensed

(24,669)



(399,972)


Depreciation Expense

(163,261)



(174,659)


Finance Costs

(260,995)



(265,637)


Administration Expenses

(535,278)



(599,463)


Loss on Disposal of Assets

(69,438)



(514,154)


Impairment of Non-Current Assets

  - 



(884,700)


Employee Expenses

(1,284,350)



(1,620,261)


Site Operations

(98,206)



(562,688)


Other Expenses                                                        3(b)

(677,196)



(227,190)








Loss before Income Tax

(2,132,448)



(5,076,606)








Income Tax Benefit

499,192    



  -    








Loss for the Period

(1,633,256)



(5,076,606)













Gain on available-for-sale investments taken to equity (net of tax)

1,052,782 




Other Comprehensive Income for the Period (net of tax)

1,052,782 




Total Comprehensive Loss for the Period

(580,474)



(5,076,606)














Earnings Per Share












Basic (cents per share)

     (0.35)



     (2.97)


Diluted (cents per share)

     (0.35)



     (2.97)








The accompanying notes form part of these condensed consolidated financial statements.


 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2009

 



31 Dec 2009


30 Jun 2009

Assets


$


$

Current Assets







Cash and Cash Equivalents


4,638,370



861,150


Trade and Other Receivables


111,079



131,431


Inventories


84,743



84,743


Other Current Assets


174,463



189,636




5,008,655



1,266,960


Non-current Assets classified as held for sale


-



1,010,000


Total Current Assets


5,008,655



2,276,960









Non-Current Assets







Property, Plant and Equipment


1,531,824



1,737,700


Exploration and Evaluation Asset


250,000



-


Other Financial Assets


11,227,273



2,500,000


Total Non-Current Assets


13,009,097



4,237,700









Total Assets


18,017,752



6,514,660









Liabilities







Current Liabilities







Trade and Other Payables


1,505,723



438,322


Financial Liabilities


206,206



83,289


Provisions


80,537



68,689


Total Current Liabilities


1,792,466



590,300









Non-Current Liabilities







Financial Liabilities


6,016,679



5,229,705


Other Liabilities


2,521



2,521


Deferred Tax Liabilities


-



48,000


Provisions


412,716



393,063


Total Non-Current Liabilities


6,431,916



5,673,289









Total Liabilities


8,224,382



6,263,589









Net Assets


9,793,370



251,071









Equity







Issued Capital


62,264,025



52,141,252


Reserves


1,397,313



344,531


Accumulated Losses


(53,867,968)



(52,234,712)


Total Equity


9,793,370



251,071









The accompanying notes form part of these condensed consolidated financial statements.

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE HALF-YEAR ENDED 31 DECEMBER 2009

 


Issued Capital


Retained Earnings


Investment Revaluation Reserve

 


Share Based Payments Reserve


Total


$


$


$


$


$





















Total Equity at 1 July 2008

46,481,426


(44,511,280)


-


279,309


2,249,455

Net Loss for the Period

  -    


(5,076,606)


-


  -    


(5,076,606)

Total comprehensive income for the period

-


(5,076,606)


-


-


(5,076,606)

Share Option Reserve

  -    


  -    


-


11,440


11,440

Less: Capital Raising Costs

(9,062)


  -    


-


  -    


(9,062)

Issue of Share Capital

6,524,867


  -    


-


  -    


6,524,867

Issue of Convertible Notes

71,421


  -    


-


  -    


71,421











Total Equity at 31 December 2008

53,068,652


(49,587,886)


-


290,749


3,771,515











Total Equity at 1 July 2009

52,141,252


(52,234,712)


-


344,531


251,071

Net Loss for the Period

  -    


(1,633,256)


-


  -    


(1,633,256)

Reserve - AFS Investment

-


-


1,052,782




1,052,782

Total comprehensive income for the period

-


(1,633,236)


1,052,782


-


(580,474)

Less: Capital Raising Costs

(56,336)


  -    


-


  -    


(56,336)

Issue of Share Capital

10,179,109


  -    


-


  -    


10,179,109











Total Equity at 31 December 2009

62,264,025


(53,867,968)


1,052,782


344,531


9,793,370












 

The accompanying notes form part of these condensed consolidated financial statements.

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE HALF-YEAR ENDED 31 DECEMBER 2009

 


Half Year Ended


Half Year Ended



31 Dec 2009


31 Dec 2008



      $


      $


Cash Flows from Operating Activities










Receipts from Customers

50,201


161,781


Payments to Suppliers and Employees

(1,130,642)


(4,328,693)







Net Cash used in Operating Activities

(1,080,441)


(4,166,912)












Cash Flows from Investing Activities










Purchase of Property, Plant & Equipment

(33,823)


-


Purchase of Available-for-sale Financial Assets

(6,907,989)


-


Purchase Exploration Tenement

(250,000)


-


Proceeds from Sale of Property, Plant & Equipment

1,017,000


1,289,547


Interest Received

32,154


21,777







Net Cash (used in)/ provided by Investment Activities

(6,142,658)


1,311,324












Cash Flows from Financing Activities










Interest Paid

(14,178)


(57,915)


Proceeds from Borrowings

926,937


1,090,420


Repayment of Borrowings

(45,212)


-


Proceeds from Issue of Shares

10,179,108


6,524,866


Capital Raising Costs

(46,336)


-







Net Cash Provided by Financing Activities

11,000,319


7,557,371







Net Increase in Cash and Cash Equivalents

3,777,220


4,701,783


Cash and Cash Equivalents at Beginning of the Half-Year

861,150


1,278,897







Cash and Cash Equivalents at the End of the Half-Year

4,638,370


5,980,680












The accompanying notes form part of these condensed consolidated financial statements.


 

 

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2009

 

 

Note 1: Significant Accounting Policies

 

Statement of Compliance

This general purpose financial report for the half-year ended 31 December 2009 has been prepared in accordance with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Act 2001. Compliance with AASB134 ensures compliance with International Financial Reporting Standard IAS 134 Interim Financial Reporting.

 

The half-year financial report does not include all the notes of the type normally included in an annual financial report.  Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2009 and the public announcements made by Creat Resources Holdings Limited during the half-year in accordance with the continuous disclosure requirements of the Corporations Act 2001.

 

Basis of Preparation

The condensed consolidated financial statements have been prepared on an accrual basis and under the historical cost convention, as modified by the revaluation of available-for-sale financial assets, financial assets and liabilities (including derivative instruments) at fair value either through profit or loss or equity and certain classes of property, plant and equipment. All amounts are presented in Australian dollars, unless otherwise stated.

 

All accounting policies adopted are consistent with those adopted and disclosed in the Company's 2009 annual financial report for the financial year ended 30 June 2009 except for the new accounting policy noted below and the impact of the new and revised standards and interpretations described below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

 

Acquired Exploration and Evaluation Interests

During the current period, the company revised its accounting policy in respect of exploration and evaluation expenditure.  The company's previously stated accounting policy was to expense exploration and evaluation expenditure as it was incurred.  This accounting policy did not contemplate the treatment of acquired exploration and evaluation interests.

 

Under the revised accounting policy, the cost of an acquired exploration and evaluation interest is recognised as an exploration and evaluation asset in the year in which it is incurred where the following conditions are satisfied:

(i) the rights to tenure of the area of interest are current; and

(ii) at least one of the following conditions is also met:

(a)        the exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the area of interest, or alternatively, by its sale; or

(b)        exploration and evaluation activities in the area of interest have not, at the reporting date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing.

 

If the above is not satisfied, the cost of an acquired exploration and evaluation interest is expensed as incurred.

 

The cost of on-going exploration and evaluation activities such as, studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortisation of assets used in exploration and evaluation activities by the company continue to be expensed as incurred in accordance with the company's existing accounting policy.

 

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.

 

This revised accounting policy has not resulted in any change to comparative amounts.

 

New and revised Standards

The Company has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current reporting period.

 

New and revised Standards and Interpretations effective for the current reporting period that are relevant to the Company include:

·      AASB 3 Business Combinations

·      AASB 8 Operating Segments

·      AASB 101 Presentation of Financial Statements

·      AASB 127 Consolidated and Separate Financial Statements

 

The adoption of these Standards and Interpretations has resulted in changes to the Company's accounting policies but has not affected the amounts reported in the current or prior periods.  The changes to the Company's accounting policies are as follows:

 

Business combinations

AASB 3 Business Combinations (2008) applies prospectively to business combinations for which the acquisition date is on or after 1 July 2009 and alters the manner in which business combinations and changes in ownership interest in subsidiaries are accounted for.  Accordingly, its adoption has no impact on previous acquisitions made by the Company.

The effect of AASB 3 (2008) and its consequential amendments to other Australian Accounting Standards has been to:

·      allow a choice on a transaction-by-transaction basis for the measurement of non-controlling interests (previously referred to as minority interests);

 

·      change the recognition and subsequent accounting requirements of contingent consideration.  Under the previous version of the Standard, contingent consideration was recognised at the acquisition date only where it met probability and reliably measurable criteria; under the revised Standard the consideration for the acquisition always includes the fair value of any contingent consideration.  Once the fair value of the contingent consideration at the acquisition date has been determined, subsequent adjustments are made against goodwill only to the extent that they reflect fair value at the acquisition date, and they occur within the measurement period (a maximum of 12 months from the acquisition date).  Under the previous version of the Standard, adjustments to contingent consideration were always made against goodwill;

 

·      where the business combination in effect settles a pre-existing relationship between the Company and acquiree, require the recognition of a settlement gain or loss, measured at fair value of non-contractual relationships; and

 

·      require that acquisition-related costs be accounted for separately from the business combination, generally leading to those cost being expensed when incurred.  Previously such costs were accounted for as part of the cost of the acquisition of the business.

 

Presentation of financial statements

The Company has adopted the revised AASB 101 (2007) Presentation of Financial Statements from 1 July 2009. The revised Standard separates owner and non-owner changes in equity. As a result, all non-owner changes in equity are presented in a statement of comprehensive income and all owner changes in equity are presented in a statement of changes in equity.

The revised Standard also changes the title of other financial statements; the income statement is now termed the statement of comprehensive income, the balance sheet is now termed the statement of financial position and the cash flow statement is now termed the statement of cash flows.

Comparative information has been re-presented to comply with the revised Standard. Since the change in accounting policy only affects presentation aspects, there is no impact on the financial position or performance of the Company.

 

Changes in ownership interests of subsidiaries

AASB 127 Consolidated and Separate Financial Statements (2008) has been adopted in the current period and applies prospectively.  The revised Standard has resulted in changes in the Group's accounting policy in regarding increases and decreases in ownership interests in its subsidiaries.  In prior years, in the absence of specific requirements in the Australian Accounting Standards, increases in interests in existing subsidiaries were treated in the same manner as the acquisition of subsidiaries, with goodwill or a bargain purchase gain being recognised where appropriate.  The impact of decreases in interests in subsidiaries that did not involve loss of control was recognised in profit or loss.  Under AASB 127 (2008), all increases or decreases in such interest are recognised in equity, with no impact on goodwill or profit or loss.

When control of a subsidiary is lost as a result of a transaction or other circumstance, the revised Standard requires that the Group derecognises all assets, liabilities, and non-controlling interests at their carrying amount.  Any retained interest in the former subsidiary is recognised at its fair value at the date that control is lost.  A gain or loss on loss of control is recognised in profit or loss as the difference between the proceeds, if any, and these adjustments.

 

Changes in ownership interests of associates

AASB 128 Investments in Associates was amended by AASB 2008-3 Amendments to Australian Accounting Standards arising from AASB 3 and AASB 127, and has been adopted in the current period.  The principle adopted in AASB 127 (2008) that a change in accounting basis is recognised as a disposal and re-acquisition at fair value is extended by consequential amendments to AASB 128 such that, on loss of significant influence, the investor measures at fair value any investment the investor retains in the former associate.

 

In addition to the above, the adoption of these new and revised Standards and Interpretations have resulted in changes to the Company's presentation of, or disclosure in, its half-year financial statements in the following area:

·      Information about Company's segments.  The adoption of AASB 8 Operating Segments and AASB 2007-3 Amendments to Australian Accounting Standards arising from AASB 8 has not resulted in any changes to the segments reported by the Company. Refer to note 2 below.



Going Concern

The financial report has been prepared on a going concern basis, which assumes continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.

 

The Company is in a development stage and in the course of its activities has sustained operating losses.  It expects such losses to continue for at least the next 12 months.  The Company will finance its operations primarily through cash and cash equivalents on hand, future financing from the issuance of debt or equity instruments and through the generation of revenues once commercial operations get underway.  However, the Company has yet to generate any significant revenues and has no assurance of future revenues. 

 

The following plan is in place by management to support the going concern basis of the Company:

1.   The Company intends to raise up to £17,000,000 through a share placement on the London Stock Exchange AIM to be conducted by the Company's broker. These funds will, subject to shareholder approval at the Company's AGM on 29 March 2010, be used to acquire further shares in Galaxy Resources Limited increasing the Company's interest in Galaxy Resources Limited to 19.99%.  This proposed acquisition is in line with the Company's revised strategy of identifying acquisitions or other transactions that would result in the expansion of its mining operations within and outside Australia, and the diversification of its resources, as approved by shareholders in July 2009.

 

The Company has agreed with Creat Group Co. Limited ("Creat Group") that, in the event that the funds raised in the placement are less than £17,000,000, Creat Group shall procure a loan to the Company, via a convertible loan note, an amount equal to such shortfall.  The convertible loan note will have a coupon of 10% per annum and the maturity date shall be the date twelve months after shareholders approve the further Galaxy Resources Limited subscription.

 

2.   On 1 February 2010 the Company received an undertaking from Creat Group to:

·        not call for repayment of the £500,000 loan scheduled for repayment in March 2010 until August 2011; and

·        provide additional funding, to meet budgeted expenditure requirements, for the forthcoming 18 months.

At the date of this report and having considered the above factors, the directors are confident that the Company will be able to continue as a going concern.

 

Note 2: Segment Information

The Company has adopted AASB 8 Operating Segments and AASB 2007-3 Amendments to Australian Accounting Standards arising from AASB 8 with effect from 1 July 2009. AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Company that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance.  In contrast, the predecessor Standard (AASB 114 Segment Reporting) required an entity to identify two sets of segments (business and geographical), using a risks and rewards approach, with the entity's 'system of internal financial reporting to key management personnel' serving only as the starting point for the identification of such segments.  Creat Resources Holdings Limited's internal operating segment disclosures are consistent with financial information presented in annual reports historically, therefore this standard has not resulted in any changes to the Company's segment information.

Creat Resources Holdings Limited reports only one reportable segment under AASB 8 being mineral exploration. 



Note 3: Disclosure of additional information

(a)  Other income



31 Dec 2009


31 Dec 2008



$


$

Foreign exchange gain arising on translation of financial liabilities


725,036



49,984

 

Total other income


725,036



49,984

 

 

(b)  Other expenses



31 Dec 2009


31 Dec 2008



$


$

Loss on convertible note option valuation


(542,739)



(143,633)

 

Other


(134,457)



(83,537)

 

Total other expenses


(677,196)



(227,190)

 

 

Note 4: Issuances, Repurchases and Repayments of Equity Securities

Issued capital as at 31 December 2009 amounted to $62,264,025 (567,276,674 ordinary shares).  During the half-year reporting period, the Company completed a share placement resulting in the issue of 114,000,000 ordinary shares of the Company at 5 pence per ordinary share and raising $10,122,772 (net of expenses). In the prior half-year reporting period 308,300,000 ordinary shares of the company were issued at 1 pence per ordinary share and raising $6,524,866.

 

Note 5: Borrowings

During the period Creat Resources Holdings Limited obtained a short-term loan from Creat Group to the amount of £500,000 or $926,937  (2008: $500,000 from Managing Director Mr Xiaojian Ren bearing interest at 10% was repaid in December 2008). The loan bears interest at 10% p.a. with repayment on 1 March 2010 or such other date that may be agreed.  Creat Group has subsequently notified the Company that it will not call for repayment of the loan within at least the next 12 months.  Based on this notification, the loan has been classified as non-current. The proceeds from the loan have been used to meet short-term expenditure needs and to progress working capital and expansion plans. 

 

Note 6: Subsequent Events

On 10 February 2010, the Company's shares were restored to trading on AIM.

 

Further Galaxy Resources Limited share subscription

 

On 21 August 2009, Creat Group Co. Limited, the controlling shareholder of the Company, entered into an agreement with Galaxy pursuant to which it agreed to subscribe for an interest of approximately 19.99% of the share capital of Galaxy and to provide a project finance facility to Galaxy.  On 17 November 2009, the Company announced that Creat Group Co. Limited intended to nominate the Company as the acquirer of the Galaxy shares pursuant to the agreement. The Company took the decision to proceed with the Galaxy subscription in two separate stages, an initial subscription of $6,000,000 and a second subscription of approximately $27,000,000. The first share subscription was completed on 15 December 2009. The proposed second subscription of shares in Galaxy constitutes a reverse takeover for the purposes of the AIM Rules for Companies. Accordingly, acquisition of further shares in Galaxy requires the approval of the Company's shareholders to occur at the Annual General Meeting, which is to be held on 29 March 2010.

Galaxy and Creat Group Co. Limited are currently at an advanced stage of discussions with financiers regarding the entry into a facility agreement whereby the financiers will provide a project finance facility to Galaxy.  As part of the facility agreement, the financiers have indicated that they will require the Company to enter into a Share Mortgage and the Facility Put Option. Under the terms of the Share Mortgage, the Company will, if the Share Mortgage is executed, agree to grant security at all times, up to a maximum aggregate of 19.9% of its shares in Galaxy in favour of the financiers. The amount secured by the Share Mortgage is limited to the proceeds realised from the sale of the shares pledged in favour of the financiers. The Facility Put Option will, if executed, entitle the financers to require the Company to purchase from the financers the debt outstanding under the facility agreement at the time the option is exercised. The purchase price for the debt outstanding under the facility agreement will be an amount equal to the principal, accrued interest and fees outstanding under the facility agreement at that time. In exercising this option, the financers would also transfer their rights under the facility agreement to the Company. The Facility Put Option will only be exercisable by the financers during the period from four years from initial drawdown until 10 December 2016. 

 

On 24 February 2010, the Company announced that the Minister for Resources in Tasmania (the "Minister") has indicated his refusal to renew two of the Company's exploration licences, namely EL20/2002 and EL 30/2002 (the "Licences"), both which were pending renewal for another term of one year.  The Company is part way through its exploration programs and would like to complete them.  As such, the Company will make an appeal to the Mining Tribunal by mid-March 2010. The directors of the Company believe that the Company has reasonable grounds to appeal the Minister's decision. Until the appeal process is completed, both Licences remain in force.


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR MMGMFMZKGGZM