Financial Statements for the Year Ended 31 December 2007
12 March 2008
Tarquin Resources Plc
("Tarquin" or the "Company")
Financial Statements
For the year ended 31 December 2007
CHAIRMAN'S STATEMENT
for the year ended 31 December 2007
I am pleased to report that during the period under review, the
Company has continued to make good progress with respect to its
copper exploration and development programme in Chile.
SRK Consultants of Santiago, Chile was retained to provide an
independent resource estimate of the Puquios (formerly Las Pascualas)
Project and the following information is an extract therefrom,
compiled by Mr. Roger Shakesby:
The mineralization comprises an enrichment blanket of secondary
sulphides overlain by oxides.
At 0.2% Copper cutoff grade the resource (including Inferred
Resources) is estimated to be:
Secondary sulphides 20.974 million tonnes @ 0.68% Copper
Green oxides 8.090 million tonnes @ 0.37% Copper
Black oxides 0.863 million tonnes @ 0.38% Copper
TOTAL 29.927 million tonnes @ 0.58% Copper
The classification of the resource, which conforms to the JORC code,
is as follows:
+-------------------------------------------------------------------------------------------------+
| |Secondary Sulphides |Green Oxides |Black Oxides |
|----------------------------+----------------------+----------------------+----------------------|
| |Tonnage |Copper |Tonnage |Copper |Tonnage |Copper |
|Resource |(Kilotonnes)|Grade |(Kilotonnes)|Grade |(Kilotonnes)|Grade |
|Classification | |(Percent)| |(Percent)| |(Percent)|
|----------------------------+------------+---------+------------+---------+------------+---------|
|Measured |5745.6 |0.79 |7183.0 |0.36 |132.9 |0.32 |
|----------------------------+------------+---------+------------+---------+------------+---------|
|Indicated |9713.6 |0.68 |906.8 |0.41 |303.1 |0.37 |
|----------------------------+------------+---------+------------+---------+------------+---------|
|Total measured and Indicated|15459.2 |0.72 |8089.8 |0.37 |436.0 |0.35 |
|----------------------------+------------+---------+------------+---------+------------+---------|
| | | | | | | |
|----------------------------+------------+---------+------------+---------+------------+---------|
|Inferred |5514.8 |0.56 |- |- |427.4 |0.40 |
+-------------------------------------------------------------------------------------------------+
The information set out above that relates to Exploration Results,
Mineral Resources or Ore Reserves is based on information compiled by
Roger Shakesby, who is a Member of the Australasian Institute of
Mining and Metallurgy, the Geological Society of Australia and is a
qualified person, with sufficient experience which is relevant to the
style of mineralization and type of deposit under consideration.
The pre-feasibility study completed during the year indicated that
the Project was robust. The feasibility study commenced in the
fourth quarter of 2007 with the appointment of Idesol Ingenieros SA,
an experienced Santiago based consultancy firm, as the principal
engineers. The target completion date for the feasibility study is
the third quarter of 2008.
Good progress has been made with the environmental approvals with
final approval expected early in 2008.
A contract was let for the re-drilling of the water well that is
proposed as the major source of project water supply. This programme
of drilling and the associated pump tests has commenced.
Exploration continued in the vicinity, and at Las Nipas a significant
copper-molybdenum-gold geochemical anomaly was located, detailed
geological mapping was completed and drill sites prepared for a
drilling programme to commence in March 2008.
In November 2007, the Company became a subsidiary of Investika Ltd, a
company in the mining finance industry with a focus on pre-production
emerging resource opportunities and the Company's Joint Venture
partner in the Puquios Project. Following that occurring, it was
resolved to rationalize the Company's board and Messrs Bogdanic,
Cleary and Smith retired as directors. I would like to express my
heartfelt thanks to each of them for their contribution to the
Company.
Chris Kyriakou
Chairman
12 March 2008
For further information:
Annie Richards, Tarquin Resources plc +44 (0) 20 7514 1480
Hugh Oram, Nabarro Wells & Co Ltd +44 (0) 20 7710 7400
Charles Vivian, Pelham Public Relations +44 (0) 20 7743 6670
REPORT OF THE DIRECTORS
for the year ended 31 December 2007
The directors present their report with the audited Group financial
statements for the year ended 31 December 2007.
Principal activities and review of business
The principal activity of the Company and the Group is investment
directly and indirectly in, and operation of, mining exploration and
development projects.
During the year the Company's main undertaking was the continuing
investment in the Puquios (formerly Las Pascualas) copper Project,
based in Chile, in which the Company has a 51% interest.
Over the year, the Company advanced �1,326,924 to its subsidiary,
Tommy SA, in respect of the Puquiois Project. Together with funds
advanced by Investika Ltd to Tommy SA, the Group expended some
�2,574,148 on Project related activities.
In May 2007 the Company secured a �1.5 million loan facility from
Investika Ltd. The loan bears interest at 8.5% per annum on funds
drawn, is secured by a negative pledge over the Company's equity
interest in Tommy SA and is repayable by 31 July 2008, either in cash
or convertible into shares in the Company at 50p per share, at
Investika's option. The facility bears a facility fee of �75,000.
In December 2007 the Company secured a further �1.3 million loan
facility from Investika Ltd. The loan bears interest at 9.5% per
annum on funds drawn, is secured by a negative pledge over the
Company's equity interest in Tommy SA and is repayable by 31 July
2008, either in cash or convertible into shares in the Company at 25p
per share, at Investika's option. The facility bears a facility fee
of �65,000.
Results and dividends
The loss for the year on ordinary activities before tax amounted to
�392,381 (2006: �904,523). The directors do not recommend the
payment of a dividend.
Share capital
Details of share capital are given in note 24 to the financial
statements.
Financial assets and liabilities
See note 34 to the financial statements.
Future developments
The directors anticipate the Company's major future developments will
revolve around further investment in and development of the Puquios
copper Project.
Principal risks and uncertainties facing the Company and Group
The principal risks faced by the Company and the Group are as
follows:
* The exploration for and development of mineral deposits involves
significant risks, which even a combination of careful evaluation,
experience and knowledge may not eliminate. There can be no
guarantee that the estimates of quantities and grades of minerals
disclosed will be available to extract. With all mining operations
there is uncertainty and, therefore, risk associated with operating
parameters and costs resulting from the scaling up of extraction
methods tested in pilot conditions.
* The operations of the Company may be disrupted by a variety of
risks and hazards which are beyond the control of the Company.
These may include geological, geotechnical and seismic factors,
environmental hazards, industrial accidents, occupational and
health hazards, technical failures, labour disputes, unusual or
unexpected rock formations, flooding and extended interruptions due
to inclement or hazardous weather conditions, explosions and other
acts. These risks and hazards could also result in damage to, or
destruction of, production facilities, personal injury,
environmental damage, business interruption, monetary losses and
possible legal liability.
* The Company's future success is substantially dependent on the
continued services and performance of its key personnel. Their
loss or the inability to recruit personnel of the appropriate
calibre could have a significant adverse effect of the business of
the Company.
* The operations of the Group are located in Chile where there may be
a number of associated risks over which it has no control. These
may include economic, social or political instability or change,
terrorism, hyperinflation, currency non-convertibility or
instability, changes of laws affecting foreign ownership,
government participation, taxation, working conditions, rates of
exchange, exchange control, and exploration licensing.
* The Company's total return and net assets can be significantly
affected by currency movements.
Directors and their interests
The directors who served during the year and their interests in the
Company's ordinary shares were as follows:
15p Ordinary shares
At 31 At date of
December 2007 appointment/
Appointed Resigned 1 January 2007
C Kyriakou* 13,034,997 5,069,714
C de - 511,111
Chezelles
R Shakesby - -
M Smith 26 April 27 November - -
2007 2007
R Cleary 26 April 27 November - -
2007 2007
T Bogdanic 26 April 27 November - -
2007 2007
Options held by directors at 31 December 2007 are as follows:
Number Exercise Price Expiry Date
C Kyriakou 125,000 40p per share 13 June 2011
C de Chezelles 50,000 40p per share 13 June 2011
R Shakesby 125,000 40p per share 13 June 2011
*C Kyriakou is a director of Investika Limited. C Kyriakou's family
trust holds shares and executive share options in Investika Limited.
The shares owned by Investika Limited in the Company's share capital
have been included in C Kyriakou's interests. From 22 November 2007,
Investika Limited became the parent company of Tarquin Resources Plc.
Full details of directors' shareholdings and options to subscribe are
maintained in the Register of Directors' Interests.
Substantial shareholdings
On 31 December 2007 the following shareholders held 3% or more of the
issued share capital of the Company:
Number of Percentage issued
Ordinary Shares Ordinary Shares
Investika Limited 13,034,997 86.8%
Events since the balance sheet date
Subsequent to 31 December 2007, the Company has:
* Received �378,837 in further advances from Investika
Ltd under the loan facility agreement with that company (refer note
22);
* Advanced �347,532 to Tommy SA to meet project
related expenditure on the Puquios copper Project.
Corporate governance
As Tarquin Resources Plc is not a fully listed company, it is not
required to comply with the Code of Best Practice published by the
Committee on the Financial Aspects of Corporate Governance ("the
Combined Code"). However, the directors do place a high degree of
importance on ensuring that high standards of corporate governance
are maintained. As a result, most of the relevant principles set out
in the Combined Code have been adopted during the period and these
are summarised below.
Directors
The Company supports the concept of an effective Board leading and
controlling the Company. The Board is responsible for approving the
Company's policies and strategies. It meets frequently and receives
and reviews on a timely basis financial and operating information
appropriate to being able to discharge its duties. Directors are
free to seek any further information they consider necessary. All
directors submit themselves for re-election every three years by
rotation in accordance with the Articles of Association. Given the
size of the Company it is not considered appropriate that there
should be a separate nomination committee. It is the view of the
Board that the appointment of new directors should be a matter for
consideration by the Board as a whole. All appointments to the Board
are subject to confirmation by shareholders at the following Annual
General Meeting.
Relations with shareholders
The Company values the views of its shareholders and recognises their
interest in the Company's strategy and performance. The Board is
available to discuss current events with its institutional and
private shareholders and positively encourages attendance at General
Meetings.
Audit committee
The principal functions of the Audit Committee are to review the
interim and annual accounts before they are presented to the Board
and to review the effectiveness of the Company's internal control and
risk management systems. The Audit committee comprises the Company's
non-executive directors from time to time. Currently it comprises R
Shakesby and C de Chezelles.
Remuneration committee
Given the size of the Company, it is not considered appropriate that
there should be a separate remuneration committee and the Board as a
whole fulfils this function. Details of the directors' emoluments
are set out in the financial statements however there is no separate
Report of the Remuneration Committee. It is the Company's policy
that the remuneration of directors should be commensurate with
services provided by them to the Company.
Internal financial control and risk management
The directors are responsible for the Company's system of internal
financial control and also for identifying the major business risks
faced by the Company. The system of internal financial control is
designed to provide reasonable, but not absolute, assurance against
material misstatement or loss. In fulfilling these responsibilities,
the Board has reviewed the effectiveness of the system of internal
financial control. The directors have established procedures for
planning, budgeting and for monitoring, on a regular basis, the
performance of the Company and for determining the appropriate course
of action to manage any major business risks. The Board has
considered the need for an internal audit function but has decided
the size of the Company does not justify it at present. This
decision will be reviewed annually.
Supplier payment policy
It is the Company's policy to agree terms of payment with all
suppliers at the time of the transaction and to pay suppliers as and
when they fall due for payment or alternatively to agree revised
terms of payment. No distinction is made between different classes
of suppliers. At the year end trade payables amounted to 12 days
(2006: 32 days).
Political and charitable donations
No political or charitable donations were made during the year.
Indemnity provision
Directors and officers insurance are in place to indemnify the
directors against liabilities arising from the discharge of their
duties as directors of the Company.
Auditors
Sawin & Edwards have indicated their willingness to continue in
office. A resolution to reappoint Sawin & Edwards for the ensuing
year will be proposed at the 2008 Annual General Meeting.
By order of the board
J Reynolds
Company Secretary
12 March 2008
STATEMENT OF DIRECTORS' RESPONSIBILITIES
for the year ended 31 December 2007
The directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare financial statements
for each financial year. Under that law the directors have elected
to prepare the financial statements in accordance with International
Financial Reporting Standards and applicable law. The financial
statements are required by law to give a true and fair view of the
state of affairs of the Company and Group and of the profit or loss
of the Group for that period.
In preparing those financial statements, the directors are required
to:
a) select suitable accounting policies and then apply them
consistently;
b) make judgements and estimates that are reasonable and
prudent;
c) state whether applicable accounting standards have been
followed, subject to any material departures disclosed and explained
in the financial statements; and
d) prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company and Group will
continue in business.
The directors are responsible for keeping proper accounting records
that disclose with reasonable accuracy at any time the financial
position of the Company and of the Group and to enable them to ensure
that the financial statements comply with the Companies Act 1985.
They are also responsible for safeguarding the assets of the Company
and Group and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of
the corporate and financial information included on the Company
website. Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from legislation
in other jurisdictions.
The directors confirm that so far as they are aware, there is no
relevant audit information (as defined by section 234ZA of the
Companies Act 1985) of which the Company's auditors are unaware.
They have taken all the steps that they ought to have taken as
directors in order to make themselves aware of any relevant audit
information and to establish that the Company's auditors are aware of
that information.
INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF
TARQUIN RESOURCES PLC
We have audited the Group and parent Company financial statements of
Tarquin Resources Plc for the year ended 31 December 2007 which
comprise the Consolidated Income Statement, the Consolidated and
Company Balance Sheets, the Statements of Changes in Equity, the
Consolidated and Company Cash Flow Statements and the related notes
numbered 1 to 35. These financial statements have been prepared
under the accounting policies set out therein.
This report is made solely to the Group's members, as a body, in
accordance with Section 235 of the Companies Act 1985. Our audit
work has been undertaken so that we might state to the Group's
members those matters we are required to state to them in an
auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone
other than the Group and Company and the Group's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of directors and auditors
The Directors' responsibilities for preparing the Annual Report and
the financial statements in accordance with applicable law and
International Financial Reporting Standards (IFRSs) as adopted for
use in the European Union are set out in the Statement of Directors'
Responsibilities.
Our responsibility is to audit the financial statements in accordance
with relevant legal and regulatory requirements and International
Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements
give a true and fair view and are properly prepared in accordance
with the Companies Act 1985. We also report to you if, in our
opinion, the Company has not kept proper accounting records, if we
have not received all of the information and explanations we require
for our audit, or if information specified by law regarding
directors' remuneration and other transactions is not disclosed.
We report to you whether in our opinion the information given in the
Directors' Report is consistent with the Financial Statements.
We read other information contained in the Annual Report, and
consider whether it is consistent with the audited financial
statements. This other information comprises only the Chairman's
Statement. We consider the implications for our report if we become
aware of any apparent misstatements or material inconsistencies with
the financial statements. Our responsibilities do not extend to any
other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on
Auditing (UK and Ireland) issued by the Auditing Practices Board. An
audit includes an examination on a test basis, of evidence relevant
to the amounts and disclosures in the financial statements. It also
includes an assessment of the significant estimates and judgements
made by the directors in the preparation of the financial statements,
and of whether the accounting policies are appropriate to the
Company's circumstances, consistently applied and adequately
disclosed.
We planned and performed our audit so as to obtain all the
information and explanations which we considered necessary in order
to provide us with sufficient evidence to give reasonable assurance
that the financial statements are free from material misstatement,
whether caused by fraud or other irregularity or error. In forming
our opinion we also evaluated the overall adequacy of the
presentation of information in the financial statements.
Opinion
In our opinion:
* the financial statements give a true and fair view, in
accordance with IFRSs as adopted for use in the European Union, of
the state of the Group and the parent Company's affairs as at 31
December 2007 and of the Group's loss for the year then ended; and
* the financial statements have been properly prepared in
accordance with the Companies Act 1985; and
* the information given in the Directors' Report is
consistent with the financial statements.
Emphasis of matter - Going concern
In forming our opinion on the financial statements, which is not
qualified, we have considered the adequacy of the disclosure made in
note 2 to the financial statements concerning the Company's ability
to continue as a going concern. The Group incurred a net loss of
�392,381 during the year ended 31 December 2007. As explained in
note 2 the Company will require to raise additional funds through
further debt or equity raisings in the next twelve months in order to
meet its projected exploration expenditure. This indicates the
existence of a material uncertainty which may cast significant doubt
about the company's ability to continue as a going concern. The
financial statements do not include the adjustments that would result
if the Company was unable to continue as a going concern.
Sawin & Edwards
15 Southampton Place
Chartered
Accountants
London
& Registered
Auditors WC1A
2AJ
12 March 2008
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2007
Year Year
Ended Ended
31 December 31 December
2007 2006
Notes � �
Revenue 3 104,500 14,053
Cost of sales (70,076) (17,676)
Unrealised losses on current asset
investments (1,473) (15,538)
_____ ______
Gross profit/(loss) 32,951 (19,161)
Other operating income 5 19,724 58,176
Administrative expenses (290,402) (854,638)
Exceptional expenses 6 - (110,162)
_______ _______
Loss from operations 7 (237,727) (925,785)
Investment income 10 17,027 21,262
Finance costs 11 (171,681) -
_______ _______
Loss before taxation (392,381) (904,523)
Income tax expense 12 - -
_______ _______
Loss for the year (392,381) (904,523)
Attributable to:
Equity holders of the parent (489,601) (799,379)
Minority interest 97,220 (105,144)
_______ _______
(392,381) (904,523)
Loss per share (pence)
Basic 13 3.19 6.62
Diluted 13 2.54 6.21
The Company has taken advantage of section 230 of the Companies Act
1985 not to publish its own income statement account.
CONSOLIDATED BALANCE SHEET
At 31 December 2007
Notes 2007 2006
� �
ASSETS
Non-current assets
Intangible assets 14 5,738,019 3,186,395
Property, plant and equipment 15 50,479 41,329
Taxation receivable 17 304,175 143,409
_______ _______
Total non-current assets 6,092,673 3,371,133
Current assets
Trading investments 18 22,344 92,837
Trade and other receivables 19 29,146 18,914
Cash and cash equivalents 19 573,859 547,412
______ ______
Total current assets 625,349 659,163
TOTAL ASSETS 6,718,022 4,030,296
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables 20 480,221 194,046
Loans and short term borrowings 21 1,643,800 -
_______ ______
Total current liabilities 2,124,021 194,046
Non-current liabilities
Trade and other payables 23 2,271,665 1,010,112
_______ _______
Total non-current liabilities 2,271,665 1,010,112
TOTAL LIABILITIES 4,395,686 1,204,158
Equity
Share capital 24 2,298,386 2,298,386
Share premium account 25 4,858,129 4,858,129
Share based payments reserve 26 56,534 68,954
Exchange translation & currency
reserve 27 (57,012) -
Retained loss (5,582,277) (5,105,096)
________ ________
Equity attributable to equity holders of the
parent 1,573,760 2,120,373
Minority Interest 28 748,576 705,765
_______ _______
TOTAL EQUITY 2,322,336 2,826,138
_______ _______
TOTAL EQUITY AND LIABILITIES 6,718,022 4,030,296
The financial statements were approved by the Board of directors on
12 March 2008 and signed on its behalf by:
C Kyriakou - Chairman
COMPANY BALANCE SHEET
At 31 December 2007
Notes 2007 2006
� �
ASSETS
Non-current assets
Investments in subsidiary undertaking 16 844,406 844,023
Trade and other receivables 17 2,372,012 1,057,557
_______ _______
Total non-current assets 3,216,418 1,901,580
Current assets
Trading investments 18 22,344 92,837
Trade and other receivables 19 17,081 16,760
Cash and cash equivalents 19 38,637 317,144
_____ ______
Total current assets 78,062 426,741
TOTAL ASSETS 3,294,480 2,328,321
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables 20 105,522 102,685
Loans 21 1,563,247 -
_______ ______
Total current liabilities 1,668,769 102,685
TOTAL LIABILITIES 1,668,769 102,685
Equity
Share capital 24 2,298,386 2,298,386
Share premium account 25 4,858,129 4,858,129
Share based payments reserve 26 56,534 68,954
Retained loss (5,587,338) (4,999,833)
________ ________
Equity attributable to equity holders of the
parent 1,625,711 2,225,636
TOTAL EQUITY 1,625,711 2,225,636
________ ________
TOTAL EQUITY AND LIABILITIES 3,294,480 2,328,321
The financial statements were approved by the Board of directors on
12 March 2008 and signed on its behalf by:
C Kyriakou - Chairman
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2007
Share Exchange
Based Translation
Share Share Payments & Currency Retained
Capital Premium Reserve Reserve Loss Total
� � � � � �
Group
Balances at 1 January 2,298,386 4,858,129 68,954 - (5,105,096) 2,120,373
2007
Exchange translation
and -
currency
movements - - (57,012) - (57,012)
Loss for the period - - - - (489,601) (489,601)
Share based reserve
movement - - (12,420) - 12,420 -
_______ ________ _______ _______ _________ ________
Balances at 31
December 2007 2,298,386 4,858,129 56,534 (57,012) (5,582,277) 1,573,760
Share
Based
Share Share Payments Retained
Capital Premium Reserve Loss Total
� � � � �
Company
Balances at 1 2,298,386 4,858,129 68,954 (4,999,833) 2,225,636
January 2007
Loss for the
period - - - (599,925) (599,925)
Share based
reserve movement - - (12,420) 12,420 -
________ ________ _______ _________ ________
Balances at 31
December 2007 2,298,386 4,858,129 56,534 (5,587,338) 1,625,711
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2007
Share
based
Share Share Payments Retained
Capital Premium Reserve Loss Total
� � � � �
Group
Balances at 1 1,576,164 4,280,351 - (4,305,717) 1,550,798
January 2006
Share issue 722,222 577,778 - - 1,300,000
Loss for the - - - (799,379) (799,379)
period
Share based - - 68,954 - 68,954
payment
________ ________ _____ ________ ________
Balance at 31
December 2006 2,298,386 4,858,129 68,954 (5,105,096) 2,120,373
Share
based
Share Share Payments Retained
Capital Premium Reserve Loss Total
� � � � �
Company
Balances at 1 1,576,164 4,280,351 - (4,326,466) 1,530,049
January 2006
Share issue 722,222 577,778 - - 1,300,000
Loss for the - - - (673,367) (673,367)
period
Share based - - 68,954 - 68,954
payment
________ ________ _____ _________ ________
Balances at 31
December 2006 2,298,386 4,858,129 68,954 (4,999,833) 2,225,636
CONSOLIDATED CASHFLOW STATEMENT
for the year ended 31 December 2007
Notes Year Year
Ended Ended
31 December 31 December
2007 2006
� �
Net cash flow from operating activities 29 (150,104) (771,522)
Investing activities
Investment income 17,027 21,262
Purchase of property, plant & equipment (22,893) (45,395)
Purchase of intangibles (2,551,255) (2,166,410)
_________ _________
Net cash from investing activities (2,557,121) (2,190,543)
Financing activities
Issue of equity share capital - 1,300,000
Loans raised 1,563,247 -
Project funds advanced 1,261,553 878,915
Loan interest payable (171,681) -
Increase in bank overdraft 80,553 -
________ ________
Net cash from financing activities 2,733,672 2,178,915
Net increase/(decrease) in cash and
cash equivalents 26,447 (783,150)
Cash and cash equivalents at 1 January 547,412 1,330,562
______ ______
Cash and cash equivalents at 31 19
December 573,859 547,412
COMPANY CASHFLOW STATEMENT
for the year ended 31 December 2007
Notes Year Year
Ended Ended
31 December 31 December
2007 2006
� �
Net cash flow from operating activities 29 (1,671,954) (1,546,582)
Investing activities
Investment income 2,264 20,679
Loan interest payable (171,681) -
Investment in subsidiary (383) (717,408)
_______ _______
Net cash from investing activities (169,800) (696,729)
Financing activities
Issue of equity share capital - 1,300,000
Loans raised 1,563,247 -
________ ________
Net cash from financing activities 1,563,247 1,300,000
Net decrease in cash and cash
equivalents (278,507) (943,311)
Cash and cash equivalents at 1 January 317,144 1,260,455
______ _______
Cash and cash equivalents at 31
December 19 38,637 317,144
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2007
1. General information
Tarquin Resources Plc is a company incorporated in England and Wales
under the Companies Act 1985. The Company's registered office is 11
Albemarle Street, London, W1S 4HH.
The principal activity of the Group is the investment in and
exploration and development of mining projects, specifically in
Chile.
The Group's principal activity is carried out in US dollars. The
financial statements are presented in pounds sterling as this is the
currency of the country (the UK) from which the Group operates.
The Board of directors has authorised the issue of these financial
statements on the date of the statement as set out on page 12.
2. Accounting policies
Basis of accounting
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) for the first
time. The disclosures required by IFRS 1 concerning the transition
from UK GAAP to IFRSs are given in note 35 to the financial
statements.
The financial statements have been prepared on the historical
cost basis except that certain financial instruments are accounted
for at fair values. The principal accounting policies adopted are
set out below.
Going Concern
The financial statements have been prepared on a going concern
basis, which contemplates continuity of normal business activities
and the realisation of assets and settlement of liabilities in the
ordinary course of business.
The directors believe that it is appropriate to prepare the
financial report on a going concern basis as they are confident that
the Company will be able to raise additional funds through further
debt or equity raisings when required. The directors are of the
opinion that the proposed debt or equity raising measures and the
existing cash resources will provide sufficient funds to enable the
Company to continue its operations for at least the next twelve
months.
Basis of consolidation
The consolidated financial statements incorporate the
financial statements of the Company and entities controlled by the
Company (its subsidiaries) made up to 31 December each year. Control
is achieved where the Company has the power to govern the financial
and operating policies of an investee entity so as to obtain benefits
from its activities.
On acquisition, the assets and liabilities and contingent
liabilities of a subsidiary are measured at their fair values at the
date of acquisition. Any excess of the cost of acquisition over the
fair values of the identifiable net assets acquired is recognised as
goodwill. Any deficiency of the cost of acquisition below the fair
values of the identifiable net assets acquired (i.e. discount on
acquisition) is credited to profit and loss in the period of
acquisition. The interest of minority shareholders is stated at the
minority's proportion of the fair values of the assets and
liabilities recognised. Subsequently, any losses applicable to the
minority interest in excess of the minority interest are allocated
against the interests of the parent.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of
disposal, as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used into
line with those used by the Group.
All intra-group transactions, balances, income and expenses
are eliminated on consolidation.
Revenue recognition
Revenue is measured at the fair value of the consideration received
or receivable and represents the amounts receivable on the sale of
trading investments.
Other operating income represents the amounts receivable for the
provision of consultancy, management and office services provided in
the normal course of business, net of VAT.
Interest income is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate applicable,
which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to that
asset's net carrying amount.
Foreign currencies
Transactions in currencies other than pounds sterling are recorded at
the rates of exchange prevailing on the dates of the individual
transactions. For practical reasons, a rate that approximates to the
actual rate at the date of the transaction is often used. At each
balance sheet date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing on the balance sheet date. Non-monetary assets and
liabilities that are denominated in foreign currencies are translated
at the rates prevailing at the balance sheet date. Gains and losses
arising on retranslation are included in net profit or loss for the
period.
On consolidation, the assets and liabilities of the Group's overseas
operations are translated at exchange rates prevailing on the balance
sheet date. Income and expense items are translated at the average
exchange rates for the period unless exchange rates fluctuate
significantly. Exchange differences arising, if any, are classified
as equity and transferred to the Group's translation reserve. Such
translation differences are recognised as income or as expenses in
the period in which the operation is disposed of.
Borrowing costs
All borrowing costs are recognised in the profit or loss in the year
in which they are incurred.
Taxation
The tax expense represents the sum of the tax currently payable and
deferred tax. The tax currently payable is based on taxable profit
for the year. Taxable profit differs from net profit as reported in
the income statement, because it excludes items of income or expense
that are taxable or deductible in other years and it further excludes
items that are never taxable or deductible. The Group's liability
for current tax is calculated using tax rates that have been enacted
or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in the
computation of taxable profit, and is accounted for using the balance
sheet liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax
assets are recognised to the extent that it is probable that taxable
profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from the original
recognition of other assets and liabilities in a transaction that
affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised. Deferred tax is charged or credited in the income
statement, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt with
in equity.
No recognition has been made for the deferred tax asset arising in
respect of current losses as the directors are of the opinion that
this may not be realisable in the foreseeable future.
Non-current intangible assets
Non-current intangible assets have a finite life and are shown at
cost/fair value less any provisions made in respect of impairment.
Non-current intangible assets - Exploration expenditure
Costs relating to the acquisition, exploration and development of
mining projects are capitalised under intangible assets. When it is
determined that such costs will be recouped through successful
development and exploitation or alternatively by sale of such
interests acquired, the expenditure will be transferred to tangible
assets and depreciated over the expected productive life of the
asset. Whenever a project is considered no longer viable, the
associated exploration expenditure is written off to the profit and
loss account.
Non-current intangible assets - Land and water rights
Costs relating to the acquisition of land and water rights are
capitalised under intangible assets. The underlying nature of these
rights is considered to be long term with no dilution expected in the
foreseeable future.
Impairment of tangible and intangible assets
At each balance sheet date, the Group reviews the carrying amounts of
its tangible and intangible assets to determine whether there is any
indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset is
estimated, in order to determine the extent of the impairment loss
(if any). Where the asset does not generate cash flows that are
independent from other assets, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs. An
intangible asset with an indefinite useful life is tested for
impairment annually and whenever there is an indication that the
asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and
value in use. Value in use is assessed by reference to the net
present value of expected future cash flows of the relevant income
generating unit or disposal value, if higher. If an asset is
impaired, a provision is made to reduce the carrying amount to its
estimated recoverable amount. An impairment loss is recognised as an
expense immediately.
Property, plant and equipment
Office equipment and furniture are stated at cost less accumulated
depreciation and any recognised impairment loss. Depreciation is
charged so as to write off the cost of assets over their estimated
useful lives, using the straight line method on the following bases:
Plant and equipment 20% & 33% straight
line
Fixtures, fittings and office equipment 20% & 33% straight line
The gain or loss arising on the disposal or retirement of an asset is
determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognised as income.
Financial instruments
Financial assets and financial liabilities are recognised on the
balance sheet when the Company becomes a party to the contractual
provisions of the instrument.
Trade receivables
Trade receivables do not carry any interest and are stated at their
nominal value as reduced by appropriate allowances for estimated
irrecoverable amounts.
Investments
Investments are recognised and derecognised on a trade date where a
purchase or sale of an investment is under a contract whose terms
require delivery of the investment within the timeframe established
by the market concerned, and are initially measured at cost,
including transaction costs.
Investments are classified as held-for-trading and are measured at
subsequent reporting dates at fair value. Where securities are held
for trading purposes, gains and losses arising from changes in fair
value are included in net profit or loss for the period.
Cash and cash equivalents
Cash and cash equivalents comprise cash held at bank and on short
term deposits.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according
to the substance of the contractual arrangement entered into. An
equity instrument is any contract that evidences a residual interest
in the assets of the Group after deducting all of its liabilities.
Bank borrowings
Interest bearing overdrafts are recorded at the proceeds received.
Finance charges are accounted for on an accruals basis to the Income
Statement.
Convertible loan notes
Convertible loan notes are regarded as compound instruments,
consisting of a liability component and an equity component. At the
date of issue, the fair value of the liability component is estimated
using the prevailing market interest rate for similar non-convertible
debt. The difference between the proceeds of issue of the
convertible loan notes and the fair value assigned to the liability
component, representing the embedded option to convert the liability
into equity of the Group, is included in equity, where material.
Issue costs are apportioned between the liability and equity
components of the convertible loan notes based on their relative
carrying amounts at the date of issue. The portion relating to the
equity component is charged directly against equity, where material.
Trade payables
Trade payables are not interest bearing and are stated at their
nominal value.
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds
received except where those proceeds appear to be less than the fair
value of the equity instruments issued, in which case the equity
instruments are recorded at fair value. The difference between the
proceeds received and the fair value is reflected in the share based
payments reserve.
The costs of issuing new equity are charged against the share premium
account.
Share based payments
The Group has applied the requirements of IFRS 2 Share-based
Payments.
The Group issues equity-settled share-based payments to directors,
staff, and certain professional advisors of the Group.
Equity-settled share-based payments are measured at fair value at the
date of grant. The fair value determined at the grant date of the
equity-settled share-based payment is expensed on a straight-line
basis over the vesting period, based on the Group's estimate of
shares that will eventually vest.
Fair value is measured using a Black-Scholes model. The expected
life used in the model has been adjusted, based on management's best
estimate, for the effects of non-transferability, exercise
restrictions, and behavioural considerations.
3. Revenue
An analysis of the Group's revenue is as follows:
Year ended Year ended
31 December 31 December
2007 2006
� �
Sale of investments 104,500 14,053
Other operating income 19,724 58,176
Investment income 17,027 21,262
______ _____
141,251 93,491
4. Segmental analysis
The revenue and loss before taxation are attributable to the
principal activities of the Group.
Segmental information on a geographical basis is set out below:
Year ended 31 December 2007
UK Chile Total
� � �
Revenue 104,500 - 104,500
(Loss)/profit for the year (599,925) 207,544 (392,381)
Depreciation - 11,708 11,708
Total assets 90,675 6,627,347 6,718,022
Total liabilities 1,668,778 2,726,908 4,395,686
Intangible assets- additions - 2,551,624 2,551,624
Tangible assets-additions - 22,893 22,893
Year ended 31 December 2006
UK Chile Total
� � �
Revenue 14,053 - 14,053
Loss for the year (637,367) (267,156) (904,523)
Depreciation - 4,066 4,066
Total assets 438,574 3,591,722 4,030,296
Total liabilities 102,694 1,101,464 1,204,158
Intangible assets- additions - 2,855,686 2,855,686
Tangible assets-additions - 45,395 45,395
5. Other operating income
Year ended Year ended
31 December 31 December
2007 2006
Company � �
Provision of administration services 19,724 58,176
6. Exceptional expenses
Year ended Year ended
31 December 31 December
2007 2006
� �
Intangible write down - 110,162
During the year ended 31 December 2006, the directors considered that
the El Morado project was not commercially viable and costs of
�110,162 incurred on the project to date were written off to the
Income Statement.
7. Net loss from operations
Net loss from operations is stated after charging/(crediting):
Year ended Year ended
31 December 31 December
2007 2006
� �
Auditors remuneration:
- as auditors 37,700 38,495
- taxation compliance 500 2,500
- professional advice 42,578 -
Audit fees - other auditor 1,141 1,728
Exchange (gain)/loss (196,932) 75,667
Depreciation 11,708 4,066
Directors' emoluments 98,000 129,500
Staff costs (see note 8) 315,444 206,398
8. Particulars of employees
The average number of staff employed by the Group during the
financial year amounted to:
Year ended Year ended
31 December 31 December
2007 2006
No. No.
Administrative staff 1 1
Project development 22 20
23 21
The aggregate costs of the above were:
� �
Wages and salaries 315,444 206,398
The above wages and salaries relate to the staff of the Chilean
subsidiary which have been capitalised as part of project costs,
including directors remuneration of �81,161 (2006: �55,746).
9. Directors' emoluments
The Company also employed six (2006: five) directors during the year
with aggregate emoluments in respect of qualifying services as
follows:
Year ended Year ended
31 December 31 December
2007 2006
� �
Directors' fees 24,000 33,500
Amounts paid to third parties for the
provision of directors' services 74,000 80,000
Ex gratia payments on retirement - 16,000
Share based payments - 36,423
_____ ______
98,000 165,923
No. No.
Number of directors who exercised share
options during the year - -
10. Investment income
Year ended Year ended
31 December 31 December
2007 2007
Group Company Group Company
� � � �
Interest on bank deposits 17,027 2,264 21,262 20,679
11. Finance costs
Year ended Year ended
31 December 31 December
2007 2006
� �
Interest on convertible loan notes 171,681 -
______ _______
Total borrowing costs 171,681 -
12. Income tax expense
Year ended Year ended
31 December 31 December
2007 2006
Group � �
Current tax:
UK Corporation tax - -
Foreign tax - -
_______ _______
- -
Due to the taxable losses arising there is no charge to corporation
tax.
Current tax reconciliation
Loss for the year before taxation (392,381) (904,523)
Loss for the year multiplied by
standard
rate of UK corporation tax 19%
/20% (2006: 19%) (77,495) (171,859)
Tax effects of:
Expenses not deductible for tax
purposes 911 7,610
Capital gains allowance (1,753) -
Overseas (profits)/losses (40,990) 40,770
Utilisation of capital losses 716
Increase in potential tax credits 118,611 123,479
______ ______
Tax charge - -
Potential UK tax credits
available multiplied by
Standard UK corporation tax 20%
(2006: 19%) 317,438 187,458
No recognition has been made of the deferred tax asset in respect of
the losses shown above as the directors are of the opinion that this
may not be realisable in the foreseeable future.
13. Loss per share - including share of associates results
Loss per share has been calculated by dividing the loss for the year
after taxation of �489,601 (2006: �799,379) attributable to the
equity holders of the parent company by the weighted average number
of shares in issue at the year end of 15,322,575 (2006: 12,064,330).
Diluted loss per share has been calculated using the weighted average
number of shares in issue at the year end, diluted for the effect of
share options and convertible loans in existence at the year end of
3,916,905 (2006: 805,000).
14. Intangible assets
Group
2007 2006
Exploration expenditure � �
Cost and fair value
Balance at 1 January 3,296,557 440,871
Additions 1,809,229 2,855,686
________ ________
Balance at 31 December 5,105,786 3,296,557
2007 2006
� �
Impairment
Balance at 1 January 110,162 -
Impairment charge - 110,162
_______ ______
Balance at 31 December 110,162 110,162
Net book value at 31 December 4,995,624 3,186,395
The exploration expenditure incurred by Tommy SA is shown at cost.
The investment by Tarquin Resources Plc, under the terms of the
acquisition agreement is shown at fair value.
2007 2006
Land & water rights � �
Cost
Balance at 1 January - -
Additions 742,395 -
______ ______
Balance at 31 December 742,395 -
Net book value at 31 December 742,395 -
During the year the Group acquired title to water rights for a volume
of twenty two litres per second from a well located in the Punta del
Viento Sector in Chile.
Total net book value at 31 December 5,738,019 3,186,395
15. Property, plant and equipment
Plant & Furniture & office Total
equipment equipment
Group � � �
Cost
Balance at 1 January 2007 29,177 16,218 45,395
Additions 19,351 3,542 22,893
Disposals (2,270) - (2,270)
_____ _____ _____
Balance at 31 December 46,258 19,760 66,018
2007
Depreciation
Balance at 1 January 2007 1,996 2,070 4,066
Charge for the year 7,613 4,095 11,708
Disposal (235) - (235)
____ ____ _____
Balance at 31 December 9,374 6,165 15,539
2007
Net book value
At 31 December 2007 36,884 13,595 50,479
At 31 December 2006 27,181 14,148 41,329
Plant & Furniture & office
equipment equipment Total
Group � � �
Cost
Balance at 1 January - - -
2006
Additions 29,177 16,218 45,395
_____ _____ _____
Balance at 31 December 29,177 16,218 45,395
2006
Depreciation
Balance at 1 January - - -
2006
Charge for the year 1,996 2,070 4,066
____ ____ ____
Balance at 31 December 1,996 2,070 4,066
2006
Net book value
At 31 December 2006 27,181 14,148 41,329
At 31 December 2005 - - -
16. Investment in Group Undertakings
Company
2007 2006
Subsidiary Undertakings � �
Balance at 1 January 844,023 126,615
Additions 383 717,408
______ ______
Balance at 31 December 844,406 844,023
Net book value at 31 December 844,406 844,023
Subsidiary Country of Holding Proportion Nature of
of
Undertaking incorporation voting Business
shares held
Tommy SA Chile Ordinary 51% Mineral
shares exploration
in Chile
QuikTrak (UK) Limited UK Ordinary 100% Dormant
shares
QuikTrak Netherlands Ordinary 100% Dormant
Telecommunications BV shares
The investment totalling �844,389 in Tommy SA has been pledged as
security against the loans advanced to the Company by Investika
Limited (see note 22).
17. Other receivables - non-current
Group Company Group Company
2007 2007 2006 2006
� � � �
Amount owed by group undertakings - 2,372,012 - 1,057,557
Taxation - VAT recoverable 304,175 - 143,409 -
______ ________ ______ ________
304,175 2,372,012 143,409 1,057,557
The amount owed by the group undertaking, Tommy SA is unsecured,
interest free and is repayable out of operating cash flows of Tommy
SA. As the repayments are linked to successful commercial
exploitation of the Chilean mining project, the directors are of the
opinion that it would be impractical to predict when these events
might occur. The receivable is therefore shown at historical cost.
The VAT taxation is recoverable upon commencement of mining
operations by Tommy SA.
18. Trading investments
Group Company Group Company
2007 2007 2006 2006
� � � �
Fair value 22,344 22,344 92,837 92,837
The investments included above represent investments in liquid equity
securities that present the Group with opportunity for return through
dividend income and trading gains. They have no fixed maturity or
coupon rate. The fair value of these securities is based on quoted
market prices.
19. Other financial assets
Trade and other receivables - current
Group Company Group Company
2007 2007 2006 2006
� � � �
Other receivables 4,421 4,407 12,509 10,355
Prepayments and accrued income 24,725 12,674 6,405 6,405
_____ _____ _____ _____
29,146 17,081 18,914 16,760
The directors consider that the carrying amount of trade and other
receivables approximates their fair value.
Cash and cash equivalents
Group Company Group Company
2007 2007 2006 2006
� � � �
Cash held on deposit 534,800 - 300,000 300,000
Cash at bank and in hand 39,059 38,637 247,412 17,144
______ _____ ______ ______
573,859 38,637 547,412 317,144
The carrying amount of these approximates their fair values.
20. Other financial liabilities
Trade and other payables - current
Group Company Group Company
2007 2007 2006 2006
� � � �
Trade payables 37,694 27,418 157,469 59,427
Amount owed by group undertakings - 13,320 - 13,320
Taxation 9,341 - 6,629 -
Other creditors 368,419 17 27 17
Accruals 64,767 64,767 29,921 29,921
______ ______ ______ ______
480,221 105,522 194,046 102,685
The directors consider that the carrying amount of trade
payables approximates their fair value.
21. Loans and short term borrowings
Group Company Group Company
2007 2007 2006 2006
� � � �
Bank overdraft 80,553 - - -
(repayable on
demand)
Loans (see note 22) 1,563,247 1,563,247 - -
_______ _______ _______ ______
1,643,800 1,563,247 - -
22. Convertible loans
In May 2007, Investika Limited provided a loan facility of �1,500,000
to Tarquin Resources Plc (Tarquin). The loan which has a facility
fee of �75,000 bears interest at 8.5% p.a., is secured over Tarquin's
investment in Tommy SA and is repayable by 31 July 2008. The loan is
repayable either in cash or by conversion into equity in Tarquin at
50p per share, at the option of Investika Limited.
In December 2007, Investika Limited provided a loan facility of
�1,300,000 to Tarquin. The loan which has a facility fee of �65,000
bears interest at 9.5% p.a., is secured over Tarquin's investment in
Tommy SA and is repayable by 31 July 2008. The loan is repayable
either in cash or by conversion into equity in Tarquin at 25p per
share, at the option of Investika Limited.
Group Company Group Company
2007 2007 2006 2006
� � � �
Loan facility - capital
utilised
- liability component 1,391,566 1,391,566 - -
Loan facility - accrued 171,681 171,681 - -
interest & fees
_______ _______ _____ ______
Balance carried forward - 1,563,247 1,563,247 - -
liability component
The directors consider that the carrying amount of the loan
liabilities approximates their fair value.
23. Trade and other payables - non current
Group Company Group Company
2007 2007 2006 2006
� � � �
Other payables 2,271,665 - 1,010,112 -
Other creditors comprise amounts due to Investika Limited from Tommy
SA. The amount is unsecured, interest free and is repayable out of
the operating cash flows of Tommy SA.
24. Called up share capital - Company and Group
2007 2007 2006 2006
No. � No. �
Authorised:
Ordinary shares of 15p 66,666,667 10,000,000 66,666,667 10,000,000
each
Allotted and fully paid:
Ordinary shares of 15p 15,322,575 2,298,386 15,322,575 2,298,386
each
The Company has one class of ordinary shares which carry no right to
fixed income.
Share options in existence at 31 December 2007 are as follows:
Number Description Exercise price Expiry date
660,000 Ordinary shares 40p per share 13 June 2011*
* Or 90 days after the option holder ceases to be engaged by
the Company if earlier.
Share options which lapsed during the year numbered 145,000.
25. Share premium account
Company and Group
2007 2006
� �
Balance at 1 January 4,858,129 4,280,351
Premium arising on issue of equity shares - 577,778
________ ________
Balance at 31 December 4,858,129 4,858,129
26. Share based payments reserve
Company and Group
2007 2006
� �
Balance at 1 January 68,954 -
Options issued to directors, staff and professional
advisors and charged to the income statement - 68,954
Transfer to profit and loss reserve - lapsed options (12,420) -
_____ _____
Balance at 31 January 56,534 68,954
The share based payment charge above relates to share options granted
to directors, staff and certain professional advisors of the Group on
14 June 2006 and which expire on 13 June 2011. Subject to that,
unless exercised, these share options expire within 90 days of the
grantee ceasing to be an Executive of the Company.
The share options vested on grant, have an exercise price of 40p per
share and are capable of being exercised at any time between the date
of grant and the expire date. Movement on the share options was as
follows:
2007 2006
Options at beginning of year 805,000 -
Options granted 805,000
Options expired (145,000) -
______ ______
Options at year end 660,000 805,000
Exercisable at year end 660,000 805,000
Remaining contracted life of outstanding 4 years 5 years
options at year end
Fair value of options granted in year - 8.56p
The option pricing model used in calculating fair value of option
granted was the Black-Scholes model. Inputs into the model were as
follows:
Share price 32.5p
Exercise price 40p
Expected volatility 29%
Expected option life 5 years
Expected dividends Nil
Risk free rate 4.50%
Expected volatility was determined by calculating the actual
volatility of the Company's share price for a 25 week period prior to
the grant date of the option.
27. Exchange translation and currency reserve - Group
2007 2006
� �
Balance at 1 January - -
Translation and currency movement in (57,012) -
year
______ _______
Balance at 31 December (57,012)
-
28. Minority interest - Group
The minority interest is in relation to a 49% share in Tommy
SA.
2007 2006
� �
Share of net assets 748,576 705,765
29. Cash flows from operating activities
Group 2007 2006
� �
Net loss from operations (237,727) (925,785)
Adjustments for:
Translation exchange and currency movements (111,788) -
Share based payments - 68,954
Impairment write down - 110,162
Depreciation 11,708 4,066
Loss on disposal of plant and machinery 2,035 -
Decrease in current investments 70,493 33,214
_______ _______
Operating cash flows before movements in working (265,279) (709,389)
capital
Increase in trade and other receivables (170,999) (141,154)
Increase in trade and other payables 286,174 79,021
_______ ______
Net cash flow from operating activities (150,104) (771,522)
Company 2007 2006
� �
Net loss from operations (430,509) (694,046)
Adjustments for:
Share based payments - 68,954
Decrease in current investments 70,493 33,214
_______ _______
Operating cash flows before movements in (360,016) (591,878)
working capital
Increase in trade and other receivables (1,314,775) (926,503)
Increase/(decrease) in trade and other 2,837 (28,201)
payables
_________ _________
Net cash outflow from operating activities (1,671,954) (1,546,582)
Cash and cash equivalents (which are presented as a single class of
assets on the face of the balance sheet) comprise cash at bank and
other short-term highly liquid investments with a maturity of three
months or less.
30. Controlling party
Up until 22 November 2007 there was no controlling party of the
Company. From 22 November 2007, the Company became a subsidiary of
Investika Limited which is considered to be the ultimate controlling
party of the Company.
31. Related party transactions
C Kyriakou and R Cleary are directors of Investika Limited
(Investika), an Australian company and shareholder in Tarquin
Resources Plc (Tarquin). From 22 November 2007 Investika became the
parent company of Tarquin.
In 2005 the company sourced from Investika the opportunity to acquire
a 51% stake in Tommy SA. As part of this acquisition and under the
joint venture agreement between Tarquin and Investika, the Company
advanced funds to Tommy SA of �961,657 (2006: �1,356,903) to meet
exploration costs during the year and �365,267 (US$765,000) (2006:
�266,212 (US$500,000)) in respect of option fee payments. At the
year end Tommy SA owed Tarquin �2,372,012 (2006: �1,057,557). At the
year end Tommy SA owed Investika �2,271,665 (2006: �1,010,112).
In May 2007, Investika provided a loan facility of �1,500,000 to
Tarquin. The loan which has a facility fee of �75,000 bears interest
at 8.5% p.a., is secured over Tarquin's investment in Tommy SA and is
repayable by 31 July 2008. The loan is repayable either in cash or
by conversion into equity in Tarquin at 50p per share at the option
of Investika.
In December 2007, Investika provided a loan facility of �1,300,000 to
Tarquin. The loan which has a facility fee of �65,000 bears interest
at 9.5% p.a., is secured over Tarquin's investment in Tommy SA and is
repayable by 31 July 2008. The loan is repayable either in cash or
by conversion into equity in Tarquin at 25p per share at the option
of Investika.
At the year end the total loan amount outstanding to Investika was
�1,563,247 including facility fees of �140,000 and interest of
�31,681.
During the year the Company was charged �Nil (2006: �8,736) by
Investika for expenses incurred on its behalf.
C Kyriakou, R Shakesby and R Cleary are also directors of Toledo
Mining Corporation Plc (Toledo), a UK based company. During the
year, the Company provided support staff to Toledo amounting to
�9,860 (2006: �14,088). During the year, Toledo provided support
staff and paid expenses on behalf of the Company amounting to �55,310
(2006: �82,807). At the year end the Company owed Toledo �2,080
(2006: �6,083).
C Kyriakou is also a director of Belitung Zinc Corporation Plc
(Belitung). During the year the Company provided support staff to
Belitung amounting to �4,932 (2006: �7,044). During the year
Belitung provided support staff to the Company amounting to �4,932
(2006: �2,348).
C Kyriakou, R Cleary and M Smith are also directors of UMC Energy plc
(UMC). During the year the Company provided support staff amounting
to UMC for �4,932 (2006: �7,044). During the year UMC provided
support staff to the Company amounting to �4,299 (2006: �2,348).
During the year Capma Pty Limited (a company in which C Kyriakou has
a beneficial interest) charged the Company �33,895 (2006: �150,364)
for expenses incurred on its behalf.
During the year the Company was charged �Nil (2006: �20,000) by Metal
Analysis Limited for the services of R Eccles as director. During
the year Metal Analysis Limited charged the Company �2,100 (2006:
�Nil) for expenses incurred on its behalf.
During the year the Company was charged �60,000 (2006: �60,000) by
Resources Capital Partners Inc for the services of C Kyriakou as
director.
During the year the Company was charged �7,000 (2006: �Nil) by
Accomplishments Pty Limited for the services of R Cleary as director
and �12,402 (2006: �Nil) for expenses incurred on its behalf.
During the year the Company was charged �7,000 (2006: �Nil) by
Sedgefield Pty Limited for the services of M Smith as director.
32. Commitments
Project commitments
Under the agreement to acquire the 51% stake in Tommy SA and the
options acquired over the Chilean copper projects, the Company and
Group have the following commitments (US$ to sterling rate at
1US$:0.5009) (2006:1US$:0.5107).
Group Company Group Company
2007 2007 2006 2006
� � � �
November 2007 option payment
(US$1,000,000) - - 510,700 260,457
November 2008 option payment
(US$5,200,000) 2,604,784 1,328,440 2,655,640 1,354,376
The option payments are only payable if the Company/Group elects to
continue with the projects. In addition, under the agreement the
Company/Group has commitments to make the following success payments
in respect of the Chilean copper project:
1) US$25,000 on each anniversary of the Puquios agreement which was
signed on 16 November 2005 provided the agreement is still current;
2) US$250,000 on completion of a feasibility study and a
decision to proceed to the development of the mining operation; and
3) 5% of the sale price, should Tommy SA after gaining ownership,
elect to sell the Puquios Mining Properties rather than developing
it.
33. Post balance sheet events
Subsequent to 31 December 2007, the Company has:
* Received �487,764 in further advances from Investika Ltd
under the loan facility agreement with that company (refer note
22);
* Advanced �456,482 to Tommy SA to meet project related
expenditure on the Puquios copper project.
34. Financial assets and liabilities
The Group's financial instruments comprise cash and cash
equivalents, financial assets and various items such as trade
receivables, trade payables, loans, accruals and prepayments that
arise directly from its operations.
The main purpose of these financial instruments is to finance
the Group's operations.
The Board regularly reviews and agrees policies for managing
the level of risk arising from the Group's financial instruments.
These are summarised below:
Foreign currency risk - The Group undertakes transactions
principally in Sterling and US Dollars. While the Group continually
monitors its exposure to movements in currency rates, it does not
utilise hedging instruments to protect against currency risks. The
main currency exposure risk to the Group is in relation to the
non-current payables which are repayable in US Dollars.
Interest rate risk - The Group utilises cash deposits at
variable rates of interest for a variety of short term periods,
depending on cash requirements. The rates are reviewed regularly and
the best rate obtained in the context of the Group's needs.
Liquidity risk - The Group's policy throughout the period has
been to ensure that it has adequate liquidity by careful management
of its working capital.
Credit risk - The Group's credit risk is primarily
attributable to its loan investments. The amounts presented in the
balance sheet are considered by the Group's management to be
recoverable in full.
Extent and nature of financial instruments
The Group held the following financial assets at the year
end:
2007 2006
� �
Trade and other receivables 333,321 162,323
Investments in listed securities (at published market 22,344
value) 92,837
Short-term deposits 534,800 300,000
Cash at bank and in hand 39,059 247,412
______ ______
Total 929,524 802,572
Short-term deposits are held on Call Money Market accounts.
The weighted average rate of interest earned on these deposits was
5.7% (2006: 4%). No funds are held on fixed rate terms.
The Group held the following financial liabilities at the year
end:
2007 2006
� �
Trade and other payables - current 480,221 194,046
Short term borrowings (bank overdraft) 80,553 -
Loans - current 1,563,247 -
Other payables - non current 2,271,665 1,010,112
_______ _______
4,395,686 1,204,158
As disclosed in note 22 the loans from Investika Limited are
secured over the Company's investment in Tommy SA and are repayable
by 31 July 2008. The loans are repayable either in cash or by
conversion into equity in the Company at 50p and 25p per share
respectively, at the option of Investika Limited.
35. First time adoption of IFRSs
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) for the first
time.
The last financial statements under UK GAAP were for the year ended
31 December 2006 and the date of transition to IFRSs was therefore 1
January 2006.
A reconciliation between the 2006 Income Statement and Balance Sheet
as shown under UK GAAP is given below:
Income Statement
Year ended Year ended
31 December 31 December
2006 Reconciling 2006
IFRS items UK GAAP
� � �
Revenue 14,053 - 14,053
Cost of sales (17,676) - (17,676)
Unrealised losses on current (15,538) - (15,538)
investments
______ ______ ______
Gross profit (19,161) - (19,161)
Administration expenses (854,638) - (854,638)
Exceptional expenses (110,162) - (110,162)
Other operating income 58,176 - 58,176
_______ ______ _______
Loss from operations (925,785) - (925,785)
Investment income 21,262 - 21,262
_______ ______ _______
Loss before taxation (904,523) - (904,523)
Income tax expense - - -
_______ ______ _______
Loss for the year (904,523) - (904,523)
Balance Sheet As at As at
31 December 31 December
2006 Reconciling 2006
IFRS items UK GAAP
� � �
ASSETS
Non-current assets
Intangible assets 3,186,395 - 3,186,395
Property, plant and equipment 41,329 - 41,329
________ _______ ________
Total non-current assets 3,227,724 - 3,227,724
Current assets
Trade and other receivables 162,323 - 162,323
Current investments 92,837 - 92,837
Cash and cash equivalents 547,412 - 547,412
______ _______ ______
Total current assets 802,572 - 802,572
TOTAL ASSETS 4,030,296 - 4,030,296
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables 194,046 - 194,046
______ _______ ______
Total current liabilities 194,046 - 194,046
Non-current liabilities
Trade and other payables 1,010,112 - 1,010,112
________ _______ ________
Total non-current liabilities 1,010,112 - 1,010,112
TOTAL LIABILITIES 1,204,158 1,204,158
-
Equity
Share capital 2,298,386 - 2,298,386
Share premium account 4,858,129 - 4,858,129
Share based payments reserve 68,954 - 68,954
Retained loss (5,105,096) - (5,105,096)
________ _______ ________
Equity attributable to equity
holders of the parent 2,120,373 - 2,120,373
Minority interest 705,765 - 705,765
________ _______ ________
TOTAL EQUITY 2,826,138 - 2,826,138
________ _______ ________
TOTAL EQUITY AND LIABILITIES 4,030,296 - 4,030,296
Balance Sheet As at As at
1 January 1 January
2006 Reconciling 2006
IFRS items UK GAAP
� � �
ASSETS
Non-current assets
Intangible assets 440,871 - 440,871
______ _______ ______
Total non-current assets 440,871 - 440,871
Current assets
Trade and other receivables 21,169 - 21,169
Current investments 126,051 - 126,051
Cash and cash equivalents 1,330,562 - 1,330,562
_______ _______ _______
Total current assets 1,477,782 - 1,477,782
TOTAL ASSETS 1,918,653 - 1,918,653
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables 115,025 - 115,025
______ _______ ______
Total current liabilities 115,025 - 115,025
Non-current liabilities
Trade and other payables 131,197 - 131,197
______ _______ ______
Total non-current liabilities 131,197 - 131,197
TOTAL LIABILITIES 246,222 246,222
-
Equity
Share capital 1,576,164 - 1,576,164
Share premium account 4,280,351 - 4,280,351
Retained loss (4,305,717) - (4,305,717)
________ _______ ________
Equity attributable to equity
holders of the parent 1,550,798 - 1,550,798
Minority interest 121,633 - 121,633
_______ _______ _______
TOTAL EQUITY 1,672,431 - 1,672,431
_______ _______ _______
TOTAL EQUITY AND LIABILITIES 1,918,653 - 1,918,653
- ---END OF MESSAGE---
Tarquin Resources (LSE:TQN)
過去 株価チャート
から 4 2024 まで 5 2024
Tarquin Resources (LSE:TQN)
過去 株価チャート
から 5 2023 まで 5 2024
