Results for the 12 months ended 30 September 2012

Companies

Nativo Resources (NTVO)

UK 100

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Independent Resources plc

("Independent Resources" or the "Company" or the "Group")

Results for the twelve months ended 30 September 2012

Highlights

·	New strategic plan under review
	The Company continues to evaluate potential transactions

·	Rivara Gas Storage Project: authorisations withheld following regional earthquake putting project on hold
	The Company has reluctantly accepted that the administrative courts will have to decide on the merits of the Region's opposition

·	Business Development has yielded two new projects
	A large-scale low-cost carbon dioxide storage site offshore Adriatic
	A gas-to-power project onshore Italy

·	Ribolla CBM Project: Data swap agreed to add further seismic coverage ahead of future well re-entry, deepening and testing
	The Company intends to further de-risk this Coal Bed Methane project and demonstrate the value of this prospective recoverable gas resource gas estimated by D&M at 4.5 BCM (160 BCF)

·	Ksar Hadada Shale Oil Project: Operator has postponed planned operations pending farm-out results
	Focus is on unconventional oil appraisal

·	Net cash at 30 September 2012: £0.73 million (2011: £2.5 million)
	Net cash at 28 November 2012 (unaudited): £1.98 million

Commenting, Grayson Nash, Executive Chairman of Independent Resources, said: "Although the year began on a very promising note, events following the unfortunate earthquake in Emilia Romagna unravelled a monetisation process for Rivara and led to major new delays with the project. Our management team did not wait to undertake a profound strategic review and immediately evaluate solutions to re-position the Company, seeking to combine our strengths with new opportunities and key personnel. We had recently reached an advanced stage on a potential transaction that will not now proceed. This means we will be reviewing other alternatives in the near term. I look forward to presenting the results of our strategic review over the next few weeks."

Chairman's statement

Our effort this year was extraordinary but it was overwhelmed by events we ultimately could not control. The team performed exceptional work on Rivara going into the late spring this year. We had reported major permitting progress following the Italian Environmental Ministry's VIA decree. Although we could not comment on the progress we were making to monetise a portion of Rivara in much the same way we had done in 2008, this effort was progressing well. We were all very confident that we could finally commence building for shareholders the valuable foundations of a long-term asset that would not only immediately benefit the project's local economy but also generations of families living in proximity to the facility through their township royalty receipts. The Emilia earthquake however raised fears that there might possibly be a connection between the planned storage facility and the much deeper seismic events and this led politicians and even industrial allies to withhold their support. The Company decided that it would have to seek an unbiased forum to judge on the merits of the regional government's withholding its required support and this precipitated the project into administrative court. This of course meant that the Company would need to focus its productive energy elsewhere, at least in the short to medium term.

As we progressed Rivara's permitting process during the year and had engaged with new parties interested in participating in its development, we also began to address the Company's partner ERG's desire to continue a process of exiting from its traditional energy businesses. As part of this process our Company reached an agreement with ERG which allowed them to withdraw from the Rivara project company and transfer their shares back to the Company. The transaction included a 1.4 million euro payment from ERG into the project company and the elimination of ERG's shareholder loans to the project company which is now a wholly-owned subsidiary. This agreement has been embraced by both parties as a sensible and beneficial solution.

The Company's focus since early June has been almost exclusively on laying new foundations for growth opportunities. High-quality transformational deals are very difficult to move from identification, to vetting, to negotiation, and eventually to completion. Over the past few months we have had contacts with various entities and in two instances discussions reached an advanced stage without success.

Discussions regarding the future of our Ribolla coal bed methane gas project near Grosseto nevertheless moved forward. Although our stated aim of negotiating a farm-out during the period was not accomplished, we were still able to creatively plan an inexpensive way to de-risk the project to ultimately set up new operations on the basin. The local economy would benefit from the sustainable exploitation of this major resource and we remain actively engaged in local politics and regional policy.

In Tunisia we have been disappointed that the Operator's plans have not yet allowed us to appraise the potentially very significant oil shale resource present at relatively shallow depth throughout the block. Given the size of our stake our aim is to help shape a future in which shareholders remain financially interested in the project's success, but are no longer exposed to the capital cost of its de-risking.

Business development continued through the period and yielded some tangible success. We now have two new projects that we are actively managing in Italy. We identified a very large structure offshore Adriatic potentially suitable for low-cost carbon dioxide storage, and we applied for an exclusive CO₂ storage site exploration permit under the recent Italian law which adopts the 2009 CCS European Directive. Additionally, a gas-to-power project onshore Italy, slated to have been awarded in July, should yield commercial results and begin generating cash within a relatively short timeframe should the remaining permitting hurdles be overcome. Formal title to these projects has not yet been obtained. We prefer to wait to illustrate these projects in detail until we have received approval from the relevant government institutions. In all these activities, we continue to maintain a cost-conscious and value-focused approach, and are confident that we will be in a position to announce significant developments in the first half of 2013.

Independent Resources plc

Consolidated statement of comprehensive income

Year ended 30 September 2012

	Notes	2012	2011
Continuing operations		£	£
Revenue		-	-

Cost of sales		-	-

Gross profit		-	-

Administrative expenses		(1,387,942)	(1,174,737)

Operating loss		(1,387,942)	(1,174,737)

Financial income		5,784	35,310

Financial expense		(437,077)	(24,818)

Loss on ordinary activities before taxation		(1,819,235)	(1,164,245)

Taxation	3	-	-

Loss for the year		(1,819,235)	(1,164,245)

Other comprehensive income:
Exchange difference on translating foreign operations		(1,074,067)	69,384
Income tax relating to other comprehensive income		-	-

Total comprehensive loss for the year		(2,893,302)	(1,094,861)

Loss attributable to:
Owners of the parent		(1,781,779)	(1,133,327)
Non-controlling interests		(37,456)	(30,918)

		(1,819,235)	(1,164,245)

Total comprehensive loss attributable to:

Owners of the parent		(2,752,613)	(1,067,632)
Non-controlling interests		(140,689)	(27,229)

		(2,893,302)	(1,094,861)

Loss per share (pence)	4

From continuing operations

Basic		(3.9)	(2.5)

Diluted		(3.9)	(2.5)

Independent Resources plc

Consolidated statement of financial position

As at 30 September 2012


	Notes	2012		2011
			£		£
Non-current assets
Property, plant and equipment			21,133		51,232
Goodwill	5		450,766		450,766
Other intangible assets	6		9,466,113		9,315,485

			9,938,012		9,817,483

Current assets
Other receivables		3,634,449		4,524,726
Cash and cash equivalents		729,786		2,501,605

		4,364,235		7,026,331

Current liabilities
Trade and other payables		(960,671)		(763,892)

		(960,671)		(763,892)
Net current assets			3,403,564		6,262,439

Net assets			13,341,576		16,079,922

Equity attributable to equity holders of the parent
Share capital	7		458,369		458,369
Share premium	8		15,287,351		15,287,351
Share option reserve			264,717		109,761
Foreign currency translation reserve			(74,844)		895,990
Retained earnings			(3,766,319)		(1,984,540)

			12,169,274		14,766,931

Non-controlling interests			1,172,302		1,312,991

Total equity			13,341,576		16,079,922

Independent Resources plc

Statement of changes in equity

Year ended 30 September 2012

					Foreign
				Share	currency		Non-
	Retained	Share	Share	option	translation		controlling	Total
	earnings	capital	premium	reserve	reserve	Total	interests	equity
	£	£	£	£	£	£	£	£
Consolidated

1 October 2010	(1,241,057)	458,369	15,287,351	389,844	830,295	15,724,802	1,340,220	17,065,022

Loss for the year	(1,133,327)	-	-	-	-	(1,133,327)	(30,918)	(1,164,245)
Exchange differences	-	-	-	-	65,695	65,695	3,689	69,384

Total comprehensive loss for the year	(1,133,327)	-	-	-	65,695	(1,067,632)	(27,229)	(1,094,861)

Share options lapsed	389,844	-	-	(389,844)	-	-	-	-
Share-based payments	-	-	-	109,761	-	109,761	-	109,761

30 September 2011	(1,984,540)	458,369	15,287,351	109,761	895,990	14,766,931	1,312,991	16,079,922

1 October 2011	(1,984,540)	458,369	15,287,351	109,761	895,990	14,766,931	1,312,991	16,079,922

Loss for the year	(1,781,779)	-	-	-	-	(1,781,779)	(37,456)	(1,819,235)
Exchange differences	-	-	-	-	(970,834)	(970,834)	(103,233)	(1,074,067)

Total comprehensive loss for the year	(1,781,779)	-	-	-	(970,834)	(2,752,613)	(140,689)	(2,893,302)

Share-based payments	-	-	-	154,956	-	154,956	-	154,956

30 September 2012	(3,766,319)	458,369	15,287,351	264,717	(74,844)	12,169,274	1,172,302	13,341,576

Independent Resources plc

Consolidated statement of cash flows

Year ended 30 September 2012

		2012	2011
Cash flows from operating activities		£	£

Loss before taxation		(1,819,235)	(1,164,245)
Adjustments for:
	Depreciation of property, plant and equipment	21,385	29,867
	Provision for well shut down costs	-	(309,759)
	Financial income	(5,784)	(35,310)
	Financial costs	437,077	24,818

		(1,366,557)	(1,454,629)
Decrease in other receivables		470,277	918,055
Increase in trade and other payables		196,779	181,334
Share-based payments		154,956	109,761
Exchange rate difference on investments		(341,796)	48,729

Cash used in operations		(886,341)	(196,750)

Income taxes received		-	88,588

Net cash used in operating activities		(886,341)	(108,162)

Cash flows from investing activities

Interest received		5,784	35,310
Interest paid		(17,077)	(9,818)
Proceeds on disposal of property, plant and equipment		5,042	-
Purchase of intangible assets		(879,227)	(1,304,848)
Purchases of property, plant and equipment		-	(5,187)

Net cash used in investing activities		(885,478)	(1,284,543)

Cash flows from financing activities


Net decrease in cash and cash equivalents		(1,771,819)	(1,392,705)

Cash and cash equivalents at 1 October 2011		2,501,605	3,894,310

Cash and cash equivalents at 30 September 2012		729,786	2,501,605

Independent Resources plc

Notes to the final results for the year ended 30 September 2012

1.	Basis of preparation

	The financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union and using accounting policies which are consistent with those applied in the financial statements for the year ending 30 September 2011.

	The financial information set out in this announcement, does not constitute the statutory financial statements of the group but was derived from those financial statements. The auditors have reported on the financial statements for the period ended 30 September 2012; this report was unqualified. There was, however, an emphasis of matter regarding the ongoing status of the Rivara project as detailed in note 6.

	The financial information for the year ending 30 September 2011 is derived from the financial statements for that year. The company's auditors have reported on the 2011 financial statements; their report was unqualified.

	The financial information set out in this announcement was approved by the board on 30 November 2012.

	The directors do not recommend the payment of a final dividend.

	The full statutory financial statements will be included in the Group's annual report, which will be e-mailed or posted to shareholders on 12 December 2012. Additional copies will be available at the Group's offices Tower Bridge House, St. Katharine's Way, London E1W 1DD after that date. The accounts will be delivered to the Registrar of Companies after the Company's Annual General Meeting, which is scheduled for 23 January 2013.

2.	Business segments

	The group has adopted IFRS 8 Operating Segments. Per IFRS 8, operating segments are based on internal reports about components of the group, which are regularly reviewed and used by the Board of Directors, being the Chief Operating Decision Maker ("CODM") for strategic decision making and resource allocation, in order to allocate resources to the segment and to assess its performance. The group's reportable operating segments are as follows:

	a.	Parent company
	b.	Rivara
	c.	Ribolla Basin CBM & Shale Gas Assets
	d.	Ksar Hadada

	The CODM monitors the operating results of each segment for the purpose of performance assessments and making decisions on resource allocation. Performance is based on assessing progress made on projects and the management of resources used. Segment assets and liabilities are presented inclusive of inter-segment balances.

	The group did not generate any revenue during the year to 30 September 2012 nor in the year to 30 September 2011.

	Information regarding each of the operations of each reportable segments is included in the following table.

					Ribolla Basin
			Parent		CBM & Shale
			company	Rivara	Gas Assets	Ksar Hadada	Consolidation	Total
			£	£	£	£	£	£
	2012

	Interest revenue		140,285	2,147	6	-	(136,654)	5,784
	Interest expense		-	(510,055)	(63,676)	-	136,654	(437,077)
	Depreciation		-	1,344	20,041	-	-	21,385
	Impairment of intangible assets		-	-	-	-	-	-
	Income tax		-	-	-	-	-	-
	Loss for the year before taxation		(1,065,445)	(758,419)	(567,201)	(20,084)	591,914	(1,819,235)

	Assets		12,339,855	11,375,970	4,128,810	217,340	(13,759,728)	14,302,247
	Liabilities		(151,438)	(5,594,817)	(4,001,708)	(542,451)	9,329,743	(960,671)


		2011

		Interest revenue		285,134	46,450	11	-		(296,285)		35,310
		Interest expense		-	(173,905)	(147,198)	-		296,285		(24,818)
		Depreciation		-	4,120	25,747	-		-		29,867
		Impairment of intangible assets		-	-	-	-		-		-
		Income tax		-	-	-	-		-		-
		Profit/(loss) for the year before taxation		(92,929)	(325,835)	(612,519)	(93,594)		(39,368)		(1,164,245)

		Assets		13,158,478	12,620,924	4,741,670	156,989		(13,834,247)		16,843,814
		Liabilities		(59,572)	(5,543,389)	(5,044,622)	(462,016)		10,345,707		(763,892)

			The geographical split of non-current assets is as follows:

								United
								Kingdom		Overseas		Total
								£		£		£
			2012

			Intangible assets					-		9,466,113		9,466,113
			Goodwill					-		450,766		450,766
			Property, plant and equipment					-		21,133		21,133

			2011

			Intangible assets					-		9,315,485		9,315,485
			Goodwill					-		450,766		450,766
			Property, plant and equipment					-		51,232		51,232

3.	Taxation
								2012			2011
								£			£
	Tax on profit on ordinary activities

	Taxation charged based on profits for the year

	UK corporation tax based on the results for the year							-			-
	Over provided in prior year							-			-
	Overseas taxation							-			-

	Total tax expense in income statement							-			-


	Reconciliation of the tax expense

	The tax assessed for the year is different from the standard rate of corporation tax in the UK (25%). The differences are explained below:

				2012		2011
				£		£

	Loss on ordinary activities before taxation			(1,819,235)		(1,164,245)


	Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2011: 27%)			(454,808)		(314,346)

	Effects of:
	Expenses disallowed for tax purposes			38,739		29,679
	Untaxed expense/(income) on deemed disposal of interest in subsidiary			-		4,050
	Deferred tax not provided - tax losses carried forward			416,069		280,617

	Total current tax			-		-

	The group has tax losses available to be carried forward in certain subsidiaries and the parent. With anticipated substantial lead times for the group's projects, and the possibility that these may therefore expire before their use, it is not considered appropriate to anticipate an asset value for them.

4.			Loss per share

			The calculation of basic and diluted loss per share at 30 September 2012 was based on the loss attributable to ordinary shareholders of £1,781,779. The weighted average number of ordinary shares outstanding during the year ending 30 September 2012 and the effect of the potentially dilutive ordinary shares to be issued are shown below.

			Contingently issuable shares such as included within the share option scheme have not been treated as dilutive as the market conditions have not been met at 30 September 2012.

					2012		2011
					£		£

			Net loss for the year		(1,781,779)		(2,135,505)

			Basic weighted average ordinary shares in issue during the year		45,836,867		42,543,262

			Diluted weighted average ordinary shares in issue during the year		45,836,867		42,543,262

5.		Goodwill (group)
							Goodwill
							£
		2012

		Cost

		1 October 2011 and 30 September 2012					450,766

		Carrying amount

		30 September 2012					450,766

		30 September 2011					450,766


	2011

	Cost

	1 October 2010 and 30 September 2011	450,766

	Carrying amount

	30 September 2011	450,766

	30 September 2010	450,766

	The goodwill arises as a result of the acquisition of Independent Energy Solutions srl which contains the Ribolla project.

	A review of the latest management information and projections shows a net present value significantly in excess of assets and liabilities relating to this project. The main assumptions indicate that no significant change has arisen on these calculations which would materially impact on the group.

	The continuing analysis and testing of technical data continues to indicate that the project is feasible.

	The group continues to work towards obtaining all the necessary approvals from regulatory authorities.

	The group anticipates being able to raise the necessary finance to continue to develop the project.

For the purpose of goodwill impairment testing, recoverable amounts have been determined based upon the value in use of the Ribolla project.

Value in use

Cash flows are projected for the periods up to the date that the project is expected to become commercially operational and from then until operations are expected to cease, based upon management's expectations. These dates depend on a number of variables, including the project's technical feasibility, regulatory approval, forecast revenue prices and the associate development and operational costs.

The project is expected to generate revenue after five to nine years and to continue doing so for a further 35 years. The directors consider that projections calculated for a period greater than five years are justified as the project is still in a development stage. The directors have used a constant rate of growth of 2.5% (2011: 2.5%) to extrapolate the cash flow projections beyond the period in which the projects will commence to generate revenue. This growth rate is considered to cover increases resulting from inflation and regulatory changes. The discount rate used is 10.0% (2011: 10.0%).

Key assumptions used in value in use calculations

The key assumptions used in the value in use calculations for the goodwill asset are the expected storage and useable capacity, costs of plant and infrastructure, expected revenue prices, expected operational costs, appropriate discount rates and foreign exchange rates. For further details please see note 6.

Management's assessment of the technical viability of the projects is supported by the evaluation work undertaken by appropriately qualified persons.

Management have assessed the project's individual net present value and thereby impairment on a variety of bases and assumptions using, where appropriate, a number of discount rates. The impairment tests are particularly sensitive to changes in the key assumptions and changes to these assumptions could result in impairment; however, all of the varying bases indicate a net present value significantly in excess of the value of goodwill.

Foreign exchange rates have been based on external market forecasts, after considering long-term market expectations and the countries in which the group operates.

6.	Other intangible assets (group)

	Development and exploration
			Rivara gas	Ribolla Basin	Ksar Hadada
			storage	CBM & Shale	exploration
			facility	Gas assets	acreage	Total
			£	£	£	£
	2012

	Cost
	1 October 2011		4,892,610	4,265,886	1,237,818	10,396,314
	Exchange differences		(389,229)	(339,370)	-	(728,599)
	Additions		732,619	86,717	59,891	879,227

	30 September 2012		5,236,000	4,013,233	1,297,709	10,546,942

	Amortisation

	1 October 2011 and 30 September 2012		-	-	1,080,829	1,080,829

	Carrying amount

	30 September 2012		5,236,000	4,013,233	216,880	9,466,113

	30 September 2011		4,892,610	4,265,886	156,989	9,315,485

	2011

	Cost
	1 October 2010		4,025,204	3,864,974	1,180,829	9,071,007
	Exchange differences		10,437	10,022	-	20,459
	Additions		856,969	390,890	56,989	1,304,848

	30 September 2011		4,892,610	4,265,886	1,237,818	10,396,314

	Amortisation

	1 October 2010 and 30 September 2011		-	-	1,080,829	1,080,829

	Carrying amount

	30 September 2011		4,892,610	4,265,886	156,989	9,315,485

	30 September 2010		4,025,204	3,864,974	100,000	7,990,178

	The primary intangible assets are all internally generated.

	For the purpose of impairment testing of intangible assets, recoverable amounts have been determined based upon the value in use of the group's three projects.

	Ksar Hadada exploration acreage - impairment charge

	The results for the 2010 drilling campaign, which was completed shortly after the start of the comparative year, were unsuccessful, although a significant amount of new and valuable data was produced and analysed. The vast majority of the company's expenditures to 30 September 2010 were therefore written off as an impairment charge in the statements of that year.
	Rivara gas storage facility and Ribolla Basin CBM & Shale Gas assets

	Despite the expected delay, a review of the latest management information and projections shows a net present value significantly in excess of assets and liabilities relating to the projects. The main assumptions indicate that no significant change has arisen on these calculations which would materially impact on the group.

	The continuing analysis and testing of technical data continues to indicate that the projects are feasible.

	The group continues to work towards obtaining all the necessary approvals from regulatory authorities.

	The group anticipates being able to raise the necessary finance to continue to develop the projects.

	Potential impairment of the Rivara project

	At the balance sheet date the Group held an 85% interest in ERG Rivara Storage srl. Intangible assets include an amount of £5,236,000 with respect to project expenditure. The regional council, Regione Emilia Romagna, where the project is located, is currently denying authorisation for project development. However authorisation has been granted by the national government. As a result ERG Rivara Storage Srl has appealed against this decision to the Emilia Romagna Bologna Administrative Court and this appeal is due to be heard in the first half of 2013.

	In the event that ERG Rivara Storage's appeal was to be unsuccessful, the capitalised expenditure will be subject to impairment testing.

	Value in use

	Value in use has been calculated separately for the group's Rivara gas storage facility and Ribolla Basin CBM & Shale Gas assets. Cash flows are projected for the periods up to the date that the projects are expected to become commercially operational and from then until operations are expected to cease, based upon management's expectations. These dates depend on a number of variables, including the project's technical feasibility, regulatory approval, forecast revenue prices and the associated development and operational costs.

	The projects are expected to generate revenue after five to nine years and to continue doing so for a further 35 years. The directors consider that projections calculated for a period greater than five years are justified as the projects are still in a development stage.

	Key assumptions used in value in use calculations

	The key assumptions used in the value in use calculations for the intangible assets are the expected storage and useable capacity of the Rivara project, the anticipated quantity of resource available for extraction for the Ribolla Basin project, costs of plant and infrastructure, expected revenue prices (specifically gas prices), expected operational costs, appropriate discount rates and foreign exchange rates.

	Management's assessment of the technical viability of the projects is supported by the evaluation work undertaken by appropriately qualified persons.

	Management has assessed the project's individual net present values and thereby impairment on a variety of bases and assumptions using, where appropriate, a number of discount rates. The impairment tests are particularly sensitive to changes in the key assumptions and changes to these assumptions could result in impairment; however, all of the varying bases indicate a net present value significantly in excess of the value of the intangible assets.

	Foreign exchange rates have been based on external market forecasts, after considering long-term market expectations and the countries in which the group operates.

	The key assumptions used in the value in use calculations are as follows:


				Assumption		Sensitivity
						factor *

	Rivara gas storage facility:

		Growth rate		2.0%		+55%
		Discount rate		6.3%		+35%
		Capital expenditure		-		-

	Ribolla Basin CBM & Shale Gas assets:

		Growth rate		2.5%		+115%
		Discount rate		10.0%		-25%
		Gas price	€0.26 per cubic metre			+36%
		Capital expenditure		-		-

	The growth rates are considered to cover increases resulting from inflation and regulatory changes.

	The discount rate for the Rivara project reflects expected return levels and has been agreed with the project partner.

	* The sensitivity factor is the percentage change in each specific assumption which would, on its own, result in the net present value equal to the carrying value of the intangible asset in the accounts.