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 [email protected] in the first instance.

 Information  X 
Enter a valid email address

Nova Resources Ltd (NOVA)

  Print      Mail a friend

Friday 28 June, 2013

Nova Resources Ltd

Final Year Results for year end 31 December 2012

RNS Number : 0621I
Nova Resources Limited
28 June 2013
 



28 June 2013

 

Nova Resources Limited

 

("Nova" or the "Company")

 

Final Year Results for the year ended 31 December 2012

 

The Board of Nova Resources Limited (AIM: NOVA.L) is pleased to announce the Company's Final Results for the year ended 31 December 2012, as follows:

 

 

Results Highlights

 

The operating loss on ordinary activities of the Group for the year amounted to £3,082,065 (2011: £274,831) and the loss after tax for the year was £3,167,606 (2012: £156,223).  This was mainly as a result of impairments against goodwill arising from the acquisition of Nova Mongolia Pte Ltd (£2,255,143) and provisions against the loan to Hoddle Ltd (£320,986).

 

The loss per share for the year was 3.11p (2011: 0.23p).

 

At 31 December 2012, the Group had cash and cash equivalents of £119,016.

 

At 31 December 2012, 21,415,861 ordinary shares in European Islamic Investment Bank Plc ("EIIB") are held by the Company.  The EIIB shares are traded on the AIM market of the London Stock Exchange. At 31 December 2012, the investment in EIIB was valued at the market bid price resulting in a fair value loss adjustment through the income statement of £117,787.

 

Group Development

During the year, we raised £975,000 by way of a share subscriptions and a further £60,000 by way of convertible loan notes, to enhance the funds available to us. 

 

We acquired the outstanding 30% of the issued shares of Nova Mongolia Corp Pte Ltd in Singapore, satisfied by new shares. 

 

In December 2011 we loaned Hoddle Limited ('Hoddle'), a company whose then subsidiaries or related companies are also engaged in the transportation of coal in Mongolia, USD500,000. Discussions are ongoing with Hoddle with respect to the loan.

 

In January 2012, the Group's Mongolian subsidiary entered into a contract to transport coal within Mongolia and commenced on 5 June 2012, for one year, with the option to extend for a further year, if agreed by both parties. The contract expired on 15 April 2013, and discussions are still ongoing with respect to renewal of the contract. However, no final decision has been reached yet.

 

The Company has secured a loan of US$2million for the acquisition of trucks and to provide further working capital. In addition, we have raised additional short term loans of £372,975 and have a trade finance facility with Khan Bank of Mongolia (drawn down by £697,000).

 

The Group will continue to seek further opportunities in line with its investing policy.

 

Investing Policy

 

The Company's Investing Policy is to focus on building up businesses, or alternatively identifying and acquiring quoted and unquoted businesses, that are involved in providing services and facilities to support, assist and serve the natural resources industries, in particular exploration, mining and extraction of resources. The services and facilities that are to be within the scope of the investing strategy will include transportation, logistics, processing, testing and storage. The investing strategy will extend to companies and businesses that are engaged in trading of natural resource products and commodities, including but not limited to coal, owning natural resources, mines and tenements and

exploration and extraction rights for natural resources of any kind, developing and construction of infrastructure for transportation, including building roads and building and owning plants for the conversion and processing of coal to useable fuel in each case in any part of the world.

 

The Company's investment strategy will continue to include real estate, investment and development, including the operation of businesses that can be combined with real estate interests based in Asia,

though other geographical areas will be considered should appropriate opportunities occur which could benefit the Company.

 

By actively investing in businesses with complementary areas of expertise, which may for example include in relation to the natural resource sector, including exploration, processing, inspection, testing, aviation, maintenance and similar activities and in the real estate sector, real estate, education, hotels, mortgage financing and other such activities, the Directors believe that it is possible to generate considerable opportunities for the cross selling of services between the different operations and countries. The Directors also intend to continue to make minority investments in such businesses where it would be a passive investor, but where those investments provide the opportunity for enhancing the growth prospects of the Company.

 

With regard to the acquisitions that the Company expects to make, the Directors may adopt earn-out structures, with specific performance targets being set for the sellers of the businesses acquired, and with suitable metrics applied.

 

The Company may invest by way of hiring appropriate persons to build up a business or by outright acquisition or by the acquisition of assets, including intellectual property, of a relevant business, partnerships or joint venture arrangements. Such investments may result in the Company acquiring the whole or part of a company (which in the case of an investment in a company may be private or listed on a stock exchange, and which may be pre-revenue), and such investments may constitute a minority stake in the Company or project in question. The Company's investments may take the form of equity, joint venture debt, convertible instruments, licence rights, or other financial instruments as the Director deem appropriate.

 

The Company will be both an active and a passive investor and the Directors will place no minimum or maximum limit on the length of time that any investment may be held.

 

There is no limit on the number of projects into which the Company may invest, nor the proportion of the Company's gross assets that any investment may represent at any time and the Company will consider possible opportunities anywhere in the world.

 

There are no borrowing limits in the Articles of Association of the Company. The Directors do not intend to acquire any cross-holdings in other corporate entities that have an interest in the Ordinary Shares.

 

There are no restrictions in the type of investment that the Company might make nor on the type of opportunity that may be considered other than set out in this Investing Policy.

 

As the Company's ordinary shares are traded on AIM this provides a facility for shareholders to realise their investment in the Company. In addition, the Directors may consider from time to time other means of facilitating returns to shareholders including dividends, share repurchases, demergers, schemes of arrangement or liquidation.

 

Nova announces that its annual report and accounts for the year ended 31 December 2012 (the "Report and Accounts") has been posted to shareholders.

 

Copies of the Reports and Accounts will be made available shortly from the Company's website, www.novaresourceslimited.com.

 

The Company will post a copy of its Notice of Annual General Meeting in due course.

 

 

 

Enquiries:

 

Nova Resources Limited

Fook-Meng Chan, Chief Executive Officer

Tel: + 65 6236 2985

 

Daniel Stewart & Company Plc

(Nominated Adviser & Broker)

David Hart/James Felix (Nominated Adviser)

Martin Lampshire/Colin Rowbury (Broking)

Tel: + 44 (0) 20 7776 6550

 

About Nova Resources

 

Nova is a natural resources investment company that focuses on acquiring and developing businesses providing services and facilities to the natural resources industries, in particular exploration, mining and the extraction of resources. Through its 100% owned Mongolian subsidiary Nova Trans LLC, Nova is currently focused on the establishment of large volume road haulage coal transportation operations in Mongolia.

 

 

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2012

 

 

 


 

 

Notes

Year

ended

2012

 

Year

ended

2011

 

CONTINUING ACTIVITIES


       £

£









Turnover


1,170,166

-

Cost of sales


(831,797)

-



────────

───────

Gross Profit


338,369

-

Administrative expenses


   (1,165,291)

(274,831)

Impairment of goodwill


(2,255,143)

-



────────

───────

OPERATING LOSS

9

      (3,082,065)

      (274,831)





Unrealised gains/(losses) on financial assets designated at fair value through profit or loss

 

12

 

(117,787)

 

117,788



────────

───────

LOSS BEFORE FINANCE INCOME AND TAX


    (3,199,852)

    (157,043)





Finance income 

7

43,226 

1,920

Finance expense

8

(982)

-

Other income


-

-



────────

───────

LOSS BEFORE TAX


     (3,157,608)

      (155,123)





Tax

10

           (9,998)

                    -



────────

───────

LOSS FOR THE YEAR


(3,167,606)

(155,123)





Minority interests


-

(1,100)



────────

───────

TOTAL COMPREHENSIVE LOSS FOR THE YEAR


   

  (3,167,606)

    

 (156,223)



════════

═══════

Attributable to




Owners of the Company


     (3,167,606)

      (156,223)



════════

═══════





Loss per share:




Basic

11

        (3.11p)

        (0.23p)



════════

═══════





Diluted

11

        (3.11p)

        (0.23p)



════════

═══════

 

 

Consolidated Statement of Financial Position

31 December 2012

 



2012

2011


Notes

£

£

ASSETS




Non-current assets




Goodwill

13

-

64,753

Financial assets designated at fair value through

profit or loss

 

12

   

653,184

   

770,971

Tangible Fixed Assets

14

2,170,128

-



────────

────────



2,823,312

    835,724



────────

────────

Current assets




Inventories

15

19,288

-

Trade and other receivables

16

922,218

324,134

Cash and cash equivalents

17

119,016

470,639



────────

────────



1,060,522

794,773



────────

────────

TOTAL ASSETS


3,883,834

1,630,497



════════

════════





SHAREHOLDERS' EQUITY




Called up share capital

20

    1,061,153

      700,000

Share based payment reserve


16,742

-

Loan note equity reserve


12,434

-

Share premium


4,995,765

   2,604,061

Retained losses


  (4,929,556)

  (1,740,681)



────────

────────



1,156,538

    1,563,380

Non-controlling interests


-

1,100



────────

────────



1,156,538

1,564,480



────────

────────

LIABILITIES




Non-current liabilities




Convertible loan note

19

20,845

-



────────

────────



20,845

-



────────

────────

Current liabilities




Trade and other payables

18

2,023,622

      66,017

Convertible loan note

18

16,721

-

Bank loan

18

666,108

-



────────

────────



2,706,451

66,017



────────

────────



────────

────────



2,727,296

      66,017



────────

────────

TOTAL EQUITY AND LIABILITIES


3,883,834

1,630,497



════════

════════

 

 

Consolidated Statement of Changes in Equity

For The Year Ended 31 December 2012

 

 


Share

Capital

Share

Premium

Other

Reserves

Retained

Loss

 

Total


£

£

£

£

£













At 1 January 2011                                               

   600,000

 2,504,061

-

(1,584,458)

1,519,603  







Loss after tax for the year

-

-

-

(156,223)

(156,223)







Issue of shares

100,000

100,000

-

-

200,000


───────

────────

───────

────────

────────

At 31 December 2011

700,000

2,604,061

-

(1,740,681)

1,563,380







Issue of shares

361,153

2,391,704

-

-

2,752,857







Loss after tax for the year

-

-

-

(3,167,606)

(3,167,606)







Provision for minority interest

no longer required

 

-

 

-

 

-

 

1,100

 

1,100







Prior year losses in subsidiaries

 

-

 

-

 

-

 

(22,369)

 

(22,369)













Share based payment reserve

-

-

16,742

-

16,742







Loan note equity reserve - capital portion of notes

 

-

 

-

 

12,434

 

-

 

12,434


────────

────────

───────

────────

────────

At 31 December 2012

1,061,153

4,995,765

29,176

(4,929,556)

1,156,538


════════

════════

═══════

════════

════════

 

 

Company Statement of Financial Position

31 December 2012

 



2012

2011


Notes

£

£





ASSETS




Non-current assets




Investments

13

498

498

Financial assets designated at fair value through profit or loss

 

12

   

653,184

   

770,971



────────

────────



653,682

771,469



────────

────────

Current assets




Trade and other receivables

16

2,296

388,232

Cash and cash equivalents

17

19,103

470,632



────────

────────



21,399

858,864



────────

────────

TOTAL ASSETS


675,081

1,630,333



════════

════════





SHAREHOLDERS' EQUITY




Called up share capital


1,061,153

      700,000

Share premium


4,995,765

   2,604,061

Share based payments reserve


16,742

-

Loan note equity reserve


12,434

-

Retained losses


  (5,549,921)

  (1,739,249)



────────

────────



    536,173

    1,564,812

LIABILITIES


────────

────────

Non-current liabilities




Convertible loan notes

19

20,845

-



────────

────────



20,845

-



────────

────────

Current liabilities




Trade and other payables

18

118,063

      65,521



────────

────────



      118,063

      65,521



────────

────────

TOTAL EQUITY AND LIABILITIES


675,081

1,630,333



════════

════════









 

 

 

NOVA RESOURCES LIMITED

 

Company Statement of Changes in Equity

For The Year Ended 31 December 2012

 

 


Share

Capital

Share

Premium

Other Reserve

Retained

Loss

 

Total


£

£

£

£

£













At 1 January 2011                                                

600,000

 2,504,061

-

 (1,584,458)

1,519,603  







Loss after tax for the year

-

-

-

(154,791)

(154,791)







Issue of shares

100,000

100,000

-

-

200,000


───────

───────

───────

───────

───────

At 31 December 2011

700,000

2,604,061

-

(1,739,249)

1,564,812







Loss after tax for the year

-

-

-

(4,240,375)

(4,240,375)







Consideration in warrants (see note 13)

 

-

 

-

 

487,288

 

-

 

487,288

Issue of shares

361,153

2,391,704

(487,288)

487,288

2,752,857













Share based payments reserve

 

-

 

-

 

16,742

 

-

 

16,742







Loan note equity reserve - capital portion of note

 

-

 

-

 

12,434

 

-

 

12,434

Foreign exchange differences

 

-

 

-

 

-

 

(57,585)

 

(57,585)


───────

───────

───────

───────

───────

At 31 December 2012

1,061,153

4,995,765

29,176

(5,549,921)

536,173


═══════

═══════

═══════

═══════

═══════







 

 

 

NOVA RESOURCES LIMITED

 

Consolidated Statement of Cash flows

For The Year Ended 31 December 2012

 



Year

ended

2012

Year

ended

2011


Note

£

£





Cash flows from operating activities




Cash generated/(consumed in) from operations

21

       841,192

       (580,942)



────────

───────

Net cash from operating activities


841,192

       (580,942)



────────

───────





Cash flows from investing activities




Interest received


43,226

           1,920

Interest paid


(982)

-

Acquisition of tangible fixed assets


(2,312,443)

-

Purchase of subsidiary undertaking net of  cash balances


      

  64,753

      

  (64,753)

Additional acquisition cost of subsidiary


(22,369)

-



────────

───────

Net cash from investing activities


(2,227,815)  

(62,833)  



────────

───────

Cash flows from financing activities




Issue of ordinary shares


975,000

        200,000

New loan


60,000

-



────────

───────

Net cash from financing activities


        

   1,035,000  

        

200,000 



────────

───────





(Decrease) in cash and cash equivalents


 

  (351,623)

  

 (443,775)





Cash and cash equivalents at beginning of year


     470,639

     914,414



────────

───────

Cash and cash equivalents at end of year


119,016

470,639



════════

═══════





 

 

NOVA RESOURCES LIMITED

 

Company Statement of Cash flows

For The Year Ended 31 December 2012

 



Year

ended

2012

Year

ended

2011


Note

£

£





Cash flows from operating activities




Cash generated from (consumed in)/operations

 

21

    

  (1,465,695)

    

  (645,204)



────────

───────

Net cash from operating activities


       (1,465,695)

       (645,204)



────────

───────





Cash flows from investing activities




Interest received


43,266

           1,920

Acquisition of subsidiaries


(64,100)

(498)



────────

───────

Net cash from investing activities


(20,834)  

1,422  



────────

───────

Cash flows from financing activities




Issue of ordinary shares


        975,000

        200,000

New loan


60,000

-



────────

───────

 

Net cash from financing activities


 

1,035,000 

       

    200,000



────────

───────





Increase/(decrease) in cash and cash equivalents


 

   (451,529)

 

    (443,782)





Cash and cash equivalents at beginning of year


    

470,632

  

  914,414



────────

───────

Cash and cash equivalents at end of year


19,103

470,632



════════

═══════





 

Notes to the Financial Statements

For The Year Ended 31 December 2012

 

1.   GENERAL INFORMATION

      Nova Resources Limited (formerly Tembusu Investments Limited) is a company incorporated in Bermuda under the Bermuda Companies Act 1981. The Company's shares are traded on the AIM market of the London Stock Exchange. The address of the registered office is disclosed on page 1 of the financial statements. The principal activities of the Company are described in the directors' report.

 

2.   BASIS OF PREPARATION AND ACCOUNTING POLICIES

      These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB) as adopted by the European Union and with those parts of the Companies Act 1981 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

      These policies have been consistently applied.

      The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. Those areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 4. 

     

      (a)     New and amended standards adopted by the Company

 

        The following new and revised IFRSs have been applied in the current year and retrospectively to all periods unless otherwise stated.  Their adoption has not had any significant impact on the accounts reported in these financial statements.

 

·      Amendments to IFRS 1 'Severe Hyperinflation'.

The amendments regarding severe hyperinflation provide guidance for entities emerging from severe hyperinflation either to resume presenting IFRS financial statements or to present IFRS financial statements for the first time.

 

·      Amendments to IFRS 1 'Removal of Fixed Dates for First-time Adopters'.

The amendments regarding the removal of fixed dates provide relief to first-time adopters of IFRSs from reconstructing transactions that occurred before their date of transition to IFRSs.

 

·      Amendments to IFRS 7 'Transfers of Financial Assets'.

  The amendments to IFRS 7 increase the disclosure requirements for transactions involving transfers of financial assets. These amendments are intended to provide greater transparency around risk exposures of transactions where a financial asset is transferred but the transferor retains some level of continuing exposure in the asset.

 

·      Amendments to IAS 12 'Deferred Tax: Recovery of Underlying Assets'.

The amendments to IAS 12 provide an exception to the general principle set out in IAS 12 Income Taxes that the measurement of deferred tax should reflect the manner in which an entity expects to recover the carrying amount of an asset. Specifically, the amendments establish a rebuttable assumption that the carrying amount of an investment property measured using the fair value model in IAS 40 Investment Property will be recovered entirely through sale.

 

(b)    New and revised IFRSs in issue but not yet effective

The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial year beginning 1 January 2012 and have not been early adopted:

 


Effective date for annual periods beginning on or after

·   IFRS 9 Financial Instruments (as revised in 2010)

1 January 2015

·   Amendments to IFRS 9 and IFRS 7 Mandatory Effective Date of IFRS 9 and Transition Disclosures

1 January 2015

·   IFRS 10 Consolidated Financial Statements

1 January 2013

·   IFRS 11  Joint Arrangements

1 January 2013

·   IFRS 12 Disclosure of Interests in Other Entities

1 January 2013

·   Amendments to IFRS 10, IFRS 11 and IFRS 12 Consolidate Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance

1 January 2013

·   IAS 27 Separate Financial Statements (as revised in 2011)

1 January 2013

·   IAS 28 Investments in Associates and Joint Ventures (as revised in 2011)

1 January 2013

·   IFRS 13 Fair Value Measurement

1 January 2013

·   IAS 19 Employee Benefits (as revised in 2011)

1 January 2013

·   Amendments to IFRS 1 Government Loans

1 January 2013

·   Amendments to IFRS 7 Disclosures - Offsetting Financial Assets and Financial Liabilities

1 January 2013

·   Amendments to IAS 1 Presentation of Items of Other Comprehensive Income

1 July 2012

·   Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities

1 January 2014

·   Annual Improvements to IFRSs 2009-2011 Cycle

1 January 2013

·   IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine

1 January 2013

 

•     IFRS 9 issued in November 2009 introduces new requirements for the classification and measurement of financial assets. IFRS 9 amended in October 2010 includes the requirements for the classification and measurement of financial liabilities and for derecognition.

 

IFRS requires all recognised financial assets that are within the scope of IAS 39 'Financial Instruments: Recognition and Measurement' to be subsequently measured at amortised cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortised cost at the end of subsequent accounting periods. All other debt investments and equity investments are measured at their fair values at the end of subsequent accounting periods.

 

The most significant effect of IFRS 9 regarding the classification and measurement of financial liabilities relates to the accounting for changes in the fair value of a financial liability (designated as at fair value through profit or loss) attributable to changes in the credit risk of that liability. Specifically, under IFRS 9, for financial liabilities that are designated as at fair value through profit or loss, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is presented in other comprehensive income, unless the recognition of the effects of the changes in the liability's credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability's credit risk are not subsequently reclassified to profit or loss. Previously, under IAS 39, the entire amount of the change in the fair value of the financial liability designated as at fair value through profit or loss was presented in profit or loss.

 

IFRS 9 is effective for annual periods beginning on or after 1 January 2015, with earlier application permitted.

 

The directors anticipate that IFRS 9 will be adopted in the Group's consolidated financial statements for the annual period beginning 1 January 2013 and that the application of IFRS 9 will not have a significant impact on amounts reported in respect of the Group's financial assets and financial liabilities.

 

•  IFRS 10 replaces the parts of IAS 27 'Consolidated and Separate Financial Statements' that deal with consolidated financial statements. SIC-12 'Consolidation - Special Purpose Entities' has been withdrawn upon the issuance of IFRS 10. Under IFRS 10, there is only one basis for consolidation, that is control. In addition, IFRS 10 includes a new definition of control that contains three elements: (a) power over an investee, (b) exposure, or rights, to variable returns from its involvement with the investee, and (c) the ability to use its power over the investee to affect the amount of the investor's returns. Extensive guidance has been added in IFRS 10 to deal with complex scenarios.

 

•  IFRS 11 replaces IAS 31 'Interests in Joint Ventures'. IFRS 11 deals with how a joint arrangement of which two or more parties have joint control should be classified. SIC-13 'Jointly Controlled Entities - Non-Monetary Contributions by Ventures' has been withdrawn upon the issuance of IFRS 11. Under IFRS 11, joint arrangements are classified as joint operations or joint ventures, depending on the rights and obligations of the parties to the arrangements. In contrast, under IAS 31, there are three types of joint arrangements: jointly controlled entities, jointly controlled assets and jointly controlled operations.

 

In addition, joint ventures under IFRS 11 are required to be accounted for using the equity method of accounting, whereas jointly controlled entities under IAS 31 can be accounted for using the equity method of accounting or proportionate accounting.

 

•  IFRS 12 is a disclosure standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. In general, the disclosure requirements in IFRS 12 are more extensive than those in the current standards.

 

•  IFRS 10, 11, 12 and 13 are effective for annual periods beginning on or after 1 January 2013. Earlier application is permitted provided that all of these five standards are applied early at the same time.

 

The directors anticipate that these four standards will be adopted in the Group's consolidated financial statements for the annual period beginning 1 January 2013. The directors consider that the application of these five standards will not likely have a significant impact on amounts reported in the consolidated financial statements.

 

•  IFRS 13 establishes a single source of guidance for fair value measurements and disclosures about fair value measurements. The standard defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. The scope of IFRS 13 is broad; it applies to both financial instrument items and non-financial instrument items for which other IFRSs require or permit fair value measurements and disclosures about fair value measurements, except in specified circumstances. In general, the disclosure requirements in IFRS 13 are more extensive than those required in the current standards. For example, quantitative and qualitative disclosures based on the three-level fair value hierarchy currently required for financial instruments only under IFRS 7 'Financial Instruments: Disclosures' will be extended by IFRS 13 to cover all asset and liabilities within its scope.

 

IFRS 13 is effective for annual periods beginning on or after 1 January 2013, with earlier application permitted.

 

The directors anticipate that IFRS 13 will be adopted in the Group's consolidated financial statements for the annual period beginning 1 January 2013 and that application of the new Standard may affect the amounts reported in the financial statements and result in more extensive disclosures in the financial statements.

 

•  The amendments to IAS 19 change the accounting for defined benefit plans and termination benefits. The most significant change relates to the accounting for changes in defined benefit obligations and plan assets. The amendments require the recognition of changes in defined benefit obligations and in fair value of plan assets when they occur, and hence eliminate the 'corridor approach' permitted under the previous version of IAS 19 and accelerate the recognition of past service costs. The amendments require all actuarial gains and losses to be recognised immediately through other comprehensive income in order for the net pension asset or liability recognised in the consolidated statement of financial position to reflect the full value of the plan deficit or surplus.

 

The amendments to IAS 19 are effective for annual periods beginning on or after 1 January 2013 and require retrospective application with certain exceptions. The directors anticipate that the amendments to IAS 19 will be adopted in the Group's consolidated financial statements for the annual period beginning 1 January 2013 and that the application of the amendments to IAS 19 will not have a significant impact on the financial statements, as the group does not have defined benefit plans.

 

      2.1  Foreign currency translation

            (a)  Functional and presentation currency

                     Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The financial statements are presented in Pounds Sterling (£), which is the Company's functional and presentation currency.

       (b)  Transactions and balances

                      Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

 

               Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

 

 

      2.2     Receivables

     Receivables are recognised and stated at fair value less any allowances for doubtful debts and provisions for impairment. Known bad debts are written off and doubtful debts are provided for based on estimates of possible losses which may arise from non-collection of certain receivables accounts.

 

      2.3     Cash and cash equivalents

               Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.

 

      2.4     Share capital

               Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

 

      2.5     Share premium

               Share premium represents the excess of the amount subscribed for share capital over the nominal value of these shares net of share issue expenses.

 

      2.6     Trade payables

               Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

 

      2.7     Borrowings

               Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest rate method.

 

               Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

      2.8     Taxation

               Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

 

               Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date together with any adjustment to tax payable in respect of previous years.

 

               Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.

 

      2.9     Revenue recognition

               Revenue comprises the fair value of the consideration received or receivable for services in the ordinary course of the Group's activities. Revenue is shown net of value-added tax, returns, rebates and discounts and after eliminating sales within the Group.

 

               Coal transportation: revenue is recognised as a commission on the amounts of coals transferred per contractual agreement. Fuel costs of vehicles and driver costs are recognised as a cost of services sold on date of completion. Revenue is the consideration received or receivable from customers in the normal course of business.

 

      2.10   Investments

               Investments are stated at cost less provision for any impairment in value.

 

      2.11   Property and equipment

               All items of property and equipment are initially recorded at cost.  Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.  The carrying amount of any replaced part is derecognised. All other repairs and maintenance are charged to the statement of comprehensive income during the financial year in which they are incurred.

 

               Subsequent to recognition, property and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. When assets are retired or otherwise disposed of, the cost and the related accumulated depreciation and any impairment in value are removed from the accounts and any resulting gain or loss is credited to or charged against current operations.

 

               Depreciation of other property and equipment is provided for on a straight-line basis to write off the cost of each asset to its residual value over the estimated useful lives of the assets as follows:

 

               Computer                                             3 years

               Vehicles                                             10 years

               Furniture and equipment                      10 years

 

Useful life and depreciation method are reviewed at each financial year end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property and equipment.

 

               An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal.  The difference between the net disposal proceeds, if any, and the net carrying amount is recognised in profit or loss.

The assets' useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.

 

      2.12   Impairment of Nonfinancial Assets

              

               Property and Equipment and Prepayments

               The Group assesses at each reporting period as to whether there is an indication that an asset may be impaired.  If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset's recoverable amount.  An asset's recoverable amount is the higher of an asset's or cash-generating unit's ("CGU") fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.  Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.  In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

 

               An assessment is made at each reporting period as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased,  If such indication exists, the recoverable amount is estimated,  A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised.  If that is the case, the carrying amount of the asset is increased to its recoverable amount.  That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.

 

               Such reversal is recognised in the profit or loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.  After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

 

      2.13   Inventories

               Inventories are valued at the lower of cost or net realisable value ("NRV") The cost of parts and supplies comprise all costs of purchase and other costs incurred in bringing the parts and supplies to their present location and condition.  These are recorded on the first-in-first-out method. NRV of parts and supplies is the current replacement cost.

 

      2.14   Financial instruments

               A financial instrument is recognised in the financial statements when, and only when, the Group and the Company become a party to the contractual provisions of the instrument.

 

               A financial instrument is recognised initially, at its fair value plus directly attributable transaction costs.

 

     (a)  Financial assets

                     The Group and the Company determine the classification of their financial assets as loans and receivables and they comprise debt instruments that are not quoted on an active market, trade and other receivables and cash and cash equivalents.

 

                     (i)   Subsequent measurement

                           Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effective interest method.

 

                     (ii)   Derecognition

                           A financial asset or part of it is derecognised when, and only when, the contractual right to receive cash flows from the asset has expired or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset.

 

                     (iii)  Impairment of financial asset

                           At each reporting date the Group and the Company assess whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that have occurred after the initial recognition of the asset or the group of financial assets and it can be reliably measured.

 

      Fair values

      The carrying amounts of the financial assets and liabilities such as cash and cash equivalents, receivables and payables of the Group at the balance sheet date approximated their fair values, due to relatively short term nature of these financial instruments.

 

      The Group provides financial guarantees to licensed banks for credit facilities extended to a subsidiary company. The fair value of such financial guarantees is not expected to be significantly different as the probability of the subsidiary company defaulting on the credit lines is remote.

 

The investments are valued in accordance with the policy stated above. It is the directors' opinion that the carrying value of trade receivables and trade payables approximates their fair value due to their short term maturity. Therefore, the directors consider all assets to be carried at a valuation, which equates to fair value.

 

Investments are made in a combination of equity and fixed rate financial instruments so as to provide potential high future capital growth.

 

In accordance with IAS 39, the Group has reviewed all contracts for embedded derivatives that are required to be separately accounted for if they do not meet certain criteria set out in the standard. No embedded derivatives have been identified by the Group.

 

The accounting policies for financial instruments have been applied to the items below:

 

  

2012

£

2012

£

2011

£

2011

£

Assets as per balance sheet

 

Loans and receivables

Assets at fair value through profit and loss

Loans

and receivables

Assets at fair value through profit and loss


£

£

£

£






Cash

19,103

-

470,639

-

Trade and other receivables

312,288

-

324,134

-

Investment at fair value through

 profit and loss

 

              -

 

653,184

 

              -

 

770,971


───────

───────

───────

───────

Total

331,391

653,184

794,773

770,971


═══════

═══════

═══════

═══════

 

 



2012

2011

Liabilities as per balance sheet


Other financial liabilities

Other financial liabilities



£

£





Trade and other payables


381,398

66,017

Loan


2,308,332

-

Unsecured loan notes


50,000

-



────────

───────



2,739,730

66,017



════════

═══════

 

   Assets classified as fair value through profit or loss were designated as such upon initial recognition. The Company has not reclassified financial assets between any of the categories detailed in IAS39, either in current or prior periods.

 

      2.15   Intangible assets

 

               (a)    Goodwill

                       Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net identifiable assets of the acquired subsidiary or associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in 'intangible assets'. Goodwill on acquisitions of associates is included in 'investments in associates' and is tested for impairment as part of the overall balance. Separately recognised goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

 

                       Impairment of non-financial assets

                      Assets that have an indefinite useful life, for example goodwill, are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that have suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

 

2.16   Loss of the parent company

         As permitted by Section 408 of the Companies Act 2006, the income statement of the Parent Company is not presented as part of these financial statements. The Parent Company's loss for the financial year was £4,223,633 (2011: £154,791).

 

 

3.   RISKS SENSITIVITY AND ANALYSIS

 

      The Group's activities expose it to a variety of financial risks: interest rate risk, liquidity risk, foreign currency risk and capital risk. The Group's activities also expose it to non-financial risks: market risk, regulatory and legislative risk. The Group's overall risk management programme focuses on unpredictability and seeks to minimise the potential adverse effects on the Group's financial performance. The Board, on a regular basis, reviews key risks and, where appropriate, actions are taken to mitigate the key risks identified.

 

      3.1     Foreign currency risk

               Currency fluctuations may affect the Group's operating cash flows since certain of its costs and potential future revenues are likely to be denominated in a number of different currencies other than Pound Sterling such as US Dollars, Mongolian Tugrik and any potential income may become subject to exchange controls. The Group does not currently have a foreign currency hedging policy in place. If and when appropriate, the adoption of such a policy will be considered.

 

               The net unhedged financial assets and liabilities of the Group companies that are not denominated in their functional currencies are as follows:

 


Net Financial Assets/ (liabilities) held in

non-functional currencies


Singapore Dollars

US Dollars

Mongolian Tugrik

 

Total

Group

£

£

£

£

As at 31 December 2012





Trade receivables

-

-

609,930

609,930

Other receivables

-

-

310,366

310,366

Cash and bank balances

2,779

-

97,134

99,913

Trade payables

(6,651)

-

(91,659)

(98,310)

Other payables

-

-

(172,424)

(172,424)

Loans

-

(2,308,332)

-

(2,308,322)


────────

────────

───────

───────


(3,872)

(2,308,332)

753,347

(1,558,847)


════════

════════

═══════

═══════

 


Net Financial Assets/ (liabilities) held in

non-functional currencies


Singapore Dollars

US Dollars

Mongolian Tugrik

 

Total

Group

£

£

£

£

As at 31 December 2011





Trade receivables

-

-

-

-

Other receivables

-

322,796

-

322,796

Cash and bank balances

50

-

589

639

Trade payables

-

-

-

Other payables

(889)

-

(104)

(993)

Loans

-

-

-

-


────────

────────

───────

───────


(839)

322,796

485

322,442


════════

════════

═══════

═══════

 


Net Financial Assets/ (liabilities) held in

non-functional currencies


Singapore Dollars

US Dollars

Mongolian Tugrik

 

Total

Company

£

£

£

£

As at 31 December 2012





Other receivables

-

375

-

375

Other payables

-

(7,262)

-

(7,262)


────────

────────

───────

───────


-

(6,887)

-

(6,887)


════════

════════

═══════

═══════

 


Net Financial Assets/ (liabilities) held in

non-functional currencies


Singapore Dollars

US Dollars

Mongolian Tugrik

 

Total

Company

£

£

£

£

As at 31 December 201





Other receivables

65,294

322,796

-

388,090

Other payables

-

(498)

-

(498)


────────

────────

───────

───────


65,294

322,298

-

387,592


════════

════════

═══════

═══════

 

 

      3.2     Interest rate risk

               The following table sets out the carrying amounts, the effective interest rates as at the Statement of Financial Position date and the remaining maturities of the Group's financial instruments that are exposed to interest rate risk:




2012

2012

2011

2011


 

 

Note

Effective interest rate

%

 

 

Within 1

year

 

 

2- 3

years

 

 

Within 1

year

 

 

2 - 3

years




£

£

£

£








Loan

18

7.5

1,611,135

-

-

-

Loan

18

16.8

697,197

-

-

-

Convertible loan note

 

19

                 10

 

-

 

50,000

 

-

 

-




────────

────────

───────

───────




2,308,332

50,000

-

-




════════

════════

═══════

═══════

 

      3.3     Liquidity risk

               The Group prepares periodic working capital forecasts for the foreseeable future, allowing an assessment of the cash requirements of the Company, to manage liquidity risk. Cash resources are managed in accordance with planned expenditure forecasts and the directors have regard to the maintenance of sufficient cash resources to fund the Group's immediate operating and exploration activities.

      3.4     Capital risk

               The successful commercial exploitation of the haulage project will require significant capital investment. The only sources of financing currently available to the Group are through the issue of additional equity capital or convertible debt. The Group's ability to raise funds will depend, inter alia, on the success of its strategy and operations.

 

4.   CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

     

      Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

 

      Impairment of receivables

      The Group assesses at each Statement of Financial Position date whether there is objective evidence that trade receivables have been impaired. Impairment loss is calculated based on a review of the current status of existing receivables and historical collections experience. Such provisions are adjusted periodically to reflect the actual and anticipated impairment. The carrying amount of the Group's receivables at the reporting date is disclosed in Note 16.

 

      Impairment of goodwill

      The Group is required to test, at least annually, whether goodwill has suffered any impairment. The recoverable amount is determined based on value in use calculations. The use of this method requires the estimation of future cash flows and the choice of a suitable discount rate in order to calculate the present value of these cash flows. Actual outcomes could vary.

 

      Share-based compensation

      The fair value of options and warrants are determined by reference to the fair value of the options granted, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At each balance sheet date, the entity revises its estimates of the number of options that are expected to vest. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity.

 

5.   EMPLOYEES AND DIRECTORS

 

      The company has 69 employees including 4 directors.           

 

      During the period the company paid directors' emoluments of £12,742 (2011 - £30,875).

 

      The average number of directors during the year was three.

     


2012

2011


£

£




Wages

40,323

-

Social security

6,951

-


───────

───────


47,274

-

 

 

══════

══════

 

 

6.   SEGMENTAL ANALYSIS

 

 

 

7.

FINANCE INCOME

2012

2011



£

£






Bank interest received

-

1,920


Other interest received

43,226

-



───────

───────



43,226

1,920



══════

══════





8.

FINANCE EXPENSES

2012

2011



£

£






Interest paid - other

982

-



══════

══════





9.

OPERATING LOSS

2012

2011



£

£


The operating loss is stated after charging:




Loss on foreign currency translation

203,325  

225  


Auditors' remuneration

15,000

     7,000


Depreciation

96,867



Share based payment

16,742




══════

══════

 

10.        TAX

 

 

11.  LOSS PER SHARE

 

      The basic loss per share is calculated by dividing the loss of £3,167,606 (2011 - £156,223) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year, which was 101,795,589 (2011 - 68,000,000)

 

      The diluted loss per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares.  For the year ended 31 December 2012 the diluted loss per share is equivalent to the basic loss per share. 

 

12.  FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS - GROUP AND COMPANY

 

All items held as fair value through profit or loss were designated as such upon initial recognition. Movements in investment at fair value through profit or loss are summarised as follows:

         

Quoted Investments


2012

2011



£

£

Opening cost


1,827,566

1,827,566

Opening unrealised gain/(loss)


 (1,056,595)

 (1,174,383)



───────

───────

Opening Valuation


770,971

      653,183



═══════

═══════

Additions at cost


-

-

Disposal proceeds


-

-

Net profit/(loss) realised on disposal


-

-

Changes in fair value in the year


 (117,787)

 117,788



───────

───────



      653,184

      770,971



═══════

═══════

Closing cost


770,971

653,183

Closing unrealised gain/(loss)


(117,787)

117,788



───────

───────

Closing valuation


653,184

770,971


     

═══════

═══════

 

In May 2008, the Company acquired 21,915,861 ordinary shares in European Islamic Investment Bank Plc ("EIIB") for a total consideration of £1,845,066. EIIB is traded on the AIM market of London Stock Exchange. At 31 December 2012, the share price of EIIB decreased to 3.05 pence per share resulting to a loss arising from change in fair value made of £117,787.

 

      The investment was determined by reference to market bid prices as at 31 December 2012.

 

13.  INVESTMENT IN SUBSIDIARY

     

         




Shares in Subsidiaries





£

Cost





At 1 January 2011




1

Additions




497





────────

At 31 December 2011




498

Additions




3,389,625





────────

At 31 December 2012




3,390,123





────────

Provision 





At 1 January 2011 and 2012




             -

Charge




        3,389,625





────────

At 31 December 2012




        3,389,625





────────

CARRYING VALUE





At 31 December 2012




498





════════

At 31 December 2011




     498





════════

 

      The details of the subsidiaries are as follows:

 

Name of Company

Country of

Incorporation

Shareholdings

Principal Activity





Nova East Management Pte Ltd

Singapore

100%

Inactive

Nova East Capital Private Limited

Singapore

100%

Dormant

Nova Mongolia Corp PTE Ltd

Singapore

100% (balance  of 30% acquired in 14 February 2012)

Investment Holding Company

 

        Nova Mongolia Corp PTE Ltd has acquired 100% of this issued share capital of Nova Logistics Holdings Limited (formally known as Salins Limited), a company incorporated in the British Virgin Islands, an investment holding company which in turn owns 100% of the issued share capital of Nova Trans LLC (Formerly ZHCH Mining LLC) ("NT"), a company incorporated in Mongolia to provide coal transportation and logistics services in Mongolia.  NT entered into a contract with another Mongolia company on 17 January 2012 to transport coal within Mongolia, to commence on 15 May 2012, for one year; actual commencement took place on 5 June 2012.

 

      The Company purchased 300 shares in the capital of Nova Mongolia Corp Pte Ltd ("Nova Mongolia") on 14 February 2012.  The total consideration for the Acquisition is £1,767,857.09 which is to be fully paid by the allotment and issuance of 23,571,428 ordinary shares of par value of £0.01 each at the issue price of £0.075 each and 12,857,143 warrants (the "Consideration Warrants"), exercisable at £0.02 per ordinary share, up to 28 February 2013.  Those are only exercisable if the company makes a reverse takeover under AIM Rules.

 

      The Consideration Warrants contain the following terms:

 

1.   the warrants are not exercisable until the company has acquired or invested in a company that qualifies as a reverse takeover under the AIM rules; and

 

2.   the warrants expired on 28 February 2013.

 

      The Company now owns 100% of Nova Mongolia; Nova Mongolia owns 100% of Nova Logistics Holdings Limited ( formerly Salins Limited)  which in turn owns owns 100% of Nova Trans LLC

      (formerly ZHCH Mining LLC).

 

      On a fully diluted basis, following execution of the Consideration Warrant together with execution/conversion of all outstanding options, warrants and convertible loan notes, but not including the convertible loan notes that may or may not be issued pursuant to the Investment Facility with Odin Structured Advisory Services LLP announced on 5 January 2012, (collectively, the "Convertibles") an additional 50,157,143 shares of par value £0.01 each would be issued, giving a total number of Ordinary Shares in issue of 153,928,571.

 

      The Convertibles comprise:

 

1.   42,857,143 warrants which may only be exercised upon completion of a reverse takeover by 28 February 2013, issued as 30,000,000 warrants to Bernholz Limited (the sole beneficiary of which is Chan Fook Meng) and the 12,857,143 Consideration Warrants.  The total number of Ordinary Shares that could be issued upon exercise is 42,857,143;

 

2.   6,500,000 options issued to directors and management of Nova which can only be exercised in tranches as announced on 16 November 2011 and 20 January 2012.  The first tranche may only be converted in May 2012.  The total number of Ordinary Shares that could be issued upon exercise is 6,500,000; and

 

3.   60,000 convertible unsecured loan notes which may be converted at any time as announced on 10 February 2012.  The total number of Ordinary Shares that could be issued upon exercise is 800,000 as declared in Note 19.

 

            Goodwill of £2,255,143 ( 2011 - £64,573) arose on this acquisition.

 

            The Company assesses at each reporting date whether there is an indication that the goodwill may be impaired, by considering whether the value in use is greater than the recoverable amount.  At the year end full impairment of the value of the goodwill was booked.

 

 

14.  TANGIBLE FIXED ASSETS


 

 

Land and

Camps

Trucks, Trailers and other Motor vehicles

 

Furniture and

Other assets

 

Computer and

software

 

 

 

Total

Cost

£

£

£

£

£

At 1 January 2012

-

-

-

-

-

Additions

362,266

1,897,987

40,362

11,822

2,312,437

Disposals

-

(45,448)

-

-

(45,448)


────────

────────

────────

────────

────────

At 31 December 2012

362,266

1,852,539

40,362

11,822

2,266,989


────────

────────

────────

────────

────────

Accumulated depreciation






At 1 January 2012

-

-

-

-

-

Charge for the year

886

92,441

2,052

1,482

96,861

On Disposals

-

-

-

-

-


────────

────────

────────

────────

────────

At 31 December 2012

886

92,441

2,052

1,482

96,861


────────

────────

────────

────────

────────







Net Book Value






31 December 2012

361,380

1,760,098

38,310

10,340

2,170,128


════════

════════

════════

════════

════════

31 December 2011

-

-

-

-

-


════════

════════

════════

════════

════════

 

        The bank and other loans are secured against the trucks and trailers.

 

15.  INVENTORIES

     


Group

Company


2012

2011

2012

2011


£

£

£

£






Transportation parts and supplies

19,288

-

-

-


════════

════════

════════

════════

     

16.

TRADE AND OTHER RECEIVABLES

Group

Company



2012

2011

2012

2011



£

£

£

£








Trade debtor

609,930

-

-

-


Loan  - intercompany

-

-

375

64,098


- Hoddle Limited

-

322,796

-

322,796


Other debtors

287,269

-

-

-


Prepayments

25,019

1,338

1,921

1,338



───────

───────

───────

───────



922,218

324,134

2,296

388,232



═══════

═══════

═══════

═══════

 

      The Company has lent to Hoddle Limited ("Hoddle") US$500,000 (£320,986) on 5 January 2012,for a period of 12 months.  As security for the Loan, the Company has been granted a charge over the entire issued share capital of Hoddle (the "Hoddle Shares"). 

 

        The sole shareholder of Hoddle Limited is JI Won Park ("Park").  Park, a Korean citizen, is a businessman with interests in Mongolia. He is not related to any director or substantial shareholder of the Company.  Park has also granted the Company exclusivity with respect to the Hoddle Shares in that he has agreed not to sell, and will terminate all discussions relating to the sale of, any of the Hoddle Shares to any third party until 30 September 2012.

 

        Hoddle is an investment holding company incorporated in the British Virgin Islands.  It owns 50% per cent of the entire issued share capital of Standard MT Private Limited ("Standard"), a company incorporated in Singapore.  Standard owns 49 per cent of the entire issued share capital of MSR LLC, a company organised and existing under the laws of Mongolia ("MSR").  MSR owns 95 per cent of the issued share capital if Standard Mining Trans LLC, a company organised and existing under the laws of Mongolia ("SMT").

 

        SMT is in the business of providing logistics services to mines in Mongolia.  SMT has signed a contract with MoEnCo LLC ("MoEnCo"), a company incorporated in Mongolia to transport coal from its Khushuut coal mine to a storage ground close to the border with the People's Republic of China.  MoEnCo is a subsidiary of Mongolian Energy Corporation,  SMT will commence the transportation of coal once the Khushuut coal mine commences production of coal.  Production is expected to commence sometime in 2012.

 

        As at the 31 December 2012, a provision was made against the carrying value of the amount due from Hoddle Limited.

 

17.

CASH AND CASH EQUIVALENTS

Group

Company



2012

2011

2012

2011



£

£

£

£








Bank current accounts

119,016

470,639

19,103

470,632



───────

───────

───────

───────



119,016

470,639

19,103

470,632



═══════

═══════

═══════

═══════

 

 

18.

TRADE AND OTHER PAYABLES

Group

Company



2012

2011

2012

2011



£

£

£

£








Trade payables

160,264

58,024

61,956

58,024


Other creditors

96,772

104

7,262

7,497


Current portion of convertible notes loan (see note 19)

 

16,721

 

-

 

16,721

 

-


Loans

2,308,332

-

-

-


Accruals

124,362

7,889

32,124

-



───────

───────

───────

───────



2,706,451

66,017

118,063

65,521



═══════

═══════

═══════

═══════

 

      Trade payable and accruals principally comprise amounts outstanding for ongoing expenses

 

      Included in loans above totalling £2,308,332;

 

(a)  An unsecured loan of US$ 2,000,000 (£1,238,160), from Brincan Holdings SA, a company incorporated in the British Virgin Islands to Nova Trans LLC, a wholly owned subsidiary of the group. This loan was for the acquisition of trucks and additional working capital. A sum of US$3,000,000 is repayable in May 2013 and discussions are ongoing with Brincan with respect to repayment of the loan. The sum of US$3,000,000 is guaranteed by Nova Resources Limited.

 

(b)  USD loans totalling £372,975 from related parties or companies controlled by them.  There are interest free and have no fixed date of repayments but are repayable on demand.

 

19.

Long Term Liabilities

 

(a)  The holder of the Notes has the right, but not the obligation, to convert the principal amount outstanding to newly issued Ordinary Shares in the capital of the Company at the subscription rate of £0.075 for each Ordinary Share.

 

(b)  There is no interest on the amount outstanding.  If all or part of the Notes is not converted by 31 March 2015, Nova shall pay to the Noteholder the principal.

 

      On 15 May 2012, £10,000 of the notes were converted into 133,333 ordinary shares.

 



Group

Company



2012

2011

2012

2011



£

£

£

£








At 1 January 2012

-

-

-

-


Issued on 10 February 2012

60,000

-

60,000

-


Converted on 15 March 2012

(10,000)

-

(10,000)

-



───────

───────

───────

───────


Balance at 31 December 2012

50,000

-

50,000

-



═══════

═══════

═══════

═══════








Allocated as follows:-






Short term liabilities (Note 18)

16,721





Transferred to shareholders' equity

Loan note equity reserve

 

12,434





Included in long tern liabilities

20,845






───────






50,000






═══════




 

 

20.  CALLED UP SHARE CAPITAL

 

Authorised

Number

Class

Nominal

Value

2012

£

2011

£






500,000,000

Ordinary

1p

5,000,000

5,000,000




═══════

═══════

Allotted, issued and fully paid










106,115,287(2011 -70,000,000)

Ordinary

1p

1,061,153

700,000




═══════

═══════

         

 

        On 15 March 2011 the company issued 10,000,000 new ordinary shares of 2p each, raising £0.2m for working capital purpose.  As part of the Share issue, warrants to subscribe for 30,000,000 ordinary shares were issued with an exercise price of 2p, of which 10,000,000 warrants that are exercisable when the market value reaches 4p, 10,000,000 are exercisable when the market value reaches 6p and 10,000,000 when the market value reaches 8p.

 

        Share options to certain directors were granted on 16 November 2011 totalling 2,000,000 options.  The Share Options have an exercise price of 3 pence and can be exercised by each director as follows:-

 

·   One third can be exercised after 1 May 2012;

·   One third can be exercised after 14 November 2012; and

·   One third can be exercised after 14 May 2013.

 

 

      On 20 January 2012, 4,000,000 share options were granted plus an additional 1,000,000 to an employee; on the resignation from the Board of Mr Lai Seng Kwoone, 500,000 options issued on 16 November 2011 were cancelled.

 

      On 10 February 2012, 10,200,000 ordinary shares were subscribed in cash;

 

      On 14 February 2012, 23,571,428 ordinary shares were issued for the acquisition of the remaining 30% of the issued share capital of Nova Mongolia Corp Pte Ltd not currently owned by the company, together with 12,857,143 warrants to subscribe for ordinary shares;

 

      On 27 February 2012, 2,210,526 new ordinary shares were subscribed for cash.

 

      Share - based payments

      Details of the options and warrants issued are provided in the Directors' Report. The details of the option scheme are as follows:

 


 

 

2012 Number of options

2012    Weighted average exercise price Pence

 

 

2011 Number of options

2011     Weighted average exercise price Pence






Outstanding at beginning of period

2,000,000

3

-

-

Options cancelled in period

-

-

-

-

Options granted in period

11,500,000

-

2,000,000

3


─────────

───────

────────

───────

Outstanding at end of the period

13,500,000

3

2,000,000

3


═════════

═══════

════════

═══════




-


      None of the options above have been exercised and all remain outstanding at the year end. The fair value of the options granted during the period has been calculated using the Black Scholes model assuming the inputs shown below:

 

Grant date

November 2011

Share price at grant date

2.38p

Exercise price

3p

Expected option life in years

5

Risk free interest rate

4%

Expected volatility

25%

Expected dividend yield

0%

Fair value of option

0.36p

      Volatility has been estimated by taking the historic volatility in the Company's share price over two years.


 

 

 

2012 Number of warrants

2012      Weighted average exercise price Pence

 

 

2011 Number of warrants

2011    Weighted average exercise price Pence

Outstanding at beginning

    of the period

 

30,000,000

 

6

 

-

 

-

Warrants granted in period

 

42,857,143

 

-

 

30,000,000

 

6


─────────

─────────

─────────

─────────

Outstanding at end of the period

 

72,857,143

 

6

 

30,000,000

 

6


═════════

═════════

═════════

═════════

      The warrant over ordinary shares that have been issued to employees have a seven year vesting period six months from the grant date.

 

      None of the warrant above have been exercised and all remain outstanding at the year end. The fair value of the warrants granted during the period has been calculated using the Black Scholes model assuming the inputs shown below:

 

Grant date

February 2012

Share price at grant date

8p

Exercise price

2p

Expected warrant life in years

1

Risk free interest rate

4%

Expected volatility

25%

Expected dividend yield

0%

Fair value of option

0.0p

      Volatility has been estimated by taking the historic volatility in the Company's share price over two years.

     

21.  RECONCILIATION OF OPERATING LOSS TO CASH GENERATED FROM OPERATIONS

         


Group

Company

Group

Company


2012

2012

2011

2011


£

£

£

£






Loss before interest and tax

(1,109,909)

(478,257)

(158,143)

(156,711)

Provision for quoted investment

117,787

   117,787

(117,788)

   (117,788)

Minority interests

(1,100)

-

1,100

-


───────

───────

───────

───────


(993,222)

(360,470)

(274,831)

(274,499)






(Increase)/(decrease) in inventories

(19,288)

-

-

-

(Increase)/decrease in trade and

other receivables

 

(919,070)

 

(1,157,789)

 

(299,926)

 

(364,024)

(Decrease)/increase in trade and

other payables

 

2,613,715

 

  35,822

 

(6,185)

 

  (6,681)

Depreciation

96,867

-

-

-

Loss on disposal of fixed assets

45,448

-

-

-

Share based payments

16,742

16,742

-

-


───────

───────

───────

───────

Cash generated from / (consumed in) operations

 

841,192

 

(1,465,695)

 

(580,942)

 

(645,204)


═══════

═══════

═══════

═══════

                    

22.  FINANCIAL COMMITMENTS

 

      Capital commitments

      There was no capital expenditure that had been contracted for at the balance sheet date but not yet incurred.

 

23.  RELATED PARTY TRANSACTIONS

 

      As at 31 December 2012, Nova Trans Limited owed Menora Trading Limited £55,107, a company controlled by Chan Fook Meng. The loan bears interest at 8% per annum.

 

      As at 31 December 2012, Nova Trans Limited owed £78,088 to Nazim Khan.

 

As at 31 December 2012, Nova Trans Limited owed £224,427 to Ferro Mongolia Resources Limited, a company where Christopher Morgan and Chan Fook Meng are directors.

 

As at 31 December 2012, Nova East Management Pte Limited paid services and consultancy fees of £60,411 to Menora Trading Limited.

 

24.  CONTINGENT LIABILITIES

 

      The Company has no contingent liabilities arising in respect of legal claims arising from the ordinary course of business and it is not anticipated that any material liabilities will arise from the contingent liabilities other than those provided for.

 

25.  POST BALANCE SHEET EVENTS

     

      On the 20th April 2013, the coal transportation contract between Nova Trans LLC and Transgobi LLC expired.

 

      On the 20th June 2013, the company issued 5,500,000 warrants. Each warrant entitles the Warrant holder to subscribe for one new ordinary share in the Company at a price of 1.5pence per new ordinary share at any time until 30 June 2018.

 

26. ULTIMATE CONTROLLING PARTY

 

      The parent company is Shine Link Limited, a British Virgin Islands registered company owned by Mr Chan Fook Meng.

 

 

 

 

 

 


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

a d v e r t i s e m e n t