Interim Results
Anglo Pacific Group PLC
08 September 2005
8 September 2005
Anglo Pacific Group PLC
Interim Results for the six months ended 30th June 2005
Anglo Pacific Group (APG), the natural resources royalties company, today
announces record interim results for the six months ended 30th June 2005.
Financial Highlights:
• Profit before tax up 101% to £5,431,000 (2004: £2,700,000)
• Profit after tax up 101% to £4,167,000 (2004: £2,076,000)
• Earnings per share for the first half up 86% to 4.38p
(2004: 2.36p)
• Cash of £2.9 million and no borrowings
• Interim dividend for the year ending 31st December 2005 to
be announced in November 2005
Operational Highlights
• Record coal royalty receipts and further profits realised
on some quoted investments
• Increased exposure to coal energy projects and uranium
interests
• Private Australian coal exploration interests extended on
three fronts
• Further licences applied for in British Columbia
• Exposure maintained to gold, base metals and PGM projects
• International Financial Reporting Standards (IFRS)
implemented from 1st January 2005
Commenting on the interim results, Peter Boycott, Chairman of Anglo Pacific,
said:
'I am pleased to report record results for the first six months of 2005 and
progress in increasing Anglo Pacific's exposure to the coal and energy sectors.
The Board expects record royalty receipts for 2005 as coking coal prices look
set to remain buoyant.
'With higher oil prices due to worldwide shortages, the outlook for uranium and
coal energy products remains positive. Due to inflation fears and turbulence in
currency markets we retain our commitment to gold and precious metals.
'The Board will continue its strategy of paying a substantial proportion of its
coal royalty cashflows as dividends to shareholders, whilst endeavouring to make
full use of its capital tax losses.'
Enquiries:
Brian Wides/Peter Boycott/Matthew Tack Anglo Pacific Group PLC 020 7409 1111
Stephen Scott / James Harris Scott Harris 020 7618 6433
Anglo Pacific Group PLC
Interim Report for the six months ended 30th June 2005
Chairman's Review
In the first six months of 2005 the temporary setback in mining markets
reflected an anticipated slow down in consumption of raw materials and energy
products by China as well as profit taking after the sharp rise in share prices
at the end of 2004.
However, economic output in China, India and the Far East has remained strong
resulting in a continuing demand for industrial raw materials. Furthermore, the
prices of oil, coal and other energy products such as uranium have recently
reached record highs and look set to continue to rise as supply problems
persist.
The price of gold has recently started to move higher reflecting worries about
not only the US Dollar but also the Euro and Sterling. In addition, industrial
relations and production problems in South Africa have contributed to the
strength of the gold price.
It is against this background that in the period under review the Company
received record coal royalty receipts and realised further profits on some of
its quoted investments.
During this period the Company has increased its exposure to coal energy
projects with further expansion of its private coal interests in Australia and
British Columbia. The Company has added to its uranium interests in Australia
and Canada and more recently in the U.S.A.. The Company maintains its exposure
to gold, base metals and PGM projects.
Financial Review
Following record coal royalty receipts and further realised capital gains I am
pleased to report that Group profits before tax for the six months ended 30th
June 2005 increased to £5,431,000 compared to £2,700,000 for the same period
last year. Profits after tax were £4,167,000 compared to £2,076,000 with
earnings per share for the half year of 4.38p compared to 2.36p.
Our private mining operational interests and quoted stakes in mining projects
were valued at 30th June 2005 at circa £18.5 million after having realised
profits of £1.22 million over the period. Cash at 30th June 2005 was £2.9
million with no borrowings.
On 5th August 2005 a final dividend of 2.0p per share for the year ended 31st
December 2004 was paid. Shareholders owning over 25% of our issued share capital
opted to take further shares in the Company under the scrip dividend
alternative. The Directors also opted to take shares rather than cash in
respect of substantially all their shareholdings thus increasing their
investment in the Company.
The Company will announce its interim dividend for the year ending 31st December
2005 in November 2005, when a scrip dividend alternative will again be available
to shareholders.
International Financial Reporting Standards (IFRS)
The European Commission published an EU Regulation in 2002 that requires the
adoption of International Financial Reporting Standards (IFRSs) in member states
for the preparation of the consolidated financial statements of listed entities.
The Regulation applies to financial periods, beginning on or after 1st January
2005 for entities whose securities are traded on a regulated market. As of 1st
January 2005 the Company implemented IFRS for the preparation of its financial
statements. The relevant standards have required an adjustment for deferred tax
on revaluation of the coal royalty. Quoted mining investments are now required
to be shown at market value with the difference from cost being credited to
investment revaluation reserve. A reconciliation between the accounts prepared
under UK GAAP and IFRS is shown on pages 11 to 17.
Operational Review
Coal Energy Interests
Coal royalties from the two mines in Queensland, Australia, increased to £4.66
million, (2004 £2.39 million).
The independent valuation of the coal royalty in June 2005, based on a net
present value of the pre-tax cashflow discounted at a rate of 7%, was £57.7
million (A$135.7 million) compared to £57.6 million (A$141.3 million) at 31st
December 2004. This increase has been incorporated in the interim figures
taking into account the new IFRS rules, mentioned above. At present the net
royalty income is taxed in Australia at 30%.
The royalties have increased in the first six months due to production moving
from Crown Land to the Company's Private Ground and due to higher coking coal
prices mainly in the second quarter when the higher prices became effective.
However these royalties have been lower than expected due to continuing shipping
delays at Australian ports, particularly at Gladstone in Queensland. These are
expected to unwind in the second half.
The Company has maintained its substantial stakes in both Cambrian Mining and
Western Canadian Coal. The Board remains committed to the coal and coal energy
sectors and sees the continuing expansion of the Chinese and Far East economies
as an opportunity to increase its holdings in these two companies, both of which
stand to benefit.
The Company has staked further ground in British Columbia at Groundhog and Trefi
and detailed evaluation of these projects continues. The Board is still
progressing its listing on the TSE despite delays due to changes in their
personnel and regulatory hurdles.
In Australia the Company continues to expand its activities with Core Resources
and is now jointly staking and actively exploring for coking coal in several
areas of the Northern Territories, Queensland and New South Wales.
The Company's private coal interests in British Columbia and Australia are part
of a strategy to develop future royalty cashflows from such projects as and when
they evolve.
Other Mining Interests
The Company holds a 19% interest in Platinum Australia where considerable
progress has been achieved on various platinum projects in South Africa.
Platinum Australia is seeking an AIM listing in the near future for additional
access to capital for its projects due to interest from UK institutions.
The Company recently announced an increase in its holding in Hidefield Gold to
18.3%. Hidefield has a number of strategic stakes in gold and diamond projects
in North and South America.
Substantial stakes are still held by the Company in Laramide Resources and
Aquiline Resources which represent further exposure to uranium and gold. The
Company has made a number of investments in the uranium sector in the last six
months. In particular it has a substantial interest in Quincy Energy Corp which
has numerous uranium projects in North America.
Other mining interests encompass gold and base metals' as well as PGM projects.
Outlook
The Board remains confident that the Company will receive record royalties for
2005 from its interests in the Kestrel and Crinum mines. Coking coal prices
look set to remain buoyant for the foreseeable future and, with higher oil
prices due to worldwide shortages, the outlook for uranium and coal energy
products remains positive. Due to inflation fears and turbulence in currency
markets we retain our commitment to gold and precious metals.
The Board will continue its strategy of paying a substantial proportion of the
coal royalty cashflows as dividends to shareholders, whilst endeavouring to make
full use of its capital tax losses.
Shareholders were informed that Mr Henry Michaelis resigned for health reasons
on 20th June 2005. The Directors wish to thank Mr Michaelis for his hard work
and substantial contribution to the development of the Company since he was
appointed in May 1997. The Board wishes him well in his retirement. The
Company intends to appoint a new non-executive director later in the year.
P.M.Boycott
Chairman
8th September 2005
CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30th JUNE 2005
Restated
Restated Year ended
Six months Six months 31st
ended 30th ended 30th December
June 2005 June 2004 2004
£'000 £'000 £'000
Royalty income 4,655 2,391 5,313
Other operating income 107 65 122
4,762 2,456 5,435
Net operating expenses (626) (506) (1,316)
Operating profit 4,136 1,950 4,119
Profit on sale of mining and exploration 1,224 718 3,507
interests
Finance income 71 32 86
Profit before tax 5,431 2,700 7,712
Tax (1,264) (624) (1,310)
Profit attributable to equity holders 4,167 2,076 6,402
Basic earnings per share 4.38p 2.36p 7.11p
Fully diluted earnings per share 4.35p 2.33p 7.06p
Dividend per share 1.60p 3.60p
Dividend (£'000) 1,513 3,414
CONSOLIDATED BALANCE SHEET
AS AT 30th JUNE 2005
Restated Restated
30th June 2005 30th June 2004 31st December 2004
£'000 £'000 £'000 £'000 £'000 £'000
Non-current assets
Property plant and equipment 849 847 852
Coal royalties (at valuation) 57,693 47,084 57,648
Mining and exploration interests 18,432 6,993 20,186
76,974 54,924 78,686
Current assets
Trade and other receivables 2,870 1,629 2,891
Cash at bank 2,877 1,559 3,452
5,747 3,188 6,343
Total assets 82,721 58,112 85,029
Current liabilities
Taxation 572 189 401
Trade and other payables 572 227 1,178
Dividends payable 1,901 1,146 1,513
3,045 1,562 3,092
Non-current liabilities
Deferred tax 13,659 10,549 13,341
13,659 10,549 13,341
Total liabilities 16,704 12,111 16,433
Capital and reserves attributable to
shareholders
Share capital 1,901 1,764 1,891
Share premium 5,222 594 4,741
Revaluation reserve 43,140 35,269 42,964
Investment revaluation reserve 2,297 71 7,850
Foreign currency translation reserve 160 85 119
Special reserve 632 632 632
Retained Earnings 12,665 7,586 10,399
66,017 46,001 68,596
Total equity and liabilities 82,721 58,112 85,029
CONSOLIDATED STATEMENT OF CHANGES OF EQUITY
Share Share Revaluation Investment Foreign Special Retained Total
capital premium reserve revaluation currency reserve earnings equity
reserve translation
reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January
2004 1,749 420 33,647 3,393 103 632 6,656 46,600
Gain / (Loss) on
Royalties revaluation 1,622 1,622
Gain / (Loss) on
Investments revaluation (3,322 ) (3,322 )
Foreign currency
translation (18 ) (18 )
Net income recognised 1,749 420 35,269 71 85 632 6,656 44,882
direct into equity
Profit for the period 2,076 2,076
Total recognised income 1,749 420 35,269 71 85 632 8,732 46,958
and expenses
Issue of share capital 0
Scrip Dividend 5 94 99
Cash Dividend (1,146 ) (1,146 )
Equity share options 10 80 90
issued
Balance at 30 June 2004 1,764 594 35,269 71 85 632 7,586 46,001
Gain / (Loss) on 7,695 7,695
Royalties revaluation
Gain / (Loss) on 7,779 7,779
Investments revaluation
Foreign currency 34 34
translation
Net income recognised 1,764 594 42,964 7,850 119 632 7,586 61,509
direct into equity
Profit for the period 4,326 4,326
Total recognised income 1,764 594 42,964 7,850 119 632 11,912 65,835
and expenses
Issue of share capital 88 3,402 3,490
Scrip Dividend 19 585 604
Cash Dividend (1,513 ) (1,513 )
Equity share options 20 160 180
issued
Balance at 31 December 1,891 4,741 42,964 7,850 119 632 10,399 68,596
2004
Gain / (Loss) on 176 176
Royalties revaluation
Gain / (Loss) on (5,553 ) (5,553 )
Investments revaluation
Foreign currency 41 41
translation
Net income recognised 1,891 4,741 43,140 2,297 160 632 10,399 63,260
direct into equity
Profit for the period 4,167 4,167
Total recognised income 1,891 4,741 43,140 2,297 160 632 14,566 67,427
and expenses
Issue of share capital 0
Scrip Dividend 10 481 491
Cash Dividend (1,901 ) (1,901 )
Equity share options 0
issued
Balance at 30 June 2005 1,901 5,222 43,140 2,297 160 632 12,665 66,017
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30th JUNE 2005
Restated
Restated Year ended
Six months Six months 31st
ended 30th ended 30th December
June 2005 June 2004 2004
£'000 £'000 £'000
Cashflows from operating activities
Profit before taxation 5,431 2,700 7,712
Adjustments for:
Interest received (71) (32) (86)
Foreign exchange gain / (loss) 41 (18) 16
Depreciation of property, plant and equipment 5 4 8
(Gain) on disposal of property, plant and (1,224) (718) (3,507)
equipment
4,182 1,936 4,143
Decrease / (Increase) in trade and other 21 (577) (1,839)
receivables
(Decrease) / Increase in trade and other payables (606) 113 1,063
Cash generated from operations 3,597 1,472 3,367
Income taxes paid (644) (477) (1,027)
Net cash from operating activities 2,953 995 2,340
Cash flows from Investing activities
Proceeds on disposal of property, plant and 3,545 2,648 8,647
equipment
Purchase of property, plant and equipment (6,122) (2,810) (11,444)
Interest received 71 32 86
Net cash used in investing activities (2,506) (130) (2,711)
Cash flows from Financing activities
Proceeds from issue of share capital - 189 3,760
Dividends paid (1,022) (1,137) (1,579)
Net cash used in financing activities (1,022) (948) 2,181
Net increase in cash and cash equivalents (575) (83) 1,810
Cash and cash equivalents at beginning of period 3,452 1,642 1,642
Cash and cash equivalents at end of period 2,877 1,559 3,452
Explanation of material adjustments to the cash flow statement
Income taxes paid in the relevant period are now classified as operating cash
flows under IFRS, but were included as a separate category of tax cash flows
under UK GAAP. This was £644,000 for the six months to 30th June 2005, £477,000
for the six months to 30th June 2004, and £1,027,000 for the year to 31st
December 2004.
Under IFRS credit cash balances held by stockbrokers are treated as cash. Under
UK GAAP, these were treated as accounts receivable. This was £23,000 at 30th
June 2005, £72,000 at 30th June 2004 and £311,000 at 31st December 2004.
There are no other material differences in the cash flow statements presented
under IFRS and previously presented under UK GAAP.
NOTES TO THE ACCOUNTS
1. Basis of preparation
These condensed consolidated financial statements of Anglo Pacific Group PLC
have been prepared in accordance with International Accounting Standards (IAS)
34, Interim Financial Reporting, and are covered by IFRS 1, First-time Adoption
of IFRS, because they are part of the period covered by the Group's first IFRS
financial statements for the year ending 31st December 2005. The policies set
out below have been consistently applied to all the periods presented.
Consolidated financial statements of the Group until 31st December 2004 had been
prepared in accordance with UK Generally Accepted Accounting Principles (UK
GAAP). UK GAAP differs in certain respects with IFRS. When preparing the
consolidated interim financial statements for 2005 management has amended
certain recognition and measurement bases applied in the UK GAAP financial
statements to comply with IFRS. The comparative figures in respect of the
interim period ending 30th June 2004 and the year end figures ended 31st
December 2004 have been restated to reflect these adjustments. Reconciliations
and descriptions of the effect of the transition from UK GAAP to IFRS on the
group's equity and its net income are given in the notes to the statements on
pages 11 to 17. Comparative figures for the year ended 31st December 2004 have
been extracted from the Group's 2004 statutory accounts.
The financial statements have been reviewed by the Company's auditors. The 2004
accounts received an unqualified auditors' report and have been delivered to the
Registrar of Companies.
2. Non-current Assets
(a) Coal Royalty Investments
The Company's coal royalty investments comprise the Kestrel and Crinum coal
royalties in Queensland, Australia. The Company commissioned a valuation of the
coal royalties in June 2005, based on a net present value of the pre-tax
cashflow discounted at a rate of 7%, which produced a valuation of £57.7 million
(A$135.7 million). At present the net royalty income is taxed in Australia at a
rate of 30%. Were the coal royalties to be realised at the revalued amount
there are £13.2 million (A$31.0 million) of capital losses potentially available
to offset against taxable gains. These losses have been included in the
deferred tax computation. In addition, the Company has UK capital tax losses in
the region of £25 million available for offset against capital gains.
(b) Mining and Exploration Interests
The market value of the quoted Mining and Exploration Interests at 30th June
2005 was £17,448,000. The directors' valuation of the unquoted Mining and
Exploration Interests was £984,000.
3. Earnings per ordinary share
The earnings per ordinary share is calculated on the Company's profit after tax
of £4,167,000 and 95,073,076 shares. Fully diluted earnings per shares is
calculated on a profit after tax of £4,167,000 and 95,778,889 shares.
4. This statement will be sent to shareholders and will be available at the
Company's registered office at 1st Floor Sentinel House, Brent Street, London
NW4 2EP.
5. Segment Information
Six months ended 30th June 2005
Royalty Mining Unallocated Total
Interests
£'000 £'000 £'000 £'000
Revenue 4,655 - 107 4,762
Operating profit 4,655 - (519) 4,136
Profit on sale of mining and exploration interests - 1,224 - 1,224
Interest received - - 71 71
Tax - - (1,264) (1,264)
Segment Result 4,655 1,224 (1,712) 4,167
Segment Assets 57,693 18,432 6,596 82,721
Segment Liabilities (13,659) - (3,045) (16,704)
Net Segment Assets 44,034 18,432 3,551 66,017
Six months ended 30th June 2004
Royalty Mining Unallocated Total
Interests
£'000 £'000 £'000 £'000
Revenue 2,391 - 65 2,456
Operating profit 2,391 - (441) 1,950
Profit on sale of mining and exploration interests - 718 - 718
Interest received - - 32 32
Tax - - (624) (624)
Segment Result 2,391 718 (1,033) 2,076
Segment Assets 47,084 6,993 4,035 58,112
Segment Liabilities (10,549) - (1,562) (12,111)
Net Segment Assets 36,535 6,993 2,473 46,001
Year ended 31st December 2004
Royalty Mining Unallocated Total
Interests
£'000 £'000 £'000 £'000
Revenue 5,313 10 112 5,435
Operating profit 5,313 10 (1,204) 4,119
Profit on sale of mining and exploration interests - 3,507 - 3,507
Interest received - - 86 86
Tax - - (1,310) (1,310)
Segment Result 5,313 3,517 (2,428) 6,402
Segment Assets 57,648 20,196 7,185 85,029
Segment Liabilities (13,341) - (3,092) (16,433)
Net Segment Assets 44,307 20,196 4,093 68,596
INCOME STATEMENT RECONCILIATION FOR THE SIX MONTHS ENDED 30th JUNE 2005
Effect of
Previous transition to IFRSs
Note GAAP IFRSs
£'000 £'000 £'000
Royalty income 4,655 - 4,655
Other operating income 107 - 107
4,762 - 4,762
Net operating expenses (626) - (626)
Operating profit 4,136 - 4,136
Profit on sale of mining and exploration 1,224 - 1,224
interests
Finance income 71 - 71
Profit before tax 5,431 - 5,431
Tax (1,264) - (1,264)
Profit attributable to equity holders 4,167 - 4,167
Earnings per share 1 4.39p (0.01p) 4.38p
Fully diluted earnings per share 2 4.35p - 4.35p
NOTES TO THE INCOME STATEMENT RECONCILIATION FOR THE SIX MONTHS TO 30 JUNE 2005:
1. Under UK GAAP the earnings per ordinary share would have been calculated on
the Company's profit after tax of £4,167,000 and 94,986,836 shares. Under IFRS
the number of shares used in the calculation is 95,073,076, resulting in a
reduction in the earnings per share. This is due to the inclusion of shares
issued as scrip dividends from the beginning of the period.
2. Under UK GAAP the fully diluted earnings per share would have been
calculated on a profit after tax of £4,167,000 and 95,692,658 shares. Under
IFRS the number of shares used in the calculation is 95,778,889. This is due to
the inclusion of shares issued as scrip dividends from the beginning of the
period. However, this does not change the diluted earnings per share.
3. Dividends declared after the period end are not included in the period's
financial statements under IFRSs. The 2004 final dividend has therefore been
recognised in the period to 30 June 2005.
INCOME STATEMENT RECONCILIATION FOR THE SIX MONTHS ENDED 30th JUNE 2004
Effect of
Previous transition to IFRSs
Note GAAP IFRSs
£'000 £'000 £'000
Royalty income 2,391 - 2,391
Other operating income 65 - 65
2,456 - 2,456
Net operating expenses (506) - (506)
Operating profit 1,950 - 1,950
Profit on sale of mining and exploration 718 - 718
interests
Finance income 32 - 32
Profit before tax 2,700 - 2,700
Tax (624) - (624)
Profit attributable to equity holders 2,076 - 2,076
Earnings per share 1 2.36p - 2.36p
Fully diluted earnings per share 2 2.33p - 2.33p
NOTES TO THE INCOME STATEMENT RECONCILIATION FOR THE SIX MONTHS TO 30 JUNE 2004:
1. Under UK GAAP the earnings per ordinary share was calculated on the
Company's profit after tax of £2,076,000 and 88,059,638 shares. Under IFRS the
number of shares used in the calculation is 88,093,902. This is due to the
inclusion of shares issued as scrip dividends from the beginning of the period.
However, this does not change the earnings per share.
2. Under UK GAAP the fully diluted earnings per share was calculated on a
profit after tax of £2,076,000 and 89,227,862 shares. Under IFRS the number of
shares used in the calculation is 89,262,126. This is due to the inclusion of
shares issued as scrip dividends from the beginning of the period. However,
this does not change the diluted earnings per share.
3. Dividends declared after the period end are not included in the period's
financial statements under IFRSs. The 2003 final dividend has therefore been
recognised in the period to 30 June 2004.
INCOME STATEMENT RECONCILIATION FOR THE YEAR ENDED 31st DECEMBER 2004
Effect of
Previous transition to IFRSs
Note GAAP IFRSs
£'000 £'000 £'000
Royalty income 5,313 - 5,313
Other operating income 122 - 122
5,435 - 5,435
Net operating expenses (1,316) - (1,316)
Operating profit 4,119 - 4,119
Profit on sale of mining and exploration 3,507 - 3,507
interests
Finance income 86 - 86
Profit before tax 7,712 - 7,712
Tax (1,310) - (1,310)
Profit attributable to equity holders 6,402 - 6,402
Earnings per share 1 7.15p (0.04p) 7.11p
Fully diluted earnings per share 2 7.10p (0.04p) 7.06p
NOTES TO THE INCOME STATEMENT RECONCILIATION FOR YEAR ENDED 31st DECEMBER 2004:
1. Under UK GAAP the earnings per ordinary share was calculated on the
Company's profit after tax of £6,402,000 and 89,575,628 shares. Under IFRS the
number of shares used in the calculation is 90,020,365, resulting in a reduction
in the earnings per share. This is due to the inclusion of shares issued as
scrip dividends from the beginning of the period.
2. Under UK GAAP the fully diluted earnings per share was calculated on a
profit after tax of £6,402,000 and 90,189,475 shares. Under IFRS the number of
shares used in the calculation is 90,634,211, resulting in a reduction in the
diluted earnings per share. This is due to the inclusion of shares issued as
scrip dividends from the beginning of the period.
3. Dividends approved after the period end are not included in the period's
financial statements under IFRSs. The 2004 final dividend has therefore been
recognised in the period to 30 June 2005. Similarly, the 2003 final dividend
has been recognised in the period to 30 June 2004.
4. The actual final dividend for the year ended 31st December 2004 was
£1,901,462 due to the additional shares issued under the scrip dividend
alternative in respect of the interim dividend for the year ended 31st December
2004, which was paid in January 2005.
RECONCILIATION OF EQUITY AS AT 30th JUNE 2005
Effect of
Previous transition to IFRSs
Note GAAP IFRSs
£'000 £'000 £'000
Non-current assets
Property plant and equipment 849 - 849
Coal royalties (at valuation) 1 57,647 46 57,693
Mining and exploration interests 2 16,135 2,297 18,432
74,631 2,343 76,974
Current assets
Trade and other receivables 3 2,979 (109) 2,870
Cash at bank and in hand 3 2,854 23 2,877
5,833 (86) 5,747
Total assets 80,464 2,257 82,721
Current liabilities
Taxation 572 - 572
Trade and other payables 3 658 (86) 572
Dividends payable 1,901 - 1,901
3,131 (86) 3,045
Non-current liabilities
Deferred tax 4 818 12,841 13,659
818 12,841 13,659
Total liabilities 3,949 12,755 16,704
Capital and reserves
Share capital 1,901 - 1,901
Share premium 5,222 - 5,222
Revaluation reserve 5 55,935 (12,795) 43,140
Investment revaluation reserve 6 2,297 2,297
-
Foreign currency translation reserve 160 - 160
Special reserve 632 - 632
Retained earnings 12,665 - 12,665
76,515 (10,498) 66,017
Total equity and liabilities 80,464 2,257 82,721
RECONCILIATION OF EQUITY AS AT 30th JUNE 2004
Effect of
Previous transition to IFRSs
Note GAAP IFRSs
£'000 £'000 £'000
Non-current assets
Property plant and equipment 847 - 847
Coal royalties (at valuation) 1 44,295 2,789 47,084
Mining and exploration interests 2 6,922 71 6,993
52,064 2,860 54,924
Current assets
Trade and other receivables 3 1,701 (72) 1,629
Cash at bank and in hand 3 1,487 72 1,559
3,188 - 3,188
Total assets 55,252 2,860 58,112
Current liabilities
Taxation 189 - 189
Trade and other payables 227 - 227
Dividends payable 1,146 - 1,146
1,562 - 1,562
Non-current liabilities
Deferred tax 4 447 10,102 10,549
447 10,102 10,549
Total liabilities 2,009 10,102 12,111
Capital and reserves
Share capital 1,764 - 1,764
Share premium 594 - 594
Revaluation reserve 5 42,582 (7,313) 35,269
Investment revaluation reserve 6 71 71
-
Foreign currency translation reserve 85 - 85
Special reserve 632 - 632
Profit and loss account balance 7,586 - 7,586
53,243 (7,242) 46,001
Total equity and liabilities 55,252 2,860 58,112
RECONCILIATION OF EQUITY AS AT 31st DECEMBER 2004
Effect of
Previous transition to IFRSs
Note GAAP IFRSs
£'000 £'000 £'000
Non-current assets
Property plant and equipment 852 - 852
Coal royalties (at valuation) 57,648 - 57,648
Mining and exploration interests 2 12,336 7,850 20,186
70,836 7,850 78,686
Current assets
Trade and other receivables 3 2,580 311 2,891
Cash at bank and in hand 3 3,763 (311) 3,452
6,343 - 6,343
Total assets 77,179 7,850 85,029
Current liabilities
Taxation 401 - 401
Trade and other payables 1,178 - 1,178
Dividends payable 7 3,405 (1,892) 1,513
4,984 (1,892) 3,092
Non-current liabilities
Deferred tax 4 370 12,971 13,341
370 12,971 13,341
Total liabilities 5,354 11,079 16,433
Capital and reserves
Share capital 1,891 - 1,891
Share premium 4,741 - 4,741
Revaluation reserve 5 55,935 (12,971) 42,964
Investment revaluation reserve 6 7,850 7,850
-
Foreign currency translation reserve 119 - 119
Special reserve 632 - 632
Profit and loss account balance 8,507 1,892 10,399
71,825 (3,229) 68,596
Total equity and liabilities 77,179 7,850 85,029
RECONCILIATION OF EQUITY AS AT 1st JANUARY 2004
Effect of
Previous transition to IFRSs
Note GAAP IFRSs
£'000 £'000 £'000
Non-current assets
Property plant and equipment 846 - 846
Coal royalties (at valuation) 44,295 - 44,295
Mining and exploration interests 2 6,047 3,393 9,440
51,188 3,393 54,581
Current assets
Trade and other receivables 3 1,052 (117) 935
Cash at bank and in hand 3 1,642 117 1,759
2,694 - 2,694
Total assets 53,882 3,393 57,275
Current liabilities
Taxation 265 - 265
Trade and other payables 114 - 114
Dividends payable 7 2,283 (1,146) 1,137
2,662 (1,146) 1,516
Non-current liabilities
Deferred tax 224 8,935 9,159
224 8,935 9,159
Total liabilities 2,886 7,789 10,675
Capital and reserves
Share capital 1,749 - 1,749
Share premium 420 - 420
Revaluation reserve 8 42,582 (8,935) 33,647
Investment revaluation reserve 6 - 3,393 3,393
Foreign currency translation reserve 103 - 103
Special reserve 632 - 632
Profit and loss account balance 5,510 1,146 6,656
50,996 (4,396) 46,600
Total equity and liabilities 53,882 3,393 57,275
NOTES TO THE RECONCILIATIONS OF EQUITY
1. The revaluation of the coal royalty is recognised in the interim accounts
under IFRSs, where previously the valuation had only been included by way of a
note to the interim results.
2. Under IFRSs the investments in mining and exploration entities via listed
equities are treated as financial assets available for sale, and as such are
revalued to fair value at the date of the Balance Sheet.
3. Under IFRSs credit cash balances held by stockbrokers are treated as cash.
Under GAAP these were treated as accounts receivable.
4. Under IFRSs the revaluation of the coal royalty in the accounts necessitates
an entry in the deferred tax account, even though the asset was not intended for
sale at the end of the period.
5. The revaluation reserve is reduced by the amount transferred to deferred tax
in Note 4.
6. Due to the revaluation in Note 2, a separate revaluation reserve has been
created.
7. Dividends approved after the period end are not included in the period's
financial statements under IFRSs. The final dividend for 2004 was not approved
until 2005 so is not recognised in the 2004 financial statements. In addition,
the final dividend for 2003 was not approved until 2004 so is not recognised in
the opening balance at 1st January 2004.
8. Under IFRS 1 the opening revaluation reserve at 1st January 2004 must be
adjusted to reflect the deferred tax component of past revaluations.
INDEPENDENT REVIEW REPORT TO ANGLO PACIFIC GROUP PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30th June 2005 which comprises consolidated income
statement, consolidated balance sheet, consolidated cashflow and consolidated
statement of recognised income and expenses. We have read the other information
contained in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
This report, including the conclusion, has been prepared for and only for the
company for the purpose of the Listing Rules of the Financial Services Authority
and for no other purpose. We do not, therefore, in producing this report,
accept or assume responsibility for any other purpose or to any other person to
whom this report is shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority.
As disclosed in note 1 to the accounts, the next annual financial statements of
the group will be prepared in accordance with those IFRSs adopted for use by the
European Union. This interim report has been prepared in accordance with
International Accounting Standard 34, 'Interim Financial Reporting' and the
requirements of IFRS 1, 'First Time Adoption of International Financial
Reporting Standards' relevant to interim reports.
The accounting policies are consistent with those that the directors intend to
use in the next annual financial statements.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and based thereon, assessing whether the disclosed accounting policies have been
applied. A review excludes audit procedures such as tests of controls and
verification of assets, liabilities and transactions. It is substantially less
in scope than an audit and therefore provides a lower level of assurance.
Accordingly, we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30th June 2005.
Baker Tilly
Chartered Accountants
Breckenridge House
274 Sauchiehall Street
Glasgow
G2 3EH
8th September 2005
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